Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 24, 2021 | Jun. 28, 2019 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | true | ||
Amendment Description | Amendment | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | PARETEUM Corp | ||
Entity Central Index Key | 0001084384 | ||
Current Fiscal Year End Date | --12-31 | ||
Title of 12(b) Security | Common Stock, $0.00001 par value per share | ||
Entity Interactive Data Current | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 275 | ||
Trading Symbol | TEUM | ||
Entity Common Stock, Shares Outstanding | 161,994,943 | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 4,447 | $ 6,052 |
Restricted cash | 1,455 | 431 |
Accounts receivable, net of an allowance for doubtful accounts of $1,546 at December 31, 2019 and $514 at December 31, 2018 | 8,307 | 3,338 |
Prepaid expenses and other current assets | 4,453 | 2,084 |
Total current assets | 18,662 | 11,905 |
NON-CURRENT ASSETS | ||
OTHER ASSETS | 752 | 45 |
RIGHT OF USE LEASE ASSETS | 2,241 | |
NOTE RECEIVABLE, NON-CURRENT | 512 | 1,082 |
PROPERTY AND EQUIPMENT, NET | 6,262 | 5,444 |
INTANGIBLE ASSETS, NET | 15,500 | 39,658 |
GOODWILL | 10,099 | 101,375 |
TOTAL ASSETS | 54,028 | 159,509 |
CURRENT LIABILITIES | ||
Accounts payable and customer deposits | 30,374 | 10,338 |
Net billings in excess of revenues | 2,529 | 227 |
Accrued expenses and other payables | 13,616 | 7,741 |
Promissory Note | 993 | 681 |
Lease liabilities, current | 2,422 | |
9% Unsecured subordinate convertible promissory notes (current portion net of debt discount and debt issuance costs) | 107 | |
Total current liabilities | 49,934 | 19,094 |
LONG-TERM LIABILITIES | ||
8% Series C Redeemable Preferred Stock, net | 4,798 | |
Lease liabilities, non-current | 415 | |
Other long term liabilities | 23 | 213 |
Deferred tax liabilities | 8,386 | |
Related party loan | 420 | 342 |
Total long term liabilities | 5,656 | 8,941 |
Total liabilities | 55,590 | 28,035 |
Commitments and Contingencies (See Notes) | ||
STOCKHOLDERS' EQUITY | ||
Preferred Stock $0.00001 par value, 50,000,000 shares authorized; designated 150 shares and 13,000 shares as Series A and B, respectively, of which 0 issued and outstanding as of December 31, 2019 and 2018, respectively | ||
Common Stock $0.00001 par value, 500,000,000 shares authorized, 139,060,180 and 98,292,530 issued and outstanding as of December 31, 2019 and 2018 respectively. | 547,948 | 453,995 |
Accumulated other comprehensive loss | (5,608) | (5,389) |
Accumulated deficit | (543,902) | (317,132) |
Pareteum Corporation stockholders' equity | (1,562) | |
Total stockholders' equity (deficit) | (1,562) | 131,474 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 54,028 | $ 159,509 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Allowance for Doubtful Accounts Receivable, Current | $ 1,546 | $ 514 |
Preferred Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 139,060,180 | 139,060,180 |
Common Stock, Shares, Outstanding | 98,292,530 | 98,292,530 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 150 | 150 |
Series B Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 13,000 | 13,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||||
REVENUES | $ 62,049 | $ 20,258 | |||
COST AND OPERATING EXPENSES | |||||
Cost of revenues (excluding depreciation and amortization) | 47,134 | 10,054 | |||
Product development | $ 3,625 | $ 2,552 | $ 6,177 | 12,956 | 3,083 |
Sales and marketing | 3,095 | 2,937 | 6,032 | 10,345 | 3,197 |
General and administrative | 34,583 | 17,330 | |||
Restructuring and acquisition costs | 124 | 3,308 | 3,432 | 3,457 | 7,260 |
Impairment of goodwill and intangible assets | 160,989 | 0 | |||
Depreciation and amortization | 3,105 | 2,726 | 5,831 | 12,938 | 5,427 |
Total cost and operating expenses | 30,960 | 27,501 | 58,461 | 282,402 | 46,351 |
LOSS FROM OPERATIONS | (14,084) | (14,432) | (28,516) | (220,353) | (26,093) |
OTHER INCOME (EXPENSE) | |||||
Interest income | 358 | 184 | |||
Interest expense | (2,120) | (309) | |||
Interest expense related to debt discount and conversion feature | (619) | (184) | |||
Changes in derivative liabilities | 0 | 1,284 | |||
Loss on extinguishment of debt | (1,000) | (1,000) | (8,873) | 0 | |
Gain on equity investment | 0 | 6,371 | |||
Amortization of deferred financing costs | (237) | (29) | |||
Other income (expense), net | (3,221) | 578 | |||
Total other income (expense) | (944) | (1,616) | (14,712) | 7,895 | |
LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES | (235,065) | (18,198) | |||
Income tax benefit | (197) | (167) | (364) | (8,295) | (174) |
NET LOSS | (226,770) | (18,024) | |||
OTHER COMPREHENSIVE LOSS | |||||
Foreign currency translation loss | $ (21) | $ (97) | $ (118) | (219) | (200) |
COMPREHENSIVE LOSS | $ (226,989) | $ (18,224) | |||
Net loss per common share and equivalents - basic and diluted | $ (1.95) | $ (0.28) | |||
Net loss per common share and equivalents - basic | $ (0.13) | $ (0.15) | $ (0.29) | ||
Net loss per common share and equivalents - diluted | $ (1.95) | $ (0.28) | |||
Weighted average shares outstanding during the period - basic | 116,182 | 64,549 | |||
Weighted average shares outstanding during the period - diluted | 116,182 | 64,549 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | IPassPreferred Stock [Member] | IPassCommon Stock [Member] | IPassAccumulated other Comprehensive loss [Member] | IPassAccumulated Deficit [Member] | IPass | Device ScapePreferred Stock [Member] | Device ScapeCommon Stock [Member] | Device ScapeAccumulated other Comprehensive loss [Member] | Device ScapeAccumulated Deficit [Member] | Device Scape | Preferred Stock [Member] | Common Stock [Member] | Accumulated other Comprehensive loss [Member] | Accumulated Deficit [Member] | Total |
Beginning Balance at Dec. 31, 2016 | $ 0 | $ 321,272,000 | $ (6,307,000) | $ (299,543,000) | $ 15,422,000 | ||||||||||
Beginning Balance (in shares) at Dec. 31, 2016 | 0 | 46,617,093 | |||||||||||||
ASC 606 transition adjustment | $ 0 | $ 0 | 0 | 107,000 | 107,000 | ||||||||||
Ending Balance at Dec. 31, 2017 | $ 0 | $ 321,024,000 | (5,189,000) | (299,108,000) | 16,727,000 | ||||||||||
Ending Balance (in shares) at Dec. 31, 2017 | 0 | 46,617,093 | |||||||||||||
Cumulative impact of accounting errors in previously reported consolidated financial statements | $ 0 | $ (248,000) | 1,118,000 | 328,000 | 1,198,000 | ||||||||||
Shares issued for Acquisition | $ 0 | $ 112,535,000 | 0 | 0 | $ 112,535,000 | ||||||||||
Shares issued for Acquisition (in shares) | 0 | 37,511,447 | 10,265,412 | ||||||||||||
Shares cancelled, at par, in acquisition | $ 0 | $ 0 | 0 | 0 | $ 0 | ||||||||||
Shares cancelled, at par, in acquisition (in shares) | 0 | (3,200,332) | |||||||||||||
Shares issued for warrant exercises | $ 0 | $ 6,115,000 | 0 | 0 | 6,115,000 | ||||||||||
Shares issued for warrant exercises (in shares) | 0 | 11,111,780 | |||||||||||||
Shares issued for Equity Fundraises | $ 0 | $ 6,100,000 | 0 | 0 | 6,100,000 | ||||||||||
Shares issued for Equity Fundraises (in shares) | 0 | 2,440,000 | |||||||||||||
Shares issued for Conversion of Notes | $ 0 | $ 1,314,000 | 0 | 0 | 1,314,000 | ||||||||||
Shares issued for Conversion of Notes (in shares) | 0 | 410,205 | |||||||||||||
Stock awards issued to Management (in shares) | 0 | ||||||||||||||
Shares issued for Exercised Stock Options | $ 0 | $ 59,000 | 0 | 0 | 59,000 | ||||||||||
Shares issued for Exercised Stock Options (in shares) | 0 | 59,220 | |||||||||||||
Expenses attributable to share issuances | $ 0 | $ (701,000) | 0 | 0 | (701,000) | ||||||||||
Expenses attributable to share issuances (in shares) | 0 | 13,400 | |||||||||||||
Stock-based compensation | $ 0 | $ 6,755,000 | 0 | 0 | 6,755,000 | ||||||||||
Expenses attributable to September financing | 0 | (701,000) | 0 | 0 | (701,000) | ||||||||||
Shares issued for Settlement of accounts payable | $ 0 | $ 794,000 | 0 | 0 | 794,000 | ||||||||||
Shares issued for Settlement of accounts payable (in shares) | 0 | 375,857 | |||||||||||||
Vesting of restricted and common stock awards | $ 0 | $ 0 | 0 | 0 | 0 | ||||||||||
Vesting of restricted and common stock awards (in shares) | 0 | 2,953,860 | |||||||||||||
Other comprehensive loss due to foreign exchange rate translation, net of tax | $ 0 | $ 0 | (200,000) | 0 | (200,000) | ||||||||||
Net Loss | 0 | $ 0 | 0 | (18,024,000) | (18,024,000) | ||||||||||
Ending Balance (in shares) at Dec. 31, 2018 | 98,292,530 | ||||||||||||||
Balance - January 1, 2018 (as restated) | 0 | $ 453,995,000 | (5,389,000) | (317,132,000) | 131,474,000 | ||||||||||
Preferred Stock (Issuance) | $ 0 | $ 33,180,000 | 0 | 0 | $ 33,180,000 | ||||||||||
Preferred Stock (Issuance) (in shares) | 0 | 18,852,272 | 3,845,193 | ||||||||||||
Shares issued for Acquisition | $ 0 | $ 28,610,000 | $ 0 | $ 0 | $ 28,610,000 | $ 0 | $ 1,692,000 | $ 0 | $ 0 | $ 1,692,000 | |||||
Shares issued for Acquisition (in shares) | 0 | 9,865,412 | 0 | 400,000 | |||||||||||
Shares issued for warrant exercises | $ 0 | $ 1,385,000 | 0 | 0 | $ 1,385,000 | ||||||||||
Shares issued for warrant exercises (in shares) | 0 | 4,703,537 | |||||||||||||
Shares issued for Conversion of Notes | $ 0 | $ 147,000 | 0 | 0 | 147,000 | ||||||||||
Shares issued for Conversion of Notes (in shares) | 0 | 84,220 | |||||||||||||
Warrants issued attributable to loan amendments | $ 0 | $ 6,781,000 | 0 | 0 | 6,781,000 | ||||||||||
Shares issued for Exercised Stock Options | $ 0 | $ 211,000 | 0 | 0 | 211,000 | ||||||||||
Shares issued for Exercised Stock Options (in shares) | 0 | 177,678 | |||||||||||||
Warrants issued in September financing-prefunded | $ 0 | $ 6,781,000 | 0 | 0 | 6,781,000 | ||||||||||
Expenses attributable to share issuances | 0 | (2,281,000) | 0 | 0 | (2,281,000) | ||||||||||
Stock-based compensation | 0 | 11,236,000 | 0 | 0 | 11,236,000 | ||||||||||
Value of stock | $ 0 | $ 33,180,000 | 0 | 0 | $ 33,180,000 | ||||||||||
Number of shares issued during period | 0 | 18,852,272 | 3,845,193 | ||||||||||||
Expenses attributable to September financing | $ 0 | $ (2,281,000) | 0 | 0 | $ (2,281,000) | ||||||||||
Fortress warrants issued in iPass acquisition | 0 | 803,000 | 0 | 0 | 803,000 | ||||||||||
Common stock issued in connection with debt facility | $ 0 | $ 3,775,000 | 0 | 0 | 3,775,000 | ||||||||||
Common stock issued in connection with debt facility (in shares) | 0 | 1,175,000 | |||||||||||||
Shares issued for Settlement of accounts payable | $ 0 | $ 8,414,000 | 0 | 0 | 8,414,000 | ||||||||||
Shares issued for Settlement of accounts payable (in shares) | 0 | 3,110,882 | |||||||||||||
Warrants issued attributable to share issuances | $ 0 | $ 803,000 | 0 | 0 | 803,000 | ||||||||||
Vesting of restricted and common stock awards | $ 0 | $ 0 | 0 | 0 | 0 | ||||||||||
Vesting of restricted and common stock awards (in shares) | 0 | 2,398,649 | |||||||||||||
Other comprehensive loss due to foreign exchange rate translation, net of tax | $ 0 | $ 0 | (219,000) | 0 | (219,000) | ||||||||||
Net Loss | 0 | 0 | 0 | (226,770,000) | (226,770,000) | ||||||||||
Ending Balance at Dec. 31, 2019 | $ 0 | $ 547,948,000 | $ (5,608,000) | $ (543,902,000) | $ (1,562,000) | ||||||||||
Ending Balance (in shares) at Dec. 31, 2019 | 0 | 139,060,180 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (226,770) | $ (18,024) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 12,938 | 5,427 |
Impairment of goodwill and intangible assets | 160,989 | 0 |
Provision for doubtful accounts and reserve for note receivables | 4,531 | 137 |
Stock-based compensation | 11,236 | 6,783 |
Change in fair value of warrant liability | 0 | (1,284) |
Amortization of deferred financing costs | 237 | 29 |
Interest expense relating to debt discount and conversion feature | 619 | 184 |
Shares issued for services | 1,788 | 822 |
Gain on equity investment | 0 | (6,371) |
Loss on extinguishment of debt | 8,873 | 0 |
Deferred tax | (8,594) | (255) |
Loss on disposal of assets | 0 | 39 |
Changes in operating assets and liabilities: | ||
(Increase) in accounts receivable | (1,952) | 1,541 |
(Increase) decrease in prepaid expenses, deposits and other assets | 1,853 | (628) |
Decrease (increase) in accounts payable and customer deposits | 16,140 | 4,650 |
Decrease (increase) in net billings in excess of revenues | (70) | 84 |
Decrease (increase) in accrued expenses and other payables | 421 | (954) |
Net cash (used in) operating activities | (17,761) | (7,820) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, equipment and software development | (7,118) | (3,707) |
Acquisition of Artilium plc, net of cash acquired | 0 | (7,318) |
Acquisition of iPass, Inc., net of cash acquired | 860 | 0 |
Investment in note receivables | (2,700) | (500) |
Acquisition of assets from Devicescape, LLC | (2,137) | 0 |
Net cash (used in) investing activities | (11,095) | (11,525) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Increase in short term loans | 0 | 548 |
Exercise of warrants and options | 1,597 | 6,174 |
Proceeds from issuance of loan | 27,907 | 0 |
Repayment on loans | (41,502) | (81) |
Gross proceeds from equity offerings | 39,961 | 6,100 |
Financing related fees | (4,101) | (633) |
Proceeds from Issuance of Redeemable Convertible Preferred Stock | 4,478 | 0 |
Net cash provided by financing activities | 28,340 | 12,108 |
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (65) | |
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (581) | (7,255) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF THE YEAR | 6,483 | 13,738 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR | 5,902 | 6,483 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash received during the period for interest | (167) | 202 |
Cash (paid) during the period for interest | (1,717) | (121) |
Cash (paid) received during the period for income taxes | $ (280) | $ (34) |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Shares issued in business combinations | 28,610 | 112,535 |
Shares issued for asset purchase | $ 1,692 | $ 0 |
Right of use lease assets and financing | 1,832 | 0 |
Conversion of notes, including converted accumulated interest | 147 | 1,314 |
Conversion of 9% unsecured convertible note | 0 | 678 |
Shares issued for settlement of services | 9,252 | 794 |
Amendments and fair market value adjustments to warrants liabilities and convertible feature liability | $ 0 | $ 314 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Business and Summary of Significant Accounting Policies | |
Business and Summary of Significant Accounting Policies | Note 1. Business and Summary of Significant Accounting Policies Description of Business Pareteum is an experienced provider of Communications Platform as a Service (“CPaaS”) solutions. Pareteum empowers enterprises, communications service providers, early-stage innovators, developers, IoT, and telecommunications infrastructure providers with the freedom and control to create, deliver and scale innovative communications experiences. The Pareteum CPaaS solutions connect people and devices around the world using the secure, ubiquitous, and highly scalable solution to deliver data, voice, video, SMS/text messaging, media, and content enablement. Pareteum has developed mobility, messaging, connectivity and security services and applications. The Pareteum platform hosts integrated IT/Back Office and Core Network functionality for mobile network operators and other enterprises, which allows our customers to implement and leverage mobile communications solutions on a fully outsourced SaaS, PaaS and/or IaaS basis: made available either as an on-premise solution or as a fully hosted service in the Cloud, depending on the needs of our customers. Pareteum also delivers an Operational Support System (“OSS”) for channel partners, with Application Program Interfaces (“APIs”) for integration with third party systems, workflows for complex application orchestration, customer support with branded portals and plug-ins for a multitude of other applications. These features facilitate and improve the ability of our channel partners to provide support and to drive sales. As of October 1, 2018, the Company acquired Artilium plc (“Artilium”), which operates as a wholly owned subsidiary of the Company. Artilium is a software development company active in the enterprise communications and core telecommunications markets delivering software solutions which layer over disparate fixed, mobile and IP networks to enable the deployment of converged communication services and applications. As of February 12, 2019, the Company acquired iPass Inc. (“iPass”), which operates as a wholly owned subsidiary of the Company. iPass is a cloud-based service provider of global mobile connectivity, offering Wi-Fi access on any mobile device through its SaaS platform. Liquidity As reflected in the accompanying consolidated financial statements, the Company reported net loss of $226,770 and $18,024 for the years ended December 31, 2019 and 2018, respectively, and had negative working capital of $31,272 and an accumulated deficit of $543,902 as of December 31, 2019. The cash balance, including restricted cash, as of December 31, 2019, was $5,902. On June 8, 2020, the Company issued a $17.5 million 8% Senior Secured Convertible Note (the “High Trail Note”) to High Trail Investments SA LLC (“High Trail”) due April 1, 2025 for an aggregate purchase price of $14 million, of which $7 million is currently maintained in one or more blocked accounts. The terms of the High Trail Note and related documents require the Company to meet certain specified conditions and covenants, some of which have not been satisfied by the dates required, including (i) the Company filing its restated financial statements with the Securities and Exchange Commission (“SEC”) for (a) the fiscal year ended December 31, 2018, (b) the quarter ended March 31, 2019 and (c) the quarter ended June 30, 2019, in each case on or prior to October 31, 2020, (ii) after October 31, 2020, the Company timely filing its subsequent quarterly reports on Form 10‑Q or its subsequent annual reports on Form 10‑K with the SEC in the manner and within the time periods required under the Exchange Act and (iii) the Company maintaining the listing of its common stock on the Nasdaq Stock Market (see Note 22, Subsequent Events ). As a result, on December 1, 2020, we entered into a forbearance agreement (the “Forbearance Agreement”) with High Trail under which: (i) we admitted that we were in default of several obligations under the High Trail Note and related agreements, (ii) High Trail acknowledged such defaults and agreed not to exercise any right or remedy under the High Trail Note or the related securities purchase agreement, warrant or security documents, including its right to accelerate the aggregate amount outstanding under the High Trail Note, until the earlier of December 31, 2020 (since extended to February 28, 2021), the date of any new event of default or initiation of any action by the Company to invalidate any of the representations and warranties made in the Forbearance Agreement. As a result of the defaults, the interest rate paid on the principal outstanding under the High Trail Note increased to 18% per annum. As partial consideration for its agreement to not exercise any right or remedy under the High Trail financing documents, we agreed with High Trail to make certain changes to the High Trail Note and related agreements. In this regard, we agreed to delete the “Floor Price” of $0.10 that had previously limited the number of shares of Company common stock into which (i) the outstanding indebtedness could be converted upon default and (ii) payments of interest could be made. We also agreed to increase the number of shares it was required to reserve for issuance upon conversion of the High Trail Note and to decrease the exercise price of the related warrant from $0.58 to $0.37. Because of the limited nature of the relief provided under the Forbearance Agreement, which does not lower the amounts payable in principal or interest, the Company believes that it will not have sufficient resources to fund its operations and meet the obligations specified in the note for the next twelve months following the filing of this Annual Report. The Company’s software platforms require ongoing funding to continue the current development and operational plans and the Company has a history of net losses. The Company will continue to expend substantial resources for the foreseeable future in connection with the continued development of its software platforms. These expenditures will include costs associated with research and development activity, corporate administration, business development, and marketing and selling of the Company’s services. In addition, other unanticipated costs may arise. As a result, the Company believes that additional capital will be required to fund its operations and provide growth capital to meet the obligations under the High Trail Note. Accordingly, the Company will have to raise additional capital in one or more debt and/or equity offerings and continue to work with High Trail to cure the defaults. However, there can be no assurance that the Company will be successful in raising the necessary capital or that any such offering will be available to the Company on terms acceptable to the Company, or at all. If the Company is unable to raise additional capital that may be needed and with acceptable terms, this would have a material adverse effect on the Company. Furthermore, the recent outbreak of the COVID‑19 pandemic has significantly disrupted world financial markets, has negatively impacted U.S. market conditions and may reduce opportunities for the Company to seek out additional funding. In particular, a decline in the market price of the Company’s common stock, coupled with the stock’s delisting from the Nasdaq Capital Market, could make it more difficult to sell equity or equity-related securities in the future at a time and price that the Company deems appropriate. The factors discussed above raise substantial doubt as to the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Pareteum and its subsidiaries and have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). All intercompany transactions and account balances have been eliminated in consolidation. Foreign Currency Translation The Company’s consolidated financial statements were translated into U.S. dollars in accordance with ASC 830, Foreign Currency Matters (“ASC 830”). The majority of the Company’s operations are carried out in Euros. For all operations outside of the U.S., assets and liabilities are translated into U.S. dollars using the period end exchange rates and the average exchange rates as to revenues and expenses, and capital accounts were translated at their historical exchange rates when the capital transaction occurred. In accordance with ASC 830, net gains and losses resulting from translation of foreign currency financial statements are included in the Statement of Changes in Stockholders’ Equity as Other comprehensive income (loss). Foreign currency transaction gains and losses are included in the Consolidated Statements of Comprehensive Loss, under the line item “Other income (expense), net”. Contingent Losses The Company records a provision for contingent losses when it is both probable that a liability will be incurred and the amount or range of the loss can be reasonably estimated. An unfavorable outcome to any legal or regulatory matter, if material, could have an adverse effect on the Company's operations or its financial position, liquidity or results of operations. The Company expenses legal fees as incurred. Use of Estimates The preparation of the accompanying consolidated financial statements conforms with accounting principles generally accepted in the U.S. and requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and intangible assets acquired through acquisitions. Significant estimates include the bad debt allowance; revenue recognition; impairment of goodwill, intangible assets and long-lived assets; valuation of financial instruments; realization of deferred tax assets; useful lives of long-lived assets; share-based compensation and contingent losses. Actual results may differ from these estimates under different assumptions or conditions. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Restricted Cash Restricted cash as of December 31, 2019 and 2018 was $1,455 and $431, respectively, and consists primarily of cash deposited in blocked accounts as bank guarantees for corporate credit cards and letters of credit issued to vendors related to contract performance. Accounts Receivables, net The Company has a geographically dispersed customer base. The Company maintains an allowance for potential credit losses on accounts receivable. The Company makes ongoing assumptions relating to the collectability of our accounts receivable. The accounts receivable amounts presented on our Consolidated Balance Sheets include an allowance for accounts that might not be collected. In determining the amount of the allowance, the Company considers its historical level of credit losses. The Company also makes judgments about the creditworthiness of significant customers based on ongoing credit evaluations, and the Company assesses current economic trends that might impact the level of credit losses in the future. The Company’s allowances have generally been adequate to cover its actual credit losses. However, since the Company cannot reliably predict future changes in the financial stability of its customers, it cannot guarantee that its allowances will continue to be adequate. If actual credit losses are significantly greater than the allowance, the Company would increase its general and administrative expenses and increase its reported net losses. Conversely, if actual credit losses are significantly less than our reserve, this would eventually decrease the Company’s general and administrative expenses and decrease its reported net losses. Allowances are recorded primarily on a specific identification basis. See Note 3, Allowance for Doubtful Accounts to the Financial Statements for more information. Leasing Arrangements The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and lease liabilities in the Company’s Consolidated Balance Sheets. As of adoption of ASU No. 2016-02, “ Leases (Topic 842) ” the Company was not party to finance lease arrangements. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not generally provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The implicit rate is used when it is readily determinable. The Company’s lease agreements may have lease and non-lease components, which the Company accounts for as a single lease component. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term and variable payments are recognized in the period they are incurred. The Company’s lease agreements do not contain any residual value guarantees. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Under the available practical expedient, the Company accounts for the lease and non-lease components as a single lease component. Revenue Recognition Our revenues represent amounts earned for our mobile and CPaaS solutions. Our solutions take many forms but our revenue generally consists of fixed and/or variable charges for services delivered monthly under a combined services and SaaS model. We also offer discrete (one-time) services for implementation and for development of specific functionality to properly service our customers. The following table presents our revenues disaggregated by revenue source: Years Ended December 31, 2019 2018 Monthly Service $ 61,206 $ 19,170 Installation and Software Development 843 1,088 Total revenues $ 62,049 $ 20,258 Both monthly services revenues are recognized over time and installation and software development revenues are recognized over time. The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers: Years Ended December 31, 2019 2018 Europe $ 39,957 $ 18,753 United States 20,124 956 Other geographic areas 1,968 549 Total revenues $ 62,049 $ 20,258 Monthly Service Revenues The Company’s performance obligations in a monthly Software as a Service (SaaS) and service offerings are simultaneously received and consumed by the customer and therefore, are recognized over time. For recognition purposes, we do not unbundle such services into separate performance obligations. The Company typically bills its customer at the end of each month, with payment to be received shortly thereafter. The fees charged may include a combination of fixed and variable charges with the variable charges tied to the number of subscribers or some other measure of volume. Although the consideration may be variable, the volumes are estimable at the time of billing, with “true-up” adjustments occurring in the subsequent month. Installation and Software Development Revenues The Company’s other revenues consist generally of installation and software development projects. Installation represents the activities necessary for a customer to obtain access and connectivity to the Company’s monthly SaaS and service offerings. While installation may require separate phases, it represents one promise within the context of the contract. Development consists of programming and other services which adds new functionality to a customer’s existing or new service offerings. Each development project defines its milestones and will have its own performance obligation. Revenue is recognized over time if the installation and development activities create an asset that has no alternative use for which the Company is entitled to receive payment for performance completed to date. If not, then revenue is not recognized until the applicable performance obligation is satisfied. Arrangements with Multiple Performance Obligations The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers. Contract Assets and Liabilities Given the nature of the Company’s services and contracts, it has no contract assets. The Company records net billings in excess of revenues when payments are made in advance of our performance, including amounts which are refundable. Net billings in excess of revenues were $2,529 and $227 as of December 31, 2019 and 2018, respectively. Payment terms vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, payment is required before control is transferred or services are delivered to the customer. Cost of Revenues Cost of Revenues Cost of revenues includes origination, termination, network and billing charges from telecommunications operators, costs of telecommunications service providers, supplies and materials, network costs, data center costs, facility cost of hosting network and equipment and cost in providing resale arrangements with long distance service providers, cost of leasing transmission facilities, international gateway switches for voice, data transmission services, and the cost of professional services of staff directly related to the generation of revenues, consisting primarily of employee-related costs associated with these services, including share-based expenses and the cost of subcontractors. Cost of revenues excludes depreciation and amortization. Reporting Segments The segment reporting guidance in ASC 280, Segments Reporting (“ASC 280”), defines operating segments as components of an enterprise for which discrete financial information is available and that is evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and in assessing performance. The Company has determined its Chief Executive Officer, together with its Chief Financial Officer, to be the CODM. During the assessment of segment reporting for the year ended December 31, 2019, the Company identified three operating segments. The three operating segments, Legacy Pareteum, Artilium and iPass, have been aggregated into one reportable segment as they have similar economic characteristics in that they provide communications connectivity through a communication-as-a-service platform to similar customers wishing to be connected to everything mobile. The results of this assessment also consider the impacts of recent acquisitions of Artilium and iPass and the way in which internally reported financial information is used by the CODM to make decisions and allocate resources. Fair Value Measurements In accordance with ASC 820, Fair Value Measurement (“ASC 820”), the Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. Level 2 – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments includes cash instruments for which quoted prices are available but are traded less frequently, derivative instruments whose fair values have been derived using a model where inputs to the model are directly observable in the market and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. Level 3 – Instruments that have little to no pricing observability as of the reported date. These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. The degree of judgment exercised by the Company in determining fair value is greatest for assets categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined by the lowest level input that is significant to the fair value measurement. Nonrecurring fair value measurements The Company’s nonfinancial assets measured at fair value on a nonrecurring basis include goodwill and intangible assets acquired in business combinations as well as fair value measurements used when performing its annual impairment test. The valuation methods used to determine fair value require a significant degree of management judgment to determine the key assumptions which include projected revenues and appropriate discount rates. As such, the Company classifies nonfinancial assets subjected to nonrecurring fair value adjustments at level 3 measurements. The Company hired a third-party valuation expert to value the trade names, customer relationships and the technology acquired as part of the acquisition of Artilium and iPass due to the expertise required to model the assumptions used. At December 31, 2019, goodwill and certain intangible assets were impaired and written down to their fair value; see Note 8, Goodwill and Net Intangibles . Recurring fair value measurements – Warrant Derivative Liabilities and Conversion Feature Derivative In cases where the Company needs to account for derivative liabilities, the Company uses the Monte Carlo valuation model and the Black-Scholes option pricing model to determine the value of the outstanding warrants and conversion feature, in these situations, the Company hires a third-party valuation expert to prepare such calculations due to the expertise required to model the assumptions. There were no derivative liabilities at December 31, 2019 and 2018. Number of Outstanding Warrants and/or Convertible Notes The number of outstanding warrants and/or convertible notes is adjusted every re-measurement date after deducting for the exercise or conversion of any outstanding warrants convertible notes during the previous reporting period. Stock Price at Valuation Date The closing stock price at re-measurement date being the last available closing price of the reporting period taken from www.nasdaq.com. Exercise Price The exercise price is fixed and determined under the terms of the financing facility it was issued. Remaining Term The remaining term is calculated by using the estimated term of the outstanding principal liability at the re-measurement date. Expected Volatility Management estimates expected cumulative volatility giving consideration to the expected term of the note and/or warrants and calculated the annual volatility by using the continuously compounded return calculated by using the share closing prices of an equal number of days prior to the maturity date of the note (reference period). The annual volatility is used to determine the (cumulative) volatility of the Company´s common stock. Liquidity Event We estimate the expected liquidity event considering the average expectation of the timing of fundraises and the need for those funds offset against scheduled repayment dates and the costs and/or savings of the future steps in re-modelling the organization. Risk-Free Interest Rate Management estimates the risk-free interest rate using the “Daily Treasury Yield Curve Rates” from the US Treasury Department with a term equal to the reported rate or derived by using both spread in intermediate term and rates, up to the expected maturity date of the derivative involved. Expected Dividend Yield Management estimates the expected dividend yield by giving consideration to the Company´s current dividend policies as well as those anticipated in the future considering the Company´s current plans and projections. Management currently does not believe that it is in the best interest of the Company to pay dividends at this time. Financial Instruments The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, notes receivable, promissory notes (payable) and customer deposits approximate their fair values based on their short-term nature. The recorded values of long-term debt, including the 8% Series C Redeemable Preferred Stock, approximate their fair values, as interest approximates market rates (Level 2). The Company’s unsecured convertible promissory note conversion feature, a derivative instrument in 2018, is recognized in the balance sheet at its fair values with changes in fair market value reported in earnings (Level 3). Share-based Compensation The Company follows the provisions of ASC 718, Compensation-Stock Compensation , (“ASC 718”). Under ASC 718, share-based awards are recorded at fair value as of the grant date and recognized as expense with an adjustment for forfeiture over the employee’s requisite service period (the vesting period, generally up to three years). The share-based compensation cost based on the grant date fair value is amortized over the period in which the related services are received. In periods prior to January 1, 2019, the Company accounted for the issuance of share-based compensation awards to contractors and advisory board members in accordance with ASC 505‑50 Equity-Based Payments to Non-Employees (“ASC 505‑50”). Under ASC 505‑50, we determined the fair value of the options or share-based compensation awards granted as either the fair value of the consideration received, or the fair value of the equity instruments issued, whichever is more reliably measurable. On January 1, 2019, the Company adopted Accounting Standards Update 2018-07, Improvements to Nonemployee Share-Based Payment Accounting requiring the measurement of the share-based compensation awards granted to non-employees at the grant-date fair value, in a manner consistently with equity-classified awards issued to employees. To determine the value of our stock options at grant date under our employee stock option plan, the Company uses the Black-Scholes option-pricing model. The use of this model requires the Company to make many subjective assumptions. The following addresses each of these assumptions and describes our methodology for determining each assumption: Expected Term The expected term represents the period that the stock option awards are expected to be outstanding. The Company uses the simplified method for estimating the expected term of the option, by taking the average between time to vesting and the contract term of the award. Expected Volatility The Company estimates expected cumulative volatility giving consideration to the expected term of the option of the respective award, and the calculated annual volatility by using the continuously compounded return calculated by using the share closing prices of an equal number of days prior to the grant-date (reference period). The annual volatility is used to determine the (cumulative) volatility of its common stock. Forfeiture rate The Company is using the aggregate forfeiture rate. The aggregate forfeiture rate is the ratio of pre-vesting forfeitures over the awards granted (pre-vesting forfeitures/grants). Risk-Free Interest Rate The Company estimates the risk-free interest rate using the “Daily Treasury Yield Curve Rates” from the U.S. Treasury Department with a term equal to the reported rate or derived by using both spread in intermediate term and rates, to the expected term of the award. Expected Dividend Yield The Company estimates the expected dividend yield by giving consideration to our current dividend policies as well as those anticipated in the future considering our current plans and projections. Income Taxes Current tax is based on the income or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purpose and is calculated using tax rates that have been enacted at the balance sheet date. Deferred tax assets are recognized for the expected future tax benefit to be derived from various sources such as tax losses and tax credit carry-forwards. Establishment of a valuation allowance is provided when it is more likely than not that deferred taxes will not be fully realized. In the ordinary course of a global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Some of these uncertainties arise as a consequence of revenue sharing and reimbursement arrangements among related entities, the identification of revenue and expenses that qualify for preferential tax treatment and assessment of the sustainability of tax positions based on several factors including changes in facts or circumstances, changes in tax law, settled audit issues and new audit activity. The Company files federal income tax returns in the U.S., various U.S. state jurisdictions and various foreign jurisdictions. The Company’s income tax returns are open to examination by federal, state and foreign tax authorities, generally for 3 years but can be extended to 6 years under certain circumstances. In other jurisdictions the period for examinations depends on local legislation, typically ranging from three to eight years. The Company’s policy is to record estimated interest and penalties on unrecognized tax benefits as part of its income tax provision. Comprehensive Income (Loss) For the years ended December 31, 2019 and 2018, the Company’s comprehensive loss consisted of net losses and foreign currency translation adjustments. Business Combinations The acquisition method of accounting for business combinations as per ASC 805, Business Combinations (“ASC 805”), requires the Company to use significant estimates and assumptions, including fair value estimates, as of the business combination date and to refine those estimates as necessary during the measurement period (defined as the period, not to exceed one year, in which the Company may adjust the provisional amounts recognized for a business combination). Under the acquisition method of accounting, the identifiable assets acquired, the liabilities assumed, and any non-controlling interests acquired in the acquisition are recognized as of the closing date for purposes of determining fair value. The Company measures goodwill as of the acquisition date as the excess of consideration transferred, over the net of the acquisition date fair value of the identifiable assets acquired and liabilities assumed. Costs that the Company incurs to complete the business combination such as investment banking, legal and other professional fees are not co |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions | |
Acquisitions | Note 2. Acquisitions Devicescape Asset Purchase On April 22, 2019, the Company, together with Devicescape Holdings, Inc., a Delaware corporation and wholly owned subsidiary of the Company (the “Holdco” and together with the Company, the “Buyer”) entered into an asset purchase agreement (the “Purchase Agreement”) with Devicescape Software, Inc., a California corporation (“Devicescape”), whereby the Buyer acquired certain assets of Devicescape and assumed certain liabilities of Devicescape, such that Holdco shall continue as a surviving subsidiary of the Company holding the acquired assets and assuming those certain liabilities of Devicescape (the “Devicescape Purchase”). In connection with the Devicescape Purchase, and pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, the Company paid cash consideration of $2,000 and issued to the stockholders of Devicescape an aggregate of 400,000 shares of the Company’s common stock at a value of $1,692 based on our closing price on April 22, 2019, of $4.23 per share. The Devicescape Purchase has been treated as an asset purchase under U.S. GAAP. Under an asset purchase, assets are recognized based on their cost to the acquiring entity, which generally includes the transaction costs of the asset acquired and is allocated to the individual assets acquired or liabilities assumed based on their relative fair values and does not give rise to goodwill. The allocation of the purchase price was as follows: Purchase consideration: Cash consideration and transaction costs $ 2,137 Shares issued to stockholders 1,692 Total purchase consideration $ 3,829 Purchase price allocation: Assets: Accounts receivable $ 71 Escrow receivable 200 Intangible assets 3,646 Total assets 3,917 Liabilities: Accounts payable & other liabilities 88 Total liabilities 88 Estimated fair value of net assets acquired $ 3,829 The allocation of the purchase price for Devicescape’s intangible assets were as follows: Estimated Useful Fair Life Value (Years) Developed technology $ 3,525 8 Customer relationships 121 8 Intangible assets $ 3,646 The value of the developed technology intangible asset was calculated using the relief-from-royalty method, an income approach. The relief-from-royalty method measures the fair value of an asset by identifying the avoided royalty costs of licensing an asset of similar utility from a third party. The value of the customer relationships intangible asset was calculated using the excess earnings method of the income approach. The excess earnings method calculates the present value of the residual after-tax cash flows, or excess earnings, attributable to the subject intangible asset after certain deductions are applied for the use of the other assets that contribute to the generation of the cash flows. The value of the tradename intangible asset was calculated using the relief-from-royalty method. iPass, Inc. Acquisition On November 12, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, TBR, Inc., and iPass. Pursuant to the Merger Agreement, TBR, Inc., a wholly owned subsidiary of the Company, commenced the offer for the “iPass Shares for the transaction consideration, upon the terms and subject to the conditions set forth in the Prospectus/Offer to Exchange dated December 4, 2018 (together with any amendments and supplements thereto, the “Offer to Exchange”), and the related Letter of Transmittal. The Offer and withdrawal rights expired at 5:00 p.m. New York City time on February 12, 2019, and promptly following such time TBR, Inc. accepted for payment and promptly paid for all validly tendered iPass Shares in accordance with the terms of the Offer. The Company acquired 100% of the voting shares of iPass. On February 12, 2019, Pareteum Corporation entered into the Consent with iPass SPV, and Fortress Credit Corp. (together with its affiliates, “Fortress”). Also, on February 12, 2019 the Company entered into the Joinder to Security Agreement, the Joinder to Guarantee and the Pledge Agreement, each for the benefit of or with Fortress, guaranteeing the Loan and granting a first-priority security interest in all of the assets of the Company to Fortress. Pursuant to the Consent, Fortress consented to the consummation of the Merger Agreement by and among the Company, iPass and TBR, Inc., a wholly owned subsidiary of the Company. The Company paid Fortress a cash fee of $150 and issued to Fortress warrants to purchase an aggregate of 325,000 shares of common stock. On February 12, 2019, following acceptance and payment for the validly tendered iPass Shares and pursuant to the terms and conditions of the Merger Agreement, the Company completed its acquisition of iPass from the stockholders of iPass when TBR, Inc. merged with and into iPass, with iPass surviving as a wholly owned subsidiary of the Company (the “Merger”). The Merger was governed by Section 251(h) of the Delaware General Corporation Law, as amended (the “DGCL”) with no stockholder vote required to consummate the Merger. At the effective time of the Merger, each iPass Share outstanding was converted into the right to receive the transaction consideration. The iPass Shares are no longer listed on the Nasdaq Capital Market. Based on the terms of the Merger Agreement, the Company issued 9,865,412 shares of common stock to former stockholders of iPass. In accordance with ASC 805, the Company recognized a settlement of a pre-existing relationship in the form of a software license that the Company purchased from iPass on May 8, 2018, on the acquisition date, which is included in consideration transferred. The aggregate consideration transferred totaled $30,141, which consisted of: i) 9,865,412 shares issued to the former stockholders of iPass valued at $28,610 (based on the Company’s closing stock price of $2.90 per share on February 12, 2019) and ii) non-monetary consideration relating to the settlement of the pre-existing relationship software license of $1,531, which approximates the estimated fair value at the date of acquisition. The allocation of the purchase price was as follows: Purchase price allocation: Assets: Cash and cash equivalents $ 860 Accounts receivable 4,344 Property, plant and equipment 873 Other assets 4,890 Intangible assets 11,106 Total assets 22,073 Liabilities: Accounts payable, accrued expenses and other current liabilities $ 17,207 Deferred revenue 1,700 Loans outstanding 9,989 Other liabilities 857 Total liabilities 29,753 Estimated fair value of net assets acquired (7,680) Goodwill $ 37,821 On February 26, 2019, concurrently with the Company entering into a credit agreement with Post Road Administrative Finance, LLC and its affiliate Post Road Special Opportunity Fund I LLP (see Note 12, Long-term Debt ), the Company paid approximately $11,000 for payment in full of the outstanding secured debt assumed in the acquisition of iPass owed to Fortress and recorded a loss on extinguishment of debt of approximately $1,000. The consolidated financial statements for the year ended December 31, 2019, included iPass and its subsidiaries from the closing date of February 12, 2019, through December 31, 2019. The allocation of the purchase price for iPass’s intangible assets were as follows: Estimated Useful Fair Life Value (Years) Developed Technology $ 2,585 8 Customer relationships 8,378 5 Tradename 143 2 Intangible assets $ 11,106 The weighted-average useful life of the intangible assets acquired is estimated at 5.7 years. Artilium plc. Acquisition Artilium plc (“Artilium”) is an innovative software development company active in the enterprise communications and core telecommunication markets delivering software solutions which layer over disparate fixed, mobile and IP networks to enable the deployment of converged communication services and applications. In October 2017, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”) with Artilium. Prior to the Exchange Agreement, the Company’s ownership of Artilium approximated 7% of Artilium’s issued and outstanding equity securities. Pursuant to the Exchange Agreement, Artilium agreed to issue and deliver to the Company an aggregate of 27,695,177 of its newly issued ordinary shares in exchange for 3,200,332 restricted shares of the Company’s common stock valued at $3,230. The Company accounted for the Exchange Agreement as a cost method equity investment in the amount of $3,230. On June 7, 2018, the Artilium Board and the Pareteum Board announced that they had reached agreement regarding the terms of a recommended share and cash offer by Pareteum to acquire the issued and to-be-issued ordinary share capital of Artilium not already owned by Pareteum. Under the terms of the acquisition, each Artilium shareholder was entitled to receive 0.1016 Pareteum shares and $2.55 (or 1.9 pence) in cash per Artilium share upon completion of the transaction. The acquisition valued each Artilium share at $26.22 (or 19.55 pence) and the entire issued and to be issued ordinary share capital of Artilium at approximately $104.7 million (or £78.0 million), based on Pareteum’s closing share price of $2.33 on June 6, 2018 and the exchange rate of US$1.3413: £1. On September 13, 2018, stockholders of Pareteum approved the proposed acquisition of the entire issued and to be issued ordinary shares of Artilium. On October 1, 2018, The Pareteum completed the acquisition of all of the outstanding shares of Artilium. In connection with the acquisition, the Company paid $8,142 in cash and issued an aggregate of 37,511,447 shares of the Company’s common stock which included 4,107,714 shares issued to certain Artilium officers. At the time of the acquisition, the Company remeasured its previously held equity investment in Artilium with a carrying value of $3,230 (3,200,332 shares) and recorded a gain on investment of $6,371 based on the Company’s stock price of $3.00 per share on October1, 2018. The shares previously issued to Artilium were cancelled at the time of the acquisition. The acquisition-date fair value of the Company’s equity investment is included in the purchase consideration. The allocation of the purchase price was as follows: Purchase consideration: Cash consideration $ 8,142 Shares issued to stockholders 112,535 Fair value of previously held equity investment 9,601 Total purchase consideration $ 130,278 Purchase price allocation: Assets: Current and long-term assets (including cash and cash equivalents of $825) $ 4,726 Intangible assets 40,800 Total assets 45,526 Liabilities: Current and long-term liabilities 7,982 Deferred tax liabilities 8,641 Total liabilities 16,623 Estimated fair value of net assets acquired 28,903 Goodwill $ 101,375 The consolidated financial statements for the year ended December 31, 2019 included Artilium and its subsidiaries from the closing date of October 1, 2018 through December 31, 2019. The allocation of the purchase price for Artilium’s intangible assets were as follows: Estimated Useful Fair Life Value (Years) Technology $ 20,600 6 Customer relationships 16,800 18 Tradename 3,400 5 Intangible assets $ 40,800 The weighted-average useful life of the intangible assets acquired is estimated at 10.9 years. |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 12 Months Ended |
Dec. 31, 2019 | |
Allowance for Doubtful Accounts | |
Allowance for Doubtful Accounts | Note 3. Allowance for Doubtful Accounts Accounts receivable are presented on the balance sheet net of estimated uncollectible amounts. The Company records an allowance for estimated uncollectible accounts in an amount approximating anticipated losses. Individual uncollectible accounts are written off against the allowance when collection of the individual accounts appears doubtful. The Company recorded an allowance for doubtful accounts of $1,546 and $514 as of December 31, 2019 and 2018, respectively. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid Expenses and Other Current Assets | |
Prepaid Expenses and Other Current Assets | Note 4. Prepaid Expenses and Other Current Assets As of December 31, 2019 and December 31, 2018, prepaid expenses and other current assets consisted of the following: December 31, December31, Prepaid expenses and other current assets 2019 2018 Prepaid insurance and legal fees $ 762 $ 219 Prepaid software license and support 890 619 Prepaid payroll taxes 214 — Prepaid expenses-other 714 290 Valued added tax 591 609 Other receivables 451 Other assets 831 347 Prepaid expenses and other current assets $ 4,453 $ 2,084 |
Other Assets Non-Current
Other Assets Non-Current | 12 Months Ended |
Dec. 31, 2019 | |
Other Assets Non-Current | |
Other Assets Non-Current | Note 5. Other Assets Non-Current Other assets at December 31, 2019 and December 31, 2018 was $752 and $45, respectively. Other assets consisted mainly of long-term deposits to various telecom carriers, facility deposits, other deposits. The deposits are refundable at the termination of the business relationship with the carriers or at the end of the lease term. |
Note Receivable
Note Receivable | 12 Months Ended |
Dec. 31, 2019 | |
Note Receivable | |
Note Receivable | Note 6. Note Receivable The Company’s notes receivable consisted of two promissory notes and totaled $512 and $1,082 at December 31, 2019 and 2018, respectively. The third quarter 2016 sale of ValidSoft for the price of $3,000 was completed and the Company received $2,000 in cash and a $1,000 promissory note. The Principal amount of $1,000 together with all interest was originally required to be paid by on or before September 30, 2018 bearing interest of 5% per annum. On July 22, 2018, an agreement was made to extend the maturity date of the note to September 30, 2019. At December 31, 2018, the outstanding principal and accrued interest amount was $577. At December 31, 2019 the outstanding principal and accrued interest amount was $512. In June 2020, the Company amended the promissory note with ValidSoft and entered into a Replacement Note in the amount of $512 which represented the outstanding principal and interest balance as of December 31, 2019. The amendment extended the maturity date of the promissory note to March 31, 2021. In connection with the amendment, ValidSoft agreed to pay $54 in overdue fees in two installments with the first installment of $27 paid at the time of the amendment and the remaining balance was paid in October 2020. The amendment also contains a provision for a discount if ValidSoft prepays any or all amounts outstanding prior to their scheduled due dates. On November 26, 2018, the Company executed a senior secured promissory note for a principal amount of $500 from Yonder Media Mobile(“Yonder”), an unrelated entity, with interest accruing at a simple rate of 12% per annum with a maturity date of May 26, 2020. On January 9, 2019, February 12, 2019 and February 28, 2019, the Company issued additional notes of $200, $500 and $2,000, respectively (the “2019 Notes”). The 2019 Notes each bear an interest rate of 12% per annum and mature 18 months following the issuance date. All principal and interest are due on the maturity date. In July 2019, the Company and Yonder became involved in a legal dispute and the Company recorded a reserve of $3,355 representing the principal and accrued interest amount outstanding on the promissory notes as of June 30, 2019. The aggregate outstanding amount of the notes are $3,355 and $505 at December 31, 2019 and 2018, respectively, with the balance outstanding on the notes at December 31, 2019 being fully reserved. In July 2020, the Company settled all the principal amounts due under the promissory notes by conversion of the amounts outstanding into shares of Yonder. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment, Net | |
Property and Equipment, Net | Note 7. Property and Equipment, Net As of December 31, 2019 and December 31, 2018, property and equipment consisted of the following: Average Estimated Useful December 31, December 31, Property and equipment Lives 2019 2018 Furniture and fixtures 5 $ 171 $ 168 Computer, communication and network equipment 3 - 10 17,450 21,009 Software 5 4,150 5,311 Automobiles 5 13 13 Leasehold improvements 5 131 — Software development 1 8,552 1,735 Total property and equipment 30,467 28,236 Less: accumulated depreciation and amortization (24,205) (22,792) Total property and equipment, net $ 6,262 $ 5,444 Computers, communications and network equipment includes the capitalization of our systems engineering and software programming activities. Typically, these investments pertain to the Company’s: Intelligent Network (IN) platform; CRM provisioning Software; Mediation, Rating & Pricing engine; ValidSoft security software applications; Operations and business support software; and Network management tools. The total amount of product development costs (internal use software costs) that are capitalized in property and equipment during the years ended December 31, 2019 and 2018 was $6,363 and $1,282, respectively. During the years ended December 31, 2019 and 2018, the Company amortized $3,269 and $901 of software development, respectively. Total property and equipment depreciation and software development amortization expenses were $5,919 and $4,165 for the years ended December 31, 2019 and 2018, respectively. |
Goodwill and Net Intangibles, N
Goodwill and Net Intangibles, Net | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Net Intangibles, Net | |
Goodwill and Net Intangibles, Net | Note 8. Goodwill and Net Intangibles, Net During the fourth quarter ended December 31, 2019, the Company performed its annual impairment test for goodwill and intangible assets. As a result of the deteriorating business conditions, the Company recorded an impairment charge of $160,989 during the year ended December 31, 2019 related to goodwill and intangible assets associated with the Company’s acquisitions of iPass and Artilium. The Company operates in a single reportable segment. The impairment test indicated that the net book value of goodwill associated with the Company’s acquisitions of iPass and Artilium exceeded their implied fair value. The Company estimated the fair value of its reportable segment utilizing a discounted cash flow model. The intangible assets acquired in the iPass and Artilium acquisitions also indicated an impairment as the carrying values exceeded the fair value determined in the impairment test. The impairment charge for goodwill and finite-lived intangible assets represented the amount by which the carrying values exceed their estimated fair values. Changes in goodwill were as follows (As restated) : Goodwill Balance at December 31, 2017 $ — Business acquisition 101,375 Balance at December 31, 2018 $ 101,375 Business acquisition 37,821 Impairment (129,097) Balance at December 31, 2019 $ 10,099 The Company utilized the income approach to determine the enterprise value of the Company in its goodwill impairment test. The fair value was based on forecasted future cash flows discounted back to the present value; significant judgments related to the risk adjusted discount rates, terminal growth rates and weighted-average cost of capital (“WACC”). Net intangibles consisted of the following amortizing intangibles: As of December 31, 2019 As of December 31, 2018 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Impairment Total Amount Amortization Impairment Total Technology $ 25,971 $ (4,102) $ (15,369) $ 6,500 $ 20,720 $ (859) $ — $ 19,861 Customer relationships 25,066 (2,192) (14,803) 8,071 16,800 (233) — 16,567 Trade names 3,374 (725) (1,720) 929 3,400 (170) — 3,230 Net intangibles $ 54,411 $ (7,019) $ (31,892) $ 15,500 $ 40,920 $ (1,262) $ — $ 39,658 Impairment charges related to finite lived intangible assets during the year ended December 31, 2019 were $31,892. There were no impairment charges for the year ended December 31, 2018. The 2019 impairment charge by type of intangible asset was as follows: Original useful Impairment charge life (years) Technology $ 15.369 6-8 Customer relationships 14,803 11-18 Trade names 1,720 3-5 Total impairment charge $ 31,892 The Company utilized various methods to determine the fair value of the intangible assets for use in the impairment test. The fair value of the trademarks intangible assets was calculated using the income approach relief-from-royalty method. The relief-from-royalty method measures the fair value of an asset by identifying the avoided royalty costs of licensing an asset of similar utility from a third party. The fair value of the technology intangible assets was calculated utilizing the relief-from-royalty method for the iPass intangible asset and the excess earnings method of the income approach for Artilium’s intangible asset. The excess earnings method calculates the present value of the residual after-tax cash flows, or excess earnings, attributable to the subject intangible asset after certain deductions are applied for the use of the other assets that contribute to the generation of the cash flows. Customer relationships were valued based on the distributor method, an income-based approach, and the cost approach for Artilium and iPass, respectively. The distributor method uses a discounted cash flow model to calculate the present value of a distributor’s expected profit margins to reflect the value of the distributor’s ability to provide products to its customers. The cost approach measures the benefits related to an asset by the cost to reconstruct it or replace it with another asset of similar utility. At December 31, 2019, the Company’s estimated useful lives of its intangible assets by category was 8 years, 5 to 6 years and 2 to 6 years for technology, customer relationships and trade names, respectively. The change in the estimated useful lives from the estimates at the acquisition dates was due to diminished expectations of the future periods that would benefit from our original estimates. At December 31, 2019, the weighted-average amortization period for intangible assets was 6.2 years. At December 31, 2019, the weighted-average amortization periods for technology, customer relationships, and trade names was 7.7 years, 5.1 years and 5.6 years, respectively. Amortization expense related to intangible assets for the years ended December 31, 2019 and 2018 was $7,019 and $1,262, respectively. The estimated annual amortization expense related to finite-lived intangible assets as of December 31, 2019, is as follows: Year Ended December 31, Amortization 2020 $ 2,606 2021 2,606 2022 2,556 2023 2,556 2024 2,556 2025 and thereafter 2,620 $ 15,500 |
Net Billings in Excess of Reven
Net Billings in Excess of Revenues | 12 Months Ended |
Dec. 31, 2019 | |
Net Billings in Excess of Revenues | |
Net Billings in Excess of Revenues | Note 9. Net Billings in Excess of Revenues Because the Company recognizes revenue upon performance of services, net billings in excess of revenues represents amounts received from customers for which either delivery has not occurred or against future sales of services. As of December 31, 2019 and 2018, the balance of net billings in excess of revenues was $2,529 and $227, respectively. |
Accrued Expenses and Other Paya
Accrued Expenses and Other Payables | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Expenses and Other Payables | |
Accrued Expenses and Other Payables | Note 10. Accrued Expenses and Other Payables As of December 31, 2019 and December 31, 2018, accrued expenses and other payables were comprised of the following: December 31, December 31, Accrued expenses and other payables 2019 2018 Accrued selling, general and administrative expenses $ 2,720 $ 1,189 Accrued salaries and bonuses 2,005 1,596 Accrued employee benefits 564 — Accrued restructuring & acquisition related costs — 1,885 Accrued cost of service 627 813 Accrued taxes (including VAT) 2,637 1,834 Accrued interest payable 53 68 Accrued customer credit 3,393 — Other accrued expenses 1,617 356 Accrued expenses and other payables $ 13,616 $ 7,741 Accrued taxes include income taxes payable as of December 31, 2019 and 2018, amounting to $316 and $81 respectively. See Note 18 to the Financial Statements for more information. Accrued selling, general and administrative expenses include social security premiums, personnel related costs such as payroll taxes, provision for holiday allowance, accruals for marketing and sales expenses, and office related expenses. |
Promissory Note and Unsecured C
Promissory Note and Unsecured Convertible Promissory Notes | 12 Months Ended |
Dec. 31, 2019 | |
Unsecured Convertible Promissory Notes [Member] | |
Promissory Notes and Unsecured Convertible Promissory Notes | Note 11. Promissory Notes and Unsecured Convertible Promissory Notes Promissory Notes The Promissory Notes of $993 at December 31, 2019 are comprised of six bank notes secured through by Artilium with varying original maturity dates ranging between 6 and 24 months with an average interest rate of 2%. The notes are not convertible and are not included in any of the tables in the remainder of this note. The promissory notes were $681 at December 31, 2018. 9% Unsecured Convertible Promissory Note On December 18, 2015, the Company consummated a closing and on March 14, 2016, the Company consummated the last of twelve closings of its private placement offering of units (“Units”) to “accredited investors” (as defined in Rule 501(a) of the Securities Act as part of a “best efforts” private placement offering of up to $4,200 consisting of up to 140 Units, each Unit consisting of: (i) one 9% unsecured subordinated Note in the principal amount of $30, which is convertible into the Note Shares of common stock of the Company at the option of the holder at a conversion price of $7.50 per share, subject to certain exceptions; and (ii) a five-year Warrant to purchase one hundred thousand (4,000) shares of common stock (the “Warrant Shares”) at an exercise price of $11.25 per share, subject to certain exceptions. During 2016 and 2015, the Company sold an aggregate of $3,548 principal amount of Notes and delivered Warrants to purchase an aggregate of 473,067 shares of common stock. In December 2016, the Company and the holders agreed upon modification of the Warrants to remove certain anti-dilution protections in the note and offered an exercise price adjustment to $3.75 and 10% bonus warrants (47,306 warrants) in return. In connection with the offering, the Company retained a registered FINRA broker dealer (the “Placement Agent”) to act as the placement agent. For acting as the placement agent, 33,115 warrants were issued with an exercise price of $11.25 and 33,115 warrants were issued with an exercise price of $7.50 along with a cash fee. The value of the Warrants and the conversion feature to the investors and the Placement Agent cash fees and warrants were capitalized and off set against the liability for the Notes at the time of issuance and were amortized over the term of the Notes using the effective interest method. During 2019, the conversion feature was exercised at a price of $1.75 per share and 60,000 shares were issued for the outstanding principal amount, 6,000 shares issued for the 10% early repayment and 18,220 shares issued for accrued interest on the promissory notes (see table below). Conversions (during 2019) Regular including Outstanding Breakdown of the 9% Unsecured Subordinated Convertible December Amortizations accelerated December Promissory Note (Matured December 2018 through June 2019) 31, 2019 (during 2019) amortization 31, 2018 Convertible Note Principal Amount Principal Amount $ — $ — $ 105 $ (105) 10% Early Repayment — — 11 (11) Debt Discounts & Financing Costs Investor Warrants — (2) — 2 Conversion Feature value — (1) — 1 7% Agent Warrants — (1) — 1 Financing Costs — (5) — 5 $ — $ (9) $ 116 $ (107) At December 31, 2019 there were 38,111,211 warrants outstanding from the accredited investors 4,818,269 warrants were exercised in 2019 and 1,488,973 outstanding from the Placement Agent. Agreement Breakdown of the conversion rights for outstanding convertible notes: Outstanding Amendments Exercises / Outstanding Number of underlying shares for Conversion of December 31, / Interest Conversions December 31, outstanding unsecured convertible notes 2019 effects / Expirations 2018 9% Convertible Note – Investors — 44,720 (84,220) 39,500 Outstanding Conversion Features — 44,720 (84,220) 39,500 In the above table the exercise price at December 31, 2018 for the conversion of the promissory notes, including accrued interest, into common shares was at $3.75 (39 shares) and converted in 2019 at an exercise price of $1.75 (84 shares) resulting in a difference of 45 shares. |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2019 | |
Promissory Notes and Unsecured Convertible Promissory Notes | |
Long-term Debt | Note 12. Long-term Debt Former Post Road Group Debt Facility On February 26, 2019, Pareteum Corporation and certain of its subsidiaries entered into a credit agreement (the “Credit Agreement”) with Post Road Administrative Finance, LLC and its affiliate Post Road Special Opportunity Fund I LLP (collectively, “Post Road”). Pursuant to the Credit Agreement, Post Road provided the Company with a secured loan of up to $50,000 (the “Loan”), with an initial loan of $25,000 funded on February 26, 2019, and additional amounts in $5,000 increments as requested by the Company before the 18-month anniversary of the initial funding date. No additional loan was to be funded until the later of delivery of certain third-party consents (the “Consents”), the filing of Pareteum’s Quarterly Report on Form 10-Q for the first quarter of 2019, or June 1, 2019. All amounts owed under the Credit Agreement were due on February 26, 2022. Borrowings under the Credit Agreement bore interest at a rate per year of Libor plus 8.5% provided, however, that upon an event of default or if certain of the Consents were not delivered prior to May 1, 2019 or June 1, 2019, as applicable, borrowings under the credit agreement were to bear interest at a rate per year of Libor plus 11.5% until the Consents were delivered. The interest was due and payable monthly in cash in arrears, provided, however, that the Company could elect to pay any or all of the interest in the form of Payment-in-Kind (“PIK”) interest due and payable at maturity at a maximum percentage per year equal to (a) through and including the first anniversary of the initial funding date, 3%, (b) after the first anniversary of the initial funding date through and including the second anniversary of the initial funding date, 2%, and (c) after the second anniversary of the initial funding date, 1%. The Loan was subject to prepayment upon the receipt of proceeds outside the ordinary course of business in excess of $1,000 and payment of a commitment fee of 1% per year on the unused portion of the Credit Agreement. Permitted use of proceeds for the initial $25,000 of the Loan included approximately $11,000 for payment in full of the outstanding secured debt owed to Fortress incurred in connection with the Company’s previously disclosed acquisition of iPass on February 12, 2019, as well as the remaining amounts for permitted acquisitions and investments and for general working capital purposes. The initial $25,000 loan was reduced by an original issue discount of (i) 0.75% of $25,000 and (ii) 1.25% of $50,000 and any additional amounts borrowed were reduced by an original issue discount of 0.75% of the funded amounts. The aggregate original issue discount was $813 and was amortized and reflected as interest expense initially over the term of the Credit agreement using the effective interest method. The Company paid $867 of debt issuance costs which were recorded as a reduction of the loan balance and was amortized and reflected as amortization expense initially over the term of the Credit Agreement using the effective interest method. The debt discount and issuance costs resulted in a higher effective interest rate on the Credit Agreement. On February 26, 2019, concurrent with entering into the Credit Agreement, the existing loan and security agreement by and among iPass, iPass IP LLC and Fortress (the “Existing iPass Loan”) was paid in full. Additionally, pursuant to the terms of the Credit Agreement, the Company issued to Post Road 425,000 shares of its common stock valued at $1,607, based on the Company’s closing stock price of $3.78 on February 26, 2019. The $1,607 was recorded as a debt issuance cost reducing the loan balance and was amortized in the same manner as the original issue discount discussed above. On August 22, 2019, the Company and Post Road entered into an agreement (the “Amendment”) to amend and waive certain provisions of the Credit Agreement. Pursuant to the Amendment, Post Road agreed to waive terms of certain obligations and covenants in the Credit Agreement and fund the Company an additional loan of $2,500. The Company agreed to issue to Post Road 750,000 shares of its common stock valued at $2,167, based on the Company’s closing stock price of $2.89 on August 22, 2019. The $2,167 was recorded as a debt issuance cost reducing the loan balance. The Company also incurred additional debt issuance costs of $140, which was recorded as a reduction of the loan balance. In September 2019, the Company paid off the Credit Agreement from the proceeds received from the Securities Purchase Agreement (as defined in Note 15, Stockholder’s Equity ). As a result, the Company recognized a loss on extinguishment of debt of $7,873 for the difference between the net carrying value of the loan, which includes the unamortized debt discount and issuance costs of $4,926 and the reacquisition price of the loan, which includes the exit fee paid to the lender of $2,947. During the year ended December 31, 2019, costs of $494 and $174 were amortized and reflected on the Consolidated Statements of Comprehensive Loss as “Interest expense related to debt discount and conversion feature” and “Amortization of deferred financing costs”, respectively, as well as $1,659 of interest expense incurred on the loan, excluding loan fees. The weighted-average interest rate was 11.08%. Redeemable Preferred Stock On December 24, 2019, the Company issued 105.33 shares of 8% Series C Redeemable Preferred Stock (the “Series C Redeemable Preferred Stock”) with a stated value of $100.00 per share in a private placement transaction exempt from the registration requirements of the Securities Act of 1933, as amended, for an aggregate purchase price of $5,033. The Series C Redeemable Preferred Stock was accounted for as a liability in accordance with ASC 480, “ Distinguishing Liabilities from Equity”. Accordingly, the Company recorded a liability of $10,533 equal to the stated value of the issued shares and a debt discount of $5,500 representing the difference between the stated value and the gross proceeds of $5,033. The debt discount is being amortized through the redemption date of December 24, 2020 using the effective interest rate method. The Company incurred placement and legal fees totaling $361 which were also recorded as a debt discount and are being amortized over the same period on a straight-line basis. Additionally, the 8% dividend is being accrued over the same period and the 12.5% redemption premium is being accreted through the redemption date and recorded to “Interest expense related to debt discount and conversion feature” on the Consolidated Statements of Operations and Comprehensive Loss. As of December 31, 2019, the components of the Series C Redeemable Preferred Stock liability consisted of the following: December 31, 2019 Series C Redeemable Preferred Stock, stated value $ 10,533 Unamortized debt discount (5,776) Accretion of redemption premium 25 Accrued dividend 16 Series C Redeemable Preferred Stock, net $ 4,798 The following table details the amounts in the Consolidated Statement of Operations and Comprehensive Loss in connection with Series C Redeemable Preferred Stock liability as of December 31, 2019: December 31, 2019 Location Amortization of debt discount $ 85 Interest expense-debt discount / Amortization of deferred financing costs Accretion of redemption premium 25 Interest expense-debt discount Accrued dividend 16 Interest expense Total interest and amortization expense $ 126 By their terms, those shares of Series C Redeemable Preferred Stock are not convertible into other securities of the Company. However, on various dates from July 17, 2020 through October 1, 2020, the Company entered into Exchange Agreements with the holders of those 105.33 shares of Series C Redeemable Preferred Stockholders (collectively, the “Series C Exchange Agreements”) containing certain exchange provisions as described below. Under the Series C Exchange Agreements, the Company and the holders of the outstanding shares of the Series C Redeemable Preferred Stock agreed that (i) the Company may exchange outstanding shares of Series C Redeemable Preferred Stock for shares of the Company’s common stock on the one-year anniversary of the issuance date of those shares; and (ii) the holders may exchange outstanding shares of Series C Redeemable Preferred Stock for shares of the Company’s common stock at any time prior to the one-year anniversary of the issuance date of those shares. Such exchanges are subject to the satisfaction of certain conditions, including approval of the Company’s stockholders of the issuance of such common stock and the Company’s ability to issue shares of common stock not subject to restrictions on resale. The number of shares of common stock issuable upon exchange of the Series C Redeemable Preferred Stock under the Series C Exchange Agreements will determined by the application of a formula in which (i) the stated value of the shares of Series C Redeemable Preferred Stock being converted plus the value of any accrued and unpaid dividends plus, with respect to certain agreed upon shares of the Series C Redeemable Preferred Stock, a premium of 12.5% on the stated value is divided by (ii) the conversion price. The conversion price for holders of 97 shares of Series C Redeemable Preferred Stock in the aggregate is $0.70, while the conversion price for the holder of the other 8 shares of Series C Redeemable Preferred Stock is the lower of (i) $0.60 and (ii) the greater of (x) the average daily volume-weighted average price per share of Common Stock during the five trading days before the closing of the exchange and (y) $0.40. The holders of the 97 shares of Series C Redeemable Preferred Stock were permitted to exchange their shares by December 31, 2020, after which time an additional condition to such exchange was imposed that requires the average daily volume-weighted average trading price of the Company’s common stock to be at least $0.60 per share, for the five consecutive trading days, before an exchange. The same additional condition was also imposed on of holders of the other 8 shares of Series C Redeemable Preferred Stock, if such holders held their shares after December 24, 2020. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions | |
Related Party Transactions | Note 13. Related Party Transactions As of December 31, 2019 and 2018, Pareteum BV has an outstanding loan payable to Comsystems (a company owned by Gerard Dorenbos). Prior to the acquisition by Pareteum, Gerard Dorenbos was a shareholder of Artilium PLC, with approximately 15% of the total shares of Artilium PLC, and a board member of Artilium PLC. The loan has a maturity date of December 31, 2021. The total amount outstanding as of December 31, 2019 and 2018 was $420 and $342, respectively, which carries an 8% interest rate and is reflected as a related party loan in the accompanying consolidated balance sheet. No repayments were made on the loan during the year ended December 31, 2019. All principal and interest are due on the maturity date. During 2019 and 2018, the Company retained Robert Turner of InTown Legal Services, who is the son of Robert H. Turner, the former Executive Chairman of the Board. InTown Legal Services has a five thousand dollars per month minimum retainer with the Company and was paid $278 in 2019 and $133 in 2018. The agreement between the Company and InTown Legal Services is an at will agreement. |
Lease Commitments
Lease Commitments | 12 Months Ended |
Dec. 31, 2019 | |
Lease Commitments | |
Lease Commitments | Note 14. Lease Commitments The Company leases property under operating leases with varying expiration dates between 2020 and 2025. The Company also leases equipment and automobiles under operating leases with expiration dates between 2021 and 2024. The Company determines if an arrangement is a lease at inception. The Company presents the operating leases in long-term assets and current and long-term liabilities. Finance lease assets are included in property and equipment, net, and finance lease liabilities are presented in current and long-term liabilities in the accompanying consolidated balance sheet as of December 31, 2019. As of December 31, 2019, the Company had 10 leased properties with remaining lease terms that ranged from of 1.0 year to 5.5 years. Two leases expired on December 31, 2019. The Company is also party to three equipment leases and 41 automobile leases. Many of our leases include options to extend the term with several allowed to renew indefinitely. The components of the lease expense recorded in the consolidated statement of operations were as follows: Year ended December 31, 2019 Operating lease cost $ 2,313 Finance lease cost: Amortization of assets 9 Interest on lease liabilities 2 Total net lease cost $ 2,324 Supplemental balance sheet information related to leases was as follows: As of Leases Classification December31, 2019 Assets: Operating lease assets Operating right-of-use asset, net of accumulated amortization (1) $ 2,241 Finance lease assets Property and equipment, net of accumulated depreciation (2) 133 Total leased assets $ 2,374 Liabilities: Current Operating Operating lease liability, current $ 2,376 Finance Financing lease liability, current 46 Noncurrent Operating Operating lease liability, noncurrent 333 Finance Finance lease liability, noncurrent 82 Total lease liabilities $ 2,837 (1) Operating lease assets are recorded net of accumulated amortization of $2,006 as of December 31, 2019. (2) Finance lease assets are recorded net of accumulated depreciation of $9 as of December 31, 2019. Supplemental cash flow and other information related to leases was as follows: Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 1,656 Operating cash outflows from finance leases (interest) $ 2 Financing cash outflows from finance leases $ 17 Weighted-average remaining lease term (in years): Operating leases 1.64 Finance leases 2.67 Weighted-average discount rate: Operating leases 9.22 % Finance leases 5.00 % Maturities of lease liabilities were as follows: As of December 31, 2019 Operating Finance Leases Leases 2020 $ 2,524 $ 51 2021 196 51 2022 54 34 2023 45 — 2024 45 — Thereafter 22 — Total lease payments 2,886 136 Less: imputed interest (177) (8) Total lease liabilities 2,709 128 Less: current liabilities (2,376) (46) Long-term lease liabilities $ 333 $ 82 As of December 31, 2019, the Company had additional operating lease obligations totaling $551 that had not yet commenced, all of which commenced in 2020 and had lease terms ranging from of 3 to 4 years. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Note 15. Stockholders’ Equity Securities Purchase Agreement In September 2019, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with institutional and accredited investors and sold: (i) 18,852,272 common stock units at a price of $1.76. Each common stock unit consisted of one share of common stock, one Series A warrant and one Series B warrant to purchase shares of common stock. The number of Series A warrants and Series B warrants that were issued totaled 18,852,272 and 9,426,136, respectively. (ii) 3,875,000 pre-funded warrants for the purchase of common stock units at price of $1.75 per share. Upon the exercise of the pre-funded warrants at an exercise price of $0.01, the investor is entitled to receive one unit which consists of one share of common stock (or 3,875,000 shares in the aggregate), 3,875,000 Series A warrants to purchase shares of common stock and 1,937,500 Series B warrants to purchase shares of common stock. The Company received net proceeds of $37,680 after deducting expenses of $2,281. In connection with the Securities Purchase Agreement, the Company issued warrants to a placement agent to purchase 909,091 shares of its common stock. These warrants have exercise price of $3.00 per share and expire in September 2024. All the warrants in this transaction are classified as equity and the Series A and B warrants are participating securities for purposes of calculating basic loss per share. The Series A warrant provides for an exercise price of $2.25 per share, exercisable beginning September 2020 and expire in September 2024. The Series B warrant provides for an exercise price of $1.84, exercisable beginning September 2019 and expire in March 2021. The pre-funded warrants do not expire and are immediately exercisable except that the pre-funded warrants cannot be exercised by the holder if, after giving effect thereto, the holder would beneficially own more than 9.99% of the Company’s common stock, subject to certain exceptions. The pre-funded warrants are classified as equity in accordance with ASC 480, “ Distinguishing Liabilities from Equity” and the fair value of the pre-funded warrants was recorded in the Company’s Statement of Changes in Stockholders Equity (Deficit) as “Pre-funded warrants.” In October 2019, all of the pre-funded warrants were exercised in a cashless transaction resulting in the issuance of 3,845,193 shares of common stock, net of shares surrendered for payment of the exercise price. On May 9, 2018, we entered into a securities purchase agreement (the “2018 Offering”) with select accredited investors relating to a registered direct offering, issuance and sale of an aggregate of 2,440,000 shares of our common stock at a purchase price of $2.50 per share for gross proceeds of $6,100 and offering expenses of $701. The shares were issued pursuant to a Registration Statement on Form S-3 filed with the Securities and Exchange Commission on September 9, 2016, as amended October 21, 2016 and November 10, 2016 and declared effective November 14, 2016. The Company also agreed to pay a placement agent a commission to reimburse the placement agent’s out-of-pocket expenses, to issue the placement agent, in a private transaction, a warrant to purchase 122,000 shares of common stock at an exercise price equal to 125% of the offering price per share, and to indemnify the placement agent against certain liabilities. Common Stock The Company is authorized to issue 500,000,000 shares of common stock. The Company had 139,060,180 shares of common stock issued and outstanding as of December 31, 2019, an increase of 40,767,650 shares from December 31, 2018, mainly due to shares issued in the acquisitions of iPass and Devicescape 10,265,412 shares issued in the Securities Purchase Agreement (18,852,272) and from the exercise of the pre-funded warrants issued in the Securities Purchase Agreement (3,845,193). As of December 31, 2019, approximately 1,733,698 stock awards vested under the Company’s non-cash compensation plans and the shares are reflected on the Consolidated Statement of Changes in Stockholders’ Equity/Deficit as outstanding at December 31, 2019, for which the issuance of the shares from the Company’s stock transfer agent are pending. Preferred Stock The Company’s Certificate of Incorporation authorizes the issuance of 50,000,000 shares of Preferred Stock, $0.00001 par value per share. Under the Company’s Certificate of Incorporation, the Board of Directors has the power, without further action by the holders of the common stock, subject to the rules of the Exchange, to designate the relative rights and preferences of the preferred stock, and issue preferred stock in such one or more series as designated by the Board of Directors. The designation of rights and preferences could include preferences as to liquidation, redemption and conversion rights, voting rights, dividends or other preferences, any of which may be dilutive of the interest of the holders of the common stock or the preferred stock of any other series. The issuance of preferred stock may have the effect of delaying or preventing a change in control of the Company without further stockholder action and may adversely affect the rights and powers, including voting rights, of the holders of common stock. In certain circumstances, the issuance of preferred stock could depress the market price of the common stock. On December 10, 2019, the Company’s Board of Directors designated 255 shares of Preferred Stock to be Series C Redeemable Preferred Stock with a stated value of $100,000 per share (the “Stated Value”). Non-cumulative dividends are required to be paid on each share of the Series C Redeemable Preferred Stock at a rate of 8% per annum of the Stated Value. The Series C Redeemable Preferred Stock ranks senior to our common stock with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Company. Upon any liquidation event, the holders of the Series C Redeemable Preferred Stock are entitled to be paid out of the assets of the Company legally available for distribution to its stockholders a liquidation preference of $0.00001 per share, plus an amount equal to any unpaid dividends to and including the date of payment, but without interest, before any distribution of assets is made to holders of the Company’s common stock, or any other class or series of stock. The Series C Redeemable Preferred Stock has no voting rights except as required by law. Under the terms of the certificate of designations for the Series C Redeemable Preferred Stock, on the one-year anniversary of the date of issuance of the Series C Redeemable Preferred Stock, the Company is required to redeem, out of legally available funds, each such share of Series C Redeemable Preferred Stock at a price per share equal to 112.5% of the Stated Value. However, as previously disclosed in Note 12, Long-term Debt to the Financial Statements, the Company entered into the Series C Exchange Agreements with each holder of Series C Redeemable Preferred Stock, under which the shares will remain outstanding. There were 105.33 shares of Series C Redeemable Preferred Stock outstanding as of December 31, 2019, see Note 12, Long-term Debt for further information, and no preferred shares outstanding as of December 31, 2018. Warrants Throughout the years, the Company has issued warrants with varying terms and conditions related to multiple financing rounds, acquisitions and other transactions. Often these warrants could be classified as equity instead of a derivative. As of December 31, 2019 and 2018, no warrants have been classified as derivative warrants. The table below summarizes the warrants outstanding (in share amounts) as of December 31, 2019 and as of December 31, 2018: Warrants: Number of Warrants Outstanding as of January 1, 2018 18,135,832 Issued 196,750 Exercised (14,463,097) Expirations (80,003) Outstanding as of December 31, 2018 3,789,482 Issued 39,199,998 Exercised (4,818,269) Expirations (60,000) Outstanding as of December 31, 2019 38,111,211 Exercise/ Conversion price(s) Outstanding Warrants (range) Expiring December 31, 2019 December 31, 2018 Equity Warrants – Fundraising $ 1.05 - $5.375 2019 - 2024 38,111,211 3,789,482 The discussion below describes the warrant activity (in thousands of shares) during the year ended December 31, 2019. Warrants - Issued In connection with the September 2019 Securities Purchase Agreement, 38,874,998 warrants were issued, of which, 3,875,000 were pre-funded and 909,091 warrants were issued to the placement agent. In February 2019, the Company issued warrants to purchase an aggregate of 325,000 shares of common stock pursuant to Fortress consenting to the consummation of the Merger Agreement by and among the Company, iPass and TBR, Inc., a wholly owned subsidiary of the Company. Warrants – Exercised During 2019, 4,818,269 warrants were exercised, out of which 800,235 were cash exercises resulting in proceeds of $1,394 received at an average exercise price of $1.74 and 4,018,034 warrants were exercised cashless resulting in the delivery of 3,903,302 shares. Warrants – Expirations During 2019, 60,000 warrants expired unexercised. |
Basic and diluted net loss per
Basic and diluted net loss per share | 12 Months Ended |
Dec. 31, 2019 | |
Basic and diluted net loss per share | |
Basic and diluted net loss per share | Note 16. Basic and diluted net loss per share Net loss per share is calculated in accordance with ASC 260, Earnings per Share (“ASC 260”). Basic net loss per share is based upon the weighted-average number of common shares outstanding. The Series A and B warrants issued in the Securities Purchase Agreement are participating securities due to the warrant holder’s participation in dividends distributed by the Company on a one-for-one basis with common stockholders thus requiring the application of the two-class method in computing basic net income per share. For the year ended December 31, 2019, the Company was in a loss position and none of the loss was allocated to the participating securities as they do not participate in the losses of the Company. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase Common Stock at the average market price during the period. The Company uses the ‘if converted’ method for its senior secured convertible notes. The diluted share base includes shares related to convertible debt, warrants to purchase Common Stock and employee awards and or stock options as follows: Dilutive Securities 2019 2018 Convertible Notes — 39,500 Warrants 38,111,211 3,789,482 Time Conditioned Share Awards 2,563,359 1,480,557 Employee Stock Options 6,924,436 3,663,812 47,599,006 8,973,351 Weighted-average number of shares used to compute basic and diluted loss per share is the same since the effect of the dilutive securities is anti-dilutive due to the Company’s reported net loss for the years ended December 31, 2019 and 2018. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Compensation and Employee Benefit Plans [Text Block] | Note 17. Employee Benefit Plan The Company grants stock options and restricted stock awards under the 2017 Long-Term Incentive Compensation Plan (“2017 Plan”) and the 2018 Long-Term Incentive Plan (“2018 Plan”). The Company also maintains the 2008 Long-term Incentive Plan (“2008 Plan”). There have been no new grants of share-based compensation under the 2008 Plan during the years ended December 31, 2019 and 2018. Stock options under each long-term incentive plan are granted with an exercise price equal to the fair market value of the Company’s common stock on the date of grant, and generally vest from one to three years from the date of grant. Options are generally granted with a five-year term. The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option pricing model. The fair value of restricted stock awards is based on the fair market value at the date of grant and expensed over the vesting period, which generally range from one to three years from the date of the grant. 2008 Long-Term Incentive Compensation Plan The 2008 Plan allowed for the grant of awards of up to 2,240,000 shares of common stock, after giving effect to a 1-for-25 reverse stock-split in 2008, in the form of incentive and non-qualified stock options, stock appreciation rights, performance units, restricted stock awards and performance bonuses. As of December 31, 2019, no further awards may be granted under the 2008 Plan and 131,268 awards remain outstanding in accordance with their terms. In addition, there are 62,180 previously granted restricted stock awards that have vested for which shares have not been issued as of December 31, 2019. The stock option activity of the 2008 Plan for the years ended December 31, 2019 and 2018 follows: Weighted Initial Fair Average Market Value Number of Exercise (Outstanding Options Price Options) Outstanding as of December 31, 2017 1,128,384 $ 9.40 $ 6,854 Revoked (cancelled) (786,697) 6.33 (3,495) Forfeitures (175) 3.07 — Expirations (138,246) 25.60 (1,997) Outstanding as of December 31, 2018 203,266 10.74 1,381 Forfeitures (71,998) 7.72 (335) Outstanding as of December 31, 2019 131,268 $ 12.40 $ 1,046 2017 Long-Term Incentive Compensation Plan The 2017 Plan allows for the grant of awards of up to 6,500,000 shares of common stock in the form of options, restricted stock awards, stock appreciation rights (“SAR’s”), performance units and performance bonuses to eligible employees and the grant of nonqualified stock options, restricted stock awards, SAR’s and performance units to consultants and eligible directors. As of December 31, 2019, there were 57,155 shares available for grant under the 2017 Plan. As of December 31, 2019, there were 2,950,519 stock options outstanding under the 2017 Plan. In addition, there are 53,399 previously granted restricted stock awards that have vested for which shares have not been issued as of December 31, 2019. The remaining 57,155 shares available for grant under the 2017 Plan may be issued to former directors and staff. The Company plans on filing a registration statement on Form S-8 for issuances that have been approved by stockholders, but still require registration. The stock option activity of the 2017 Plan for the years ended December 31, 2019 and December 31, 2018 follows: Weighted Initial Fair Market Average Value Exercise (Outstanding Number of Options Price Options) Outstanding as of December 31, 2017 1,899,800 $ 1.00 $ 1,053 Granted 1,999,685 2.42 3,378 Exercised (59,220) 1.00 (59) Forfeitures (374,663) 1.55 (766) Expirations (5,056) 1.00 (5) Outstanding as of December 31, 2018 3,460,546 $ 1.76 $ 3,601 Exercised (177,678) 1.19 (129) Forfeitures (294,178) 2.37 (442) Expirations (38,171) 1.09 (25) Outstanding as of December 31, 2019 2,950,519 $ 1.74 $ 3,005 There were no stock options granted under 2017 Plan during 2019. The key assumptions included in Black-Scholes option pricing model for stock options granted in 2018 follows: Year-ended December 31, 2018 Expected Volatility 130 % Weighted-average Expected Term (years) 2.79 Weighted-average Risk-free Interest Rate 2.69 % Dividend yield — Weighted-average Fair Value at Grant-date $ 1.68 Additional information for stock options issued under the 2017 Plan follows: December 31, 2019 December 31, 2018 Options Outstanding Total Options Outstanding 2,950,519 3,460,546 Weighted-average Remaining Contractual Term (Years) 1.90 2.98 Weighted-average Remaining Expected Term (Years) 1.04 1.84 Weighted-average Exercise Price $ 1.74 $ 1.81 Aggregate Intrinsic Value (1) $ — $ 1,723 Options Exercisable Total Options Exercisable 2,066,506 841,053 Weighted-average Exercise Price $ 1.61 $ 1.00 Weighted-average Remaining Contractual Term (Years) 1.70 2.24 Aggregate Intrinsic Value (1) $ — $ 580 Unvested Options Total Unvested Options 884,013 2,619,493 Weighted-average Exercise Price $ 2.06 $ 2.01 Forfeiture rate used for this period ending 18.65 % 11.25 % Options expected to vest Number of options expected to vest corrected by forfeiture 719,109 2,324,885 Unrecognized share-based compensation expense $ 1,412 $ 2,449 Weighting Average remaining contract Term (Years) 1.92 2.86 Exercises Total shares delivered/issued 177,678 59,220 Weighted-average Exercise Price $ 1.19 $ 1.00 Intrinsic Value of Options Exercised $ 363 $ 101 (1) Excludes options with exercise prices that were greater than the average market price of our common shares for the period. 2018 Long-Term Incentive Compensation Plan On October 10, 2018, the Company filed a registration statement on Form S‑8 to register the issuance and sale of the remaining 8,000,000 shares of common stock of the 2018 Long Term Incentive Compensation Plan which was previously ratified by our stockholders on September 12, 2017 at our annual meeting. This incentive plan provides for awards of up to 8,000,000 shares of common stock, in the form of options, restricted stock awards, stock appreciation rights (“SAR’s”), performance units and performance bonuses to eligible employees and the grant of nonqualified stock options, restricted stock awards, SAR’s and performance units to consultants and eligible directors. Pursuant to the terms of the 2018 Plan, as amended, the number of shares available under the plan shall increase on the first day of each fiscal year in an amount equal to the lesser of (i) 15% of the total number of shares of common stock outstanding as of December 31 st of the preceding fiscal year or (ii) such number of shares of common stock determined by the Board of Directors (the “Evergreen Increase”). As a result of the 2019 Evergreen Increase, the number of shares available under the 2018 Plan increased by 7,500,000 shares, such number determined by the Board of Directors being the lesser of (i) and (ii) as described herein (the “2018 Plan Increase”). The 2018 Plan Increase took effect upon the filing of the Registration Statement on Form S-8 on June 28, 2019. As of December 31, 2019, there were 6,456,665 shares available for grant under the 2018 Plan. As of December 31, 2019, there were 3,842,649 stock options and 1,447,780 unvested restricted stock units outstanding under the 2018 Plan. In addition, there are 34,304 previously granted restricted stock awards that have vested for which shares have not been issued as of December 31, 2019. There were no stock options issued under the 2018 Plan during the year ended December 31, 2018. The stock option activity under the 2018 Plan follows: Weighted Initial Fair Market Average Value Exercise (Outstanding Options: Number of Options Price Options) Outstanding as of December 31, 2018 — $ — $ — Granted 5,649,649 2.24 10,629 Forfeitures (1,542,000) 2.38 (2,927) Expirations (265,000) 3.07 (813) Outstanding as of December 31, 2019 3,842,649 $ 2.13 $ 6,889 The key assumptions included in Black-Scholes option pricing model for stock options granted in 2019 follows: Year-ended December 31, 2019 Expected Volatility 121 % Weighted-average Expected Term (years) 3.19 Weighted-average Risk-free Interest Rate 2.40 % Dividend yield — Weighted-average Fair Value at Grant-date $ 1.88 Additional information for stock options issued under the 2018 Plan follows: December 31, 2019 Options Outstanding Total Options Outstanding 3,842,649 Weighted-average Remaining Contractual Term (years) 4.05 Weighted-average Remaining Expected Term (years) 2.39 Weighted-average Exercise Price $ 2.13 Aggregate Intrinsic Value (1) $ — Options Exercisable (1) Total Options Exercisable 100,000 Weighted-average Exercise Price $ 0.36 Weighted-average Remaining Contractual Term (years) 3.83 Aggregate Intrinsic Value $ 8 Unvested Options Total Unvested Options 3,742,649 Weighted-average Exercise Price $ 2.18 Forfeiture Rate Used for this Period Ending 28 % Options expected to vest Number of options Expected to Vest Corrected by Forfeiture 2,678,081 Unrecognized Share-based Compensation Expense $ 7,625 Weighting Average Remaining Contract Term (years) 2.90 Exercises Total shares delivered/issued — Weighted-average Exercise Price $ — Intrinsic Value of Options Exercised $ — (1) Excludes options with exercise prices that were greater than the average market price of our common shares for the period. There were 60,696 shares of restricted stock awarded to two officers in 2019 that remain unvested as of December 31, 2019. A rollforward of restricted stock activity under the 2018 Plan follows: Weighted-average Grant Date Number of Shares Fair Value Nonvested as of December 31, 2017 — $ — Granted 2,000,000 3.00 Vested (1,000,000) 3.00 Forfeited — Outstanding as of December 31, 2018 1,000,000 $ 3.00 Granted 345,000 2.56 Vested (950,967) 3.03 Forfeited (333,337) 2.28 Outstanding as of December 31, 2019 60,696 $ 3.92 Share-Based Compensation Expense The Company recorded for the year ended December 31, 2019 and 2018, $11,236 and $6,783, respectively, of share-based compensation under all plans for both equity and liability classified awards. At December 31, 2019, the unrecognized expense portion of the share-based compensation awards granted under all plans was approximately $9,321 adjusted for cancellations, forfeitures and returns during the preceding period, which is expected to be recognized over a weighted-average period of 1.2 years. The fair value of the time conditioned awards that vested during 2019 and 2018 was $2,884 and $3,708, respectively. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income taxes | |
Income taxes | Note 18. Income taxes Loss before the income tax benefit consists of the following; 2019 2018 U.S. $ (108,644) $ (19,369) Foreign (126,421) 1,171 Total loss before income tax provision $ (235,065) $ (18,198) The Company files income tax returns in the US federal jurisdiction and various state and foreign jurisdictions. The applicable statutory tax rates vary from none (zero) to 34%. However, because the Company and its subsidiaries have incurred annual corporate income tax losses since their inception, management has determined that it is more likely than not that the Company will not realize the benefits of its US and foreign net deferred tax assets. Therefore, in all jurisdictions where the Company has a net deferred tax asset, the Company has recorded a full valuation allowance to reduce the net carrying amount of the deferred tax assets to zero. The Company’s 2019 income tax benefit of $8.4 million relates to $8.7 million of benefit associated with the net losses in certain foreign jurisdictions offset by current taxes of $0.3 million in other foreign jurisdictions with taxable income. Income tax (benefit) expense is summarized as follows: December 31, December 31, 2019 2018 Current: Federal $ — $ — State — — Foreign 316 81 316 81 Deferred: Federal — — State — — Foreign (8,611) (255) (8,611) (255) Income tax (benefit) expense $ (8,295) $ (174) The following is a reconciliation of the provision for income taxes at the U.S. federal statutory rate (21%) to the foreign income tax rate for the years ended: December 31, December 31, 2019 2018 Tax expense at statutory rate federal 21 % 21 % Foreign income tax rate difference 1 % — Transaction costs — (7) % Compensation — (6) % GILTI — (1) % Non-operating gain on stock acquisition — 8 % Goodwill Impairment (11) % — Change in valuation allowance (7) % (15) % Other — 1 % 4 % 1 % The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities are as follows: 2019 2018 Deferred tax attributable to: Net operating losses $ 55,859 $ 31,928 Share-based compensation expense 666 302 Accrued liabilities and allowances 1,287 257 Fixed Assets 188 — ROU lease liability 288 — Other 69 66 Less: valuation allowance (55,561) (29,812) Total deferred tax assets 2,796 2,741 Deferred tax liabilities attributable to: Intangible assets (1,976) (10,003) ROU Asset (194) — Deferred revenue (626) (1,124) Total deferred tax liabilities (2,796) (11,127) Net deferred tax liabilities $ — $ (8,386) As of December 31, 2019 and 2018, the Company had no unrecognized tax benefits and no related interest and penalties for the years then ended. As of December 31, 2019, and 2018, the Company had net operating losses carryforwards of approximately $258 million and $150 million, respectively. Any net deferred tax assets in a jurisdiction have been offset by a full valuation allowance in both 2019 and 2018 due to the uncertainty of realizing any tax benefit for such losses. Releases of the valuation allowances in the future, if any, will be recognized through earnings. Section 382 of the Internal Revenue Code limits the use of net operating loss and tax credit carry forwards in certain situations where changes occur in the stock ownership of a company. In the event the Company has a change in ownership, utilization of the carry forward could be limited. In the ordinary course of business, the Company is subject to tax examinations in the jurisdictions in which it files tax returns. The Company’s statute of limitations for assessment is three years for federal and three to four years for state purposes. The federal net operating loss carry forwards remain open for adjustment until the net operating losses are fully utilized. The Company’s statute of limitations is four to six years in the major foreign jurisdictions in which the Company files. The Company files income tax returns in the US federal jurisdiction and various state and foreign jurisdictions. As of December 31, 2019 and 2018, the Company did not have any liabilities for uncertain tax positions. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 19. Commitments and Contingencies Commitments During the year ended December 31, 2019, the Company entered into certain off–balance sheet commitments that require the future purchase of goods or services (“unconditional purchase obligations”). The Company entered into the Strategic Connectivity Agreement (the “Connectivity Agreement”) with Hutchison 3G UK Limited (“3UK”) on July 23, 2019. Under the Connectivity Agreement, the Company is obligated to pay 3UK $0.7 million dollars for the implementation of a MVNO (the “3UK MVNO”), and for monthly services provided, based on usage, after the 3UK MVNO is launched, which management anticipates to be in the third quarter of 2021. As of December 31, 2019, $0.1 million was invoiced by 3UK and is recorded in Accrued expenses and other payables in the Consolidated Balance Sheet as of December 31, 2019. Of the remaining unconditional purchase obligation to 3UK outstanding as of December 31, 2019, management expects to remit $0.1 million in 2020 and the remainder in 2021. Concurrent with the execution of the Connectivity Agreement, the Company entered into the Agreement for the Sale and Purchase of Credit Voucher (the “Credit Voucher Agreement”) with PCCW Global Limited (“PCCW”) under which the Company is obligated to purchase a credit voucher for $33.0 million. The credit voucher will be used to offset certain monthly service charges incurred under the Connectivity Agreement. As of December 31, 2019, $0.7 million of the purchase price has been recorded in Accrued expenses and other payables in the Consolidated Balance Sheet. The remaining $32.3 million unconditional purchase obligation is due and payable following the launch date of the 3UK MVNO, whereafter on a monthly basis, the Company is required to remit the amount of the credit voucher used to offset monthly charges incurred under the Connectivity Agreement to PCCW. Should the aggregate of the monthly charges offset with the credit voucher from the Connectivity Agreement launch date through June 30, 2022 be less than $8.6 million, the Company is obligated to remit a make-up payment (the “2022 Make-up Payment”) for the difference between $8.6 million and the aggregate monthly charges offset with the credit voucher. Should the aggregate of the monthly charges offset with the credit voucher from the Connectivity Agreement launch date through June 30, 2023, plus any 2022 Make-up Payment, if applicable, be less than $15.2 million, the Company is obligated to remit a make-up payment (the “2023 Make-up Payment”) for the difference between $15.2 million and the aggregate monthly charges offset with the credit voucher, plus any 2022 Make-up Payment. Should the aggregate of the monthly charges offset with the credit voucher from the Connectivity Agreement launch date through June 30, 2024, plus any 2022 Make-up Payment and any 2023 Make-up Payment, if applicable, be less than $23.1 million, the Company is obligated to remit a make-up payment (the “2024 Make-up Payment”) for the difference between $23.1 million and the aggregate monthly charges offset with the credit voucher, plus the 2022 Make-up Payment and the 2023 Make-up Payment. Should the aggregate of the monthly charges offset with the credit voucher from the Connectivity Agreement launch date through June 30, 2025, plus any 2022 Make-up Payment and any 2023 Make-up Payment and any 2024 Make-up Payment, if applicable, be less than $32.3 million, the Company is obligated to remit a final make-up payment for the difference between $32.3 million and the aggregate monthly charges offset with the credit voucher, plus any 2022 Make-up Payment and any 2023 Make-up Payment and any 2024 Make-up Payment. The following table presents the minimum amounts due under the Company’s unconditional purchase obligations as of December 31, 2019: Credit Connectivity Voucher Agreement Agreement Total 2020 $ 132 $ — $ 132 2021 395 — 395 2022 — 8,571 8,571 2023 — 6,593 6,593 2024 — 7,911 7,911 Thereafter — 9,230 9,230 Total $ 527 $ 32,305 $ 32,832 The following table presents management’s estimate of the timing of amounts due under the Company’s unconditional purchase obligations as of December 31, 2019: Credit Connectivity Voucher Agreement Agreement Total 2020 $ 132 $ — $ 132 2021 395 360 755 2022 — 9,662 9,662 2023 — 7,894 7,894 2024 — 9,457 9,457 Thereafter — 4,932 4,932 Total $ 527 $ 32,305 $ 32,832 Contingencies The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and that have not been fully resolved. The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts above management’s expectations, the Company’s financial condition and operating results for that period could be materially adversely affected. In the opinion of management, the ultimate resolution of such legal proceedings and claims will not have a material adverse effect on our financial position, liquidity, or results of operations. Ellenoff Grossman & Schole LLP. On May 5, 2017, the Company’s former legal counsel, Ellenoff Grossman & Schole LLP, commenced litigation proceedings in New York alleging breach of contract and claiming $0.8 million in unpaid legal fees for January 2015 through November 2016. On June 29, 2017, the parties entered into a settlement agreement for the full $0.8 million with agreed-upon monthly installment payments through August 31, 2019. As of December31, 2019, the amount outstanding on the settlement agreement is $0.1 million. SEC Investigation. In August 2019 and February 2020, the SEC issued the Company subpoenas requiring the production of documents related to, among other things, the Company’s recognition of revenue, practices with certain customers, and internal accounting controls. The SEC staff has also interviewed and taken testimony from individuals previously employed by the Company in connection with the investigation The Company is cooperating with the SEC staff in the SEC investigation and discussions with the SEC staff regarding a potential resolution of the investigation are ongoing. In re Pareteum Securities Litigation is the consolidation of various putative class actions that were filed in the United States District Court for the Southern District of New York (the “Southern District Court”). The Southern District Court consolidated the actions on January 10, 2020 and named the Pareteum Shareholder Investor Group as the Lead Plaintiff. The Lead Plaintiff is asserting claims on behalf of purported purchasers and/or acquirers of Company securities between December 14, 2017 and October 21, 2019. The defendants are the Company, Robert H. Turner, Edward O’Donnell, Victor Bozzo, Denis McCarthy, Dawson James Securities Inc., and Squar Milner LLP (“Defendants”). The Lead Plaintiff alleges that Defendants caused the Company to issue certain materially false or misleading statements in SEC filings and other public pronouncements in violation of Sections 10(b) and 20(a) of the Exchange Act, and Sections 11, 12 and 15 of the Securities Act. Lead Plaintiff seeks to recover compensatory damages with interest for itself and the other class members for all damages sustained as a result of Defendants’ alleged wrongdoing and reasonable costs and attorney’s fees incurred in the case. Douglas Loskot v. Pareteum Corporation, et al., is a putative class action pending in the Superior Court of California, County of San Mateo. It was filed on May 29, 2020 on behalf of all former shareholders of iPass Inc. who received shares of the Company’s common stock pursuant to a February 12, 2019 exchange tender offer. The defendants are the Company, Robert H. Turner, Edward O’Donnell, Victor Bozzo, Yves van Sante, Robert Lippert and Luis Jimenez-Tunon. The Complaint alleges that the defendants caused the Company to issue materially false or misleading statements in SEC filings submitted in connection with the tender offer in violation of Sections 11 and 15 of the Securities Act. Miller ex rel. Pareteum Corporation v. Victor Bozzo, et al. was filed on February 28, 2020 in the Supreme Court for the State of New York, New York County. It is a stockholder derivative suit brought by Plaintiff William Miller (“Plaintiff Miller”), derivatively on behalf of Pareteum, the Nominal Defendant, against certain officers and directors of Pareteum, including Victor Bozzo, Laura Thomas, Yves van Sante, Luis Jimenez-Tunon, Robert Lippert, Robert H. Turner, Edward O’Donnell, and Denis McCarthy (the “Individual Defendants”). Plaintiff Miller alleges that the Individual Defendants caused the Company to issue false or misleading statements in SEC filings and other public pronouncements in violation of certain federal securities regulations. Plaintiff Miller alleges that as a result of their misconduct, the Individual Defendants are liable for violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement and waste of corporate assets. Plaintiff Miller seeks a judgment awarding Pareteum damages with interest sustained as a result of the Individual Defendants’ alleged misconduct, directing the Individual Defendants to take certain measures to reform and improve Pareteum’s corporate governance and internal procedures, awarding Pareteum restitution from the Individual Defendants, and awarding Plaintiff Miller all costs and expenses incurred in pursuing the claims. Zhang ex rel. Pareteum Corporation v. Robert H. Turner, et al. was filed on May 26, 2020 in the Supreme Court for the State of New York, New York County. It is a stockholder derivative suit brought by Plaintiff Wei Zhang (“Plaintiff Zhang”), derivatively on behalf of Pareteum, the Nominal Defendant, against certain officers and directors of Pareteum, including Robert H. Turner, Edward O’Donnell, Denis McCarthy, Victor Bozzo, Rob Mumby, Luis Jimenez-Tunon, Robert Lippert, Laura Thomas, and Yves van Sante (the “Individual Defendants”). Plaintiff Zhang alleges that the Individual Defendants caused the Company to issue false or misleading statements in SEC filings and other public pronouncements in violation of certain federal securities regulations. Plaintiff Zhang alleges that as a result of their misconduct, the Individual Defendants are liable for violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement and waste of corporate assets. Plaintiff Zhang seeks a judgment awarding Pareteum damages with interest sustained as a result of the Individual Defendants’ alleged misconduct, directing the Individual Defendants to take certain measures to reform and improve Pareteum’s corporate governance and internal procedures, awarding Pareteum restitution from the Individual Defendants, and awarding Plaintiff Zhang all costs and expenses incurred in pursuing this claim. Shaw ex. rel. Pareteum Corporation v. Luis Jimenez-Tunon, et al. was filed on July 10, 2020 in the Supreme Court for the State of New York, New York County. It is a stockholder derivative suit brought by Plaintiff Michael Shaw (“Plaintiff Shaw”), derivatively on behalf of Pareteum, the Nominal Defendant, against certain officers and directors of Pareteum, including Luis Jimenez-Tunon, Robert Lippert, Yves van Sante, Robert H. Turner, Edward O’Donnell, Denis McCarthy, Victor Bozzo, and Laura Thomas (the “Individual Defendants”). Plaintiff Shaw alleges that the Individual Defendants caused the Company to issue false or misleading statements in SEC filings and other public pronouncements in violation of certain federal securities regulations. Plaintiff Shaw alleges that as a result of their misconduct, the Individual Defendants are liable for violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. Plaintiff Shaw seeks a judgment awarding Pareteum damages sustained as a result of the Individual Defendants’ alleged misconduct, directing the Individual Defendants to take certain measures to reform and improve Pareteum’s corporate governance and internal procedures, and awarding Plaintiff Shaw all costs and expenses incurred in pursuing this claim. In re Pareteum Corporation Stockholder Derivative Litigation (the “Delaware Derivative Action”) is a consolidated action that was originally filed in the United States District Court for the District of Delaware (the “Delaware District Court”) and joins several related derivative actions (the “Related Suits”). On April 3, 2020, the Delaware District Court consolidated related suits brought by stockholders Edward Hayes, Juanita Silvera, and Brad Linton (“Plaintiffs”), derivatively on behalf of Pareteum, the Nominal Defendant, against certain officers and directors of Pareteum, including Robert H. Turner, Edward O’Donnell, Denis McCarthy, Laura Thomas, Victor Bozzo, Luis Jimenez-Tunon, Robert Lippert, Rob Mumby and Yves van Sante (the “Individual Defendants”). Plaintiffs in the related actions have alleged that the Individual Defendants caused Pareteum to issue false or misleading statements in SEC filings and other public pronouncements in violation of certain federal securities regulations. Plaintiffs allege that as a result of the Individual Defendants’ misconduct, they are liable for violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, and gross mismanagement. Plaintiffs seek a judgment (1) declaring that the Individual Defendants breached their fiduciary duties and/or aided and abetted the breach of their fiduciary duties; (2) awarding Pareteum damages sustained as a result of the Individual Defendants’ breaches of fiduciary duty and violations of federal securities laws; (3) ordering that the Individual Defendants disgorge any performance-based compensation that was received during, or as a result of, the Individual Defendants’ breaches of fiduciary duty; (4) directing the Individual Defendants to take certain measures to reform and improve Pareteum’s corporate governance and internal procedures; (5) granting appropriate equitable or injunctive relief to remedy the Individual Defendants’ breaches of fiduciary duties and other violations of laws; (6) awarding Pareteum restitution from the Individual Defendants; and (7) awarding Plaintiffs all costs and expenses incurred in the Related Suits and Delaware Derivative Action. On July 22, 2020, this action was transferred to the United States District Court for the Southern District of New York. Sabby Volatility Warrant Master Fund, Ltd. v. Pareteum Corp., et al. , No. 19-cv-10460 (S.D.N.Y.) (the “Section 11 Action”), is an action brought under Section 11 of the Securities Act by an investor, Sabby Volatility Master Fund, Ltd. (“Plaintiff Sabby”), against the Company, Robert H. Turner, Edward O’Donnell, Denis McCarthy, Victor Bozzo, Robert Lippert, Yves van Sante, and Luis Jimenez Tunon (collectively, the “Defendants”). It was filed on November 11, 2019. Plaintiff Sabby alleges that Defendants caused the Company to issue false or misleading statements in a Registration Statement filed with the SEC. As a result of the alleged misconduct, Plaintiff Sabby claims that Defendants are liable for violations of Section 11 of the Securities Act, breaches of a Securities Purchase Agreement (the “SPA”) entered into between Plaintiff Sabby and Pareteum, and contractual indemnification allegedly owed to Plaintiff Sabby under the SPA. Plaintiff Sabby seeks monetary damages and/or rescission of the SPA, and indemnification by Pareteum for any losses resulting from its alleged breach of the SPA, including costs and expenses incurred in connection with the Section 11 Action. Artilium Africa, LLC et al. v. Artilium, PLC et al. ; ICDR Case No. 01-19-0003-1680 and Artilium Africa, LLC and Tristar Africa Telecom, LLC v. Pareteum Corporation are related matters arising out of the same dispute. The former matter is an arbitration filed with the International Center for Dispute Resolution (“ICDR”) on October 1, 2019 alleging that Artilium Group Limited, a subsidiary of Pareteum Corporation formerly known as Artilium PLC (“Artilium”), breached an Operating Agreement relating to a joint venture called Artilium Africa formed by Artilium Green Globe Services LLC and Tristar Africa Telecom, LLC (“Tristar” and together with Artilium, the “Delaware Plaintiffs”) to provide mobile data, cloud, and telecommunications services throughout Africa. The Claimants in the ICDR arbitration are seeking $30 million. The latter matter is a civil case filed on October 10, 2019 in the Delaware District Court. The Delaware Plaintiffs allege that Pareteum Corporation tortuously interfered with Tristar’s contract with Artilium in order to enter into the same type of agreement with Artilium. The Plaintiffs are seeking $150,000 in damages. Reuben Harmon, derivatively on behalf of Pareteum Corp. v. Robert H. Turner, et al. is a stockholder derivative lawsuit that was filed in the Supreme Court for the State of New York, New York County, on January 27, 2021 by Reuben Harmon (“Plaintiff Harmon”). This case was brought derivatively on behalf of Pareteum, the Nominal Defendant, against certain current and former officers and directors of the Company, including Robert H. Turner, Edward O’Donnell, Denis McCarthy, Victor Bozzo, Rob Mumby, Luis Jimenez-Tunon, Robert Lippert, Laura Thomas and Yves van Sante (the “Individual Defendants”). Plaintiff Harmon alleges that the Individual Defendants caused Pareteum to issue false or misleading statements in SEC filings and other public pronouncements in violation of certain federal securities statutes and regulations. Plaintiff Harmon further alleges that as a result of their misconduct, the Individual Defendants are liable for breaches of their fiduciary duties as directors and/or officers of Pareteum, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. Plaintiff Harmon seeks a judgment awarding Pareteum damages with interest sustained as a result of the Individual Defendants’ alleged misconduct, directing the Individual Defendants to take certain measures to reform and improve Pareteum’s corporate governance and internal procedures, awarding Pareteum restitution from the Individual Defendants, and awarding Plaintiff Harmon all costs and expenses incurred in pursing the claim. Gregory Lackey, derivatively on behalf of Pareteum Corp. v. Robert “Hal” Turner, et al ., No. 1:21-mc-00070, is a shareholder derivative suit that was filed on January 25, 2021 in the United States District Court for the Southern District of New York. Plaintiff Gregory Lackey (“Plaintiff Lackey”) is a purported shareholder suing on behalf of Pareteum and alleging that certain officers and directors of Pareteum, including Robert H. Turner, Edward O’Donnell, Denis McCarthy, Victor Bozzo, Luis Jimenez-Tunon, Robert Lippert, Rob Mumby , Laura Thomas and Yves van Sante (the “Individual Defendants”) caused Pareteum to issue false or misleading statements in SEC filings and other public pronouncements in violation of certain federal securities statutes and regulations. Plaintiff Lackey alleges that as a result of their misconduct, the Individual Defendants are liable for contribution and indemnification under Section 21D of the Exchange Act, breach of fiduciary duty, and unjust enrichment. Plaintiff Lackey seeks a judgment (1) awarding Pareteum damages sustained as a result of the Individual Defendants’ breaches of fiduciary duty; (2) directing the Individual Defendants to take certain measures to reform and improve Pareteum’s corporate governance and internal procedures; (3) awarding Pareteum restitution from the Individual Defendants and disgorgement of all profits obtained by the Individual Defendants; and (4) awarding Plaintiff Lackey all costs and expenses incurred in the action. Deutsche Telekom A.G. (“ DTAG ”) is both a supplier to, and customer of, the Company’s subsidiary, iPass. DTAG has initiated a lawsuit in Germany in the amount of approximately USD $790,000 for non-payment for supply of services to iPass and/or insufficient delivery of services to DTAG. iPass has reasonable grounds to net-off a significant proportion of the claimed sums and otherwise dispute the claims. iPass intends to vigorously defend and/or set-off the DTAG claim. Stephen Brown v. Elephant Talk North America Corporation and Elephant Talk Communications Corp., Case No. 5:18-cv-00902-R in the Western District of Oklahoma. A former consultant, Steve Brown (“Brown”) brought a lawsuit against Pareteum and its subsidiary claiming approximately five (5) years’ unpaid consulting fees in an amount equal to $780,000. The Company believes some or all of his claims are time-barred and/or frivolous. The Company’s position is that Brown was dismissed for cause in 2013/14, and intends to defend itself in this matter vigorously. |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2019 | |
Concentrations | |
Concentrations | Note 20. Concentrations Financial instruments that potentially subject us to concentrations of credit risk consist of accounts receivable and unbilled receivables. Those customers that comprised 10% or more of our revenue, accounts receivable and unbilled receivables are summarized as follows: For the year ended December 31, 2019, the Company had one customer that accounted for 20% of total revenue. For the year ended December 31, 2018, the Company had one customer that accounted for 64% of total revenue. As of December 31, 2019, the Company had one customer that accounted for 38% of accounts receivable including unbilled revenue. As of December 31, 2018, the Company had one customer that accounted for 10% of accounts receivable including unbilled revenue. |
Unaudited Quarterly Data (Resta
Unaudited Quarterly Data (Restated) | 12 Months Ended |
Dec. 31, 2019 | |
Unaudited Quarterly Data (Restated) | |
Unaudited Quarterly Data (Restated) | Note 21. Unaudited Quarterly Data (Restated) In the opinion of management, the following unaudited quarterly data for the three months ended March 31, 2019 and three and six months ended June 30, 2019 reflect all adjustments necessary for a fair statement of the results of operations. On October 21, 2019, the Board of Directors determined that the Company’s financial statements that were included in its annual report for the year ended December 31, 2018 and quarterly reports for the quarters ended March 31, 2019 and June 30, 2019 (collectively, the “Non-Reliance Periods”) should no longer be relied upon. The Company restated its financial statements for the Non-Reliance period that occurred in the year ended December 31, 2018, including the interim periods within such year, in the previously filed Amendment No. 1 to our Annual Report for the year ended December 31, 2018 on Form 10-K/A filed with the SEC on December 14, 2020. This Annual Report on Form 10-K for the year ended December 31, 2019 contains the unaudited restated condensed consolidated financial statements for the Non-Reliance Periods for the quarters ended March 31, 2019 and June 30, 2019. The Board’s decision to restate the Company’s financial statements is based on the Company’s conclusion that certain revenues and the corresponding costs recognized during the year ended December 31, 2018, and in each of the quarters within such year, as well as in the first and second quarter of 2019 should not have been recorded during those periods. This Note 21, Unaudited Quarterly Data (Restated) to the consolidated financial statements discloses the nature of the restatement matters and their impact on the consolidated financial statements for the three months ended March 31, 2019 and the three and six months ended June 30, 2019, collectively referred to as the “Restatement”. This Annual Report reflects the corrections of the following errors identified subsequent to the filing of the original Quarterly Reports on Form 10-Q for the periods ended March 31, 2019 and June 30, 2019 (the “Original Filing”): A. The Company determined that it incorrectly recognized revenue prior to customers obtaining control of certain products or customer acceptance requirement provisions in contracts. As a result, customers had not obtained control of the products in accordance with ASC 606-10-25-27 to -29. The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 Revenues $ (9,993) $ (16,128) $ (26,121) Cost of revenues (excluding depreciation and amortization) (1,634) (2,749) (4,383) General and administrative (220) (542) (762) March31, June30, 2019 2019 Accounts receivable, net $ (8,476) $ (24,611) Net billings in excess of revenues 912 902 Accrued expenses and other payables (1,488) (4,308) Accumulated other comprehensive loss (239) (229) B. The Company determined that it had incorrectly accounted for share-based compensation expense for awards granted to employees and non-employees over the appropriate requisite service periods in accordance with ASC 718. The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 General and administrative $ (1,029) $ 707 $ (322) March31, June30, 2019 2019 Common stock $ (1,029) $ (376) Accrued expenses and other payables — 54 C. The Company determined that it incorrectly accounted for extinguishments of accounts payables for which the Company issued shares to settle the outstanding balances of accounts payable. In accordance with ASC 470-50-40-2, the difference between the reacquisition price of the debt and the net carrying amount of the extinguished debt is recognized as a loss or gain in the period of extinguishment. The reacquisition price includes the fair value of any assets transferred or equity securities issued. The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 Product development $ — $ 228 $ 228 General and administrative 235 87 322 March31, June30, 2019 2019 Common stock $ 235 $ 550 D. The Company determined that it incorrectly included a prepayment penalty liability associated with the Fortress Credit Corp (“Fortress”) outstanding loan balance that was assumed by the Company with the acquisition of iPass on February 12, 2019. The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): March31, June30, 2019 2019 Goodwill $ (1,000) $ (1,000) Long-term debt (1,000) (1,000) E. The Company determined that it incorrectly accounted for the extinguishment of the Fortress outstanding loan balance. Based on the terms of Fortress’s credit agreement, if the loan is paid off before its stated maturity, the Company is required to pay a $1,000 prepayment penalty. On February 26, 2019, the Company paid off the outstanding loan balance before maturity. The payment made by the Company included the outstanding loan balance and $1,000 prepayment liability originally assumed by the Company. The Company recorded the $1,000 prepayment to the prepayment liability assumed in the acquisition of iPass (as discussed in letter D above). In accordance with ASC 470-50-40-2, the difference between the reacquisition price of the debt and the net carrying amount of the extinguished debt is recognized as a loss or gain in the period of extinguishment. The reacquisition price includes the fair value of any assets transferred or equity securities issued. Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 Other income/(loss) $ (1,000) $ — $ (1,000) March31, June30, 2019 2019 Long-term debt $ 1,000 $ 1,000 F. In connection with the acquisition of iPass on February 12, 2019, the Company determined that it had used incorrect revenue assumptions in valuing the intangible assets recognized (technology, customer relationships and tradenames) in the purchase price allocation. The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): March31, June30, 2019 2019 Intangibles assets, net $ (11,594) $ (11,594) Goodwill 11,594 11,594 As a result of incorrectly valuing the intangible assets above acquired in the acquisition of iPass, the Company determined that it incorrectly calculated amortization expense. The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 Depreciation and amortization $ (127) $ (221) $ (348) March31, June30, 2019 2019 Intangible assets, net $ 127 $ 348 G. In connection with the acquisition of iPass on February 12, 2019, the Company determined that it incorrectly accounted for a settlement of the pre-existing relationship software license and related maintenance agreement of $1,531 which approximates the estimated fair value at the date of acquisition, which was purchased from iPass on May 8, 2018. In accordance with ASC 805, Business Combinations, the settlement of a pre-existing relationship is included in the consideration transferred. The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): Three Months Three Months Six Months Ended March Ended Ended 31, 2019 June 30, 2019 June 30, 2019 General and administrative $ (185) $ — $ (185) Depreciation and amortization (25) (76) (101) March31, June30, 2019 2019 Property and equipment, net $ (1,289) $ (1,229) Goodwill 1,531 1,531 Accumulated other comprehensive loss (32) (16) H. The Company determined that it incorrectly included the 705,000 shares of its common stock issued to iPass employees valued at $2,045 as part of the consideration transferred in the acquisition of iPass on February 12, 2019. In connection with this issuance of shares of common stock to iPass employees, the Company determined that it had incorrectly accounted for share-based compensation expense based on its stock price on the grant dates as well as recognizing share-based compensation over the appropriate requisite service periods in accordance with ASC 718. The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 General and administrative $ 1,677 $ — $ 1,677 Restructuring and acquisition costs 677 — 677 March31, June30, 2019 2019 Goodwill $ (2,045) $ (2,045) Common stock 309 309 I. The Company incorrectly translated its property and equipment balances using a historical rate and not the current exchange rate at the balance sheet reporting date in accordance with ASC 830, Foreign Currency Matters. The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): March31, June30, 2019 2019 Property and equipment, net $ (96) $ (28) Accumulated other comprehensive loss 96 28 J. The Company determined that in incorrectly accounted for operating leases under ASC 842 on January 1, 2019. The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 General and administrative $ 3 $ (31) $ (28) March31, June30, 2019 2019 Right of use lease assets $ 622 $ 780 Other assets 385 — Prepaid expenses and other current assets — 36 Goodwill (385) (385) Accrued expenses and other payables — (91) Lease liabilities, current 1,994 237 Lease liabilities, non-current (1,369) 257 K. Through a review of its accounting for warrants, the Company determined that it incorrectly accounted for the 325,000 warrants issued to Fortress. The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 General and administrative $ 802 $ — $ 802 March31, June30, 2019 2019 Common stock $ 802 $ 802 L. Through a review of the acquisition of Devicescape that closed in April 2019, the Company determined that it incorrectly accounted for the acquisition as a business combination instead of an asset acquisition under ASC 805. The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 General and administrative $ — $ (70) $ (70) Depreciation and amortization — 38 38 March31, June30, 2019 2019 Cash and cash equivalents $ — $ (380) Accounts receivable, net — (12) Prepaid expenses and other current assets — 74 Intangible assets, net — 2,020 Goodwill — (1,588) Accounts payable and customer deposits — 52 Accrued expenses and other payables — 30 M. Through review of the Company’s software projects performed by its personnel, the Company determined that additional amounts should have be capitalized. The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 General and administrative $ (433) $ (338) $ (771) Depreciation and amortization 36 136 172 March31, June30, 2019 2019 Property and equipment, net $ 395 $ 602 Accumulated other comprehensive loss 2 (3) N. Through review of the Company’s accruals for usage of vendor network services, the Company determined that certain accruals were overstated. The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 Cost of revenues (excluding depreciation and amortization) $ (559) $ (134) $ (693) General and administrative 18 (30) (12) Other income/(loss) — 181 181 March31, June30, 2019 2019 Accounts payable and customer deposits $ (541) $ (886) O. The Company determined that it was appropriate to adjust revenues related to a repricing arrangement that impacted the previously recognized revenues. The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 Revenues $ — $ (1,133) $ (1,133) March31, June30, 2019 2019 Accounts receivable, net $ — $ (1,133) P. Through review of the Company’s allocation methodology and corrections to management and personnel cost noted above, the Company adjusted certain allocations between the individual functional line items of the Condensed Statement of Operations. The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 Cost of revenues (excluding depreciation and amortization) $ 151 $ 194 $ 335 Product development 312 (678) 9 Sales and marketing (4) 250 (129) General and administrative 39 (446) 343 Restructuring and acquisition costs (488) (70) (558) Q. The Company determined that it incorrectly accounted for various severance packages within Restructuring and Acquisition Costs that did not meet the criteria identified in ASC 420, Exit or Disposal Cost Obligations to be accounted for as restructuring costs . The impact of the correction of this matter on the Company’s condensed financial statements is as follows (in thousands): Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 Cost of revenues (excluding depreciation and amortization) $ 29 $ 41 $ 70 Product development 42 85 127 Sales and marketing 376 75 451 General and administrative 317 32 349 Restructuring and acquisition costs (764) (234) (998) R. In addition to the matters described above in A thru Q, the Company also corrected for immaterial misstatements, including misstatements in certain footnotes, identified during an account review and analysis exercise. The account balances labeled “As Reported” in the following tables as of the periods ended March 31, 2019 and June 30, 2019, for the three months ended March 31, 2019 and for the three and six months ended June 30, 2019 represent the previously reported financial statements as presented in the Original Filing. A summary of where the restatement adjustments had an effect on the Company’s consolidated financial statements are as follows: Condensed Consolidated Balance Sheet at March 31, 2019 – Unaudited As reported PY Adjustments Adjustments As restated ASSETS Accounts receivable,net $ 28,645 $ (12,024) $ (8,476) $ 8,145 Prepaid expenses and other current assets 3,634 — (92) 3,542 Total current assets 43,683 (12,024) (8,568) 23,091 OTHER ASSETS 576 — 385 961 RIGHT OF USE LEASE ASSETS 3,136 — 622 3,758 PROPERTY AND EQUIPMENT, NET 5,184 891 (991) 5,084 INTANGIBLE ASSETS,NET 60,706 — (11,466) 49,240 GOODWILL 119,899 9,601 9,695 139,195 Total assets 236,947 $ (1,532) $ (10,323) 225,092 LIABILITIES Accounts payable and customer deposits 25,081 $ — $ (630) 24,451 Net billings in excess of revenues 1,616 (700) 892 1,808 Accrued expenses and other payables 12,567 (212) (1,597) 10,758 Lease liabilities, current — — 1,994 1,994 Total current liabilities 39,780 (912) 659 39,527 Lease liabilities, non-current 3,142 — (1,369) 1,773 Deferred tax liabilities 8,191 (30) — 8,161 Total liabilities 73,342 (942) (710) 71,690 STOCKHOLDERS' EQUITY Common stock 488,670 3,004 227 491,901 Accumulated other comprehensive loss (6,661) 912 263 (5,486) Accumulated deficit (318,404) (4,506) (10,103) (333,013) Total stockholders’ equity 163,605 (590) (9,613) 153,402 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 236,947 $ (1,532) $ (10,323) $ 225,092 Condensed Consolidated Statement of Operations and Comprehensive Loss – Unaudited Three Months ended March 31, 2019: As Reported Adjustments As Restated REVENUES $ 23,040 $ (9,971) $ 13,069 COST AND OPERATING EXPENSES Cost of revenues (excluding depreciation and amortization) 10,068 (2,022) 8,046 Product development 2,198 354 2,552 Sales & Marketing 2,565 372 2,937 General and administrative expenses 7,615 317 7,932 Restructuring and acquisition costs 3,080 226 3,308 Depreciation and amortization 2,843 (117) 2,726 Total cost and operating expenses 28,369 (868) 27,501 LOSS FROM OPERATIONS (5,329) (9,103) (14,432) OTHER INCOME (EXPENSE) (616) (1,000) (1,616) LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES (5,945) (10,103) (16,048) Income tax benefit (167) — (167) NET LOSS (5,778) (10,103) (15,881) OTHER COMPREHENSIVE LOSS Foreign currency translation loss (360) 263 (97) COMPREHENSIVE LOSS $ (6,138) $ (9,840) $ (15,978) Net loss per common share and equivalents - basic and diluted $ (0.06) $ (0.15) Consolidated Condensed Statement of Cash Flows – Unaudited Three Months ended March 31, 2019: As Reported Adjustments As Restated CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (5,778) $ (10,103) $ (15,881) Adjustements to reconcile net loss to net cash used in operating activities Depreciation and amortization 2,843 (117) 2,726 Provision for doubtful accounts 286 (260) 26 Stock based compensation 3,714 1,315 5,029 Shares issued for services 1,523 (485) 1,038 Loss on extinguishment of debt — 1,000 1,000 Deferred tax — (525) (525) Changes in operating assets and liabilities Increase in accounts receivable (9,225) 8,621 (604) Decrease in prepaid expenses, deposits and other assets 2,816 (2,213) 603 Increase in accounts payable and customer deposits 3,420 117 3,537 Decrease in net billings in excess of revenues (1,237) 1,120 (117) Decrease in accrued expenses and other payables (3,098) 1,427 (1,671) Net cash used in operating activities (4,614) (103) (4,717) Purchases of property, equipment and software development (765) (653) (1,418) Acquisition of iPass, Inc., net of cash acquired (284) Net cash used in investing activities (3,749) 491 (3,258) Increase in short term loans (287) — Exercise of warrants & options 717 33 750 Financing related fees (894) 27 (867) Proceeds from issuance of loan 25,000 (976) 24,024 Repayment on loans (11,670) 681 (10,989) Net cash provided by financing activities 13,440 (522) 12,918 EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH (156) 135 (21) NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 4,921 — 4,922 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD 6,483 — 6,483 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD $ 11,404 $ — $ 11,404 Consolidated Condensed Balance Sheet at June 30, 2019 – Unaudited As reported PY Adjustments Adjustments As restated ASSETS Cash and cash equivalents $ 3,378 $ — $ (380) $ 2,998 Accounts receivable,net 45,061 (12,024) (25,729) 7,308 Prepaid expenses and other current assets 3,386 — 36 3,422 Total current assets 53,954 (12,024) (26,073) 15,857 RIGHT OF USE LEASE ASSETS 2,493 — 780 3,273 PROPERTY AND EQUIPMENT,NET 4,897 891 (658) 5,130 INTANGIBLE ASSETS,NET 60,262 — (9,225) 51,037 GOODWILL 121,487 9,601 8,107 139,195 Total assets 246,869 $ (1,532) $ (27,069) $ 218,268 LIABILITIES Accounts payable and customer deposits 28,184 $ — $ (875) $ 27,309 Net billings in excess of revenues 1,331 (700) 861 1,492 Accrued expenses and other payables 14,037 (212) (4,402) 9,423 Lease liabilities, current 1,777 — 237 2,014 Total current liabilities 46,000 (912) (4,179) 40,909 Lease liabilities, non-current 1,014 — 257 1,271 Deferred tax liabilities 7,713 (30) 252 7,935 Total liabilities 77,211 (942) (3,670) 72,599 STOCKHOLDERS' EQUITY Common stock 494,803 3,004 1,213 499,020 Accumulated other comprehensive loss (6,225) 912 (194) (5,507) Accumulated deficit (318,920) (4,506) (24,418) (347,844) Total stockholders’ equity 169,658 (590) (23,399) 145,669 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 246,869 $ (1,532) $ (27,069) $ 218,268 Consolidated Condensed Statement of Operations and Comprehensive Loss – Unaudited Three Months ended June 30, 2019: As Reported Adjustments As Restated REVENUES $ 34,148 $ (17,272) $ 16,876 COST AND OPERATING EXPENSES Cost of revenues (excluding depreciation and amortization) 15,293 (2,649) 12,644 Product development 3,242 383 3,625 Sales and marketing 2,769 326 3,095 General and administrative 9,033 (666) 8,367 Restructuring and acquisition costs 428 (304) 124 Depreciation and amortization 3,224 (119) 3,105 Total cost and operating expenses 33,989 (3,029) 30,960 LOSS FROM OPERATIONS 159 (14,243) (14,084) OTHER INCOME (EXPENSE) (1,124) 180 (944) LOSS BEFORE PROVISION FOR INCOME TAXES (965) (14,063) (15,028) Income tax benefit (449) 252 (197) NET LOSS (516) (14,315) (14,831) OTHER COMPREHENSIVE INCOME/(LOSS) Foreign currency translation (loss)/income 436 (457) (21) COMPREHENSIVE LOSS $ (80) $ (14,772) $ (14,852) Net loss per common share and equivalents - basic and diluted $ 0.00 $ (0.13) Six Months ended June 30, 2019: As Reported Adjustments As Restated REVENUES $ 57,188 $ (27,243) $ 29,945 COST AND OPERATING EXPENSES Cost of revenues (excluding depreciation and amortization) 25,361 (4,671) 20,690 Product development 5,816 361 6,177 Sales and marketing 5,710 322 6,032 General and administrative 15,897 402 16,299 Restructuring and acquisition costs 3,508 (76) 3,432 Depreciation and amortization 6,067 (236) 5,831 Total cost and operating expenses 62,359 (3,898) 58,461 LOSS FROM OPERATIONS (5,171) (23,345) (28,516) OTHER INCOME (EXPENSE) (1,740) (820) (2,560) LOSS BEFORE PROVISION FOR INCOME TAXES (6,911) (24,165) (31,076) Income tax benefit (617) 253 (364) NET LOSS (6,294) (24,418) (30,712) OTHER COMPREHENSIVE INCOME/(LOSS) Foreign currency translation (loss)/income 76 (194) (118) COMPREHENSIVE LOSS $ (6,218) $ (24,612) $ (30,830) Net loss per common share and equivalents - basic and diluted $ (0.06) $ (0.29) Consolidated Condensed Statement of Cash Flows – Unaudited Six Months ended June 30, 2019: As Reported Adjustments As Restated CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (6,294) $ (24,418) $ (30,712) Adjustements to reconcile net loss to net cash used in operating activities Depreciation and amortization 6,067 (236) 5,831 Provision for doubtful accounts 286 (214) 72 Stock based compensation 5,722 2,022 7,744 Shares issued for services 2,279 (926) 1,353 Loss on extinguishment of debt — 1,000 1,000 Deferred tax — (522) (522) Changes in operating assets and liabilities Increase in accounts receivable (25,191) 24,296 (895) Decrease in prepaid expenses, deposits and other assets 2,975 (1,610) 1,365 Increase in accounts payable and customer deposits 6,937 909 7,846 Decrease in net billings in excess of revenues (2,000) 1,564 (436) Decrease in accrued expenses and other payables (1,643) (1,096) (2,739) Net cash used in operating activities (10,440) 769 (9,671) Purchases of property, equipment and software development (1,650) (993) (2,643) Acquisition of iPass, Inc., net of cash acquired (1,563) 2,423 860 Investment in note receivables (2,761) 61 (2,700) Acquisition of assets from Devicescape, LLC — (2,137) (2,137) Net cash used in investing activities (5,974) (646) (6,620) Increase in short term loans 142 (142) — Financing related fees (624) (243) (867) Proceeds from issuance of loan 25,000 (822) 24,178 Repayment on loans (11,670) 681 (10,989) Net cash provided by financing activities 14,443 (526) 13,917 EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH (29) 23 (6) NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (2,000) (380) (2,380) CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD 6,483 — 6,483 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD $ 4,483 $ (380) $ 4,103 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 22. Subsequent events The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K and determined that there have been no events that have occurred that would require adjustments to our disclosures in the consolidated financial statements except for the transactions described below. Senior Second Lien Secured Convertible Note On February 22, 2021, the Company issued a $2.4 million in principal amount 8% Senior Second Lien Secured Convertible Note due April 1, 2025 (the “Senior Second Lien Note”) to an institutional investor (the “Purchaser”) for $2.0 million. The Second Lien Note is a senior, secured obligation of the Company, but ranks junior to the High Trail Note (as defined below), issued by the Company and held by High Trail (as defined below). Interest is payable monthly beginning April 1, 2021 at a rate of 8% per annum. The Second Lien Note is secured by a second lien on substantially all assets of the Company and substantially all assets of its material U.S.-organized subsidiaries. Interest may be paid, at the election of the Company, in cash or in shares of common stock of the Company; provided, that, so long as the High Trail Note remains outstanding, such payments may only be made in shares. The number of shares of common stock to be issued to pay interest in shares of the Company’s common stock is determined by the application of a formula in which the amount of the interest due is divided by 85% of the lowest volume-weighted average price of the Company’s common stock on the principal market for the Company’s common stock over the 10 days preceding the date of such payment. Subject to an intercreditor agreement with the holder of the High Trail Note, upon notice by the Company, the Company may elect to redeem all or a portion of the then-outstanding principal amount outstanding under the Second Lien Note. The Purchaser or the Company may also elect for the Company to redeem the Second Lien Note at a 20% premium if the Company undergoes a fundamental change. The Second Lien Note will be convertible into common stock of the Company, in part or in whole, from time to time, at the election of the Purchaser. The initial conversion rate is equal to 1666.6667 shares of the Company’s common stock for each $1,000 of principal amount of the Second Lien Note or $0.60 per share. The conversion rate is subject to customary anti-dilution adjustments in the event the Company issues stock dividends or effects a split or reverse split of the Company’s common stock. In connection with the Second Lien Note, the Company also granted a warrant to purchase 2,750,000 shares of its common stock to the Purchaser at an exercise price of $0.40 per share expiring on February 22, 2026. The warrants are exercisable any time after February 22, 2021. 8% Series C Redeemable Preferred Stock On various dates from February 21, 2020 through August 18, 2020, the Company issued an additional 116 shares of Series C Redeemable Preferred Stock with a stated value of $11,600 for an aggregate purchase price of $9,100. By their terms, those shares are not convertible into other securities of the Company. However, on various dates from July 17, 2020 through October 1, 2020, the Company entered into the Series C Exchange Agreements with the holders of those 116 shares which allow either the Company or the holders to convert amounts due in connection with those shares of Series C Redeemable Preferred Stock into shares of the Company common stock. Senior Convertible Note On June 8, 2020, the Company issued an $17.5 million in principal amount of an 8% Senior Secured Convertible Note due April1, 2025 (the "High Trail Note" or the “Note”) to High Trail Investments SA LLC (“High Trail”) for $14 million. On June 8, 2020, the Company received $4 million of the $14 million and incurred legal fees of $0.3 million. The remaining $10 million balance was received by the Company but was deposited into a non-springing bank account based on terms of a Control Agreement. Under the terms of the Control Agreement, the Company has no right or any other right or ability to control, access, pick up, withdraw or transfer, deliver or dispose of items or funds from the non-springing account. Under the terms of the High Trail Note, the remaining $10 million balance will be released to the Company subject to the satisfaction of certain conditions as follows: · $3 million when the Company receives $4 million in additional financing. The Company received the additional financing in July 2020 and the $3 million was released to the Company to be used for working capital purposes. · $7 million when the Company meets certain specified conditions (the “Specified Conditions”) on or prior to October 31, 2020 the “Specified Conditions Date”). The $7 million will be reported as restricted cash until the Specified Conditions are met on the Specified Conditions Date. The Specified Conditions include satisfaction of certain equity conditions and other conditions as of any date and on each of the 20 previous trading days prior to such date as defined in the High Trail Note. The satisfaction of the certain equity conditions includes: · the Company’s being able to issue shares of its common stock upon conversion that are not subject to restrictions on resale; · High Trail not, upon conversion, beneficially owning in excess of 4.99% of the Company’s outstanding common stock; · the Company at all times having sufficient authorized and unissued shares of its common stock available for the issuance of common stock upon conversion equal to the outstanding principal amount plus accrued interest; · the average daily volume weighted-average price per share of the Company’s common stock being not less than $0.50 (for a common stock change event as defined in the Note) and the daily dollar trading volume (as reported on Bloomberg) for the Company’s common stock on such date and for at least 17 of the prior 20 trading days being not less than $750,000; · there being no defaults or events of a default that have occurred or are continuing; · the Company having obtained the requisite stockholder approval required by the Nasdaq Stock Market for the issuance of the shares of its common stock upon conversion; · the average daily volume-weighted average price per share of the Company’s common stock being not less than $0.85 (for a common stock change event as defined in the Note); and · the absence of any defaults or events of default. The Note contains customary events of default, as well as events of default if the Company fails to use reasonable efforts to obtain the approval of its stockholders of the issuance of the shares issuable upon conversion by October 31, 2020, the Company’s shares cease to be traded on the NASDAQ Stock Market, or the Company fails to restate its financial statements for the year ended December 31, 2018 and the quarters ended March 31, 2019 and June 30, 2019, in each case, prior to October 31, 2020 or fails to timely file its subsequent quarterly reports on Form 10-Q or its subsequent annual reports on Form 10-K with the SEC in the manner and within the time periods required by the Exchange Act. The Company is currently in default. Beginning October 1, 2020, and on the first day of each calendar month thereafter, at the election of High Trail, the Company can be required to redeem a portion of the Note. The amount of each redemption payment will be up to $3.5 million, provided, that in any case the amount of any redemption payment will not exceed the principal amount then outstanding under the Notes. If the Company elects the option to pay an optional redemption payment in shares of its common stock on any optional redemption date, High Trail shall have the right to allocate all or any portion of the applicable optional redemption payment (or applicable portion thereof) to one or more scheduled trading days during the period beginning on, and including, the applicable optional redemption date and ending on, and including, the scheduled trading day immediately before the subsequent optional redemption date or defer such optional redemption payment (or applicable portion thereof) to any future optional redemption date selected by High Trail. The High Trail Note has a stated interest rate of 8.0% per year, payable monthly in arrears at the Company’s option in cash or shares of its common stock or a combination of both cash and shares of the Company’s common stock beginning on August 1, 2020. On December 8, 2020, the Company and High Trail entered into a letter agreement whereby the Company agreed that High Trail would accept 1,093,750 shares of the Company’s common stock in full satisfaction of the Company’s obligation to make a $0.3 million interest payment on December 1, 2020. If the Company fails to pay any amount payable on this Note on or before the due date as provided in the Note, then, regardless of whether such failure constitutes an event of default, or a default or event of default occurs as set forth in the Note (such amount payable or the principal amount outstanding as of such failure to pay or default or event of default, (as applicable, a “Defaulted Amount”), then in each case, interest (“Default Interest”) will accrue on such Defaulted Amount at a rate per annum equal to 18.0%, from, and including, such due date or the date of such default or event of default, as applicable, to, but excluding, the date such failure to pay or default or event of default is cured and all outstanding Default Interest under the Note has been paid, as applicable. As a result of the Company’s defaults under the terms of the High Trail Note, it is currently paying the Default Interest rate. If the Company elects to pay the stated interest (or any applicable portion thereof) in shares of its common stock, High Trail shall have the right to allocate all or any portion of the applicable payment of the stated interest (or applicable portion thereof) to one or more scheduled trading days as defined in the High Trail Note) during the period beginning on, and including, the applicable interest payment date and ending on, and including, the scheduled trading day immediately before the subsequent interest payment date (or defer such payment of the stated interest (or applicable portion thereof) to any future Interest payment date selected by High Trail. The number of shares of common stock to be issued by the Company for payment for both the optional redemption payment and the stated interest amounts are determined as set forth in the Note by dividing each amount by 85% of the lowest average daily volume-weighted-average price per share of the Company’s common stock during the 10 trading day period ending on the trading day immediately prior to such interest payment or the optional redemption payment payable in shares of common stock. The High Trail Note is convertible into shares of the Company’s common stock including any portion constituting an optional redemption payment amount and other circumstances as set forth in the Note at High Trail’s election. The initial conversion rate is equal to 1,666.667 shares of the Company’s common stock per $1,000 principal amount of the Note, or $0.60 per share. However, when the Company receives the $4 million in additional financing and if the additional financing date conversion rate is lower than the initial current conversion rate, the initial conversion rate shall be reduced to equal the additional financing date conversion rate; and, provided, further, that on the Specified Conditions Date, if the Specified Conditions conversion rate is lower than the then current conversion rate, the conversion rate at the time shall be reduced to equal the Specified Conditions conversion rate. The conversion rate is further subject to changes based on subsequent equity issuances as defined in the Note. The additional financing conversion rate is computed as follows: per $1,000 principal amount of the High Trail Note divided by the last reported stock price on the trading date prior to the additional financing date multiplied by 105% (based on the last reported stock price prior to the Company receiving the additional financing). In July 2020, the Company received the additional financing amount and the additional financing conversion rate was higher than the initial conversion rate of 1,666.667, based on the last reported stock on the trading date prior to the Company receiving the additional financing. As a result, the initial conversion rate remained the same. The Specified Conditions conversion rate is computed as follows: per $1,000 principal amount of the High Trail Notes divided by the last reported stock price on the trading date prior to the additional financing date multiplied by 105% on the weighted-average price of the Company’s common stock in respect of the period from the scheduled open of trading until the scheduled close of trading immediately before the Specified Conditions Date, which the Company has not yet met. The Note is secured by a first lien on substantially all assets of the Company and substantially all assets of its material U.S. organized subsidiaries and the assets of Pareteum Europe BV, a subsidiary organized in the Netherlands. In addition, the Note contains customary affirmative and negative covenants, including restrictions on indebtedness, equity securities, liens, dividends, distributions, acquisitions, investments, sale or transfer of assets, transactions with affiliates and maintenance of certain financial ratios. All payments due under the Note rank senior to all other indebtedness of the Company to the extent of the value of the Collateral and any Subordinated Indebtedness. If the Company undergoes a fundamental change as set forth in the Note, High Trail will have the right to require the Company to repurchase all or part of the Note in cash equal to of the greater of (i) 120% of the then outstanding principal amount of the Note (or portion thereof) and (ii) 120% of the product of (A) the conversion rate in effect as of the trading day immediately preceding the effective date of such fundamental change; (B) the principal amount of this Note to be repurchased upon a fundamental change divided by $1,000; and (C) the highest daily volume weighted-average price per share of the Company’s common stock occurring during the consecutive volume-weighted average price per share of the Company’s common stock trading days ending on, and including, the daily volume-weighted average price per share of the Company’s common stock on the trading day immediately before the effective date of such fundamental change. If the Company enters into a bankruptcy proceeding as set forth in the Note, then the then-outstanding portion of the principal amount and all accrued and unpaid interest will immediately become due and payable to High Trail. In addition, at High Trail’s option, the Note will become due and payable immediately for cash equal to an default acceleration amount upon certain events of default as set forth in the Note, which includes, the Company not filing its restated financial statements with the SEC for (A)the fiscal year ended December 31, 2018, (B)the quarter ended March 31, 2019 and (C) the quarter ended June 30, 2019, in each case on or prior to October 31, 2020 and in compliance with all requirements under the Exchange Act and after October 31, 2020 (A)the Company timely filing its subsequent quarterly reports on Form 10-Q or its subsequent annual reports on Form 10-K with the SEC in the manner and within the time periods required by the Exchange Act. The default acceleration amount is equal to the greater of (A) 120% of the then outstanding principal amount of this Note plus accrued and unpaid interest; and (B) 120% of the product of (i) the conversion rate in effect as of the trading day immediately preceding the date such notice is delivered; (ii) the total then outstanding principal portion of the Note plus accrued and unpaid interest; and (iii) the greater of (x) the highest daily volume-weighted average price per share of the Company’s common stock occurring during the 30 consecutive volume-weighted average price per share of the Company’s common stock trading days ending on, and including, the daily volume-weighted average price per share of the Company’s common stock on the trading day before the date the applicable event of default occurred. In connection with High Trail Note, the Company granted a warrant to purchase 15,000,000 shares of its common stock to High Trail at an exercise price of $0.58 per share expiring on June 8, 2025. Under the Forbearance Agreement, the exercise price of the warrant was reduced to $0.37 per share. Delisting of the Company’s Common Stock On November 5, 2020, the Company notified the Nasdaq Hearings Panel that it would not be able to file its Quarterly Report on Form 10-Q for the period ended September 30, 2019, its amended Annual Report on Form 10-K/A for the year ended December 31, 2018, its Annual Report on Form 10-K for the year ended December 31, 2019 or its Quarterly Reports on Form 10-Q for the periods ended March 31, 2020 and June 30, 2020 by November 9, 2020, the date by which the Hearing Panel had required the Company to make such filings in order for the Company’s common stock to remain listed on Nasdaq. In response to the Company’s notice to Nasdaq that it would not satisfy the conditions to the exception to the listing requirements granted by the Hearings Panel, Nasdaq notified the Company by letter dated November 10, 2020 that the Company’s common stock would be delisted, and trading of the Company’s common stock on Nasdaq’s Capital Market was suspended effective at the open of business on November 12, 2020. After the trading of the Company’s common stock was suspended by Nasdaq, prices for the Company’s common stock began to be quoted on the OTC Markets Group Inc.’s Pink Open Market. The delisting became effective on February 12, 2021. |
Business and Summary of Signi_2
Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Business and Summary of Significant Accounting Policies | |
Description of Business | Description of Business Pareteum is an experienced provider of Communications Platform as a Service (“CPaaS”) solutions. Pareteum empowers enterprises, communications service providers, early-stage innovators, developers, IoT, and telecommunications infrastructure providers with the freedom and control to create, deliver and scale innovative communications experiences. The Pareteum CPaaS solutions connect people and devices around the world using the secure, ubiquitous, and highly scalable solution to deliver data, voice, video, SMS/text messaging, media, and content enablement. Pareteum has developed mobility, messaging, connectivity and security services and applications. The Pareteum platform hosts integrated IT/Back Office and Core Network functionality for mobile network operators and other enterprises, which allows our customers to implement and leverage mobile communications solutions on a fully outsourced SaaS, PaaS and/or IaaS basis: made available either as an on-premise solution or as a fully hosted service in the Cloud, depending on the needs of our customers. Pareteum also delivers an Operational Support System (“OSS”) for channel partners, with Application Program Interfaces (“APIs”) for integration with third party systems, workflows for complex application orchestration, customer support with branded portals and plug-ins for a multitude of other applications. These features facilitate and improve the ability of our channel partners to provide support and to drive sales. As of October 1, 2018, the Company acquired Artilium plc (“Artilium”), which operates as a wholly owned subsidiary of the Company. Artilium is a software development company active in the enterprise communications and core telecommunications markets delivering software solutions which layer over disparate fixed, mobile and IP networks to enable the deployment of converged communication services and applications. As of February 12, 2019, the Company acquired iPass Inc. (“iPass”), which operates as a wholly owned subsidiary of the Company. iPass is a cloud-based service provider of global mobile connectivity, offering Wi-Fi access on any mobile device through its SaaS platform. |
Liquidity | Liquidity As reflected in the accompanying consolidated financial statements, the Company reported net loss of $226,770 and $18,024 for the years ended December 31, 2019 and 2018, respectively, and had negative working capital of $31,272 and an accumulated deficit of $543,902 as of December 31, 2019. The cash balance, including restricted cash, as of December 31, 2019, was $5,902. On June 8, 2020, the Company issued a $17.5 million 8% Senior Secured Convertible Note (the “High Trail Note”) to High Trail Investments SA LLC (“High Trail”) due April 1, 2025 for an aggregate purchase price of $14 million, of which $7 million is currently maintained in one or more blocked accounts. The terms of the High Trail Note and related documents require the Company to meet certain specified conditions and covenants, some of which have not been satisfied by the dates required, including (i) the Company filing its restated financial statements with the Securities and Exchange Commission (“SEC”) for (a) the fiscal year ended December 31, 2018, (b) the quarter ended March 31, 2019 and (c) the quarter ended June 30, 2019, in each case on or prior to October 31, 2020, (ii) after October 31, 2020, the Company timely filing its subsequent quarterly reports on Form 10‑Q or its subsequent annual reports on Form 10‑K with the SEC in the manner and within the time periods required under the Exchange Act and (iii) the Company maintaining the listing of its common stock on the Nasdaq Stock Market (see Note 22, Subsequent Events ). As a result, on December 1, 2020, we entered into a forbearance agreement (the “Forbearance Agreement”) with High Trail under which: (i) we admitted that we were in default of several obligations under the High Trail Note and related agreements, (ii) High Trail acknowledged such defaults and agreed not to exercise any right or remedy under the High Trail Note or the related securities purchase agreement, warrant or security documents, including its right to accelerate the aggregate amount outstanding under the High Trail Note, until the earlier of December 31, 2020 (since extended to February 28, 2021), the date of any new event of default or initiation of any action by the Company to invalidate any of the representations and warranties made in the Forbearance Agreement. As a result of the defaults, the interest rate paid on the principal outstanding under the High Trail Note increased to 18% per annum. As partial consideration for its agreement to not exercise any right or remedy under the High Trail financing documents, we agreed with High Trail to make certain changes to the High Trail Note and related agreements. In this regard, we agreed to delete the “Floor Price” of $0.10 that had previously limited the number of shares of Company common stock into which (i) the outstanding indebtedness could be converted upon default and (ii) payments of interest could be made. We also agreed to increase the number of shares it was required to reserve for issuance upon conversion of the High Trail Note and to decrease the exercise price of the related warrant from $0.58 to $0.37. Because of the limited nature of the relief provided under the Forbearance Agreement, which does not lower the amounts payable in principal or interest, the Company believes that it will not have sufficient resources to fund its operations and meet the obligations specified in the note for the next twelve months following the filing of this Annual Report. The Company’s software platforms require ongoing funding to continue the current development and operational plans and the Company has a history of net losses. The Company will continue to expend substantial resources for the foreseeable future in connection with the continued development of its software platforms. These expenditures will include costs associated with research and development activity, corporate administration, business development, and marketing and selling of the Company’s services. In addition, other unanticipated costs may arise. As a result, the Company believes that additional capital will be required to fund its operations and provide growth capital to meet the obligations under the High Trail Note. Accordingly, the Company will have to raise additional capital in one or more debt and/or equity offerings and continue to work with High Trail to cure the defaults. However, there can be no assurance that the Company will be successful in raising the necessary capital or that any such offering will be available to the Company on terms acceptable to the Company, or at all. If the Company is unable to raise additional capital that may be needed and with acceptable terms, this would have a material adverse effect on the Company. Furthermore, the recent outbreak of the COVID‑19 pandemic has significantly disrupted world financial markets, has negatively impacted U.S. market conditions and may reduce opportunities for the Company to seek out additional funding. In particular, a decline in the market price of the Company’s common stock, coupled with the stock’s delisting from the Nasdaq Capital Market, could make it more difficult to sell equity or equity-related securities in the future at a time and price that the Company deems appropriate. The factors discussed above raise substantial doubt as to the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Pareteum and its subsidiaries and have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). All intercompany transactions and account balances have been eliminated in consolidation. |
Foreign Currency Translation | Foreign Currency Translation The Company’s consolidated financial statements were translated into U.S. dollars in accordance with ASC 830, Foreign Currency Matters (“ASC 830”). The majority of the Company’s operations are carried out in Euros. For all operations outside of the U.S., assets and liabilities are translated into U.S. dollars using the period end exchange rates and the average exchange rates as to revenues and expenses, and capital accounts were translated at their historical exchange rates when the capital transaction occurred. In accordance with ASC 830, net gains and losses resulting from translation of foreign currency financial statements are included in the Statement of Changes in Stockholders’ Equity as Other comprehensive income (loss). Foreign currency transaction gains and losses are included in the Consolidated Statements of Comprehensive Loss, under the line item “Other income (expense), net”. |
Contingent loss | Contingent Losses The Company records a provision for contingent losses when it is both probable that a liability will be incurred and the amount or range of the loss can be reasonably estimated. An unfavorable outcome to any legal or regulatory matter, if material, could have an adverse effect on the Company's operations or its financial position, liquidity or results of operations. The Company expenses legal fees as incurred. |
Use of Estimates | Use of Estimates The preparation of the accompanying consolidated financial statements conforms with accounting principles generally accepted in the U.S. and requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and intangible assets acquired through acquisitions. Significant estimates include the bad debt allowance; revenue recognition; impairment of goodwill, intangible assets and long-lived assets; valuation of financial instruments; realization of deferred tax assets; useful lives of long-lived assets; share-based compensation and contingent losses. Actual results may differ from these estimates under different assumptions or conditions. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. |
Restricted Cash | Restricted Cash Restricted cash as of December 31, 2019 and 2018 was $1,455 and $431, respectively, and consists primarily of cash deposited in blocked accounts as bank guarantees for corporate credit cards and letters of credit issued to vendors related to contract performance. |
Accounts Receivables, net | Accounts Receivables, net The Company has a geographically dispersed customer base. The Company maintains an allowance for potential credit losses on accounts receivable. The Company makes ongoing assumptions relating to the collectability of our accounts receivable. The accounts receivable amounts presented on our Consolidated Balance Sheets include an allowance for accounts that might not be collected. In determining the amount of the allowance, the Company considers its historical level of credit losses. The Company also makes judgments about the creditworthiness of significant customers based on ongoing credit evaluations, and the Company assesses current economic trends that might impact the level of credit losses in the future. The Company’s allowances have generally been adequate to cover its actual credit losses. However, since the Company cannot reliably predict future changes in the financial stability of its customers, it cannot guarantee that its allowances will continue to be adequate. If actual credit losses are significantly greater than the allowance, the Company would increase its general and administrative expenses and increase its reported net losses. Conversely, if actual credit losses are significantly less than our reserve, this would eventually decrease the Company’s general and administrative expenses and decrease its reported net losses. Allowances are recorded primarily on a specific identification basis. See Note 3, Allowance for Doubtful Accounts to the Financial Statements for more information. |
Leasing Arrangements | Leasing Arrangements The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and lease liabilities in the Company’s Consolidated Balance Sheets. As of adoption of ASU No. 2016-02, “ Leases (Topic 842) ” the Company was not party to finance lease arrangements. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not generally provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The implicit rate is used when it is readily determinable. The Company’s lease agreements may have lease and non-lease components, which the Company accounts for as a single lease component. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term and variable payments are recognized in the period they are incurred. The Company’s lease agreements do not contain any residual value guarantees. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Under the available practical expedient, the Company accounts for the lease and non-lease components as a single lease component. |
Revenue Recognition | Revenue Recognition Our revenues represent amounts earned for our mobile and CPaaS solutions. Our solutions take many forms but our revenue generally consists of fixed and/or variable charges for services delivered monthly under a combined services and SaaS model. We also offer discrete (one-time) services for implementation and for development of specific functionality to properly service our customers. The following table presents our revenues disaggregated by revenue source: Years Ended December 31, 2019 2018 Monthly Service $ 61,206 $ 19,170 Installation and Software Development 843 1,088 Total revenues $ 62,049 $ 20,258 Both monthly services revenues are recognized over time and installation and software development revenues are recognized over time. The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers: Years Ended December 31, 2019 2018 Europe $ 39,957 $ 18,753 United States 20,124 956 Other geographic areas 1,968 549 Total revenues $ 62,049 $ 20,258 Monthly Service Revenues The Company’s performance obligations in a monthly Software as a Service (SaaS) and service offerings are simultaneously received and consumed by the customer and therefore, are recognized over time. For recognition purposes, we do not unbundle such services into separate performance obligations. The Company typically bills its customer at the end of each month, with payment to be received shortly thereafter. The fees charged may include a combination of fixed and variable charges with the variable charges tied to the number of subscribers or some other measure of volume. Although the consideration may be variable, the volumes are estimable at the time of billing, with “true-up” adjustments occurring in the subsequent month. Installation and Software Development Revenues The Company’s other revenues consist generally of installation and software development projects. Installation represents the activities necessary for a customer to obtain access and connectivity to the Company’s monthly SaaS and service offerings. While installation may require separate phases, it represents one promise within the context of the contract. Development consists of programming and other services which adds new functionality to a customer’s existing or new service offerings. Each development project defines its milestones and will have its own performance obligation. Revenue is recognized over time if the installation and development activities create an asset that has no alternative use for which the Company is entitled to receive payment for performance completed to date. If not, then revenue is not recognized until the applicable performance obligation is satisfied. Arrangements with Multiple Performance Obligations The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers. |
Contract Assets and Liabilities | Contract Assets and Liabilities Given the nature of the Company’s services and contracts, it has no contract assets. The Company records net billings in excess of revenues when payments are made in advance of our performance, including amounts which are refundable. Net billings in excess of revenues were $2,529 and $227 as of December 31, 2019 and 2018, respectively. Payment terms vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, payment is required before control is transferred or services are delivered to the customer. |
Cost of Revenues | Cost of Revenues Cost of Revenues Cost of revenues includes origination, termination, network and billing charges from telecommunications operators, costs of telecommunications service providers, supplies and materials, network costs, data center costs, facility cost of hosting network and equipment and cost in providing resale arrangements with long distance service providers, cost of leasing transmission facilities, international gateway switches for voice, data transmission services, and the cost of professional services of staff directly related to the generation of revenues, consisting primarily of employee-related costs associated with these services, including share-based expenses and the cost of subcontractors. Cost of revenues excludes depreciation and amortization. |
Reporting Segments | Reporting Segments The segment reporting guidance in ASC 280, Segments Reporting (“ASC 280”), defines operating segments as components of an enterprise for which discrete financial information is available and that is evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and in assessing performance. The Company has determined its Chief Executive Officer, together with its Chief Financial Officer, to be the CODM. During the assessment of segment reporting for the year ended December 31, 2019, the Company identified three operating segments. The three operating segments, Legacy Pareteum, Artilium and iPass, have been aggregated into one reportable segment as they have similar economic characteristics in that they provide communications connectivity through a communication-as-a-service platform to similar customers wishing to be connected to everything mobile. The results of this assessment also consider the impacts of recent acquisitions of Artilium and iPass and the way in which internally reported financial information is used by the CODM to make decisions and allocate resources. |
Fair Value Measurements | Fair Value Measurements In accordance with ASC 820, Fair Value Measurement (“ASC 820”), the Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. Level 2 – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments includes cash instruments for which quoted prices are available but are traded less frequently, derivative instruments whose fair values have been derived using a model where inputs to the model are directly observable in the market and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. Level 3 – Instruments that have little to no pricing observability as of the reported date. These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. The degree of judgment exercised by the Company in determining fair value is greatest for assets categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined by the lowest level input that is significant to the fair value measurement. Nonrecurring fair value measurements The Company’s nonfinancial assets measured at fair value on a nonrecurring basis include goodwill and intangible assets acquired in business combinations as well as fair value measurements used when performing its annual impairment test. The valuation methods used to determine fair value require a significant degree of management judgment to determine the key assumptions which include projected revenues and appropriate discount rates. As such, the Company classifies nonfinancial assets subjected to nonrecurring fair value adjustments at level 3 measurements. The Company hired a third-party valuation expert to value the trade names, customer relationships and the technology acquired as part of the acquisition of Artilium and iPass due to the expertise required to model the assumptions used. At December 31, 2019, goodwill and certain intangible assets were impaired and written down to their fair value; see Note 8, Goodwill and Net Intangibles . Recurring fair value measurements – Warrant Derivative Liabilities and Conversion Feature Derivative In cases where the Company needs to account for derivative liabilities, the Company uses the Monte Carlo valuation model and the Black-Scholes option pricing model to determine the value of the outstanding warrants and conversion feature, in these situations, the Company hires a third-party valuation expert to prepare such calculations due to the expertise required to model the assumptions. There were no derivative liabilities at December 31, 2019 and 2018. Number of Outstanding Warrants and/or Convertible Notes The number of outstanding warrants and/or convertible notes is adjusted every re-measurement date after deducting for the exercise or conversion of any outstanding warrants convertible notes during the previous reporting period. Stock Price at Valuation Date The closing stock price at re-measurement date being the last available closing price of the reporting period taken from www.nasdaq.com. Exercise Price The exercise price is fixed and determined under the terms of the financing facility it was issued. Remaining Term The remaining term is calculated by using the estimated term of the outstanding principal liability at the re-measurement date. Expected Volatility Management estimates expected cumulative volatility giving consideration to the expected term of the note and/or warrants and calculated the annual volatility by using the continuously compounded return calculated by using the share closing prices of an equal number of days prior to the maturity date of the note (reference period). The annual volatility is used to determine the (cumulative) volatility of the Company´s common stock. Liquidity Event We estimate the expected liquidity event considering the average expectation of the timing of fundraises and the need for those funds offset against scheduled repayment dates and the costs and/or savings of the future steps in re-modelling the organization. Risk-Free Interest Rate Management estimates the risk-free interest rate using the “Daily Treasury Yield Curve Rates” from the US Treasury Department with a term equal to the reported rate or derived by using both spread in intermediate term and rates, up to the expected maturity date of the derivative involved. Expected Dividend Yield Management estimates the expected dividend yield by giving consideration to the Company´s current dividend policies as well as those anticipated in the future considering the Company´s current plans and projections. Management currently does not believe that it is in the best interest of the Company to pay dividends at this time |
Non recurring Fair Value Measurement | Nonrecurring fair value measurements The Company’s nonfinancial assets measured at fair value on a nonrecurring basis include goodwill and intangible assets acquired in business combinations as well as fair value measurements used when performing its annual impairment test. The valuation methods used to determine fair value require a significant degree of management judgment to determine the key assumptions which include projected revenues and appropriate discount rates. As such, the Company classifies nonfinancial assets subjected to nonrecurring fair value adjustments at level 3 measurements. The Company hired a third-party valuation expert to value the trade names, customer relationships and the technology acquired as part of the acquisition of Artilium and iPass due to the expertise required to model the assumptions used. At December 31, 2019, goodwill and certain intangible assets were impaired and written down to their fair value; see Note 8, Goodwill and Net Intangibles . Recurring fair value measurements – Warrant Derivative Liabilities and Conversion Feature Derivative In cases where the Company needs to account for derivative liabilities, the Company uses the Monte Carlo valuation model and the Black-Scholes option pricing model to determine the value of the outstanding warrants and conversion feature, in these situations, the Company hires a third-party valuation expert to prepare such calculations due to the expertise required to model the assumptions. There were no derivative liabilities at December 31, 2019 and 2018. Number of Outstanding Warrants and/or Convertible Notes The number of outstanding warrants and/or convertible notes is adjusted every re-measurement date after deducting for the exercise or conversion of any outstanding warrants convertible notes during the previous reporting period. Stock Price at Valuation Date The closing stock price at re-measurement date being the last available closing price of the reporting period taken from www.nasdaq.com. Exercise Price The exercise price is fixed and determined under the terms of the financing facility it was issued. Remaining Term The remaining term is calculated by using the estimated term of the outstanding principal liability at the re-measurement date. Expected Volatility Management estimates expected cumulative volatility giving consideration to the expected term of the note and/or warrants and calculated the annual volatility by using the continuously compounded return calculated by using the share closing prices of an equal number of days prior to the maturity date of the note (reference period). The annual volatility is used to determine the (cumulative) volatility of the Company´s common stock. Liquidity Event We estimate the expected liquidity event considering the average expectation of the timing of fundraises and the need for those funds offset against scheduled repayment dates and the costs and/or savings of the future steps in re-modelling the organization. Risk-Free Interest Rate Management estimates the risk-free interest rate using the “Daily Treasury Yield Curve Rates” from the US Treasury Department with a term equal to the reported rate or derived by using both spread in intermediate term and rates, up to the expected maturity date of the derivative involved. Expected Dividend Yield Management estimates the expected dividend yield by giving consideration to the Company´s current dividend policies as well as those anticipated in the future considering the Company´s current plans and projections. Management currently does not believe that it is in the best interest of the Company to pay dividends at this time. |
Financial Instruments | Financial Instruments The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, notes receivable, promissory notes (payable) and customer deposits approximate their fair values based on their short-term nature. The recorded values of long-term debt, including the 8% Series C Redeemable Preferred Stock, approximate their fair values, as interest approximates market rates (Level 2). The Company’s unsecured convertible promissory note conversion feature, a derivative instrument in 2018, is recognized in the balance sheet at its fair values with changes in fair market value reported in earnings (Level 3). |
Share-based Compensation | Share-based Compensation The Company follows the provisions of ASC 718, Compensation-Stock Compensation , (“ASC 718”). Under ASC 718, share-based awards are recorded at fair value as of the grant date and recognized as expense with an adjustment for forfeiture over the employee’s requisite service period (the vesting period, generally up to three years). The share-based compensation cost based on the grant date fair value is amortized over the period in which the related services are received. In periods prior to January 1, 2019, the Company accounted for the issuance of share-based compensation awards to contractors and advisory board members in accordance with ASC 505‑50 Equity-Based Payments to Non-Employees (“ASC 505‑50”). Under ASC 505‑50, we determined the fair value of the options or share-based compensation awards granted as either the fair value of the consideration received, or the fair value of the equity instruments issued, whichever is more reliably measurable. On January 1, 2019, the Company adopted Accounting Standards Update 2018-07, Improvements to Nonemployee Share-Based Payment Accounting requiring the measurement of the share-based compensation awards granted to non-employees at the grant-date fair value, in a manner consistently with equity-classified awards issued to employees. To determine the value of our stock options at grant date under our employee stock option plan, the Company uses the Black-Scholes option-pricing model. The use of this model requires the Company to make many subjective assumptions. The following addresses each of these assumptions and describes our methodology for determining each assumption: Expected Term The expected term represents the period that the stock option awards are expected to be outstanding. The Company uses the simplified method for estimating the expected term of the option, by taking the average between time to vesting and the contract term of the award. Expected Volatility The Company estimates expected cumulative volatility giving consideration to the expected term of the option of the respective award, and the calculated annual volatility by using the continuously compounded return calculated by using the share closing prices of an equal number of days prior to the grant-date (reference period). The annual volatility is used to determine the (cumulative) volatility of its common stock. Forfeiture rate The Company is using the aggregate forfeiture rate. The aggregate forfeiture rate is the ratio of pre-vesting forfeitures over the awards granted (pre-vesting forfeitures/grants). Risk-Free Interest Rate The Company estimates the risk-free interest rate using the “Daily Treasury Yield Curve Rates” from the U.S. Treasury Department with a term equal to the reported rate or derived by using both spread in intermediate term and rates, to the expected term of the award. Expected Dividend Yield The Company estimates the expected dividend yield by giving consideration to our current dividend policies as well as those anticipated in the future considering our current plans and projections. |
Income Taxes | Income Taxes Current tax is based on the income or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purpose and is calculated using tax rates that have been enacted at the balance sheet date. Deferred tax assets are recognized for the expected future tax benefit to be derived from various sources such as tax losses and tax credit carry-forwards. Establishment of a valuation allowance is provided when it is more likely than not that deferred taxes will not be fully realized. In the ordinary course of a global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Some of these uncertainties arise as a consequence of revenue sharing and reimbursement arrangements among related entities, the identification of revenue and expenses that qualify for preferential tax treatment and assessment of the sustainability of tax positions based on several factors including changes in facts or circumstances, changes in tax law, settled audit issues and new audit activity. The Company files federal income tax returns in the U.S., various U.S. state jurisdictions and various foreign jurisdictions. The Company’s income tax returns are open to examination by federal, state and foreign tax authorities, generally for 3 years but can be extended to 6 years under certain circumstances. In other jurisdictions the period for examinations depends on local legislation, typically ranging from three to eight years. The Company’s policy is to record estimated interest and penalties on unrecognized tax benefits as part of its income tax provision. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) For the years ended December 31, 2019 and 2018, the Company’s comprehensive loss consisted of net losses and foreign currency translation adjustments. |
Business Combinations | Business Combinations The acquisition method of accounting for business combinations as per ASC 805, Business Combinations (“ASC 805”), requires the Company to use significant estimates and assumptions, including fair value estimates, as of the business combination date and to refine those estimates as necessary during the measurement period (defined as the period, not to exceed one year, in which the Company may adjust the provisional amounts recognized for a business combination). Under the acquisition method of accounting, the identifiable assets acquired, the liabilities assumed, and any non-controlling interests acquired in the acquisition are recognized as of the closing date for purposes of determining fair value. The Company measures goodwill as of the acquisition date as the excess of consideration transferred, over the net of the acquisition date fair value of the identifiable assets acquired and liabilities assumed. Costs that the Company incurs to complete the business combination such as investment banking, legal and other professional fees are not considered part of consideration and the Company charges them to general and administrative expense as they are incurred. During the measurement period, the Company adjusts the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. Measurement period adjustments are recognized in the reporting period in which they are determined. |
Goodwill | Goodwill The Company records goodwill when the fair value of consideration transferred in a business combination exceeds the fair value of the identifiable assets acquired and liabilities assumed. Goodwill and other intangible assets that have indefinite useful lives are not amortized, but the Company tests them for impairment annually during its fourth fiscal quarter and whenever an event or change in circumstances indicates that the carrying value of the asset is impaired. The authoritative guidance for the goodwill impairment model includes a two-step process. First, it requires a comparison of the carrying value of the reporting unit to its fair value. If the fair value is determined to be less than the carrying value, a second step is performed. In the second step, the Company compares the implied fair value of goodwill to its carrying value in the reporting unit. The shortfall of the fair value below carrying value, if any, would represent the amount of goodwill impairment charge. The Company uses the criteria in ASU No. 2011‑08 Intangibles – Goodwill and Other (Topic 350) : Testing Goodwill for Impairment , which permits the Company to make a qualitative assessment of whether it is more likely than not than not that a reporting unit’s fair value is less than the carrying amount before applying the two-step goodwill impairment test. If the Company concludes that it is not more likely than not that the fair value of a reporting unit is less that its carrying amount, it would not need to perform the two-step impairment test for that reporting unit. The Company tests goodwill for impairment in the fourth quarter of each year, or sooner should there be an indicator of impairment as per ASC 350. The Company periodically analyzes whether any such indicators of impairment exist. Such indicators include a sustained, significant decline in the Company’s stock price and market capitalization, a decline in the Company’s expected future cash flows, a significant adverse change in legal factors or in the business climate, unanticipated competition, and/or slower growth rate, among others. In the Company’s case, the primary indicators are the continuing losses and decline in the Company's expected future cash flows. At December31, 2019 goodwill was impaired and written down to fair value; see Note 8, Goodwill and Net Intangibles . |
Long-Lived Assets and Intangible Assets | Long-Lived Assets and Intangible Assets In accordance with ASC 30, long-lived assets, including intangible assets subject to amortization, are carried at cost less accumulated amortization and impairment charges. Intangible assets are amortized on a straight-line basis over the expected useful lives of the assets, between three and ten years. Long-lived assets, including intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Impairment is measured based on the amount of the carrying a that exceeds the fair value of the asset. At December31, 2019, certain intangible assets were impaired and written down to their fair value; see Note 8, Goodwill and Net Intangibles . |
Property and Equipment, Internal Use Software and Third - Party Software | Property and Equipment, Internal Use Software and Third - Party Software Property and equipment are initially recorded at cost. Additions and improvements are capitalized, while expenditures that do not enhance the assets or extend the useful life are charged to operating expenses as incurred. Included in property and equipment are certain costs related to the development of the Company’s internally developed software technology platform. The Company has adopted the provisions of ASC 350‑40, Internal-Use Software , and therefore the costs incurred in the preliminary stages of development are expensed as incurred. The Company capitalizes all costs related to software developed or obtained for internal use when management commits to funding the project; the preliminary project stage is completed and when technological feasibility is established. Software developed for internal use has generally been used to deliver hosted services to the Company’s customers. Technological feasibility is considered to have occurred upon completion of a detailed program design that has been confirmed by documenting the product specifications, or to the extent that a detailed program design is not pursued, upon completion of a working model that has been confirmed by testing to be consistent with the product design. Once a new functionality or improvement is released for operational use, the asset is moved from the property and equipment category “construction in progress” (“CIP”) to a property and equipment asset subject to depreciation. In addition, account management also records equipment acquired from third parties, until it is ready for use. Capitalization of costs ceases when the project is substantially complete and ready for its intended use. Depreciation is applied using the straight-line method over the estimated useful lives of the assets once the assets are placed in service. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. There were no material impairment losses recognized in 2019 and 2018 related to property and equipment, internal use software and third-party software. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. ASU2018-07became effective for the Company on January 1, 2019. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In July 2017, the FASB issued ASU No. 2017-11, Earnings per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815) (“ASU 2017-11”). ASU 2017-11 consists of two parts. The amendments in Part I of this update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common stockholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this update re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part II of this update do not require any transition guidance because those amendments do not have an accounting effect. ASU2017-11became effective for the Company on January 1, 2019. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). This new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. In July 2018, the FASB issued ASU No. 2018-11 which provides an alternative transition method that allows entities to apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has adopted the requirements of ASU 2016-02 on January 1, 2019, using the modified retrospective method. The Company took advantage of the practical expedient options, which allows an entity not to reassess whether any existing or expired contracts contain leases. Upon adoption of this standard on January 1, 2019, the Company recorded right of use assets and corresponding lease liabilities of $1.8 million. The standard did not have a material impact on our consolidated income statements. We elected to apply the practical expedient related to land easements, as well as the package of practical expedients permitted under the transition guidance in the new standard, which allowed us to carryforward our historical lease classification. In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”). The ASU allows entities to reclassify certain “stranded tax effects” resulting from the Tax Cuts and Jobs Act (the “Tax Act”) from accumulated other comprehensive income (“AOCI”) to retained earnings. Under existing guidance in ASC 740, Income Taxes , adjustments to deferred tax assets and liabilities resulting from a change in tax laws or rates occur within the period that the enactment of these changes occur and any adjustments are included in income from continuing operations. Deferred income taxes originally recognized through other comprehensive income were initially measured at the previous income tax rate resulting in a disproportionate tax balance remaining in AOCI from recognizing the tax rate adjustments from the Tax Act in income from continuing operations (i.e., “stranded tax effects”). The amendments in the ASU have been applied under adoption of this standard for the 2019 tax year, and the effects of the change resulted in an immaterial adjustment to accumulated deficit. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ,” (“ASU 2016-13”) which requires measurement and recognition of expected versus incurred credit losses for financial assets held. ASU 2016-13 is effective for the Company’s annual and interim reporting periods beginning January 1, 2023, with early adoption permitted on January 1, 2019. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment , which simplifies the accounting for goodwill impairments by eliminating Step 2 from the goodwill impairment test. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, versus determining an implied fair value in Step 2 to measure the impairment loss. ASU 2017-04 is effective for annual periods beginning after December 15, 2019. The Company does not expect the provisions of ASU 2017-04 to have a material impact on the Company’s consolidated financial position, results of operations and cash flows. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (“ASU 2018-15”), which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). ASU 2018-15 is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption of the amendments is permitted including adoption in any interim period. The guidance can be applied either prospectively to all implementation costs incurred after the date of adoption or retrospectively. The Company adopted this standard on January 1, 2020 on a prospective basis. The adoption of ASU 2018-15 did not have a material impact on the Company’s financial condition, results of operations, cash flows, and financial statement disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820)—Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement , to modify the disclosure requirements for fair value measurements. The standard adds, modifies, and removes previous disclosure requirements. Eliminated disclosures include items such as removing disclosures for the valuation process for Level 3 measurements, policy for timing of transfers between levels of the fair value hierarchy and changes in unrealized gains and losses included in earnings for recurring Level 3 measurements held at the reporting period. The guidance is effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted. The Company does not anticipate the adoption of ASU 2018-13 to have a material impact on the disclosures accompanying its consolidated financial statement statements. In November 2019, the FASB issued ASU 2019-08, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements – Share-Based Consideration Payable to a Customer . Under this new guidance, share-based payment awards issued to a customer should be recorded as a reduction of the transaction price in revenue with an amount measured under the grant-date fair value of the award. Changes in the measurement of the share-based payments after the grant date that are due to the form of the consideration are not included in the transaction price and are recorded elsewhere in the income statement. The award is measured and classified under ASC 718 for its entire term, unless the award is modified after it vests and the grantee is no longer a customer. The new guidance is effective in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adoption of ASU 2019-08 on its financial statements. In December 2019, the FASB issued ASU 2019-12 , Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for the Company beginning in fiscal 2021. The Company is currently evaluating the impact of adoption of ASU 2019-12 on its consolidated financial statements, financial condition or results of operations. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for convertible instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. Upon adoption, a convertible debt instrument will be accounted for as a single liability at amortized cost unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging , or (2) a convertible debt instrument was issued at a substantial premium. These changes will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that was bifurcated according to previously existing rules. ASU 2020-06 also requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will be no longer available. The new guidance is effective for public entities excluding smaller reporting companies in fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. For public business entities that meet the definition of a smaller reporting company, the amendments in ASU 2020-06 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023. ASU 2020-06 is effective for us in our first quarter of fiscal 2024. The Company is currently evaluating the impact of adoption of ASU 2020-06 on its consolidated financial statements, financial condition or results of operations. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This ASU provides optional guidance for a limited period of time to ease the burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. This would apply to companies meeting certain criteria that have contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This standard is effective as of March 12, 2020 through December 31, 2022 and may be applied to contract modifications made and hedging relationships entered into from the beginning of an interim period that includes or is subsequent to March 12, 2020. The Company is currently evaluating the impact of adoption of ASU 2020-04 on its consolidated financial statements, financial condition or results of operations. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. |
Business and Summary of Signi_3
Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business and Summary of Significant Accounting Policies | |
Disaggregation of Revenue [Table Text Block] | The following table presents our revenues disaggregated by revenue source: Years Ended December 31, 2019 2018 Monthly Service $ 61,206 $ 19,170 Installation and Software Development 843 1,088 Total revenues $ 62,049 $ 20,258 |
Revenue from External Customers by Geographic Areas [Table Text Block] | The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers: Years Ended December 31, 2019 2018 Europe $ 39,957 $ 18,753 United States 20,124 956 Other geographic areas 1,968 549 Total revenues $ 62,049 $ 20,258 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Device Scape | |
Schedule of allocation of the purchase price | Purchase consideration: Cash consideration and transaction costs $ 2,137 Shares issued to stockholders 1,692 Total purchase consideration $ 3,829 Purchase price allocation: Assets: Accounts receivable $ 71 Escrow receivable 200 Intangible assets 3,646 Total assets 3,917 Liabilities: Accounts payable & other liabilities 88 Total liabilities 88 Estimated fair value of net assets acquired $ 3,829 |
Schedules of allocation of the purchase price for Devicescape's intangible assets | The allocation of the purchase price for Devicescape’s intangible assets were as follows: Estimated Useful Fair Life Value (Years) Developed technology $ 3,525 8 Customer relationships 121 8 Intangible assets $ 3,646 |
iPass, Inc. Acquisition | |
Schedule of allocation of the purchase price | Purchase price allocation: Assets: Cash and cash equivalents $ 860 Accounts receivable 4,344 Property, plant and equipment 873 Other assets 4,890 Intangible assets 11,106 Total assets 22,073 Liabilities: Accounts payable, accrued expenses and other current liabilities $ 17,207 Deferred revenue 1,700 Loans outstanding 9,989 Other liabilities 857 Total liabilities 29,753 Estimated fair value of net assets acquired (7,680) Goodwill $ 37,821 |
Schedules of allocation of the purchase price for Devicescape's intangible assets | The allocation of the purchase price for iPass’s intangible assets were as follows: Estimated Useful Fair Life Value (Years) Developed Technology $ 2,585 8 Customer relationships 8,378 5 Tradename 143 2 Intangible assets $ 11,106 |
Artilium plc. Acquisition | |
Schedule of allocation of the purchase price | Purchase consideration: Cash consideration $ 8,142 Shares issued to stockholders 112,535 Fair value of previously held equity investment 9,601 Total purchase consideration $ 130,278 Purchase price allocation: Assets: Current and long-term assets (including cash and cash equivalents of $825) $ 4,726 Intangible assets 40,800 Total assets 45,526 Liabilities: Current and long-term liabilities 7,982 Deferred tax liabilities 8,641 Total liabilities 16,623 Estimated fair value of net assets acquired 28,903 Goodwill $ 101,375 |
Schedules of allocation of the purchase price for Devicescape's intangible assets | The allocation of the purchase price for Artilium’s intangible assets were as follows: Estimated Useful Fair Life Value (Years) Technology $ 20,600 6 Customer relationships 16,800 18 Tradename 3,400 5 Intangible assets $ 40,800 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid Expenses and Other Current Assets | |
Schedule of prepaid expenses and other current assets | December 31, December31, Prepaid expenses and other current assets 2019 2018 Prepaid insurance and legal fees $ 762 $ 219 Prepaid software license and support 890 619 Prepaid payroll taxes 214 — Prepaid expenses-other 714 290 Valued added tax 591 609 Other receivables 451 Other assets 831 347 Prepaid expenses and other current assets $ 4,453 $ 2,084 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment, Net | |
Schedule of property and equipment | As of December 31, 2019 and December 31, 2018, property and equipment consisted of the following: Average Estimated Useful December 31, December 31, Property and equipment Lives 2019 2018 Furniture and fixtures 5 $ 171 $ 168 Computer, communication and network equipment 3 - 10 17,450 21,009 Software 5 4,150 5,311 Automobiles 5 13 13 Leasehold improvements 5 131 — Software development 1 8,552 1,735 Total property and equipment 30,467 28,236 Less: accumulated depreciation and amortization (24,205) (22,792) Total property and equipment, net $ 6,262 $ 5,444 |
Goodwill and Net intangibles,_2
Goodwill and Net intangibles, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Net Intangibles, Net | |
Schedule of changes in goodwill | Changes in goodwill were as follows (As restated) : Goodwill Balance at December 31, 2017 $ — Business acquisition 101,375 Balance at December 31, 2018 $ 101,375 Business acquisition 37,821 Impairment (129,097) Balance at December 31, 2019 $ 10,099 |
Schedule of net intangibles | Net intangibles consisted of the following amortizing intangibles: As of December 31, 2019 As of December 31, 2018 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Impairment Total Amount Amortization Impairment Total Technology $ 25,971 $ (4,102) $ (15,369) $ 6,500 $ 20,720 $ (859) $ — $ 19,861 Customer relationships 25,066 (2,192) (14,803) 8,071 16,800 (233) — 16,567 Trade names 3,374 (725) (1,720) 929 3,400 (170) — 3,230 Net intangibles $ 54,411 $ (7,019) $ (31,892) $ 15,500 $ 40,920 $ (1,262) $ — $ 39,658 |
Schedule of impairment charges related to finite lived intangible assets | Impairment charges related to finite lived intangible assets during the year ended December 31, 2019 were $31,892. There were no impairment charges for the year ended December 31, 2018. The 2019 impairment charge by type of intangible asset was as follows: Original useful Impairment charge life (years) Technology $ 15.369 6-8 Customer relationships 14,803 11-18 Trade names 1,720 3-5 Total impairment charge $ 31,892 |
Schedule of estimated annual amortization expense related to finite-lived intangible assets | The estimated annual amortization expense related to finite-lived intangible assets as of December 31, 2019, is as follows: Year Ended December 31, Amortization 2020 $ 2,606 2021 2,606 2022 2,556 2023 2,556 2024 2,556 2025 and thereafter 2,620 $ 15,500 |
Accrued Expenses and Other Pa_2
Accrued Expenses and Other Payables (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Expenses and Other Payables | |
Schedule of accrued expenses and other payables | As of December 31, 2019 and December 31, 2018, accrued expenses and other payables were comprised of the following: December 31, December 31, Accrued expenses and other payables 2019 2018 Accrued selling, general and administrative expenses $ 2,720 $ 1,189 Accrued salaries and bonuses 2,005 1,596 Accrued employee benefits 564 — Accrued restructuring & acquisition related costs — 1,885 Accrued cost of service 627 813 Accrued taxes (including VAT) 2,637 1,834 Accrued interest payable 53 68 Accrued customer credit 3,393 — Other accrued expenses 1,617 356 Accrued expenses and other payables $ 13,616 $ 7,741 |
Promissory Note and Unsecured_2
Promissory Note and Unsecured Convertible Promissory Notes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Unsecured Convertible Promissory Notes | |
Schedule of promissory notes | Conversions (during 2019) Regular including Outstanding Breakdown of the 9% Unsecured Subordinated Convertible December Amortizations accelerated December Promissory Note (Matured December 2018 through June 2019) 31, 2019 (during 2019) amortization 31, 2018 Convertible Note Principal Amount Principal Amount $ — $ — $ 105 $ (105) 10% Early Repayment — — 11 (11) Debt Discounts & Financing Costs Investor Warrants — (2) — 2 Conversion Feature value — (1) — 1 7% Agent Warrants — (1) — 1 Financing Costs — (5) — 5 $ — $ (9) $ 116 $ (107) |
9% Convetrible Note | |
Schedule of promissory notes | Agreement Breakdown of the conversion rights for outstanding convertible notes: Outstanding Amendments Exercises / Outstanding Number of underlying shares for Conversion of December 31, / Interest Conversions December 31, outstanding unsecured convertible notes 2019 effects / Expirations 2018 9% Convertible Note – Investors — 44,720 (84,220) 39,500 Outstanding Conversion Features — 44,720 (84,220) 39,500 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Promissory Notes and Unsecured Convertible Promissory Notes | |
Summary of components of the Redeemable Preferred Stock liability | As of December 31, 2019, the components of the Series C Redeemable Preferred Stock liability consisted of the following: December 31, 2019 Series C Redeemable Preferred Stock, stated value $ 10,533 Unamortized debt discount (5,776) Accretion of redemption premium 25 Accrued dividend 16 Series C Redeemable Preferred Stock, net $ 4,798 |
Summary of amounts recorded in the Consolidated Statement of Operations and Comprehensive Loss in connection with Redeemable Preferred Stock liability | The following table details the amounts in the Consolidated Statement of Operations and Comprehensive Loss in connection with Series C Redeemable Preferred Stock liability as of December 31, 2019: December 31, 2019 Location Amortization of debt discount $ 85 Interest expense-debt discount / Amortization of deferred financing costs Accretion of redemption premium 25 Interest expense-debt discount Accrued dividend 16 Interest expense Total interest and amortization expense $ 126 |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Lease Commitments | |
Summary of components of the lease expense | The components of the lease expense recorded in the consolidated statement of operations were as follows: Year ended December 31, 2019 Operating lease cost $ 2,313 Finance lease cost: Amortization of assets 9 Interest on lease liabilities 2 Total net lease cost $ 2,324 |
Summary of supplemental balance sheet information related to leases | Supplemental balance sheet information related to leases was as follows: As of Leases Classification December31, 2019 Assets: Operating lease assets Operating right-of-use asset, net of accumulated amortization (1) $ 2,241 Finance lease assets Property and equipment, net of accumulated depreciation (2) 133 Total leased assets $ 2,374 Liabilities: Current Operating Operating lease liability, current $ 2,376 Finance Financing lease liability, current 46 Noncurrent Operating Operating lease liability, noncurrent 333 Finance Finance lease liability, noncurrent 82 Total lease liabilities $ 2,837 (1) Operating lease assets are recorded net of accumulated amortization of $2,006 as of December 31, 2019. Finance lease assets are recorded net of accumulated depreciation of $9 as of December 31, 2019. |
Summary of supplemental cash flow and other information related to leases | Supplemental cash flow and other information related to leases was as follows: Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 1,656 Operating cash outflows from finance leases (interest) $ 2 Financing cash outflows from finance leases $ 17 Weighted-average remaining lease term (in years): Operating leases 1.64 Finance leases 2.67 Weighted-average discount rate: Operating leases 9.22 % Finance leases 5.00 % |
Summary of maturities of lease liabilities | Maturities of lease liabilities were as follows: As of December 31, 2019 Operating Finance Leases Leases 2020 $ 2,524 $ 51 2021 196 51 2022 54 34 2023 45 — 2024 45 — Thereafter 22 — Total lease payments 2,886 136 Less: imputed interest (177) (8) Total lease liabilities 2,709 128 Less: current liabilities (2,376) (46) Long-term lease liabilities $ 333 $ 82 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Description Of Detail Information About Warrants [Table Text Block] | The table below summarizes the warrants outstanding (in share amounts) as of December 31, 2019 and as of December 31, 2018: Warrants: Number of Warrants Outstanding as of January 1, 2018 18,135,832 Issued 196,750 Exercised (14,463,097) Expirations (80,003) Outstanding as of December 31, 2018 3,789,482 Issued 39,199,998 Exercised (4,818,269) Expirations (60,000) Outstanding as of December 31, 2019 38,111,211 |
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | Exercise/ Conversion price(s) Outstanding Warrants (range) Expiring December 31, 2019 December 31, 2018 Equity Warrants – Fundraising $ 1.05 - $5.375 2019 - 2024 38,111,211 3,789,482 |
Basic and diluted net loss pe_2
Basic and diluted net loss per share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Basic and diluted net loss per share | |
Schedule of the diluted share base includes shares related to convertible debt, warrants to purchase Common Stock and employee awards and or stock options | Dilutive Securities 2019 2018 Convertible Notes — 39,500 Warrants 38,111,211 3,789,482 Time Conditioned Share Awards 2,563,359 1,480,557 Employee Stock Options 6,924,436 3,663,812 47,599,006 8,973,351 |
Employee Benefit Plan (Tables)
Employee Benefit Plan (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
2008 Long-Term Incentive Compensation Plan [Member] | |
Share-based Compensation, Stock Options, Activity [Table Text Block] | The stock option activity of the 2008 Plan for the years ended December 31, 2019 and 2018 follows: Weighted Initial Fair Average Market Value Number of Exercise (Outstanding Options Price Options) Outstanding as of December 31, 2017 1,128,384 $ 9.40 $ 6,854 Revoked (cancelled) (786,697) 6.33 (3,495) Forfeitures (175) 3.07 — Expirations (138,246) 25.60 (1,997) Outstanding as of December 31, 2018 203,266 10.74 1,381 Forfeitures (71,998) 7.72 (335) Outstanding as of December 31, 2019 131,268 $ 12.40 $ 1,046 The stock option activity of the 2008 Plan for the years ended December 31, 2019 and 2018 follows: Weighted Initial Fair Average Market Value Number of Exercise (Outstanding Options Price Options) Outstanding as of December 31, 2017 1,128,384 $ 9.40 $ 6,854 Revoked (cancelled) (786,697) 6.33 (3,495) Forfeitures (175) 3.07 — Expirations (138,246) 25.60 (1,997) Outstanding as of December 31, 2018 203,266 10.74 1,381 Forfeitures (71,998) 7.72 (335) Outstanding as of December 31, 2019 131,268 $ 12.40 $ 1,046 Weighted Initial Fair Market Average Value Exercise (Outstanding Number of Options Price Options) Outstanding as of December 31, 2017 1,899,800 $ 1.00 $ 1,053 Granted 1,999,685 2.42 3,378 Exercised (59,220) 1.00 (59) Forfeitures (374,663) 1.55 (766) Expirations (5,056) 1.00 (5) Outstanding as of December 31, 2018 3,460,546 $ 1.76 $ 3,601 Exercised (177,678) 1.19 (129) Forfeitures (294,178) 2.37 (442) Expirations (38,171) 1.09 (25) Outstanding as of December 31, 2019 2,950,519 $ 1.74 $ 3,005 |
2017 Long-Term Incentive Compensation Plan [Member] | |
Share-based Compensation, Stock Options, Activity [Table Text Block] | The stock option activity of the 2008 Plan for the years ended December 31, 2019 and 2018 follows: Weighted Initial Fair Average Market Value Number of Exercise (Outstanding Options Price Options) Outstanding as of December 31, 2017 1,128,384 $ 9.40 $ 6,854 Revoked (cancelled) (786,697) 6.33 (3,495) Forfeitures (175) 3.07 — Expirations (138,246) 25.60 (1,997) Outstanding as of December 31, 2018 203,266 10.74 1,381 Forfeitures (71,998) 7.72 (335) Outstanding as of December 31, 2019 131,268 $ 12.40 $ 1,046 Weighted Initial Fair Market Average Value Exercise (Outstanding Number of Options Price Options) Outstanding as of December 31, 2017 1,899,800 $ 1.00 $ 1,053 Granted 1,999,685 2.42 3,378 Exercised (59,220) 1.00 (59) Forfeitures (374,663) 1.55 (766) Expirations (5,056) 1.00 (5) Outstanding as of December 31, 2018 3,460,546 $ 1.76 $ 3,601 Exercised (177,678) 1.19 (129) Forfeitures (294,178) 2.37 (442) Expirations (38,171) 1.09 (25) Outstanding as of December 31, 2019 2,950,519 $ 1.74 $ 3,005 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The key assumptions included in Black-Scholes option pricing model for stock options granted in 2018 follows: Year-ended December 31, 2018 Expected Volatility 130 % Weighted-average Expected Term (years) 2.79 Weighted-average Risk-free Interest Rate 2.69 % Dividend yield — Weighted-average Fair Value at Grant-date $ 1.68 Additional information for stock options issued under the 2017 Plan follows: December 31, 2019 December 31, 2018 Options Outstanding Total Options Outstanding 2,950,519 3,460,546 Weighted-average Remaining Contractual Term (Years) 1.90 2.98 Weighted-average Remaining Expected Term (Years) 1.04 1.84 Weighted-average Exercise Price $ 1.74 $ 1.81 Aggregate Intrinsic Value (1) $ — $ 1,723 Options Exercisable Total Options Exercisable 2,066,506 841,053 Weighted-average Exercise Price $ 1.61 $ 1.00 Weighted-average Remaining Contractual Term (Years) 1.70 2.24 Aggregate Intrinsic Value (1) $ — $ 580 Unvested Options Total Unvested Options 884,013 2,619,493 Weighted-average Exercise Price $ 2.06 $ 2.01 Forfeiture rate used for this period ending 18.65 % 11.25 % Options expected to vest Number of options expected to vest corrected by forfeiture 719,109 2,324,885 Unrecognized share-based compensation expense $ 1,412 $ 2,449 Weighting Average remaining contract Term (Years) 1.92 2.86 Exercises Total shares delivered/issued 177,678 59,220 Weighted-average Exercise Price $ 1.19 $ 1.00 Intrinsic Value of Options Exercised $ 363 $ 101 (1) Excludes options with exercise prices that were greater than the average market price of our common shares for the period. |
2018 Long-Term Incentive Compensation Plan [Member] | |
Share-based Compensation, Stock Options, Activity [Table Text Block] | Weighted-average Grant Date Number of Shares Fair Value Nonvested as of December 31, 2017 — $ — Granted 2,000,000 3.00 Vested (1,000,000) 3.00 Forfeited — Outstanding as of December 31, 2018 1,000,000 $ 3.00 Granted 345,000 2.56 Vested (950,967) 3.03 Forfeited (333,337) 2.28 Outstanding as of December 31, 2019 60,696 $ 3.92 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | There were no stock options issued under the 2018 Plan during the year ended December 31, 2018. The stock option activity under the 2018 Plan follows: Weighted Initial Fair Market Average Value Exercise (Outstanding Options: Number of Options Price Options) Outstanding as of December 31, 2018 — $ — $ — Granted 5,649,649 2.24 10,629 Forfeitures (1,542,000) 2.38 (2,927) Expirations (265,000) 3.07 (813) Outstanding as of December 31, 2019 3,842,649 $ 2.13 $ 6,889 The key assumptions included in Black-Scholes option pricing model for stock options granted in 2019 follows: Year-ended December 31, 2019 Expected Volatility 121 % Weighted-average Expected Term (years) 3.19 Weighted-average Risk-free Interest Rate 2.40 % Dividend yield — Weighted-average Fair Value at Grant-date $ 1.88 Additional information for stock options issued under the 2018 Plan follows: December 31, 2019 Options Outstanding Total Options Outstanding 3,842,649 Weighted-average Remaining Contractual Term (years) 4.05 Weighted-average Remaining Expected Term (years) 2.39 Weighted-average Exercise Price $ 2.13 Aggregate Intrinsic Value (1) $ — Options Exercisable (1) Total Options Exercisable 100,000 Weighted-average Exercise Price $ 0.36 Weighted-average Remaining Contractual Term (years) 3.83 Aggregate Intrinsic Value $ 8 Unvested Options Total Unvested Options 3,742,649 Weighted-average Exercise Price $ 2.18 Forfeiture Rate Used for this Period Ending 28 % Options expected to vest Number of options Expected to Vest Corrected by Forfeiture 2,678,081 Unrecognized Share-based Compensation Expense $ 7,625 Weighting Average Remaining Contract Term (years) 2.90 Exercises Total shares delivered/issued — Weighted-average Exercise Price $ — Intrinsic Value of Options Exercised $ — Excludes options with exercise prices that were greater than the average market price of our common shares for the period. |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income taxes | |
Schedule of Loss before the income tax benefit | Loss before the income tax benefit consists of the following; 2019 2018 U.S. $ (108,644) $ (19,369) Foreign (126,421) 1,171 Total loss before income tax provision $ (235,065) $ (18,198) |
Schedule of Income tax (benefit) expense | Income tax (benefit) expense is summarized as follows: December 31, December 31, 2019 2018 Current: Federal $ — $ — State — — Foreign 316 81 316 81 Deferred: Federal — — State — — Foreign (8,611) (255) (8,611) (255) Income tax (benefit) expense $ (8,295) $ (174) |
Schedule of reconciliation of the provision for income taxes at the U.S. federal statutory rate (21%) to the foreign income tax rate | The following is a reconciliation of the provision for income taxes at the U.S. federal statutory rate (21%) to the foreign income tax rate for the years ended: December 31, December 31, 2019 2018 Tax expense at statutory rate federal 21 % 21 % Foreign income tax rate difference 1 % — Transaction costs — (7) % Compensation — (6) % GILTI — (1) % Non-operating gain on stock acquisition — 8 % Goodwill Impairment (11) % — Change in valuation allowance (7) % (15) % Other — 1 % 4 % 1 % |
Schedule of The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities | The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities are as follows: 2019 2018 Deferred tax attributable to: Net operating losses $ 55,859 $ 31,928 Share-based compensation expense 666 302 Accrued liabilities and allowances 1,287 257 Fixed Assets 188 — ROU lease liability 288 — Other 69 66 Less: valuation allowance (55,561) (29,812) Total deferred tax assets 2,796 2,741 Deferred tax liabilities attributable to: Intangible assets (1,976) (10,003) ROU Asset (194) — Deferred revenue (626) (1,124) Total deferred tax liabilities (2,796) (11,127) Net deferred tax liabilities $ — $ (8,386) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Minimum amounts due under the Company's unconditional purchase obligations | The following table presents the minimum amounts due under the Company’s unconditional purchase obligations as of December 31, 2019: Credit Connectivity Voucher Agreement Agreement Total 2020 $ 132 $ — $ 132 2021 395 — 395 2022 — 8,571 8,571 2023 — 6,593 6,593 2024 — 7,911 7,911 Thereafter — 9,230 9,230 Total $ 527 $ 32,305 $ 32,832 The following table presents management’s estimate of the timing of amounts due under the Company’s unconditional purchase obligations as of December 31, 2019: Credit Connectivity Voucher Agreement Agreement Total 2020 $ 132 $ — $ 132 2021 395 360 755 2022 — 9,662 9,662 2023 — 7,894 7,894 2024 — 9,457 9,457 Thereafter — 4,932 4,932 Total $ 527 $ 32,305 $ 32,832 |
Unaudited Quarterly Data (Res_2
Unaudited Quarterly Data (Restated) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of quarterly financial information | Condensed Consolidated Balance Sheet at March 31, 2019 – Unaudited As reported PY Adjustments Adjustments As restated ASSETS Accounts receivable,net $ 28,645 $ (12,024) $ (8,476) $ 8,145 Prepaid expenses and other current assets 3,634 — (92) 3,542 Total current assets 43,683 (12,024) (8,568) 23,091 OTHER ASSETS 576 — 385 961 RIGHT OF USE LEASE ASSETS 3,136 — 622 3,758 PROPERTY AND EQUIPMENT, NET 5,184 891 (991) 5,084 INTANGIBLE ASSETS,NET 60,706 — (11,466) 49,240 GOODWILL 119,899 9,601 9,695 139,195 Total assets 236,947 $ (1,532) $ (10,323) 225,092 LIABILITIES Accounts payable and customer deposits 25,081 $ — $ (630) 24,451 Net billings in excess of revenues 1,616 (700) 892 1,808 Accrued expenses and other payables 12,567 (212) (1,597) 10,758 Lease liabilities, current — — 1,994 1,994 Total current liabilities 39,780 (912) 659 39,527 Lease liabilities, non-current 3,142 — (1,369) 1,773 Deferred tax liabilities 8,191 (30) — 8,161 Total liabilities 73,342 (942) (710) 71,690 STOCKHOLDERS' EQUITY Common stock 488,670 3,004 227 491,901 Accumulated other comprehensive loss (6,661) 912 263 (5,486) Accumulated deficit (318,404) (4,506) (10,103) (333,013) Total stockholders’ equity 163,605 (590) (9,613) 153,402 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 236,947 $ (1,532) $ (10,323) $ 225,092 Condensed Consolidated Statement of Operations and Comprehensive Loss – Unaudited Three Months ended March 31, 2019: As Reported Adjustments As Restated REVENUES $ 23,040 $ (9,971) $ 13,069 COST AND OPERATING EXPENSES Cost of revenues (excluding depreciation and amortization) 10,068 (2,022) 8,046 Product development 2,198 354 2,552 Sales & Marketing 2,565 372 2,937 General and administrative expenses 7,615 317 7,932 Restructuring and acquisition costs 3,080 226 3,308 Depreciation and amortization 2,843 (117) 2,726 Total cost and operating expenses 28,369 (868) 27,501 LOSS FROM OPERATIONS (5,329) (9,103) (14,432) OTHER INCOME (EXPENSE) (616) (1,000) (1,616) LOSS BEFORE (BENEFIT) PROVISION FOR INCOME TAXES (5,945) (10,103) (16,048) Income tax benefit (167) — (167) NET LOSS (5,778) (10,103) (15,881) OTHER COMPREHENSIVE LOSS Foreign currency translation loss (360) 263 (97) COMPREHENSIVE LOSS $ (6,138) $ (9,840) $ (15,978) Net loss per common share and equivalents - basic and diluted $ (0.06) $ (0.15) Consolidated Condensed Statement of Cash Flows – Unaudited Three Months ended March 31, 2019: As Reported Adjustments As Restated CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (5,778) $ (10,103) $ (15,881) Adjustements to reconcile net loss to net cash used in operating activities Depreciation and amortization 2,843 (117) 2,726 Provision for doubtful accounts 286 (260) 26 Stock based compensation 3,714 1,315 5,029 Shares issued for services 1,523 (485) 1,038 Loss on extinguishment of debt — 1,000 1,000 Deferred tax — (525) (525) Changes in operating assets and liabilities Increase in accounts receivable (9,225) 8,621 (604) Decrease in prepaid expenses, deposits and other assets 2,816 (2,213) 603 Increase in accounts payable and customer deposits 3,420 117 3,537 Decrease in net billings in excess of revenues (1,237) 1,120 (117) Decrease in accrued expenses and other payables (3,098) 1,427 (1,671) Net cash used in operating activities (4,614) (103) (4,717) Purchases of property, equipment and software development (765) (653) (1,418) Acquisition of iPass, Inc., net of cash acquired (284) Net cash used in investing activities (3,749) 491 (3,258) Increase in short term loans (287) — Exercise of warrants & options 717 33 750 Financing related fees (894) 27 (867) Proceeds from issuance of loan 25,000 (976) 24,024 Repayment on loans (11,670) 681 (10,989) Net cash provided by financing activities 13,440 (522) 12,918 EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH (156) 135 (21) NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 4,921 — 4,922 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD 6,483 — 6,483 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD $ 11,404 $ — $ 11,404 Consolidated Condensed Balance Sheet at June 30, 2019 – Unaudited As reported PY Adjustments Adjustments As restated ASSETS Cash and cash equivalents $ 3,378 $ — $ (380) $ 2,998 Accounts receivable,net 45,061 (12,024) (25,729) 7,308 Prepaid expenses and other current assets 3,386 — 36 3,422 Total current assets 53,954 (12,024) (26,073) 15,857 RIGHT OF USE LEASE ASSETS 2,493 — 780 3,273 PROPERTY AND EQUIPMENT,NET 4,897 891 (658) 5,130 INTANGIBLE ASSETS,NET 60,262 — (9,225) 51,037 GOODWILL 121,487 9,601 8,107 139,195 Total assets 246,869 $ (1,532) $ (27,069) $ 218,268 LIABILITIES Accounts payable and customer deposits 28,184 $ — $ (875) $ 27,309 Net billings in excess of revenues 1,331 (700) 861 1,492 Accrued expenses and other payables 14,037 (212) (4,402) 9,423 Lease liabilities, current 1,777 — 237 2,014 Total current liabilities 46,000 (912) (4,179) 40,909 Lease liabilities, non-current 1,014 — 257 1,271 Deferred tax liabilities 7,713 (30) 252 7,935 Total liabilities 77,211 (942) (3,670) 72,599 STOCKHOLDERS' EQUITY Common stock 494,803 3,004 1,213 499,020 Accumulated other comprehensive loss (6,225) 912 (194) (5,507) Accumulated deficit (318,920) (4,506) (24,418) (347,844) Total stockholders’ equity 169,658 (590) (23,399) 145,669 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 246,869 $ (1,532) $ (27,069) $ 218,268 Consolidated Condensed Statement of Operations and Comprehensive Loss – Unaudited Three Months ended June 30, 2019: As Reported Adjustments As Restated REVENUES $ 34,148 $ (17,272) $ 16,876 COST AND OPERATING EXPENSES Cost of revenues (excluding depreciation and amortization) 15,293 (2,649) 12,644 Product development 3,242 383 3,625 Sales and marketing 2,769 326 3,095 General and administrative 9,033 (666) 8,367 Restructuring and acquisition costs 428 (304) 124 Depreciation and amortization 3,224 (119) 3,105 Total cost and operating expenses 33,989 (3,029) 30,960 LOSS FROM OPERATIONS 159 (14,243) (14,084) OTHER INCOME (EXPENSE) (1,124) 180 (944) LOSS BEFORE PROVISION FOR INCOME TAXES (965) (14,063) (15,028) Income tax benefit (449) 252 (197) NET LOSS (516) (14,315) (14,831) OTHER COMPREHENSIVE INCOME/(LOSS) Foreign currency translation (loss)/income 436 (457) (21) COMPREHENSIVE LOSS $ (80) $ (14,772) $ (14,852) Net loss per common share and equivalents - basic and diluted $ 0.00 $ (0.13) Six Months ended June 30, 2019: As Reported Adjustments As Restated REVENUES $ 57,188 $ (27,243) $ 29,945 COST AND OPERATING EXPENSES Cost of revenues (excluding depreciation and amortization) 25,361 (4,671) 20,690 Product development 5,816 361 6,177 Sales and marketing 5,710 322 6,032 General and administrative 15,897 402 16,299 Restructuring and acquisition costs 3,508 (76) 3,432 Depreciation and amortization 6,067 (236) 5,831 Total cost and operating expenses 62,359 (3,898) 58,461 LOSS FROM OPERATIONS (5,171) (23,345) (28,516) OTHER INCOME (EXPENSE) (1,740) (820) (2,560) LOSS BEFORE PROVISION FOR INCOME TAXES (6,911) (24,165) (31,076) Income tax benefit (617) 253 (364) NET LOSS (6,294) (24,418) (30,712) OTHER COMPREHENSIVE INCOME/(LOSS) Foreign currency translation (loss)/income 76 (194) (118) COMPREHENSIVE LOSS $ (6,218) $ (24,612) $ (30,830) Net loss per common share and equivalents - basic and diluted $ (0.06) $ (0.29) Consolidated Condensed Statement of Cash Flows – Unaudited Six Months ended June 30, 2019: As Reported Adjustments As Restated CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (6,294) $ (24,418) $ (30,712) Adjustements to reconcile net loss to net cash used in operating activities Depreciation and amortization 6,067 (236) 5,831 Provision for doubtful accounts 286 (214) 72 Stock based compensation 5,722 2,022 7,744 Shares issued for services 2,279 (926) 1,353 Loss on extinguishment of debt — 1,000 1,000 Deferred tax — (522) (522) Changes in operating assets and liabilities Increase in accounts receivable (25,191) 24,296 (895) Decrease in prepaid expenses, deposits and other assets 2,975 (1,610) 1,365 Increase in accounts payable and customer deposits 6,937 909 7,846 Decrease in net billings in excess of revenues (2,000) 1,564 (436) Decrease in accrued expenses and other payables (1,643) (1,096) (2,739) Net cash used in operating activities (10,440) 769 (9,671) Purchases of property, equipment and software development (1,650) (993) (2,643) Acquisition of iPass, Inc., net of cash acquired (1,563) 2,423 860 Investment in note receivables (2,761) 61 (2,700) Acquisition of assets from Devicescape, LLC — (2,137) (2,137) Net cash used in investing activities (5,974) (646) (6,620) Increase in short term loans 142 (142) — Financing related fees (624) (243) (867) Proceeds from issuance of loan 25,000 (822) 24,178 Repayment on loans (11,670) 681 (10,989) Net cash provided by financing activities 14,443 (526) 13,917 EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH (29) 23 (6) NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (2,000) (380) (2,380) CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD 6,483 — 6,483 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD $ 4,483 $ (380) $ 4,103 |
Revenue prior to customer | |
Schedule of quarterly financial information | Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 Revenues $ (9,993) $ (16,128) $ (26,121) Cost of revenues (excluding depreciation and amortization) (1,634) (2,749) (4,383) General and administrative (220) (542) (762) March31, June30, 2019 2019 Accounts receivable, net $ (8,476) $ (24,611) Net billings in excess of revenues 912 902 Accrued expenses and other payables (1,488) (4,308) Accumulated other comprehensive loss (239) (229) |
Immaterial Accounting Errors [Member] | |
Schedule of quarterly financial information | Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 General and administrative $ (1,029) $ 707 $ (322) March31, June30, 2019 2019 Common stock $ (1,029) $ (376) Accrued expenses and other payables — 54 |
Settle Outstanding Balances of Accounts Payable [Member] | |
Schedule of quarterly financial information | Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 Product development $ — $ 228 $ 228 General and administrative 235 87 322 March31, June30, 2019 2019 Common stock $ 235 $ 550 |
Impact on acquisition of iPass Inc | |
Schedule of quarterly financial information | March31, June30, 2019 2019 Goodwill $ (1,000) $ (1,000) Long-term debt (1,000) (1,000) |
Impact on amortization expense, iPass acquistion | |
Schedule of quarterly financial information | Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 Depreciation and amortization $ (127) $ (221) $ (348) March31, June30, 2019 2019 Intangible assets, net $ 127 $ 348 |
Impact on acquisition prepayment liability of iPass Inc | |
Schedule of quarterly financial information | Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 Other income/(loss) $ (1,000) $ — $ (1,000) March31, June30, 2019 2019 Long-term debt $ 1,000 $ 1,000 |
Settlement of Pre-Existing Software, Acquisition of Ipass Inc | |
Schedule of quarterly financial information | Three Months Three Months Six Months Ended March Ended Ended 31, 2019 June 30, 2019 June 30, 2019 General and administrative $ (185) $ — $ (185) Depreciation and amortization (25) (76) (101) March31, June30, 2019 2019 Property and equipment, net $ (1,289) $ (1,229) Goodwill 1,531 1,531 Accumulated other comprehensive loss (32) (16) |
Impact on revenue assumptions in valuing intangible assets recognized | |
Schedule of quarterly financial information | March31, June30, 2019 2019 Intangibles assets, net $ (11,594) $ (11,594) Goodwill 11,594 11,594 |
Impact on consideration transferred, acquisition of ipass Inc, | |
Schedule of quarterly financial information | Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 General and administrative $ 1,677 $ — $ 1,677 Restructuring and acquisition costs 677 — 677 March31, June30, 2019 2019 Goodwill $ (2,045) $ (2,045) Common stock 309 309 |
Impact on Warrants Issued, Acquisition of Ipass Inc | |
Schedule of quarterly financial information | Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 General and administrative $ 802 $ — $ 802 March31, June30, 2019 2019 Common stock $ 802 $ 802 |
Impact of foreign currency translation on Property and Equipment | |
Schedule of quarterly financial information | March31, June30, 2019 2019 Property and equipment, net $ (96) $ (28) Accumulated other comprehensive loss 96 28 |
Impact on Accounting of Operating Leases | |
Schedule of quarterly financial information | Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 General and administrative $ 3 $ (31) $ (28) March31, June30, 2019 2019 Right of use lease assets $ 622 $ 780 Other assets 385 — Prepaid expenses and other current assets — 36 Goodwill (385) (385) Accrued expenses and other payables — (91) Lease liabilities, current 1,994 237 Lease liabilities, non-current (1,369) 257 |
Impact on Acquisition of Devicescape [Member] | |
Schedule of quarterly financial information | Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 General and administrative $ — $ (70) $ (70) Depreciation and amortization — 38 38 March31, June30, 2019 2019 Cash and cash equivalents $ — $ (380) Accounts receivable, net — (12) Prepaid expenses and other current assets — 74 Intangible assets, net — 2,020 Goodwill — (1,588) Accounts payable and customer deposits — 52 Accrued expenses and other payables — 30 |
Impact on Capitalization of Software [Member] | |
Schedule of quarterly financial information | Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 General and administrative $ (433) $ (338) $ (771) Depreciation and amortization 36 136 172 March31, June30, 2019 2019 Property and equipment, net $ 395 $ 602 Accumulated other comprehensive loss 2 (3) |
Impact on Accruals for Usage of Vendor Network Services [Member] | |
Schedule of quarterly financial information | Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 Cost of revenues (excluding depreciation and amortization) $ (559) $ (134) $ (693) General and administrative 18 (30) (12) Other income/(loss) — 181 181 March31, June30, 2019 2019 Accounts payable and customer deposits $ (541) $ (886) |
Impact on Adjustment of Revenues Related to Repricing Agreement [Member] | |
Schedule of quarterly financial information | Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 Revenues $ — $ (1,133) $ (1,133) March31, June30, 2019 2019 Accounts receivable, net $ — $ (1,133) |
Impact of Income Statement [Member] | |
Schedule of quarterly financial information | Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 Cost of revenues (excluding depreciation and amortization) $ 151 $ 194 $ 335 Product development 312 (678) 9 Sales and marketing (4) 250 (129) General and administrative 39 (446) 343 Restructuring and acquisition costs (488) (70) (558) |
Impact on reclassification within restructuring and acquisition costs | |
Schedule of quarterly financial information | Three Months Three Months Six Months Ended Ended Ended March 31, 2019 June 30, 2019 June 30, 2019 Cost of revenues (excluding depreciation and amortization) $ 29 $ 41 $ 70 Product development 42 85 127 Sales and marketing 376 75 451 General and administrative 317 32 349 Restructuring and acquisition costs (764) (234) (998) |
Business and Summary of Signi_4
Business and Summary of Significant Accounting Policies - Disaggregated by revenue source (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | $ 62,049 | $ 20,258 |
Software Development [Member] | ||
Revenues | 843 | 1,088 |
Monthly Service [Member] | ||
Revenues | $ 61,206 | $ 19,170 |
Business and Summary of Signi_5
Business and Summary of Significant Accounting Policies - Revenues disaggregated by geography (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | $ 62,049 | $ 20,258 |
Europe [Member] | ||
Revenues | 39,957 | 18,753 |
United States | ||
Revenues | 20,124 | 956 |
Other Geographic Areas [Member] | ||
Revenues | $ 1,968 | $ 549 |
Business and Summary of Signi_6
Business and Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 08, 2020 | Jun. 07, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Feb. 22, 2021 | Jun. 30, 2019 | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2017 |
Net Income (Loss) Attributable to Parent | $ (226,770) | $ (18,024) | |||||||
Negative working capital | 31,272 | ||||||||
Retained Earnings (Accumulated Deficit) | (543,902) | (317,132) | $ (347,844) | $ (333,013) | |||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 5,902 | 6,483 | 4,103 | 11,404 | $ 13,738 | ||||
Proceeds from Convertible Debt, Which is Maintained in One or More Blocked Accounts | $ 7,000 | ||||||||
Debt Instruments, Floor Price to be Deleted | 0.10% | ||||||||
Restricted Cash and Cash Equivalents, Current | 1,455 | 431 | |||||||
Billings In Excess Of Costs Current | $ 2,529 | 227 | 1,492 | 1,808 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 3 years | ||||||||
Operating Lease, Right-of-Use Asset | $ 2,241 | 3,273 | 3,758 | ||||||
Operating Lease, Liability | $ 2,709 | ||||||||
High Trail Note | |||||||||
Debt Instrument, Face Amount | $ 17,500 | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | ||||||||
Proceeds from Convertible Debt | $ 14,000 | ||||||||
Debt Conversion, Original Debt, Interest Rate of Debt | 18.00% | ||||||||
Warrant, Exercise Price, Decrease | $ 0.37 | $ 0.58 | |||||||
Subsequent Event [Member] | |||||||||
Debt Instrument, Face Amount | $ 1,000 | ||||||||
Minimum | |||||||||
Finite-Lived Intangible Asset, Useful Life | 3 years | ||||||||
Maximum | |||||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||||||||
Adjustments | |||||||||
Retained Earnings (Accumulated Deficit) | (24,418) | (10,103) | |||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 0 | (380) | 0 | ||||||
Billings In Excess Of Costs Current | 861 | 892 | |||||||
Operating Lease, Right-of-Use Asset | $ 780 | $ 622 | |||||||
Accounting Standards Update 2016-02 [Member] | Adjustments | |||||||||
Operating Lease, Right-of-Use Asset | $ 1,800 | ||||||||
Operating Lease, Liability | $ 1,800 |
Acquisitions - Asset Purchase (
Acquisitions - Asset Purchase (Details) $ / shares in Units, € in Thousands | Apr. 22, 2019USD ($)$ / sharesshares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) |
Purchase consideration: | |||||||
Shares issued to shareholders | $ 112,535,000 | ||||||
Liabilities: | |||||||
Goodwill | $ 101,375,000 | $ 10,099,000 | $ 139,195,000 | $ 139,195,000 | |||
Device Scape | |||||||
Purchase consideration: | |||||||
Cash consideration | $ 2,137,000 | ||||||
Shares issued to shareholders | 1,692,000 | ||||||
Total Purchase Consideration | 3,829,000 | ||||||
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | $ 1,692,000 | 2,000 | |||||
Business Acquisition, Share Price | $ / shares | $ 4.23 | ||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 400,000 | ||||||
Assets | |||||||
Accounts receivable | 71,000 | ||||||
Escrow receivable | 200,000 | ||||||
Intangible assets | 3,646,000 | ||||||
TOTAL ASSETS | 3,917,000 | ||||||
Liabilities: | |||||||
Accounts payable & other liabilities | 88,000 | ||||||
Total liabilities | 88,000 | ||||||
Estimated fair value of net assets acquired | 3,829,000 | ||||||
iPass, Inc. Acquisition | |||||||
Assets | |||||||
Cash and cash equivalents | 860,000 | ||||||
Accounts receivable | 4,344,000 | ||||||
Property, plant and equipment | 873,000 | ||||||
Other assets | 4,890,000 | ||||||
Intangible assets | 11,106,000 | ||||||
TOTAL ASSETS | 22,073,000 | ||||||
Liabilities: | |||||||
Accounts payable, accrued expenses and other current liabilities | 17,207,000 | ||||||
Deferred revenue | 1,700,000 | ||||||
Loans outstanding | 9,989,000 | ||||||
Other liabilities | 857,000 | ||||||
Total liabilities | 29,753,000 | ||||||
Estimated fair value of net assets acquired | (7,680,000) | ||||||
Goodwill | 37,821,000 | ||||||
Artilium Plc [Member] | |||||||
Purchase consideration: | |||||||
Cash consideration | 8,142,000 | ||||||
Shares issued to shareholders | 112,535,000 | ||||||
Fair value of previously held equity investment | 9,601,000 | ||||||
Total Purchase Consideration | $ 130,278,000 | ||||||
Assets | |||||||
Cash and cash equivalents | € | € 825 | ||||||
Current and long-term assets (including cash and cash equivalents of $825) | 4,726,000 | ||||||
Intangible assets | 40,800,000 | ||||||
TOTAL ASSETS | 45,526,000 | ||||||
Liabilities: | |||||||
Current and long-term liabilities | 7,982,000 | ||||||
Deferred tax liabilities | 8,641,000 | ||||||
Total liabilities | 16,623,000 | ||||||
Estimated fair value of net assets acquired | 28,903,000 | ||||||
Goodwill | $ 101,375,000 |
Acquisitions - Estimated Fair V
Acquisitions - Estimated Fair Value (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Device Scape | |
Estimated Fair Value | $ 3,646 |
iPass, Inc. Acquisition | |
Estimated Fair Value | 11,106 |
Artilium Plc [Member] | |
Estimated Fair Value | 40,800 |
Technology | Artilium Plc [Member] | |
Estimated Fair Value | $ 20,600 |
USeful life (yeras) | 6 years |
Customer relationships | Device Scape | |
Estimated Fair Value | $ 121 |
USeful life (yeras) | 8 years |
Customer relationships | iPass, Inc. Acquisition | |
Estimated Fair Value | $ 8,378 |
USeful life (yeras) | 5 years |
Customer relationships | Artilium Plc [Member] | |
Estimated Fair Value | $ 16,800 |
USeful life (yeras) | 18 years |
Trade names | iPass, Inc. Acquisition | |
Estimated Fair Value | $ 143 |
USeful life (yeras) | 2 years |
Trade names | Artilium Plc [Member] | |
Estimated Fair Value | $ 3,400 |
USeful life (yeras) | 5 years |
Developed Technology Rights [Member] | Device Scape | |
Estimated Fair Value | $ 3,525 |
USeful life (yeras) | 8 years |
Developed Technology Rights [Member] | iPass, Inc. Acquisition | |
Estimated Fair Value | $ 2,585 |
USeful life (yeras) | 8 years |
Acquisitions - iPass, Inc. Acqu
Acquisitions - iPass, Inc. Acquisition (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 26, 2019 | Feb. 12, 2019 | May 08, 2018 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Shares issued for Acquisition (in shares) | 10,265,412 | ||||||
Loss on extinguishment of debt | $ (1,000) | $ (1,000) | $ (8,873) | $ 0 | |||
Fortress | |||||||
Cash fee | $ 150 | ||||||
Warrants to purchase an aggregate shares of common stock | 325,000 | ||||||
iPass, Inc. Acquisition | |||||||
Aggregate consideration | $ 30,141 | ||||||
Value of shares issued in consideration | $ 28,610 | ||||||
stock price | $ 2.90 | ||||||
Non-monetary consideration, software license | $ 1,531 | ||||||
Payment of outstanding secured debt assumed | $ 11,000 | ||||||
Loss on extinguishment of debt | $ 1,000 | ||||||
Weighted-average useful life of the intangible assets | 5 years 8 months 12 days |
Acquisitions - Artilium plc. Ac
Acquisitions - Artilium plc. Acquisition (Details) | Oct. 01, 2018USD ($)$ / sharesshares | Jun. 07, 2018USD ($)$ / sharesshares | Oct. 31, 2017USD ($)shares | Dec. 31, 2019 | Jun. 06, 2018$ / shares |
Share Exchange Agreement, Artilium plc | |||||
Ownership percentage held prior to acquisition | 7.00% | ||||
Aggregate shares issued on exchange | 27,695,177 | ||||
Issue of restricted shares on acquisition | 3,200,332 | ||||
Value of shares issued in consideration | $ | $ 104,700,000 | $ 3,230 | |||
Cost method equity investment | $ | $ 3,230 | ||||
Number of shares entitled to receive by Artilium shareholder | 0.1016 | ||||
Cash per share payable | $ / shares | $ 2.55 | ||||
Acquisition value per share | $ / shares | $ 26.22 | ||||
Closing share price | $ / shares | $ 2.33 | ||||
Exchange rate | 1.3413 | ||||
Artilium plc. Acquisition | |||||
Aggregate shares issued on exchange | 37,511,447 | ||||
Issue of restricted shares on acquisition | 4,107,714 | ||||
Closing share price | $ / shares | $ 3 | ||||
Acquisition of assets | $ | $ 8,142 | ||||
Gain on investment | $ | $ 6,371,000 | ||||
Weighted-average useful life of the intangible assets | 10 years 10 months 24 days |
Allowance for Doubtful Accoun_2
Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Allowance for Doubtful Accounts | ||
Allowance for doubtful accounts | $ 1,546 | $ 514 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Prepaid Expenses and Other Current Assets | ||||
Prepaid insurance and legal fees | $ 762 | $ 219 | ||
Prepaid software license and support | 890 | 619 | ||
Prepaid payroll taxes | 214 | |||
Prepaid expenses-other | 714 | 290 | ||
Valued added tax | 591 | 609 | ||
Other receivables | 451 | |||
Other assets | 831 | 347 | ||
Prepaid expenses and other current assets | $ 4,453 | $ 3,422 | $ 3,542 | $ 2,084 |
Other Assets Non-Current (Detai
Other Assets Non-Current (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Other Assets Non-Current | |||
Other Assets, Noncurrent | $ 752 | $ 961 | $ 45 |
Note Receivable (Details)
Note Receivable (Details) $ in Thousands | Feb. 28, 2019USD ($) | Feb. 12, 2019USD ($) | Jan. 09, 2019USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2019USD ($)item | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Nov. 26, 2018USD ($) | Sep. 30, 2018USD ($) |
Number of Notes Receivable | item | 2 | |||||||||
Notes, Loans and Financing Receivable, Net, Noncurrent | $ 512 | $ 1,082 | ||||||||
Proceeds from Divestiture of Businesses and Interests in Affiliates | $ 1,000 | |||||||||
Financing Receivable, after Allowance for Credit Loss | 512 | |||||||||
Overdue Fees Payable in Two Installments | $ 54 | |||||||||
Overdue Fees, First Installment, Paid at Time of Amendment | $ 27 | |||||||||
Yonder [Member] | ||||||||||
Notes, Loans and Financing Receivable, Net, Noncurrent | $ 3,355 | 505 | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||
Notes Issued | $ 2,000 | $ 500 | $ 200 | |||||||
Debt Instrument, Term | 18 months | |||||||||
Notes and Loans Receivable Principal Amount | $ 3,355 | |||||||||
ValidSoft Ltd [Member] | ||||||||||
Notes, Loans and Financing Receivable, Net, Noncurrent | $ 512 | |||||||||
Disposal Group, Including Discontinued Operation, Consideration | 3,000 | |||||||||
Disposal Group Including Discontinued Operation Consideration Promissory Note | $ 2,000 | |||||||||
Cash | $ 1,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | |||||||||
Interest Receivable | $ 577 | |||||||||
Promissory note | Yonder [Member] | ||||||||||
Debt Instrument, Face Amount | $ 500 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment, Gross | $ 30,467 | $ 28,236 | ||
Less: accumulated depreciation and amortization | (24,205) | (22,792) | ||
Total property and equipment, net | $ 6,262 | $ 5,130 | $ 5,084 | 5,444 |
Automobiles [Member] | ||||
Average Estimated Useful Lives | 5 years | |||
Automobiles [Member] | Including Assets Held For Sale [Member] | ||||
Property, Plant and Equipment, Gross | $ 13 | 13 | ||
Furniture and Fixtures [Member] | ||||
Average Estimated Useful Lives | 5 years | |||
Furniture and Fixtures [Member] | Including Assets Held For Sale [Member] | ||||
Property, Plant and Equipment, Gross | $ 171 | 168 | ||
Technology Equipment [Member] | Including Assets Held For Sale [Member] | ||||
Property, Plant and Equipment, Gross | $ 17,450 | 21,009 | ||
Technology Equipment [Member] | Minimum | ||||
Average Estimated Useful Lives | 3 years | |||
Technology Equipment [Member] | Maximum | ||||
Average Estimated Useful Lives | 10 years | |||
Software and Software Development Costs [Member] | ||||
Average Estimated Useful Lives | 5 years | |||
Software and Software Development Costs [Member] | Including Assets Held For Sale [Member] | ||||
Property, Plant and Equipment, Gross | $ 4,150 | 5,311 | ||
Leasehold improvements | ||||
Average Estimated Useful Lives | 5 years | |||
Leasehold improvements | Including Assets Held For Sale [Member] | ||||
Property, Plant and Equipment, Gross | $ 131 | |||
Software Development [Member] | ||||
Average Estimated Useful Lives | 1 year | |||
Software Development [Member] | Including Assets Held For Sale [Member] | ||||
Property, Plant and Equipment, Gross | $ 8,552 | $ 1,735 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Capitalized Computer Software, Additions | $ 6,363 | $ 1,282 |
Depreciation and amortization expenses | 5,919 | 4,165 |
Software Development [Member] | ||
Amortization | $ 3,269 | $ 901 |
Goodwill and Net Intangibles,_3
Goodwill and Net Intangibles, Net - Changes in goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in goodwill | ||
Balance at the beginning of the year | $ 101,375 | |
Business acquisition | 37,821 | $ 101,375 |
Impairment | 129,097 | |
Balance at the end of the year | $ 10,099 | $ 101,375 |
Goodwill and Net Intangibles,_4
Goodwill and Net Intangibles, Net - Net intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite lived intangible assets | ||
Gross Carrying Amount | $ 54,411 | $ 40,920 |
Accumulated Amortization | (7,019) | (1,262) |
Impairment | (31,892) | 0 |
Total | 15,500 | 39,658 |
Technology | ||
Finite lived intangible assets | ||
Gross Carrying Amount | 25,971 | 20,720 |
Accumulated Amortization | (4,102) | (859) |
Impairment | (15,369) | |
Total | 6,500 | 19,861 |
Customer relationships | ||
Finite lived intangible assets | ||
Gross Carrying Amount | 25,066 | 16,800 |
Accumulated Amortization | (2,192) | (233) |
Impairment | (14,803) | |
Total | 8,071 | 16,567 |
Trade names | ||
Finite lived intangible assets | ||
Gross Carrying Amount | 3,374 | 3,400 |
Accumulated Amortization | (725) | (170) |
Impairment | (1,720) | |
Total | $ 929 | $ 3,230 |
Goodwill and Net Intangibles,_5
Goodwill and Net Intangibles, Net - Impairment charges (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite lived intangible assets | ||
Impairment charge | $ 31,892 | $ 0 |
Technology | ||
Finite lived intangible assets | ||
Impairment charge | 15,369 | |
Customer relationships | ||
Finite lived intangible assets | ||
Impairment charge | 14,803 | |
Trade names | ||
Finite lived intangible assets | ||
Impairment charge | $ 1,720 | |
Adjustments | Technology | ||
Finite lived intangible assets | ||
Useful life (in years) | 8 years | |
Minimum | ||
Finite lived intangible assets | ||
Useful life (in years) | 3 years | |
Minimum | Technology | ||
Finite lived intangible assets | ||
Useful life (in years) | 6 years | |
Minimum | Customer relationships | ||
Finite lived intangible assets | ||
Useful life (in years) | 11 years | |
Minimum | Trade names | ||
Finite lived intangible assets | ||
Useful life (in years) | 3 years | |
Minimum | Adjustments | Customer relationships | ||
Finite lived intangible assets | ||
Useful life (in years) | 5 years | |
Minimum | Adjustments | Trade names | ||
Finite lived intangible assets | ||
Useful life (in years) | 2 years | |
Maximum | ||
Finite lived intangible assets | ||
Useful life (in years) | 10 years | |
Maximum | Technology | ||
Finite lived intangible assets | ||
Useful life (in years) | 8 years | |
Maximum | Customer relationships | ||
Finite lived intangible assets | ||
Useful life (in years) | 18 years | |
Maximum | Trade names | ||
Finite lived intangible assets | ||
Useful life (in years) | 5 years | |
Maximum | Adjustments | Customer relationships | ||
Finite lived intangible assets | ||
Useful life (in years) | 6 years | |
Maximum | Adjustments | Trade names | ||
Finite lived intangible assets | ||
Useful life (in years) | 6 years |
Goodwill and Net Intangibles,_6
Goodwill and Net Intangibles, Net - Estimated annual amortization expense (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill and Net Intangibles, Net | ||
2020 | $ 2,606 | |
2021 | 2,606 | |
2022 | 2,556 | |
2023 | 2,556 | |
2024 | 2,556 | |
2025 and thereafter | 2,620 | |
Total | $ 15,500 | $ 39,658 |
Goodwill and Net Intangibles,_7
Goodwill and Net Intangibles, Net - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite lived intangible assets | ||
Impairment charge of goodwill and intangible assets | $ (160,989) | $ 0 |
Impairment charge | $ (31,892) | 0 |
Weighted-average amortization period | 6 years 2 months 12 days | |
Amortization expense | $ 7,019 | $ 1,262 |
Minimum | ||
Finite lived intangible assets | ||
Useful life (in years) | 3 years | |
Maximum | ||
Finite lived intangible assets | ||
Useful life (in years) | 10 years | |
Technology | ||
Finite lived intangible assets | ||
Impairment charge | $ (15,369) | |
Weighted-average amortization period | 7 years 8 months 12 days | |
Technology | Minimum | ||
Finite lived intangible assets | ||
Useful life (in years) | 6 years | |
Technology | Maximum | ||
Finite lived intangible assets | ||
Useful life (in years) | 8 years | |
Technology | Adjustments | ||
Finite lived intangible assets | ||
Useful life (in years) | 8 years | |
Customer relationships | ||
Finite lived intangible assets | ||
Impairment charge | $ (14,803) | |
Weighted-average amortization period | 5 years 1 month 6 days | |
Customer relationships | Minimum | ||
Finite lived intangible assets | ||
Useful life (in years) | 11 years | |
Customer relationships | Maximum | ||
Finite lived intangible assets | ||
Useful life (in years) | 18 years | |
Customer relationships | Adjustments | Minimum | ||
Finite lived intangible assets | ||
Useful life (in years) | 5 years | |
Customer relationships | Adjustments | Maximum | ||
Finite lived intangible assets | ||
Useful life (in years) | 6 years | |
Trade names | ||
Finite lived intangible assets | ||
Impairment charge | $ (1,720) | |
Weighted-average amortization period | 5 years 7 months 6 days | |
Trade names | Minimum | ||
Finite lived intangible assets | ||
Useful life (in years) | 3 years | |
Trade names | Maximum | ||
Finite lived intangible assets | ||
Useful life (in years) | 5 years | |
Trade names | Adjustments | Minimum | ||
Finite lived intangible assets | ||
Useful life (in years) | 2 years | |
Trade names | Adjustments | Maximum | ||
Finite lived intangible assets | ||
Useful life (in years) | 6 years |
Net Billings in Excess of Rev_2
Net Billings in Excess of Revenues (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Net Billings in Excess of Revenues | ||||
Billings In Excess Of Costs Current | $ 2,529 | $ 1,492 | $ 1,808 | $ 227 |
Accrued Expenses and Other Pa_3
Accrued Expenses and Other Payables (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Accrued Expenses and Other Payables | ||||
Accrued selling, general and administrative expenses | $ 2,720 | $ 1,189 | ||
Accrued salaries and bonuses | 2,005 | 1,596 | ||
Accrued employee benefits | 564 | 0 | ||
Accrued restructuring & acquisition related costs | 0 | 1,885 | ||
Accrued cost of service | 627 | 813 | ||
Accrued taxes (including VAT) | 2,637 | 1,834 | ||
Accrued interest payable | 53 | 68 | ||
Accrued customer credit | 3,393 | 0 | ||
Other accrued expenses | 1,617 | 356 | ||
Accrued expenses and other payables | $ 13,616 | $ 9,423 | $ 10,758 | $ 7,741 |
Accrued Expenses and Other Pa_4
Accrued Expenses and Other Payables - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accrued Expenses and Other Payables | ||
Accrued Income Taxes, Current | $ 316 | $ 81 |
Promissory Note and Unsecured_3
Promissory Note and Unsecured Convertible Promissory Notes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Convertible Debt [Member] | ||
Short-term Debt [Line Items] | ||
Convertible Note Principal Amount | $ (105) | |
Convertible Note Principal Amount, Total Amortizations | $ 0 | |
Convertible Note Principal Amount, accelerated amortization | 105 | |
Convertible Debt [Member] | Short-term Debt [Member] | ||
Short-term Debt [Line Items] | ||
Convertible Note Principal Amount | (11) | |
Convertible Note Principal Amount, Total Amortizations | 0 | |
Convertible Note Principal Amount, accelerated amortization | 11 | |
9% Unsecured Convertible Note[Member] | ||
Short-term Debt [Line Items] | ||
Convertible Note Principal Amount, Total Amortizations | (9) | |
Convertible Note Principal Amount, accelerated amortization | $ 116 | |
Debt Discounts & Financing Costs | (107) | |
Unsecured convertible note | ||
Short-term Debt [Line Items] | ||
Outstanding Balance at December 31, 2017 (in shares) | 39,500 | |
Warrants And Debt Conversion Feature, Agreement Amendments | 44,720 | |
Warrants And Debt Conversion Feature, Exercises And Conversions | (84,220) | |
Investor Warrants [Member] | Convertible Debt [Member] | ||
Short-term Debt [Line Items] | ||
Debt Discounts & Financing Costs | 2 | |
Amortization of debt discount and deferred financing costs | $ (2) | |
7% Agent Warrants [Member] | Convertible Debt [Member] | ||
Short-term Debt [Line Items] | ||
Debt Discounts & Financing Costs | 1 | |
Amortization of debt discount and deferred financing costs | $ (1) | |
9% Convertible Note - Investors [Member] | Unsecured convertible note | ||
Short-term Debt [Line Items] | ||
Outstanding Balance at December 31, 2017 (in shares) | 39,500 | |
Warrants And Debt Conversion Feature, Agreement Amendments | 44,720 | |
Warrants And Debt Conversion Feature, Exercises And Conversions | (84,220) | |
Conversion Feature value [Member] | Convertible Debt [Member] | ||
Short-term Debt [Line Items] | ||
Debt Discounts & Financing Costs | 1 | |
Amortization of debt discount and deferred financing costs | $ (1) | |
Financing Costs [Member] | Convertible Debt [Member] | ||
Short-term Debt [Line Items] | ||
Debt Discounts & Financing Costs | $ 5 | |
Amortization of debt discount and deferred financing costs | $ (5) |
Promissory Note and Unsecured_4
Promissory Note and Unsecured Convertible Promissory Notes - Additional Information (Details) - USD ($) | 12 Months Ended | ||||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2016 | Sep. 30, 2019 | Dec. 31, 2017 | Dec. 31, 2015 | Dec. 18, 2015 | |
Short-term Debt [Line Items] | |||||||
Notes Payable, Current | $ 993,000 | $ 681,000 | |||||
Debt Instrument, Interest Rate During Period | 2.00% | ||||||
Exercise price for conversion of promissory notes | $ 1.75 | $ 3.75 | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.74 | ||||||
Class of Warrants or Rights, Modified Exercise Price | $ 3.75 | ||||||
Class of Warrants or Rights Modifications, Percentage of Additional Bonus Warrants Issued | 10.00% | ||||||
Number of additional bonus warrants issued | 47,306 | ||||||
Shares issued upon conversion of outstanding principal amount | 60,000 | ||||||
Shares issued for the 10% early repayment | 6,000 | ||||||
Early repayments of debt (as a percent) | 10.00% | ||||||
Shares issued upon conversion of accrued interest on the promissory notes | 18,220 | ||||||
Number of warrants outstanding | 38,111,211 | 3,789,482 | 18,135,832 | ||||
Number of warrants exercises | 4,818,269 | 14,463,097 | |||||
Accredited investors | |||||||
Short-term Debt [Line Items] | |||||||
Number of warrants outstanding | 38,111,211 | ||||||
Number of warrants exercises | 4,818,269 | ||||||
Placement Agent | |||||||
Short-term Debt [Line Items] | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 909,091 | ||||||
Number of warrants outstanding | 1,488,973 | ||||||
Private Placement [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Private Placement Offering Units Authorized | $ 4,200 | ||||||
Private Placement Offering Units Authorized Units | 140 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | ||||||
Debt Instrument, Face Amount | $ 30 | ||||||
Exercise price for conversion of promissory notes | $ 7.50 | ||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 4,000 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 11.25 | ||||||
Private Placement [Member] | Placement Agent One [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 11.25 | ||||||
Warrants Issued | 33,115 | ||||||
Private Placement [Member] | Placement Agent Two [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 7.50 | ||||||
Warrants Issued | 33,115 | ||||||
Note Warrant [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt Instrument, Face Amount | $ 3,548 | $ 3,548 | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 473,067 | 473,067 |
Long-term Debt - Former Post Ro
Long-term Debt - Former Post Road Group Debt Facility (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 22, 2019 | Feb. 26, 2019 | Sep. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | |||||||
Payments of debt issuance costs | $ 1,607 | ||||||
Number of shares issued during period | 3,845,193 | ||||||
Value of stock | $ 33,180 | ||||||
Additional debt issuance cost | $ 140 | ||||||
Loss on extinguishment of debt | $ (1,000) | $ (1,000) | (8,873) | $ 0 | |||
Interest expense related to debt discount and conversion feature | 619 | $ 184 | |||||
Amortization of deferred financing costs | 174 | ||||||
Interest expense incurred | $ 1,659 | ||||||
Weighted-average interest rate | 11.08% | ||||||
Post Road Group Debt Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | 50,000 | ||||||
Loan amount | 25,000 | ||||||
Additional amounts in increments | $ 5,000 | ||||||
Threshold period in which additional amounts is funded | 18 months | ||||||
Spread on variable interest rate | 8.50% | ||||||
Spread on variable interest rate upon an event of default | 11.50% | ||||||
Payment-in-Kind interest, through and including the first anniversary of the initial funding date | 3.00% | ||||||
Payment-in-Kind interest, after the first anniversary of the initial funding date through and including the second anniversary of the initial funding date | 2.00% | ||||||
Payment-in-Kind interest, after the second anniversary of the initial funding date | 1.00% | ||||||
Threshold proceeds outside the ordinary course of business for loan was subject to prepayment | $ 1,000 | ||||||
Commitment fee | 1.00% | ||||||
Original issue discount on initial loan (as a percent) | 0.75% | ||||||
Original issue discount on maximum borrowing capacity (as a percent) | 1.25% | ||||||
Aggregate original issue discount amortized | $ 813 | ||||||
Payments of debt issuance costs | $ 2,167 | $ 867 | |||||
Number of shares issued during period | 750,000 | 425,000 | |||||
Value of stock | $ 2,167 | $ 1,607 | |||||
Share price | $ 2.89 | $ 3.78 | |||||
Additional debt issuance cost | $ 2,500 | ||||||
Loss on extinguishment of debt | $ 7,873 | ||||||
Unamortized debt discount and issuance costs | 4,926 | ||||||
Exit fee paid to the lender | $ 2,947 | ||||||
Post Road Group Debt Facility [Member] | Fortress | |||||||
Debt Instrument [Line Items] | |||||||
Repayments of debt | $ 11,000 |
Long-term Debt - Redeemable Pre
Long-term Debt - Redeemable Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 24, 2019 | Dec. 10, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | ||||
Number of shares issued during period | 3,845,193 | |||
Stated value per share | $ 0.00001 | $ 0.00001 | ||
Proceeds from issuance of redeemable preferred stock | $ 4,478 | $ 0 | ||
Series C Redeemable Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Number of shares issued during period | 105.33 | 255 | ||
Dividend on preferred stock (as a percent) | 8.00% | 8.00% | 8.00% | |
Stated value per share | $ 100 | $ 100,000 | ||
Proceeds from issuance of redeemable preferred stock | $ 5,033 | |||
Net proceeds from issuance of shares | $ 4,479 | |||
Legal fees | 361 | |||
Proceeds remitted to an escrow account | $ 193 | |||
Premium on preferred stock | 12.50% |
Long-term Debt - 8% Series C Re
Long-term Debt - 8% Series C Redeemable Preferred Stock (Details) - Series C Redeemable Preferred Stock $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |
Redeemable preferred stock accounted as liability | $ 10,533 |
Debt discount | 5,500 |
Gross proceeds | 5,033 |
Legal fees | $ 361 |
Dividend on preferred stock (as a percent) | 8.00% |
Premium on preferred stock | 12.50% |
Long-term Debt - Components Of
Long-term Debt - Components Of Series C Redeemable Preferred Stock Liability (Details) - Series C Redeemable Preferred Stock $ in Thousands | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |
Series C Redeemable Preferred Stock, stated value | $ 10,533 |
Unamortized debt discount | 5,776 |
Accretion of redemption premium | 25 |
Accrued dividend | 16 |
Series C Redeemable Preferred Stock, net | $ 4,798 |
Long-term Debt - Interest and A
Long-term Debt - Interest and Amortization Expense related to Series C Redeemable Preferred Stock (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Interest Expense, Debt, Total | $ 2,120 | $ 309 |
Series C Redeemable Preferred Stock | ||
Debt Instrument [Line Items] | ||
Amortization of debt discount | 85 | |
Accretion of redemption premium | 25 | |
Accrued dividend | 16 | |
Interest Expense, Debt, Total | $ 126 |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2019D$ / sharesshares | |
Debt Instrument [Line Items] | |
Period after which the company may convert preferred stock into common stock | 1 year |
Period in which the holders may convert preferred stock into common stock | 1 year |
Conversion of shares whose conversion price is 0.70 | shares | 97 |
Conversion price one | $ / shares | $ 0.70 |
Conversion of shares whose conversion price is other than 0.70 | shares | 8 |
Conversion price two | $ / shares | $ 0.60 |
Number of trading days to calculate daily volume-weighted average price per share | D | 5 |
Conversion price three | $ / shares | $ 0.40 |
Holders held their shares after December 31, 2020 | |
Debt Instrument [Line Items] | |
Number of shares permitted to exchange | shares | 97 |
Average daily volume-weighted average trading price | $ / shares | $ 0.60 |
Number of consecutive trading days to calculate daily volume-weighted average price per share | D | 5 |
Holders held their shares after December 24, 2020 | |
Debt Instrument [Line Items] | |
Number of shares permitted to exchange | shares | 8 |
Series C Redeemable Preferred Stock | |
Debt Instrument [Line Items] | |
Premium on preferred stock | 12.50% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Related Party Transaction, Retainage Fee | $ 5 | |
Payment for Management Fee | 278 | $ 133 |
Due To Related Parties Non current | $ 420 | $ 342 |
Related Party Transaction, Rate | 8.00% | |
Share Holder [Member] | Artilium Plc [Member] | ||
Related Party Transaction [Line Items] | ||
Equity Method Investment, Ownership Percentage | 15.00% |
Lease Commitments - Additional
Lease Commitments - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2019propertylease | |
Lessee, Lease, Description [Line Items] | |
Number of leased properties | property | 10 |
Number of leases expired | 2 |
Number of equipment leases | 3 |
Number of automobile leases | 41 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 5 years 6 months |
Lease Commitments - Lease expen
Lease Commitments - Lease expense in Statement of Operations (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Components of the lease expense | |
Operating lease cost | $ 2,313 |
Finance lease cost: | |
Amortization of assets | 9 |
Interest on lease liabilities | 2 |
Total net lease cost | $ 2,324 |
Lease Commitments - Supplementa
Lease Commitments - Supplemental balance sheet information related to leases (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 |
Assets: | |||
Operating lease assets | $ 2,241 | $ 3,273 | $ 3,758 |
Finance lease assets | 133 | ||
Total leased assets | 2,374 | ||
Liabilities: | |||
Operating, Current | 2,376 | ||
Finance, Current | 46 | ||
Operating, Noncurrent | 333 | ||
Finance, Noncurrent | 82 | ||
Total lease liabilities | 2,837 | ||
Operating lease assets, accumulated amortization | 2,006 | ||
Finance lease assets, accumulated depreciation | $ 9 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gapp:OperatingLeaseLiabilityCurrent | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Operating, Noncurrent | ||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Finance, Current | ||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Finance, Noncurrent |
Lease Commitments - Supplemen_2
Lease Commitments - Supplemental cash flow information related to leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash outflows from operating leases | $ 1,656 |
Operating cash outflows from finance leases (interest) | 2 |
Financing cash outflows from finance leases | $ 17 |
Weighted-average remaining lease term (in years): Operating leases | 1 year 7 months 21 days |
Weighted-average remaining lease term (in years): Finance leases | 2 years 8 months 1 day |
Weighted-average discount rate: Operating leases | 9.22% |
Weighted-average discount rate: Finance leases | 5.00% |
Lease Commitments - Maturities
Lease Commitments - Maturities of lease liabilities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Operating Leases | |
2020 | $ 2,524 |
2021 | 196 |
2022 | 54 |
2023 | 45 |
2024 | 45 |
Thereafter | 22 |
Total lease payments | 2,886 |
Less: imputed interest | (177) |
Total lease liabilities | 2,709 |
Less: current liabilities, Operating, Current | (2,376) |
Long-term lease liabilities | 333 |
Finance Leases | |
2020 | 51 |
2021 | 51 |
2022 | 34 |
Finance Lease, Liability, Payment, Due | 136 |
Less: imputed interest | (8) |
Total lease liabilities | 128 |
Less: current liabilities, Finance, Current | (46) |
Finance Lease, Liability, Noncurrent | 82 |
Operating lease obligations | $ 551 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Total lease liabilities |
Minimum | |
Finance Leases | |
Lease term | 3 years |
Maximum | |
Finance Leases | |
Lease term | 4 years |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | ||
Number of Warrants, Outstanding | 3,789,482 | 18,135,832 |
Number of Warrants, Issued | 39,199,998 | 196,750 |
Number of Warrants, Exercised | (4,818,269) | (14,463,097) |
Number of Warrants, Expirations | (60,000) | (80,003) |
Number of Warrants, Outstanding | 38,111,211 | 3,789,482 |
Stockholders' Equity - Outstand
Stockholders' Equity - Outstanding Warrants (Details) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Outstanding | 38,111,211 | 3,789,482 | 18,135,832 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.74 | ||
Warrants - Fundraising [Member] | |||
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Outstanding | 38,111,211 | 3,789,482 | |
Maximum | Warrants - Fundraising [Member] | |||
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.375 | ||
Minimum | Warrants - Fundraising [Member] | |||
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.05 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | Dec. 24, 2019 | Dec. 10, 2019 | Feb. 26, 2019 | May 09, 2018 | Oct. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Feb. 28, 2019 | Dec. 31, 2017 |
Exericse price per warrant | $ 1.74 | ||||||||||
Shares issued upon exercise of warrant | 18,852,272 | ||||||||||
Number of shares issued during period | 3,845,193 | ||||||||||
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 | |||||||||
Common Stock, Shares, Issued | 139,060,180 | 139,060,180 | |||||||||
Common Stock, Shares, Outstanding | 98,292,530 | 98,292,530 | |||||||||
Stock Issued During Period, Shares, Period Increase (Decrease) | 40,767,650 | ||||||||||
Stock Issued During Period, Shares, Acquisitions | 10,265,412 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 1,733,698 | ||||||||||
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | |||||||||
Class of Warrant or Right, Outstanding | 38,111,211 | 3,789,482 | 18,135,832 | ||||||||
Exercise of warrants and options | $ 750,000 | $ 1,597,000 | $ 6,174,000 | ||||||||
Common Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 | |||||||||
Stated value per share | $ 0.00001 | $ 0.00001 | |||||||||
Preferred Stock outstanding | 0 | 0 | |||||||||
Number of cashless exercises of warrants | 800,235 | ||||||||||
Number of warrants exercises | 4,818,269 | 14,463,097 | |||||||||
Average exercise price | $ 1.74 | ||||||||||
Shares issued for Exercised Stock Options | $ 211,000 | $ 59,000 | |||||||||
Proceeds from Issuance Initial Public Offering | $ 39,961,000 | $ 6,100,000 | |||||||||
Financing related fees | $ 1,607,000 | ||||||||||
Fortress | |||||||||||
Warrants for the purchase of common stock units | 325,000 | ||||||||||
2018 Offering | |||||||||||
Warrants for the purchase of common stock units | 122,000 | ||||||||||
Stock issuance expense | $ 701,000 | ||||||||||
Number of shares issued during period | 2,440,000 | ||||||||||
Exercise price as a percentage of offering price per share | 125.00% | ||||||||||
Price per share | $ 2.50 | ||||||||||
Percentage of Exercise price over the Offering Price | 125.00% | ||||||||||
Proceeds from issuance of shares | $ 6,100,000 | ||||||||||
Securities Purchase Agreement | |||||||||||
Number of units issued | 18,852,272 | ||||||||||
Price per unit | $ 1.76 | ||||||||||
Number of common stock per unit | 1 | ||||||||||
Number of warrants per unit | 1 | ||||||||||
Warrants for the purchase of common stock units | 38,874,998 | ||||||||||
Exericse price per warrant | $ 3 | ||||||||||
Net proceeds from issuance of equity | $ 37,680,000 | ||||||||||
Stock issuance expense | $ 2,281,000 | ||||||||||
Average exercise price | $ 3 | ||||||||||
Derivative Warrants [Member] | |||||||||||
Class of Warrant or Right, Outstanding | 0 | 0 | |||||||||
Derivative, Fair Value, Net | $ 0 | $ 0 | |||||||||
Placement Agent | |||||||||||
Warrants for the purchase of common stock units | 909,091 | ||||||||||
Class of Warrant or Right, Outstanding | 1,488,973 | ||||||||||
Placement Agent | Securities Purchase Agreement | |||||||||||
Warrants for the purchase of common stock units | 909,091 | ||||||||||
Accredited investors | |||||||||||
Class of Warrant or Right, Outstanding | 38,111,211 | ||||||||||
Number of warrants exercises | 4,818,269 | ||||||||||
Series A warrant | Securities Purchase Agreement | |||||||||||
Number of warrants per unit | 1 | ||||||||||
Number of warrants issued | 18,852,272 | ||||||||||
Warrants for the purchase of common stock units | 3,875,000 | ||||||||||
Exericse price per warrant | $ 2.25 | ||||||||||
Average exercise price | 2.25 | ||||||||||
Series B warrant | Securities Purchase Agreement | |||||||||||
Number of warrants per unit | 1 | ||||||||||
Number of warrants issued | 9,426,136 | ||||||||||
Warrants for the purchase of common stock units | 1,937,500 | ||||||||||
Exericse price per warrant | 1.84 | ||||||||||
Average exercise price | $ 1.84 | ||||||||||
Pre funded warrants | |||||||||||
Warrants for the purchase of common stock units | 3,875,000 | ||||||||||
Pre funded warrants | Securities Purchase Agreement | |||||||||||
Price per unit | $ 1.75 | ||||||||||
Warrants for the purchase of common stock units | 3,875,000 | ||||||||||
Exericse price per warrant | $ 0.01 | ||||||||||
Maximum beneficially ownership of holder | 9.99% | ||||||||||
Shares issued upon exercise of warrant | 3,845,193 | ||||||||||
Average exercise price | $ 0.01 | ||||||||||
Warrants [Member] | |||||||||||
Shares issued upon exercise of warrant | 3,903,302 | ||||||||||
Number of cashless exercises of warrants | 4,018,034 | ||||||||||
Number of warrants exercises | 4,818,269 | ||||||||||
Sharebased Compensation Arrangement by Sharebased Payment Award Equity Instruments Other than Options Unexercised | 60,000 | ||||||||||
Common Stock [Member] | |||||||||||
Common Stock, Shares, Issued | 139,060,180 | ||||||||||
Series C Redeemable Preferred Stock | |||||||||||
Number of shares issued during period | 105.33 | 255 | |||||||||
Stated value per share | $ 100 | $ 100,000 | |||||||||
Dividend on preferred stock (as a percent) | 8.00% | 8.00% | 8.00% | ||||||||
Liquidation preference per share | $ 0.00001 | ||||||||||
Price per share as a percentage of the Stated Value | 112.50% | ||||||||||
Preferred Stock outstanding | 105.33 | 0 |
Basic and diluted net loss pe_3
Basic and diluted net loss per share (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 47,599,006 | 8,973,351 |
Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 39,500 | |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 38,111,211 | 3,789,482 |
Time Conditioned Share Awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,563,359 | 1,480,557 |
Stock option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 6,924,436 | 3,663,812 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) | 12 Months Ended | |||
Dec. 31, 2019shares | Dec. 31, 2018shares | Dec. 31, 2016shares | Dec. 31, 2008shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number registered | 7,500,000 | |||
Awards vested | 950,967 | 1,000,000 | ||
2018 Long-Term Incentive Compensation Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number registered | 8,000,000 | |||
Awards vested | 34,304 | |||
Issued and Outstanding | 3,842,649 | |||
Shares available for grant | 6,456,665 | |||
2008 Long-Term Incentive Compensation Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized | 2,240,000 | |||
Reverse stock-split | 0.04 | |||
Awards granted | 0 | |||
Issued and Outstanding | 131,268 | 203,266 | 1,128,384 | |
2017 Long-Term Incentive Compensation Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized | 6,500,000 | |||
Awards granted | 57,155 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 177,678 | 59,220 | ||
Issued and Outstanding | 2,950,519 | 3,460,546 | ||
Stock option | 2017 Long-Term Incentive Compensation Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Issued and Outstanding | 2,950,519 | |||
Restricted stock awards | 2008 Long-Term Incentive Compensation Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards vested | 62,180 | |||
Restricted stock awards | 2017 Long-Term Incentive Compensation Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards vested | 53,399 |
Employee Benefit Plan - Stock o
Employee Benefit Plan - Stock option activity of plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Initial Fair Market Value (Outstanding Options), Granted | $ 2,884 | $ 3,708 | ||
2008 Long-Term Incentive Compensation Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of Options, Outstanding | 203,266 | |||
Number of Options, Revoked (cancelled) in 2018 | (786,697) | |||
Number of Options, Forfeitures (Pre-vesting) | (71,998) | (175) | ||
Number of Options, Expirations (Post-vesting) | (138,246) | |||
Number of Options, Outstanding | 131,268 | 203,266 | ||
Weighted Average Exercise Price | $ 12.40 | $ 10.74 | $ 9.40 | |
Weighted Average Exercise Price, Revoked (cancelled) in 2018 | 6.33 | |||
Weighted Average Exercise Price, Forfeitures (Pre-vesting) (in dollars per share) | 7.72 | 3.07 | ||
Weighted Average Exercise Price, Expirations (Post-vesting) (in dollars per share) | 25.60 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending balance | $ 12.40 | $ 10.74 | $ 9.40 | |
Initial Fair Market Value (Outstanding Options), Outstanding | $ 1,046 | $ 1,381 | $ 6,854 | |
Initial Fair Market Value, Revoked (cancelled) in 2018 | (3,495) | |||
Initial Fair Market Value (Outstanding Options), Forfeitures (Pre-vesting) | (335) | |||
Initial Fair Market Value (Outstanding Options), Expirations (Post-vesting) | (1,997) | |||
Initial Fair Market Value (Outstanding Options), Outstanding | $ 1,046 | $ 1,381 | $ 6,854 | |
2017 Long-Term Incentive Compensation Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of Options, Outstanding | 3,460,546 | 1,899,800 | ||
Number of Options, Granted | 1,999,685 | |||
Number of Options, Exercised (with delivery of shares) | (177,678) | (59,220) | ||
Number of Options, Forfeitures (Pre-vesting) | (294,178) | (374,663) | ||
Number of Options, Expirations (Post-vesting) | (38,171) | (5,056) | ||
Number of Options, Outstanding | 2,950,519 | 3,460,546 | ||
Weighted Average Exercise Price | $ 1.74 | $ 1.76 | $ 1 | |
Weighted Average Exercise Price, Granted (in dollars per share) | 2.42 | |||
Weighted Average Exercise Price, Exercised (with delivery of shares) (in dollars per share) | 1.19 | 1 | ||
Weighted Average Exercise Price, Forfeitures (Pre-vesting) (in dollars per share) | 2.37 | 1.55 | ||
Weighted Average Exercise Price, Expirations (Post-vesting) (in dollars per share) | 1.09 | 1 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending balance | $ 1.74 | $ 1.76 | $ 1 | |
Initial Fair Market Value (Outstanding Options), Outstanding | $ 3,005 | $ 3,601 | $ 1,053 | |
Initial Fair Market Value (Outstanding Options), Granted | 3,378 | |||
Initial Fair Market Value (Outstanding Options), Exercised (with delivery of shares) | (129) | (59) | ||
Initial Fair Market Value (Outstanding Options), Forfeitures (Pre-vesting) | (442) | (766) | ||
Initial Fair Market Value (Outstanding Options), Expirations (Post-vesting) | (25) | (5) | ||
Initial Fair Market Value (Outstanding Options), Outstanding | $ 3,005 | $ 3,601 | $ 1,053 | |
2018 Long-Term Incentive Compensation Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of Options, Granted | 5,649,649 | |||
Number of Options, Forfeitures (Pre-vesting) | (1,542,000) | |||
Number of Options, Expirations (Post-vesting) | (265,000) | |||
Number of Options, Outstanding | 3,842,649 | |||
Weighted Average Exercise Price | $ 2.13 | |||
Weighted Average Exercise Price, Granted (in dollars per share) | 2.24 | |||
Weighted Average Exercise Price, Forfeitures (Pre-vesting) (in dollars per share) | 2.38 | |||
Weighted Average Exercise Price, Expirations (Post-vesting) (in dollars per share) | 3.07 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending balance | $ 2.13 | |||
Initial Fair Market Value (Outstanding Options), Outstanding | $ 6,889 | |||
Initial Fair Market Value (Outstanding Options), Granted | 10,629 | |||
Initial Fair Market Value (Outstanding Options), Forfeitures (Pre-vesting) | (2,927) | |||
Initial Fair Market Value (Outstanding Options), Expirations (Post-vesting) | (813) | |||
Initial Fair Market Value (Outstanding Options), Outstanding | $ 6,889 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional information for stock options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Options expected to vest | |||
Unrecognized stock-based compensation expense | $ 9,321 | ||
2017 Long-Term Incentive Compensation Plan [Member] | |||
Grants | |||
During the year | 57,155 | ||
Weighted Average Annual Volatility | 130.00% | ||
Weighted Average Expected Life of grants (Years) | 2 years 9 months 15 days | ||
Weighted Average Risk Free Interest Rate | 2.69% | ||
Weighted Average Fair Value at Grant-date | $ 1.68 | ||
Options Outstanding | |||
Total Options Outstanding | 2,950,519 | 3,460,546 | |
Weighted Average Remaining Contractual Life (Years) | 1 year 10 months 24 days | 2 years 11 months 23 days | |
Weighted Average Remaining Expected Life (Years) | 1 year 15 days | 1 year 10 months 2 days | |
Weighted Average Exercise Price | $ 1.74 | $ 1.81 | |
Aggregate Intrinsic Value (all options) | [1] | $ 1,723 | |
Options Exercisable | |||
Total Options Exercisable | 2,066,506 | 841,053 | |
Weighted Average Exercise Price | $ 1.61 | $ 1 | |
Weighted Average Remaining Contractual Life (Years) | 1 year 8 months 12 days | 2 years 2 months 27 days | |
Aggregate Intrinsic Value | [1] | $ 580 | |
Unvested Options | |||
Total Unvested Options | 884,013 | 2,619,493 | |
Weighted Average Exercise Price | $ 2.06 | $ 2.01 | |
Forfeiture rate used for this period ending (staff only) | 18.65% | 11.25% | |
Options expected to vest | |||
Number of options expected to vest corrected by forfeiture | 719,109 | 2,324,885 | |
Unrecognized stock-based compensation expense | $ 1,412 | $ 2,449 | |
Weighting Average remaining contract life (Years) | 1 year 11 months 1 day | 2 years 10 months 10 days | |
Exercises | |||
Total shares delivered/issued | 177,678 | 59,220 | |
Weighted Average Exercise Price | $ 1.19 | $ 1 | |
Intrinsic Value of Options Exercised | $ 363 | $ 101 | |
2018 Long-Term Incentive Compensation Plan [Member] | |||
Grants | |||
Weighted Average Annual Volatility | 121.00% | ||
Weighted Average Expected Life of grants (Years) | 3 years 2 months 9 days | ||
Weighted Average Risk Free Interest Rate | 2.40% | ||
Weighted Average Fair Value at Grant-date | $ 1.88 | ||
Options Outstanding | |||
Total Options Outstanding | 3,842,649 | ||
Weighted Average Remaining Contractual Life (Years) | 4 years 18 days | ||
Weighted Average Remaining Expected Life (Years) | 2 years 4 months 21 days | ||
Weighted Average Exercise Price | $ 2.13 | ||
Options Exercisable | |||
Total Options Exercisable | [2] | 100,000 | |
Weighted Average Exercise Price | $ 0.36 | ||
Weighted Average Remaining Contractual Life (Years) | [2] | 3 years 9 months 29 days | |
Aggregate Intrinsic Value | [2] | $ 8 | |
Unvested Options | |||
Total Unvested Options | 3,742,649 | ||
Weighted Average Exercise Price | $ 2.18 | ||
Forfeiture rate used for this period ending (staff only) | 28.00% | ||
Options expected to vest | |||
Number of options expected to vest corrected by forfeiture | 2,678,081 | ||
Unrecognized stock-based compensation expense | $ 7,625 | ||
Weighting Average remaining contract life (Years) | 2 years 10 months 24 days | ||
[1] | Excludes options with exercise prices that were greater than the average market price of our common shares for the period. | ||
[2] | Excludes options with exercise prices that were greater than the average market price of our common shares for the period. |
Employee Benefit Plan - Rollfor
Employee Benefit Plan - Rollforward of restricted stock activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Balance at the beginning | 1,000,000 | 0 |
Granted | 345,000 | 2,000,000 |
Vested | 950,967 | 1,000,000 |
Forfeited | 333,337 | 0 |
Balance at the end | 60,696 | 1,000,000 |
Weighted-average Grant Date Fair Value | ||
Balance at the beginning (in dollars per share) | $ 3 | |
Granted (in dollars per share) | 2.56 | $ 3 |
Vested (in dollars per share) | 3.03 | 3 |
Forfeited (in dollars per share) | 2.28 | |
Balance at the end (in dollars per share) | $ 3.92 | $ 3 |
Employee Benefit Plan - Share-B
Employee Benefit Plan - Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock-Based Compensation Expense | $ 11,236 | $ 6,783 |
Unrecognized expense portion of the share-based compensation | $ 9,321 | |
Unrecognized expense portion of the share-based compensation expected to be recognized over a weighted-average period | 1 year 2 months 12 days | |
Fair value of the time conditioned awards that vested | $ 2,884 | $ 3,708 |
Employee Benefit Plan - Addit_2
Employee Benefit Plan - Additional Information (Details)) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Oct. 10, 2018shares | Dec. 31, 2017shares | Dec. 31, 2016shares | Dec. 31, 2008shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 7,500,000 | |||||
Awards vested | 950,967 | 1,000,000 | ||||
Outstanding unvested restricted stock units | 60,696 | 1,000,000 | 0 | |||
Share Based Compensation Arrangements By Share Based Payment Award Options Grants In Period Fair Value | $ | $ 2,884 | $ 3,708 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ | 9,321 | |||||
Allocated Share-based Compensation Expense | $ | $ 11,236 | $ 6,783 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 1.74 | |||||
Common Stock, Shares, Issued | 139,060,180 | 139,060,180 | ||||
2018 Long-Term Incentive Compensation Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 8,000,000 | |||||
Awards remain outstanding | 3,842,649 | |||||
Awards vested | 34,304 | |||||
Shares available for grant | 6,456,665 | |||||
Outstanding unvested restricted stock units | 1,447,780 | |||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares | $ 2.24 | |||||
Share Based Compensation Arrangements By Share Based Payment Award Options Grants In Period Fair Value | $ | $ 10,629 | |||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ | $ 7,625 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 1,542,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 3,842,649 | |||||
Common Stock, Shares, Issued | 8,000,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | 265,000 | |||||
2008 Long-Term Incentive Compensation Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | 2,240,000 | |||||
Reverse stock-split | 0.04 | |||||
Awards granted | 0 | |||||
Awards remain outstanding | 131,268 | 203,266 | 1,128,384 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 71,998 | 175 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 131,268 | 203,266 | 1,128,384 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | 138,246 | |||||
Share based Compensation Arrangement By Share based Payment Award Revoked In Period | (786,697) | |||||
2017 Long-Term Incentive Compensation Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | 6,500,000 | |||||
Awards granted | 57,155 | |||||
Awards remain outstanding | 2,950,519 | 3,460,546 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ | $ 1,412 | $ 2,449 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 2,950,519 | 3,460,546 | ||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ / shares | $ 1.19 | $ 1 |
Income taxes - Loss before the
Income taxes - Loss before the income tax benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income taxes | ||
U.S. | $ (108,644) | $ (19,369) |
Foreign | (126,421) | 1,171 |
Total loss before income tax provision | $ (235,065) | $ (18,198) |
Income taxes - Income tax (bene
Income taxes - Income tax (benefit) expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | |||||
Foreign | $ 316 | $ 81 | |||
Current Income Tax Expense (Benefit), Total | 316 | 81 | |||
Deferred: | |||||
Foreign | (8,611) | (255) | |||
Deferred Income Tax Expense (Benefit), Total | $ (525) | $ (522) | (8,611) | (255) | |
Income tax (benefit) expense | $ (197) | $ (167) | $ (364) | $ (8,295) | $ (174) |
Income taxes - Reconciliation o
Income taxes - Reconciliation of the provision for income taxes (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income taxes | ||
Tax expense at statutory rate federal | 21.00% | 21.00% |
Foreign income tax rate difference | 1.00% | |
Transaction costs | (7.00%) | |
Compensation | (6.00%) | |
GILTI | (1.00%) | |
Non-operating gain on stock acquisition | 8.00% | |
Goodwill Impairment | (11.00%) | |
Change in valuation allowance | (7.00%) | (15.00%) |
Other | 1.00% | |
Total | 4.00% | 1.00% |
Income taxes - The tax effects
Income taxes - The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax attributable to: | ||
Net operating losses | $ 55,859 | $ 31,928 |
Share-based compensation expense | 666 | 302 |
Accrued liabilities and allowances | 1,287 | 257 |
Fixed Assets | 188 | |
ROU lease liability | 288 | |
Other | 69 | 66 |
Less: valuation allowance | (55,561) | (29,812) |
Total deferred tax assets | 2,796 | 2,741 |
Deferred tax liabilities attributable to: | ||
Intangibles assets | (1,976) | (10,003) |
ROU Asset | 194 | |
Deferred revenue | (626) | (1,124) |
Total deferred tax liabilities | $ (2,796) | (11,127) |
Net deferred tax liabilities | $ (8,386) |
Income taxes - Additional Infor
Income taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Line Items] | |||||
Income tax benefit offset by current taxes | $ 8,700 | ||||
Liability for Uncertainty in Income Taxes, Current | 0 | $ 0 | |||
Current Income Tax Expense (Benefit) | 316 | 81 | |||
Income tax expense (benefit) | $ (197) | $ (167) | $ (364) | $ (8,295) | $ (174) |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | |||
Unrecognized tax benefits | $ 0 | ||||
Interest and penalties | $ 0 | ||||
Operating Loss Carryforwards | 258,000 | $ 150,000 | |||
Foreign Tax Authority [Member] | |||||
Income Tax Disclosure [Line Items] | |||||
Current Income Tax Expense (Benefit) | 8,400 | ||||
Income tax expense (benefit) | $ 300 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Millions | Dec. 31, 2019USD ($) |
Connectivity Agreement | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Amount obligated to pay | $ 0.7 |
Credit Voucher agreement | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Amount obligated to pay | 33 |
Unconditional purchase obligation incurred | 0.7 |
Scenario One, Make-up Payment Requirement, Year One [Member] | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Make-up payment obligation | 8.6 |
Aggregate monthly charge offset | 8.6 |
Scenario Two, Make-up Payment Requirement , Year Two [Member] | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Make-up payment obligation | 15.2 |
Aggregate monthly charge offset | 15.2 |
Scenario Three, Make-up Payment Requirement , Year Three [Member] | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Make-up payment obligation | 23.1 |
Aggregate monthly charge offset | 23.1 |
Accrued Expenses And Other Payables [Member] | Connectivity Agreement | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Unconditional purchase obligation incurred | $ 0.1 |
Commitments and Contingencies -
Commitments and Contingencies - Minimum Amounts Due (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
2020 | $ 132 |
2021 | 395 |
2022 | 8,571 |
2023 | 6,593 |
2024 | 7,911 |
Thereafter | 9,230 |
Total | 32,832 |
Connectivity Agreement | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
2020 | 132 |
2021 | 395 |
Total | 527 |
Credit Voucher agreement | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
2022 | 8,571 |
2023 | 6,593 |
2024 | 7,911 |
Thereafter | 9,230 |
Total | 32,305 |
Estimation of Timing of Amounts Due [Member] | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
2020 | 132 |
2021 | 755 |
2022 | 9,662 |
2023 | 7,894 |
2024 | 9,457 |
Thereafter | 4,932 |
Total | 32,832 |
Estimation of Timing of Amounts Due [Member] | Connectivity Agreement | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
2020 | 132 |
2021 | 395 |
Total | 527 |
Estimation of Timing of Amounts Due [Member] | Credit Voucher agreement | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
2021 | 360 |
2022 | 9,662 |
2023 | 7,894 |
2024 | 9,457 |
Thereafter | 4,932 |
Total | $ 32,305 |
Commitments and Contingencies_3
Commitments and Contingencies - Ellenoff Grossman & Schole LLP (Details) - USD ($) $ in Millions | Jul. 29, 2017 | May 05, 2017 | Dec. 31, 2019 |
Loss Contingencies [Line Items] | |||
Settlement outstanding amount | $ 0.1 | ||
Unpaid Legal Fees [Member] | |||
Loss Contingencies [Line Items] | |||
Lawsuit claim amount | $ 0.8 | $ 0.8 |
Commitments and Contingencies_4
Commitments and Contingencies - Artilium Africa, LLC et al. v. Artilium, PLC et al (Details) - USD ($) $ in Thousands | Oct. 01, 2019 | Dec. 31, 2019 |
Artilium Africa, LLC et al vs Artilium, PLC et al [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 150,000 | |
Litigation Settlement, Amount Awarded to Other Party | $ 30,000 | |
Deutsche Telekom A.G. | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 790,000 | |
Lawsuit By Stephen Brown [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 780,000 | |
Number of years, unpaid consulting fees | 5 years |
Concentrations (Details)
Concentrations (Details) - Customer One [Member] | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Sales Revenue, Net [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 20.00% | 64.00% |
Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 38.00% | 10.00% |
Unaudited Quarterly Data (Res_3
Unaudited Quarterly Data (Restated) - Restatement Adjustments (Details) - USD ($) $ in Thousands | Feb. 12, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Feb. 26, 2019 |
Revenues | $ 62,049 | $ 20,258 | |||||
Cost of revenues | $ 12,644 | $ 8,046 | $ 20,690 | ||||
Accounts receivable, net | (7,308) | (8,145) | (7,308) | (8,307) | (3,338) | ||
Net billings in excess of revenues | 1,492 | 1,808 | 1,492 | 2,529 | 227 | ||
Accrued expenses and other payables | 9,423 | 10,758 | 9,423 | 13,616 | 7,741 | ||
Accumulated other comprehensive loss | (5,507) | (5,486) | (5,507) | (5,608) | (5,389) | ||
Common Stock | (499,020) | (491,901) | (499,020) | (547,948) | (453,995) | ||
Product development | 3,625 | 2,552 | 6,177 | 12,956 | 3,083 | ||
Goodwill | 139,195 | 139,195 | 139,195 | 10,099 | 101,375 | ||
Other income/(loss) | (3,221) | 578 | |||||
Long-term debt | (4,798) | ||||||
Depreciation and amortization | (3,105) | (2,726) | (5,831) | (12,938) | (5,427) | ||
Intangible assets, net | (51,037) | (49,240) | (51,037) | (15,500) | (39,658) | ||
Property and equipment, net | (5,130) | (5,084) | (5,130) | (6,262) | (5,444) | ||
Value of stock | $ 33,180 | ||||||
Number of shares issued during period | 3,845,193 | ||||||
RIGHT OF USE LEASE ASSETS | 3,273 | 3,758 | 3,273 | $ 2,241 | |||
OTHER ASSETS | 961 | 752 | 45 | ||||
Prepaid expenses and other current assets | 3,422 | 3,542 | 3,422 | 4,453 | 2,084 | ||
Lease liabilities, current | 2,014 | 1,994 | 2,014 | 2,422 | |||
Lease liabilities, non-current | 1,271 | 1,773 | 1,271 | 415 | |||
Cash and Cash Equivalents, at Carrying Value, Ending Balance | (2,998) | (2,998) | (4,447) | (6,052) | |||
Accounts payable and customer deposits | 27,309 | 24,451 | 27,309 | 30,374 | 10,338 | ||
Restructuring and acquisition costs | 124 | 3,308 | 3,432 | $ 3,457 | $ 7,260 | ||
Revenue prior to customer | |||||||
Revenues | (16,128) | (9,993) | (26,121) | ||||
Cost of revenues | 2,749 | 1,634 | 4,383 | ||||
General and administrative | (542) | 220 | 762 | ||||
Accounts receivable, net | (24,611) | (8,476) | (24,611) | ||||
Net billings in excess of revenues | 902 | 912 | 902 | ||||
Accrued expenses and other payables | 4,308 | 1,488 | 4,308 | ||||
Accumulated other comprehensive loss | (229) | (239) | (229) | ||||
Immaterial Accounting Errors [Member] | |||||||
General and administrative | 707 | 1,029 | 322 | ||||
Accrued expenses and other payables | 54 | 54 | |||||
Common Stock | (376) | (1,029) | (376) | ||||
Settle Outstanding Balances of Accounts Payable [Member] | |||||||
General and administrative | 87 | 235 | 322 | ||||
Common Stock | (550) | (235) | (550) | ||||
Product development | 228 | 228 | |||||
Impact on acquisition of iPass Inc | |||||||
Common Stock | (802) | (802) | (802) | ||||
Goodwill | (1,000) | (1,000) | (1,000) | ||||
Long-term debt | (1,000) | (1,000) | (1,000) | ||||
Number of shares issued during period | 325,000 | ||||||
Impact on amortization expense, iPass acquistion | |||||||
Depreciation and amortization | (221) | (127) | (348) | ||||
Intangible assets, net | (348) | (127) | (348) | ||||
Impact on acquisition prepayment liability of iPass Inc | |||||||
Other income/(loss) | (1,000) | (1,000) | |||||
Long-term debt | (1,000) | (1,000) | (1,000) | ||||
Prepayment penalty | $ 1,000 | ||||||
Prepayment liability outstanding loan balance | $ 1,000 | ||||||
Prepayment liability | $ 1,000 | ||||||
Impact on revenue assumptions in valuing intangible assets recognized | |||||||
Goodwill | 11,594 | 11,594 | 11,594 | ||||
Intangible assets, net | (11,594) | (11,594) | (11,594) | ||||
Settlement of Pre-Existing Software, Acquisition of Ipass Inc | |||||||
General and administrative | 185 | 185 | |||||
Accumulated other comprehensive loss | (16) | (32) | (16) | ||||
Goodwill | 1,531 | 1,531 | 1,531 | ||||
Depreciation and amortization | (76) | (25) | (101) | ||||
Non-monetary consideration, software license | $ 1,531 | ||||||
Property and equipment, net | (1,229) | (1,289) | (1,229) | ||||
Impact on consideration transferred, acquisition of ipass Inc, | |||||||
General and administrative | 1,677 | 1,677 | |||||
Value of stock | $ 2,045 | ||||||
Number of shares issued during period | 705,000 | ||||||
Restructuring and acquisition costs | 677 | 677 | |||||
Impact on Warrants Issued, Acquisition of Ipass Inc | |||||||
Common Stock | (309) | (309) | (309) | ||||
Goodwill | (2,045) | (2,045) | (2,045) | ||||
Impact of foreign currency translation on Property and Equipment | |||||||
Accumulated other comprehensive loss | 28 | 96 | 28 | ||||
Property and equipment, net | (28) | (96) | (28) | ||||
Impact on Accounting of Operating Leases | |||||||
General and administrative | 31 | 3 | 28 | ||||
Accrued expenses and other payables | 91 | 91 | |||||
Goodwill | (385) | (385) | (385) | ||||
RIGHT OF USE LEASE ASSETS | 780 | 622 | 780 | ||||
OTHER ASSETS | 385 | ||||||
Prepaid expenses and other current assets | 36 | 36 | |||||
Lease liabilities, current | 237 | 1,994 | 237 | ||||
Lease liabilities, non-current | 257 | 1,369 | 257 | ||||
Impact on Acquisition of Devicescape [Member] | |||||||
Accounts receivable, net | (12) | (12) | |||||
Accrued expenses and other payables | 30 | 30 | |||||
Goodwill | (1,588) | (1,588) | |||||
Depreciation and amortization | (38) | (38) | |||||
Intangible assets, net | (2,020) | (2,020) | |||||
Prepaid expenses and other current assets | 74 | 74 | |||||
Cash and Cash Equivalents, at Carrying Value, Ending Balance | (380) | (380) | |||||
Accounts payable and customer deposits | 52 | 52 | |||||
Impact on Capitalization of Software [Member] | |||||||
Accumulated other comprehensive loss | (3) | 2 | (3) | ||||
Depreciation and amortization | (136) | (36) | (172) | ||||
Property and equipment, net | (602) | (395) | (602) | ||||
Impact on Accruals for Usage of Vendor Network Services [Member] | |||||||
Other income/(loss) | 181 | 181 | |||||
Accounts payable and customer deposits | (886) | (541) | (886) | ||||
Impact on Adjustment of Revenues Related to Repricing Agreement [Member] | |||||||
Revenues | (1,133) | (1,133) | |||||
Accounts receivable, net | (1,133) | (1,133) | |||||
Impact Of Income Statement [Member] | |||||||
General and administrative | 446 | 39 | 343 | ||||
Product development | 678 | 312 | 9 | ||||
Restructuring and acquisition costs | (70) | (488) | (558) | ||||
Impact on reclassification within restructuring and acquisition costs | |||||||
General and administrative | 32 | 317 | 349 | ||||
Product development | 85 | 42 | 127 | ||||
Restructuring and acquisition costs | $ (234) | $ (764) | $ (998) |
Unaudited Quarterly Data (Res_4
Unaudited Quarterly Data (Restated) - Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||||
Cash and cash equivalents | $ 4,447 | $ 2,998 | $ 6,052 | |
Accounts receivable, net | 8,307 | 7,308 | $ 8,145 | 3,338 |
Prepaid expenses and other current assets | 4,453 | 3,422 | 3,542 | 2,084 |
Total current assets | 18,662 | 15,857 | 23,091 | 11,905 |
OTHER ASSETS | 752 | 961 | 45 | |
RIGHT OF USE LEASE ASSETS | 2,241 | 3,273 | 3,758 | |
PROPERTY AND EQUIPMENT, NET | 6,262 | 5,130 | 5,084 | 5,444 |
INTANGIBLE ASSETS,NET | 15,500 | 51,037 | 49,240 | 39,658 |
GOODWILL | 10,099 | 139,195 | 139,195 | 101,375 |
TOTAL ASSETS | 54,028 | 218,268 | 225,092 | 159,509 |
LIABILITIES | ||||
Accounts payable and customer deposits | 30,374 | 27,309 | 24,451 | 10,338 |
Net billings in excess of revenues | 2,529 | 1,492 | 1,808 | 227 |
Accrued expenses and other payables | 13,616 | 9,423 | 10,758 | 7,741 |
Lease, Liability, Current | 2,422 | 2,014 | 1,994 | |
Total current liabilities | 49,934 | 40,909 | 39,527 | 19,094 |
Lease, Liability, Noncurrent | 415 | 1,271 | 1,773 | |
Deferred tax liabilities | 7,935 | 8,161 | 8,386 | |
Total liabilities | 55,590 | 72,599 | 71,690 | 28,035 |
STOCKHOLDERS' EQUITY | ||||
Common Stock | 547,948 | 499,020 | 491,901 | 453,995 |
Accumulated other comprehensive loss | (5,608) | (5,507) | (5,486) | (5,389) |
Accumulated deficit | (543,902) | (347,844) | (333,013) | (317,132) |
Total stockholders' equity (deficit) | (1,562) | 145,669 | 153,402 | 131,474 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 54,028 | 218,268 | 225,092 | $ 159,509 |
As reported | ||||
ASSETS | ||||
Cash and cash equivalents | 3,378 | |||
Accounts receivable, net | 45,061 | 28,645 | ||
Prepaid expenses and other current assets | 3,386 | 3,634 | ||
Total current assets | 53,954 | 43,683 | ||
OTHER ASSETS | 576 | |||
RIGHT OF USE LEASE ASSETS | 2,493 | 3,136 | ||
PROPERTY AND EQUIPMENT, NET | 4,897 | 5,184 | ||
INTANGIBLE ASSETS,NET | 60,262 | 60,706 | ||
GOODWILL | 121,487 | 119,899 | ||
TOTAL ASSETS | 246,869 | 236,947 | ||
LIABILITIES | ||||
Accounts payable and customer deposits | 28,184 | 25,081 | ||
Net billings in excess of revenues | 1,331 | 1,616 | ||
Accrued expenses and other payables | 14,037 | 12,567 | ||
Lease, Liability, Current | 1,777 | |||
Total current liabilities | 46,000 | 39,780 | ||
Lease, Liability, Noncurrent | 1,014 | 3,142 | ||
Deferred tax liabilities | 7,713 | 8,191 | ||
Total liabilities | 77,211 | 73,342 | ||
STOCKHOLDERS' EQUITY | ||||
Common Stock | 494,803 | 488,670 | ||
Accumulated other comprehensive loss | (6,225) | (6,661) | ||
Accumulated deficit | (318,920) | (318,404) | ||
Total stockholders' equity (deficit) | 169,658 | 163,605 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 246,869 | 236,947 | ||
PY Adjustments | ||||
ASSETS | ||||
Accounts receivable, net | 12,024 | 12,024 | ||
Total current assets | (12,024) | (12,024) | ||
PROPERTY AND EQUIPMENT, NET | 891 | 891 | ||
GOODWILL | 9,601 | 9,601 | ||
TOTAL ASSETS | (1,532) | (1,532) | ||
LIABILITIES | ||||
Net billings in excess of revenues | (700) | (700) | ||
Accrued expenses and other payables | 212 | (212) | ||
Total current liabilities | (912) | (912) | ||
Deferred tax liabilities | (30) | (30) | ||
Total liabilities | (942) | (942) | ||
STOCKHOLDERS' EQUITY | ||||
Common Stock | 3,004 | 3,004 | ||
Accumulated other comprehensive loss | 912 | 912 | ||
Accumulated deficit | (4,506) | (4,506) | ||
Total stockholders' equity (deficit) | (590) | (590) | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | (1,532) | (1,532) | ||
Adjustments | ||||
ASSETS | ||||
Cash and cash equivalents | 380 | |||
Accounts receivable, net | 25,729 | (8,476) | ||
Prepaid expenses and other current assets | 36 | (92) | ||
Total current assets | (26,073) | (8,568) | ||
OTHER ASSETS | 385 | |||
RIGHT OF USE LEASE ASSETS | 780 | 622 | ||
PROPERTY AND EQUIPMENT, NET | (658) | (991) | ||
INTANGIBLE ASSETS,NET | 9,225 | 11,466 | ||
GOODWILL | 8,107 | 9,695 | ||
TOTAL ASSETS | (27,069) | (10,323) | ||
LIABILITIES | ||||
Accounts payable and customer deposits | (875) | (630) | ||
Net billings in excess of revenues | 861 | 892 | ||
Accrued expenses and other payables | 4,402 | (1,597) | ||
Lease, Liability, Current | 237 | 1,994 | ||
Total current liabilities | (4,179) | 659 | ||
Lease, Liability, Noncurrent | 257 | (1,369) | ||
Deferred tax liabilities | 252 | |||
Total liabilities | (3,670) | (710) | ||
STOCKHOLDERS' EQUITY | ||||
Common Stock | 1,213 | 227 | ||
Accumulated other comprehensive loss | (194) | 263 | ||
Accumulated deficit | (24,418) | (10,103) | ||
Total stockholders' equity (deficit) | (23,399) | (9,613) | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ (27,069) | $ (10,323) |
Unaudited Quarterly Data (Res_5
Unaudited Quarterly Data (Restated) - Income Statement (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Unaudited Quarterly Data (Restated) | |||||
REVENUES | $ 16,876 | $ 13,069 | $ 29,945 | ||
COST AND OPERATING EXPENSES | |||||
Cost of Revenues | 12,644 | 8,046 | 20,690 | ||
Product development | 3,625 | 2,552 | 6,177 | $ 12,956 | $ 3,083 |
General and administrative | 8,367 | 7,932 | 16,299 | ||
Restructuring and acquisition costs | 124 | 3,308 | 3,432 | 3,457 | 7,260 |
Depreciation and amortization | 3,105 | 2,726 | 5,831 | 12,938 | 5,427 |
Total cost and operating expenses | 30,960 | 27,501 | 58,461 | 282,402 | 46,351 |
LOSS FROM OPERATIONS | (14,084) | (14,432) | (28,516) | (220,353) | (26,093) |
Total other income (expense) | (2,560) | ||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | (15,028) | (16,048) | (31,076) | ||
Income tax benefit | (197) | (167) | (364) | (8,295) | (174) |
NET LOSS | (14,831) | (15,881) | (30,712) | ||
OTHER COMPREHENSIVE INCOME | |||||
Foreign currency translation income | (21) | (97) | (118) | $ (219) | $ (200) |
COMPREHENSIVE LOSS | $ (14,852) | $ (15,978) | $ (30,830) | ||
Net loss per common share and equivalents - basic | $ (0.13) | $ (0.15) | $ (0.29) | ||
Net loss per common share and equivalents - diluted | $ (1.95) | $ (0.28) | |||
As reported | |||||
Unaudited Quarterly Data (Restated) | |||||
REVENUES | $ 34,148 | $ 23,040 | $ 57,188 | ||
COST AND OPERATING EXPENSES | |||||
Cost of Revenues | 15,293 | 10,068 | 25,361 | ||
Product development | 3,242 | 2,198 | 5,816 | ||
General and administrative | 9,033 | 7,615 | 15,897 | ||
Restructuring and acquisition costs | 428 | 3,080 | 3,508 | ||
Depreciation and amortization | 3,224 | 2,843 | 6,067 | ||
Total cost and operating expenses | 33,989 | 28,369 | 62,359 | ||
LOSS FROM OPERATIONS | 159 | (5,329) | (5,171) | ||
Total other income (expense) | (1,740) | ||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | (965) | (5,945) | (6,911) | ||
Income tax benefit | (449) | (167) | (617) | ||
NET LOSS | (516) | (5,778) | (6,294) | ||
OTHER COMPREHENSIVE INCOME | |||||
Foreign currency translation income | 436 | (360) | 76 | ||
COMPREHENSIVE LOSS | $ (80) | $ (6,138) | $ (6,218) | ||
Net loss per common share and equivalents - basic | $ 0 | $ (0.06) | $ (0.06) | ||
Adjustments | |||||
Unaudited Quarterly Data (Restated) | |||||
REVENUES | $ (17,272) | $ (9,971) | $ (27,243) | ||
COST AND OPERATING EXPENSES | |||||
Cost of Revenues | (2,649) | (2,022) | (4,671) | ||
Product development | 383 | 354 | 361 | ||
General and administrative | (666) | 317 | 402 | ||
Restructuring and acquisition costs | (304) | 226 | (76) | ||
Depreciation and amortization | (119) | (117) | (236) | ||
Total cost and operating expenses | (3,029) | (868) | (3,898) | ||
LOSS FROM OPERATIONS | (14,243) | (9,103) | (23,345) | ||
Total other income (expense) | (820) | ||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | (14,063) | (10,103) | (24,165) | ||
Income tax benefit | 252 | 253 | |||
NET LOSS | (14,315) | (10,103) | (24,418) | ||
OTHER COMPREHENSIVE INCOME | |||||
Foreign currency translation income | (457) | 263 | (194) | ||
COMPREHENSIVE LOSS | $ (14,772) | $ (9,840) | $ (24,612) |
Unaudited Quarterly Data (Res_6
Unaudited Quarterly Data (Restated) - Cash Flow (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2016 | |
Restatement to Adjustments Of Cash Flow Statement [Line Items] | ||||||
Net loss | $ (226,770) | $ (18,024) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation and amortization | $ 3,105 | $ 2,726 | $ 5,831 | 12,938 | 5,427 | |
Provision for doubtful accounts and reserve for note receivables | 26 | 72 | 4,531 | 137 | ||
Stock-based compensation | 5,029 | 7,744 | 11,236 | 6,783 | ||
Shares issued for services | 1,038 | 1,353 | 1,788 | 822 | ||
Loss on extinguishment of debt | 1,000 | 1,000 | 8,873 | 0 | ||
Deferred tax | (525) | (522) | (8,611) | (255) | ||
Changes in operating assets and liabilities: | ||||||
(Increase) in accounts receivable | (604) | (895) | (1,952) | 1,541 | ||
(Increase) decrease in prepaid expenses, deposits and other assets | 603 | 1,365 | 1,853 | (628) | ||
Decrease (increase) in accounts payable and customer deposits | 3,537 | 7,846 | 16,140 | 4,650 | ||
Decrease (increase) in net billings in excess of revenues | (117) | (436) | (70) | 84 | ||
Decrease (increase) in accrued expenses and other payables | (1,671) | (2,739) | 421 | (954) | ||
Net cash (used in) operating activities | (4,717) | (9,671) | (17,761) | (7,820) | ||
Purchases of property, equipment and software development | (1,418) | (2,643) | (7,118) | (3,707) | ||
Acquisition of iPass, Inc., net of cash acquired | 860 | 860 | 0 | (7,318) | ||
Investment in note receivables | (2,700) | (2,700) | (500) | |||
Acquisition of assets from Devicescape, LLC | (2,137) | |||||
Net cash (used in) investing activities | (3,258) | (6,620) | (11,095) | (11,525) | ||
Increase in short term loans | 0 | 548 | ||||
Exercise of warrants and options | 750 | 1,597 | 6,174 | |||
Financing related fees | (867) | (867) | (4,101) | (633) | ||
Proceeds from issuance of loan | 24,024 | 24,178 | 27,907 | 0 | ||
Repayment on loans | (10,989) | (10,989) | 41,502 | 81 | ||
Net cash provided by financing activities | 12,918 | 13,917 | 28,340 | 12,108 | ||
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (21) | (6) | (65) | $ (18) | ||
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 4,922 | (2,380) | (581) | (7,255) | ||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF THE YEAR | 11,404 | 6,483 | 6,483 | 6,483 | 13,738 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR | 4,103 | 11,404 | 4,103 | 5,902 | 6,483 | |
As reported | ||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation and amortization | 3,224 | 2,843 | 6,067 | |||
Provision for doubtful accounts and reserve for note receivables | 286 | 286 | ||||
Stock-based compensation | 3,714 | 5,722 | ||||
Shares issued for services | 1,523 | 2,279 | ||||
Changes in operating assets and liabilities: | ||||||
(Increase) in accounts receivable | (9,225) | (25,191) | ||||
(Increase) decrease in prepaid expenses, deposits and other assets | 2,816 | 2,975 | ||||
Decrease (increase) in accounts payable and customer deposits | 3,420 | 6,937 | ||||
Decrease (increase) in net billings in excess of revenues | (1,237) | (2,000) | ||||
Decrease (increase) in accrued expenses and other payables | (3,098) | (1,643) | ||||
Net cash (used in) operating activities | (4,614) | (10,440) | ||||
Purchases of property, equipment and software development | (765) | (1,650) | ||||
Acquisition of iPass, Inc., net of cash acquired | (284) | (1,563) | ||||
Investment in note receivables | (2,761) | |||||
Net cash (used in) investing activities | (3,749) | (5,974) | ||||
Increase in short term loans | 287 | 142 | ||||
Exercise of warrants and options | 717 | |||||
Financing related fees | (894) | (624) | ||||
Proceeds from issuance of loan | 25,000 | 25,000 | ||||
Repayment on loans | (11,670) | (11,670) | ||||
Net cash provided by financing activities | 13,440 | 14,443 | ||||
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (156) | (29) | ||||
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 4,921 | (2,000) | ||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF THE YEAR | 11,404 | 6,483 | 6,483 | 6,483 | ||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR | 4,483 | 11,404 | 4,483 | 6,483 | ||
Adjustments | ||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation and amortization | (119) | (117) | (236) | |||
Provision for doubtful accounts and reserve for note receivables | (260) | (214) | ||||
Stock-based compensation | 1,315 | 2,022 | ||||
Shares issued for services | (485) | (926) | ||||
Loss on extinguishment of debt | 1,000 | 1,000 | ||||
Deferred tax | (525) | (522) | ||||
Changes in operating assets and liabilities: | ||||||
(Increase) in accounts receivable | 8,621 | 24,296 | ||||
(Increase) decrease in prepaid expenses, deposits and other assets | (2,213) | (1,610) | ||||
Decrease (increase) in accounts payable and customer deposits | 117 | 909 | ||||
Decrease (increase) in net billings in excess of revenues | 1,120 | 1,564 | ||||
Decrease (increase) in accrued expenses and other payables | 1,427 | (1,096) | ||||
Net cash (used in) operating activities | (103) | 769 | ||||
Purchases of property, equipment and software development | (653) | (993) | ||||
Acquisition of iPass, Inc., net of cash acquired | 1,144 | 2,423 | ||||
Investment in note receivables | (61) | |||||
Acquisition of assets from Devicescape, LLC | (2,137) | |||||
Net cash (used in) investing activities | 491 | (646) | ||||
Increase in short term loans | (287) | (142) | ||||
Exercise of warrants and options | 33 | |||||
Financing related fees | 27 | (243) | ||||
Proceeds from issuance of loan | (976) | (822) | ||||
Repayment on loans | 681 | 681 | ||||
Net cash provided by financing activities | (522) | (526) | ||||
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 135 | 23 | ||||
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 0 | (380) | ||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF THE YEAR | 0 | 0 | 0 | $ 0 | ||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR | $ (380) | $ 0 | $ (380) | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 22, 2021 | Oct. 01, 2020 | Jul. 01, 2020 | Jun. 08, 2020 | Dec. 24, 2019 | Dec. 10, 2019 | Aug. 22, 2019 | Feb. 26, 2019 | Jul. 31, 2020 | Oct. 01, 2020 | Mar. 31, 2019 | Aug. 18, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 01, 2021 | Dec. 08, 2020 | Oct. 31, 2020 | Feb. 28, 2019 |
Subsequent Event [Line Items] | |||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 3,845,193 | ||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.74 | ||||||||||||||||||
Fair Value Adjustment of Warrants | $ 0 | $ (1,284) | |||||||||||||||||
Preferred Stock, Shares Issued | 0 | 0 | |||||||||||||||||
Preferred Stock, Value, Issued | |||||||||||||||||||
Debt, Weighted Average Interest Rate | 11.08% | ||||||||||||||||||
Goodwill and Intangible Asset Impairment | $ 160,989 | 0 | |||||||||||||||||
Goodwill | $ 139,195 | $ 139,195 | 10,099 | $ 101,375 | |||||||||||||||
Goodwill, Impairment Loss | $ 129,097 | ||||||||||||||||||
Debt Instrument, Interest Rate During Period | 2.00% | ||||||||||||||||||
Common Stock, Shares, Issued | 139,060,180 | 139,060,180 | |||||||||||||||||
Net Proceeds | $ 24,024 | $ 24,178 | $ 27,907 | $ 0 | |||||||||||||||
Conversion price | $ 1.75 | $ 3.75 | |||||||||||||||||
Stated value per share | $ 0.00001 | $ 0.00001 | |||||||||||||||||
Proceeds from issuance of loan | $ 4,478 | $ 0 | |||||||||||||||||
Post Road Group Debt Facility [Member] | |||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||
Line of Credit Facility, Commitment Fee Percentage | 1.00% | ||||||||||||||||||
Share Price | $ 2.89 | $ 3.78 | |||||||||||||||||
Stock Issued During Period, Shares, New Issues | 750,000 | 425,000 | |||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000 | ||||||||||||||||||
Long-term Line of Credit | 25,000 | ||||||||||||||||||
Line of Credit Facility, Increase (Decrease), Net | 5,000 | ||||||||||||||||||
Amortization of Debt Discount (Premium) | $ 813 | ||||||||||||||||||
Artilium Plc [Member] | |||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||
Goodwill | $ 101,375 | ||||||||||||||||||
Fortress | |||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 325,000 | ||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 18,852,272 | ||||||||||||||||||
Series C Redeemable Preferred Stock | |||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 105.33 | 255 | |||||||||||||||||
Preferred Stock, Liquidation Preference Per Share | $ 0.00001 | ||||||||||||||||||
Legal Fees | $ 361 | ||||||||||||||||||
Preferred Stock, Dividend Rate, Percentage | 8.00% | 8.00% | 8.00% | ||||||||||||||||
Stated value per share | $ 100 | $ 100,000 | |||||||||||||||||
Proceeds from issuance of loan | $ 5,033 | ||||||||||||||||||
Subsequent Event [Member] | |||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||
Redemption Premium | $ 3,500 | ||||||||||||||||||
Debt, Weighted Average Interest Rate | 85.00% | 85.00% | |||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 1,666.667 | ||||||||||||||||||
Debt Conversion, Original Debt, Amount | $ 1,000 | ||||||||||||||||||
Debt Conversion, Description | (i) 120% of the then outstanding principal amount of the Note (or portion thereof) and (ii) 120% of the product of (A) the conversion rate in effect as of the trading day immediately preceding the effective date of such fundamental change; (B) the principal amount of this Note to be repurchased upon a fundamental change divided by $1,000; and (C) the highest daily volume weighted-average price per share of the Company's common stock occurring during the consecutive volume-weighted average price per share of the Company's common stock trading days ending on, and including, the daily volume-weighted average price per share of the Company's common stock on the trading day immediately before the effective date of such fundamental change. | ||||||||||||||||||
Principal amount | $ 1,000 | ||||||||||||||||||
Subsequent Event [Member] | Senior Second Lien Secured Convertible Note | |||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 2,750,000 | ||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.40 | ||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | 8.00% | |||||||||||||||||
Principal amount | $ 2,400 | ||||||||||||||||||
Net Proceeds | $ 2,000 | ||||||||||||||||||
Percentage of lowest volume-weighted average price | 85.00% | ||||||||||||||||||
Threshold number of days, interest payment calculation | 10 days | ||||||||||||||||||
Redemption premium percent | 20.00% | ||||||||||||||||||
Number of shares issued on initial conversion | 1.6666667 | ||||||||||||||||||
Conversion price | $ 0.60 | ||||||||||||||||||
Subsequent Event [Member] | Series C Redeemable Preferred Stock | |||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 116 | ||||||||||||||||||
Preferred Stock, Value, Issued | $ 11,600 | ||||||||||||||||||
Proceeds from issuance of loan | $ 9,100 | ||||||||||||||||||
Number of shares convertible | 116 | ||||||||||||||||||
Subsequent Event [Member] | 8% Secured Convertible Note [Member] | |||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||
Legal Fees | $ 300 | ||||||||||||||||||
Debt Instrument, Periodic Payment, Principal | 17,500 | ||||||||||||||||||
Debt Instrument, Collateral Amount | 14,000 | ||||||||||||||||||
Proceeds from Issuance of Senior Long-term Debt | 4,000 | ||||||||||||||||||
Debt Instrument, Unused Borrowing Capacity, Amount | $ 10,000 | ||||||||||||||||||
Proceeds from Sale of Finance Receivables | $ 3,000 | ||||||||||||||||||
Proceed from Sale Of Additional Financing Cost | 4,000 | ||||||||||||||||||
Working Capital | $ 3,000 | ||||||||||||||||||
Restricted Cash | $ 7,000 | ||||||||||||||||||
Debt, Weighted Average Interest Rate | 105.00% | 105.00% | 105.00% | ||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 1,666.667 | ||||||||||||||||||
Debt Conversion, Original Debt, Amount | $ 1,000 | $ 1,000 | |||||||||||||||||
Debt Instrument, Interest Rate During Period | 8.00% | ||||||||||||||||||
Subsequent Event [Member] | Senior Convertible Note [Member] | |||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||
Warrants to Purchase Common Stock Shares | 15,000,000 | ||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.58 | ||||||||||||||||||
Reduction In Class Of Warrant Or Right Exercise Price Of Warrants Or Rights1 | $ 0.37 | ||||||||||||||||||
Letter Agreement [Member] | Subsequent Event [Member] | |||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||
Common Stock, Shares, Issued | 1,093,750 |
Uncategorized Items - teum-2019
Label | Element | Value |
Restatement Adjustment [Member] | ||
Selling and Marketing Expense | us-gaap_SellingAndMarketingExpense | $ 372,000 |
Selling and Marketing Expense | us-gaap_SellingAndMarketingExpense | 322,000 |
Selling and Marketing Expense | us-gaap_SellingAndMarketingExpense | 326,000 |
Nonoperating Income (Expense) | us-gaap_NonoperatingIncomeExpense | (1,000,000) |
Nonoperating Income (Expense) | us-gaap_NonoperatingIncomeExpense | 180,000 |
Scenario Previously Reported [Member] | ||
Selling and Marketing Expense | us-gaap_SellingAndMarketingExpense | 2,565,000 |
Selling and Marketing Expense | us-gaap_SellingAndMarketingExpense | 5,710,000 |
Selling and Marketing Expense | us-gaap_SellingAndMarketingExpense | 2,769,000 |
Nonoperating Income (Expense) | us-gaap_NonoperatingIncomeExpense | (616,000) |
Nonoperating Income (Expense) | us-gaap_NonoperatingIncomeExpense | (1,124,000) |
Impact On Reclassification Of Restructuring And Acquisition Costs [Member] | ||
Selling and Marketing Expense | us-gaap_SellingAndMarketingExpense | 376,000 |
Selling and Marketing Expense | us-gaap_SellingAndMarketingExpense | 451,000 |
Selling and Marketing Expense | us-gaap_SellingAndMarketingExpense | 75,000 |
Cost of Goods and Services Sold | us-gaap_CostOfGoodsAndServicesSold | 29,000 |
Cost of Goods and Services Sold | us-gaap_CostOfGoodsAndServicesSold | 70,000 |
Cost of Goods and Services Sold | us-gaap_CostOfGoodsAndServicesSold | 41,000 |
Impact On Acquisition Of Ipass Inc [Member] | ||
General and Administrative Expense | us-gaap_GeneralAndAdministrativeExpense | 802,000 |
General and Administrative Expense | us-gaap_GeneralAndAdministrativeExpense | 802,000 |
Impact On Accruals For Usage Of Vendor Network Services [Member] | ||
General and Administrative Expense | us-gaap_GeneralAndAdministrativeExpense | 18,000 |
General and Administrative Expense | us-gaap_GeneralAndAdministrativeExpense | 12,000 |
General and Administrative Expense | us-gaap_GeneralAndAdministrativeExpense | 30,000 |
Cost of Goods and Services Sold | us-gaap_CostOfGoodsAndServicesSold | 559,000 |
Cost of Goods and Services Sold | us-gaap_CostOfGoodsAndServicesSold | 693,000 |
Cost of Goods and Services Sold | us-gaap_CostOfGoodsAndServicesSold | 134,000 |
Impact On Capitalization Of Software [Member] | ||
General and Administrative Expense | us-gaap_GeneralAndAdministrativeExpense | 433,000 |
General and Administrative Expense | us-gaap_GeneralAndAdministrativeExpense | 771,000 |
General and Administrative Expense | us-gaap_GeneralAndAdministrativeExpense | 338,000 |
Impact On Acquisition Of Devicescape [Member] | ||
General and Administrative Expense | us-gaap_GeneralAndAdministrativeExpense | 70,000 |
General and Administrative Expense | us-gaap_GeneralAndAdministrativeExpense | 70,000 |
Impact Of Income Statement [Member] | ||
Selling and Marketing Expense | us-gaap_SellingAndMarketingExpense | 4,000 |
Selling and Marketing Expense | us-gaap_SellingAndMarketingExpense | 129,000 |
Selling and Marketing Expense | us-gaap_SellingAndMarketingExpense | 250,000 |
Cost of Goods and Services Sold | us-gaap_CostOfGoodsAndServicesSold | 151,000 |
Cost of Goods and Services Sold | us-gaap_CostOfGoodsAndServicesSold | 335,000 |
Cost of Goods and Services Sold | us-gaap_CostOfGoodsAndServicesSold | $ 194,000 |