Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 28, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Support.com, Inc. | ||
Entity Central Index Key | 1,104,855 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 53,578,410 | ||
Entity Common Stock, Shares Outstanding | 18,955,264 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 25,182 | $ 18,050 |
Short-term investments | 24,467 | 31,183 |
Accounts receivable, less allowance of $13 and $9 at December 31, 2018 and 2017, respectively | 12,292 | 11,951 |
Prepaid expenses and other current assets | 999 | 802 |
Total current assets | 62,940 | 61,986 |
Property and equipment, net | 703 | 1,133 |
Intangible assets, net | 250 | 250 |
Other assets | 707 | 984 |
Total assets | 64,600 | 64,353 |
Current liabilities: | ||
Accounts payable | 368 | 504 |
Accrued compensation | 3,423 | 3,157 |
Other accrued liabilities | 978 | 1,330 |
Accrued legal settlement | 10,000 | 0 |
Short-term deferred revenue | 1,135 | 2,006 |
Total current liabilities | 15,904 | 6,997 |
Long-term deferred revenue | 0 | 13 |
Other long-term liabilities | 800 | 885 |
Total liabilities | 16,704 | 7,895 |
Commitments and contingencies (Note 5) | ||
Stockholders' equity: | ||
Common stock; par value $0.0001, 50,000,000 shares authorized; 19,438,178 issued and 18,955,264 outstanding at December 31, 2018; 19,211,826 issued and 18,728,192 outstanding at December 31, 2017 | 2 | 2 |
Additional paid-in capital | 268,794 | 267,857 |
Treasury stock, at cost (482,914 shares at December 31, 2018 and December 31, 2017) | (5,297) | (5,297) |
Accumulated other comprehensive loss | (2,507) | (2,108) |
Accumulated deficit | (213,096) | (203,996) |
Total stockholders' equity | 47,896 | 56,458 |
Total liabilities and stockholders' equity | $ 64,600 | $ 64,353 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Accounts receivable, allowance for doubtful accounts | $ 13 | $ 9 |
Stockholders' equity: | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 19,438,178 | 19,211,826 |
Common stock, shares outstanding | 18,955,264 | 18,728,192 |
Treasury stock | 482,914 | 482,914 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue: | ||
Services | $ 64,476 | $ 54,670 |
Software and other | 5,073 | 5,451 |
Total revenue | 69,549 | 60,121 |
Costs of revenue: | ||
Cost of services | 57,396 | 47,101 |
Cost of software and other | 208 | 287 |
Total cost of revenue | 57,604 | 47,388 |
Gross profit | 11,945 | 12,733 |
Operating expenses: | ||
Research and development | 2,780 | 3,033 |
Sales and marketing | 1,823 | 2,425 |
General and administrative | 7,408 | 8,696 |
Amortization of intangible assets and other | 0 | 16 |
Legal settlement | 10,000 | 0 |
Restructuring | 0 | 128 |
Total operating expenses | 22,011 | 14,298 |
Loss from operations | (10,066) | (1,565) |
Interest income and other, net | 965 | 643 |
Loss from continuing operations, before income taxes | (9,101) | (922) |
Income tax provision | (1) | 604 |
Net loss | $ (9,100) | $ (1,526) |
Basic earnings (loss) per share: | ||
Basic net loss per share (in dollars per share) | $ (0.48) | $ (0.08) |
Diluted earnings (loss) per share: | ||
Diluted net loss per share (in dollars per share) | $ (0.48) | $ (0.08) |
Shares used in computing basic net loss per share (in shares) | 18,826 | 18,644 |
Shares used in computing diluted net loss per share (in shares) | 18,826 | 18,644 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (9,100) | $ (1,526) |
Other comprehensive loss: | ||
Change in foreign currency translation adjustment | (414) | 264 |
Change in net unrealized gain (loss) on investments | 15 | (43) |
Other comprehensive income (loss) | (399) | 221 |
Comprehensive loss | $ (9,499) | $ (1,305) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] | Total |
Balances at Dec. 31, 2016 | $ 2 | $ 267,400 | $ (5,295) | $ (2,329) | $ (202,470) | $ 57,308 |
Balances (in shares) at Dec. 31, 2016 | 18,548,180 | |||||
Net loss | (1,526) | (1,526) | ||||
Partial shares in reverse split | (1) | (1) | ||||
Partial shares in reverse split (in shares) | (40) | |||||
Other comprehensive income | 221 | 221 | ||||
Stock-based compensation expense | 430 | 430 | ||||
Issuance of common stock upon exercise of stock options for cash and releases of RSUs (in shares) | 153,824 | |||||
Issuance of common stock under employee stock purchase plan | $ 28 | 28 | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 28,018 | |||||
Repurchase of common stock | (2) | (2) | ||||
Repurchase of common stock (in shares) | (1,070) | |||||
Balances at Dec. 31, 2017 | $ 2 | 267,857 | (5,297) | (2,108) | (203,996) | $ 56,458 |
Balances (in shares) at Dec. 31, 2017 | 18,728,912 | 18,728,192 | ||||
Net loss | (9,100) | $ (9,100) | ||||
Other comprehensive income | (399) | (399) | ||||
Stock-based compensation expense | 680 | 680 | ||||
Issuance of common stock upon exercise of stock options for cash and releases of RSUs | 185 | 185 | ||||
Issuance of common stock upon exercise of stock options for cash and releases of RSUs (in shares) | 194,965 | |||||
Issuance of common stock under employee stock purchase plan | 72 | 72 | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 31,387 | |||||
Balances at Dec. 31, 2018 | $ 2 | $ 268,794 | $ (5,297) | $ (2,507) | $ (213,096) | $ 47,896 |
Balances (in shares) at Dec. 31, 2018 | 18,955,264 | 18,955,264 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities: | ||
Net loss | $ (9,100) | $ (1,526) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Stock-based compensation expense | 680 | 430 |
Amortization of intangible assets and other | 0 | 16 |
Amortization of premiums and discounts on investments | 176 | 65 |
Depreciation | 638 | 628 |
Deferred income taxes | 0 | 585 |
Loss on disposal of fixed assets | 0 | 8 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (341) | (2,384) |
Prepaid expenses and other current assets | (210) | 417 |
Other assets | 159 | 132 |
Accounts payable | (136) | (581) |
Accrued legal settlement | 10,000 | 0 |
Accrued compensation | 257 | 191 |
Other accrued liabilities | (358) | (1,159) |
Other long-term liabilities | (85) | (179) |
Deferred revenue | (884) | (846) |
Net cash provided by (used in) operating activities | 796 | (4,203) |
Investing activities: | ||
Purchases of property and equipment | (208) | (63) |
Purchases of investments | (30,049) | (25,795) |
Maturities of investments | 36,604 | 31,023 |
Net cash provided by investing activities | 6,347 | 5,165 |
Financing activities: | ||
Cash settlement in stock split | 0 | (1) |
Proceeds from exercise of stock | 185 | 28 |
Proceeds from employee stock purchase plan | 72 | 0 |
Repurchase of common stock | 0 | (2) |
Net cash provided by financing activities | 257 | 25 |
Net increase (decrease) in cash and cash equivalents | 7,400 | 987 |
Effect of exchange rate changes on cash and cash equivalents | (268) | 173 |
Cash and cash equivalents at beginning of year | 18,050 | 16,890 |
Cash and cash equivalents at end of year | 25,182 | 18,050 |
Supplemental schedule of cash flow information: | ||
Cash paid for income taxes | $ 72 | $ 323 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | Nature of Operations Support.com, Inc. (“Support.com”, “the Company”, “We” or “Our”), was incorporated in the state of Delaware on December 3, 1997. Our common stock trades on the Nasdaq Capital Market under the symbol “SPRT.” Support.com is a leading provider of tech support and turnkey support center services, producer of anti-malware products, and the maker of Support.com Our technology support services programs help leading brands create new revenue streams and deepen customer relationships. Cloud is a solution for companies to optimize support interactions with their customers using their own- or third-party support personnel enables companies to quickly resolve complex technology issues for their customers, boosting agent productivity and dramatically improving the customer experience. Basis of Presentation The consolidated financial statements include the accounts of Support.com and its wholly-owned foreign subsidiaries. All intercompany transactions and balances have been eliminated. Foreign Currency Translation The functional currency of our foreign subsidiaries is generally the local currency. Assets and liabilities of our wholly owned foreign subsidiaries are translated from their respective functional currencies at exchange rates in effect at the balance sheet date, and revenues and expenses are translated at average exchange rates prevailing during the year. Any material resulting translation adjustments are reflected as a separate component of stockholders’ equity in accumulated other comprehensive income (loss). Realized foreign currency transaction gains (losses) were not material during the years ended December 31, 2018 and 2017. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The accounting estimates that require management’s most significant, difficult and subjective judgments include accounting for revenue recognition, assumptions used to estimate self-insurance and litigation accruals, the valuation of investments, the assessment of recoverability of intangible assets and their estimated useful lives, the valuations and recognition of stock-based compensation and the recognition and measurement of current and deferred income tax assets and liabilities. Actual results could differ materially from these estimates. Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, investments and trade accounts receivable. Periodically throughout the year, the Company has maintained balances in various operating accounts in excess of federally insured limits. Our investment portfolio consists of investment grade securities. Except for obligations of the United States government and securities issued by agencies of the United States government, we diversify our investments by limiting our holdings with any individual issuer. We are exposed to credit risks in the event of default by the issuers to the extent of the amount recorded on the balance sheet. The credit risk in our trade accounts receivable is substantially mitigated by our evaluation of the customers’ financial conditions at the time we enter into business and reasonably short payment terms. Trade Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are recorded at the invoiced amount. We perform evaluations of our customers’ financial condition and generally do not require collateral. We make judgments as to our ability to collect outstanding receivables and provide allowances for a portion of receivables when collection becomes doubtful. Our allowances are made based on a specific review of all significant outstanding invoices. For those invoices not specifically provided for, allowances are recorded at differing rates, based on the age of the receivable. In determining these rates, we analyze our historical collection experience and current payment trends. The determination of past-due accounts is based on contractual terms. The following table summarizes the allowance for doubtful accounts as of December 31, 2018 and 2017 (in thousands): Balance at Beginning of Period Adjustments to Costs and Expenses Write- offs Balance at End of Period Allowance for doubtful accounts: Year ended December 31, 2017 $ 19 $ 34 $ (44 ) $ 9 Year ended December 31, 2018 $ 9 $ 24 $ (20 ) $ 13 As of December 31, 2018, Comcast and Cox Communications accounted for approximately 71% and 20% of our total accounts receivable, respectively. As of December 31, 2017, Comcast and Cox Communications accounted for approximately 71% and 12% of our total accounts receivable, respectively. No other customers accounted for 10% or more of our total accounts receivable as of December 31, 2018 and 2017. Cash, Cash Equivalents and Investments All liquid instruments with an original maturity at the date of purchase of 90 days or less are classified as cash equivalents. Cash equivalents and short-term investments consist primarily of money market funds, certificates of deposit, commercial paper, corporate and municipal bonds. Our interest income on cash, cash equivalents and investments is recorded monthly and reported as interest income and other in our consolidated statements of operations. Our cash equivalents and short-term investments are classified as investment, and are reported at fair value with unrealized gains/losses included in accumulated other comprehensive loss within stockholders’ equity on the consolidated balance sheets and in the consolidated statements of comprehensive loss. We view this investment portfolio as available for use in our current operations, and therefore we present our marketable securities as short-term assets. We monitor our investments for impairment on a quarterly basis and determine whether a decline in fair value is other-than-temporary by considering factors such as current economic and market conditions, the credit rating of the security’s issuer, the length of time an investment’s fair value has been below our carrying value, the Company’s intent to sell the security and the Company’s belief that it will not be required to sell the security before the recovery of its amortized cost. If an investment’s decline in fair value is deemed to be other-than-temporary, we reduce its carrying value to its estimated fair value, as determined based on quoted market prices or liquidation values. Declines in value judged to be other-than-temporary, if any, are recorded in operations as incurred. At December 31, 2018, the Company evaluated its unrealized losses on available-for-sale securities and determined them to be temporary. We currently do not intend to sell securities with unrealized losses, and we concluded that we will not be required to sell these securities before the recovery of their amortized cost basis. At December 31, 2018 and 2017, the estimated fair value of cash, cash equivalents and investments was $49.6 million and $49.2 million, respectively. The following is a summary of cash, cash equivalents and investments at December 31, 2018 and 2017 (in thousands): For the Year Ended December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 8,391 $ — $ — $ 8,391 Money market fund 14,295 — — 14,295 Certificates of deposit 1,171 — (1 ) 1,170 Commercial paper 3,986 — (1 ) 3,985 Corporate notes and bonds 14,899 — (66 ) 14,833 U.S. government agency securities 6,976 — (1 ) 6,975 $ 49,718 $ — $ (69 ) $ 49,649 Classified as: Cash and cash equivalents $ 25,182 $ — $ — $ 25,182 Short-term investments 24,536 — (69 ) 24,467 $ 49,718 $ — $ (69 ) $ 49,649 For the Year Ended December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 7,408 $ — $ — $ 7,408 Money market fund 10,643 $ — (1 ) 10,642 Certificates of deposit 1,207 — (2 ) 1,205 Commercial paper 2,494 — (1 ) 2,493 Corporate notes and bonds 22,846 — (76 ) 22,770 U.S. government agency securities 4,719 — (4 ) 4,715 $ 49,317 $ — $ (84 ) $ 49,233 Classified as: Cash and cash equivalents $ 18,051 $ — $ (1 ) $ 18,050 Short-term investments 31,266 — (83 ) 31,183 $ 49,317 $ — $ (84 ) $ 49,233 The following table summarizes the estimated fair value of our available-for-sale securities classified by the stated maturity date of the security (in thousands): December 31, 2018 2017 Due within one year $ 20,874 $ 22,228 Due within two years 3,593 8,955 $ 24,467 $ 31,183 We determined that the gross unrealized losses on our available-for-sale investments as of December 31, 2018 are temporary in nature. The fair value of our available-for-sale securities at December 31, 2018 and 2017 reflects a net unrealized loss of $68,000 and $84,000, respectively. There were no net realized gains (losses) on available-for-sale securities in the years ended December 31, 2018 and 2017. The cost of securities sold is based on the specific identification method. The following table sets forth the unrealized losses for the Company’s available-for-sale investments as of December 31, 2018 and 2017 (in thousands): As of December 31, 2018 In Loss Position Less Than 12 Months In Loss Position More Than 12 Months Total in Loss Position Description Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Certificates of deposit $ 720 $ (1 ) $ — $ — $ 719 $ (1 ) Corporate notes and bonds 18,883 (67 ) — — 18,816 (67 ) U.S. government agency securities 6,976 (1 ) — — 6,975 (1 ) Total $ 26,579 $ (69 ) $ — $ — $ 26,510 $ (69 ) As of December 31, 2017 In Loss Position Less Than 12 Months In Loss Position More Than 12 Months Total in Loss Position Description Fair Value Unrealized Losses Fail Value Unrealized Losses Fair Value Unrealized Losses Certificates of deposit $ 718 $ (2 ) $ — $ — $ 718 $ (2 ) Corporate notes and bonds 16,530 (32 ) 6,947 (47 ) 23,477 (79 ) U.S. government agency securities 3,720 (3 ) 998 — 4,718 (3 ) Total $ 20,968 $ (37 ) $ 7,945 $ (47 ) $ 28,913 $ (84 ) Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization which is determined using the straight-line method over the estimated useful lives of two to five years for computer equipment and software, three years for furniture and fixtures, and the shorter of the estimated useful lives or the lease term for leasehold improvements. Repairs and maintenance costs are expensed as they are incurred. Long-Lived Assets We record purchased identifiable intangible assets at fair value as part of a business combination. Useful life is estimated as the period over which the identifiable intangible assets are expected to contribute directly or indirectly to the future cash flows of the Company. As we do not believe that we can reliably determine a pattern by which the economic benefits of these identifiable intangible assets will be consumed, management adopted straight-line amortization. The original cost is amortized on a straight-line basis over the estimated useful life of each identifiable intangible asset. The Company assesses its long-lived assets, which includes property and equipment and identifiable intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the sum of the future net cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. If our estimates regarding future cash flows derived from such assets were to change, we may record an impairment charge to the value of these assets. Such impairment loss would be measured as the difference between the carrying amount of the asset and its fair value. Revenue Recognition On January 1, 2018, the Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606"). As a result, the Company has changed its accounting policy for revenue recognition and applied ASC 606 using the modified retrospective method. Typically, this approach would result in recognizing the cumulative effect of initially applying ASC 606 as an adjustment to the opening retained earnings at January 1, 2018, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic revenue recognition methodology under ASC 605, Revenue Recognition Disaggregation of Revenue We generate revenue from the sale of services and sale of software fees for end-user software products provided through direct customer downloads and through the sale of these end-user software products via partners. The following table depicts the disaggregation of revenue (in thousands) according to revenue type and is consistent with how we evaluate our financial performance: Revenue from Contracts with Customers: Twelve months ended December 31, 2018 2017 Services $ 64,476 $ 54,670 Software and other 5,073 5,451 Total revenue $ 69,549 $ 60,121 Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We determine revenue recognition through the following steps: ● identification of the contract, or contracts, with a customer; ● identification of the performance obligations in the contract; ● determination of the transaction price; ● allocation of the transaction price to the performance obligations in the contract; and ● recognition of revenue when, or as, we satisfy a performance obligation. Services Revenue Services revenue is comprised primarily of fees for technology support services. Our service programs are designed for both the consumer and SMB markets, and include computer and mobile device set-up, security and support, virus and malware removal and wireless network set-up, and automation system onboarding and support. We offer technology services to consumers and SMBs, primarily through our partners (which include communications providers, retailers, technology companies and others) and to a lesser degree directly through our website at www.support.com. We transact with customers via reseller programs, referral programs and direct transactions. In reseller programs, the partner generally executes the financial transactions with the customer and pays a fee to us which we recognize as revenue when the service is delivered. In referral programs, we transact with the customer directly and pay a referral fee to the referring party. Referral fees are generally expensed in the period in which revenues are recognized. In such referral programs, since we are the primary obligor and bear substantially all risks associated with the transaction, we record the gross amount of revenue. In direct transactions, we sell directly to the customer at the retail price. The technology services described above include four types of offerings: ● Hourly-Based Services - In connection with the provisions of certain services programs, fees are calculated based on contracted hourly rates with partners. For these programs, we recognize revenue as services are performed, based on billable hours of work delivered by our technology specialists. These services programs also include performance standards, which may result in incentives or penalties, which are recognized as earned or incurred. ● Subscriptions - Customers purchase subscriptions or “service plans” under which certain services are provided over a fixed subscription period. Revenues for subscriptions are recognized ratably over the respective subscription periods. ● Incident-Based Services - Customers purchase a discrete, one-time service. Revenue recognition occurs at the time of service delivery. Fees paid for services sold but not yet delivered are recorded as deferred revenue and recognized at the time of service delivery. In certain cases, we are paid for services that are sold but not yet delivered. We initially record such balances as deferred revenue, and recognize revenue when the service has been provided or, on the non-subscription portion of these balances, when the likelihood of the service being redeemed by the customer is remote (“services breakage”). Based on our historical redemption patterns for these relationships, we believe that the likelihood of a service being delivered more than 90 days after sale is remote. We therefore recognize non-subscription deferred revenue balances older than 90 days as services revenue. For the years ended December 31, 2018 and 2017, services breakage revenue accounted for less than 1% of total services revenue. The following table represent deferred revenue activity for the years ended December 31, 2018 and 2017 (in thousands): Partners are generally invoiced monthly. Fees from customers via referral programs and direct transactions are generally paid with a credit card at the time of sale. Revenue is recognized net of any applicable sales tax. We generally provide a refund period on services, during which refunds may be granted to customers under certain circumstances, including inability to resolve certain support issues. For our partnerships, the refund period varies by partner, but is generally between 5 and 14 days. For referral programs and direct transactions, the refund period is generally 5 days. For all channels, we recognize revenue net of refunds and cancellations during the period. Refunds and cancellations have not been material. Services revenue also includes fees from licensing of our Support.com cloud-based software. In such arrangements, customers receive a right to use our Support.com Cloud in their own technology support organizations. We license our cloud-based software using a SaaS model under which customers cannot take possession of the technology and pay us on a per-user basis during the term of the arrangement. In addition, services revenue includes fees from implementation services of our cloud-based software. Currently, revenues from implementation services are recognized ratably over the customer life which is estimated as the term of the arrangement once the Support.com Cloud services are made available to customers. We generally charge for these services on a time and material basis. As of December 31, 2018, revenues from implementation services are di minimus. Software and Other Revenue Software and other revenue is comprised primarily of fees for end-user software products provided through direct customer downloads and through the sale of these end-user software products via partners. Our software is sold to customers as a perpetual license or as a fixed period subscription. We offer when-and-if-available software upgrades to our end-user products. Management has determined that these upgrades are not distinct, as the upgrades are an input into a combined output. In addition, Management has determined that the frequency and timing of the when-and-if-available upgrades are unpredictable and therefore we recognize revenue consistent with the sale of the perpetual license or subscription. We generally control fulfillment, pricing, product requirements, and collection risk and therefore we record the gross amount of revenue. We provide a 30-day money back guarantee for the majority of our end-user software products. For certain end-user software products, we sell perpetual licenses. We provide a limited amount of free technical support to customers. Since the cost of providing this free technical support is insignificant and free product enhancements are minimal and infrequent, we do not defer the recognition of revenue associated with sales of these products. For certain of our end-user software products (principally SUPERAntiSpyware), we sell licenses for a fixed subscription period. We provide regular, significant updates over the subscription period and therefore recognize revenue for these products ratably over the subscription period. Other revenue consists primarily of revenue generated through partners advertising to our customer base in various forms, including toolbar advertising, email marketing, and free trial offers. We recognize other revenue in the period in which our partners notify us that the revenue has been earned. Research and Development Research and development expenditures are charged to operations as they are incurred. Software Development Costs Based on our product development process, technological feasibility is established on the completion of a working model. The Company determined that technological feasibility is reached shortly before the product is ready for general release and therefore development costs incurred have been insignificant. Accordingly, we have charged all such costs to research and development expense in the period in which they were incurred. Purchased Technology for Internal Use We capitalize costs related to software that we license and incorporate into our product and service offerings or develop for internal use. Advertising Costs Advertising costs are recorded as sales and marketing expense in the period in which they are incurred. Advertising expense was $18,000 and $0.1 million for the years ended December 31, 2018 and 2017, respectively. Earnings (Loss) Per Share Basic earnings (loss) per share is computed using our net income (loss) and the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share is computed using our net income (loss) and the weighted average number of common shares outstanding, including the effect of the potential issuance of common stock such as stock issuable pursuant to the exercise of stock options and vesting of restricted stock units (“RSUs”) using the treasury stock method when dilutive. We excluded outstanding weighted average stock options of 0.8 million and 1.9 million for the years ended December 31, 2018 and 2017, respectively, from the calculation of diluted earnings per common share because the exercise prices of these stock options were greater than or equal to the average market value of the common stock. These stock options could be included in the calculation in the future if the average market value of the common stock increases and is greater than the exercise price of these stock options. Since we reported a net loss for the years ended December 31, 2018 and 2017, 64,000 and 28,000 outstanding options and RSUs were also excluded from the computation of diluted loss per share since their effect would have been anti-dilutive. The following table sets forth the computation of basic and diluted net earnings (loss) per share (in thousands, except per share amounts): Year Ended December 31, 2018 2017 Net loss $ (9,100 ) $ (1,526 ) Basic: Weighted-average shares of common stock outstanding 18,826 18,644 Shares used in computing basic net loss per share 18,826 18,644 Basic net loss per share $ (0.48 ) $ (0.08 ) Diluted: Weighted-average shares of common stock outstanding 18,826 18,644 Add: Common equivalent shares outstanding — — Shares used in computing diluted net loss per share 18,826 18,644 Diluted net loss per share $ (0.48 ) $ (0.08 ) Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, which relate entirely to accumulated foreign currency translation losses associated with our foreign subsidiaries and unrealized losses on investments, consisted of the following (in thousands): Foreign Currency Translation Losses Unrealized Gains (Losses) on Investments Total Balance as of December 31, 2017 $ (2,024 ) $ (84 ) $ (2,108 ) Current-period other comprehensive gain (loss) (414 ) 15 (399 ) Balance as of December 31, 2018 $ (2,438 ) $ (69 ) $ (2,507 ) Realized gains/losses on investments reclassified from accumulated other comprehensive loss are reported as interest income and other, net in our consolidated statements of operations. The amounts noted in the consolidated statements of comprehensive loss are shown before taking into account the related income tax impact. The income tax effect allocated to each component of other comprehensive income for each of the periods presented is not significant. Stock-Based Compensation We apply the provisions of ASC 718, Compensation - Stock Compensation, Determining Fair Value of Share-Based Payments Valuation and Attribution Method: Stock-based compensation expense for service-based stock options and employee stock purchase plan (“ESPP”) is estimated at the date of grant based on the fair value of awards using the Black-Scholes-Merton Risk-free Interest Rate: We base our risk-free interest rate on the yield currently available on U.S. Treasury zero coupon issues for the expected term of the stock options. Expected Term: Our expected term represents the period that our stock options are expected to be outstanding and is determined based on historical experience of similar stock options considering the contractual terms of the stock options, vesting schedules and expectations of future employee behavior. Expected Volatility: Our expected volatility represents the amount by which the stock price is expected to fluctuate throughout the period that the stock option is outstanding. The expected volatility is based on the historical volatility of the Company’s stock. Expected Dividend: We use a dividend yield of zero, as we have never paid cash dividends and do not expect to pay dividends in the future. The fair value of our stock-based awards was estimated using the following weighted average assumptions for the years ended December 31, 2018 and 2017: Stock Option Plan Employee Stock Purchase Plan 2018 2017 2018 2017 Risk-free interest rate 2.43 % 1.71 % 2.31 % 0.5 % Expected term (in years) 3.0 3.0 0.5 0.5 Volatility 41.2 % 41.2 % 29.0 % 39.0 % Expected dividend 0 % 0 % 0 % 0 % Weighted average grant-date fair value $ 0.84 $ 0.68 $ 0.67 $ 0.39 We recorded the following stock-based compensation expense for the fiscal years ended December 31, 2018 and 2017 (in thousands): For the Year Ended December 31, 2018 2017 Stock-based compensation expense related to grants of: Stock options $ 395 $ 144 ESPP 16 21 RSU 269 265 $ 680 $ 430 Stock-based compensation expense recognized in: Cost of service $ 63 $ 109 Cost of software and others - 4 Research and development 42 78 Sales and marketing 54 59 General and administrative 521 180 $ 680 $ 430 Cash provided by (used in) from the issuance of common stock, net of repurchase of common stock and cash settlement in stock split, was $257,000 and $25,000 for the years ended December 31, 2018 and 2017, respectively. Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be reversed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets, if it is more likely than not, that such assets will not be realized. The Company’s deferred tax asset and related valuation allowance increased by $2.1 million to $46 million. As the deferred tax asset is fully allowed for, this change had no impact on the Company’s financial position or results of operations. Warranties and Indemnifications We generally provide a refund period on sales, during which refunds may be granted to consumers under certain circumstances, including our inability to resolve certain support issues. For our partnerships, the refund period varies by partner, but is generally between 5-14 days. For referral programs and direct transactions, the refund period is generally 5 days. For the majority of our end-user software products, we provide a 30-day money back guarantee. For all channels, we recognize revenue net of refunds and cancellations during the period. Refunds and cancellations have not been material to date. We generally agree to indemnify our customers against legal claims that our end-user software products infringe certain third-party intellectual property rights. As of December 31, 2018, we were not required to make any payment resulting from infringement claims asserted against our customers and have not recorded any related accruals. Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures, ● Level 1 - Quoted prices in active markets for identical assets or liabilities. ● Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table represents our fair value hierarchy for our financial assets (cash equivalents and investments) measured at fair value on a recurring basis as of December 31, 2018 and 2017 (in thousands): As of December 31, 2018 Level 1 Level 2 Level 3 Total Money market funds $ 14,295 $ — $ — $ 14,295 Certificates of deposit — 1,170 — 1,170 Commercial paper — 3,985 — 3,985 Corporate notes and bonds — 14,833 — 14,833 U.S. government agency securities — 6,975 — 6,975 Total $ 14,295 $ 26,963 $ — $ 41,258 As of December 31, 2017 Level 1 Level 2 Level 3 Total Money market funds $ 10,642 $ — $ — $ 10,642 Certificates of deposit — 1,206 — 1,206 Commercial paper — 2,493 — 2,493 Corporate notes and bonds — 22,769 — 22,769 U.S. government agency securities — 4,715 — 4,715 Total $ 10,642 $ 31,183 $ — $ 41,825 For short-term investments, measured at fair value using Level 2 inputs, we review trading activity and pricing for these investments as of the measurement date. When sufficient quoted pricing for identical securities is not available, we use market pricing and other observable market inputs for similar securities obtained from various third-party data providers. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data. Our policy is that the end of our quarterly reporting period determines when transfers of financial instruments between levels are recognized. Segment Information The Company reports its operations as a single operating segment and has a single reporting unit. Our Chief Operating Decision Maker (“CODM”), our Chief Executive Officer, manages our operations on a consolidated basis for purposes of allocating resources. When evaluating performance and allocating resources, the CODM reviews financial information presented on a consolidated basis. Revenue from customers located outside the United States was less than 1% of total for the years ended December 31, 2018 and 2017. For the year ended December 31, 2018, Comcast and Cox Communications accounted for approximately 69% and 15%, respectively, of our total revenue. For the year ended December 31, 2017, Comcast accounted for approximately 65% of our total revenue. There were no other customers that accounted for 10% or more of our total revenue in any of the periods presented. Long-lived assets are attributed to the geographic location in which they are located. We include in long-lived assets all tangible assets. Long-lived assets by geographic areas are as follows (in thousands): December 31, 2018 2017 United States $ 702 $ 1,132 India - - Philippines 1 1 Total $ 703 $ 1,133 Recent Accounting Pronouncements Accounting Standards Adopted in the Current Period Revenue Recognition We have implemented all new accounting pronouncements that are in effect and that management believes would materially affect our financial statements. In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers Deferra |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment are stated at cost, less accumulated depreciation, and consist of the following as of December 31, 2018 and 2017 (in thousands): December 31, 2018 2017 Computer equipment and software $ 7,143 $ 6,935 Furniture and office equipment 142 142 Leasehold improvements 348 348 Construction in progress — — 7,633 7,425 Accumulated depreciation (6,930 ) (6,292 $ 703 $ 1,133 Depreciation expense was $638,000 and $628,000 for the years ended December 31, 2018 and 2017, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Amortization expense related to intangible assets was $0 and $16,000 for the years ended December 31, 2018and 2017, respectively. In December 2006, we acquired the use of a toll-free telephone number for cash consideration of $250,000. This asset has an indefinite useful life. The intangible asset is tested for impairment annually or more often if events or changes in circumstances indicate that the carrying value may not be recoverable. As of December 31, 2018, all intangible assets have been fully amortized with the exception of the indefinite-life intangibles. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Lease commitments Sunnyvale office lease. Other facility leases. Total facility rent expense pursuant to all operating lease agreements was $401,000 and $567,000 for the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018, minimum payments due under all non-cancelable lease agreements were as follows (in thousands): Years ending December 31, Operating Leases 2019 $ 273 2020 158 2021 70 Total minimum lease and principal payments $ 501 Legal contingencies Federal Trade Commission Consent Order. As previously disclosed, on December 20, 2016 the Federal Trade Commission (“FTC”) issued a confidential Civil Investigative Demand, or CID, to the Company requiring the Company to produce certain documents and materials and to answer certain interrogatories relating to PC Healthcheck, an obsolete software program that the Company developed on behalf of a third party for their use with their customers. The investigation relates to the Company providing software like PC Healthcheck to third parties for their use prior to December 31, 2016, when the Company was under management of the previous Board and executive team. Since issuing the CID, the FTC has sought additional written and testimonial evidence from the Company. We have cooperated fully with the FTC’s investigation and provided all requested information. In addition, the Company has not used PC Healthcheck nor provided it to any customers since December 2016. On March 9, 2018, the FTC notified the Company that the FTC was willing to engage in settlement discussions. On November 6, 2018, the Company and the FTC entered into a proposed Stipulation to Entry of Order for Permanent Injunction and Monetary Judgment, or the Consent Order. The Consent Order is expected to be approved by the Commission and lodged with the U.S. District Court for the Southern District of Florida. Upon final entry by the Court, the Consent Order resolves the FTC’s multi-year investigation of the Company. Pursuant to the Consent Order, under which the Company neither admitted nor denied the FTC’s allegations (except as to the Court having jurisdiction over the matter), the FTC has agreed to accept a payment of $10 million in settlement of the $35 million judgement, subject to the factual accuracy of the information the Company has provided as part of our financial representations. The $10 million payment will be made within seven (7) days of the entry of the Consent Order in the Southern District of Florida and is recognized in operating expenses within the Company’s consolidated statements of operations for the year ended December 31, 2018. Additionally, pursuant to the Consent Order, the Company has agreed to implement certain new procedures and enhance certain existing procedures. For example, the Consent Order necessitates that the Company cooperate with representatives of the Commission on associated investigations if needed; imposes requirements on the Company regarding obtaining acknowledgements of the Consent Order and compliance certification, including record creation and maintenance; and prohibits the Company from making misrepresentations and misleading claims or providing the means for others to make such claims regarding, among other things, detection of security or performance issues on consumer’s Electronic Devices. Electronic Devices include, but are not limited to, cell phones, tablets and computers. The Company intends to monitor the impact of the Consent Order regularly and, while the Company currently does not expect the settlement to have a long-term and materially adverse impact on its business, the Company’s business may be negatively impacted as the Company adjusts to some of the changes. If the Company is unable to comply with the Consent Order, then this could result in a material and adverse impact to the Company’s results of operations and financial condition. Other Matters. The Texas AG has not alleged a factual basis underlying the issuance of the Civil Investigative Demand. Accordingly, the Company has responded to both the Washington AG Civil Investigative Demand and the Texas AG Civil Investigative Demand. To date, the Company has not received any follow-up communications from either state’s AG with respect to these matters. We are also subject to other routine legal proceedings, as well as demands, claims and threatened litigation, that arise in the normal course of our business, potentially including assertions that we may be infringing patents or other intellectual property rights of others. We currently do not believe that the ultimate amount of liability, if any, for any pending claims of any type (alone or combined) will materially affect our financial position, results of operations or cash flows. The ultimate outcome of any litigation is uncertain; however, any unfavorable outcomes could have a material negative impact on our financial condition and operating results. Regardless of outcome, litigation can have an adverse impact on us because of defense costs, negative publicity, diversion of management resources and other factors. Guarantees We have identified guarantees in accordance with ASC 450, Contingencies |
Other Accrued Liabilities
Other Accrued Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Accrued Liabilities | Other accrued liabilities consist of the following (in thousands): As of December 31, 2018 2017 Accrued expenses $ 338 $ 462 Self-insurance accruals 585 679 Other accrued liabilities 55 189 Total other accrued liabilities $ 978 $ 1,330 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Equity Compensation Plan We adopted the amended and restated 2010 Equity and Performance Incentive Plan (the “2010 Plan”), effective as of February 8, 2010. Under the 2010 Plan, the number of shares of Common Stock that may be issued will not exceed in the aggregate 1,666,666 shares of Common Stock plus the number of shares of Common Stock relating to prior awards under the 2000 Omnibus Equity Incentive Plan that expire, are forfeited or are cancelled after the adoption of the 2010 Plan, subject to adjustment as provided in the 2010 Plan. Pursuant to an approval from the Company’s shareholders, the number of shares of Common Stock that may be issued under the 2010 Plan was increased by 750,000 shares of Common Stock in May 2013 and 333,333 shares in June 2016. No grants will be made under the 2010 Plan after the tenth anniversary of its effective date. Under our 2010 Plan, as of December 31, 2018, there were approximately 2.1 million shares available for grant. We adopted the 2014 Inducement Award Plan (the “Inducement Plan”), effective as of May 13, 2014. Under the Inducement Plan, the number of shares of Common Stock that may be issued will not exceed in the aggregate 666,666 shares of Common Stock. Under our Inducement Plan, as of December 31, 2018, there were approximately 456,000 shares available for grant. Stock Options The following tables represent stock option activity for the years ended December 31, 2018 and 2017: Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding options at December 31, 2016 1,381,843 $ 14.85 4.95 $ 0 Granted 430,500 $ 2.291 Exercised (0 ) $ - Forfeited (1,080,153 ) $ 5.90 Outstanding options at December 31, 2017 732,190 $ 3.72 8.17 $ 56 Granted 330,000 $ 2.75 Exercised (75,022 ) $ 2.46 Forfeited (183,848 ) $ 6.14 Outstanding options at December 31, 2018 803,320 $ 2.89 8.43 $ 54 Options vested and expected to vest 786,829 $ 2.90 8.43 $ 51 Exercisable at December 31, 2018 556,487 $ 3.12 8.31 $ 20 A summary of additional information related to the options outstanding as of December 31, 2018 under the 2010 and 2014 Plans are as follows: Option Plans Range of Exercise Prices Number of Outstanding Options Weighted Average Remaining Contractual Life Weighted Average Exercise Price $ 2.29 - $2.29 315,330 8.52 $ 2.29 $ 2.51-$2.52 88,105 7.37 $ 2.51 $ 2.56-$2.57 29,208 7.45 $ 2.56 $ 2.74-$2.74 300,000 9.15 $ 2.74 $ 2.88-$13.44 61,549 7.06 $ 6.29 $ 13.50-$17.67 9,128 4.62 $ 16.78 803,320 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that would have been received by the option holders had they all exercised their options on December 31, 2018 and 2017. This amount will change based on the fair market value of our stock. The total aggregate intrinsic value of options exercised under our stock option plans was $27,000 and $0 for the years ended December 31, 2018 and 2017, respectively. The total fair value of options vested during 2018 and 2017 was $22,000 and $32,000, respectively. At December 31, 2018, there was $165,000 of unrecognized compensation cost related to stock options which is expected to be recognized over a weighted average period of 1.6 years. Employee Stock Purchase Plan In the second quarter of 2011, to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward eligible employees and by motivating such persons to contribute to the growth and profitability of the Company, the Company’s Board of Directors and stockholders approved a new Employee Stock Purchase Plan and reserved 1,000,000 shares of our common stock for issuance effective as of May 15, 2011. The ESPP continues in effect for ten (10) years from its effective date unless terminated earlier by the Company. The ESPP consists of six-month offering periods during which employees may enroll in the plan. The purchase price on each purchase date shall not be less than eighty-five percent (85%) of the lesser of (a) the fair market value of a share of stock on the offering date of the offering period, or (b) the fair market value of a share of stock on the purchase date. A total of 31,387 shares and 28,018 shares were issued under the ESPP during the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018, approximately 78,847 shares remain available for grant under the ESPP. Restricted Stock Units The following table represents RSU activity for the years ended December 31, 2018 and 2017: Number ofShares WeightedAverageGrant-DateFair Valueper Share WeightedAverageRemainingContractual Term (in years) AggregateIntrinsic Value(in thousands) Outstanding RSUs at December 31, 2016 351,921 $ 4.59 1.06 $ 908 Awarded 102,880 $ 2.43 Released (153,714 ) $ 3.45 Forfeited (164,758 ) $ 5.78 Outstanding RSUs at December 31, 2017 136,329 $ 2.80 0.80 $ 329 Awarded 90,905 $ 2.75 Released (119,943 ) $ 2.79 Forfeited (11,061 ) $ 2.67 Outstanding RSUs at December 31, 2018 96,230 $ 2.78 0.60 $ 227 At December 31, 2018, there was $116,000 of unrecognized compensation cost related to RSUs which is expected to be recognized over a weighted average period of 0.6 years. Stock Repurchase Program On April 27, 2005, our Board of Directors authorized the repurchase of up to 666,666 outstanding shares of our common stock. As of December 31, 2018, the maximum number of shares remaining that can be repurchased under this program was 602,467. The Company does not intend to repurchase shares without a pre-approval from its Board of Directors. Stockholder Rights Agreement and Tax Benefits Preservation Plan Our Board adopted the Section 382 Tax Benefits Preservation Plan in an effort to diminish the risk that the Company’s ability to utilize its net operating loss carryovers (collectively, the “NOLs”) to reduce potential future federal income tax obligations may become substantially limited. Under the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations promulgated thereunder by the U.S. Treasury Department, these NOLs may be “carried forward” in certain circumstances to offset any current and future taxable income and thus reduce federal income tax liability, subject to certain requirements and restrictions. However, if the Company experiences an “ownership change,” within the meaning of Section 382 of the Code (“Section 382”), its ability to utilize the NOLs may be substantially limited, and the timing of the usage of the NOLs could be substantially delayed, which could therefore significantly impair the value of those assets. Section 382 and the Treasury regulations thereunder make the Company’s commercial risk from a Section 382 limitation triggering event particularly acute given the relative size of its current cash on hand to its market capitalization. As applied to the Company’s current cash position and current market capitalization, if the Company was to currently experience an ownership change, it would be subject to Section 382’s “non-business asset” limitation which would result in the Company permanently losing all $141 million of its NOLs. The Section 382 Tax Benefits Preservation Plan is intended to act as a deterrent to any person or group acquiring beneficial ownership of 4.99% or more of the outstanding Common Stock without the approval of the Board (such person, an “Acquiring Person”). A person who acquires, without the approval of the Board, beneficial ownership (other than as a result of repurchases of stock by the Company, dividends or distributions by the Company or certain inadvertent actions by stockholders) of 4.99% or more of the outstanding Common Stock (including any ownership interest held by that person's Affiliates and Associates as defined under the Section 382 Tax Benefits Preservation Plan) could be subject to significant dilution. Stockholders who beneficially own 4.99% or more of the outstanding Common Stock prior to the first public announcement by the Company of the Board’s adoption of the Section 382 Tax Benefits Preservation Plan will not trigger the Section 382 Tax Benefits Preservation Plan so long as they do not acquire beneficial ownership of additional shares of the Common Stock (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding shares of Common Stock or pursuant to a split or subdivision of the outstanding shares of Common Stock) at a time when they still beneficially own 4.99% or more of such stock. In addition, the Board retains the sole discretion to exempt any person or group from the penalties imposed by the Section 382 Tax Benefits Preservation Plan. In the event that a person becomes an Acquiring Person, each holder of a Right, other than Rights that are or, under certain circumstances, were beneficially owned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right and payment of the Purchase Price, and subject to the terms, provisions and conditions of the Section 382 Tax Benefits Preservation Plan, a number of shares of the Common Stock having a market value of two times the Purchase Price. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The components of our loss before income taxes are as follows (in thousands): Year Ended December 31, 2018 2017 United States $ (9,458 ) $ (1,541 ) Foreign 357 619 Total $ (9,101 ) $ (922 ) The provision (benefit) for income taxes from continuing operations consisted of the following (in thousands): Year Ended December 31, Current: 2018 2017 Federal $ — $ (79 ) State 8 13 Foreign (38 ) 85 Total Current $ (30 ) $ 19 Deferred Federal $ — $ — State — — Foreign 29 585 Total Deferred $ 29 $ 585 Provision (benefit) for income taxes $ (1 ) $ 604 The reconciliation of the Federal statutory income tax rate to our effective income tax rate is as follows (in thousands): Year Ended December 31, 2018 2017 Provision at Federal statutory rate $ (1,911 ) $ (322 ) State taxes 8 13 Permanent differences/other 65 581 Tax Cuts and Jobs Act of 2017 Rate Change — 22,714 Stock-based compensation 81 365 Federal valuation allowance (used) provided 1,756 (22,747 ) Provision (benefit) for income taxes $ (1 ) $ 604 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows (in thousands): December 31, 2018 2017 Deferred Tax Assets Fixed assets $ 66 $ 64 Accruals and reserves 2,673 147 Stock options 179 196 Net operating loss carryforwards 35,522 35,254 Federal and state credits 3,461 3,461 Foreign credits 152 165 Intangible assets 2,139 2,442 Research and development expense 2,224 2,542 Gross deferred tax assets 46,416 44,271 Valuation allowance (46,283 ) (44,100 ) Total deferred tax assets 133 171 Deferred Tax Liabilities (1) (543 ) (543 ) Net deferred tax asset/liabilities (410 ) (372 ) (1) The 543,000 deferred tax liabilities is the only tax related to the Indian subsidiaries remittance would be a dividend distribution tax. ASC 740, Income Taxes Based on management’s review of both positive and negative evidence, which includes the historical operating performance of our Canadian subsidiary, the Company has concluded that it is more likely than not that the Company will be able to realize a portion of the Company’s Canadian deferred tax assets. Therefore, the Company has a partial valuation allowance on Canadian deferred tax assets. There is no valuation allowance against the Company’s Indian deferred tax assets. The Company reassesses the need for its valuation allowance on a quarterly basis. Based on management’s review discussed above, the realization of deferred tax assets is dependent on improvements over present levels of pre-tax income. Until the Company is consistently profitable in the U.S., it will not realize its deferred tax assets. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. The Company has calculated its best estimate of the impact of the Tax Act in its year end income tax provision in accordance with its understanding of the Tax Act and guidance available as of the date of this filing. The Company has evaluated these changes and, as a result of the decrease in tax rate, has recorded a provisional decrease to net deferred tax assets of $22.7 million with a corresponding decrease to valuation allowance. Due to the complexities involved in accounting for the recently enacted Tax Act, the U.S. Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB”) 118 requires that the Company include in its financial statements a reasonable estimate of the impact of the Tax Act on earnings to the extent such estimate has been determined. Pursuant to the SAB118, the Company is allowed a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. December 22, 2018 marked the end of the measurement period for purposes of SAB 118. As such, the Company has completed the analysis relating to the Act currently available which resulted in no additional SAB 118 tax effect in the fourth quarter of 2018 for the year ended December 31, 2018. Beginning in 2018, the Tax Act provides a 100% deduction for dividends received from 10-percent owned foreign corporations by U.S. corporate shareholders, subject to a one-year holding period. Although dividend income is now exempt from U.S. federal tax in the hands of the U.S. corporate shareholders, companies must still apply the guidance of ASC 740-30-25-18 to account for the tax consequences of outside basis differences and other tax impacts of their investments in non-U.S. subsidiaries. Deferred income taxes have not been provided on the cumulative undistributed earnings of foreign subsidiaries except for a change in assertion at December 31, 2017 for Support.com India Private Ltd. The amount of cumulative undistributed Indian subsidiary’s earnings at December 31, 2017 for which the Company is changing its assertion under ASC 740-30-25 is $2.67 million. Under the Tax Cuts and Jobs Act of 2017, all foreign subsidiaries’ accumulated earnings through December 31, 2017 has been included in U.S. taxable income. As such, the only tax related to the Indian subsidiary remittance would be a dividend distribution tax of $543,000. The Transition Tax on unrepatriated foreign earnings is a tax on previously untaxed accumulated and current earnings and profits (“E&P”) of the Company’s foreign subsidiaries. To determine the amount of the Transition Tax, the Company must determine, among other factors, the amount of post-1986 E&P of its foreign subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings. The Company was able to make a reasonable estimate of its previously untaxed accumulated and current earnings and profits and has concluded that such amount is an accumulated deficit; therefore, no Transition Tax results. The net valuation allowance increased and decreased by approximately $2.1 million and $18.0 million during the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018, the Company had Federal and state net operating loss carryforwards of approximately $1452.4 million and $70.5 million, respectively. The Federal net operating loss and credit carryforwards will expire at various dates beginning in 2020 through 2037, if not utilized. The state net operating loss carryforwards will expire at various dates beginning in 2018 through 2037, if not utilized. As a result of the adoption of ASU 2016-09 in fiscal 2017, the Company recorded a cumulative effect adjustment to increase deferred tax assets and a corresponding increase to valuation allowance from stock-based compensation which had not been previously recognized. As such there was no cumulative effect to retained earnings adjustment required. The Company also had Federal and state research and development credit carryforwards of approximately $2.8 million and $2.4 million, respectively. The federal credits expire in varying amounts between 2020 and 2031. The state research and development credit carryforwards do not have an expiration date. Utilization of net operating loss carryforwards and credits may be subject to substantial annual limitation or could be lost due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. ASC 740-10 clarifies the accounting for uncertainties in income taxes by prescribing guidance for the recognition, de-recognition and measurement in financial statements of income tax positions taken in previously filed tax returns or tax positions expected to be taken in tax returns, including a decision whether to file or not to file in a particular jurisdiction. ASC 740-10 requires the disclosure of any liability created for unrecognized tax benefits. The application of ASC 740-10 may also affect the tax bases of assets and liabilities and therefore may change or create deferred tax liabilities or assets. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Year Ended December 31, 2018 2017 Balance at beginning of year $ 2,229 $ 2,285 Increase related to prior year tax positions — 26 Decrease related to prior year tax positions (20 ) — Increase related to current year tax positions — — Settlements with tax authorities (92 ) (82 ) Decrease related to lapse of statute of limitations — — Balance at end of year $ 2,117 $ 2,229 The Company’s total amounts of unrecognized tax benefits that, if recognized, that would affect its tax rate are $0.1 million and $0.2 million as of December 31, 2018 and 2017, respectively. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within its provision for (benefit from) income taxes. The Company had $140,000 accrued for payment of interest and penalties related to unrecognized tax benefits as of December 31, 2018. The Company had $158,000 accrued for payment of interest and penalties related to unrecognized tax benefit as of December 31, 2017. As of December 31, 2018, it is reasonably possible that the balance of unrecognized tax benefits could significantly change within the next twelve months. However, an estimate of the range of reasonably possible adjustments cannot be made at this time. The Company files federal, state and foreign income tax returns in jurisdictions with varying statutes of limitations. Due to its net operating loss carryforwards, the Company’s income tax returns generally remain subject to examination by federal and most state authorities. In our foreign jurisdictions, the 2009 through 2018 tax years remain subject to examination by their respective tax authorities. We are required to make periodic filings in the jurisdictions where we are deemed to have a presence for tax purposes. We have undergone audits in the past and have paid assessments arising from these audits. Our India entity was issued notices of income tax assessment pertaining to the 2004-2009 fiscal years. The notices claimed that the transfer price used in our inter-company agreements resulted in understated income in our Indian entity. During the fourth quarter of 2014, the Company re-evaluated the probability of its tax position and recorded an ASC 740-10 reserve related to India transfer pricing. As of December 31, 2018, the ASC 740-10 reserve for India transfer pricing totals $253,000. The Company’s tax position related to India has not changed in 2018 aside from an additional $3,000 increase to the reserve representing accrued interest. Separately, the Company settled its Advanced Pricing Agreement with the Indian tax authorities on July 25, 2017. As a result of this settlement, the Company no longer records an ASC 740-10 reserve related to the APA. We may be subject to other income tax assessments in the future. We evaluate estimated expenses that could arise from those assessments in accordance with ASC 740-10 . |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Support.com, Inc. (“Support.com”, “the Company”, “We” or “Our”), was incorporated in the state of Delaware on December 3, 1997. Our common stock trades on the Nasdaq Capital Market under the symbol “SPRT.” Support.com is a leading provider of tech support and turnkey support center services, producer of anti-malware products, and the maker of Support.com Our technology support services programs help leading brands create new revenue streams and deepen customer relationships. Cloud is a solution for companies to optimize support interactions with their customers using their own- or third-party support personnel enables companies to quickly resolve complex technology issues for their customers, boosting agent productivity and dramatically improving the customer experience. |
Basis of Presentation | The consolidated financial statements include the accounts of Support.com and its wholly-owned foreign subsidiaries. All intercompany transactions and balances have been eliminated. |
Foreign Currency Translation | The functional currency of our foreign subsidiaries is generally the local currency. Assets and liabilities of our wholly owned foreign subsidiaries are translated from their respective functional currencies at exchange rates in effect at the balance sheet date, and revenues and expenses are translated at average exchange rates prevailing during the year. Any material resulting translation adjustments are reflected as a separate component of stockholders’ equity in accumulated other comprehensive income (loss). Realized foreign currency transaction gains (losses) were not material during the years ended December 31, 2018 and 2017. |
Use of Estimates | The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The accounting estimates that require management’s most significant, difficult and subjective judgments include accounting for revenue recognition, assumptions used to estimate self-insurance and litigation accruals, the valuation of investments, the assessment of recoverability of intangible assets and their estimated useful lives, the valuations and recognition of stock-based compensation and the recognition and measurement of current and deferred income tax assets and liabilities. Actual results could differ materially from these estimates. |
Concentrations of Credit Risk | Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, investments and trade accounts receivable. Periodically throughout the year, the Company has maintained balances in various operating accounts in excess of federally insured limits. Our investment portfolio consists of investment grade securities. Except for obligations of the United States government and securities issued by agencies of the United States government, we diversify our investments by limiting our holdings with any individual issuer. We are exposed to credit risks in the event of default by the issuers to the extent of the amount recorded on the balance sheet. The credit risk in our trade accounts receivable is substantially mitigated by our evaluation of the customers’ financial conditions at the time we enter into business and reasonably short payment terms. |
Trade Accounts Receivable and Allowance for Doubtful Accounts | Trade accounts receivable are recorded at the invoiced amount. We perform evaluations of our customers’ financial condition and generally do not require collateral. We make judgments as to our ability to collect outstanding receivables and provide allowances for a portion of receivables when collection becomes doubtful. Our allowances are made based on a specific review of all significant outstanding invoices. For those invoices not specifically provided for, allowances are recorded at differing rates, based on the age of the receivable. In determining these rates, we analyze our historical collection experience and current payment trends. The determination of past-due accounts is based on contractual terms. The following table summarizes the allowance for doubtful accounts as of December 31, 2018 and 2017 (in thousands): Balance at Beginning of Period Adjustments to Costs and Expenses Write- offs Balance at End of Period Allowance for doubtful accounts: Year ended December 31, 2017 $ 19 $ 34 $ (44 ) $ 9 Year ended December 31, 2018 $ 9 $ 24 $ (20 ) $ 13 As of December 31, 2018, Comcast and Cox Communications accounted for approximately 71% and 20% of our total accounts receivable, respectively. As of December 31, 2017, Comcast and Cox Communications accounted for approximately 71% and 12% of our total accounts receivable, respectively. No other customers accounted for 10% or more of our total accounts receivable as of December 31, 2018 and 2017. |
Cash, Cash Equivalents and Investments | All liquid instruments with an original maturity at the date of purchase of 90 days or less are classified as cash equivalents. Cash equivalents and short-term investments consist primarily of money market funds, certificates of deposit, commercial paper, corporate and municipal bonds. Our interest income on cash, cash equivalents and investments is recorded monthly and reported as interest income and other in our consolidated statements of operations. Our cash equivalents and short-term investments are classified as investment, and are reported at fair value with unrealized gains/losses included in accumulated other comprehensive loss within stockholders’ equity on the consolidated balance sheets and in the consolidated statements of comprehensive loss. We view this investment portfolio as available for use in our current operations, and therefore we present our marketable securities as short-term assets. We monitor our investments for impairment on a quarterly basis and determine whether a decline in fair value is other-than-temporary by considering factors such as current economic and market conditions, the credit rating of the security’s issuer, the length of time an investment’s fair value has been below our carrying value, the Company’s intent to sell the security and the Company’s belief that it will not be required to sell the security before the recovery of its amortized cost. If an investment’s decline in fair value is deemed to be other-than-temporary, we reduce its carrying value to its estimated fair value, as determined based on quoted market prices or liquidation values. Declines in value judged to be other-than-temporary, if any, are recorded in operations as incurred. At December 31, 2018, the Company evaluated its unrealized losses on available-for-sale securities and determined them to be temporary. We currently do not intend to sell securities with unrealized losses, and we concluded that we will not be required to sell these securities before the recovery of their amortized cost basis. At December 31, 2018 and 2017, the estimated fair value of cash, cash equivalents and investments was $49.6 million and $49.2 million, respectively. The following is a summary of cash, cash equivalents and investments at December 31, 2018 and 2017 (in thousands): For the Year Ended December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 8,391 $ — $ — $ 8,391 Money market fund 14,295 — — 14,295 Certificates of deposit 1,171 — (1 ) 1,170 Commercial paper 3,986 — (1 ) 3,985 Corporate notes and bonds 14,899 — (66 ) 14,833 U.S. government agency securities 6,976 — (1 ) 6,975 $ 49,718 $ — $ (69 ) $ 49,649 Classified as: Cash and cash equivalents $ 25,182 $ — $ — $ 25,182 Short-term investments 24,536 — (69 ) 24,467 $ 49,718 $ — $ (69 ) $ 49,649 For the Year Ended December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 7,408 $ — $ — $ 7,408 Money market fund 10,643 $ — (1 ) 10,642 Certificates of deposit 1,207 — (2 ) 1,205 Commercial paper 2,494 — (1 ) 2,493 Corporate notes and bonds 22,846 — (76 ) 22,770 U.S. government agency securities 4,719 — (4 ) 4,715 $ 49,317 $ — $ (84 ) $ 49,233 Classified as: Cash and cash equivalents $ 18,051 $ — $ (1 ) $ 18,050 Short-term investments 31,266 — (83 ) 31,183 $ 49,317 $ — $ (84 ) $ 49,233 The following table summarizes the estimated fair value of our available-for-sale securities classified by the stated maturity date of the security (in thousands): December 31, 2018 2017 Due within one year $ 20,874 $ 22,228 Due within two years 3,593 8,955 $ 24,467 $ 31,183 We determined that the gross unrealized losses on our available-for-sale investments as of December 31, 2018 are temporary in nature. The fair value of our available-for-sale securities at December 31, 2018 and 2017 reflects a net unrealized loss of $68,000 and $84,000, respectively. There were no net realized gains (losses) on available-for-sale securities in the years ended December 31, 2018 and 2017. The cost of securities sold is based on the specific identification method. The following table sets forth the unrealized losses for the Company’s available-for-sale investments as of December 31, 2018 and 2017 (in thousands): As of December 31, 2018 In Loss Position Less Than 12 Months In Loss Position More Than 12 Months Total in Loss Position Description Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Certificates of deposit $ 720 $ (1 ) $ — $ — $ 719 $ (1 ) Corporate notes and bonds 18,883 (67 ) — — 18,816 (67 ) U.S. government agency securities 6,976 (1 ) — — 6,975 (1 ) Total $ 26,579 $ (69 ) $ — $ — $ 26,510 $ (69 ) As of December 31, 2017 In Loss Position Less Than 12 Months In Loss Position More Than 12 Months Total in Loss Position Description Fair Value Unrealized Losses Fail Value Unrealized Losses Fair Value Unrealized Losses Certificates of deposit $ 718 $ (2 ) $ — $ — $ 718 $ (2 ) Corporate notes and bonds 16,530 (32 ) 6,947 (47 ) 23,477 (79 ) U.S. government agency securities 3,720 (3 ) 998 — 4,718 (3 ) Total $ 20,968 $ (37 ) $ 7,945 $ (47 ) $ 28,913 $ (84 ) |
Property and Equipment | Property and equipment are stated at cost, less accumulated depreciation and amortization which is determined using the straight-line method over the estimated useful lives of two to five years for computer equipment and software, three years for furniture and fixtures, and the shorter of the estimated useful lives or the lease term for leasehold improvements. Repairs and maintenance costs are expensed as they are incurred. |
Long-Lived Assets | We record purchased identifiable intangible assets at fair value as part of a business combination. Useful life is estimated as the period over which the identifiable intangible assets are expected to contribute directly or indirectly to the future cash flows of the Company. As we do not believe that we can reliably determine a pattern by which the economic benefits of these identifiable intangible assets will be consumed, management adopted straight-line amortization. The original cost is amortized on a straight-line basis over the estimated useful life of each identifiable intangible asset. The Company assesses its long-lived assets, which includes property and equipment and identifiable intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the sum of the future net cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. If our estimates regarding future cash flows derived from such assets were to change, we may record an impairment charge to the value of these assets. Such impairment loss would be measured as the difference between the carrying amount of the asset and its fair value. |
Revenue Recognition | On January 1, 2018, the Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606"). As a result, the Company has changed its accounting policy for revenue recognition and applied ASC 606 using the modified retrospective method. Typically, this approach would result in recognizing the cumulative effect of initially applying ASC 606 as an adjustment to the opening retained earnings at January 1, 2018, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic revenue recognition methodology under ASC 605, Revenue Recognition |
Disaggregation of Revenue | We generate revenue from the sale of services and sale of software fees for end-user software products provided through direct customer downloads and through the sale of these end-user software products via partners. The following table depicts the disaggregation of revenue (in thousands) according to revenue type and is consistent with how we evaluate our financial performance: Revenue from Contracts with Customers: Twelve months ended December 31, 2018 2017 Services $ 64,476 $ 54,670 Software and other 5,073 5,451 Total revenue $ 69,549 $ 60,121 Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We determine revenue recognition through the following steps: ● identification of the contract, or contracts, with a customer; ● identification of the performance obligations in the contract; ● determination of the transaction price; ● allocation of the transaction price to the performance obligations in the contract; and ● recognition of revenue when, or as, we satisfy a performance obligation. Services Revenue Services revenue is comprised primarily of fees for technology support services. Our service programs are designed for both the consumer and SMB markets, and include computer and mobile device set-up, security and support, virus and malware removal and wireless network set-up, and automation system onboarding and support. We offer technology services to consumers and SMBs, primarily through our partners (which include communications providers, retailers, technology companies and others) and to a lesser degree directly through our website at www.support.com. We transact with customers via reseller programs, referral programs and direct transactions. In reseller programs, the partner generally executes the financial transactions with the customer and pays a fee to us which we recognize as revenue when the service is delivered. In referral programs, we transact with the customer directly and pay a referral fee to the referring party. Referral fees are generally expensed in the period in which revenues are recognized. In such referral programs, since we are the primary obligor and bear substantially all risks associated with the transaction, we record the gross amount of revenue. In direct transactions, we sell directly to the customer at the retail price. The technology services described above include four types of offerings: ● Hourly-Based Services - In connection with the provisions of certain services programs, fees are calculated based on contracted hourly rates with partners. For these programs, we recognize revenue as services are performed, based on billable hours of work delivered by our technology specialists. These services programs also include performance standards, which may result in incentives or penalties, which are recognized as earned or incurred. ● Subscriptions - Customers purchase subscriptions or “service plans” under which certain services are provided over a fixed subscription period. Revenues for subscriptions are recognized ratably over the respective subscription periods. ● Incident-Based Services - Customers purchase a discrete, one-time service. Revenue recognition occurs at the time of service delivery. Fees paid for services sold but not yet delivered are recorded as deferred revenue and recognized at the time of service delivery. In certain cases, we are paid for services that are sold but not yet delivered. We initially record such balances as deferred revenue, and recognize revenue when the service has been provided or, on the non-subscription portion of these balances, when the likelihood of the service being redeemed by the customer is remote (“services breakage”). Based on our historical redemption patterns for these relationships, we believe that the likelihood of a service being delivered more than 90 days after sale is remote. We therefore recognize non-subscription deferred revenue balances older than 90 days as services revenue. For the years ended December 31, 2018 and 2017, services breakage revenue accounted for less than 1% of total services revenue. The following table represent deferred revenue activity for the years ended December 31, 2018 and 2017 (in thousands): Partners are generally invoiced monthly. Fees from customers via referral programs and direct transactions are generally paid with a credit card at the time of sale. Revenue is recognized net of any applicable sales tax. We generally provide a refund period on services, during which refunds may be granted to customers under certain circumstances, including inability to resolve certain support issues. For our partnerships, the refund period varies by partner, but is generally between 5 and 14 days. For referral programs and direct transactions, the refund period is generally 5 days. For all channels, we recognize revenue net of refunds and cancellations during the period. Refunds and cancellations have not been material. Services revenue also includes fees from licensing of our Support.com cloud-based software. In such arrangements, customers receive a right to use our Support.com Cloud in their own technology support organizations. We license our cloud-based software using a SaaS model under which customers cannot take possession of the technology and pay us on a per-user basis during the term of the arrangement. In addition, services revenue includes fees from implementation services of our cloud-based software. Currently, revenues from implementation services are recognized ratably over the customer life which is estimated as the term of the arrangement once the Support.com Cloud services are made available to customers. We generally charge for these services on a time and material basis. As of December 31, 2018, revenues from implementation services are di minimus. Software and Other Revenue Software and other revenue is comprised primarily of fees for end-user software products provided through direct customer downloads and through the sale of these end-user software products via partners. Our software is sold to customers as a perpetual license or as a fixed period subscription. We offer when-and-if-available software upgrades to our end-user products. Management has determined that these upgrades are not distinct, as the upgrades are an input into a combined output. In addition, Management has determined that the frequency and timing of the when-and-if-available upgrades are unpredictable and therefore we recognize revenue consistent with the sale of the perpetual license or subscription. We generally control fulfillment, pricing, product requirements, and collection risk and therefore we record the gross amount of revenue. We provide a 30-day money back guarantee for the majority of our end-user software products. For certain end-user software products, we sell perpetual licenses. We provide a limited amount of free technical support to customers. Since the cost of providing this free technical support is insignificant and free product enhancements are minimal and infrequent, we do not defer the recognition of revenue associated with sales of these products. For certain of our end-user software products (principally SUPERAntiSpyware), we sell licenses for a fixed subscription period. We provide regular, significant updates over the subscription period and therefore recognize revenue for these products ratably over the subscription period. Other revenue consists primarily of revenue generated through partners advertising to our customer base in various forms, including toolbar advertising, email marketing, and free trial offers. We recognize other revenue in the period in which our partners notify us that the revenue has been earned. |
Research and Development | Research and development expenditures are charged to operations as they are incurred. |
Software Development Costs | Based on our product development process, technological feasibility is established on the completion of a working model. The Company determined that technological feasibility is reached shortly before the product is ready for general release and therefore development costs incurred have been insignificant. Accordingly, we have charged all such costs to research and development expense in the period in which they were incurred. |
Purchased Technology for Internal Use | We capitalize costs related to software that we license and incorporate into our product and service offerings or develop for internal use. |
Advertising Costs | Advertising costs are recorded as sales and marketing expense in the period in which they are incurred. Advertising expense was $18,000 and $0.1 million for the years ended December 31, 2018 and 2017, respectively. |
Earnings (Loss) Per Share | Basic earnings (loss) per share is computed using our net income (loss) and the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share is computed using our net income (loss) and the weighted average number of common shares outstanding, including the effect of the potential issuance of common stock such as stock issuable pursuant to the exercise of stock options and vesting of restricted stock units (“RSUs”) using the treasury stock method when dilutive. We excluded outstanding weighted average stock options of 0.8 million and 1.9 million for the years ended December 31, 2018 and 2017, respectively, from the calculation of diluted earnings per common share because the exercise prices of these stock options were greater than or equal to the average market value of the common stock. These stock options could be included in the calculation in the future if the average market value of the common stock increases and is greater than the exercise price of these stock options. Since we reported a net loss for the years ended December 31, 2018 and 2017, 64,000 and 28,000 outstanding options and RSUs were also excluded from the computation of diluted loss per share since their effect would have been anti-dilutive. The following table sets forth the computation of basic and diluted net earnings (loss) per share (in thousands, except per share amounts): Year Ended December 31, 2018 2017 Net loss $ (9,100 ) $ (1,526 ) Basic: Weighted-average shares of common stock outstanding 18,826 18,644 Shares used in computing basic net loss per share 18,826 18,644 Basic net loss per share $ (0.48 ) $ (0.08 ) Diluted: Weighted-average shares of common stock outstanding 18,826 18,644 Add: Common equivalent shares outstanding — — Shares used in computing diluted net loss per share 18,826 18,644 Diluted net loss per share $ (0.48 ) $ (0.08 ) |
Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss, which relate entirely to accumulated foreign currency translation losses associated with our foreign subsidiaries and unrealized losses on investments, consisted of the following (in thousands): Foreign Currency Translation Losses Unrealized Gains (Losses) on Investments Total Balance as of December 31, 2017 $ (2,024 ) $ (84 ) $ (2,108 ) Current-period other comprehensive gain (loss) (414 ) 15 (399 ) Balance as of December 31, 2018 $ (2,438 ) $ (69 ) $ (2,507 ) Realized gains/losses on investments reclassified from accumulated other comprehensive loss are reported as interest income and other, net in our consolidated statements of operations. The amounts noted in the consolidated statements of comprehensive loss are shown before taking into account the related income tax impact. The income tax effect allocated to each component of other comprehensive income for each of the periods presented is not significant. |
Stock-Based Compensation | We apply the provisions of ASC 718, Compensation - Stock Compensation, Determining Fair Value of Share-Based Payments Valuation and Attribution Method: Stock-based compensation expense for service-based stock options and employee stock purchase plan (“ESPP”) is estimated at the date of grant based on the fair value of awards using the Black-Scholes-Merton Risk-free Interest Rate: We base our risk-free interest rate on the yield currently available on U.S. Treasury zero coupon issues for the expected term of the stock options. Expected Term: Our expected term represents the period that our stock options are expected to be outstanding and is determined based on historical experience of similar stock options considering the contractual terms of the stock options, vesting schedules and expectations of future employee behavior. Expected Volatility: Our expected volatility represents the amount by which the stock price is expected to fluctuate throughout the period that the stock option is outstanding. The expected volatility is based on the historical volatility of the Company’s stock. Expected Dividend: We use a dividend yield of zero, as we have never paid cash dividends and do not expect to pay dividends in the future. The fair value of our stock-based awards was estimated using the following weighted average assumptions for the years ended December 31, 2018 and 2017: Stock Option Plan Employee Stock Purchase Plan 2018 2017 2018 2017 Risk-free interest rate 2.43 % 1.71 % 2.31 % 0.5 % Expected term (in years) 3.0 3.0 0.5 0.5 Volatility 41.2 % 41.2 % 29.0 % 39.0 % Expected dividend 0 % 0 % 0 % 0 % Weighted average grant-date fair value $ 0.84 $ 0.68 $ 0.67 $ 0.39 We recorded the following stock-based compensation expense for the fiscal years ended December 31, 2018 and 2017 (in thousands): For the Year Ended December 31, 2018 2017 Stock-based compensation expense related to grants of: Stock options $ 395 $ 144 ESPP 16 21 RSU 269 265 $ 680 $ 430 Stock-based compensation expense recognized in: Cost of service $ 63 $ 109 Cost of software and others - 4 Research and development 42 78 Sales and marketing 54 59 General and administrative 521 180 $ 680 $ 430 Cash provided by (used in) from the issuance of common stock, net of repurchase of common stock and cash settlement in stock split, was $257,000 and $25,000 for the years ended December 31, 2018 and 2017, respectively. |
Income Taxes | Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be reversed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets, if it is more likely than not, that such assets will not be realized. The Company’s deferred tax asset and related valuation allowance increased by $2.1 million to $46 million. As the deferred tax asset is fully allowed for, this change had no impact on the Company’s financial position or results of operations. |
Warranties and Indemnifications | We generally provide a refund period on sales, during which refunds may be granted to consumers under certain circumstances, including our inability to resolve certain support issues. For our partnerships, the refund period varies by partner, but is generally between 5-14 days. For referral programs and direct transactions, the refund period is generally 5 days. For the majority of our end-user software products, we provide a 30-day money back guarantee. For all channels, we recognize revenue net of refunds and cancellations during the period. Refunds and cancellations have not been material to date. We generally agree to indemnify our customers against legal claims that our end-user software products infringe certain third-party intellectual property rights. As of December 31, 2018, we were not required to make any payment resulting from infringement claims asserted against our customers and have not recorded any related accruals. |
Fair Value Measurements | ASC 820, Fair Value Measurements and Disclosures, ● Level 1 - Quoted prices in active markets for identical assets or liabilities. ● Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table represents our fair value hierarchy for our financial assets (cash equivalents and investments) measured at fair value on a recurring basis as of December 31, 2018 and 2017 (in thousands): As of December 31, 2018 Level 1 Level 2 Level 3 Total Money market funds $ 14,295 $ — $ — $ 14,295 Certificates of deposit — 1,170 — 1,170 Commercial paper — 3,985 — 3,985 Corporate notes and bonds — 14,833 — 14,833 U.S. government agency securities — 6,975 — 6,975 Total $ 14,295 $ 26,963 $ — $ 41,258 As of December 31, 2017 Level 1 Level 2 Level 3 Total Money market funds $ 10,642 $ — $ — $ 10,642 Certificates of deposit — 1,206 — 1,206 Commercial paper — 2,493 — 2,493 Corporate notes and bonds — 22,769 — 22,769 U.S. government agency securities — 4,715 — 4,715 Total $ 10,642 $ 31,183 $ — $ 41,825 For short-term investments, measured at fair value using Level 2 inputs, we review trading activity and pricing for these investments as of the measurement date. When sufficient quoted pricing for identical securities is not available, we use market pricing and other observable market inputs for similar securities obtained from various third-party data providers. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data. Our policy is that the end of our quarterly reporting period determines when transfers of financial instruments between levels are recognized. |
Segment Information | The Company reports its operations as a single operating segment and has a single reporting unit. Our Chief Operating Decision Maker (“CODM”), our Chief Executive Officer, manages our operations on a consolidated basis for purposes of allocating resources. When evaluating performance and allocating resources, the CODM reviews financial information presented on a consolidated basis. Revenue from customers located outside the United States was less than 1% of total for the years ended December 31, 2018 and 2017. For the year ended December 31, 2018, Comcast and Cox Communications accounted for approximately 69% and 15%, respectively, of our total revenue. For the year ended December 31, 2017, Comcast accounted for approximately 65% of our total revenue. There were no other customers that accounted for 10% or more of our total revenue in any of the periods presented. Long-lived assets are attributed to the geographic location in which they are located. We include in long-lived assets all tangible assets. Long-lived assets by geographic areas are as follows (in thousands): December 31, 2018 2017 United States $ 702 $ 1,132 India - - Philippines 1 1 Total $ 703 $ 1,133 |
Recent Accounting Pronouncements | Accounting Standards Adopted in the Current Period Revenue Recognition We have implemented all new accounting pronouncements that are in effect and that management believes would materially affect our financial statements. In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers Deferral of the Effective Date Financial Instruments In January 2016, The FASB issued ASU No. 2016-01, Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825) Income Taxes In March 2018, the Company adopted Accounting Standards Update No. 2018-05 – Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, which updates the income tax accounting in U.S. GAAP to reflect the Securities and Exchange Commission (“SEC”) interpretive guidance released on December 22, 2017, when the Tax Cuts and Jobs Act was signed into law. New Accounting Standards to be adopted in Future Periods Intangible Assets In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment Lease Accounting In February 2016, the FASB issued an ASU amending the accounting for leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months, in addition to those currently recorded, on our consolidated balance sheets. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. We will adopt this ASU on January 1, 2019. This adoption approach will result in a balance sheet presentation that will not be comparable to the prior period in the first year of adoption. We are in the process of finalizing the impact on the amounts to be recognized as total right-of-use assets and total lease liabilities on our consolidated balance sheet beginning in 2019. Other than this disclosure, we do not expect the new standard to have a material impact on our remaining consolidated financial statements. Comprehensive Income 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, |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Allowance for Doubtful Accounts | Balance at Beginning of Period Adjustments to Costs and Expenses Write- offs Balance at End of Period Allowance for doubtful accounts: Year ended December 31, 2017 $ 19 $ 34 $ (44 ) $ 9 Year ended December 31, 2018 $ 9 $ 24 $ (20 ) $ 13 |
Summary of Cash, Cash Equivalents and Investments | For the Year Ended December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 8,391 $ — $ — $ 8,391 Money market fund 14,295 — — 14,295 Certificates of deposit 1,171 — (1 ) 1,170 Commercial paper 3,986 — (1 ) 3,985 Corporate notes and bonds 14,899 — (66 ) 14,833 U.S. government agency securities 6,976 — (1 ) 6,975 $ 49,718 $ — $ (69 ) $ 49,649 Classified as: Cash and cash equivalents $ 25,182 $ — $ — $ 25,182 Short-term investments 24,536 — (69 ) 24,467 $ 49,718 $ — $ (69 ) $ 49,649 For the Year Ended December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 7,408 $ — $ — $ 7,408 Money market fund 10,643 $ — (1 ) 10,642 Certificates of deposit 1,207 — (2 ) 1,205 Commercial paper 2,494 — (1 ) 2,493 Corporate notes and bonds 22,846 — (76 ) 22,770 U.S. government agency securities 4,719 — (4 ) 4,715 $ 49,317 $ — $ (84 ) $ 49,233 Classified as: Cash and cash equivalents $ 18,051 $ — $ (1 ) $ 18,050 Short-term investments 31,266 — (83 ) 31,183 $ 49,317 $ — $ (84 ) $ 49,233 |
Summary of Estimated Fair Value of Available-For-Sale Securities Classified by Stated Maturity Date | December 31, 2018 2017 Due within one year $ 20,874 $ 22,228 Due within two years 3,593 8,955 $ 24,467 $ 31,183 |
Summary of Unrealized Losses for Available-For-Sale Investments | As of December 31, 2018 In Loss Position Less Than 12 Months In Loss Position More Than 12 Months Total in Loss Position Description Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Certificates of deposit $ 720 $ (1 ) $ — $ — $ 719 $ (1 ) Corporate notes and bonds 18,883 (67 ) — — 18,816 (67 ) U.S. government agency securities 6,976 (1 ) — — 6,975 (1 ) Total $ 26,579 $ (69 ) $ — $ — $ 26,510 $ (69 ) As of December 31, 2017 In Loss Position Less Than 12 Months In Loss Position More Than 12 Months Total in Loss Position Description Fair Value Unrealized Losses Fail Value Unrealized Losses Fair Value Unrealized Losses Certificates of deposit $ 718 $ (2 ) $ — $ — $ 718 $ (2 ) Corporate notes and bonds 16,530 (32 ) 6,947 (47 ) 23,477 (79 ) U.S. government agency securities 3,720 (3 ) 998 — 4,718 (3 ) Total $ 20,968 $ (37 ) $ 7,945 $ (47 ) $ 28,913 $ (84 ) |
Disaggregation of revenue | Twelve months ended December 31, 2018 2017 Services $ 64,476 $ 54,670 Software and other 5,073 5,451 Total revenue $ 69,549 $ 60,121 |
Computation of Basic and Diluted Net Earnings (Loss) per Share | Year Ended December 31, 2018 2017 Net loss $ (9,100 ) $ (1,526 ) Basic: Weighted-average shares of common stock outstanding 18,826 18,644 Shares used in computing basic net loss per share 18,826 18,644 Basic net loss per share $ (0.48 ) $ (0.08 ) Diluted: Weighted-average shares of common stock outstanding 18,826 18,644 Add: Common equivalent shares outstanding — — Shares used in computing diluted net loss per share 18,826 18,644 Diluted net loss per share $ (0.48 ) $ (0.08 ) |
Components of Accumulated Other Comprehensive Loss | Foreign Currency Translation Losses Unrealized Gains (Losses) on Investments Total Balance as of December 31, 2017 $ (2,024 ) $ (84 ) $ (2,108 ) Current-period other comprehensive gain (loss) (414 ) 15 (399 ) Balance as of December 31, 2018 $ (2,438 ) $ (69 ) $ (2,507 ) |
Fair Value of Stock-Based Awards Valuation Assumptions | Stock Option Plan Employee Stock Purchase Plan 2018 2017 2018 2017 Risk-free interest rate 2.43 % 1.71 % 2.31 % 0.5 % Expected term (in years) 3.0 3.0 0.5 0.5 Volatility 41.2 % 41.2 % 29.0 % 39.0 % Expected dividend 0 % 0 % 0 % 0 % Weighted average grant-date fair value $ 0.84 $ 0.68 $ 0.67 $ 0.39 |
Stock-Based Compensation Expense | For the Year Ended December 31, 2018 2017 Stock-based compensation expense related to grants of: Stock options $ 395 $ 144 ESPP 16 21 RSU 269 265 $ 680 $ 430 Stock-based compensation expense recognized in: Cost of service $ 63 $ 109 Cost of software and others - 4 Research and development 42 78 Sales and marketing 54 59 General and administrative 521 180 $ 680 $ 430 |
Fair Value Hierarchy for Financial Assets Measured at Fair Value on Recurring Basis | As of December 31, 2018 Level 1 Level 2 Level 3 Total Money market funds $ 14,295 $ — $ — $ 14,295 Certificates of deposit — 1,170 — 1,170 Commercial paper — 3,985 — 3,985 Corporate notes and bonds — 14,833 — 14,833 U.S. government agency securities — 6,975 — 6,975 Total $ 14,295 $ 26,963 $ — $ 41,258 As of December 31, 2017 Level 1 Level 2 Level 3 Total Money market funds $ 10,642 $ — $ — $ 10,642 Certificates of deposit — 1,206 — 1,206 Commercial paper — 2,493 — 2,493 Corporate notes and bonds — 22,769 — 22,769 U.S. government agency securities — 4,715 — 4,715 Total $ 10,642 $ 31,183 $ — $ 41,825 |
Summary of Long-Lived Assets by Geographic Areas | December 31, 2018 2017 United States $ 702 $ 1,132 India - - Philippines 1 1 Total $ 703 $ 1,133 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Components of Property and Equipment | December 31, 2018 2017 Computer equipment and software $ 7,143 $ 6,935 Furniture and office equipment 142 142 Leasehold improvements 348 348 Construction in progress — — 7,633 7,425 Accumulated depreciation (6,930 ) (6,292 $ 703 $ 1,133 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments | Years ending December 31, Operating Leases 2019 $ 273 2020 158 2021 70 Total minimum lease and principal payments $ 501 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Accrued Liabilities | As of December 31, 2018 2017 Accrued expenses $ 338 $ 462 Self-insurance accruals 585 679 Other accrued liabilities 55 189 Total other accrued liabilities $ 978 $ 1,330 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Summary of Stock Option Activity | Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding options at December 31, 2016 1,381,843 $ 14.85 4.95 $ 0 Granted 430,500 $ 2.291 Exercised (0 ) $ - Forfeited (1,080,153 ) $ 5.90 Outstanding options at December 31, 2017 732,190 $ 3.72 8.17 $ 56 Granted 330,000 $ 2.75 Exercised (75,022 ) $ 2.46 Forfeited (183,848 ) $ 6.14 Outstanding options at December 31, 2018 803,320 $ 2.89 8.43 $ 54 Options vested and expected to vest 786,829 $ 2.90 8.43 $ 51 Exercisable at December 31, 2018 556,487 $ 3.12 8.31 $ 20 |
Summary of Additional Information Related to Options Outstanding | Option Plans Range of Exercise Prices Number of Outstanding Options Weighted Average Remaining Contractual Life Weighted Average Exercise Price $ 2.29 - $2.29 315,330 8.52 $ 2.29 $ 2.51-$2.52 88,105 7.37 $ 2.51 $ 2.56-$2.57 29,208 7.45 $ 2.56 $ 2.74-$2.74 300,000 9.15 $ 2.74 $ 2.88-$13.44 61,549 7.06 $ 6.29 $ 13.50-$17.67 9,128 4.62 $ 16.78 803,320 |
Summary of Restricted Stock Units Activity | Number ofShares WeightedAverageGrant-DateFair Valueper Share WeightedAverageRemainingContractual Term (in years) AggregateIntrinsic Value(in thousands) Outstanding RSUs at December 31, 2016 351,921 $ 4.59 1.06 $ 908 Awarded 102,880 $ 2.43 Released (153,714 ) $ 3.45 Forfeited (164,758 ) $ 5.78 Outstanding RSUs at December 31, 2017 136,329 $ 2.80 0.80 $ 329 Awarded 90,905 $ 2.75 Released (119,943 ) $ 2.79 Forfeited (11,061 ) $ 2.67 Outstanding RSUs at December 31, 2018 96,230 $ 2.78 0.60 $ 227 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Components of Loss before Income Taxes | Year Ended December 31, 2018 2017 United States $ (9,458 ) $ (1,541 ) Foreign 357 619 Total $ (9,101 ) $ (922 ) |
Components of Provision for Income Taxes from Continuing Operations | Year Ended December 31, Current: 2018 2017 Federal $ — $ (79 ) State 8 13 Foreign (38 ) 85 Total Current $ (30 ) $ 19 Deferred Federal $ — $ — State — — Foreign 29 585 Total Deferred $ 29 $ 585 Provision (benefit) for income taxes $ (1 ) $ 604 |
Reconciliation of Federal Statutory Income Tax Rate to Effective Income Tax Rate | Year Ended December 31, 2018 2017 Provision at Federal statutory rate $ (1,911 ) $ (322 ) State taxes 8 13 Permanent differences/other 65 581 Tax Cuts and Jobs Act of 2017 Rate Change — 22,714 Stock-based compensation 81 365 Federal valuation allowance (used) provided 1,756 (22,747 ) Provision (benefit) for income taxes $ (1 ) $ 604 |
Components of Deferred Tax Assets and Liabilities | December 31, 2018 2017 Deferred Tax Assets Fixed assets $ 66 $ 64 Accruals and reserves 2,673 147 Stock options 179 196 Net operating loss carryforwards 35,522 35,254 Federal and state credits 3,461 3,461 Foreign credits 152 165 Intangible assets 2,139 2,442 Research and development expense 2,224 2,542 Gross deferred tax assets 46,416 44,271 Valuation allowance (46,283 ) (44,100 ) Total deferred tax assets 133 171 Deferred Tax Liabilities (1) (543 ) (543 ) Net deferred tax asset/liabilities (410 ) (372 ) (1) The 543,000 deferred tax liabilities is the only tax related to the Indian subsidiaries remittance would be a dividend distribution tax. |
Reconciliation of Beginning and Ending Unrecognized Tax Benefits | Year Ended December 31, 2018 2017 Balance at beginning of year $ 2,229 $ 2,285 Increase related to prior year tax positions — 26 Decrease related to prior year tax positions (20 ) — Increase related to current year tax positions — — Settlements with tax authorities (92 ) (82 ) Decrease related to lapse of statute of limitations — — Balance at end of year $ 2,117 $ 2,229 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies (Details) - Allowance for Doubtful Accounts [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Balance at beginning of period | $ 9 | $ 19 |
Adjustments to costs and expenses | 24 | 34 |
Write-offs | (20) | (44) |
Balance at end of period | $ 13 | $ 9 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Amortized Cost | $ 49,718 | $ 49,317 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (69) | (84) |
Fair Value | 49,649 | 49,233 |
Commercial Paper [Member] | ||
Amortized Cost | 3,986 | 2,494 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1) | (1) |
Fair Value | 3,985 | 2,493 |
Corporate Debt Securities [Member] | ||
Amortized Cost | 14,899 | 22,846 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (66) | (76) |
Fair Value | 14,833 | 22,770 |
US Government Agencies Debt Securities [Member] | ||
Amortized Cost | 6,976 | 4,719 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1) | (4) |
Fair Value | 6,975 | 4,715 |
Short-term Investments [Member] | ||
Amortized Cost | 24,536 | 31,266 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (69) | (83) |
Fair Value | 24,467 | 31,183 |
Cash [Member] | ||
Amortized Cost | 8,391 | 7,408 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 8,391 | 7,408 |
Money Market Funds [Member] | ||
Amortized Cost | 14,295 | 10,643 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | (1) |
Fair Value | 14,295 | 10,642 |
Certificates of Deposit [Member] | ||
Amortized Cost | 1,171 | 1,207 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1) | (2) |
Fair Value | 1,170 | 1,205 |
Cash and Cash Equivalents [Member] | ||
Amortized Cost | 25,182 | 18,051 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | (1) |
Fair Value | $ 25,182 | $ 18,050 |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Due within one year | $ 20,874 | $ 22,228 |
Due within two years | 3,593 | 8,955 |
Total fair value | $ 24,467 | $ 31,183 |
Organization and Summary of S_7
Organization and Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Continuous unrealized loss position, fair value | ||
In loss position less than 12 months | $ 26,579 | $ 20,968 |
In loss position more than 12 months | 0 | 7,945 |
Total in loss position | 26,510 | 28,913 |
Continuous unrealized loss position, unrealized losses | ||
In loss position less than 12 months | (69) | (37) |
In loss position more than 12 months | 0 | (47) |
Total in loss position | (69) | (84) |
Certificates of Deposit [Member] | ||
Continuous unrealized loss position, fair value | ||
In loss position less than 12 months | 720 | 718 |
In loss position more than 12 months | 0 | 0 |
Total in loss position | 719 | 718 |
Continuous unrealized loss position, unrealized losses | ||
In loss position less than 12 months | (1) | (2) |
In loss position more than 12 months | 0 | 0 |
Total in loss position | (1) | (2) |
Corporate Debt Securities [Member] | ||
Continuous unrealized loss position, fair value | ||
In loss position less than 12 months | 18,883 | 16,530 |
In loss position more than 12 months | 0 | 6,947 |
Total in loss position | 18,816 | 23,477 |
Continuous unrealized loss position, unrealized losses | ||
In loss position less than 12 months | (67) | (32) |
In loss position more than 12 months | 0 | (47) |
Total in loss position | (67) | (79) |
US Government Agencies Debt Securities [Member] | ||
Continuous unrealized loss position, fair value | ||
In loss position less than 12 months | 6,976 | 3,720 |
In loss position more than 12 months | 0 | 998 |
Total in loss position | 6,975 | 4,718 |
Continuous unrealized loss position, unrealized losses | ||
In loss position less than 12 months | (1) | (3) |
In loss position more than 12 months | 0 | 0 |
Total in loss position | $ (1) | $ (3) |
Organization and Summary of S_8
Organization and Summary of Significant Accounting Policies (Details 4) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Services | $ 64,476 | $ 54,670 |
Software and other | 5,073 | 5,451 |
Total revenue | $ 69,549 | $ 60,121 |
Organization and Summary of S_9
Organization and Summary of Significant Accounting Policies (Details 5) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (9,100) | $ (1,526) |
Basic | ||
Weighted-average shares of common stock outstanding (in shares) | 18,826 | 18,644 |
Shares used in computing basic net loss per share (in shares) | 18,826 | 18,644 |
Basic net loss per share (in dollars per share) | $ (0.48) | $ (0.08) |
Diluted | ||
Weighted-average shares of common stock outstanding (in shares) | 18,826 | 18,644 |
Add: Common equivalent shares outstanding (in shares) | 0 | 0 |
Shares used in computing diluted net loss per share (in shares) | 18,826 | 18,644 |
Diluted net loss per share (in dollars per share) | $ (0.48) | $ (0.08) |
Organization and Summary of _10
Organization and Summary of Significant Accounting Policies (Details 6) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Balances | $ (2,108) | |
Current-period other comprehensive gain (loss) | (399) | $ 221 |
Balances | (2,507) | (2,108) |
Foreign Currency Translation Losses [Member] | ||
Balances | (2,024) | |
Current-period other comprehensive gain (loss) | (414) | |
Balances | (2,438) | (2,024) |
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | ||
Balances | (84) | |
Current-period other comprehensive gain (loss) | 15 | |
Balances | $ (69) | $ (84) |
Organization and Summary of _11
Organization and Summary of Significant Accounting Policies (Details 7) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Options [Member] | ||
Risk-free interest rate | 2.43% | 1.71% |
Expected term | 3 years | 3 years |
Volatility | 41.20% | 41.20% |
Expected dividend | 0.00% | 0.00% |
Weighted average grant-date fair value (in dollars per share) | $ 0.84 | $ 0.68 |
Employee Stock [Member] | ||
Risk-free interest rate | 2.31% | 0.50% |
Expected term | 6 months | 6 months |
Volatility | 29.00% | 39.00% |
Expected dividend | 0.00% | 0.00% |
Weighted average grant-date fair value (in dollars per share) | $ 0.67 | $ 0.39 |
Organization and Summary of _12
Organization and Summary of Significant Accounting Policies (Details 8) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-based compensation expense | $ 680 | $ 430 |
Cost of Service [Member] | ||
Stock-based compensation expense | 63 | 109 |
Cost of software [Member] | ||
Stock-based compensation expense | 0 | 4 |
Research and Development Expense [Member] | ||
Stock-based compensation expense | 42 | 78 |
Selling and Marketing Expense [Member] | ||
Stock-based compensation expense | 54 | 59 |
General and Administrative Expense [Member] | ||
Stock-based compensation expense | 521 | 180 |
Stock Options [Member] | ||
Stock-based compensation expense | 395 | 144 |
Employee Stock [Member] | ||
Stock-based compensation expense | 16 | 21 |
Restricted Stock Units ("RSUs") [Member] | ||
Stock-based compensation expense | $ 269 | $ 265 |
Organization and Summary of _13
Organization and Summary of Significant Accounting Policies (Details 9) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair value for financial assets | $ 41,258 | $ 41,825 |
Level 1 [Member] | ||
Fair value for financial assets | 14,295 | 10,642 |
Level 2 [Member] | ||
Fair value for financial assets | 26,963 | 31,183 |
Level 3 [Member] | ||
Fair value for financial assets | 0 | 0 |
Money Market Funds [Member] | ||
Fair value for financial assets | 14,295 | 10,642 |
Money Market Funds [Member] | Level 1 [Member] | ||
Fair value for financial assets | 14,295 | 10,642 |
Money Market Funds [Member] | Level 2 [Member] | ||
Fair value for financial assets | 0 | 0 |
Money Market Funds [Member] | Level 3 [Member] | ||
Fair value for financial assets | 0 | 0 |
Certificates of Deposit [Member] | ||
Fair value for financial assets | 1,170 | 1,206 |
Certificates of Deposit [Member] | Level 1 [Member] | ||
Fair value for financial assets | 0 | 0 |
Certificates of Deposit [Member] | Level 2 [Member] | ||
Fair value for financial assets | 1,170 | 1,206 |
Certificates of Deposit [Member] | Level 3 [Member] | ||
Fair value for financial assets | 0 | 0 |
Commercial Paper [Member] | ||
Fair value for financial assets | 3,985 | 2,493 |
Commercial Paper [Member] | Level 1 [Member] | ||
Fair value for financial assets | 0 | 0 |
Commercial Paper [Member] | Level 2 [Member] | ||
Fair value for financial assets | 3,985 | 2,493 |
Commercial Paper [Member] | Level 3 [Member] | ||
Fair value for financial assets | 0 | 0 |
Corporate Debt Securities [Member] | ||
Fair value for financial assets | 14,833 | 22,769 |
Corporate Debt Securities [Member] | Level 1 [Member] | ||
Fair value for financial assets | 0 | 0 |
Corporate Debt Securities [Member] | Level 2 [Member] | ||
Fair value for financial assets | 14,833 | 22,769 |
Corporate Debt Securities [Member] | Level 3 [Member] | ||
Fair value for financial assets | 0 | 0 |
US Government Agencies Debt Securities [Member] | ||
Fair value for financial assets | 6,975 | 4,715 |
US Government Agencies Debt Securities [Member] | Level 1 [Member] | ||
Fair value for financial assets | 0 | 0 |
US Government Agencies Debt Securities [Member] | Level 2 [Member] | ||
Fair value for financial assets | 6,975 | 4,715 |
US Government Agencies Debt Securities [Member] | Level 3 [Member] | ||
Fair value for financial assets | $ 0 | $ 0 |
Organization and Summary of _14
Organization and Summary of Significant Accounting Policies (Details 10) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Long-lived assets | $ 703 | $ 1,133 |
United States [Member] | ||
Long-lived assets | 702 | 1,132 |
INDIA | ||
Long-lived assets | 0 | 0 |
Philippines [Member] | ||
Long-lived assets | $ 1 | $ 1 |
Organization and Summary of _15
Organization and Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Advertising expense | $ 18 | $ 100 |
Shares excluded from the computation of diluted earnings (loss) per share (in shares) | 64,000 | 28,000 |
Cash provided by (used in) proceeds from issuance of common stock, net of repurchase of common stock and cash settlement in stock split | $ 257 | $ 25 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property and equipment, gross | $ 7,633 | $ 7,425 |
Accumulated depreciation | (6,930) | (6,292) |
Property and equipment, net | 703 | 1,133 |
Computer Equipment and Software [Member] | ||
Property and equipment, gross | 7,143 | 6,935 |
Furniture and Fixtures [Member] | ||
Property and equipment, gross | 142 | 142 |
Leasehold Improvements [Member] | ||
Property and equipment, gross | 348 | 348 |
Construction in Progress [Member] | ||
Property and equipment, gross | $ 0 | $ 0 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 638 | $ 628 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 0 | $ 16 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,019 | $ 273 |
2,020 | 158 |
2,021 | 70 |
Total minimum lease and principal payments | $ 501 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expense | $ 401 | $ 567 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other Liabilities Disclosure [Abstract] | ||
Accrued expenses | $ 338 | $ 462 |
Self-insurance accruals | 585 | 679 |
Other accrued liabilities | 55 | 189 |
Total other accrued liabilities | $ 978 | $ 1,330 |
Stockholder's Equity (Details)
Stockholder's Equity (Details) - Stock Options [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock option activity, number of shares | ||
Outstanding options, beginning of period | 732,190 | 1,381,843 |
Granted | 330,000 | 430,500 |
Exercised | (75,022) | 0 |
Forfeited | (183,848) | (1,080,153) |
Outstanding options, end of period | 803,320 | 732,190 |
Options vested and expected to vest | 786,829 | |
Exercisable | 556,487 | |
Weighted average exercise price per share | ||
Outstanding options, beginning of period | $ 3.72 | $ 14.85 |
Granted | 2.75 | 2.291 |
Exercised | 2.46 | |
Forfeited | 6.14 | 5.9 |
Outstanding options, end of period | 2.89 | $ 3.72 |
Options vested and expected to vest | 2.9 | |
Exercisable | $ 3.12 | |
Additional disclosure | ||
Options outstanding, weighted average remaining contractual term | 8 years 5 months 5 days | 8 years 2 months 1 day |
Options vested and expected to vest, weighted average remaining contractual term | 8 years 5 months 5 days | |
Options exercisable, weighted average remaining contractual term | 8 years 3 months 22 days | |
Options outstanding, aggregate intrinsic value | $ 54 | $ 56 |
Options vested and expected to vest, aggregate intrinsic value | 51 | |
Options exercisable, aggregate intrinsic value | $ 20 |
Stockholder's Equity (Details 1
Stockholder's Equity (Details 1) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Options outstanding, number of options | shares | 803,320 |
Exercise Price Range, Range One [Member] | |
Exercise price range, lower range limit | $ 2.29 |
Exercise price range, upper range limit | $ 2.29 |
Options outstanding, number of options | shares | 315,330 |
Options outstanding, weighted average remaining contractual life | 8 years 6 months 7 days |
Options outstanding, weighted average exercise price | $ 2.29 |
Exercise Price Range, Range Two [Member] | |
Exercise price range, lower range limit | 2.51 |
Exercise price range, upper range limit | $ 2.52 |
Options outstanding, number of options | shares | 88,105 |
Options outstanding, weighted average remaining contractual life | 7 years 4 months 13 days |
Options outstanding, weighted average exercise price | $ 2.51 |
Exercise Price Range, Range Three [Member] | |
Exercise price range, lower range limit | 2.56 |
Exercise price range, upper range limit | $ 2.57 |
Options outstanding, number of options | shares | 29,208 |
Options outstanding, weighted average remaining contractual life | 7 years 5 months 12 days |
Options outstanding, weighted average exercise price | $ 2.56 |
Exercise Price Range, Range Four [Member] | |
Exercise price range, lower range limit | 2.74 |
Exercise price range, upper range limit | $ 2.74 |
Options outstanding, number of options | shares | 300,000 |
Options outstanding, weighted average remaining contractual life | 9 years 1 month 24 days |
Options outstanding, weighted average exercise price | $ 2.74 |
Exercise Price Range, Range Five [Member] | |
Exercise price range, lower range limit | 2.88 |
Exercise price range, upper range limit | $ 13.44 |
Options outstanding, number of options | shares | 61,549 |
Options outstanding, weighted average remaining contractual life | 7 years 22 days |
Options outstanding, weighted average exercise price | $ 6.29 |
Exercise Price Range, Range Six [Member] | |
Exercise price range, lower range limit | 13.50 |
Exercise price range, upper range limit | $ 17.67 |
Options outstanding, number of options | shares | 9,128 |
Options outstanding, weighted average remaining contractual life | 4 years 7 months 13 days |
Options outstanding, weighted average exercise price | $ 16.78 |
Stockholder's Equity (Details 2
Stockholder's Equity (Details 2) - Restricted Stock Units ("RSUs") [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Restricted stock units, number of shares | ||
Outstanding RSUs, beginning of period | 136,329 | 351,921 |
Awarded | 90,905 | 102,880 |
Released | (119,943) | (153,714) |
Forfeited | (11,061) | (164,758) |
Outstanding RSUs, end of period | 96,230 | 136,329 |
Restricted stock units, weighted average grant-date fair value | ||
Outstanding RSUs, beginning of period | $ 2.8 | $ 4.59 |
Awarded | 2.75 | 2.43 |
Released | 2.79 | 3.45 |
Forfeited | 2.67 | 5.78 |
Outstanding RSUs, end of period | $ 2.78 | $ 2.8 |
Restricted stock units, additional disclosures | ||
Outstanding RSUs, weighted average remaining contractual term | 7 months 6 days | 9 months 18 days |
Outstanding RSUs, aggregate intrinsic value, beginning | $ 329 | $ 908 |
Outstanding RSUs, aggregate intrinsic value, ending | $ 227 | $ 329 |
Stockholder's Equity (Details N
Stockholder's Equity (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | ||
Fair value of options vested | $ 22 | $ 32 |
Unrecognized compensation cost related to stock options | $ 165 | |
Weighted average period of recognition for unrecognized compensation cost | 1 year 7 months 6 days | |
Unrecognized compensation cost related to restricted stock units | $ 116 | |
Weighted average period of recognition for unrecognized compensation cost | 7 months 6 days | |
Stock repurchase program, remaining number of shares authorized to be repurchased | 602,467 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
United States | $ (9,458) | $ (1,541) |
Foreign | 357 | 619 |
Loss from continuing operations, before income taxes | $ (9,101) | $ (922) |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current | ||
Federal | $ 0 | $ (79) |
State | 8 | 13 |
Foreign | (38) | 85 |
Total current | (30) | 19 |
Deferred | ||
Federal | 0 | 0 |
State | 0 | 0 |
Foreign | 29 | 585 |
Total Deferred | 29 | 585 |
Provision (benefit) for income taxes | $ (1) | $ 604 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Provision at Federal statutory rate | $ (1,911) | $ (322) |
State taxes | 8 | 13 |
Permanent differences/other | 65 | 581 |
Tax Cuts and Jobs Act of 2017 Rate Change | 0 | 22,714 |
Stock-based compensation | 81 | 365 |
Federal valuation allowance (used) provided | 1,756 | (22,747) |
Provision (benefit) for income taxes | $ (1) | $ 604 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets, Net [Abstract] | ||
Fixed assets | $ 66 | $ 64 |
Accruals and reserves | 2,673 | 147 |
Stock options | 179 | 196 |
Net operating loss carryforwards | 35,522 | 35,254 |
Federal and state credits | 3,461 | 3,461 |
Foreign credits | 152 | 165 |
Intangible assets | 2,139 | 2,442 |
Research and development expense | 2,224 | 2,542 |
Gross deferred tax assets | 46,416 | 44,271 |
Valuation allowance | (46,283) | (44,100) |
Total deferred tax assets | 133 | 171 |
Deferred Tax Liabilities | (543) | (543) |
Net deferred tax asset/liabilities | $ (410) | $ (372) |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Balance at beginning of year | $ 2,229 | $ 2,285 |
Increase related to prior year tax positions | 0 | 26 |
Decrease related to prior year tax positions | (20) | 0 |
Increase related to current year tax positions | 0 | 0 |
Settlements with tax authorities | (92) | (82) |
Decrease related to lapse of statute of limitations | 0 | 0 |
Balance at end of year | $ 2,117 | $ 2,229 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Increase (decrease) in net valuation allowance | $ 22,700 | |
Operating loss carryforwards | 1,452,400 | $ 70,500 |
Unrecognized tax benefits that would impact effective tax rate | 100 | 200 |
Income tax penalties and interest accrued | 140 | $ 158 |
Federal [Member] | ||
Tax credit carryforward | 2,800 | |
State [Member] | ||
Tax credit carryforward | $ 2,400 |