(Mark One) | |
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED March 31, 2017; OR |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________TO ________. |
Minnesota | 41-1577970 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer o | Accelerated filer o | |
Non-accelerated filer o | (Do no check if a smaller reporting company) | Smaller reporting company x |
Emerging growth company o |
Description | Page | |
March 31, 2017 | December 31, 2016 | ||||||
Assets | (unaudited) | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 10,411 | $ | 10,364 | |||
Receivables, net of allowance for doubtful accounts of $20 and $34, respectively | 4,614 | 7,495 | |||||
Income tax receivable | 168 | 317 | |||||
Prepaid expenses and other current assets | 2,681 | 2,470 | |||||
Total current assets | 17,874 | 20,646 | |||||
Property and equipment, net of accumulated depreciation of $3,970 and $3,711, respectively | 1,584 | 1,827 | |||||
Intangible assets, net | 7,623 | 8,110 | |||||
Goodwill | 6,808 | 6,749 | |||||
Deferred income taxes, non-current | 69 | 70 | |||||
Other assets, non-current | 4,643 | 4,827 | |||||
Total assets | $ | 38,601 | $ | 42,229 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable and other accrued liabilities | $ | 1,990 | $ | 2,394 | |||
Accrued compensation | 2,122 | 2,361 | |||||
Deferred revenue | 8,982 | 8,992 | |||||
Deferred rent | 283 | 283 | |||||
Financing obligations | 473 | 508 | |||||
Warrant liability | 971 | 893 | |||||
Total current liabilities | 14,821 | 15,431 | |||||
Long-term liabilities: | |||||||
Deferred revenue, non-current | 632 | 423 | |||||
Income taxes payable, non-current | 3 | 6 | |||||
Deferred tax liability, non-current | 260 | 294 | |||||
Deferred rent, non-current | 638 | 712 | |||||
Financing obligations, non-current | 80 | 170 | |||||
Term loan, non-current | 6,603 | 6,617 | |||||
Total long-term liabilities | 8,216 | 8,222 | |||||
Total liabilities | 23,037 | 23,653 | |||||
Commitments and contingencies (Note 3) | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $0.01 par value, authorized 250,000 shares, no shares issued and outstanding | — | — | |||||
Common stock, $0.01 par value, authorized 29,750,000 shares, issued and outstanding 9,284,114 and 9,227,247, respectively | 93 | 92 | |||||
Additional paid-in capital | 67,276 | 66,864 | |||||
Accumulated deficit | (48,035 | ) | (44,473 | ) | |||
Accumulated other comprehensive loss | (3,770 | ) | (3,907 | ) | |||
Total stockholders’ equity | 15,564 | 18,576 | |||||
Total liabilities and stockholders’ equity | $ | 38,601 | $ | 42,229 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Revenues: | |||||||
Software licenses and appliances | $ | 1,220 | $ | 1,962 | |||
Service | 5,491 | 6,774 | |||||
Total revenues | 6,711 | 8,736 | |||||
Cost of revenues: | |||||||
Software licenses and appliances | 494 | 957 | |||||
Service | 2,090 | 2,861 | |||||
Total cost of revenues | 2,584 | 3,818 | |||||
Gross profit | 4,127 | 4,918 | |||||
Operating expenses: | |||||||
Research and development | 2,109 | 2,350 | |||||
Sales and marketing | 2,451 | 3,532 | |||||
General and administrative | 2,460 | 2,970 | |||||
Amortization of purchased intangibles | 223 | 226 | |||||
Total operating expenses | 7,243 | 9,078 | |||||
Operating loss | (3,116 | ) | (4,160 | ) | |||
Other income (expense): | |||||||
Interest expense, net | (317 | ) | (12 | ) | |||
Change in fair value of warrant liability | (78 | ) | — | ||||
Other, net | (55 | ) | 36 | ||||
Total other income (expense), net | (450 | ) | 24 | ||||
Loss before income taxes | (3,566 | ) | (4,136 | ) | |||
Income tax benefit | (4 | ) | (4 | ) | |||
Net loss | $ | (3,562 | ) | $ | (4,132 | ) | |
Net loss per share – basic and diluted: | |||||||
Net loss per share | $ | (0.39 | ) | $ | (0.45 | ) | |
Weighted average shares outstanding | 9,245 | 9,218 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net loss | $ | (3,562 | ) | $ | (4,132 | ) | |
Other comprehensive income (loss): | |||||||
Net change in foreign currency translation adjustments | 137 | (350 | ) | ||||
Change in net unrealized gain (loss) on marketable securities, net of tax | — | 1 | |||||
Total other comprehensive income (loss) | 137 | (349 | ) | ||||
Total comprehensive loss | $ | (3,425 | ) | $ | (4,481 | ) |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Operating activities: | |||||||
Net loss | $ | (3,562 | ) | $ | (4,132 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 774 | 852 | |||||
Stock-based compensation | 413 | 351 | |||||
Accretion of debt discount and issuance costs | 111 | — | |||||
Change in fair value of warrant liability | 78 | — | |||||
Deferred income taxes | (33 | ) | (1 | ) | |||
Changes in operating assets and liabilities: | |||||||
Receivables | 2,896 | 3,911 | |||||
Income taxes receivable / payable | 148 | 245 | |||||
Prepaid expenses and other assets | (23 | ) | (1,170 | ) | |||
Accounts payable and other accrued liabilities | (367 | ) | (101 | ) | |||
Accrued compensation | (245 | ) | (1,006 | ) | |||
Deferred revenue | 178 | (756 | ) | ||||
Deferred rent | (75 | ) | (48 | ) | |||
Other non-current liabilities | — | (125 | ) | ||||
Net cash provided by (used in) operating activities | 293 | (1,980 | ) | ||||
Investing activities: | |||||||
Sales and maturities of marketable securities | — | 4,000 | |||||
Purchases of property and equipment | (14 | ) | (12 | ) | |||
Net cash provided by (used in) investing activities | (14 | ) | 3,988 | ||||
Financing activities: | |||||||
Payment for term loan issuance costs | (125 | ) | — | ||||
Principal payments on financing obligations | (125 | ) | (118 | ) | |||
Common stock repurchases to settle employee withholding liability | — | (1 | ) | ||||
Net cash used in financing activities | (250 | ) | (119 | ) | |||
Effect of exchange rate changes on cash | 18 | 50 | |||||
Net increase in cash and cash equivalents | 47 | 1,939 | |||||
Cash and cash equivalents, beginning of period | 10,364 | 7,072 | |||||
Cash and cash equivalents, end of period | $ | 10,411 | $ | 9,011 | |||
Supplemental disclosures of net cash paid (received) during the period: | |||||||
Income taxes, net | $ | (125 | ) | $ | 22 | ||
Interest, net | $ | 208 | $ | 18 |
(1) | Nature of Business and Basis of Presentation |
(2) | Intangible Assets and Goodwill |
March 31, 2017 | |||||||||||||||||||
Customer Relationships | Developed Technology | Trademarks / Trade-Names | Covenants Not to Compete | Total | |||||||||||||||
Original cost | $ | 4,774 | $ | 7,945 | $ | 2,179 | $ | 31 | $ | 14,929 | |||||||||
Accumulated amortization | (1,720 | ) | (4,861 | ) | (694 | ) | (31 | ) | (7,306 | ) | |||||||||
Net identifiable intangible assets | $ | 3,054 | $ | 3,084 | $ | 1,485 | $ | — | $ | 7,623 | |||||||||
Weighted-average useful lives (years) | 10 | 6 | 15 | 2 | 9 |
December 31, 2016 | |||||||||||||||||||
Customer Relationships | Developed Technology | Trademarks / Trade-Names | Covenants Not to Compete | Total | |||||||||||||||
Original cost | $ | 4,759 | $ | 7,917 | $ | 2,178 | $ | 31 | $ | 14,885 | |||||||||
Accumulated amortization | (1,577 | ) | (4,509 | ) | (658 | ) | (31 | ) | (6,775 | ) | |||||||||
Net identifiable intangible assets | $ | 3,182 | $ | 3,408 | $ | 1,520 | $ | — | $ | 8,110 | |||||||||
Weighted-average useful lives (years) | 10 | 6 | 15 | 2 | 9 |
Three Months Ended March 31, 2017 | |||
Balance, beginning of period | $ | 8,110 | |
Amortization expense | (516 | ) | |
Currency translation | 29 | ||
Balance, end of period | $ | 7,623 |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Amortization expense associated with the developed technology included in cost of revenues | $ | 293 | $ | 322 | ||||
Amortization expense associated with other acquired intangible assets included in operating expenses | 223 | 226 | ||||||
Total amortization expense | $ | 516 | $ | 548 |
(3) | Commitments and Contingencies |
March 31, 2017 | December 31, 2016 | ||||||
Computer and network equipment | $ | 511 | $ | 511 | |||
Furniture | 287 | 287 | |||||
Assets acquired under capital lease obligations | 798 | 798 | |||||
Accumulated depreciation | (432 | ) | (372 | ) | |||
Assets acquired under capital lease obligations, net | $ | 366 | $ | 426 |
March 31, 2017 | December 31, 2016 | ||||||
Capital leases and other financing obligations, current | $ | 473 | $ | 508 | |||
Capital leases and other financing obligations, noncurrent | 80 | 170 | |||||
Total capital leases and other financing obligations | $ | 553 | $ | 678 |
Capital leases and other financing obligations | Operating leases | Total | |||||||||
Remainder of 2017 | $ | 406 | $ | 891 | $ | 1,297 | |||||
2018 | 171 | 976 | 1,147 | ||||||||
2019 | 3 | 522 | 525 | ||||||||
2020 | — | 298 | 298 | ||||||||
2021 | — | 300 | 300 | ||||||||
Thereafter | — | 331 | 331 | ||||||||
Total minimum lease payments | 580 | $ | 3,318 | $ | 3,898 | ||||||
Less amount representing interest | (27 | ) | |||||||||
Present value of net minimum lease payments | $ | 553 |
March 31, 2017 | December 31, 2016 | ||||||
Term loan, at face value | $ | 8,000 | $ | 8,000 | |||
Unamortized original issue discount | (887 | ) | (967 | ) | |||
Unamortized debt issuance costs | (510 | ) | (416 | ) | |||
Term loan | $ | 6,603 | $ | 6,617 |
• | Level 1: Inputs are unadjusted quoted prices in active markets for identical assets and liabilities. |
• | Level 2: Inputs include data points that are observable such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) such as interest rates and yield curves that are observable for the asset or liability, either directly or indirectly. |
• | Level 3: Inputs are generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect an entity’s own estimates of assumptions that market participants would use in pricing the asset or liability. |
Fair Value Measurements Using | |||||||||||||||
Total Fair Value at March 31, 2017 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Liabilities: | |||||||||||||||
Derivative warrant liability | $ | 971 | $ | — | $ | — | $ | 971 |
Fair Value Measurements Using | |||||||||||||||
Total Fair Value at December 31, 2016 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Liabilities: | |||||||||||||||
Derivative warrant liability | $ | 893 | $ | — | $ | — | $ | 893 |
Balance at December 31, 2016 | $ | 893 | ||
Change in fair value | 78 | |||
Balance at March 31, 2017 | $ | 971 |
(5) | Stock-Based Compensation |
Three Months Ended March 31, | |||||
2017 | 2016 | ||||
Stock options | 125,000 | — | |||
Restricted stock awards | 62,500 | — | |||
Performance stock units | 166,149 | — |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Stock-based compensation cost, before income tax benefit: | ||||||||
Stock options | $ | 126 | $ | 148 | ||||
Restricted stock awards and restricted stock units | 209 | 203 | ||||||
Performance stock units | 78 | — | ||||||
Total stock-based compensation | $ | 413 | $ | 351 | ||||
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Stock-based compensation cost included in: | ||||||||
Cost of revenues | $ | 14 | $ | (7 | ) | |||
Operating expenses | 399 | 358 | ||||||
Total stock-based compensation | $ | 413 | $ | 351 |
(6) | Income Taxes |
(7) | Computation of Net Loss Per Share of Common Stock |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net loss per share – basic and diluted | |||||||
Net loss | $ | (3,562 | ) | $ | (4,132 | ) | |
Weighted average shares outstanding – basic and diluted | 9,245 | 9,218 | |||||
Net loss per share – basic and diluted | $ | (0.39 | ) | $ | (0.45 | ) |
Three Months Ended March 31, | ||||||
2017 | 2016 | |||||
Stock options | 1,529 | 1,563 | ||||
Warrant | 314 | — | ||||
Restricted stock units | 120 | 40 | ||||
Total anti-dilutive | 1,963 | 1,603 |
(8) | Investment in Software Company |
(9) | Recently Issued Accounting Standards |
• | Software revenue associated with non-cancellable subscription or, term-based, software license arrangements will generally be recognized upon delivery of the license. Historically, these arrangements have been material, and the Company currently recognizes this revenue ratably over the term of the software license; and |
• | The Company expects that the accounting for software revenue derived from perpetual based licensing arrangements and associated services revenues will not be materially impacted. |
Three Months Ended March 31, | |||||||||
Percentage of Revenues | Percent Increase (Decrease) | ||||||||
2017 | 2016 | 2016 to 2017 | |||||||
Revenues | 100.0 | % | 100.0 | % | (23 | )% | |||
Cost of revenues | (38.5 | ) | (43.7 | ) | (32 | ) | |||
Gross profit | 61.5 | 56.3 | (16 | ) | |||||
Operating expenses: | |||||||||
Research and development | 31.4 | 26.9 | (10 | ) | |||||
Sales and marketing | 36.5 | 40.4 | (31 | ) | |||||
General and administrative | 36.7 | 34.0 | (17 | ) | |||||
Amortization of purchased intangibles | 3.3 | 2.6 | (1 | ) | |||||
Total operating expenses | 107.9 | 103.9 | (20 | ) | |||||
Operating loss | (46.4 | ) | (47.6 | ) | (25 | ) | |||
Other income (expense) | (6.7 | ) | 0.3 | n/m | |||||
Loss before income taxes | (53.1 | ) | (47.3 | ) | (14 | ) | |||
Income tax benefit | — | — | — | ||||||
Net loss | (53.1 | )% | (47.3 | )% | (14 | )% |
Three Months Ended March 31, | |||||||||||||||
Increase (Decrease) | Percent Increase (Decrease) | ||||||||||||||
2017 | 2016 | 2016 to 2017 | 2016 to 2017 | ||||||||||||
Software licenses and appliances | $ | 1,220 | $ | 1,962 | $ | (742 | ) | (38 | )% | ||||||
Service | |||||||||||||||
Subscription, maintenance and support | 4,838 | 5,525 | (687 | ) | (12 | ) | |||||||||
Professional services and other | 653 | 1,249 | (596 | ) | (48 | ) | |||||||||
Total service | 5,491 | 6,774 | (1,283 | ) | (19 | ) | |||||||||
Total revenues | $ | 6,711 | $ | 8,736 | $ | (2,025 | ) | (23 | )% |
Three Months Ended March 31, | |||||||||||||||
Increase (Decrease) | Percent Increase (Decrease) | ||||||||||||||
2017 | 2016 | 2016 to 2017 | 2016 to 2017 | ||||||||||||
Gross profit: | |||||||||||||||
Software licenses and appliances | $ | 726 | $ | 1,005 | $ | (279 | ) | (28 | )% | ||||||
Service | 3,401 | 3,913 | (512 | ) | (13 | ) | |||||||||
Total gross profit | $ | 4,127 | $ | 4,918 | $ | (791 | ) | (16 | )% | ||||||
Gross margin: | |||||||||||||||
Software licenses and appliances | 59.5 | % | 51.2 | % | 8.3 | % | |||||||||
Service | 61.9 | % | 57.8 | % | 4.1 | % | |||||||||
Total gross margin | 61.5 | % | 56.3 | % | 5.2 | % |
Three Months Ended March 31, | |||||||||||||||
Increase (Decrease) | Percent Increase (Decrease) | ||||||||||||||
2017 | 2016 | 2016 to 2017 | 2016 to 2017 | ||||||||||||
Operating expenses: | |||||||||||||||
Research and development | $ | 2,109 | $ | 2,350 | $ | (241 | ) | (10 | )% | ||||||
Sales and marketing | 2,451 | 3,532 | (1,081 | ) | (31 | ) | |||||||||
General and administrative | 2,460 | 2,970 | (510 | ) | (17 | ) | |||||||||
Amortization of purchased intangibles | 223 | 226 | (3 | ) | (1 | ) | |||||||||
Total operating expenses | $ | 7,243 | $ | 9,078 | $ | (1,835 | ) | (20 | )% |
Three Months Ended March 31, | |||||||||||||||
Increase (Decrease) | Percent Increase (Decrease) | ||||||||||||||
2017 | 2016 | 2016 to 2017 | 2016 to 2017 | ||||||||||||
Compensation and employee-related | $ | 1,635 | $ | 1,646 | $ | (11 | ) | (1 | )% | ||||||
Overhead and other expenses | 295 | 336 | (41 | ) | (12 | ) | |||||||||
Outside services and consulting | 93 | 257 | (164 | ) | (64 | ) | |||||||||
Depreciation and amortization | 38 | 60 | (22 | ) | (37 | ) | |||||||||
Equity-based compensation | 48 | 51 | (3 | ) | (6 | ) | |||||||||
Total research and development expenses | $ | 2,109 | $ | 2,350 | $ | (241 | ) | (10 | )% |
Three Months Ended March 31, | |||||||||||||||
Increase (Decrease) | Percent Increase (Decrease) | ||||||||||||||
2017 | 2016 | 2016 to 2017 | 2016 to 2017 | ||||||||||||
Compensation and employee-related | $ | 1,899 | $ | 2,801 | $ | (902 | ) | (32 | )% | ||||||
Overhead and other expenses | 266 | 399 | (133 | ) | (33 | ) | |||||||||
Outside services and consulting | 207 | 211 | (4 | ) | (2 | ) | |||||||||
Depreciation and amortization | 19 | 32 | (13 | ) | (41 | ) | |||||||||
Equity-based compensation | 60 | 89 | (29 | ) | (33 | ) | |||||||||
Total sales and marketing expenses | $ | 2,451 | $ | 3,532 | $ | (1,081 | ) | (31 | )% |
Three Months Ended March 31, | |||||||||||||||
Increase (Decrease) | Percent Increase (Decrease) | ||||||||||||||
2017 | 2016 | 2016 to 2017 | 2016 to 2017 | ||||||||||||
Compensation and employee-related | $ | 977 | $ | 1,194 | $ | (217 | ) | (18 | )% | ||||||
Overhead and other expenses | 362 | 423 | (61 | ) | (14 | ) | |||||||||
Outside services and consulting | 639 | 945 | (306 | ) | (32 | ) | |||||||||
Depreciation and amortization | 191 | 190 | 1 | 1 | |||||||||||
Equity-based compensation | 291 | 218 | 73 | 33 | |||||||||||
Total general and administrative expenses | $ | 2,460 | $ | 2,970 | $ | (510 | ) | (17 | )% |
March 31, 2017 | December 31, 2016 | ||||||
Cash and cash equivalents | $ | 10,411 | $ | 10,364 | |||
Working capital | $ | 3,053 | $ | 5,215 | |||
Financing obligations | $ | 553 | $ | 678 | |||
Term loan | 6,603 | 6,617 | |||||
Financing obligations and term loan | $ | 7,156 | $ | 7,295 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Cash flows provided by (used in): | |||||||
Operating activities | $ | 293 | $ | (1,980 | ) | ||
Investing activities | (14 | ) | 3,988 | ||||
Financing activities | (250 | ) | (119 | ) | |||
Effect of exchange rate changes on cash | 18 | 50 | |||||
Net change in cash and cash equivalents | $ | 47 | $ | 1,939 | |||
Net change in marketable securities | $ | — | $ | (3,999 | ) |
Monthly Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as part of Publicly Announced Plans or Programs | Maximum Number of Shares that may yet be Purchased under the Plans or Programs (at end of period) | ||||
January 2017 | — | $— | — | 778,365 | ||||
February 2017 | 383 | $2.20 | — | 778,365 | ||||
March 2017 | — | $— | — | 778,365 |
(a) | The following exhibits are included herein: |
31.1 | Certificate of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Exchange Act. |
31.2 | Certificate of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Exchange Act. |
32. | Certifications pursuant to 18 U.S.C. §1350. |
QUMU CORPORATION | ||||
Registrant | ||||
Date: | May 9, 2017 | By: | /s/ Vern Hanzlik | |
Vern Hanzlik | ||||
President and Chief Executive Officer | ||||
(Principal Executive Officer) | ||||
Date: | May 9, 2017 | By: | /s/ Peter J. Goepfrich | |
Peter J. Goepfrich | ||||
Chief Financial Officer | ||||
(Principal Financial Officer) | ||||
(Principal Accounting Officer) |
1. | I have reviewed this Form 10-Q of Qumu Corporation; |
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; and |
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. |
Date: | May 9, 2017 | /s/ Vern Hanzlik | |
Vern Hanzlik | |||
President and Chief Executive Officer |
1. | I have reviewed this Form 10-Q of Qumu Corporation; |
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; and |
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. |
Date: | May 9, 2017 | /s/ Peter J. Goepfrich | |
Peter J. Goepfrich | |||
Chief Financial Officer |
(1) | The accompanying Quarterly Report on Form 10-Q for the period ended March 31, 2017 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the accompanying report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 9, 2017 | /s/ Vern Hanzlik | |
Vern Hanzlik | |||
President and Chief Executive Officer | |||
Date: | May 9, 2017 | /s/ Peter J. Goepfrich | |
Peter J. Goepfrich | |||
Chief Financial Officer |
Document And Entity Information - shares |
3 Months Ended | |
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Mar. 31, 2017 |
May 04, 2017 |
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Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2017 | |
Current Fiscal Year End Date | --12-31 | |
Document Period End Date | Mar. 31, 2017 | |
Entity Registrant Name | QUMU CORP | |
Entity Central Index Key | 0000892482 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 9,284,114 |
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
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Statement of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 20 | $ 34 |
Property and equipment, accumulated depreciation and amortization | $ 3,970 | $ 3,711 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 29,750,000 | 29,750,000 |
Common stock, shares issued | 9,284,114 | 9,227,247 |
Common stock, shares outstanding | 9,284,114 | 9,227,247 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 250,000 | 250,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statements Of Operations (Unaudited) - USD ($) shares in Thousands |
3 Months Ended | |
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Mar. 31, 2017 |
Mar. 31, 2016 |
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Revenues: | ||
Software licenses and appliances | $ 1,220,000 | $ 1,962,000 |
Service | 5,491,000 | 6,774,000 |
Total revenues | 6,711,000 | 8,736,000 |
Cost of revenues: | ||
Software licenses and appliances | 494,000 | 957,000 |
Service | 2,090,000 | 2,861,000 |
Total cost of revenues | 2,584,000 | 3,818,000 |
Gross profit | 4,127,000 | 4,918,000 |
Operating expenses: | ||
Research and development | 2,109,000 | 2,350,000 |
Sales and marketing | 2,451,000 | 3,532,000 |
General and administrative | 2,460,000 | 2,970,000 |
Amortization of purchased intangibles | 223,000 | 226,000 |
Total operating expenses | 7,243,000 | 9,078,000 |
Operating loss | (3,116,000) | (4,160,000) |
Other income (expense): | ||
Interest expense, net | (317,000) | (12,000) |
Change in fair value of warrant liability | (78,000) | 0 |
Other, net | (55,000) | 36,000 |
Total other income (expense), net | (450,000) | 24,000 |
Loss before income taxes | (3,566,000) | (4,136,000) |
Income tax benefit | (4,000) | (4,000) |
Net loss | $ (3,562,000) | $ (4,132,000) |
Weighted average shares outstanding | 9,245 | 9,218 |
Earnings per share, basic and diluted | $ (0.39) | $ (0.45) |
Condensed Consolidated Statements Of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2017 |
Mar. 31, 2016 |
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Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (3,562) | $ (4,132) |
Other comprehensive income (loss): | ||
Net change in foreign currency translation adjustments | 137 | (350) |
Change in net unrealized gain (loss) on marketable securities, net of tax | 0 | 1 |
Total other comprehensive income (loss) | 137 | (349) |
Total comprehensive loss | $ (3,425) | $ (4,481) |
Nature of Business and Basis of Presentation |
3 Months Ended |
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Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | Nature of Business and Basis of Presentation Qumu Corporation (the "Company") provides the software applications businesses use to create, manage, secure, deliver and measure the success of their videos. The Company's innovative solutions release the power in video to engage and empower employees, partners and clients, allowing organizations around the world to realize the greatest possible value from video they create and publish. Whatever the audience size, viewer device or network configuration, the Company's solutions are how business does video. The Company views its operations and manages its business as one segment and one reporting unit. Factors used to identify the Company's single operating segment and reporting unit include the financial information available for evaluation by the chief operating decision maker in making decisions about how to allocate resources and assess performance. The Company manages the marketing of its products and services through regional sales representatives and independent distributors in the United States and international markets. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accompanying condensed consolidated financial statements are unaudited and have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, pursuant to the rules and regulations of the Securities and Exchange Commission. Pursuant to such rules and regulations, certain financial information and footnote disclosures normally included in a complete set of financial statements have been condensed or omitted. However, in the opinion of management, the financial statements include all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the financial position and results of operations and cash flows of the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2016. The Company has experienced recurring operating losses and negative cash flows from operating activities and during the quarter ended March 31, 2017 was unable to project future compliance with certain covenants in its credit agreement under certain financial scenarios. The ability of the Company to continue as a going concern is dependent upon the Company maintaining compliance with its covenants. If an event of default occurs due to the Company not maintaining compliance with its covenants, the lender may accelerate the repayment of outstanding principal, which could negatively impact the Company’s ability to fund its working capital requirements, capital expenditures and general corporate expenses. On March 31, 2017, the Company amended its credit agreement and is projecting future compliance with the amended covenants with an operating plan that, when combined with its expense reduction program, further aligns resources with revenue. |
Intangible Assets and Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible Assets The Company’s amortizable intangible assets consisted of the following (in thousands):
Changes to the carrying amount of net amortizable intangible assets for the three months ended March 31, 2017 consisted of the following (in thousands):
Amortization expense of intangible assets consisted of the following (in thousands):
Goodwill On October 3, 2014, the Company completed the acquisition of Kulu Valley, Ltd., subsequently renamed Qumu Ltd, and recognized $8.8 million of goodwill and $6.7 million of intangible assets. The goodwill balance of $6.8 million at March 31, 2017 reflects the impact of foreign currency exchange rate fluctuations since the acquisition date. The gross carrying amount of goodwill related to the 2011 acquisition of Qumu, Inc. of $22.2 million was fully impaired in 2012. During the three months ended March 31, 2017, the Company’s stock price traded at levels which caused the Company’s enterprise value, excluding any control premium, to approximate its book value, resulting in increased risk of a potential impairment of goodwill. As of March 31, 2017, the Company’s market capitalization, without a control premium, exceeded its book value by approximately 68% and the Company determined there were no other triggering events necessitating a goodwill impairment analysis. Declines in the Company’s market capitalization or a downturn in its future financial performance and/or future outlook could require the Company to record goodwill and other impairment charges. While a goodwill impairment charge is a non-cash charge, it would have a negative impact on the Company's results of operations. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Leases and Other Financing Obligations Balances for assets acquired under capital lease obligations and included in property and equipment were as follows (in thousands):
The current and long-term portions of capital leases and other financing obligations were as follows (in thousands):
The Company leases certain of its facilities and some of its equipment under non-cancelable operating lease arrangements. The rental payments under these leases are charged to expense on a straight-line basis over the non-cancelable term of the lease. Future minimum payments under capital lease obligations, other financing obligations, and non-cancelable operating leases, excluding property taxes and other operating expenses, as of March 31, 2017 are as follows (in thousands):
Term Loan On March 31, 2017, the Company and its wholly-owned subsidiary, Qumu, Inc., entered into an Amendment No. 1 to its credit agreement dated October 21, 2016 with HCP-FVD, LLC as lender and Hale Capital Partners, LP as administrative agent. Through the Amendment No. 1, the parties agreed to reduce the minimum core bookings covenant from $10 million to $8 million for any computation period ending prior to June 30, 2018 (returning to $10 million for any computation period ending on or after June 30, 2018) and to increase the covenant relating to minimum amount of eligible accounts receivable and cash from 100% to 118% of outstanding obligations. The parties also amended the credit agreement to require prepayment of 100% of the net cash proceeds of any “Asset Disposition” as defined in the credit agreement and to increase the prepayment fee to 10% of the principal amount prepaid if prepayment occurs at any time prior to October 21, 2019. In connection with the amendment, the Company paid the administrative agent an amendment fee of $125,000, which is included in unamortized debt issuance costs as of March 31, 2017. The $8.0 million term loan is scheduled to mature on October 21, 2019 and requires payment of interest monthly at the prime rate plus 6.0%. As of March 31, 2017, interest was payable at 10.0% and the effective interest rate, which includes the impact of accreting the original issue discount and debt issuance costs to interest expense over the term of the loan, was 18.6%. The term loan is reported in the Company's consolidated balance sheets as follows (in thousands):
The term loan had an estimated fair value of $7.2 million as of March 31, 2017. The fair value of the term loan is estimated using a discounted cash flow analysis based on the Company’s current incremental borrowing rate. As the contractual terms of the loan provide all the necessary inputs for this calculation, the term loan is classified as Level 2 within the fair value hierarchy. The estimated fair value is not necessarily indicative of the amount that would be realized in a current market exchange. The credit agreement contains affirmative and negative covenants and requirements relating to the Company and its operations, with which the Company was in compliance as of March 31, 2017. Contingencies The Company is exposed to a number of asserted and unasserted claims encountered in the normal course of business. Legal costs related to loss contingencies are expensed as incurred. In the opinion of management, the resolution of these matters will not have a material adverse effect on the Company’s financial position or results of operations. The Company’s standard arrangements include provisions indemnifying customers against liabilities if the Company's products infringe a third-party’s intellectual property rights. The Company has not incurred any costs in its continuing operations as a result of such indemnifications and has not accrued any liabilities related to such contingent obligations in the accompanying condensed consolidated financial statements. |
Fair Value Measurements (Notes) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] | Fair Value Measurements A hierarchy for inputs used in measuring fair value is in place that distinguishes market data between observable independent market inputs and unobservable market assumptions by the reporting entity. The hierarchy is intended to maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that the most observable inputs be used when available. Three levels within the hierarchy may be used to measure fair value:
The Company’s assets and liabilities measured at fair value on a recurring basis and the fair value hierarchy utilized to determine such fair values is as follows at March 31, 2017 and December 31, 2016 (in thousands):
In conjunction with the October 21, 2016 debt financing, the Company issued a warrant for the purchase of up to 314,286 shares of the Company's common stock, the entire portion of which remained unexercised and outstanding at December 31, 2016. The warrant, which expires on October 21, 2026, has an exercise price of $2.80 per share and is transferrable. The warrant contains a cash settlement feature contingent upon the occurrence of certain events defined in the warrant agreement. Because of this cash settlement feature, the warrant is subject to derivative accounting as prescribed under ASC 815. Accordingly, the fair value of the warrant on the date of issuance was recorded in the Company’s consolidated balance sheets as a liability. The warrant liability was recorded in the Company's consolidated balance sheets at its fair value on the date of issuance and is revalued on each subsequent 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 months ended March 31, 2017, the Company recorded a non-cash loss from the change in fair value of the warrant liability of $78,000. The increase in fair value of the warrant liability during the three months ended March 31, 2017 was primarily driven by an increase in the Company’s stock price. 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 Company classified the warrant liability as Level 3 due to the lack of relevant observable market data over fair value inputs such as the probability-weighting of the various scenarios in the arrangement. The following table represents a roll forward of the fair value of the Level 3 instrument (significant unobservable inputs):
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Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The Company granted the following stock-based awards:
The stock options, restricted stock awards and performance stock units granted during the three months ended March 31, 2017 were granted under the Company's Second Amended and Restated 2007 Stock Incentive Plan (the "2007 Plan"), a shareholder approved plan. The 166,149 performance stock units were issued in connection with the 2017 Incentive Plan. In settlement of the performance stock units, the Company will issue a number of shares equal to the number of performance stock units issued multiplied by the total percentage achievement of the performance goals for the 2017 Incentive Plan. The percentage achievement for the performance stock units may not exceed 100%. On May 12, 2016, the Company’s shareholders approved an amendment to the 2007 Plan to increase the number of shares authorized under the plan by 500,000 to a total of 2,730,320 shares. The Company recognized the following expense related to its share-based payment arrangements (in thousands):
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Income Taxes |
3 Months Ended |
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Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes As of March 31, 2017 and December 31, 2016, the Company’s liability for gross unrecognized tax benefits totaled $1.1 million and $1.0 million, respectively (excluding interest and penalties). Total accrued interest and penalties relating to unrecognized tax benefits amounted to $1,000 and $3,000 on a gross basis at March 31, 2017 and December 31, 2016, respectively. The change in the liability for gross unrecognized tax benefits reflects an increase in reserves established for federal and state research and development credits. The Company does not currently expect significant changes in the amount of unrecognized tax benefits during the next twelve months. |
Computation of Net Loss Per Share of Common Stock |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Net Loss Per Share of Common Stock | Computation of Net Loss Per Share of Common Stock The following table identifies the components of net loss per basic and diluted share (in thousands, except for per share data):
Stock options, warrant and restricted stock units to acquire common shares excluded from the computation of diluted weighted-average common shares as their effect is anti-dilutive were as follows (in thousands):
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Investment in Software Company |
3 Months Ended |
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Mar. 31, 2017 | |
Investments, All Other Investments [Abstract] | |
Investment in Software Company | Investment in Software Company As of March 31, 2017 and December 31, 2016, the Company held an investment totaling $3.1 million in convertible preferred stock of BriefCam, Ltd. (“BriefCam”), a privately-held Israeli company that develops video synopsis technology to augment security and surveillance systems to facilitate review of surveillance video. The investment is included in other non-current assets. Because Qumu's ownership interest is less than 20% and it has no other rights or privileges that enable it to exercise significant influence over the operating and financial policies of BriefCam, Qumu accounts for this equity investment using the cost method. Equity securities accounted for under the cost method are reviewed quarterly for changes in circumstances or the occurrence of events that suggest the Company’s investment may not be fully recoverable. If an unrealized loss for the investment is considered to be other-than-temporary, the loss will be recognized in the consolidated statements of operations in the period the determination is made. Qumu monitors BriefCam's results of operations, business plan and capital raising activities and is not aware of any events or circumstances that would indicate a decline in the fair value below the carrying value of its investment. |
Recently Issued Accounting Standards |
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Mar. 31, 2017 | |||||||||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||||||||
Recently Issued Accounting Standards | Recently Issued Accounting Standards In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The purpose of the amendment is to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently evaluating the impact of adopting this standard, which could be material to its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which will simplify the income tax consequences, accounting for forfeitures and classification on the statements of consolidated cash flows. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. The Company adopted ASU 2016-09 effective January 1, 2017 and elected to account for forfeitures of share-based payment awards as they occur. The adoption did not have a material impact to the consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases, which will supersede the existing lease guidance and will require all leases with a term greater than 12 months to be recognized in the statements of financial position and eliminate current real estate-specific lease guidance, while maintaining substantially similar classification criteria for distinguishing between finance leases and operating leases. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact on its consolidated financial statements of adopting this standard, which will require right-of-use assets and lease liabilities be recorded in the consolidated balance sheet for operating leases. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall, which requires entities to measure equity instruments at fair value and recognize any changes in fair value in net income (loss). Entities may estimate the fair value of certain equity securities that do not have readily determinable fair value or may choose a practical expedient. If the practical expedient is elected, these investments would be recorded at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The guidance also updates certain presentation and disclosure requirements. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company is currently evaluating the impact of adopting this standard, which could be material to its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In July 2015, the FASB voted to amend ASU 2014-09 by approving a one-year deferral of the effective date as well as providing the option to early adopt the standard on the original effective date. The new standard is effective for the Company on January 1, 2018 but may be early adopted effective January 1, 2017. The new revenue standard may be applied using either of the following transition methods: a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or a modified retrospective approach with the cumulative effect of initially adopting the standard recognized at the date of adoption (which includes additional footnote disclosures). The Company will adopt the standard in the first quarter of 2018 and preliminarily expects to use the modified retrospective method. However, the Company is continuing to evaluate the impact of the standard, and its adoption method is subject to change. Currently, the Company is in the process of reviewing its historical contracts to quantify the impact that the adoption of the standard will have on specific performance obligations. The Company is also continuing to evaluate the impact of the standard on its recognition of costs related to obtaining customer contracts (namely, sales commissions). While the Company continues to assess all potential impacts of this new standard, it currently believes the most significant impacts relate to the accounting for the timing of revenue recognition of subscription, or term-based, software license arrangements. Specifically, under the new standard:
The adoption of the standard will require the implementation of new accounting processes, which will change the Company's internal controls over revenue recognition, contract acquisition costs and financial reporting. The Company is designing and implementing these controls in anticipation adopting the new standard January 1, 2018. |
Intangible Assets and Goodwill (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes In Intangible Assets | The Company’s amortizable intangible assets consisted of the following (in thousands):
Changes to the carrying amount of net amortizable intangible assets for the three months ended March 31, 2017 consisted of the following (in thousands):
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Amortization Expense | Amortization expense of intangible assets consisted of the following (in thousands):
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Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Capital Leased Assets | Balances for assets acquired under capital lease obligations and included in property and equipment were as follows (in thousands):
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Schedule of Debt | The current and long-term portions of capital leases and other financing obligations were as follows (in thousands):
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Schedule of Future Minimum Lease Payments for Capital Leases | Future minimum payments under capital lease obligations, other financing obligations, and non-cancelable operating leases, excluding property taxes and other operating expenses, as of March 31, 2017 are as follows (in thousands):
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Schedule of Long-term Debt Instruments | The term loan is reported in the Company's consolidated balance sheets as follows (in thousands):
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The Company’s assets and liabilities measured at fair value on a recurring basis and the fair value hierarchy utilized to determine such fair values is as follows at March 31, 2017 and December 31, 2016 (in thousands):
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Fair Value, Liabilities Measured on Recurring Basis [Table Text Block] | The Company classified the warrant liability as Level 3 due to the lack of relevant observable market data over fair value inputs such as the probability-weighting of the various scenarios in the arrangement. The following table represents a roll forward of the fair value of the Level 3 instrument (significant unobservable inputs):
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Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Share-Based Payment Arrangements | The Company granted the following stock-based awards:
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Schedule of Allocation of Share-based Compensation Costs by Plan | The Company recognized the following expense related to its share-based payment arrangements (in thousands):
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Computation of Net Loss Per Share of Common Stock (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Stock options, warrant and restricted stock units to acquire common shares excluded from the computation of diluted weighted-average common shares as their effect is anti-dilutive were as follows (in thousands):
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Components Of Net Income (Loss) Per Basic And Diluted Share | The following table identifies the components of net loss per basic and diluted share (in thousands, except for per share data):
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Nature of Business and Basis of Presentation (Details) |
3 Months Ended |
---|---|
Mar. 31, 2017
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 1 |
Intangible Assets and Goodwill (Intangible Assets Rollforward) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Finite-lived Intangible Assets [Roll Forward] | ||
Balance, beginning of period | $ 8,110 | |
Amortization expense | (516) | $ (548) |
Currency translation | (29) | |
Balance, end of period | $ 7,623 |
Intangible Assets and Goodwill (Amortization Expense) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Amortization expense | ||
Amortization of purchased intangibles | $ 223 | $ 226 |
Amortization expense | (516) | (548) |
Cost of revenues | ||
Amortization expense | ||
Amortization of purchased intangibles | 293 | 322 |
Operating expenses | ||
Amortization expense | ||
Amortization of purchased intangibles | $ 223 | $ 226 |
Intangible Assets and Goodwill (Narrative) (Details) - USD ($) $ in Thousands |
1 Months Ended | |||
---|---|---|---|---|
Oct. 03, 2014 |
Oct. 30, 2011 |
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Goodwill And Intangible Assets [Line Items] | ||||
Goodwill | $ 6,808 | $ 6,749 | ||
Reporting unit, percentage of fair value in excess of carrying amount | 68.00% | |||
Kulu Valley Ltd | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Goodwill | $ 8,800 | $ 6,800 | ||
Intangible assets acquired during the period | $ 6,700 | |||
Qumu Inc | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Goodwill acquired during period | $ 22,200 |
Commitments and Contingencies (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Capital Leased Assets [Line Items] | ||
Capital Leased Assets, Gross | $ 798 | $ 798 |
Capital Leases, Lessee Balance Sheet, Assets by Major Class, Accumulated Depreciation | (432) | (372) |
Capital Leases, Balance Sheet, Assets by Major Class, Net | 366 | 426 |
Computer and network equipment | ||
Capital Leased Assets [Line Items] | ||
Capital Leased Assets, Gross | 511 | 511 |
Furniture | ||
Capital Leased Assets [Line Items] | ||
Capital Leased Assets, Gross | $ 287 | $ 287 |
Commitments and Contingencies (Schedule of Capital Leases and Other Financing Obligations) (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Capital leases and other financing obligations, current | $ 473 | $ 508 |
Capital leases and other financing obligations, noncurrent | 80 | 170 |
Capital Lease Obligations | $ 553 | $ 678 |
Commitments and Contingencies (Future Minimum Lease Payments) (Details) $ in Thousands |
Mar. 31, 2017
USD ($)
|
---|---|
Contractual Obligation, Fiscal Year Maturity Schedule [Abstract] | |
Remainder of 2017 | $ 1,297 |
2018 | 1,147 |
2019 | 525 |
2020 | 298 |
2021 | 300 |
Thereafter | 331 |
Total minimum lease payments | 3,898 |
Capital leases and other financing obligations | |
Remainder of 2017 | 406 |
2018 | 171 |
2019 | 3 |
2020 | 0 |
2021 | 0 |
Thereafter | 0 |
Total minimum lease payments | 580 |
Less amount representing interest | (27) |
Present value of net minimum lease payments | 553 |
Operating leases | |
Remainder of 2017 | 891 |
2018 | 976 |
2019 | 522 |
2020 | 298 |
2021 | 300 |
Thereafter | 331 |
Total minimum lease payments | $ 3,318 |
Fair Value Measurements Narrative (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Oct. 21, 2016 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant shares | 314,286 | ||
Warrant, exercise price | $ 2.80 | ||
Change in fair value of warrant liability | $ (78,000) | $ 0 | |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Change in fair value of warrant liability | $ (78,000) |
Fair Value Measurements Rollforward (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at December 31, 2016 | $ 893,000 | |
Change in fair value of warrant liability | 78,000 | $ 0 |
Balance at March 31, 2017 | 971,000 | |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at December 31, 2016 | 893,000 | |
Change in fair value of warrant liability | 78,000 | |
Balance at March 31, 2017 | $ 971,000 |
Stock-Based Compensation (Schedule of Stock-based Awards Granted) (Details) - 2007 Stock Incentive Plan - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 125,000 | 0 |
Restricted stock awards and restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 62,500 | 0 |
Performance stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 166,149 | 0 |
Stock-Based Compensation Narrative (Details) - 2007 Stock Incentive Plan - shares |
3 Months Ended | ||
---|---|---|---|
May 12, 2016 |
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 500,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,730,320 | ||
Performance stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 166,149 | 0 |
Income Taxes (Details) - USD ($) |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits | $ 1,100,000 | $ 1,000,000 |
Accrued interest and penalties relating to unrecognized tax benefits | $ 1,000 | $ 3,000 |
Investment in Software Company (Details) - Briefcam Ltd. - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Cost method investments | $ 3.1 | $ 3.1 |
Maximum | ||
Minority ownership interest (less than 20%) | 20.00% | 20.00% |
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