Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2021shares | |
Document And Entity Information [Line Items] | |
Entity Registrant Name | UTStarcom Holdings Corp. |
Entity Central Index Key | 0001030471 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2021 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Shell Company | false |
Entity Emerging Growth Company | false |
Entity Common Stock, Shares Outstanding | 36,113,940 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | FY |
Entity Interactive Data Current | Yes |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Registration Statement | false |
Entity Bankruptcy Proceedings, Reporting Current | false |
Document Accounting Standard | U.S. GAAP |
Entity File Number | 001-35216 |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | 4th Floor, South Wing |
Entity Address, Address Line Two | 368 Liuhe Road, Binjiang District |
Entity Address, City or Town | Hangzhou |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 310052 |
Title of 12(g) Security | Ordinary Shares, $0.00375 par value |
Trading Symbol | UTSI |
Security Exchange Name | NASDAQ |
Auditor Firm ID | 1487 |
Auditor Name | GRANT THORNTON |
Auditor Location | Shanghai, China |
Business Contact | |
Document And Entity Information [Line Items] | |
Entity Address, Address Line One | 4th Floor, South Wing, 368 Liuhe Road |
Entity Address, Address Line Two | Binjiang District |
Entity Address, City or Town | Hangzhou |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 310052 |
Contact Personnel Name | Investor Relations |
City Area Code | 86-571 |
Local Phone Number | 8192-8888 |
Contact Personnel Email Address | UTSI-IR@utstar.com |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 53,797 | $ 34,221 |
Short-term investments | 2,100 | |
Notes receivable | 108 | 58 |
Accounts receivable, net of allowances for credit losses of $6,631 and $15,982 in 2021 and 2020, respectively | 27,445 | 49,623 |
Inventories | 1,537 | 6,695 |
Deferred costs | 19 | 12 |
Prepaid and other current assets | 4,811 | 5,108 |
Short-term restricted cash | 10,076 | 12,088 |
Total current assets | 97,793 | 109,905 |
Property, plant and equipment, net | 602 | 620 |
Operating lease right-of-use assets, net | 4,734 | 1,183 |
Long-term investments | 0 | 0 |
Deferred tax assets | 2,131 | 4,271 |
Long-term restricted cash | 2,403 | 2,079 |
Other long-term assets | 616 | 666 |
Total assets | 108,279 | 118,724 |
Current liabilities: | ||
Accounts payable | 19,031 | 25,120 |
Income taxes payable | 8,787 | 5,934 |
Customer advances | 231 | 391 |
Deferred revenue | 80 | 410 |
Operating lease liabilities, current | 1,411 | 1,217 |
Employee payroll and compensation | 2,514 | 2,925 |
Other current liabilities | 3,373 | 4,045 |
Total current liabilities | 35,427 | 40,042 |
Long-term deferred revenue | 26 | 25 |
Operating lease liabilities, non-current | 3,496 | 256 |
Other long-term liabilities | 979 | 1,000 |
Total liabilities | 39,928 | 41,323 |
Commitments and contingencies (Note 7) | ||
Shareholders' equity: | ||
Ordinary shares: $0.00375 par value; 250,000 authorized shares; 41,123 and 40,907 shares issued at December 31, 2021 and December 31, 2020, respectively; 36,114 and 35,898 shares outstanding at December 31, 2021 and December 31, 2020, respectively | 123 | 123 |
Additional paid-in capital | 1,266,822 | 1,266,318 |
Treasury stock, at cost: 5,009 and 5,009 shares at December 31, 2021 and December 31, 2020, respectively | (12,322) | (12,322) |
Accumulated deficit | (1,246,207) | (1,240,379) |
Accumulated other comprehensive income | 59,935 | 63,661 |
Total shareholders' equity | 68,351 | 77,401 |
Total liabilities and shareholders' equity | $ 108,279 | $ 118,724 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Statement Of Financial Position [Abstract] | ||
Allowances for doubtful accounts (in dollars) | $ 6,631 | $ 15,982 |
Ordinary share, par value (in dollars per share) | $ 0.00375 | $ 0.00375 |
Ordinary share, authorized shares | 250,000,000 | 250,000,000 |
Ordinary share, shares issued | 41,123,000 | 40,907,000 |
Ordinary share, shares outstanding | 36,114,000 | 35,898,000 |
Treasury shares | 5,009,000 | 5,009,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Net sales | ||||
Net sales | [1] | $ 15,921 | $ 24,310 | $ 65,623 |
Cost of net sales | ||||
Cost of net sales | 16,996 | 20,781 | 41,466 | |
Gross profit (loss) | (1,075) | 3,529 | 24,157 | |
Operating expenses: | ||||
Selling, general and administrative | [2] | (2,642) | 18,689 | 15,827 |
Research and development | 6,886 | 8,083 | 14,467 | |
Total operating expenses | 4,244 | 26,772 | 30,294 | |
Operating loss | (5,319) | (23,243) | (6,137) | |
Interest income | 1,136 | 990 | 1,337 | |
Interest expense | (10) | (16) | ||
Other income (expense), net | 1,649 | (2,166) | 872 | |
Investment impairment | (1,029) | |||
Loss before income taxes | (2,534) | (25,458) | (3,944) | |
Income tax benefit (expense) | (3,294) | 1,782 | 31 | |
Net loss | $ (5,828) | $ (23,676) | $ (3,913) | |
Net loss per share Basic | $ (0.16) | $ (0.66) | $ (0.11) | |
Net loss per share Diluted | $ (0.16) | $ (0.66) | $ (0.11) | |
Weighted average shares outstanding-Basic | 36,027 | 35,881 | 35,556 | |
Weighted average shares outstanding-Diluted | 36,027 | 35,881 | 35,556 | |
Net loss | $ (5,828) | $ (23,676) | $ (3,913) | |
Other comprehensive income (loss), net of tax | ||||
Net change in cumulative translation adjustment | (3,726) | 1,560 | 529 | |
Comprehensive loss | (9,554) | (22,116) | (3,384) | |
Products | ||||
Net sales | ||||
Net sales | [1] | 2,323 | 12,385 | 43,722 |
Cost of net sales | ||||
Cost of net sales | 6,681 | 11,148 | 29,566 | |
Services | ||||
Net sales | ||||
Net sales | [1] | 13,598 | 11,925 | 21,901 |
Cost of net sales | ||||
Cost of net sales | $ 10,315 | $ 9,633 | $ 11,900 | |
[1] | Revenue recognized for the years ended December 31, 2021, 2020 and 2019 that was included in deferred revenue (including current and non-current) and customer advances as of the beginning of each year was $ 0.4 million, $ 1.2 million and $ 2.8 million, respectively. | |||
[2] | Allowances for credit losses of ($ 9.2 million), $ 9.4 million and $ 4.4 million were recognized as selling expenses in 2021, 2020 and 2019, respectively. |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | |||
Revenue recognized | $ 0.4 | $ 1.2 | $ 2.8 |
Selling expenses recognized | $ (9.2) | $ 9.4 | $ 4.4 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Ordinary Shares | Additional Paid-in Capital | Treasury Stock | (Accumulated Deficit) | Accumulated Other Comprehensive Income |
Balance at Dec. 31, 2018 | $ 102,166 | $ 123 | $ 1,264,160 | $ (10,899) | $ (1,212,790) | $ 61,572 |
Balance (in shares) at Dec. 31, 2018 | 35,317,742 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Ordinary shares issued upon option exercise | 56 | 56 | ||||
Ordinary shares issued upon option exercise (in shares) | 25,000 | |||||
Restricted shares issued and restricted share units released | 1,399 | 1,399 | ||||
Restricted shares issued and restricted share units released (in shares) | 510,438 | |||||
Repurchase or buyback of ordinary shares | $ (1,049) | (1,049) | ||||
Repurchase or buyback of ordinary shares (in shares) | (328,856) | (328,856) | ||||
Net loss | $ (3,913) | (3,913) | ||||
Other comprehensive income (loss): | ||||||
Foreign currency translation | 529 | 529 | ||||
Balance at Dec. 31, 2019 | 99,188 | $ 123 | 1,265,615 | (11,948) | (1,216,703) | 62,101 |
Balance (in shares) at Dec. 31, 2019 | 35,524,324 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Restricted shares issued and restricted share units released | 703 | 703 | ||||
Restricted shares issued and restricted share units released (in shares) | 573,281 | |||||
Repurchase or buyback of ordinary shares | $ (374) | (374) | ||||
Repurchase or buyback of ordinary shares (in shares) | (199,331) | (199,331) | ||||
Net loss | $ (23,676) | (23,676) | ||||
Other comprehensive income (loss): | ||||||
Foreign currency translation | 1,560 | 1,560 | ||||
Balance at Dec. 31, 2020 | $ 77,401 | $ 123 | 1,266,318 | (12,322) | (1,240,379) | 63,661 |
Balance (in shares) at Dec. 31, 2020 | 35,898,000 | 35,898,274 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Restricted shares issued and restricted share units released | $ 504 | 504 | ||||
Restricted shares issued and restricted share units released (in shares) | 215,666 | |||||
Repurchase or buyback of ordinary shares | ||||||
Repurchase or buyback of ordinary shares (in shares) | ||||||
Net loss | $ (5,828) | (5,828) | ||||
Other comprehensive income (loss): | ||||||
Foreign currency translation | (3,720) | (3,720) | ||||
CTA recognition on liquidation of the subsidiaries | (6) | (6) | ||||
Balance at Dec. 31, 2021 | $ 68,351 | $ 123 | $ 1,266,822 | $ (12,322) | $ (1,246,207) | $ 59,935 |
Balance (in shares) at Dec. 31, 2021 | 36,114,000 | 36,113,940 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (5,828) | $ (23,676) | $ (3,913) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation | 372 | 572 | 644 |
Lease amortization | 1,429 | 1,516 | 1,946 |
Net loss (gain) on disposal of assets | (33) | 5 | |
Gain on liquidation of a subsidiary | (6) | ||
Reversal of guarantee obligations (ASC 460) reserve upon expiration of statute of limitations | (42) | (1,182) | |
Investment impairment | 1,029 | ||
Gain on reversal of accounts payable | (3,161) | ||
Stock-based compensation expense | 504 | 703 | 1,399 |
Allowance for/(recovery of) credit losses | (9,158) | 9,441 | 4,396 |
Allowance for inventory | 4,573 | 170 | 1,904 |
Deferred income taxes | 2,052 | (1,499) | (465) |
Changes in operating assets and liabilities | |||
Accounts receivable | 31,336 | 18,767 | (21,561) |
Inventories and deferred costs | 578 | (230) | 18,278 |
Prepaids and other assets | (4,595) | 600 | (3,625) |
Accounts payable | (6,089) | (5,754) | (19,882) |
Income taxes payable | 2,832 | (1,894) | 506 |
Customer advances | (160) | 231 | (401) |
Deferred revenue | (329) | (1,254) | (2,259) |
Other liabilities | 2,393 | (2,122) | 3,224 |
Net cash provided by (used in) investing activities | 19,829 | (3,400) | (24,147) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of property, plant and equipment | (348) | (115) | (507) |
Purchase of short-term investments | (41) | ||
Proceeds from sale of short-term investments | 2,100 | 2,095 | 41 |
Net cash provided by (used in) investing activities | 1,752 | 1,980 | (507) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from exercise of stock options | 56 | ||
Proceeds from short-term borrowing | 4,625 | ||
Repayment of short-term borrowing | (4,625) | ||
Repurchase of ordinary shares | (374) | (1,049) | |
Net cash used in financing activities | (374) | (993) | |
Effect of exchange rate changes on cash and cash equivalents | (3,693) | 1,575 | 554 |
Net decrease in cash and cash equivalents | 17,888 | (219) | (25,093) |
Cash, cash equivalents and restricted cash at beginning of year | 48,388 | 48,607 | 73,700 |
Cash, cash equivalents and restricted cash at end of year | 66,276 | 48,388 | 48,607 |
Cash paid: | |||
Interest paid | 10 | 16 | |
Income taxes paid | $ 800 | $ 2,100 | $ 1,400 |
BASIS OF PRESENTATION, LIQUIDIT
BASIS OF PRESENTATION, LIQUIDITY | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
BASIS OF PRESENTATION, LIQUIDITY | NOTE 1-BASIS OF PRESENTATION, LIQUIDITY UTStarcom Holdings Corp., a Cayman Islands corporation incorporated in 2011 and its wholly owned subsidiaries (collectively, the “Company”), is a global telecom infrastructure provider dedicated to developing technology that will serve the rapidly growing demand for bandwidth from mobile, streaming and other applications. The Company works with carriers from Asia to the Americas, to meet this demand through a range of innovative broadband packet optical transport and wireless/fixed-line access products and solutions. UTStarcom, Inc. was founded in 1991 and started trading on NASDAQ in 2000. On June 24, 2011, the shareholders of UTStarcom, Inc. approved the proposed merger (the “Merger”), to reorganize UTStarcom, Inc. as a Cayman Islands company. Pursuant to the approval of the shareholders, UTSI Mergeco Inc., a Delaware corporation and a wholly-owned subsidiary of UTStarcom Holdings Corp., merged with and into the existing public company, UTStarcom, Inc., which is incorporated under the laws of the State of Delaware. As a result of the reorganization, UTStarcom Holdings Corp. became the parent company of UTStarcom, Inc. and its subsidiaries. Also pursuant to the Merger, the Company issued an equal number of ordinary shares in exchange for the common stock of UTStarcom, Inc. The Company’s business is conducted in substantially the same manner as was conducted by UTStarcom, Inc. The transaction was accounted for as a legal re-organization of entities under common control. The accompanying consolidated financial statements include the accounts of the Company and its wholly- and majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated in the preparation of the consolidated financial statements. The accompanying Consolidated Balance Sheets as of December 31, 2021 and 2020, and the Consolidated Statements of Comprehensive Loss for each of the three years ended December 31, 2021, 2020 and 2019 have been prepared by the Company is in conformity with generally accepted accounting principles in the United States of America (“US GAAP”). The accompanying consolidated financial statements are presented on the basis that the Company is a going concern. The going concern assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and considers the Company’s current financial status, business operation, market strategy, and products development in the twelve months following the issuance date of these financial statements. The Company has concluded there was no substantial doubt about the Company’s ability to continue as a going concern. The Company incurred net losses of $ 5.8 million, $ 23.7 million and $ 3.9 million for the years ended December 31, 2021, 2020, and 2019, respectively. As of December 31, 2021 and 2020, the Company had an accumulated deficit of $ 1,246.2 million and $ 1,240.4 million, respectively. The Company’s operations provided net cash of $ 19.8 million and used net cash of $ 3.4 million and $ 24.1 million for the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021 and 2020, the Company had cash and cash equivalents of $ 53.8 million and $ 34.2 million, of which $ 12.2 million and $ 12.2 million, respectively, were held by subsidiaries in China. China imposes currency exchange controls on certain transfers of cash to and from China. The Company’s China subsidiaries are subject to pre-approval from the State Administration of Foreign Exchange (“SAFE”) for non-domestic financing. Additionally, the amount of cash available for transfer from the China subsidiaries for use by the Company’s non-China subsidiaries is also limited both by the liquidity needs of the subsidiaries in China and restrictions on foreign currency exchange by Chinese-government mandated limitations including currency exchange controls on certain transfers of cash outside of China. As of December 31, 2021, the Company’s China subsidiaries have no accumulated profit, as determined in accordance with Chinese accounting standards, that can be paid as dividends. In 2021, 2020 and 2019, the Company’s China subsidiaries did not pay dividends. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates: The preparation of consolidated financial statements in conformity with US GAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant judgment and estimates are used for revenue recognition, allowances for credit losses on accounts receivable and sales returns, tax valuation allowances, inventory write-down, impairment of property, plant and equipment, deferred costs, accrued product warranty costs, provisions for contract losses, investment impairments, going concern assessment, stock-based compensation expense, and loss contingencies among others. Actual results could differ materially from those estimates. Cash and Cash Equivalents: Cash and cash equivalents consist of highly liquid instruments with maturities of three months or less when acquired. Approximately 6.9 %, or $ 3.7 million and 22.7 % or $ 7.8 million of cash and cash equivalents were held by the Company’s subsidiaries in the United States as of December 31, 2021 and 2020, respectively. The remainder was held by the other UTStarcom entities throughout the world. As of December 31, 2021 and 2020, approximately 22.7 %, or $ 12.2 million and 35.8 % or $ 12.2 million, of the Company’s cash and cash equivalents were held by its subsidiaries in China, respectively. China imposes currency exchange controls on transfers of cash outside of China. Restricted Cash: As of December 31, 2021, the Company had short-term restricted cash of $ 10.1 million, and long-term restricted cash of $ 2.4 million. As of December 31, 2020, the Company had short-term restricted cash of $ 12.1 million, and long-term restricted cash of $ 2.1 million. These amounts primarily collateralize the Company’s issuances of performance guarantee, warranty, and standby and commercial letters of credit. Investments: The Company’s investments consist principally of debt and equity securities classified as “available for sale”, and cost and equity method investments in privately held companies. The investments in equity securities of privately held companies in which the Company does not have the ability to exercise significant influence are accounted for under ASC 321, “ Investments—Equity Securities ” using the measurement alternative . For those investments without readily determinable fair values, the Company elects to record these investments at cost, less impairment, plus or minus subsequent adjustments for observable price changes. Before ASC 321 took effective, the Company’s investments, such as GCT Semiconductor, were recorded under cost method. The investments in equity securities of privately held companies in which the Company has the ability to exercise significant influence, but does not own a majority equity interest or otherwise control are accounted for under ASC 323, “ Investments-Equity Method and Joint Ventures ” using the equity method. Investments in debt securities classified as available for sale are measured at fair value on the balance sheets under ASC 320, “ Investments-Debt and Equity Securities. ” Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) are excluded from earnings and reported in other comprehensive income until realized, except as indicated in the following paragraph. The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. The Company reviews several factors to determine whether the losses are other-than-temporary, including but not limited to: (i) the length of time the investment was in an unrealized loss position, (ii) the extent to which fair value was less than cost, (iii) the financial condition and near term prospects of the issuer, and (iv) the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. The determination of fair value of the investment involves considering factors such as current economic and market conditions, the operating performance of the companies including current earnings trends and forecasted cash flows, and other company and industry specific information. Investment impairments recorded as other-than-temporary were nil , $ 1.0 million and nil , for the years ended December 31, 2021, 2020 and 2019, respectively. Revenue Recognition: The Company recognizes revenue in accordance with ASC 606. The core principle of ASC 606 is that revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. To determine the appropriate amount of revenue to be recognized for arrangements determined to be within the scope of ASC 606, for each customer contract, we performed the following five steps: 1. Identify the contract with a customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to the performance obligations in the contract; and 5. Recognize revenue when or as the Company satisfies a performance obligation. The Company accounts for a contract with a customer that is within the scope of ASC 606 when all of the following criteria are met: (i) the arrangement has been approved by the parties and the parties are committed to perform their respective obligations, (ii) each party's rights regarding the goods or services to be transferred can be identified, (iii) the payment terms for the goods or services to be transferred can be identified, (iv) the arrangement has commercial substance and (v) collection of substantially all of the consideration to which the Company will be entitled in exchange for the goods or services that will be transferred to the customer is probable. Performance obligations promised in a contract are identified based on the services and the products that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the services and the products is separately identifiable from other promises in the contract. Our performance obligations consist of (i) sales of communication equipment with embedded software, (ii) provision of installation and commission service, and (iii) provision of annual maintenance service. The software component is not considered distinct as the software component is integral to the functionality of the communication equipment. The transaction price is determined based on the consideration to which we expect to be entitled in exchange for transferring services to the customer. Some sales agreements have performance guarantees covering a certain timeframe. If there is an underperformance event, the Company may incur liquidation damages as a percentage of the total purchase price. Such performance guarantees represent a form of variable consideration and are estimated at the contact inception at the best estimate and updated at the end of each reporting period as additional performance data becomes available and only to the extent that it is probable that a significant reversal of any revenue will not occur. Variable consideration includes estimates for sales credits, which are based on historical level and specific criteria outlined in the sales contracts, and other factors known at the time. The Company generally invoices customers for equipment and services upon meeting certain milestones. Customer invoices are generally due within 30 to 90 days after issuance. The Company’s contracts with customers typically do not include significant financing components as the period between the transfer of performance obligations and timing of payment are generally within one year. The Company allocates the transaction price based on the estimated standalone selling price. The Company develops assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract. The Company utilizes key assumptions to determine the standalone selling price, which may include other comparable transactions, pricing considered in negotiating the transaction and the estimated costs. Certain variable consideration is allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated to each performance obligation are consistent with the amounts the Company would expect to receive for satisfying each performance obligation. Revenue recognized when a customer obtains control of promised goods or services at an amount that reflects the consideration that is expected to be received in exchange for those goods or services. The Company utilizes judgment to assess the nature of the combined performance obligation determine whether a performance obligation is satisfied over time or at a point in time. Revenue from sales of communication equipment is recognized at a point in time, which is generally upon delivery. Revenue from provision of installation and commission service is recognized at a point in time when the service is completed. Revenue from provision of annual maintenance services is recognized over time on a ratable basis over the contract term. Product Warranty: The Company provides a warranty on its equipment and terminal sales for periods generally ranging from one to two years from the time of final acceptance. At times, the Company has entered into arrangements to provide limited warranty services for periods longer than two years . The Company provides for the expected cost of product warranties at the time that revenue is recognized based on an assessment of past warranty experience and when specific circumstances dictate. The Company assesses the adequacy of its recorded warranty liability every quarter and makes adjustments to the liabilities if necessary. From time to time, the Company may be subject to additional costs related to non-standard warranty claims from its customers. If and when this occurs, the Company estimates additional accruals based on historical experience, communication with its customers and various assumptions that the Company believes to be reasonable under the circumstances. Such additional warranty accruals are recorded in the period in which the additional costs are identified. Specific warranty accruals are reversed upon the expiration of the warranty period and are recorded as reduction of cost of sales. Receivables: Although the Company evaluates customer credit worthiness prior to a sale, the Company provides an allowance for credit losses on trade and notes receivable when collection may no longer be reasonably assured. The Company assesses collectability of receivables based on a number of factors including analysis of customer creditworthiness, historical payment history, our ability to collect payment, length of time an individual receivable balance is outstanding and current and future economic conditions. Allowance for credit losses: Effective on January 1, 2020, the Company adopted Accounting Standards Update (ASU) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which introduces an expected loss approach using macroeconomic data, referred to as a current expected credit losses (“CECL”) methodology. The Company makes estimates of the lifetime expected credit losses for accounts receivable with similar risk characteristics on a pool basis. For each pool, the Company first estimates its recovery period based on relevant historical accounts receivable collection information, and then estimates the credit allowances based on the recovery period, the historical distribution of each aging bucket, and the impact of macroeconomic factors. Expected credit losses are recorded as selling, general and administrative expenses in the consolidated statements of comprehensive income (loss). Changes in these estimates and assumptions could materially affect the credit losses. Inventories: Inventories consist of product held at the Company’s manufacturing facility and warehouses, as well as finished goods at customer sites for which the customer has taken possession but, based on specific contractual terms, title has not yet passed to the customer. The Company may ship inventory to existing customers that require additional equipment to expand their existing networks prior to the signing of an expansion contract. Inventories are stated at the lower of cost and net realizable value. The Company continually monitors inventory valuation for potential losses and obsolete inventory at our manufacturing facilities as well as at customer sites. Adjustments are recorded to write down the cost of inventory to estimated net realizable value, which is dependent upon the factors such as inventory aging, historical and forecasted consumer demand, and market conditions that impact pricing. Write-downs are recorded in cost of revenues in our consolidated statements of comprehensive income (loss). Deferred Costs: Deferred cost balances are the unamortized cost of post-contract customer support over a period of time of certain legacy contracts. The Company amortizes the deferred revenue and related costs of goods sold over the post-contract support period. Property, Plant and Equipment: Property, plant and equipment are recorded at cost and are stated net of accumulated depreciation. Depreciation is provided on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful lives or the term of the lease. When assets are disposed of, the cost and related accumulated depreciation are removed and the resulting gains or losses are included in results of operations. The Company generally depreciates its property, plant and equipment over the following periods: Years Equipment and furniture 5 Computers and software 2 - 3 Automobiles 5 Leasehold improvements Lesser of the lease term or estimated useful life Depreciation expense was $ 0.4 million, $ 0.6 million, and $ 0.6 million, for the years ended December 31, 2021, 2020 and 2019, respectively. Impairment of Long-Lived Assets: Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If undiscounted expected future cash flows are less than the carrying value of the assets, an impairment loss is recognized based on the excess of the carrying amount over the fair value of the assets. Long-lived assets that are to be sold are measured at the lower of book value or fair value less cost to sell. Advances: Advances from customers represent cash received from customers before revenue recognition for the purchase of the Company’s products. Advertising Costs: The Company expenses all advertising costs as incurred. Payment to customers for marketing development costs are accounted for as incurred as a reduction of the revenue associated with customers. For the years ended December 31, 2021, 2020 and 2019, advertising costs totaled $ 0.1 million, $ 0.1 million, and $ 0.1 million, respectively. Operating Leases: At the inception of each arrangement, the Company determine if the arrangement is a lease or contains an embedded lease and review the facts and circumstances of the arrangement to classify lease assets as operating or finance leases under Topic 842. The Company leases office space under operating lease agreements with initial lease terms up to five years . The Company has entered into various non-cancelable operating lease agreements for its office space. These leases have lease periods that expire no later than 2021 to 2026 . Some of these lease agreements have options to extend the lease terms for an additional period subject to mutual negotiations and agreements with the lessor. The Company considered all renewal options that were reasonably certain to be exercised and are considered in determining the lease term at the inception of the lease. The Company measures lease liabilities based on the present value of the total remaining lease payments. To determine the present value of future minimum lease payments, we used the implicit rate when readily determinable. When the implicit rate is not available, the Company applies its incremental borrowing rate, which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease. The Company estimates its incremental borrowing rate based on an analysis of interest rates published by banks. Treasury Stock: Treasury stock is recorded at cost and represents shares repurchased by the Company. Stock-Based Compensation: Stock-based compensation expense for all share-based payment awards granted to employees is determined based on the grant-date fair value. Stock-based compensation expense for restricted stock awards is measured based on the closing fair market value of the Company’s ordinary shares on the date of grant. Stock-based compensation expense for stock options is estimated at the grant date based on each option’s fair value as calculated by the Black-Scholes model. Stock-based compensation is expensed ratably on a straight-line basis over the requisite service period, which is generally the vesting term of the share-based payment awards. The performance-based restricted stock units are subject to the attainment of goals determined by the Compensation Committee of the Company’s Board of Directors. The Company records the relevant stock-based compensation for the performance-based restricted stock units based on the probability of meeting the performance conditions. Accumulated Other Comprehensive Income (“AOCI”): AOCI consisted of foreign currency translation adjustments. The changes in AOCI, including the amounts reclassified to income, were as follows: Foreign currency translation and unrealized gains (losses), net of tax (in thousands) Balance at December 31, 2019 $ 62,101 Unrecognized gain on foreign currency translation 1,560 Balance at December 31, 2020 $ 63,661 Unrecognized loss on foreign currency translation ( 3,720 ) Less: Gain reclassified from AOCI to income ( 6 ) Balance at December 31, 2021 $ 59,935 Income Taxes: The Company is subject to income taxes in both the United States and numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining the provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company recognizes the tax benefit (expense) from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company recognizes interest expense and penalties related to income tax matters as part of the provision for income taxes. The Company recognizes deferred income taxes as the difference between the tax basis of assets and liabilities and their financial statement amounts based on enacted tax rates. Management judgment is required in the assessment of the recoverability of our deferred tax assets based on its assessment of projected taxable income. Numerous factors could affect our results of operations in the future. If there is a significant decline in our future operating results, management’s assessment of the recoverability of our deferred tax assets would need to be revised, and any such adjustment to our deferred tax assets would be charged to income in that period. If necessary, the Company records a valuation allowance to reduce deferred tax assets to an amount which management believes is more likely than not to be realized. Changes in estimates of taxable income in the future could result in reversal of the valuation allowances which would be credited to income in the year of reversal. Financial Instruments: Financial instruments consist of cash and cash equivalents, short and long-term investments, notes receivable, accounts receivable and payable and accrued liabilities. The carrying amounts of cash and cash equivalents, bank notes, accounts receivable and payable, notes receivable, and accrued liabilities approximate their fair values because of the short-term nature of those instruments. The fair value of long-term investments in debt and equity securities is determined based on quoted market prices or available information about investees. Foreign Currency Translation: The Company’s operations are conducted through international subsidiaries where the local currency is the functional currency and the financial statements of those subsidiaries are translated from their respective functional currencies into U.S. Dollars which is the functional and reporting currency of the Company. All foreign currency assets and liabilities are translated at the period-end exchange rate and all revenues and expenses are translated at the average exchange rate for the period. The effects of translating the financial statements of foreign subsidiaries into U.S. Dollars are reported as a cumulative translation adjustment, a separate component of accumulated other comprehensive income in shareholders’ equity. The foreign currency translation gain (loss) related to the remeasurement of transactions denominated in other than the functional currency is included in other income (expense), net in the consolidated statements of comprehensive income (loss). In connection with this remeasurement process, the Company recorded income of $ 1.3 million, and losses of $ 2.9 million and $ 3.9 million for the years ended December 31, 2021, 2020 and 2019, respectively. Earnings per Share: Basic earnings per share is computed by dividing the net income (loss) available to shareholders by the weighted average number of the Company’s ordinary shares outstanding, as applicable, during the period, which excludes unvested restricted stock. Diluted earnings per share reflects the amount of net income (loss) available to each ordinary share outstanding during the period plus number of additional shares that would have been outstanding if potentially dilutive securities had been issued. The Company’s potentially dilutive ordinary shares include outstanding stock options, unvested restricted stock, restricted stock units and performance-based units. The following table summarizes the total potential ordinary shares that were excluded from the diluted per share calculation, because their effect was anti-dilutive. Years ended December 31, 2021 2020 2019 (in thousands) Anti-dilutive stock options and awards/units outstanding 1,695 1,478 1,335 Total(1) 1,695 1,478 1,335 (1) Calculated using the treasury stock method, which assumes proceeds are used to reduce the dilutive effect of outstanding stock awards. Assumed proceeds include the unrecognized deferred compensation of share awards, and assumed tax proceeds from excess stock-based compensation deductions. For the years ended December 31, 2021, 2020 and 2019, no potential ordinary shares were dilutive because of the net loss incurred in those years, therefore basic and dilutive earnings per share were the same. Recently Adopted Accounting Standards: In December 2019, the FASB issued ASU 2019-12, “Income tax (Topic 740) Simplifying accounting for income taxes”. The amendments in this Update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. Recently Issued Accounting Pronouncements: In November 2021, the FASB issued ASU 2021-10 creating new Codification Topic 832 (government assistance), which requires business entities to disclose information about certain government assistance that they receive. The new Topic 832 disclosure requirements include: the nature of the transactions and the related accounting policies used; the line items on the balance sheet and income statement that are affected and the amounts applicable to each financial statement line item; and significant terms and conditions of the transactions. Topic 832 is effective for all business entities in fiscal years beginning after December 15, 2021. The Company is in the process of evaluating the financial impact to the Company and will apply the applicable amendments (if any) from fiscal year 2022. |
COMPREHENSIVE LOSS
COMPREHENSIVE LOSS | 12 Months Ended |
Dec. 31, 2021 | |
Comprehensive Income Net Of Tax [Abstract] | |
COMPREHENSIVE LOSS | NOTE 3-COMPREHENSIVE LOSS Total Comprehensive Loss for the years ended December 31, 2021, 2020 and 2019 consisted of the following: Years ended December 31, 2021 2020 2019 (in thousands) Net loss $ ( 5,828 ) $ ( 23,676 ) $ ( 3,913 ) Other comprehensive income (loss) Net Change in Foreign currency translation ( 3,726 ) 1,560 529 Total comprehensive loss $ ( 9,554 ) $ ( 22,116 ) $ ( 3,384 ) |
BALANCE SHEET DETAILS
BALANCE SHEET DETAILS | 12 Months Ended |
Dec. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
BALANCE SHEET DETAILS | NOTE 4-BALANCE SHEET DETAILS The following tables provide details of selected balance sheet items: December 31, December 31, 2021 2020 (in thousands) Inventories: Raw materials $ 563 $ 3,328 Work in process 39 1,766 Finished goods (1) 935 1,601 Total Inventory $ 1,537 $ 6,695 (1) Includes finished goods at customer sites of approximately $ 0.1 million and $ 0.5 million at December 31, 2021 and 2020, respectively, for which the customer has taken possession, but based on specific contractual terms, title has not yet passed to the customer and for which revenue has not yet been recognized. December 31, December 31, 2021 2020 (in thousands) Prepaid and other current assets Prepaid tax (1) $ 1,295 $ 1,736 Advance to suppliers 7 15 Other receivables 796 1,054 Prepaid and others (2) 2,713 2,303 Total Prepaid and other current assets $ 4,811 $ 5,108 (1) 2021 balance includes $ 0.1 million prepaid consumption tax, $ 0.9 million prepaid of value added tax, $ 0.01 million duty recoverable and $ 0.3 million goods and servic e tax. 2020 balance includes $ 0.1 million prepaid consumption tax, $ 0.8 million prepaid of value added tax, $ 0.5 million duty recoverable and $ 0.3 million goods and service tax. (2) 2021 balance includes $ 2.0 million interest receivabl e. 2020 balance includes $ 1.4 million interest receivable, $ 0.4 million prepaid of software and license December 31, December 31, 2021 2020 (in thousands) Property, plant and equipment, net: Leasehold improvements $ 1,801 $ 1,846 Automobiles 271 340 Computers and software 4,461 4,579 Equipment and furniture 22,240 23,906 Total 28,773 30,671 Less: accumulated depreciation ( 28,171 ) ( 30,051 ) Total Property, plant and equipment, net $ 602 $ 620 During the years ended December 31, 2021, 2020 and 2019, the Company wrote-off fully depreciated property, plant and equipment o f $ 2.4 million w ith accumulated depreciation of $ 2.4 million, $ 0.5 million with accumulated depreciation of $ 0.5 million, and $ 0.1 million with accumulated depreciation of $ 0.1 million, respectively. December 31, December 31, 2021 2020 (in thousands) Other current liabilities: Warranty costs $ 53 $ 54 Accrued professional fees 993 988 Accrued other taxes 36 376 Provision for LD 1,073 1,575 Contract deposits 349 343 Others 869 709 Total other current liabilities $ 3,373 $ 4,045 December 31, December 31, 2021 2020 (in thousands) Other long-term liabilities Non-current income tax payable $ 979 $ 1,000 Other long-term liabilities — — Total other long-term liabilities $ 979 $ 1,000 |
CASH, CASH EQUIVALENTS AND SHOR
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Investments And Cash [Abstract] | |
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | NOTE 5-CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS Cash and cash equivalents, consisting primarily of bank deposits and money market funds, are recorded at cost which approximates fair value because of the short-term nature of these instruments. Short-term investments consist of available-for-sale securities and held to maturity investments with original maturities longer than three months and less than twelve months when acquired. Long-term investments consist of cost and equity method investments in privately held companies. The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. In making this determination, the Company reviews several factors to determine whether the losses are other-than-temporary, including but not limited to: (i) the length of time the investment was in an unrealized loss position, (ii) the extent to which fair value was less than cost, (iii) the financial condition and near term prospects of the issuer, and (iv) the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. The following table shows the break-down of the Company’s total short-term investment and long-term investments as of December 31, 2021 and December 31, 2020: Accounting December 31, December 31, Method 2021 2020 (in thousands) GCT Semiconductor Cost $ — $ — UiTV Media Inc. Equity — — UTStarcom Hong Kong Holdings Ltd AFS — 2,100 Total Investments $ — $ 2,100 GCT Semiconductor In October 2004, the Company invested $ 3.0 million in Series D preferred convertible stock of GCT Semiconductor, Inc., or GCT, which designs, develops and markets integrated circuit products for the wireless communications industry. This investment represents approximately a 0.4 % interest in GCT. The Company assesses the fair value every year-end. In 2012 and 2016, the Company recorded $ 2.1 million and $ 0.8 million investment impairment, respectively. As of December 31, 2016, the book value of the investment was zero . UiTV Media Inc. or UiTV On October 16, 2010, the Company invested $ 30.0 million in UiTV Media Inc., or (“UiTV”), $ 10.0 million of which was paid by the Company’s common shares that it had the repurchase rights and $ 20.0 million of which was paid by cash. The Company recorded this transaction as an acquisition because the Company owned 75 % interest of UiTV and had effective control. The transactions closed on November 8, 2010. On April 15, 2012, the Company exercised its repurchase right, and this triggered deconsolidation of UiTV from the Company’s consolidated financial statements starting from June 21, 2012 as the Company lost the effective control due to reduced ownership from 75% to 49 % and loss of a Board of Directors seat. As the result, the Company accounted for this investment using the equity method. From December 3, 2012 to December 31, 2015, the Company purchased $ 35.1 million convertible bonds that bear interest at 6.5 % per annum with various maturity dates, and subsequently all maturity dates were extended to December 31, 2015. In 2013 and 2014, the Company recorded a total of $ 9.6 million and $ 5.3 million, respectively, in losses for the preferred stock investment to reflect 49 % interest in UiTV losses. After the value of the preferred shares was reduced to zero, the Company started to record 100% of UiTV losses against our convertible bond investment balance until the carrying value of the convertible bond investment balance was reduced to zero . Therefore, in 2014 and 2015, the Company recorded $ 3.6 million and $ 14.0 million in losses to reflect 100 % of UiTV losses. At every year-end, the Company assessed the fair value of the UiTV, and recorded impairment charges of $ 9.1 million, $ 2.4 million and $ 6.0 million in 2013, 2014 and 2015, respectively. The convertible bond investments balance was reduced to zero as of December 31, 2015. UTStarcom Hong Kong Holdings Ltd., On August 31, 2012, the Company completed the sale of our IPTV business to UTStarcom Hong Kong Holdings Ltd. to its former Chief Executive Officer. On the same day, the Company purchased a $ 20.0 million Convertible Bond from UTStarcom Hong Kong Holdings Ltd. which bears interest at 6.5 % per annum and matured on August 31, 2017. On April 7, 2015, the Company entered an agreement with UTStarcom Hong Kong Holdings Ltd. for the conversion of the $ 20.0 million Convertible Bond. Pursuant to the agreement, UTStarcom Hong Kong Holdings Ltd. paid $ 10.0 million in cash as partial repayment of the principal of the Convertible Bond. The remaining principal and interest of the Convertible Bond were converted to 14 % of equity interest of UTStarcom Hong Kong Holdings Ltd. The Company used the cost method to account for this investment. The Company assesses the fair value impairment every year-end. In 2015, the Company recorded $ 6.5 million investment impairment. During 2018 and 2019, the Company assessed the fair value of UTStarcom Hong Kong Holdings Ltd. and recorded a $ 0.4 million and nil impairment charge. As of December 31, 2019, the recorded value of this investment was $ 3.1 million. On December 17, 2020, the Company signed an agreement with Eagle Field Holding Limited to sale of 14 % interest (“equity interest”) of UTStarcom Hong Kong Holdings Limited for a consideration of $ 2.1 million which will be paid on March 31, 2021. As the result, the Company recorded $ 1.0 million impairment loss during 2020 and reclassified this investment as short-term investment as at December 31, 2020. On March 31, 2021, the Company received $ 2.1 million from buyer. Aceland Investment Limited In December 2010, the Company invested $ 2.1 million into Aceland Investments Limited (“Aceland”). In the second quarter of 2011, the Company extended a shareholder loan to Aceland in the amount of $ 7.1 million with a maturity date of December 31, 2015 . The Company owned an approximately 35 % interest in Aceland and accounted for the investment in Aceland using the equity method. In 2015, the Company recorded a $ 1.0 million impairment charge on the Aceland investment. In 2016, the Company received $ 6.7 million cash from Aceland as partial repayment of the loan balance and the Company realized a $ 1.0 million gain of foreign exchange. In 2017 and 2018, the Company realized a $ 0.2 million and $ 0.3 million equity loss as a result of the depreciation of the US Dollar deposit, respectively. As of December 31, 2018, the book value of the investment was $ 2.1 million. In October 2019, the Board of Aceland approved a resolution to reduce its shares capital and was expected to repurchase our full investment in Aceland within one year. As the result, the Company classified this investment as a trading security in the short-term investment account in the amount of $ 2.1 million at December 31, 2019. In March 2020, Aceland repurchased all the Company’s investment and the Company recorded a $ 0.3 million gain in other income. AioTV Inc. In November 2012, the Company invested $ 8.0 million in Series B Preferred Stock of AioTV Inc, (“AioTV”), representing a 44 % equity interest of AioTV. The Preferred Stock was classified as available-for-sale security as it was not considered to be in-substance common stock due to the redemption feature. In December 2015 and October 2016, the Company invested in a convertible bond of $ 0.5 million that matured on March 28, 2017 and of $ 0.3 million that matured on October 6, 2017, respectively. All convertible bonds bear interest at 10.0 % per annum. During 2016, the Company assessed the fair value of the investment, and recorded a $ 4.3 million impairment charge relating to this investment. On May 30, 2017, the Company converted all the existing Preferred Shares of AioTV into common shares of AioTV, and converted $ 0.5 million convertible bond issued in December 2015 into common shares of AioTV. After this conversion, the Company deemed to have significant influence in AioTV and began to use the equity method to account for the investment in AioTV. On the same day, the Company signed a “Note Purchase Agreement” with AioTV. Pursuant to the agreement, the valuation cap of AioTV was reduced to $ 0.16 million, and the Company promised to purchase a $ 0.8 million convertible promissory note including $ 0.32 million of existing convertible bond issued in October 2016. As the result of these transactions, the Company recorded $ 1.3 million investment impairment in the second quarter of 2017. The Company invested $ 0.1 million and $ 0.38 million in the second and third quarter of 2017, respectively, in the convertible promissory note. In the third quarter of 2017, the Company recorded $ 0.1 million in losses for the common stock investment to reflect its 45 % share of AioTV’s losses. After the common stock was reduced to zero , the Company started and continued to record its 45 % share of AioTV’s losses against its convertible promissory note until the carrying value of the convertible promissory note investment balance is reduced to zero . In the third and fourth quarters of 2017, the Company recorded $ 0.2 million and $ 0.2 million respectively in losses to reflect its 45 % share of AioTV’s losses. At 2017 year-end, the Company assessed the fair value of AioTV, and concluded that a $ 0.4 million impairment charge to this investment was necessary. As of December 31, 2017, the book value of this investment was zero . On December 19, 2018, the Company entered into the assignment and assumption agreement to transfer the Company’s all equity interests and debt interests in AioTV to a third party for cash consideration of $ 1 by the buyer. This transaction was closed on April 11, 2019. Fair Value Measurements Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The accounting guidance also establishes a three-tier fair value hierarchy which requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The fair value hierarchy prioritizes the inputs into three levels that may be used in measuring fair value as follows: Level 1-observable inputs such as quoted prices in active markets for identical assets or liabilities. Level 2-inputs other than the quoted prices in active markets for identical assets or liabilities that are observable either directly or indirectly. Level 3-unobservable inputs based on the Company’s assumptions. The Company’s financial instruments consist principally of cash and cash equivalents, short-term investments, restricted cash, accounts receivable, long-term investments, accounts payable and certain accrued expenses. Short-term investments consist of bank notes, term deposits and hold for trading with maturities longer than three months and less than one year when acquired. As of December 31, 2021, the respective carrying values of financial instruments except for long-term investments approximated their fair values based on their short-term maturities. There were no financial assets measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy for the year ended December 31, 2021 and 2020. The following is the change in value of financial assets using unobservable inputs (Level 3) for the year ended December 31, 2021. Amount In thousands As of December 31, 2020 $ 2,100 Less: Proceeds from sales of short-term investment ( 2,100 ) As of December 31, 2021 $ — |
OPERATING LEASES
OPERATING LEASES | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
OPERATING LEASES | NOTE 6- OPERATING LEASES The Company’s leases consist of operating leases fo r office space in PRC, India, Japan and the United States. The Company determines if an arrangement is a lease at inception. As of December 31, 2021, the Company had no long-term leases that were classified as a financing lease. As of December 31, 2021, the Company did not have additional operating leases that have not yet commenced. Total operating lease expenses for the year ended December 31, 2021 were $ 1.4 million, including $ 0.8 million in cost of net sales and $ 0.6 million in operating expense in the consolidated statement of comprehensive loss . As of December 31, 2021, the Company recognized operating lease ROU assets of $ 4.7 million and total lease liabilities $ 4.9 million, including a current portion of $ 1.4 million for operating leases. For the year ended For the year ended (in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used in operating leases $ 1,581 $ 1,337 Right-of-use assets obtained in exchange of new lease obligations: Operating leases $ 4,734 $ 1,183 Weighted average remaining lease term Operating leases 4.0 years 1.3 years Weighted average discount rate Operating leases 4.45 % 4.53 % Maturities of lease liabilities as of December 31, 2021 are as follows: Amount (in thousands) 2022 $ 1,590 2023 1,447 2024 921 2025 921 2026 460 Thereafter — Total future lease payments 5,339 Less: Imputed interest ( 432 ) Total lease liability balance $ 4,907 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 7-COMMITMENTS AND CONTINGENCIES Contractual obligations and commercial commitments Letters of credit: The Company issues bid bond, commercial letters of credit or standby letters of credit primarily to support international sales activities outside of China and in support of purchase commitments. When the Company submits a bid for a sale, often the potential customer will require that the Company issue a bid bond or a standby letter of credit to demonstrate its commitment through the bid process. In addition, the Company may be required to issue standby letters of credit as guarantees for advance customer payments upon contract signing or performance guarantees. The standby letters of credit usually expire without being drawn by the beneficiary thereof. Finally, the Company may issue commercial letters of credit in support of purchase commitments. As of December 31, 2021, the Company’s outstanding letters of credit approximated $ 12.5 million. These balances are included in Short-term restricted cash and Long-term restricted cash. Purchase commitments: The Company is obligated to purchase raw materials and work-in-process inventory under various orders from various suppliers. If the Company fails to fulfill the contracts, it will have adverse consequences materials to the Company’s operations or financial condition. On December 31, 2021, the Company had outstanding purchase commitments, including agreements that are non-cancelable, approximating $ 0.4 million. Intellectual property: Certain sales contracts include provisions under which customers are indemnified by the Company in the event of, among other things, a third party claim against the customer for intellectual property rights infringement related to the Company’s products. There are no limitations on the maximum potential future payments under these guarantees. The Company has not accrued any amounts in relation to these contractual provisions as no such claims have been made and the Company believes it has valid enforceable rights to the intellectual property embedded in its products. Uncertain Tax Positions: As of December 31, 2021, the Company had $ 3.2 million of gross unrecognized tax benefits, of which $ 0.5 million related to tax benefits that, if recognized, would affect the annual effective tax rate. The remaining $ 2.7 million gross unrecognized tax benefits, if recognized, would affect certain deferred tax assets and federal tax benefit of state income tax. Litigation: The Company is a party to other litigation matters and claims that are normal in the course of operations and, while the results of such litigation matters and claims cannot be predicted with certainty, management of the Company believes it is not reasonably possible the final outcome of such matters will have a material adverse impact on the Company’s financial position, results of operations or cash flows. |
ORDINARY SHARE REPURCHASE AND I
ORDINARY SHARE REPURCHASE AND ISSUANCE | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
ORDINARY SHARE REPURCHASE AND ISSUANCE | NOTE 8-ORDINARY SHARE REPURCHASE AND ISSUANCE On November 12, 2014, the Company’s Board of Directors approved a share repurchase program of up to $ 40.0 million of its ordinary shares outstanding over the 24 months through 2016. On November 4, 2016, the Company’s Board of Directors approved an extension for this program to November 2018. On November 4, 2018, the Company’s Board of Directors approved an extension for this program to November 2019. In September 2019, the Board had approved to extend two additional years. In September 2021, the Company's Board of Directors approved to extend this program to March 2022. In March 2022, the Board of Directors approved an extension for this program to the end of March 2023. For the years ended December 31, 2021, 2020 and 2019, the Company repurchased nil , 199,331 and 328,856 shares at the cost of nil , $ 0.4 million and $ 1.0 million, respectively. All the repurchased shares under the repurchase program are classified as treasury shares of the Company until they are retired or reissued. |
ORDINARY SHARE AND SHARE INCENT
ORDINARY SHARE AND SHARE INCENTIVE PLANS | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
ORDINARY SHARE AND SHARE INCENTIVE PLANS | NOTE 9-ORDINARY SHARE AND SHARE INCENTIVE PLANS Stock Incentive Plans As of December 31, 2021, the Company has the stock incentive plans described below. Substantially all outstanding awards are subject to potential accelerated vesting in the event of a change in control of the Company. The Company repurchases and cancels its ordinary shares forfeited with respect to the tax liability associated with certain vesting of restricted stock and restricted stock unit grants under these plans. 2017 Equity Incentive Plan: The 2017 Equity Incentive Plan, or (the “2017 Plan”), was approved by the Board of Director on November 4, 2016, and will expire on December 31, 2021. The 2017 Plan provides for the grant of the following types of incentive awards: (i) stock options, (ii) stock appreciation rights, (iii) restricted stock, (iv) restricted stock units, (v) performance shares and performance units, and (vi) other stock or cash awards (“Award,” and collectively, “Awards”). Those who are eligible for Awards under the 2017 Plan include employees, directors and consultants who provide services to the Company and its affiliates. The maximum aggregate number of shares that may be awarded and sold under the Plan is 2,000,000 Shares plus (i) any shares that, as of December 31, 2016, have been reserved but not issued pursuant to any awards granted under UTStarcom Holdings Corp.’s Amended and Restated 2006 Equity Incentive Plan (the “2006 Plan”), and (ii) any shares subject to stock options or similar awards granted under the 2006 Plan that expire or otherwise terminate without having been exercised in full and Shares issued pursuant to awards granted under the 2006 Plan that are forfeited to or repurchased by the Company. The shares may be authorized but unissued, or reacquired common stock. As of December 31, 2021, 1,694,582 shares underlying options and restricted stock awards and units were outstanding under the 2017 Plan. The 2006 Equity incentive plan expired on December 31, 2016, and as of December 31, 2021, 1,590,693 ordinary shares available for grant under this plan were transferred to the 2017 equity incentive plan. Stock Award and Stock Option Activity During 2021, the Company granted equity awards primarily consisting of stock option and restricted stock. Such awards generally vest over a period of four years or two years from the vesting start date. Restricted stock has the voting rights of ordinary shares and the shares underlying restricted stock are issued and outstanding. As of December 31, 2021, the number of ordinary shares available for issuance pursuant to future grants under the 2017 plan, including remaining unissued shares under Prior Plans that have been transferred into the 2017 plan were 29,423 . The 2006 Plan expired on December 31, 2016, and as of December 31, 2021, 1,590,693 shares were transferred to the 2017 Plan that was approved by the Board of Director on November 4, 2016. The following table summarizes the Company’s stock option activities: Weighted Number of average shares exercise outstanding price (in thousands) Options Outstanding, December 31, 2019 181 $ 2.24 Options granted 875 1.14 Options exercised — — Options forfeited or expired — — Options Outstanding, December 31, 2020 1,056 $ 1.33 Options granted 850 1.07 Options exercised Options forfeited or expired ( 451 ) 1.52 Options Outstanding, December 31, 2021 1,455 $ 1.12 Under the Plans, the Company granted restricted stock awards. Restricted stock awards are unvested stock awards that may include grants of restricted stock or grants of restricted stock units. Such awards generally vest over a period of four years from the date of grant. Restricted stock has the voting rights of ordinary share and the shares underlying restricted stock are considered to be currently issued and outstanding. Restricted stock units do not have the voting rights of ordinary shares, and the shares underlying the restricted stock units are not considered issued and outstanding. The expense for such awards is based on the fair market value of the shares at the date of grant and is recognized on a straight-line basis over the requisite service period. The grant of restricted stock awards is deducted from the shares available on a one to one basis for grant under the Company’s stock plan. Unvested restricted awards as of December 31, 2021 and changes during the year ended December 31, 2021 is summarized below: Weighted average grant date Shares fair value (in thousands) Total nonvested restricted stock at December 31, 2019 1,153 $ 2.89 Granted 76 1.50 Vested ( 536 ) 2.77 Forfeited ( 272 ) 3.32 Total nonvested restricted stock at December 31, 2020 421 $ 3.05 Granted 96 1.29 Vested ( 196 ) 2.71 Forfeited ( 82 ) 3.71 Total nonvested restricted stock at December 31, 2021 239 $ 2.39 During 2021, 0.2 million shares of restricted stock awards vested. The total fair value of restricted stock awards vested, as measured on the date of vesting, during 2021 was $ 0.5 million. During 2021, the Company also granted 0.1 million restricted stock awards. During 2020, 0.5 million shares of restricted stock awards vested. The total fair value of restricted stock awards vested, as measured on the date of vesting, during 2020 was $ 1.5 million. During 2020, the Company also granted 0.1 million restricted stock awards. The following table summarizes significant ranges of outstanding and exercisable stock options as of December 31, 2021: Weighted Number of shares Average Weighted Number of shares Weighted Range of Outstanding Remaining Average Exercisable Average Exercise Prices as of 12/31/2021 Contractual Term Exercise Price as of 12/31/2021 Exercise Price $ 1.07 $ 1.07 849,890 $ 6.92 $ 1.07 — $ — $ 1.14 $ 1.14 580,528 $ 5.92 $ 1.14 290,261 $ 1.14 $ 2.24 $ 2.24 25,000 $ 0.45 $ 2.24 25,000 $ 2.24 Number of Weighted Options exercisable as of December 31, 2021 315,261 $ 1.23 Options vested and expected to vest as of December 31, 2021 1,455,418 $ 1.12 The intrinsic value represents the total pre-tax intrinsic value and is calculated as the difference between the market value as reported by NASDAQ on December 31, 2021 of $ 0.87 and the exercise price of the in-the-money shares. During 2021, the total pre-tax intrinsic value of options exercised was negligible. The weighted average remaining contractual life of options exercisable was 5.49 years, and the weighted average remaining contractual life of options expected to vest was 6.41 years as of December 31, 2021. Stock-Based Compensation Stock-based compensation expense for stock options is estimated at the grant date based on each option’s fair value as calculated by the Black-Scholes model. The Black-Scholes model was developed for use in estimating the fair value of short-lived exchange traded options that have no vesting restrictions and are fully transferable. In addition, option pricing models require the input of highly subjective assumptions, including the expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. The Company uses historical volatility as management believes it is more representative of future stock price trends than implied volatility due to the relatively small number of actively traded options on the Company’s ordinary shares available to determine implied volatility. The Company estimates an expected term of options granted based upon the Company’s historical exercise and cancellation data for vested options. In addition, separate groups of employees that have similar exercise behavior are considered separately. The expected term of employee stock purchase plan shares is the average of the remaining purchase periods under each offering period. The Company bases the risk free interest rate used in the option valuation model on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero in the option valuation model. The Company is required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest. The fair values of stock-based payment awards were estimated using the Black-Scholes option pricing model with the following assumptions: Years ended December 31, Stock Options: 2021 2016 Expected term in years 4.25 4.75 Weighted average risk-free interest rate 1.02 % 1.30 % Expected dividend rate — % — % Volatility 55.21 % 51.6 % At December 31, 2021, there was approximately $ 0.7 million of total unrecognized compensation cost, as measured, related to unvested stock options and restricted stock and restricted stock units, which is expected to be recognized over a weighted-average period of 1.31 years. At December 31, 2020, there was approximately $ 0.9 million of total unrecognized compensation cost, as measured, related to unvested stock options and restricted stock and restricted stock units, which is expected to be recognized over a weighted-average period of 1.80 years. The following table summarizes the stock-based compensation expense recognized in the Company’s Consolidated Statements of Comprehensive Loss: Years Ended December 31, 2021 2020 2019 (in thousands) Cost of net sales $ 87 $ 89 $ 136 Selling, general and administrative 236 360 985 Research and development 181 254 278 Total $ 504 $ 703 $ 1,399 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 10—INCOME TAXES Cayman Islands Under the current tax laws of Cayman Islands, the Company and its subsidiaries are not subject to tax on their income or capital gains. In addition, upon payment of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed. United States and Foreign Income Taxes United States and foreign income (loss) before income taxes and minority interest were as follows: Years Ended December 31, 2021 2020 2019 United States $ ( 961 ) $ ( 13,225 ) $ 6,647 Foreign ( 1,573 ) ( 12,233 ) ( 10,591 ) $ ( 2,534 ) $ ( 25,458 ) $ ( 3,944 ) The components of the income tax expense (benefit) are summarized as follows: Years Ended December 31, 2021 2020 2019 (in thousands) Current Federal $ ( 42 ) $ 1 $ ( 984 ) State — — — Foreign 1,284 1,044 150 Total current income tax expense (benefit) $ 1,242 $ 1,045 $ ( 834 ) Deferred Federal — — — State — — — Foreign 2,052 ( 2,827 ) 803 Total deferred tax expense (benefit) $ 2,052 $ ( 2,827 ) $ 803 Total income tax expense (benefit) $ 3,294 $ ( 1,782 ) $ ( 31 ) On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100 % of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows Net Operating Loss ("NOL") incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The CARES Act contains modifications on the limitation of business interest for tax years beginning in 2019 and 2020. The CARES Act establishes the Paycheck Protection Program which provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. The Company has evaluated the impact of the CARES Act, but at present does not expect that the CARES Act would result in any tax benefit to us. Prior to the effectiveness of the Tax Act, the Company did not recognize a deferred tax liability related to un-remitted foreign earnings because such earnings were expected to be reinvested indefinitely. Because such earnings were previously subject to the one-time transition tax on foreign earnings, any taxes due with respect to such earnings would generally be limited to foreign and state taxes. As of December 31, 2021, the Company has not recognized a deferred tax liability related un-remitted foreign earnings, as it is intends to indefinitely reinvest these earnings and expects future US cash generation to be sufficient to meet future US cash needs. As of December 31, 2021, the Company had gross unrecognized tax benefits of approximately $ 3.2 million and had certain deferred tax assets and the federal tax benefit of state income tax items totaling $ 2.7 million. Of the total $ 3.2 million gross unrecognized tax benefits, $ 0.5 million related to tax benefits that, if recognized, would impact the annual effective tax rate. The Company has reduced its unrecognized tax benefits by approximately $ 160 thousand during 2021 mainly due to statute of limitations expirations and rate change impact. The Company’s policy is to recognize interest expense and penalties related to the above unrecognized tax benefits as a component of income tax expense. The Company had accrued interest and penalties of approximately $ 0.4 million as of December 31, 2021 and approximately $ 0.5 million as of December 31, 2020. The Company is subject to taxation in the U.S. federal jurisdiction and various U.S. state and foreign jurisdictions. The Company is also under audit by the taxing authorities in China on a recurring basis. The material jurisdictions that the Company is subject to examination are in the United States and China. The Company’s tax years for 2011 through 2021 are still open for examination in China and in the United States. ASC 740-10 establishes criteria for recognizing or continuing to recognize only more-likely-than-not tax positions, which may result in income tax expense volatility in future periods. While the Company believes that it has adequately provided for all tax positions, amounts asserted by taxing authorities could be greater than the Company’s accrued position. Accordingly, additional provisions on income tax related matters could be recorded in the future as revised estimates are made or the underlying matters are settled or otherwise resolved. A summary of the Company’s unrecognized tax benefits is as follows: Years Ended December 31, 2021 2020 2019 Beginning balance-gross unrecognized tax benefits (UTB’s) $ 3,404 $ 15,507 $ 17,496 Lapse of statute of limitations — — ( 291 ) Tax credit expiration ( 160 ) ( 12,103 ) — Rate change impact — — ( 1,698 ) Ending balance—UTB 3,244 3,404 15,507 UTB’s as a credit in deferred taxes ( 2,347 ) ( 2,347 ) ( 12,905 ) Federal benefit of state taxes ( 356 ) ( 516 ) ( 2,062 ) UTB’s that would impact the effective tax rate $ 541 $ 541 $ 540 In establishing its deferred income tax assets and liabilities, the Company makes judgments and interpretations based on the enacted tax laws and published tax guidance applicable to its operations. The Company records deferred tax assets and liabilities and evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts. The likelihood of a material change in the Company’s expected realization of these assets is dependent on future taxable income and its ability to use foreign tax credit carryforwards and carrybacks. A summary of the components of net deferred tax assets is as follows: December 31, December 31, 2021 2020 Deferred Tax Assets Allowance and reserves $ 3,811 $ 5,681 Prepaid expense — 93 Net operating loss carryforward 167,844 166,297 Tax credit carryforwards 6,451 6,881 Writedown/amortization of intangible assets and goodwill — 1 Property, plant and equipment 396 815 Stock-based compensation 29 74 Accrued warranties 12 12 Other 14,052 13,874 Total deferred tax assets 192,595 193,728 Deferred Tax Liabilities Deferred revenue and customer advances, net ( 88 ) ( 204 ) Prepaid expense ( 42 ) — Total deferred tax liabilities ( 130 ) ( 204 ) Total net deferred tax assets 192,465 193,524 Less: Valuation allowance ( 190,334 ) ( 189,253 ) Total net deferred tax assets $ 2,131 $ 4,271 As of December 31, 2021, the Company’s U.S. federal net operating loss carryforwards were $ 562 million and expire in varying amounts between 2025 and 2037 . As of December 31, 2021, state net operating loss carryforwards were $ 228 million and expire in varying amounts between 2028 and 2033 . The Company has concluded that these federal and state net operating losses did not meet the more likely than not standard contained in FASB ASC 740-10 and has therefore provided a $ 131.9 million valuation allowance against the related deferred tax assets. In the event the tax benefits related to the valuation allowance are realized, an immaterial amount would be credited to paid-in capital. As of December 31, 2021, the Company also had net operating loss carryforwards (“NOLs”) in China of approximately $ 134.7 million. The China net operating loss carryforwards will expire in varying amounts between 2024 and 2031 . The Company has also concluded that these China net operating losses did not meet the more likely than not standard and has therefore provided a $ 20.3 million valuation allowance against the related deferred tax assets. As of December 31, 2021, the Company had NOLs of approximately $ 93.6 million in countries other than the U.S. and China. The majority of these NOLs do not expire and can be carried forward indefinitely. However, the Company concluded majority of these losses did not meet the more likely than not standard and has therefore provided a valuation allowance of $ 15.6 million against the related deferred tax assets. As of December 31, 2021, the Company has federal and California research and development credit carryforwards of $ 1.2 million and $ 6.4 million, $ 6.4 million of the credits have an indefinite life and $ 1.2 million of the credits expire in varying amounts between 2026 and 2028 . The Company has U.S. foreign tax credits of $ 3.4 million which expire in varying amounts between 2022 and 2028 . The Company has concluded that these U.S. tax credit carryforwards did not meet the more likely than not standard contained in FASB ASC 740-10 and has therefore provided a $ 6.5 million valuation allowance against the related deferred tax assets. The difference between the Company’s effective income tax amount and the federal statutory amount are reconciled below: Years Ended December 31, 2021 2020 2019 Federal tax (benefit) at statutory rate $ ( 532 ) $ ( 5,388 ) $ ( 858 ) Stock compensation expense 68 148 132 Effect of differences in foreign tax rates 1,715 ( 1,408 ) 547 ASC 740-10 reserve ( 21 ) 22 ( 349 ) Change in deferred tax valuation allowance 1,273 4,334 1,107 Other 791 510 ( 610 ) Total Tax Expense (Benefit) $ 3,294 $ ( 1,782 ) $ ( 31 ) On June 24, 2011, the Company effected the Merger to reorganize the corporate structure of UTStarcom, Inc., a Delaware corporation incorporated in 1991, and its subsidiaries. The Merger resulted in shares of the common stock of UTStarcom, Inc. being converted into the right to receive an equal number of ordinary shares in our capital, which were issued by us in connection with the Merger. Following the Merger, UTStarcom, Inc. became our wholly-owned subsidiary and the Company became the parent company of UTStarcom, Inc. and its subsidiaries. The Company, together with its subsidiaries, continues to conduct its business in substantially the same manner as was conducted by UTStarcom, Inc. and its subsidiaries. The transaction was accounted for as a legal re-organization of entities under common control. The China Corporate Income Tax Law (“CIT Law”) became effective on January 1, 2008. Under the CIT Law, China’s dual tax system for domestic enterprises and foreign investment enterprises (“FIEs”) was effectively replaced by a unified system. The new law establishes a tax rate of 25 % for most enterprises and a reduced tax rate of 15 % for certain qualified high technology enterprises. The CIT Law provides the reduced 15% enterprise income tax rate for qualified high and new technology enterprises. One of the Company’s China subsidiaries, UTStarcom Telecom Co., Ltd (“HUTS”), through which the majority of our business in China is conducted obtained the High and New Technology Enterprise Certificate, or (“High-tech Certificate”), from the relevant approval authorities on September 19, 2008, and thereafter were approved to pay CIT at the reduced tax rate of 15%. The approval for the reduced 15 % tax rate is valid for three years and applies retroactively from January 1, 2008, subject to possible re-assessment by the approval authorities. During the re-assessment, the tax authority may suspend the implementation of the reduced 15% rate. HUTS’s High-tech Certificate renewal was completed in 2020, thus the approval extended the reduced 15 % tax rate terms for three years from 2020. However, since HUTS is currently in significant loss position, the reduced tax rate will no t have a material adverse impact on the business or liquidity until HUTS begin to generate profit and deplete all the net operating loss carry forwards. As of September 30, 2005, the Company did not believe it was more likely than not that it would generate a sufficient level and proper mix of taxable income within the appropriate period to utilize all the deferred tax assets in China and the United States. As a result of the review undertaken at September 30, 2005, the Company has concluded that it was appropriate to establish a full valuation allowance for the net deferred tax assets in China and the United States wherein the cumulative losses weigh heavily in the overall assessment. The Company has continued to provide full valuation allowances since 2005 as it did not believe it was more likely than not that it would generate sufficient taxable income within the appropriate period to utilize those deferred tax assets. In 2021, the change in deferred tax valuation allowance of $ 1.3 million is primarily attributable to the tax expense related to continuing to provide full valuation allowance on the Company’s deferred tax assets at December 31, 2021 in the United States and China. In 2020, the change in deferred tax valuation allowance of $ 4.3 million is primarily attributable to the tax expense related to continuing to provide full valuation allowance on the Company’s deferred tax assets at December 31, 2020 in the United States and China. In 2019, the change in deferred tax valuation allowance of $ 1.1 million is primarily attributable to the tax expense related to continuing to provide full valuation allowance on the Company’s deferred tax assets at December 31, 2019 in the United States and China. In 2021, 2020, and 2019, there was no net income tax benefit related to tax credits due to full valuation allowance applied . |
OTHER INCOME (EXPENSE), NET
OTHER INCOME (EXPENSE), NET | 12 Months Ended |
Dec. 31, 2021 | |
Other Income And Expenses [Abstract] | |
OTHER INCOME (EXPENSE), NET | NOTE 11-OTHER INCOME (EXPENSE), NET Other income (expense), net consists of the following: Years ended December 31, 2021 2020 2019 (in thousands) Foreign exchange gain (loss) $ 1,315 $ ( 2,934 ) $ ( 3,880 ) Tax reversal for expiration of statute of limitations (1) — — 1,182 Gain on liquidation of subsidiary 6 — — Aged account payable write-off (2) — — 3,161 Gain of investment — 347 — Other 328 421 409 Total $ 1,649 $ ( 2,166 ) $ 872 (1) In 2019, approximately $ 1.2 million reversal of ASC 460 reserve due to expiration of the related statute of limitations. (2) In 2019, the Company reversed an aged account payable balance due to the expiration of the related statute of limitations in India. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NOTE 12-NET LOSS PER SHARE The following table sets forth the computation of basic and diluted net loss per share for the years ended December 31, 2021, 2020 and 2019: Years Ended December 31, 2021 2020 2019 (in thousands) Numerator: Net loss $ ( 5,828 ) $ ( 23,676 ) $ ( 3,913 ) Denominator: Weighted average shares outstanding-Basic 36,027 35,881 35,556 Potentially dilutive ordinary share equivalents-stock — — — Weighted average shares outstanding–Diluted 36,027 35,881 35,556 Net loss per share–Basic $ ( 0.16 ) $ ( 0.66 ) $ ( 0.11 ) Net loss per share–Diluted $ ( 0.16 ) $ ( 0.66 ) $ ( 0.11 ) The dilutive effect of share-based awards is reflected in diluted net loss per share by application of the treasury stock method, which includes consideration of unamortized share-based compensation expense and the dilutive effect of in-the-money options and unvested restricted stock units. Under the treasury stock method, the amount the employee must pay for exercising stock options and unamortized share-based compensation expense are assumed proceeds to be used to repurchase hypothetical shares. An increase in the fair market value of the Company’s ordinary share can result in a greater dilutive effect from potentially dilutive awards. For the years ended December 31, 2021, 2020 and 2019, there was nil ordinary shares that were dilutive. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 13-SEGMENT REPORTING The Company’s reporting segments are as follows: • Equipment- Sales of equipment, including network infrastructure and application products. Network infrastructure products mainly include broadband products. Network application products mainly include wireless infrastructure technologies. • Services-Providing services and support for our equipment products and also the new operational support segment. The Company’s Chief Operating Decision Maker, who is also our Chief Executive Officer, makes financial decisions and resource allocations based on information they receive from their internal management system and currently evaluate the operating performance and allocates resources to the reporting segments based on segment revenue, gross profit and income before income taxes. Cost of sales and direct expenses in relation to production are assigned to the reporting segments. The accounting policies used in measuring segment assets and operating performance are the same as those used at the consolidated level. Summarized below are the Company’s segment net sales, gross profit and income before income taxes for the years ended December 31, 2021, 2020 and 2019 based on the current reporting segment structure. Years Ended December 31, % of % of % of Sales by Segment 2021 Net Sales 2020 Net Sales 2019 Net Sales (in thousands, except percentages) Equipment $ 2,323 15 % $ 12,385 51 % $ 43,722 67 % Services 13,598 85 % 11,925 49 % 21,901 33 % Total $ 15,921 100 % $ 24,310 100 % $ 65,623 100 % Years Ended December 31, Gross Profit Gross Profit Gross Profit Gross profit (loss)by Segment 2021 % 2020 % 2019 % (in thousands, except percentages) Equipment $ ( 4,358 ) ( 188 ) % $ 1,237 10 % $ 14,156 32 % Services 3,283 24 % 2,292 19 % 10,001 46 % Total $ ( 1,075 ) ( 7 ) % $ 3,529 15 % $ 24,157 37 % Years ended December 31, Segment income (loss) and Loss before income taxes 2021 2020 2019 (in thousands) Equipment $ ( 12,868 ) $ ( 7,640 ) $ 51 Services 3,283 2,292 10,001 Total segment income (loss) ( 9,585 ) ( 5,348 ) 10,052 General and corporate 7,051 ( 20,110 ) ( 13,996 ) Loss before income taxes $ ( 2,534 ) $ ( 25,458 ) $ ( 3,944 ) General and corporate expenses include all un-allocated expenses such as sales and marketing, general and administration and common R&D expenses, equity income (loss) of associates, and investment impairment. Sales are attributed to a geographical area based upon the location of the customer. Sales data by geographical area are as follows: Years Ended December 31, % of net % of net % of net 2021 Sales 2020 Sales 2019 Sales (in thousands, except percentages) Net Sales by Region China $ 1,858 11 % $ 2,286 10 % $ 2,439 4 % India 8,221 52 % 9,807 40 % 37,206 57 % Japan 5,842 37 % 12,208 50 % 21,761 33 % Taiwan — — % — — % 3,515 5 % Other — — % 9 — % 702 1 % Total $ 15,921 100 % $ 24,310 100 % $ 65,623 100 % Long-lived assets, consisting of property, plant and equipment, by geographical area are as follows: December 31, 2021 2020 China $ 528 $ 565 Other 74 55 Total long-lived assets $ 602 $ 620 |
CREDIT RISK AND CONCENTRATION
CREDIT RISK AND CONCENTRATION | 12 Months Ended |
Dec. 31, 2021 | |
Risks And Uncertainties [Abstract] | |
CREDIT RISK AND CONCENTRATION | NOTE 14-CREDIT RISK AND CONCENTRATION Financial Risks: Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, short-term investments and accounts and notes receivable. The Company places its idle cash and short-term investments with several commercial banks. Approximately $ 53.8 million and $ 28.6 million of the Company’s cash and cash equivalents and short-term investments were on deposit in accounts outside the U.S. at December 31, 2021 and 2020, respectively, of which approximately $ 12.2 million and $ 12.2 million were held by subsidiaries in China. China imposes currency exchange controls on certain transfers of funds to and from China. The Company’s China subsidiaries are subject to pre-approval from the State Administration of Foreign Exchange (“SAFE”) for non-domestic financing. Additionally, the amount of cash available for transfer from the China subsidiaries for use by the Company’s non-China subsidiaries is also limited both by the liquidity needs of the subsidiaries in China and the restriction on foreign currency exchange by Chinese-government mandated limitations including currency exchange controls on certain transfers of funds outside of China. The Company’s exposure to market risk for changes in interest rates relates primarily to its investment portfolio. The fair value of its investment portfolio would not be significantly affected by either a 10 % increase or decrease in interest rates due mainly to the short-term nature of most of its investment portfolio with the exception of the available-for-sale securities. The investment classified as available-for-sales securities is reported at fair value. It will be measured subsequently at fair value on the balance sheets with unrealized gains and losses recorded in accumulated other comprehensive income in shareholders’ equity. Any negative events or deterioration in financial well-being with respect to the counterparties of the long-term investments and the underlying collateral may cause material losses to the Company and have a material effect on the Company’s financial condition and results of operations. In addition, the Company’s interest income can be sensitive to changes in the general level of U.S. and China interest rates since the majority of its funds are invested in instruments with maturities of less than one year. In a declining interest rate environment, as short-term investments mature, reinvestment occurs at less favorable market rates. Given the short-term nature of certain investments, declining interest rates will not negatively impact the Company’s investment income. The Company maintains an investment portfolio of various holdings, types and maturities. The Company does not use derivative financial instruments. The Company places its cash investments in instruments that meet high credit quality standards, as specified in its investment policy guidelines. The Company’s policy is to limit the risk of principal loss and to ensure the safety of invested funds by generally attempting to limit market risk. The Company’s available-for-sale securities are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income in shareholders’ equity. Any negative events or deterioration in financial well-being with respect to the counterparties of these investments may cause material losses to the Company and have a material effect on the Company’s financial condition and results of operations. Concentration of Credit Risk and Major Customers: At December 31, 2021 and 2020, the Company’s accounts receivable balance included amounts due from customer A, representin g approximately nil and 1 % of the C ompany’s total accounts receivable, net of allowances for credit losses, respectively. At December 31, 2021 and 2020, the Company’s accounts receivable balance included amounts due from customer B, representing approximately 92 % and 91 % of the Company’s total accounts receivable, net of allowances for credit losses, respectively. The Company has collected over $ 35 million and $ 8 million in 2021 and in the first quarter of 2022, respectively. The following customers accounted for 10% or more of the Company’s net revenues: For the years ended December 31, 2021 2020 2019 Customer A 30 % 25 % 21 % Customer B 44 % 31 % 48 % Country Risks: The Company’s main operating functions inclusive of R&D, manufacturing and related supports as well as its core management team are in China. The Company’s operations in China are subject to special considerations and significant risks not typically associated with companies in the United States. These include risks associated with, among others, the political, economic and legal environments, foreign currency exchange. The Company’s results may be adversely affected by, among other things, changes in the political, economic and social conditions in China, public health issues such as COVID-19 pandemic, and by changes in governmental policies with respect to laws and regulations, changes in China’s telecommunications industry and regulatory rules and policies, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation. In addition, the major customers of the Company are based in Japan and India. Therefore, our results of operations may be adversely affected by the political and business relationship between as well as other events affecting Japan or India in general. From time to time there have been tensions and conflicts among China, Japan and India. Adverse changes in political and economic policies, geopolitical uncertainties, and international conflicts may lead to a reduction in our sales. Any future conflicts among China, Japan and India have an adverse impact on the political and business relationship of the countries. Furthermore, events affecting Japan or India in general, such as natural disasters, public health issues (COVID-19 pandemic as example), or a local currency devaluation may also have a negative impact on our business, financial condition and results of operations. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15-RELATED PARTY TRANSACTIONS Tonghao (Cayman) Limited, or Tonghao Cayman, acquired an additional 9,200,000 Ordinary Shares from the Company’s former shareholders and became the largest shareholder of the Company. Tongding Interconnection Information Co., Ltd. (“TDI”) is the parent company of Tonghao Cayman. The Company had sales transactions with TDI in the amount of nil , $ 13,000 and $ 49,000 in 2021, 2020 and 2019, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16-SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date of these consolidated financial statements and is not aware of any significant subsequent events that would require recognition or disclosure. |
SCHEDULE I CONDENSED FINANCIAL
SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT | SCHEDU LE I UTSTARCOM HOLDINGS CORP. (UNCONSOLIDATED-PARENT COMPANY BASIS) REGISTRANT BALANCE SHEETS (In thousands, except par value) December 31, 2021 2020 (in thousands) ASSETS Investment in subsidiaries $ 82,696 $ 91,904 Total assets 82,696 91,904 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable-intercompany 14,345 14,503 Total current liabilities 14,345 14,503 Total liabilities 14,345 14,503 Shareholders’ equity: Ordinary shares: $ 0.00375 par value; 250,000 authorized shares; 41,123 40,907 shares issued at December 31, 2021 and December 31, 2020, 36,114 and 35,898 shares outstanding at December 31, 2021 123 123 Additional paid-in capital 1,266,822 1,266,318 Treasury stock, at cost: 5,009 and 5,009 shares at December 31, 2021 ( 12,322 ) ( 12,322 ) Accumulated deficit ( 1,246,207 ) ( 1,240,379 ) Accumulated other comprehensive income 59,935 63,661 Total shareholders’ equity 68,351 77,401 Total liabilities and shareholders’ equity $ 82,696 $ 91,904 The accompanying notes are an integral part of these financial statements. UTSTARCOM HOLDINGS CORP. (UNCONSOLIDATED-PARENT COMPANY BASIS) CONDENSED INFORMATION AS TO STATEMENTS OF COMPREHENSIVE LOSS OF THE REGISTRANT (In thousands) Years ended December 31, 2021 2020 2019 (in thousands) Sales Unrelated parties $ — $ — $ — Related parties — — — Intercompany — — — Cost of sales Unrelated parties — — — Related parties — — — Intercompany — — — Gross profit — — — Operating expenses: Selling, general and administrative 769 693 633 Research and development — — — Total operating expenses 769 693 633 Operating loss ( 769 ) ( 693 ) ( 633 ) Interest income — — — Interest expense — — — Other income, net — — — Loss before income taxes and equity in loss of affiliated companies ( 769 ) ( 693 ) ( 633 ) Equity in net loss of affiliated companies ( 5,059 ) ( 22,983 ) ( 3,280 ) Income tax expense — — — Net loss $ ( 5,828 ) $ ( 23,676 ) $ ( 3,913 ) Other comprehensive income (loss), net of tax $ ( 3,726 ) $ 1,560 $ 529 Comprehensive loss $ ( 9,554 ) $ ( 22,116 ) $ ( 3,384 ) The accompanying notes are an integral part of these financial statements. UTSTARCOM HOLDINGS CORP. NOTES TO CONDENSED FINANCIAL STATEMENTS NOTE 1-BASIS OF PRESENTATION UTStarcom Holdings Corp., or the Company, a Cayman Island corporation, is the parent company of all UTStarcom Holdings Corp. subsidiaries. The condensed financial statements of the Company have been prepared pursuant to the rules and regulations of the SEC and in conformity with U.S. GAAP. The Company determined cash flow activities during the period were not material and therefore omitted the statement of cash flows from these financial statements. On June 24, 2011, the Company effected a merger, or the Merger, to reorganize the corporate structure of UTStarcom, Inc., a Delaware corporation incorporated in 1991, and its subsidiaries. As a result of the reorganization, UTStarcom Holdings Corp. became the parent company of UTStarcom, Inc. and its subsidiaries. Pursuant to the Merger, the Company issued an equal number of ordinary shares in exchange for the common stock of UTStarcom, Inc. Given the reorganization of the corporate structure on June 24, 2011, the prior period numbers have been adjusted as if the new corporate structure had been in place since the beginning of the earliest period presented in the above condensed financial statements. The Company is generally a holding company of certain subsidiaries, or collectively subsidiaries. The condensed financial statements of the Company have been prepared with the assumption that the current corporate structure has been in existence throughout all relevant periods. The Company records its investment in subsidiaries under the equity method of accounting as prescribed in ASC 323-10, “ The Equity Method of Accounting for Investments in Common Stock. ” Such investment is presented on the balance sheet as “Investment in affiliated companies” and the subsidiaries’ profit or loss are recognized based on the effective shareholding percentage as “Equity in net income (loss) of affiliated companies” on the results of operations. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company. The Company is a holding company and does not have any activities. Operating expenses for the Company for the years ended December 31, 2021, 2020 and 2019 consisted mainly of the retaining fee for the Board of Directors, its director and officer insurance expenses and the expenses associated with investor relations. As the Company does not have any cash activity, the recorded expenses were paid on behalf of the Company by UTStarcom, Inc., its subsidiary, and statements of cash flows have been omitted. |
SCHEDULE II VALUATION AND QUALI
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND ALLOWANCE | 12 Months Ended |
Dec. 31, 2021 | |
Valuation And Qualifying Accounts [Abstract] | |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND ALLOWANCE | SCHEDU LE II UTSTARCOM HOLDINGS CORP. VALUATION AND QUALIFYING ACCOUNTS AND ALLOWANCE For the Years Ended December 31, 2021, 2020, and 2019 Charged Balance at (credited) to Credited to Balance at beginning of costs and other (Deductions) end of Description the period expenses accounts Adjustments (1) the period Year ended December 31, 2021 Allowance for credit losses $ 15,982 $ ( 9,158 ) $ — $ ( 193 ) $ 6,631 Tax valuation allowance $ 189,253 $ 1,273 $ ( 192 ) $ — $ 190,334 Year ended December 31, 2020 Allowance for credit losses $ 6,506 $ 9,441 $ — $ 35 $ 15,982 Tax valuation allowance $ 193,788 $ 4,334 $ ( 8,869 ) $ — $ 189,253 Year ended December 31, 2019 Allowance for credit losses $ 2,124 $ 4,396 $ — $ ( 14 ) $ 6,506 Tax valuation allowance $ 206,630 $ 1,107 $ ( 13,949 ) $ — $ 193,788 (1) Represents write-offs of allowance for credit losses and foreign exchange adjustments. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates: The preparation of consolidated financial statements in conformity with US GAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant judgment and estimates are used for revenue recognition, allowances for credit losses on accounts receivable and sales returns, tax valuation allowances, inventory write-down, impairment of property, plant and equipment, deferred costs, accrued product warranty costs, provisions for contract losses, investment impairments, going concern assessment, stock-based compensation expense, and loss contingencies among others. Actual results could differ materially from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents: Cash and cash equivalents consist of highly liquid instruments with maturities of three months or less when acquired. Approximately 6.9 %, or $ 3.7 million and 22.7 % or $ 7.8 million of cash and cash equivalents were held by the Company’s subsidiaries in the United States as of December 31, 2021 and 2020, respectively. The remainder was held by the other UTStarcom entities throughout the world. As of December 31, 2021 and 2020, approximately 22.7 %, or $ 12.2 million and 35.8 % or $ 12.2 million, of the Company’s cash and cash equivalents were held by its subsidiaries in China, respectively. China imposes currency exchange controls on transfers of cash outside of China. |
Restricted Cash | Restricted Cash: As of December 31, 2021, the Company had short-term restricted cash of $ 10.1 million, and long-term restricted cash of $ 2.4 million. As of December 31, 2020, the Company had short-term restricted cash of $ 12.1 million, and long-term restricted cash of $ 2.1 million. These amounts primarily collateralize the Company’s issuances of performance guarantee, warranty, and standby and commercial letters of credit. |
Investments | Investments: The Company’s investments consist principally of debt and equity securities classified as “available for sale”, and cost and equity method investments in privately held companies. The investments in equity securities of privately held companies in which the Company does not have the ability to exercise significant influence are accounted for under ASC 321, “ Investments—Equity Securities ” using the measurement alternative . For those investments without readily determinable fair values, the Company elects to record these investments at cost, less impairment, plus or minus subsequent adjustments for observable price changes. Before ASC 321 took effective, the Company’s investments, such as GCT Semiconductor, were recorded under cost method. The investments in equity securities of privately held companies in which the Company has the ability to exercise significant influence, but does not own a majority equity interest or otherwise control are accounted for under ASC 323, “ Investments-Equity Method and Joint Ventures ” using the equity method. Investments in debt securities classified as available for sale are measured at fair value on the balance sheets under ASC 320, “ Investments-Debt and Equity Securities. ” Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) are excluded from earnings and reported in other comprehensive income until realized, except as indicated in the following paragraph. The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. The Company reviews several factors to determine whether the losses are other-than-temporary, including but not limited to: (i) the length of time the investment was in an unrealized loss position, (ii) the extent to which fair value was less than cost, (iii) the financial condition and near term prospects of the issuer, and (iv) the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. The determination of fair value of the investment involves considering factors such as current economic and market conditions, the operating performance of the companies including current earnings trends and forecasted cash flows, and other company and industry specific information. Investment impairments recorded as other-than-temporary were nil , $ 1.0 million and nil , for the years ended December 31, 2021, 2020 and 2019, respectively. |
Revenue Recognition | Revenue Recognition: The Company recognizes revenue in accordance with ASC 606. The core principle of ASC 606 is that revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. To determine the appropriate amount of revenue to be recognized for arrangements determined to be within the scope of ASC 606, for each customer contract, we performed the following five steps: 1. Identify the contract with a customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to the performance obligations in the contract; and 5. Recognize revenue when or as the Company satisfies a performance obligation. The Company accounts for a contract with a customer that is within the scope of ASC 606 when all of the following criteria are met: (i) the arrangement has been approved by the parties and the parties are committed to perform their respective obligations, (ii) each party's rights regarding the goods or services to be transferred can be identified, (iii) the payment terms for the goods or services to be transferred can be identified, (iv) the arrangement has commercial substance and (v) collection of substantially all of the consideration to which the Company will be entitled in exchange for the goods or services that will be transferred to the customer is probable. Performance obligations promised in a contract are identified based on the services and the products that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the services and the products is separately identifiable from other promises in the contract. Our performance obligations consist of (i) sales of communication equipment with embedded software, (ii) provision of installation and commission service, and (iii) provision of annual maintenance service. The software component is not considered distinct as the software component is integral to the functionality of the communication equipment. The transaction price is determined based on the consideration to which we expect to be entitled in exchange for transferring services to the customer. Some sales agreements have performance guarantees covering a certain timeframe. If there is an underperformance event, the Company may incur liquidation damages as a percentage of the total purchase price. Such performance guarantees represent a form of variable consideration and are estimated at the contact inception at the best estimate and updated at the end of each reporting period as additional performance data becomes available and only to the extent that it is probable that a significant reversal of any revenue will not occur. Variable consideration includes estimates for sales credits, which are based on historical level and specific criteria outlined in the sales contracts, and other factors known at the time. The Company generally invoices customers for equipment and services upon meeting certain milestones. Customer invoices are generally due within 30 to 90 days after issuance. The Company’s contracts with customers typically do not include significant financing components as the period between the transfer of performance obligations and timing of payment are generally within one year. The Company allocates the transaction price based on the estimated standalone selling price. The Company develops assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract. The Company utilizes key assumptions to determine the standalone selling price, which may include other comparable transactions, pricing considered in negotiating the transaction and the estimated costs. Certain variable consideration is allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated to each performance obligation are consistent with the amounts the Company would expect to receive for satisfying each performance obligation. Revenue recognized when a customer obtains control of promised goods or services at an amount that reflects the consideration that is expected to be received in exchange for those goods or services. The Company utilizes judgment to assess the nature of the combined performance obligation determine whether a performance obligation is satisfied over time or at a point in time. Revenue from sales of communication equipment is recognized at a point in time, which is generally upon delivery. Revenue from provision of installation and commission service is recognized at a point in time when the service is completed. Revenue from provision of annual maintenance services is recognized over time on a ratable basis over the contract term. |
Product Warranty | Product Warranty: The Company provides a warranty on its equipment and terminal sales for periods generally ranging from one to two years from the time of final acceptance. At times, the Company has entered into arrangements to provide limited warranty services for periods longer than two years . The Company provides for the expected cost of product warranties at the time that revenue is recognized based on an assessment of past warranty experience and when specific circumstances dictate. The Company assesses the adequacy of its recorded warranty liability every quarter and makes adjustments to the liabilities if necessary. From time to time, the Company may be subject to additional costs related to non-standard warranty claims from its customers. If and when this occurs, the Company estimates additional accruals based on historical experience, communication with its customers and various assumptions that the Company believes to be reasonable under the circumstances. Such additional warranty accruals are recorded in the period in which the additional costs are identified. Specific warranty accruals are reversed upon the expiration of the warranty period and are recorded as reduction of cost of sales. |
Receivables | Receivables: Although the Company evaluates customer credit worthiness prior to a sale, the Company provides an allowance for credit losses on trade and notes receivable when collection may no longer be reasonably assured. The Company assesses collectability of receivables based on a number of factors including analysis of customer creditworthiness, historical payment history, our ability to collect payment, length of time an individual receivable balance is outstanding and current and future economic conditions. |
Allowance for Credit Losses | Allowance for credit losses: Effective on January 1, 2020, the Company adopted Accounting Standards Update (ASU) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which introduces an expected loss approach using macroeconomic data, referred to as a current expected credit losses (“CECL”) methodology. The Company makes estimates of the lifetime expected credit losses for accounts receivable with similar risk characteristics on a pool basis. For each pool, the Company first estimates its recovery period based on relevant historical accounts receivable collection information, and then estimates the credit allowances based on the recovery period, the historical distribution of each aging bucket, and the impact of macroeconomic factors. Expected credit losses are recorded as selling, general and administrative expenses in the consolidated statements of comprehensive income (loss). Changes in these estimates and assumptions could materially affect the credit losses. |
Inventories | Inventories: Inventories consist of product held at the Company’s manufacturing facility and warehouses, as well as finished goods at customer sites for which the customer has taken possession but, based on specific contractual terms, title has not yet passed to the customer. The Company may ship inventory to existing customers that require additional equipment to expand their existing networks prior to the signing of an expansion contract. Inventories are stated at the lower of cost and net realizable value. The Company continually monitors inventory valuation for potential losses and obsolete inventory at our manufacturing facilities as well as at customer sites. Adjustments are recorded to write down the cost of inventory to estimated net realizable value, which is dependent upon the factors such as inventory aging, historical and forecasted consumer demand, and market conditions that impact pricing. Write-downs are recorded in cost of revenues in our consolidated statements of comprehensive income (loss). |
Deferred Costs | Deferred Costs: Deferred cost balances are the unamortized cost of post-contract customer support over a period of time of certain legacy contracts. The Company amortizes the deferred revenue and related costs of goods sold over the post-contract support period. |
Property, Plant and Equipment | Property, Plant and Equipment: Property, plant and equipment are recorded at cost and are stated net of accumulated depreciation. Depreciation is provided on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful lives or the term of the lease. When assets are disposed of, the cost and related accumulated depreciation are removed and the resulting gains or losses are included in results of operations. The Company generally depreciates its property, plant and equipment over the following periods: Years Equipment and furniture 5 Computers and software 2 - 3 Automobiles 5 Leasehold improvements Lesser of the lease term or estimated useful life Depreciation expense was $ 0.4 million, $ 0.6 million, and $ 0.6 million, for the years ended December 31, 2021, 2020 and 2019, respectively. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets: Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If undiscounted expected future cash flows are less than the carrying value of the assets, an impairment loss is recognized based on the excess of the carrying amount over the fair value of the assets. Long-lived assets that are to be sold are measured at the lower of book value or fair value less cost to sell. |
Advances | Advances: Advances from customers represent cash received from customers before revenue recognition for the purchase of the Company’s products. |
Advertising Costs | Advertising Costs: The Company expenses all advertising costs as incurred. Payment to customers for marketing development costs are accounted for as incurred as a reduction of the revenue associated with customers. For the years ended December 31, 2021, 2020 and 2019, advertising costs totaled $ 0.1 million, $ 0.1 million, and $ 0.1 million, respectively. |
Operating Leases | Operating Leases: At the inception of each arrangement, the Company determine if the arrangement is a lease or contains an embedded lease and review the facts and circumstances of the arrangement to classify lease assets as operating or finance leases under Topic 842. The Company leases office space under operating lease agreements with initial lease terms up to five years . The Company has entered into various non-cancelable operating lease agreements for its office space. These leases have lease periods that expire no later than 2021 to 2026 . Some of these lease agreements have options to extend the lease terms for an additional period subject to mutual negotiations and agreements with the lessor. The Company considered all renewal options that were reasonably certain to be exercised and are considered in determining the lease term at the inception of the lease. The Company measures lease liabilities based on the present value of the total remaining lease payments. To determine the present value of future minimum lease payments, we used the implicit rate when readily determinable. When the implicit rate is not available, the Company applies its incremental borrowing rate, which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease. The Company estimates its incremental borrowing rate based on an analysis of interest rates published by banks. |
Treasury Stock | Treasury Stock: Treasury stock is recorded at cost and represents shares repurchased by the Company. |
Stock-Based Compensation | Stock-Based Compensation: Stock-based compensation expense for all share-based payment awards granted to employees is determined based on the grant-date fair value. Stock-based compensation expense for restricted stock awards is measured based on the closing fair market value of the Company’s ordinary shares on the date of grant. Stock-based compensation expense for stock options is estimated at the grant date based on each option’s fair value as calculated by the Black-Scholes model. Stock-based compensation is expensed ratably on a straight-line basis over the requisite service period, which is generally the vesting term of the share-based payment awards. The performance-based restricted stock units are subject to the attainment of goals determined by the Compensation Committee of the Company’s Board of Directors. The Company records the relevant stock-based compensation for the performance-based restricted stock units based on the probability of meeting the performance conditions. |
Accumulated Other Comprehensive Income (AOCI) | Accumulated Other Comprehensive Income (“AOCI”): AOCI consisted of foreign currency translation adjustments. The changes in AOCI, including the amounts reclassified to income, were as follows: Foreign currency translation and unrealized gains (losses), net of tax (in thousands) Balance at December 31, 2019 $ 62,101 Unrecognized gain on foreign currency translation 1,560 Balance at December 31, 2020 $ 63,661 Unrecognized loss on foreign currency translation ( 3,720 ) Less: Gain reclassified from AOCI to income ( 6 ) Balance at December 31, 2021 $ 59,935 |
Income Taxes | Income Taxes: The Company is subject to income taxes in both the United States and numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining the provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company recognizes the tax benefit (expense) from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company recognizes interest expense and penalties related to income tax matters as part of the provision for income taxes. The Company recognizes deferred income taxes as the difference between the tax basis of assets and liabilities and their financial statement amounts based on enacted tax rates. Management judgment is required in the assessment of the recoverability of our deferred tax assets based on its assessment of projected taxable income. Numerous factors could affect our results of operations in the future. If there is a significant decline in our future operating results, management’s assessment of the recoverability of our deferred tax assets would need to be revised, and any such adjustment to our deferred tax assets would be charged to income in that period. If necessary, the Company records a valuation allowance to reduce deferred tax assets to an amount which management believes is more likely than not to be realized. Changes in estimates of taxable income in the future could result in reversal of the valuation allowances which would be credited to income in the year of reversal. |
Financial Instruments | Financial Instruments: Financial instruments consist of cash and cash equivalents, short and long-term investments, notes receivable, accounts receivable and payable and accrued liabilities. The carrying amounts of cash and cash equivalents, bank notes, accounts receivable and payable, notes receivable, and accrued liabilities approximate their fair values because of the short-term nature of those instruments. The fair value of long-term investments in debt and equity securities is determined based on quoted market prices or available information about investees. |
Foreign Currency Translation | Foreign Currency Translation: The Company’s operations are conducted through international subsidiaries where the local currency is the functional currency and the financial statements of those subsidiaries are translated from their respective functional currencies into U.S. Dollars which is the functional and reporting currency of the Company. All foreign currency assets and liabilities are translated at the period-end exchange rate and all revenues and expenses are translated at the average exchange rate for the period. The effects of translating the financial statements of foreign subsidiaries into U.S. Dollars are reported as a cumulative translation adjustment, a separate component of accumulated other comprehensive income in shareholders’ equity. The foreign currency translation gain (loss) related to the remeasurement of transactions denominated in other than the functional currency is included in other income (expense), net in the consolidated statements of comprehensive income (loss). In connection with this remeasurement process, the Company recorded income of $ 1.3 million, and losses of $ 2.9 million and $ 3.9 million for the years ended December 31, 2021, 2020 and 2019, respectively. |
Earnings per Share | Earnings per Share: Basic earnings per share is computed by dividing the net income (loss) available to shareholders by the weighted average number of the Company’s ordinary shares outstanding, as applicable, during the period, which excludes unvested restricted stock. Diluted earnings per share reflects the amount of net income (loss) available to each ordinary share outstanding during the period plus number of additional shares that would have been outstanding if potentially dilutive securities had been issued. The Company’s potentially dilutive ordinary shares include outstanding stock options, unvested restricted stock, restricted stock units and performance-based units. The following table summarizes the total potential ordinary shares that were excluded from the diluted per share calculation, because their effect was anti-dilutive. Years ended December 31, 2021 2020 2019 (in thousands) Anti-dilutive stock options and awards/units outstanding 1,695 1,478 1,335 Total(1) 1,695 1,478 1,335 (1) Calculated using the treasury stock method, which assumes proceeds are used to reduce the dilutive effect of outstanding stock awards. Assumed proceeds include the unrecognized deferred compensation of share awards, and assumed tax proceeds from excess stock-based compensation deductions. For the years ended December 31, 2021, 2020 and 2019, no potential ordinary shares were dilutive because of the net loss incurred in those years, therefore basic and dilutive earnings per share were the same. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards: In December 2019, the FASB issued ASU 2019-12, “Income tax (Topic 740) Simplifying accounting for income taxes”. The amendments in this Update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements: In November 2021, the FASB issued ASU 2021-10 creating new Codification Topic 832 (government assistance), which requires business entities to disclose information about certain government assistance that they receive. The new Topic 832 disclosure requirements include: the nature of the transactions and the related accounting policies used; the line items on the balance sheet and income statement that are affected and the amounts applicable to each financial statement line item; and significant terms and conditions of the transactions. Topic 832 is effective for all business entities in fiscal years beginning after December 15, 2021. The Company is in the process of evaluating the financial impact to the Company and will apply the applicable amendments (if any) from fiscal year 2022. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Useful Lives of Property Plant and Equipment | The Company generally depreciates its property, plant and equipment over the following periods: Years Equipment and furniture 5 Computers and software 2 - 3 Automobiles 5 Leasehold improvements Lesser of the lease term or estimated useful life |
Schedule of Changes in AOCI, Including the Amounts Reclassified to Income | AOCI consisted of foreign currency translation adjustments. The changes in AOCI, including the amounts reclassified to income, were as follows: Foreign currency translation and unrealized gains (losses), net of tax (in thousands) Balance at December 31, 2019 $ 62,101 Unrecognized gain on foreign currency translation 1,560 Balance at December 31, 2020 $ 63,661 Unrecognized loss on foreign currency translation ( 3,720 ) Less: Gain reclassified from AOCI to income ( 6 ) Balance at December 31, 2021 $ 59,935 |
Summary of the Total Potential Ordinary Shares that were Excluded from the Diluted Per Share Calculation | The following table summarizes the total potential ordinary shares that were excluded from the diluted per share calculation, because their effect was anti-dilutive. Years ended December 31, 2021 2020 2019 (in thousands) Anti-dilutive stock options and awards/units outstanding 1,695 1,478 1,335 Total(1) 1,695 1,478 1,335 (1) Calculated using the treasury stock method, which assumes proceeds are used to reduce the dilutive effect of outstanding stock awards. Assumed proceeds include the unrecognized deferred compensation of share awards, and assumed tax proceeds from excess stock-based compensation deductions. For the years ended December 31, 2021, 2020 and 2019, no potential ordinary shares were dilutive because of the net loss incurred in those years, therefore basic and dilutive earnings per share were the same. |
COMPREHENSIVE LOSS (Tables)
COMPREHENSIVE LOSS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Comprehensive Income Net Of Tax [Abstract] | |
Schedule of Total Comprehensive Loss | Total Comprehensive Loss for the years ended December 31, 2021, 2020 and 2019 consisted of the following: Years ended December 31, 2021 2020 2019 (in thousands) Net loss $ ( 5,828 ) $ ( 23,676 ) $ ( 3,913 ) Other comprehensive income (loss) Net Change in Foreign currency translation ( 3,726 ) 1,560 529 Total comprehensive loss $ ( 9,554 ) $ ( 22,116 ) $ ( 3,384 ) |
BALANCE SHEET DETAILS (Tables)
BALANCE SHEET DETAILS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Inventories | The following tables provide details of selected balance sheet items: December 31, December 31, 2021 2020 (in thousands) Inventories: Raw materials $ 563 $ 3,328 Work in process 39 1,766 Finished goods (1) 935 1,601 Total Inventory $ 1,537 $ 6,695 (1) Includes finished goods at customer sites of approximately $ 0.1 million and $ 0.5 million at December 31, 2021 and 2020, respectively, for which the customer has taken possession, but based on specific contractual terms, title has not yet passed to the customer and for which revenue has not yet been recognized. |
Schedule of Prepaid and Other Current Assets | December 31, December 31, 2021 2020 (in thousands) Prepaid and other current assets Prepaid tax (1) $ 1,295 $ 1,736 Advance to suppliers 7 15 Other receivables 796 1,054 Prepaid and others (2) 2,713 2,303 Total Prepaid and other current assets $ 4,811 $ 5,108 (1) 2021 balance includes $ 0.1 million prepaid consumption tax, $ 0.9 million prepaid of value added tax, $ 0.01 million duty recoverable and $ 0.3 million goods and servic e tax. 2020 balance includes $ 0.1 million prepaid consumption tax, $ 0.8 million prepaid of value added tax, $ 0.5 million duty recoverable and $ 0.3 million goods and service tax. (2) 2021 balance includes $ 2.0 million interest receivabl e. 2020 balance includes $ 1.4 million interest receivable, $ 0.4 million prepaid of software and license |
Schedule of Property, Plant and Equipment, Net | December 31, December 31, 2021 2020 (in thousands) Property, plant and equipment, net: Leasehold improvements $ 1,801 $ 1,846 Automobiles 271 340 Computers and software 4,461 4,579 Equipment and furniture 22,240 23,906 Total 28,773 30,671 Less: accumulated depreciation ( 28,171 ) ( 30,051 ) Total Property, plant and equipment, net $ 602 $ 620 |
Schedule of Other Current Liabilities | December 31, December 31, 2021 2020 (in thousands) Other current liabilities: Warranty costs $ 53 $ 54 Accrued professional fees 993 988 Accrued other taxes 36 376 Provision for LD 1,073 1,575 Contract deposits 349 343 Others 869 709 Total other current liabilities $ 3,373 $ 4,045 |
Schedule of Other Long-term Liabilities | December 31, December 31, 2021 2020 (in thousands) Other long-term liabilities Non-current income tax payable $ 979 $ 1,000 Other long-term liabilities — — Total other long-term liabilities $ 979 $ 1,000 |
CASH, CASH EQUIVALENTS AND SH_2
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | |
Schedule Showing Break-down of the Company's Total Short-term Investment and Long-term Investments | Accounting December 31, December 31, Method 2021 2020 (in thousands) GCT Semiconductor Cost $ — $ — UiTV Media Inc. Equity — — UTStarcom Hong Kong Holdings Ltd AFS — 2,100 Total Investments $ — $ 2,100 |
Schedule of Change in Value of Financial Assets using Unobservable Inputs (Level 3) | Amount In thousands As of December 31, 2020 $ 2,100 Less: Proceeds from sales of short-term investment ( 2,100 ) As of December 31, 2021 $ — |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Summary of Total Operating Lease Expenses | As of December 31, 2021, the Company recognized operating lease ROU assets of $ 4.7 million and total lease liabilities $ 4.9 million, including a current portion of $ 1.4 million for operating leases. For the year ended For the year ended (in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used in operating leases $ 1,581 $ 1,337 Right-of-use assets obtained in exchange of new lease obligations: Operating leases $ 4,734 $ 1,183 Weighted average remaining lease term Operating leases 4.0 years 1.3 years Weighted average discount rate Operating leases 4.45 % 4.53 % |
Summary of Maturities of Lease liabilities | Maturities of lease liabilities as of December 31, 2021 are as follows: Amount (in thousands) 2022 $ 1,590 2023 1,447 2024 921 2025 921 2026 460 Thereafter — Total future lease payments 5,339 Less: Imputed interest ( 432 ) Total lease liability balance $ 4,907 |
ORDINARY SHARE AND SHARE INCE_2
ORDINARY SHARE AND SHARE INCENTIVE PLANS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of the Assumptions Used in the Estimating the Fair Values of Stock-based Payment Awards Excluding Non-employee | Years ended December 31, Stock Options: 2021 2016 Expected term in years 4.25 4.75 Weighted average risk-free interest rate 1.02 % 1.30 % Expected dividend rate — % — % Volatility 55.21 % 51.6 % |
Summary of Stock-based Compensation Expense Recognized in Consolidated Statements of Comprehensive Loss | Years Ended December 31, 2021 2020 2019 (in thousands) Cost of net sales $ 87 $ 89 $ 136 Selling, general and administrative 236 360 985 Research and development 181 254 278 Total $ 504 $ 703 $ 1,399 |
2017 Equity Incentive Plan | |
Summary of Stock Options Activity | Weighted Number of average shares exercise outstanding price (in thousands) Options Outstanding, December 31, 2019 181 $ 2.24 Options granted 875 1.14 Options exercised — — Options forfeited or expired — — Options Outstanding, December 31, 2020 1,056 $ 1.33 Options granted 850 1.07 Options exercised Options forfeited or expired ( 451 ) 1.52 Options Outstanding, December 31, 2021 1,455 $ 1.12 |
Summary of Unvested Restricted Awards | Weighted average grant date Shares fair value (in thousands) Total nonvested restricted stock at December 31, 2019 1,153 $ 2.89 Granted 76 1.50 Vested ( 536 ) 2.77 Forfeited ( 272 ) 3.32 Total nonvested restricted stock at December 31, 2020 421 $ 3.05 Granted 96 1.29 Vested ( 196 ) 2.71 Forfeited ( 82 ) 3.71 Total nonvested restricted stock at December 31, 2021 239 $ 2.39 |
Summary of Significant Ranges of Outstanding and Exercisable Stock Options | Weighted Number of shares Average Weighted Number of shares Weighted Range of Outstanding Remaining Average Exercisable Average Exercise Prices as of 12/31/2021 Contractual Term Exercise Price as of 12/31/2021 Exercise Price $ 1.07 $ 1.07 849,890 $ 6.92 $ 1.07 — $ — $ 1.14 $ 1.14 580,528 $ 5.92 $ 1.14 290,261 $ 1.14 $ 2.24 $ 2.24 25,000 $ 0.45 $ 2.24 25,000 $ 2.24 Number of Weighted Options exercisable as of December 31, 2021 315,261 $ 1.23 Options vested and expected to vest as of December 31, 2021 1,455,418 $ 1.12 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of United States and Foreign Income (Loss) Before Income Taxes and Minority Interest | United States and foreign income (loss) before income taxes and minority interest were as follows: Years Ended December 31, 2021 2020 2019 United States $ ( 961 ) $ ( 13,225 ) $ 6,647 Foreign ( 1,573 ) ( 12,233 ) ( 10,591 ) $ ( 2,534 ) $ ( 25,458 ) $ ( 3,944 ) |
Schedule of Components of the (Expense) Benefit for Income Taxes | Years Ended December 31, 2021 2020 2019 (in thousands) Current Federal $ ( 42 ) $ 1 $ ( 984 ) State — — — Foreign 1,284 1,044 150 Total current income tax expense (benefit) $ 1,242 $ 1,045 $ ( 834 ) Deferred Federal — — — State — — — Foreign 2,052 ( 2,827 ) 803 Total deferred tax expense (benefit) $ 2,052 $ ( 2,827 ) $ 803 Total income tax expense (benefit) $ 3,294 $ ( 1,782 ) $ ( 31 ) |
Summary of Unrecognized Tax Benefits | Years Ended December 31, 2021 2020 2019 Beginning balance-gross unrecognized tax benefits (UTB’s) $ 3,404 $ 15,507 $ 17,496 Lapse of statute of limitations — — ( 291 ) Tax credit expiration ( 160 ) ( 12,103 ) — Rate change impact — — ( 1,698 ) Ending balance—UTB 3,244 3,404 15,507 UTB’s as a credit in deferred taxes ( 2,347 ) ( 2,347 ) ( 12,905 ) Federal benefit of state taxes ( 356 ) ( 516 ) ( 2,062 ) UTB’s that would impact the effective tax rate $ 541 $ 541 $ 540 |
Summary of the Components of Net Deferred Tax Assets | December 31, December 31, 2021 2020 Deferred Tax Assets Allowance and reserves $ 3,811 $ 5,681 Prepaid expense — 93 Net operating loss carryforward 167,844 166,297 Tax credit carryforwards 6,451 6,881 Writedown/amortization of intangible assets and goodwill — 1 Property, plant and equipment 396 815 Stock-based compensation 29 74 Accrued warranties 12 12 Other 14,052 13,874 Total deferred tax assets 192,595 193,728 Deferred Tax Liabilities Deferred revenue and customer advances, net ( 88 ) ( 204 ) Prepaid expense ( 42 ) — Total deferred tax liabilities ( 130 ) ( 204 ) Total net deferred tax assets 192,465 193,524 Less: Valuation allowance ( 190,334 ) ( 189,253 ) Total net deferred tax assets $ 2,131 $ 4,271 |
Schedule of Reconciliation of Effective Income Tax Amount and the Federal Statutory Amount | Years Ended December 31, 2021 2020 2019 Federal tax (benefit) at statutory rate $ ( 532 ) $ ( 5,388 ) $ ( 858 ) Stock compensation expense 68 148 132 Effect of differences in foreign tax rates 1,715 ( 1,408 ) 547 ASC 740-10 reserve ( 21 ) 22 ( 349 ) Change in deferred tax valuation allowance 1,273 4,334 1,107 Other 791 510 ( 610 ) Total Tax Expense (Benefit) $ 3,294 $ ( 1,782 ) $ ( 31 ) |
OTHER INCOME (EXPENSE), NET (Ta
OTHER INCOME (EXPENSE), NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Income And Expenses [Abstract] | |
Schedule of Components of Other Income (expense), Net | Other income (expense), net consists of the following: Years ended December 31, 2021 2020 2019 (in thousands) Foreign exchange gain (loss) $ 1,315 $ ( 2,934 ) $ ( 3,880 ) Tax reversal for expiration of statute of limitations (1) — — 1,182 Gain on liquidation of subsidiary 6 — — Aged account payable write-off (2) — — 3,161 Gain of investment — 347 — Other 328 421 409 Total $ 1,649 $ ( 2,166 ) $ 872 (1) In 2019, approximately $ 1.2 million reversal of ASC 460 reserve due to expiration of the related statute of limitations. (2) In 2019, the Company reversed an aged account payable balance due to the expiration of the related statute of limitations in India. |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share for the years ended December 31, 2021, 2020 and 2019: Years Ended December 31, 2021 2020 2019 (in thousands) Numerator: Net loss $ ( 5,828 ) $ ( 23,676 ) $ ( 3,913 ) Denominator: Weighted average shares outstanding-Basic 36,027 35,881 35,556 Potentially dilutive ordinary share equivalents-stock — — — Weighted average shares outstanding–Diluted 36,027 35,881 35,556 Net loss per share–Basic $ ( 0.16 ) $ ( 0.66 ) $ ( 0.11 ) Net loss per share–Diluted $ ( 0.16 ) $ ( 0.66 ) $ ( 0.11 ) |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Summary of the Company's Segment Net Sales, Gross Profit and Income Before Income Taxes | Summarized below are the Company’s segment net sales, gross profit and income before income taxes for the years ended December 31, 2021, 2020 and 2019 based on the current reporting segment structure. Years Ended December 31, % of % of % of Sales by Segment 2021 Net Sales 2020 Net Sales 2019 Net Sales (in thousands, except percentages) Equipment $ 2,323 15 % $ 12,385 51 % $ 43,722 67 % Services 13,598 85 % 11,925 49 % 21,901 33 % Total $ 15,921 100 % $ 24,310 100 % $ 65,623 100 % Years Ended December 31, Gross Profit Gross Profit Gross Profit Gross profit (loss)by Segment 2021 % 2020 % 2019 % (in thousands, except percentages) Equipment $ ( 4,358 ) ( 188 ) % $ 1,237 10 % $ 14,156 32 % Services 3,283 24 % 2,292 19 % 10,001 46 % Total $ ( 1,075 ) ( 7 ) % $ 3,529 15 % $ 24,157 37 % Years ended December 31, Segment income (loss) and Loss before income taxes 2021 2020 2019 (in thousands) Equipment $ ( 12,868 ) $ ( 7,640 ) $ 51 Services 3,283 2,292 10,001 Total segment income (loss) ( 9,585 ) ( 5,348 ) 10,052 General and corporate 7,051 ( 20,110 ) ( 13,996 ) Loss before income taxes $ ( 2,534 ) $ ( 25,458 ) $ ( 3,944 ) |
Schedule of Sales Data by Geographical Area | Sales are attributed to a geographical area based upon the location of the customer. Sales data by geographical area are as follows: Years Ended December 31, % of net % of net % of net 2021 Sales 2020 Sales 2019 Sales (in thousands, except percentages) Net Sales by Region China $ 1,858 11 % $ 2,286 10 % $ 2,439 4 % India 8,221 52 % 9,807 40 % 37,206 57 % Japan 5,842 37 % 12,208 50 % 21,761 33 % Taiwan — — % — — % 3,515 5 % Other — — % 9 — % 702 1 % Total $ 15,921 100 % $ 24,310 100 % $ 65,623 100 % |
Schedule of Long-lived Assets, Consisting of Property, Plant and Equipment, by Geographical Area | Long-lived assets, consisting of property, plant and equipment, by geographical area are as follows: December 31, 2021 2020 China $ 528 $ 565 Other 74 55 Total long-lived assets $ 602 $ 620 |
CREDIT RISK AND CONCENTRATION (
CREDIT RISK AND CONCENTRATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Risks And Uncertainties [Abstract] | |
Schedule of Customers Accounted for 10% or More of the Company's Net Revenues | The following customers accounted for 10% or more of the Company’s net revenues: For the years ended December 31, 2021 2020 2019 Customer A 30 % 25 % 21 % Customer B 44 % 31 % 48 % |
BASIS OF PRESENTATION, LIQUID_2
BASIS OF PRESENTATION, LIQUIDITY - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net income (loss) attributable to UTStarcom Holdings Corp. | $ (5,828,000) | $ (23,676,000) | $ (3,913,000) |
Accumulated deficit | 1,246,207,000 | 1,240,379,000 | |
Net cash inflow (used) from operations | 19,829,000 | (3,400,000) | $ (24,147,000) |
Cash and cash equivalents | 53,797,000 | 34,221,000 | |
Subsidiaries | China | |||
Cash and cash equivalents | 12,200,000 | $ 12,200,000 | |
Accumulated profit determined in accordance with accounting standards of a particular country that can be paid as dividends | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and Cash Equivalents - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash and Cash Equivalents | ||
Cash and cash equivalents | $ 53,797 | $ 34,221 |
Subsidiaries | United States | ||
Cash and Cash Equivalents | ||
Cash and cash equivalents (as a percent) | 6.90% | 22.70% |
Cash and cash equivalents | $ 3,700 | $ 7,800 |
Subsidiaries | China | ||
Cash and Cash Equivalents | ||
Cash and cash equivalents (as a percent) | 22.70% | 35.80% |
Cash and cash equivalents | $ 12,200 | $ 12,200 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Restricted Cash - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Short-term restricted cash | $ 10,076 | $ 12,088 |
Long-term restricted cash | $ 2,403 | $ 2,079 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Investments - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||
Investment impairment | $ 1,029 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Minimum | |
Revenue Recognition: | |
Customers invoices payment due period | 30 days |
Maximum | |
Revenue Recognition: | |
Customers invoices payment due period | 90 days |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Product Warranty - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Minimum | |
Product Warranty | |
Warranty period | 1 year |
Period after sale to provide limited warranty services | 2 years |
Maximum | |
Product Warranty | |
Warranty period | 2 years |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Useful Lives of Property Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Equipment and furniture | |
Property, Plant and Equipment | |
Useful lives | 5 years |
Computers and software | Minimum | |
Property, Plant and Equipment | |
Useful lives | 2 years |
Computers and software | Maximum | |
Property, Plant and Equipment | |
Useful lives | 3 years |
Automobiles | |
Property, Plant and Equipment | |
Useful lives | 5 years |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||
Depreciation | $ 372 | $ 572 | $ 644 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising Costs and Operating Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Advertising costs | $ 0.1 | $ 0.1 | $ 0.1 |
Maximum | |||
Initial operating lease terms | 5 years | ||
Operating leases expiration year | 2026 | ||
Minimum | |||
Operating leases expiration year | 2021 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Changes in AOCI, including the Amounts Reclassified to Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in AOCI, including the amounts reclassified to income | ||
Balance | $ 77,401 | $ 99,188 |
Less: Gain reclassified from AOCI to income | (6) | |
Balance | 68,351 | 77,401 |
AOCI Including Portion Attributable to Noncontrolling Interest | ||
Changes in AOCI, including the amounts reclassified to income | ||
Balance | 63,661 | 62,101 |
Balance | 59,935 | 63,661 |
Foreign currency translation | ||
Changes in AOCI, including the amounts reclassified to income | ||
Unrecognized gain (loss) on foreign currency translation | $ (3,720) | $ 1,560 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign Currency Translation - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Foreign Currency Translation | |||
Income (losses) on foreign currency translation | $ 1,315 | $ (2,934) | $ (3,880) |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of the Total Potential Ordinary Shares that were Excluded from the Diluted Per Share Calculation (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings per Share | |||
Anti-dilutive stock options and awards/units outstanding (in shares) | 1,695 | 1,478 | 1,335 |
Stock options and awards/units | |||
Earnings per Share | |||
Anti-dilutive stock options and awards/units outstanding (in shares) | 1,695 | 1,478 | 1,335 |
SUMMARY OF SIGNIFICANT ACCOU_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of the Total Potential Ordinary Shares that were Excluded from the Diluted Per Share Calculation (Parenthetical) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||
Potential dilutive ordinary shares | 0 | 0 | 0 |
COMPREHENSIVE INCOME (LOSS) - S
COMPREHENSIVE INCOME (LOSS) - Schedule of Total Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Comprehensive Income Net Of Tax [Abstract] | |||
Net loss | $ (5,828) | $ (23,676) | $ (3,913) |
Other comprehensive income (loss) | |||
Net change in foreign currency translation | (3,726) | 1,560 | 529 |
Comprehensive loss | $ (9,554) | $ (22,116) | $ (3,384) |
BALANCE SHEET DETAILS - Schedul
BALANCE SHEET DETAILS - Schedule of Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Inventories: | ||
Raw materials | $ 563 | $ 3,328 |
Work in process | 39 | 1,766 |
Finished goods | 935 | 1,601 |
Total Inventory | $ 1,537 | $ 6,695 |
BALANCE SHEET DETAILS - Sched_2
BALANCE SHEET DETAILS - Schedule of Inventories (Parenthetical) (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
Finished goods at customer sites | $ 0.1 | $ 0.5 |
BALANCE SHEET DETAILS - Sched_3
BALANCE SHEET DETAILS - Schedule of Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Prepaid and other current assets | ||
Prepaid tax | $ 1,295 | $ 1,736 |
Advance to suppliers | 7 | 15 |
Other receivables | 796 | 1,054 |
Prepaid and others | 2,713 | 2,303 |
Total Prepaid and other current assets | $ 4,811 | $ 5,108 |
BALANCE SHEET DETAILS - Sched_4
BALANCE SHEET DETAILS - Schedule of Prepaid and Other Current Assets (Parenthetical) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
Prepaid consumption tax | $ 100 | $ 100 |
Prepaid of value added tax | 900 | 800 |
Duty recoverable | 10 | 500 |
Goods and service tax | 300 | 300 |
Interest receivable | $ 2,000 | 1,400 |
Prepaid of software and licenses | $ 400 |
BALANCE SHEET DETAILS - Sched_5
BALANCE SHEET DETAILS - Schedule of Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment | ||
Total | $ 28,773 | $ 30,671 |
Less: accumulated depreciation | (28,171) | (30,051) |
Total Property, plant and equipment, net | 602 | 620 |
Leasehold improvements | ||
Property, Plant and Equipment | ||
Total | 1,801 | 1,846 |
Automobiles | ||
Property, Plant and Equipment | ||
Total | 271 | 340 |
Computers and Software | ||
Property, Plant and Equipment | ||
Total | 4,461 | 4,579 |
Equipment and Furniture | ||
Property, Plant and Equipment | ||
Total | $ 22,240 | $ 23,906 |
BALANCE SHEET DETAILS - Additio
BALANCE SHEET DETAILS - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |||
Write off of fully depreciated property, plant and equipment | $ 2.4 | $ 0.5 | $ 0.1 |
Accumulated depreciation related to derecognized amount of property, plant and equipment | $ 2.4 | $ 0.5 | $ 0.1 |
BALANCE SHEET DETAILS - Sched_6
BALANCE SHEET DETAILS - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Other current liabilities: | ||
Warranty costs | $ 53 | $ 54 |
Accrued professional fees | 993 | 988 |
Accrued other taxes | 36 | 376 |
Provision for LD | 1,073 | 1,575 |
Contract deposits | 349 | 343 |
Other | 869 | 709 |
Total other current liabilities | $ 3,373 | $ 4,045 |
BALANCE SHEET DETAILS - Sched_7
BALANCE SHEET DETAILS - Schedule of Other Long-term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Other long-term liabilities | ||
Non-current income tax payable | $ 979 | $ 1,000 |
Total other long-term liabilities | $ 979 | $ 1,000 |
CASH, CASH EQUIVALENTS AND SH_3
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS - Schedule Showing Break-down of the Company's Total Short-term Investment and Long-term Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | ||
Total Investments using Cost Method | $ 0 | $ 0 |
Total Investments | 2,100 | |
UTStarcom Hong Kong Holdings Ltd. | Available-for-sale Securities | ||
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | ||
Total Investments | $ 2,100 |
CASH, CASH EQUIVALENTS AND SH_4
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS - Long-term Investments, GCT Semiconductor - Additional Information (Details) - GCT Semiconductor, Inc. - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2004 | Dec. 31, 2016 | Dec. 31, 2012 | |
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS | |||
Payments to acquire investments | $ 3 | ||
Ownership interest (as a percent) | 0.40% | ||
Other-than-temporary impairment charge | $ 0.8 | $ 2.1 | |
Carrying amount of the investment | $ 0 |
CASH, CASH EQUIVALENTS AND SH_5
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS - Long-term Investments, UiTV Media Inc. - Additional Information (Details) - USD ($) $ in Thousands | Jun. 12, 2012 | Oct. 16, 2010 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 |
Investment impairment | $ 1,029 | ||||||||
UiTV | |||||||||
Payments to acquire investments | $ 30,000 | ||||||||
Aggregate cash consideration | $ 20,000 | ||||||||
Interest owned after transaction | 75.00% | ||||||||
Percentage of ownership lost | 49.00% | ||||||||
UiTV | Common Stock | |||||||||
Aggregate purchase price | $ 10,000 | ||||||||
UiTV | Series A preferred stock | |||||||||
Equity in net loss of affiliated companies | $ (5,300) | $ (9,600) | |||||||
Loss from equity method investment (as a percent) | 49.00% | 49.00% | |||||||
UiTV | Convertible bonds of private company | |||||||||
Payment to acquire available-for-sale debt securities | $ 35,100 | ||||||||
Interest rate of debt securities (as a percent) | 6.50% | 6.50% | |||||||
Equity in net loss of affiliated companies | $ (14,000) | $ (3,600) | |||||||
Loss from equity method investment (as a percent) | 100.00% | 100.00% | |||||||
Amount invested | $ 0 | $ 0 | |||||||
Investment impairment | $ 6,000 | $ 2,400 | $ 9,100 |
CASH, CASH EQUIVALENTS AND SH_6
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS - Long-term Investments, UTStarcom Hong Kong Holdings Ltd - Additional Information (Details) - UTStarcom Hong Kong Holdings Ltd. - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 17, 2020 | Apr. 07, 2015 | Aug. 31, 2012 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2015 |
Convertible bonds of private company | ||||||||
Payments to Acquire Investments | $ 20 | |||||||
Interest rate of debt securities (as a percent) | 6.50% | |||||||
Face amount of convertible debt | $ 20 | |||||||
Proceeds from sale of bond | $ 10 | |||||||
Ownership interest upon conversion of preference shares and convertible bonds | 14.00% | |||||||
Impairment charge on investment | $ 0.4 | $ 6.5 | ||||||
Carrying amount of the investment | $ 3.1 | |||||||
Eagle Field Holding Limited | ||||||||
Impairment charge on investment | $ 1 | |||||||
Equity interest percentage | 14.00% | |||||||
Aggregate cash consideration | $ 2.1 | |||||||
Amount received from buyer | $ 2.1 |
CASH, CASH EQUIVALENTS AND SH_7
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS - Long-term Investments, Aceland Investments Limited - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2020 | Dec. 31, 2010 | Jun. 30, 2011 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2019 | |
Investment Holdings [Line Items] | ||||||||
Debt instrument, maturity date | Dec. 31, 2015 | |||||||
Aceland | ||||||||
Investment Holdings [Line Items] | ||||||||
Payments to acquire investments | $ 2.1 | |||||||
Contribution of equity investment through a shareholder loan | $ 7.1 | |||||||
Equity method investment, ownership interest (as a percent) | 35.00% | |||||||
Investment impairment | $ 1 | |||||||
Proceeds from sale, maturity and collection of investments | $ 6.7 | |||||||
Equity pick up of gain (loss) of an associate | $ 0.3 | $ 0.2 | $ 1 | |||||
Carrying amount of the investment | $ 2.1 | |||||||
Short-term investments | $ 2.1 | |||||||
Aceland | Other Security Investments [Member] | ||||||||
Investment Holdings [Line Items] | ||||||||
Gain on other income | $ 0.3 |
CASH, CASH EQUIVALENTS AND SH_8
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS - Long-term Investments, AioTV Inc. - Additional Information (Details) - USD ($) | Dec. 19, 2018 | May 30, 2017 | Oct. 31, 2016 | Dec. 31, 2015 | Nov. 30, 2012 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |||||||||||||
Investment impairment | $ 1,029,000 | ||||||||||||
AioTV | |||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |||||||||||||
Convertible preferred stock converted into common shares, value | $ 500,000 | ||||||||||||
Cash consideration by the buyer | $ 1 | ||||||||||||
AioTV | Note Purchase Agreement | |||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |||||||||||||
Principal amount | 320,000 | ||||||||||||
Capital value | 160,000 | ||||||||||||
AioTV | Series B preferred stock | |||||||||||||
Investment Holdings [Line Items] | |||||||||||||
Investment amount | $ 8,000,000 | ||||||||||||
Equity method investment, ownership interest (as a percent) | 44.00% | ||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |||||||||||||
Investment impairment | $ 4,300,000 | ||||||||||||
AioTV | Convertible bonds of private company | |||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |||||||||||||
Investment impairment | $ 400,000 | ||||||||||||
Payment to acquire available-for-sale debt securities | $ 300,000 | $ 500,000 | |||||||||||
Interest rate of debt securities (as a percent) | 10.00% | 10.00% | |||||||||||
Carrying amount of the investment | $ 0 | $ 0 | $ 0 | ||||||||||
Equity loss of associates | $ (200,000) | $ (200,000) | |||||||||||
Loss from equity method investment (as a percent) | 45.00% | 45.00% | |||||||||||
Common stocks | $ 0 | ||||||||||||
AioTV | Convertible bonds of private company | Note Purchase Agreement | |||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |||||||||||||
Investment impairment | $ 1,300,000 | ||||||||||||
Convertible promissory note, value | $ 800,000 | ||||||||||||
Payments to acquire investments | 380,000 | $ 100,000 | |||||||||||
Equity loss of associates | $ (100,000) |
CASH, CASH EQUIVALENTS AND SH_9
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS - Summary of Available-for-sale Investments -Additional Information (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Minimum | |
Schedule of Available-for-sale Securities [Line Items] | |
Maturity period of bank notes receivable | 3 months |
Maximum | |
Schedule of Available-for-sale Securities [Line Items] | |
Maturity period of bank notes receivable | 1 year |
CASH, CASH EQUIVALENTS AND S_10
CASH, CASH EQUIVALENTS AND SHORT AND LONG TERM INVESTMENTS - Schedule of Change in Value of Financial Assets using Unobservable Inputs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in financial assets using unobservable inputs (Level 3) | |||
Balance at the beginning of the period | $ 2,100 | ||
Less: Proceeds from sales of short-term investment | $ (2,100) | $ (2,095) | $ (41) |
Balance at the end of the period | $ 2,100 |
OPERATING LEASES - Additional I
OPERATING LEASES - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Leases [Line Items] | ||
Operating lease not yet commenced description | As of December 31, 2021, the Company did not have additional operating leases that have not yet commenced. | |
Operating lease expenses | $ 1,400 | |
Operating lease ROU assets | 4,734 | $ 1,183 |
Operating lease liability | 4,907 | |
Operating lease liability, current | 1,411 | $ 1,217 |
Cost of Net Sales | ||
Operating Leases [Line Items] | ||
Operating lease expenses | 800 | |
Operating Expense | ||
Operating Leases [Line Items] | ||
Operating lease expenses | $ 600 |
OPERATING LEASES - Summary of T
OPERATING LEASES - Summary of Total Operating Lease Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows used in operaing leases | $ 1,581 | $ 1,337 |
Right-of-use assets obtained in exchange of new lease obligations: | ||
Operating leases | $ 4,734 | $ 1,183 |
Weighted average remaining lease term | ||
Operating leases | 4 years | 1 year 3 months 18 days |
Weighted average discount rate | ||
Operating leases | 4.45% | 4.53% |
OPERATING LEASES - Summary of M
OPERATING LEASES - Summary of Maturities of Lease liabilities (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Leases [Abstract] | |
2022 | $ 1,590 |
2023 | 1,447 |
2024 | 921 |
2025 | 921 |
2026 | 460 |
Total future lease payments | 5,339 |
Less: Imputed interest | (432) |
Total lease liability balance | $ 4,907 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Contractual Obligations and Commercial Commitments - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | ||||
Outstanding letters of credit | $ 12,500 | |||
Outstanding purchase commitments, including agreements that are non-cancelable | 400 | |||
Uncertain Tax Positions | ||||
Gross unrecognized tax benefits | 3,244 | $ 3,404 | $ 15,507 | $ 17,496 |
Unrecognized tax benefits that would impact the annual effective tax rate if recognized | 541 | 541 | $ 540 | |
Unrecognized tax benefits if recognized, would impact certain deferred tax assets | $ 2,700 | $ 2,700 |
ORDINARY SHARE REPURCHASE AND_2
ORDINARY SHARE REPURCHASE AND ISSUANCE - Additional Information (Details) - USD ($) $ in Thousands | Nov. 12, 2014 | Sep. 30, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Equity, Class of Treasury stock | |||||
Shares repurchased under program | 199,331 | 328,856 | |||
Value of shares repurchased | $ 374 | $ 1,049 | |||
Repurchase program November 2014 | |||||
Equity, Class of Treasury stock | |||||
Share repurchase program, Authorized amount | $ 40,000 | ||||
Share repurchase program, Period in force | 24 months | ||||
Share repurchase program, additional period | 2 years |
ORDINARY SHARE AND SHARE INCE_3
ORDINARY SHARE AND SHARE INCENTIVE PLANS - Stock Incentive Plans - Additional Information (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2016 | |
2017 Equity Incentive Plan | ||
Stock Incentive Plans | ||
Number of shares authorized | 2,000,000 | |
Number of ordinary shares available for issuance pursuant to future grants | 29,423 | |
Number of shares transferred from the prior plan | 1,590,693 | |
2017 Equity Incentive Plan | Maximum | ||
Stock Incentive Plans | ||
Vesting period | 4 years | |
2017 Equity Incentive Plan | Minimum | ||
Stock Incentive Plans | ||
Vesting period | 2 years | |
2017 Equity Incentive Plan | Stock Options and Restricted Stock Units RSU | ||
Stock Incentive Plans | ||
Number of awards outstanding (in shares) | 1,694,582 | |
2006 Equity Incentive Plan | ||
Stock Incentive Plans | ||
Number of shares expired | 1,590,693 |
ORDINARY SHARE AND SHARE INCE_4
ORDINARY SHARE AND SHARE INCENTIVE PLANS - Stock Option Activity (Details) - 2017 Equity Incentive Plan - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Number of shares outstanding | ||
Options Outstanding at the beginning of the period (in shares) | 1,056 | 181 |
Options granted (in shares) | 850 | 875 |
Options forfeited or expired (in shares) | (451) | |
Options Outstanding at the end of the period (in shares) | 1,455 | 1,056 |
Weighted average exercise price | ||
Options Outstanding at the beginning of the period (in dollars per share) | $ 1.33 | $ 2.24 |
Options granted (in dollars per share) | 1.07 | 1.14 |
Options forfeited or expired (in dollars per share) | 1.52 | |
Options Outstanding at the end of the period (in dollars per share) | $ 1.12 | $ 1.33 |
ORDINARY SHARE AND SHARE INCE_5
ORDINARY SHARE AND SHARE INCENTIVE PLANS - Unvested Restricted Awards - Additional Information (Details) - 2017 Equity Incentive Plan - Restricted Stock shares in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)shares | |
Restricted stock awards | ||
Vesting period | 4 years | |
Ratio for grant of stock awards that is deducted from the shares available for grant | 1 | |
Shares | ||
Vested (in shares) | (196) | (536) |
Fair value of restricted stock awards vested | $ | $ 0.5 | $ 1.5 |
Granted (in shares) | 96 | 76 |
ORDINARY SHARE AND SHARE INCE_6
ORDINARY SHARE AND SHARE INCENTIVE PLANS - Unvested Restricted Awards (Details) - 2017 Equity Incentive Plan - Restricted Stock - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Shares | ||
Total nonvested restricted stock at the beginning of the period (in shares) | 421 | 1,153 |
Granted (in shares) | 96 | 76 |
Vested (in shares) | (196) | (536) |
Forfeited (in shares) | (82) | (272) |
Total nonvested restricted stock at the end of the period (in shares) | 239 | 421 |
Weighted average grant date fair value | ||
Total nonvested restricted stock at the beginning of the period (in dollars per share) | $ 3.05 | $ 2.89 |
Granted (in dollars per share) | 1.29 | 1.50 |
Vested (in dollars per share) | 2.71 | 2.77 |
Forfeited (in dollars per share) | 3.71 | 3.32 |
Total nonvested restricted stock at the end of the period (in dollars per share) | $ 2.39 | $ 3.05 |
ORDINARY SHARE AND SHARE INCE_7
ORDINARY SHARE AND SHARE INCENTIVE PLANS - Significant Ranges of Outstanding and Exercisable Stock Options (Details) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Options exercisable and vested and expected to vest at the end of the period | |
Number of options exercisable (in shares) | shares | 315,261 |
Number of options vested and expected to vest (in shares) | shares | 1,455,418 |
Weighted-average exercise price per share of options exercisable (in dollars per share) | $ 1.23 |
Weighted-average exercise price per share of options vested and expected to vest (in dollars per share) | 1.12 |
Exercise Price Range from Dollars 1.07 to 1.07 | |
Exercise Price Range | |
Exercise price, low end of range (in dollars per share) | 1.07 |
Exercise price, high end of range (in dollars per share) | $ 1.07 |
Stock Options Outstanding | |
Number of shares outstanding (in shares) | shares | 849,890 |
Weighted-average remaining contractual life | 6 years 11 months 1 day |
Weighted-average exercise price per share (in dollars per share) | $ 1.07 |
Exercise Price Range from Dollars 1.14 to 1.14 | |
Exercise Price Range | |
Exercise price, low end of range (in dollars per share) | 1.14 |
Exercise price, high end of range (in dollars per share) | $ 1.14 |
Stock Options Outstanding | |
Number of shares outstanding (in shares) | shares | 580,528 |
Weighted-average remaining contractual life | 5 years 11 months 1 day |
Weighted-average exercise price per share (in dollars per share) | $ 1.14 |
Stock Options Exercisable | |
Number of shares Exercisable (in shares) | shares | 290,261 |
Weighted-average exercise price per share (in dollars per share) | $ 1.14 |
Exercise Price Range from Dollars 2.24 to 2.24 | |
Exercise Price Range | |
Exercise price, low end of range (in dollars per share) | 2.24 |
Exercise price, high end of range (in dollars per share) | $ 2.24 |
Stock Options Outstanding | |
Number of shares outstanding (in shares) | shares | 25,000 |
Weighted-average remaining contractual life | 5 months 12 days |
Weighted-average exercise price per share (in dollars per share) | $ 2.24 |
Stock Options Exercisable | |
Number of shares Exercisable (in shares) | shares | 25,000 |
Weighted-average exercise price per share (in dollars per share) | $ 2.24 |
ORDINARY SHARE AND SHARE INCE_8
ORDINARY SHARE AND SHARE INCENTIVE PLANS - Intrinsic Value - Additional Information (Details) - 2017 Equity Incentive Plan | 12 Months Ended |
Dec. 31, 2021$ / shares | |
Market value of shares as reported by NASDAQ ((in dollars per share) | $ 0.87 |
Weighted average remaining contractual life of options exercisable | 5 years 5 months 26 days |
Weighted average remaining contractual life of options expected to vest | 6 years 4 months 28 days |
ORDINARY SHARE AND SHARE INCE_9
ORDINARY SHARE AND SHARE INCENTIVE PLANS - Dividend Yield, Black-Scholes Assumptions and Unrecognized Compensation Cost (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2016 | |
Black-Scholes option pricing model with the assumptions | ||
Expected term in years | 4 years 3 months | 4 years 9 months |
Weighted average risk-free interest rate | 1.02% | 1.30% |
Expected dividend rate | 0.00% | 0.00% |
Volatility | 55.21% | 51.60% |
ORDINARY SHARE AND SHARE INC_10
ORDINARY SHARE AND SHARE INCENTIVE PLANS - Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Unrecognized compensation cost related to unvested stock options and restricted stock and restricted stock units | ||
Unrecognized compensation cost | $ 0.7 | $ 0.9 |
Expected weighted-average period of unrecognized cost | 1 year 3 months 21 days | 1 year 9 months 18 days |
ORDINARY SHARE AND SHARE INC_11
ORDINARY SHARE AND SHARE INCENTIVE PLANS - Allocation of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock based compensation expense | |||
Stock-based compensation expense recognized | $ 504 | $ 703 | $ 1,399 |
Cost of Net Sales | |||
Stock based compensation expense | |||
Stock-based compensation expense recognized | 87 | 89 | 136 |
Selling, general and administrative | |||
Stock based compensation expense | |||
Stock-based compensation expense recognized | 236 | 360 | 985 |
Research and development | |||
Stock based compensation expense | |||
Stock-based compensation expense recognized | $ 181 | $ 254 | $ 278 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) $ in Thousands | Mar. 27, 2020 | Oct. 11, 2014 | Jan. 01, 2008 | Dec. 31, 2021USD ($)Item | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
INCOME TAXES | ||||||
Ending balance—gross unrecognized tax benefits (“UTB”s) | $ 3,244 | $ 3,404 | $ 15,507 | |||
Unrecognized tax benefits if recognized, would impact certain deferred tax assets | 2,700 | 2,700 | ||||
Unrecognized tax benefits that would impact the annual effective tax rate if recognized | 541 | 541 | 540 | |||
Decrease in provision for income taxes due to reduction of gross unrecognized tax benefits | 160 | |||||
Accrued interest and penalties | 400 | 500 | ||||
Change in deferred tax valuation allowance | 1,273 | 4,334 | 1,107 | |||
Income tax benefit related to tax credits | 0 | $ 0 | $ 0 | |||
U.S Federal | ||||||
INCOME TAXES | ||||||
Net operating loss carryforwards | 562,000 | |||||
Valuation allowance against the related deferred tax assets | 3,400 | |||||
U.S Federal | Research and development credit carryforwards | ||||||
INCOME TAXES | ||||||
Tax credit carryforwards | 1,200 | |||||
Tax Credit Carry Forward Amount Not Subject To Expiration | 6,400 | |||||
Tax Credit Carry Forward Amount Subject To Expiration | 1,200 | |||||
State | ||||||
INCOME TAXES | ||||||
Net operating loss carryforwards | 228,000 | |||||
U.S Federal and State | ||||||
INCOME TAXES | ||||||
Valuation allowance against the related deferred tax assets | 131,900 | |||||
Foreign | ||||||
INCOME TAXES | ||||||
Tax credit carryforwards | $ 6,500 | |||||
Earliest Tax Year | U.S Federal | ||||||
INCOME TAXES | ||||||
Operating loss carryforwards expiration year | 2025 | |||||
Tax credit carryforward expiration year | 2022 | |||||
Earliest Tax Year | U.S Federal | Research and development credit carryforwards | ||||||
INCOME TAXES | ||||||
Tax credit carryforward expiration year | 2026 | |||||
Earliest Tax Year | State | ||||||
INCOME TAXES | ||||||
Operating loss carryforwards expiration year | 2028 | |||||
Latest Tax Year | U.S Federal | ||||||
INCOME TAXES | ||||||
Operating loss carryforwards expiration year | 2037 | |||||
Tax credit carryforward expiration year | 2028 | |||||
Latest Tax Year | U.S Federal | Research and development credit carryforwards | ||||||
INCOME TAXES | ||||||
Tax credit carryforward expiration year | 2028 | |||||
Latest Tax Year | State | ||||||
INCOME TAXES | ||||||
Operating loss carryforwards expiration year | 2033 | |||||
CARES Act | ||||||
INCOME TAXES | ||||||
NOL carryovers and carrybacks percentage | 100.00% | |||||
Net Operating Loss taxable years to generate a refund of previously paid income taxes | 5 years | |||||
CAYMAN ISLANDS | ||||||
INCOME TAXES | ||||||
Withholding tax | $ 0 | |||||
China | ||||||
INCOME TAXES | ||||||
Foreign statutory tax rate (as a percent) | 25.00% | |||||
Reduced tax rate for qualified high technology enterprises (as a percent) | 15.00% | |||||
China | U T Starcom Telecom Co Ltd | ||||||
INCOME TAXES | ||||||
Reduced tax rate for qualified high technology enterprises (as a percent) | 15.00% | 15.00% | ||||
Number of subsidiaries approved for the reduced tax rate | Item | 1 | |||||
Valid period for reduced income tax rate applicable to qualified high technology enterprise | 3 years | 3 years | ||||
China | Foreign | ||||||
INCOME TAXES | ||||||
Net operating loss carryforwards | $ 134,700 | |||||
Valuation allowance against the related deferred tax assets | $ 20,300 | |||||
China | Earliest Tax Year | Foreign | ||||||
INCOME TAXES | ||||||
Operating loss carryforwards expiration year | 2024 | |||||
China | Latest Tax Year | Foreign | ||||||
INCOME TAXES | ||||||
Operating loss carryforwards expiration year | 2031 | |||||
Countries other than the U.S. and China | Foreign | ||||||
INCOME TAXES | ||||||
Net operating loss carryforwards | $ 93,600 | |||||
Valuation allowance against the related deferred tax assets | 15,600 | |||||
California | State | Research and development credit carryforwards | ||||||
INCOME TAXES | ||||||
Tax credit carryforwards | $ 6,400 |
INCOME TAXES - Schedule of Unit
INCOME TAXES - Schedule of United States and foreign Income (Loss) Before Income Taxes and Non-Controlling Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
United States and foreign income (loss) before income taxes and non-controlling interest | |||
United States | $ (961) | $ (13,225) | $ 6,647 |
Foreign | (1,573) | (12,233) | (10,591) |
Loss before income taxes | $ (2,534) | $ (25,458) | $ (3,944) |
INCOME TAXES - Schedule of Comp
INCOME TAXES - Schedule of Components of the (Expense) Benefit for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current | |||
Federal | $ (42) | $ 1 | $ (984) |
Foreign | 1,284 | 1,044 | 150 |
Total current income tax expense (benefit) | 1,242 | 1,045 | (834) |
Deferred | |||
Foreign | 2,052 | (2,827) | 803 |
Total deferred tax expense (benefit) | 2,052 | (2,827) | 803 |
Total income tax expense (benefit) | $ 3,294 | $ (1,782) | $ (31) |
INCOME TAXES - Summary of Unrec
INCOME TAXES - Summary of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Unrecognized tax benefits | |||
Beginning balance-gross unrecognized tax benefits (UTB’s) | $ 3,404 | $ 15,507 | $ 17,496 |
Lapse of statute of limitations | (291) | ||
Tax credit expiration | (160) | (12,103) | |
Rate change impact | (1,698) | ||
Ending balance—gross unrecognized tax benefits (“UTB”s) | 3,244 | 3,404 | 15,507 |
UTB’s as a credit in deferred taxes | (2,347) | (2,347) | (12,905) |
Federal benefit of state taxes | (356) | (516) | (2,062) |
Unrecognized tax benefits that would impact the annual effective tax rate if recognized | $ 541 | $ 541 | $ 540 |
INCOME TAXES - Summary of Compo
INCOME TAXES - Summary of Components of Net Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Tax Assets | ||
Allowance and reserves | $ 3,811 | $ 5,681 |
Prepaid expense | 93 | |
Net operating loss carryforward | 167,844 | 166,297 |
Tax credit carryforwards | 6,451 | 6,881 |
Writedown/amortization of intangible assets and goodwill | 1 | |
Property, plant and equipment | 396 | 815 |
Stock-based compensation | 29 | 74 |
Accrued warranties | 12 | 12 |
Other | 14,052 | 13,874 |
Total deferred tax assets | 192,595 | 193,728 |
Deferred Tax Liabilities | ||
Deferred revenue and customer advances, net | (88) | (204) |
Prepaid expense | (42) | |
Total deferred tax liabilities | (130) | (204) |
Total net deferred tax assets | 192,465 | 193,524 |
Less: Valuation allowance | (190,334) | (189,253) |
Total net deferred tax assets | $ 2,131 | $ 4,271 |
INCOME TAXES - Schedule of Reco
INCOME TAXES - Schedule of Reconciliation of Effective Income Tax Rate and Federal Statutory Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of effective income tax rate and the federal statutory rate | |||
Federal tax (benefit) at statutory rate | $ (532) | $ (5,388) | $ (858) |
Stock compensation expense | 68 | 148 | 132 |
Effect of differences in foreign tax rates | 1,715 | (1,408) | 547 |
ASC 740-10 reserve | (21) | 22 | (349) |
Change in deferred tax valuation allowance | 1,273 | 4,334 | 1,107 |
Other | 791 | 510 | (610) |
Total income tax expense (benefit) | $ 3,294 | $ (1,782) | $ (31) |
OTHER INCOME (EXPENSE), NET - S
OTHER INCOME (EXPENSE), NET - Schedule of Components of Other Income (expense), Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Other Income And Expenses [Abstract] | ||||
Foreign exchange gain (loss) | $ 1,315 | $ (2,934) | $ (3,880) | |
Tax reversal for expiration of statute of limitations | [1] | 1,182 | ||
Gain on liquidation of subsidiary | 6 | |||
Aged account payable write-off | [2] | 3,161 | ||
Gain of investment | 347 | |||
Other | 328 | 421 | 409 | |
Total | $ 1,649 | $ (2,166) | $ 872 | |
[1] | In 2019, approximately $ 1.2 million reversal of ASC 460 reserve due to expiration of the related statute of limitations. | |||
[2] | In 2019, the Company reversed an aged account payable balance due to the expiration of the related statute of limitations in India. |
OTHER INCOME (EXPENSE), NET -_2
OTHER INCOME (EXPENSE), NET - Schedule of Components of Other Income (expense), Net (Parenthetical) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2019 | |
Other Income And Expenses [Abstract] | ||
Reversal of ASC 460 reserve due to expiration of statute of limitations | $ 42 | $ 1,182 |
NET LOSS PER SHARE - Schedule o
NET LOSS PER SHARE - Schedule of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | |||
Net loss | $ (5,828) | $ (23,676) | $ (3,913) |
Denominator: | |||
Weighted average shares outstanding-Basic | 36,027 | 35,881 | 35,556 |
Potentially dilutive ordinary share equivalents-stock options and restricted stock | |||
Weighted average shares outstanding-Diluted | 36,027 | 35,881 | 35,556 |
Net loss per share Basic | $ (0.16) | $ (0.66) | $ (0.11) |
Net loss per share Diluted | $ (0.16) | $ (0.66) | $ (0.11) |
NET LOSS PER SHARE - Additional
NET LOSS PER SHARE - Additional Information (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |||
Potential dilutive ordinary shares | 0 | 0 | 0 |
SEGMENT REPORTING - Summary of
SEGMENT REPORTING - Summary of the Company's Segment Net Sales, Gross Profit and Segment Margin (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
SEGMENT REPORTING | ||||
Net Sales by Segment | [1] | $ 15,921 | $ 24,310 | $ 65,623 |
Net Sales by Segment (as a percent) | 100.00% | 100.00% | 100.00% | |
Gross profit (loss) by Segment | $ (1,075) | $ 3,529 | $ 24,157 | |
Gross profit (loss) by Segment (as a percent) | (7.00%) | 15.00% | 37.00% | |
Loss before income taxes | $ (2,534) | $ (25,458) | $ (3,944) | |
Operating segments | ||||
SEGMENT REPORTING | ||||
Total segment income (loss) | (9,585) | (5,348) | 10,052 | |
Operating segments | Equipment | ||||
SEGMENT REPORTING | ||||
Net Sales by Segment | $ 2,323 | $ 12,385 | $ 43,722 | |
Net Sales by Segment (as a percent) | 15.00% | 51.00% | 67.00% | |
Gross profit (loss) by Segment | $ (4,358) | $ 1,237 | $ 14,156 | |
Gross profit (loss) by Segment (as a percent) | (188.00%) | 10.00% | 32.00% | |
Total segment income (loss) | $ (12,868) | $ (7,640) | $ 51 | |
Operating segments | Services | ||||
SEGMENT REPORTING | ||||
Net Sales by Segment | $ 13,598 | $ 11,925 | $ 21,901 | |
Net Sales by Segment (as a percent) | 85.00% | 49.00% | 33.00% | |
Gross profit (loss) by Segment | $ 3,283 | $ 2,292 | $ 10,001 | |
Gross profit (loss) by Segment (as a percent) | 24.00% | 19.00% | 46.00% | |
Total segment income (loss) | $ 3,283 | $ 2,292 | $ 10,001 | |
General and Corporate | ||||
SEGMENT REPORTING | ||||
General and corporate | $ 7,051 | $ (20,110) | $ (13,996) | |
[1] | Revenue recognized for the years ended December 31, 2021, 2020 and 2019 that was included in deferred revenue (including current and non-current) and customer advances as of the beginning of each year was $ 0.4 million, $ 1.2 million and $ 2.8 million, respectively. |
SEGMENT REPORTING - Schedule of
SEGMENT REPORTING - Schedule of Sales Data by Geographical Area (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
SEGMENT REPORTING | ||||
Net Sales by Segment | [1] | $ 15,921 | $ 24,310 | $ 65,623 |
Net Sales by Segment (as a percent) | 100.00% | 100.00% | 100.00% | |
China | ||||
SEGMENT REPORTING | ||||
Net Sales by Segment | $ 1,858 | $ 2,286 | $ 2,439 | |
Net Sales by Segment (as a percent) | 11.00% | 10.00% | 4.00% | |
India | ||||
SEGMENT REPORTING | ||||
Net Sales by Segment | $ 8,221 | $ 9,807 | $ 37,206 | |
Net Sales by Segment (as a percent) | 52.00% | 40.00% | 57.00% | |
Japan | ||||
SEGMENT REPORTING | ||||
Net Sales by Segment | $ 5,842 | $ 12,208 | $ 21,761 | |
Net Sales by Segment (as a percent) | 37.00% | 50.00% | 33.00% | |
Taiwan | ||||
SEGMENT REPORTING | ||||
Net Sales by Segment | $ 3,515 | |||
Net Sales by Segment (as a percent) | 5.00% | |||
Other | ||||
SEGMENT REPORTING | ||||
Net Sales by Segment | $ 9 | $ 702 | ||
Net Sales by Segment (as a percent) | 1.00% | |||
[1] | Revenue recognized for the years ended December 31, 2021, 2020 and 2019 that was included in deferred revenue (including current and non-current) and customer advances as of the beginning of each year was $ 0.4 million, $ 1.2 million and $ 2.8 million, respectively. |
SEGMENT REPORTING - Schedule _2
SEGMENT REPORTING - Schedule of Long-lived Assets, Consisting of Property, Plant and Equipment, by Geographical Area (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
SEGMENT REPORTING | ||
Long-lived assets | $ 602 | $ 620 |
China | ||
SEGMENT REPORTING | ||
Long-lived assets | 528 | 565 |
Other | ||
SEGMENT REPORTING | ||
Long-lived assets | $ 74 | $ 55 |
CREDIT RISK AND CONCENTRATION -
CREDIT RISK AND CONCENTRATION - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Concentration Risk | |||||
Increase or decrease in interest rates of short-term investments that will not significantly affect the fair value of investment portfolio (as a percent) | 10.00% | ||||
Net sales | [1] | $ 15,921 | $ 24,310 | $ 65,623 | |
China | |||||
Concentration Risk | |||||
Net sales | 1,858 | 2,286 | $ 2,439 | ||
Cash, Cash Equivalents and Short Term Investments | Countries Other than US | Credit Concentration Risk | |||||
Concentration Risk | |||||
Cash and cash equivalents and short-term investments | $ 53,800 | $ 28,600 | |||
Accounts Receivable | Customer Concentration Risk | Customer A | |||||
Concentration Risk | |||||
Concentration of risk (as a percent) | 0.00% | 1.00% | |||
Accounts Receivable | Customer Concentration Risk | Customer B | |||||
Concentration Risk | |||||
Concentration of risk (as a percent) | 92.00% | 91.00% | |||
Net sales | $ 35,000 | ||||
Accounts Receivable | Customer Concentration Risk | Customer B | Subsequent Event | |||||
Concentration Risk | |||||
Net sales | $ 8,000 | ||||
Subsidiaries | Cash, Cash Equivalents and Short Term Investments | China | Credit Concentration Risk | |||||
Concentration Risk | |||||
Cash and cash equivalents and short-term investments | $ 12,200 | $ 12,200 | |||
[1] | Revenue recognized for the years ended December 31, 2021, 2020 and 2019 that was included in deferred revenue (including current and non-current) and customer advances as of the beginning of each year was $ 0.4 million, $ 1.2 million and $ 2.8 million, respectively. |
CREDIT RISK AND CONCENTRATION_2
CREDIT RISK AND CONCENTRATION - Schedule of Customers Accounted for 10% or More of the Company's Net Revenues (Details) - Sales Revenue, Net - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Customer A | |||
Concentration Risk | |||
Concentration of risk (as a percent) | 30.00% | 25.00% | 21.00% |
Customer B | |||
Concentration Risk | |||
Concentration of risk (as a percent) | 44.00% | 31.00% | 48.00% |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Details) - TDI - USD ($) $ in Thousands | Sep. 03, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||||
Additional ordinary shares acquired from former shareholders | 9,200,000 | |||
Sales transactions | $ 0 | $ 13,000 | $ 49,000 |
SCHEDULE I CONDENSED FINANCIA_2
SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT - REGISTRANT BALANCE SHEETS (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Total assets | $ 108,279 | $ 118,724 |
Current liabilities: | ||
Accounts payable-intercompany | 19,031 | 25,120 |
Total current liabilities | 35,427 | 40,042 |
Total liabilities | 39,928 | 41,323 |
Shareholders' equity: | ||
Ordinary shares: $0.00375 par value; 250,000 authorized shares; 41,123 and 40,907 shares issued at December 31, 2021 and December 31, 2020, respectively; 36,114 and 35,898 shares outstanding at December 31, 2021 and December 31, 2020, respectively | 123 | 123 |
Additional paid-in capital | 1,266,822 | 1,266,318 |
Treasury stock, at cost: 5,009 and 5,009 shares at December 31, 2021 and December 31, 2020, respectively | (12,322) | (12,322) |
Accumulated deficit | (1,246,207) | (1,240,379) |
Accumulated other comprehensive income | 59,935 | 63,661 |
Total shareholders' equity | 68,351 | 77,401 |
Total liabilities and shareholders' equity | 108,279 | 118,724 |
UTSTARCOM HOLDINGS CORP | ||
ASSETS | ||
Investment in subsidiaries | 82,696 | 91,904 |
Total assets | 82,696 | 91,904 |
Current liabilities: | ||
Accounts payable-intercompany | 14,345 | 14,503 |
Total current liabilities | 14,345 | 14,503 |
Total liabilities | 14,345 | 14,503 |
Shareholders' equity: | ||
Ordinary shares: $0.00375 par value; 250,000 authorized shares; 41,123 and 40,907 shares issued at December 31, 2021 and December 31, 2020, respectively; 36,114 and 35,898 shares outstanding at December 31, 2021 and December 31, 2020, respectively | 123 | 123 |
Additional paid-in capital | 1,266,822 | 1,266,318 |
Treasury stock, at cost: 5,009 and 5,009 shares at December 31, 2021 and December 31, 2020, respectively | (12,322) | (12,322) |
Accumulated deficit | (1,246,207) | (1,240,379) |
Accumulated other comprehensive income | 59,935 | 63,661 |
Total shareholders' equity | 68,351 | 77,401 |
Total liabilities and shareholders' equity | $ 82,696 | $ 91,904 |
SCHEDULE I CONDENSED FINANCIA_3
SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT - REGISTRANT BALANCE SHEETS (Parenthetical) (Details) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Common Stock, Par or Stated Value Per Share | $ 0.00375 | $ 0.00375 |
Ordinary share, authorized shares | 250,000,000 | 250,000,000 |
Ordinary share, shares issued | 41,123,000 | 40,907,000 |
Ordinary share, shares outstanding | 36,114,000 | 35,898,000 |
Treasury shares | 5,009,000 | 5,009,000 |
UTSTARCOM HOLDINGS CORP | ||
Common Stock, Par or Stated Value Per Share | $ 0.00375 | $ 0.00375 |
Ordinary share, authorized shares | 250,000,000 | 250,000,000 |
Ordinary share, shares issued | 41,123,000 | 40,907,000 |
Ordinary share, shares outstanding | 36,114,000 | 35,898,000 |
Treasury shares | 5,009,000 | 5,009,000 |
SCHEDULE I CONDENSED FINANCIA_4
SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT - STATEMENTS OF COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Sales | ||||
Net sales | [1] | $ 15,921 | $ 24,310 | $ 65,623 |
Cost of net sales | ||||
Cost of net sales | 16,996 | 20,781 | 41,466 | |
Gross profit (loss) by Segment | (1,075) | 3,529 | 24,157 | |
Operating expenses: | ||||
Research and development | 6,886 | 8,083 | 14,467 | |
Total operating expenses | 4,244 | 26,772 | 30,294 | |
Operating loss | (5,319) | (23,243) | (6,137) | |
Interest income | 1,136 | 990 | 1,337 | |
Interest expense | (10) | (16) | ||
Other income, net | 1,649 | (2,166) | 872 | |
Income tax benefit (expense) | (3,294) | 1,782 | 31 | |
Net loss | (5,828) | (23,676) | (3,913) | |
Comprehensive loss | (9,554) | (22,116) | (3,384) | |
UTSTARCOM HOLDINGS CORP | ||||
Operating expenses: | ||||
Selling, general and administrative | 769 | 693 | 633 | |
Total operating expenses | 769 | 693 | 633 | |
Operating loss | (769) | (693) | (633) | |
Loss before income taxes and equity in loss of affiliated companies | (769) | (693) | (633) | |
Equity in net loss of affiliated companies | (5,059) | (22,983) | (3,280) | |
Net loss | (5,828) | (23,676) | (3,913) | |
Other comprehensive income (loss), net of tax | (3,726) | 1,560 | 529 | |
Comprehensive loss | $ (9,554) | $ (22,116) | $ (3,384) | |
[1] | Revenue recognized for the years ended December 31, 2021, 2020 and 2019 that was included in deferred revenue (including current and non-current) and customer advances as of the beginning of each year was $ 0.4 million, $ 1.2 million and $ 2.8 million, respectively. |
SCHEDULE II VALUATION AND QUA_2
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND ALLOWANCE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Allowance for credit losses | |||
Changes in valuation and qualifying accounts | |||
Balance at beginning of period | $ 15,982 | $ 6,506 | $ 2,124 |
Charged (credited) to costs and expenses | (9,158) | 9,441 | 4,396 |
(Deductions) Adjustments | (193) | 35 | (14) |
Balance at end of period | 6,631 | 15,982 | 6,506 |
Tax valuation allowance | |||
Changes in valuation and qualifying accounts | |||
Balance at beginning of period | 189,253 | 193,788 | 206,630 |
Charged (credited) to costs and expenses | 1,273 | 4,334 | 1,107 |
Credited to other accounts | (192) | (8,869) | (13,949) |
Balance at end of period | $ 190,334 | $ 189,253 | $ 193,788 |