Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2017 | May 05, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Inspired Entertainment, Inc. | |
Entity Central Index Key | 1,615,063 | |
Document Type | 10-Q | |
Trading Symbol | INSE | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | No | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 22,419,069 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 24, 2016 |
Current assets | ||
Cash | $ 13,345 | $ 1,486 |
Accounts receivable, net | 21,752 | 16,446 |
Inventory, net | 6,702 | 7,684 |
Prepaid expenses and other current assets | 18,881 | 19,124 |
Total current assets | 60,680 | 44,740 |
Property and equipment, net | 44,775 | 49,231 |
Software development costs, net | 41,100 | 36,960 |
Other acquired intangible assets subject to amortization, net | 10,167 | 12,234 |
Goodwill | 43,829 | 45,705 |
Other assets | 980 | 1,000 |
Total assets | 201,531 | 189,870 |
Current liabilities | ||
Accounts payable | 12,621 | 13,662 |
Accrued expenses | 13,148 | 17,478 |
Corporate tax and other current taxes payable | 2,957 | 4,665 |
Deferred revenue, current | 10,247 | 9,593 |
Other current liabilities | 3,133 | 3,115 |
Current portion of long-term debt | 13,723 | 10,082 |
Current portion of capital lease obligations | 484 | 210 |
Total current liabilities | 56,313 | 58,805 |
Long-term debt | 103,298 | 402,327 |
Capital lease obligations, net of current portion | 394 | 165 |
Deferred revenue, net of current portion | 10,066 | 12,282 |
Earnout liability | 10,478 | |
Derivative liability | 1,136 | |
Other long-term liabilities | 12,774 | 12,362 |
Total liabilities | 194,459 | 485,941 |
Commitments and contingencies | ||
Stockholders' equity (deficit) | ||
Preferred stock; $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding at March 31, 2017 and September 24, 2016 | ||
Common stock; $0.0001 par value; 49,000,000 shares authorized; 20,378,002 shares and 11,801,369 shares issued and outstanding at March 31, 2017 and September 24, 2016, respectively | 2 | 1 |
Additional paid in capital | 320,248 | 614 |
Accumulated other comprehensive income | 48,116 | 33,105 |
Accumulated deficit | (361,294) | (329,791) |
Total stockholders' equity (deficit) | 7,072 | (296,071) |
Total liabilities and stockholders' equity (deficit) | $ 201,531 | $ 189,870 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2017 | Sep. 24, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorised | 1,000,000 | 1,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorised | 49,000,000 | 49,000,000 |
Common stock, issued | 20,363,927 | 11,801,369 |
Common stock, outstanding | 20,363,927 | 11,801,369 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue: | ||||
Service | $ 25,396 | $ 29,151 | $ 50,640 | $ 59,223 |
Hardware | 2,664 | 1,289 | 4,457 | 2,032 |
Total revenue | 28,060 | 30,440 | 55,097 | 61,255 |
Cost of sales, excluding depreciation and amortization: | ||||
Cost of service | (3,232) | (4,125) | (6,980) | (8,492) |
Cost of hardware | (2,451) | (503) | (3,612) | (841) |
Selling, general and administrative expenses | (14,404) | (14,595) | (28,135) | (30,771) |
Stock-based compensation expense | (1,291) | (1,327) | ||
Acquisition related transaction expenses | (813) | (389) | (11,273) | (1,667) |
Depreciation and amortization | (8,004) | (9,172) | (15,172) | (18,444) |
Net operating (loss) income | (2,135) | 1,656 | (11,402) | 1,040 |
Other income (expense) | ||||
Interest income | 12 | |||
Interest expense | (4,542) | (14,905) | (18,965) | (31,012) |
Change in fair value of earnout liability | (2,155) | (879) | ||
Change in fair value of derivative liability | (203) | (79) | ||
Other finance costs | (53) | (63) | (107) | (128) |
Total other expense, net | (6,953) | (14,968) | (20,018) | (31,140) |
Net loss before income taxes | (9,088) | (13,312) | (31,420) | (30,100) |
Income tax expense | (32) | (203) | (83) | (289) |
Net loss | (9,120) | (13,515) | (31,503) | (30,389) |
Other comprehensive income (loss): | ||||
Foreign currency translation gain/(loss) | 649 | 18,706 | 18,134 | 18,408 |
Actuarial losses on pension plan | (1,867) | (2,498) | (3,123) | (3,790) |
Other comprehensive income/(loss) | (1,218) | 16,208 | 15,011 | 14,618 |
Comprehensive (loss) income | $ (10,338) | $ 2,693 | $ (16,492) | $ (15,771) |
Net loss per common share - basic and diluted (in dollars per share) | $ (0.45) | $ (1.15) | $ (1.94) | $ (2.61) |
Weighted average number of shares outstanding during the period - basic and diluted (in shares) | 20,378,002 | 11,801,369 | 16,266,916 | 11,648,033 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - 6 months ended Mar. 31, 2017 - USD ($) $ in Thousands | Common stock [Member] | Additional paid in capital [Member] | Accumulated other comprehensive income [Member] | Accumulated deficit [Member] | Total |
Balance at beginning at Sep. 24, 2016 | $ 1 | $ 614 | $ 33,105 | $ (329,791) | $ (296,071) |
Balance at beginning (in shares) at Sep. 24, 2016 | 11,801,369 | 11,801,369 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Foreign currency translation adjustments | 18,134 | $ 18,134 | |||
Actuarial losses on pension plan | (3,123) | (3,123) | |||
Shares issued in Merger | $ 1 | 326,237 | 326,238 | ||
Shares issued in Merger (in shares) | 8,412,097 | ||||
Earnout liability related to Merger | (9,575) | (9,575) | |||
Sale of common stock | 1,645 | 1,645 | |||
Sale of common stock (in shares) | 164,536 | ||||
Stock-based compensation expense | 1,327 | 1,327 | |||
Net loss | (31,503) | (31,503) | |||
Balance at ending at Mar. 31, 2017 | $ 2 | $ 320,248 | $ 48,116 | $ (361,294) | $ 7,072 |
Balance at ending (in shares) at Mar. 31, 2017 | 20,378,002 | 20,363,927 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (31,503) | $ (30,389) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 15,172 | 18,444 |
Stock-based compensation expense | 1,327 | |
Change in fair value of derivative liability | 79 | |
Change in fair value of earnout liability | 879 | |
Non-cash interest expense relating to PIK loan notes | 9,762 | 21,578 |
Changes in assets and liabilities: | ||
Accounts receivable | (5,865) | (4,684) |
Inventory | 679 | (575) |
Prepaid expenses and other assets | (432) | 5,651 |
Corporate tax and other current taxes payable | (1,474) | (361) |
Accounts payable | 2,363 | 3,973 |
Other current liabilities | (11) | (226) |
Deferred revenues and customer prepayment | (486) | (2,895) |
Accrued expenses | (1,295) | (2,476) |
Other long-term liabilities | (1,496) | (2,919) |
Net cash (used in) provided by operating activities | (12,301) | 5,121 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (9,092) | (8,697) |
Purchases of capital software | (11,248) | (10,258) |
Net cash used in investing activities | (20,340) | (18,955) |
Cash flows from financing activities: | ||
Proceeds from issuance of revolver and long-term debt | 4,039 | 12,737 |
Proceeds from (repayments of) finance leases | 517 | (75) |
Cash received in connection with Merger | 36,664 | |
Proceeds from sale of common stock | 1,645 | |
Repayments of long-term debt | ||
Net cash provided by financing activities | 42,865 | 12,662 |
Effect of exchange rate changes on cash | 1,635 | (125) |
Net increase (decrease) in cash | 11,859 | (1,297) |
Cash, beginning of period | 1,486 | 4,060 |
Cash, end of period | 13,345 | 2,763 |
Supplemental cash flow disclosures | ||
Cash paid during the period for interest | 5,604 | 6,418 |
Cash paid during the period for income taxes | 47 | $ 9 |
Supplemental disclosure of noncash investing and financing activities | ||
Fair value adjustment of PIK shareholder loans | $ 174,990 |
Nature of Operations, Managemen
Nature of Operations, Management's Plans and Summary of Significant Accounting Policies | 6 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations, Management's Plans and Summary of Significant Accounting Policies | 1. Nature of Operations, Management’s Plans and Summary of Significant Accounting Policies Company Description and Nature of Operations Inspired Entertainment, Inc. (f/k/a Hydra Industries Acquisition Corp.) (the “Company,” the “Group,” “we,” “our,” and “us”) is a global gaming technology company, supplying Virtual Sports, Mobile and Server Based Gaming (“SBG”) systems to regulated lottery, betting and gaming operators worldwide. Our strategic focus is the development and sale of software systems and digital terminals. The Company was originally incorporated in Delaware on May 24, 2014 as a special purpose acquisition company, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, recapitalization or other similar business combination with one or more businesses. On December 23, 2016 (the “Closing Date”), the Company consummated its business combination with DMWSL 633 Limited (“Inspired”) pursuant to the Share Sale Agreement (the “Merger”), dated as of July 13, 2016, by and among the Company, the previous owners, Inspired, DMWSL 632 Limited and Gaming Acquisitions Limited (the “Sale Agreement”). In connection with the closing of the Merger, the Company changed its name from Hydra Industries Acquisition Corp. to Inspired Entertainment, Inc. Unless the context otherwise requires, the “Company” refers to the combined company and its subsidiaries following the Merger, “Hydra” refers to the Company prior to the closing of the Merger and “Inspired” refers to Inspired prior to the Merger. See Note 2 for further discussion of the Merger. Management Liquidity Plans As of March 31, 2017, the Company’s cash on hand was $13,345 and the Company had working capital of $4,367. The Company recorded net losses of $31,503 and $30,389 for the six months ended March 31, 2017 and 2016, respectively. The net losses arose primarily due to one-time items, primarily acquisition related expenses and interest on shareholder loan notes which are no longer a liability of the Company following the Merger as detailed in Note 2. The Company historically has had positive cash flows from operating activities and has relied on a combination of cash flows provided by operations and the incurrence of additional debt and/or the refinancing of existing debt to fund its obligations. Management believes that the Company’s cash balances on hand, cash flows expected to be generated from operations, ability to control and defer capital projects and borrowings available under the Company’s credit facilities will be sufficient to fund the Company’s net cash requirements through May 2018. Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management’s opinion, however, that the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with Inspired’s consolidated financial statements and notes thereto for the periods ended September 24, 2016, September 26, 2015 and September 27, 2014. The financial information as of September 24, 2016 is derived from the audited consolidated financial statements presented in the Form 8-K filed by the Company with the SEC on December 30, 2016. The interim results for the three and six months ended March 31, 2017 are not necessarily indicative of the results to be expected for the year ending September 30, 2017 or for any future interim periods. The Merger has been accounted for as a reverse merger in accordance with US GAAP. This determination was primarily based on Inspired’s business comprising the ongoing operations of the Company following the Merger, Inspired’s senior management comprising the senior management of the Company and Inspired’s stockholders having a majority of the voting power of the Company. For accounting purposes, Hydra is considered the “acquired” company and Inspired is considered the “acquirer.” Accordingly, for accounting purposes, the Merger is treated as the equivalent of Inspired issuing stock for the net assets of Hydra, accompanied by a recapitalization. The net assets of Hydra are stated at historical cost, with no goodwill or other intangible assets recorded. The consolidated assets, liabilities and results of operations prior to the Closing Date of the Merger are those of Inspired, and Hydra’s assets, liabilities and results of operations are consolidated with Inspired beginning on the Closing Date. The shares and corresponding capital amounts and earnings per share available to common stockholders, pre-merger, have been retroactively restated as shares reflecting the exchange ratio in the Merger. The historical financial information and operating results of Hydra prior to the Merger have not been separately presented in these condensed consolidated financial statements as they were not significant or meaningful. Effective September 25, 2016, the Company changed its reporting year end from a 52-week period ending on the last Saturday in September to a September 30 year end, commencing with the year ending September 30, 2017. Accordingly, the period ended March 31, 2017 includes the results of operations for the Company for the period from September 25, 2016 through March 31, 2017. Additionally, the period ended March 31, 2016 includes the results of operations for the Company for the period from September 27, 2015 through March 31, 2016. Principles of Consolidation All monetary values set forth in these unaudited interim condensed consolidated financial statements are in US Dollars (“USD”) unless otherwise stated herein. The accompanying unaudited interim condensed consolidated financial statements include the results of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Reclassification Certain prior year amounts were reclassified to conform to the current year’s presentation. These reclassifications have no effect on the financial position or results of operations reported as of and for the three and six months ended March 31, 2016. Use of Estimates The preparation of unaudited interim condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates these estimates, including those related to the revenue recognition for contracts involving software and non-software elements, allowance for doubtful accounts, inventory reserve for net realizable value, goodwill and intangible assets, useful lives of long-lived assets, stock-based compensation, valuation allowances on deferred taxes, earnout liability, derivative liabilities, commitments and contingencies and litigation, among others. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. We regularly evaluate these significant factors and make adjustments when facts and circumstances dictate. Actual results may differ from these estimates. Common Stock Purchase Warrants and Derivative Financial Instruments The Company reviews any common stock purchase warrants and other freestanding derivative financial instruments at each balance sheet date and classifies them on the condensed consolidated balance sheet as: a) Equity if they (i) require physical settlement or net-share settlement, or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement), or b) Assets or liabilities if they (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control), or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its common stock purchase warrants and other freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company determined that its outstanding common stock purchase warrants satisfied the criteria for classification as equity instruments at March 31, 2017. The Company also determined that its obligation to settle certain management bonuses in either cash or stock satisfied the criteria for classification as a derivative financial instrument at March 31, 2017 (see Note 14). Share-Based Payment Arrangements The Company accounts for stock based compensation in accordance with Accounting Standards Codification (“ASC”) 718, “Compensation - Stock Compensation” (“ASC 718”). ASC 718 requires generally that all equity awards be accounted for at their “fair value.” This fair value is measured on the grant date for stock-settled awards, and at subsequent exercise or settlement for cash-settled awards. Fair value is equal to the underlying value of the stock for “full-value” awards such as restricted stock and performance shares, and is estimated using an option-pricing model with traditional inputs for “appreciation” awards such as stock options and stock appreciation rights. Costs equal to these fair values are recognized ratably over the requisite service period based on the number of awards that are expected to vest, or in the period of grant for awards that vest immediately and have no future service condition. For awards that vest over time, previously recognized compensation cost is reversed if the service or performance conditions are not satisfied and the award is forfeited. The expense resulting from share-based payments is recorded in general and administrative expense in the accompanying consolidated statements of operations. Subsequent modifications to outstanding awards result in incremental cost if the fair value is increased as a result of the modification. Customer Concentration During the three months ended March 31, 2017, there were two customers that represented at least 10% of revenues, accounting for 27% and 13% of the Company’s revenues. During the three months ended March 31, 2016, two customers represented at least 10% of revenues, accounting for 29% and 12% of the Company’s revenues. During the six months ended March 31, 2017, there were two customers that represented at least 10% of revenues, accounting for 29% and 12% of the Company’s revenues. During the six months ended March 31, 2016, two customers represented at least 10% of revenues, accounting for 30% and 11% of the Company’s revenues. At March 31, 2017, one customer represented at least 10% of accounts receivable, accounting for 30% of the Company’s accounts receivable. At September 24, 2016, there were no customers that represented at least 10% of accounts receivable. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which was subsequently modified in August 2015 by ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date. As a result, the ASU No. 2014-09 is effective retrospectively for fiscal years and interim periods within those years beginning after December 15, 2017. The core principle of ASU No. 2014-09 is that companies should recognize revenue when the transfer of promised goods or services to customers occurs in an amount that reflects what the company expects to receive. It requires additional disclosures to describe the nature, amount, timing and uncertainty of revenue and cash flows from contracts with customers. In 2016, the FASB issued additional ASUs that clarify the implementation guidance on principal versus agent considerations (ASU 2016-08), on identifying performance obligations and licensing (ASU 2016-10), and on narrow-scope improvements and practical expedients (ASU 2016-12) as well as on the revenue recognition criteria and other technical corrections (ASU 2016-20). The Company will adopt the standard on January 1, 2018, using the full retrospective transition method, which may result in a cumulative-effect adjustment for deferred revenue to the opening balance sheet for 2016 and the restatement of the financial statements for all prior periods presented. The Company continues to evaluate the impact of adoption of this standard on its consolidated financial statements and disclosures. In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 was issued as part of the FASB’s simplification initiative and affects all entities that issue share-based payment awards to their employees. The amendments in this update cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016. This guidance can be applied either prospectively, retrospectively or using a modified retrospective transition method, depending on the area covered in this update. Early adoption is permitted. The Company adopted the methodologies prescribed by ASU 2014-15 as of October 1, 2016. The adoption of ASU 2016-09 did not have a material effect on the Company’s financial position or results of operations. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows: Clarification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”), which eliminates the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance on eight specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. ASU 2016-15 provides for retrospective application for all periods presented. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740)” (“ASU 2016-16”), which reduces the complexity in the accounting standards by allowing the recognition of current and deferred income taxes for an intra-entity asset transfer, other than inventory, when the transfer occurs. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted using a modified retrospective transition approach. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805) Clarifying the Definition of a Business” (“ASU 2017-01”). The amendments in ASU 2017-01 is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact of adopting this guidance. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). ASU 2017-04 eliminates Step 2 along with amending other parts of the goodwill impairment test. Under ASU 2017-04, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value with the loss not exceeding the total amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective for annual periods beginning after December 15, 2019, and interim periods therein with early adoption permitted for interim or annual goodwill impairment tests performed after January 1, 2017. At adoption, this update will require a prospective approach. The Company is currently evaluating the impact of adopting this guidance. In March 2017, the FASB issued ASU 2017-07, “Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU 2017-07”). The new guidance requires companies with sponsored defined benefit pension and/or other postretirement benefit plans to present the service cost component of net periodic benefit cost in the same income statement line item as other compensation costs. The other components of net periodic benefit cost will be presented separately and not included in operating income. In addition, only service costs are eligible to be capitalized as an asset. ASU 2017-07 will be effective for fiscal years beginning after December 15, 2017, including interim periods within those years, and the guidance will generally be applied retroactively, whereas the capitalization of the service cost component will be applied prospectively. Early adoption is permitted with all of the amendments adopted in the same period. If an entity early adopts the guidance in an interim period, any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. The Company is currently assessing the effect that ASU 2017-07 will have on its financial position, results of operations, and disclosures. |
Merger
Merger | 6 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Merger | 2. Merger On the Closing Date, Hydra and Inspired consummated the Merger contemplated by the Sale Agreement which provided for, among other things, the acquisition of all of the outstanding equity and shareholder loan notes of Inspired by Hydra pursuant to the Merger. In connection with the Merger, Hydra issued 11,815,435 shares of common stock to the prior owners of Inspired. Immediately following the Merger, there were 20,213,466 shares of common stock outstanding and warrants to purchase 9,539,615 shares of common stock. Warrants As of the Closing Date of the Merger, Hydra had 19,079,230 outstanding warrants to purchase an aggregate of 9,539,615 shares of the Company’s common stock, which includes 8,000,000 warrants originally issued as part of the IPO (the “Public Warrants”) and 11,079,230 warrants issued in private placements (the “Private Placement Warrants”). Each warrant entitles its holder to purchase one-half of one share of the Company’s common stock at an exercise price of $11.50 per whole share and will expire on December 23, 2021, or earlier upon liquidation by the Company. The warrants became exercisable 30 days after the Closing Date. The Company may redeem the Public Warrants at a price of $0.01 per warrant if the last sale price of the common stock equals or exceeds $24.00 per share for any 20 trading days within a 30 trading day period. The Company may not redeem the Private Placement Warrants so long as they are held by the initial purchaser or such purchasers’ permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or such purchasers’ permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Accounts Receivable | 3. Accounts Receivable Accounts receivable consist of the following: March 31, 2017 September 24, 2016 Trade receivables $ 22,015 $ 16,698 Other receivables 52 88 Allowance for doubtful accounts (315 ) (340 ) Total accounts receivable, net $ 21,752 $ 16,446 |
Inventory
Inventory | 6 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | 4. Inventory Inventory consists of the following: March 31, 2017 September 24, 2016 Component parts $ 4,745 $ 6,175 Finished goods 1,957 1,509 Total inventories $ 6,702 $ 7,684 Component parts include parts for gaming terminals. Included in component parts are reserves for excess and slow-moving inventory of $363 and $469 as of March 31, 2017 and September 24, 2016, respectively. Our finished goods inventory primarily consists of gaming terminals which are ready for sale. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets | 6 Months Ended |
Mar. 31, 2017 | |
Prepaid Expense and Other Assets [Abstract] | |
Prepaid Expenses and Other Assets | 5. Prepaid Expenses and Other Assets Prepaid expenses and other assets consist of the following: March 31, 2017 September 24, 2016 Prepaid expenses $ 7,940 $ 8,678 Unbilled accounts receivable 10,941 10,446 Total prepaid expenses and other assets $ 18,881 $ 19,124 |
Property and Equipment, net
Property and Equipment, net | 6 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | 6. Property and Equipment, net March 31, 2017 September 24, 2016 Short-term leasehold property $ 345 $ 360 Video lottery terminals 100,249 104,176 Computer equipment 7,628 7,242 Plant and machinery 3,567 3,215 111,789 114,993 Less: accumulated depreciation (67,014 ) (65,762 ) $ 44,775 $ 49,231 Depreciation and amortization expense amounted to $4,519 and $5,590 for the three months ended March 31, 2017 and 2016, respectively, and $9,157 and $11,874 for the six months ended March 31, 2017 and 2016, respectively. |
Software Development Costs, net
Software Development Costs, net | 6 Months Ended |
Mar. 31, 2017 | |
Research and Development [Abstract] | |
Software Development Costs, net | 7. Software Development Costs, net Software development costs, net consisted of the following: March 31, 2017 September 24, 2016 Software development costs $ 74,659 $ 67,289 Less: accumulated amortization (33,559 ) (30,329 ) $ 41,100 $ 36,960 For the quarter ended March 31, 2017, the Company capitalized $5,158 of software development costs. Amounts in the above table include $2,385 and $1,797 of internal use software at March 31, 2017 and September 24, 2016, respectively. The total amount of software costs amortized was $2,444 and $2,463 for the three months ended March 31, 2017 and 2016, respectively, and $4,193 and $4,492 for the six months ended March 31, 2017 and 2016, respectively. Software costs written down to net realizable value amounted to $263 for the three and six months ended March 31, 2017. The Company did not have any software costs written down to net realizable value in the three and six months ended March 31, 2016. The weighted average amortization period was 3.2 years for the three and six months ended March 31, 2017 and 2016, respectively. The estimated software amortization expense for the six months ending September 30, 2017 is $5,976 and for the years ending September 30, 2018, 2019, 2020, 2021 and 2022 is $12,971, $11,147, $6,808, $3,286 and $912 per annum, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | 8. Intangible Assets and Goodwill The following tables present certain information regarding our intangible assets. Amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives of ten years with no estimated residual values, which materially approximates the expected pattern of use. March 31, 2017 September 24, 2016 Trademarks $ 16,870 $ 17,592 Customer relationships 14,417 15,035 31,287 32,627 Less: accumulated amortization (21,120 ) (20,393 ) $ 10,167 $ 12,234 Aggregate intangible asset amortization expense amounted to $777 and $920 for the three months ended March 31, 2017 and 2016, respectively, and $1,558 and $1,879 for the six months ended March 31, 2017 and 2016, respectively. The estimated intangible asset amortization expense for the period ending September 30, 2017 (six months) is $1,566 and for the years ended September 30, 2018 and 2019 is $3,132 per annum, with a final amortization expense of $2,337 in the year ending September 30, 2020. Goodwill The difference in the carrying amount of goodwill at March 31, 2017 and September 24, 2016, as reported in the accompanying unaudited interim condensed consolidated balance sheets is attributable to foreign currency translation adjustments. |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Mar. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 9. Accrued Expenses Accrued expenses consist of the following: March 31, 2017 September 24, 2016 Interest payable - cash $ 2,781 $ 2,679 Interest payable – payment in kind 573 381 Asset retirement obligations 162 - Accrued corporate cost expenses 2,403 1,914 Direct costs of sales 4,313 7,530 Other creditors 2,916 4,974 $ 13,148 $ 17,478 |
Other Liabilities
Other Liabilities | 6 Months Ended |
Mar. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | 10. Other Liabilities Other liabilities consist of the following: March 31, 2017 September 24, 2016 Customer prepayments & deposits $ 3,133 $ 3,115 Total other liabilities, current 3,133 3,115 Foreign exchange contract liabilities - 12 Other payables, net of current portion 2,614 3,454 Asset retirement obligations 659 921 Pension liability 9,501 7,975 Total other liabilities, long-term 12,774 12,362 $ 15,907 $ 15,477 |
Long Term and Other Debt
Long Term and Other Debt | 6 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long Term and Other Debt | 11. Long Term and Other Debt Outstanding Debt and Capital Leases The following reflects outstanding debt and capital leases as of the dates indicated below: Principal Unamortized deferred financing charge Book value, March 31, 2017 Senior bank debt $ 117,596 $ (575 ) $ 117,021 Capital leases and hire purchase contract 878 - 878 Total long-term debt outstanding 118,474 (575 ) $ 117,899 Less: current portion of long-term debt (14,207 ) - (14,207 ) Long-term debt, excluding current portion $ 104,267 $ (575 ) $ 103,692 Principal Unamortized deferred financing charge Book value, September 24, 2016 Senior bank debt $ 115,379 $ (1,218 ) $ 114,161 PIK shareholder loan notes 298,248 - 298,248 Capital leases and hire purchase contract 375 - 375 Total long-term debt outstanding 414,002 (1,218 ) 412,784 Less: current portion of long-term debt (10,292 ) - (10,292 ) Long-term debt, excluding current portion $ 403,710 $ (1,218 ) $ 402,492 In connection with the Merger, the value of PIK shareholder loan notes was reduced from $291,780 to $116,790. Accordingly, the Company recorded $174,990 as a capital contribution in the accompanying condensed consolidated statement of stockholders’ equity representing the reduction in the value of the PIK shareholder loan notes. The shareholders transferred their rights to the remaining loan balance of $116,790 to Hydra in connection with the Merger, and therefore the $116,790 is eliminated in consolidation. The $116,790 was also accounted for as a capital contribution by the shareholders. These amounts are recorded in the Condensed Consolidated Statements of Stockholders Equity in shares issued in merger. The Company is in compliance with all relevant covenants and the long term debt portion is correctly classified as such in line with the underlying agreements. Long term debt for the years ending September 30 matures as follows: Fiscal period Senior bank debt Capital leases and hire purchase contract Total 2017 (six months) $ 13,723 * $ 238 $ 13,961 2018 - 331 331 2019 103,873 273 104,146 2020 - 36 36 Total $ 117,596 $ 878 $ 118,474 * This amount can be rolled over and is not due to be paid until 2019. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 12. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset and liability in an orderly transaction between market participants at the measurement date. We estimate the fair value of our assets and liabilities utilizing an established three-level hierarchy. The hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date as follows: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs also include non-binding market consensus prices that can be corroborated with observable market data, as well as quoted prices that were adjusted for security-specific restrictions. Level 3: Unobservable inputs that are supported by little or no market activity that are significant to the fair value of the asset or liability. Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that are unable to be corroborated with observable market data. The fair value of our financial assets and liabilities is determined by reference to market data and other valuation techniques as appropriate. We believe the fair value of our financial instruments, which are principally cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities, approximates their recorded values. For each period, derivative financial instrument assets and liabilities measured at fair value on a recurring basis are included in the financial statements as per the table below. March 31, September 24, Level 2017 2016 Earnout liability 3 $ 10,478 $ - Derivative liability 3 $ 1,136 $ - Foreign exchange contract liabilities (included in other liabilities) 2 $ - $ 12 |
Earnout Liability
Earnout Liability | 6 Months Ended |
Mar. 31, 2017 | |
Earnout Liability [Abstract] | |
Earnout Liability | 13. Earnout Liability Pursuant to the Sale Agreement discussed in Note 2, an earnout payment of up to 2,500,000 shares of the Company’s common stock, subject to certain customary anti-dilution adjustments (having a value of $25,000 at an assumed value of $10.00 per share (the “Earnout Consideration”) shall be paid to the previous owners of Inspired (the “Selling Group”) and will be determined based on the financial performance of Inspired’s businesses in six specific countries, China, Colombia, Greece, Norway, Spain and Ukraine (collectively, the “Earnout Jurisdictions”), as measured by earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the twelve months ending September 30, 2018 (the “Earnout Period”). If such EBITDA is equal to or greater than £15,000 ($18,713), the Selling Group will receive an aggregate of 2,500,000 shares. If such EBITDA is less than £15,000 ($18,713), the Selling Group will receive the number of shares equal to the product of (x) 2,500,000 and (y) a fraction, the numerator of which is such EBITDA and the denominator of which is £15,000 ($18,713). For example, if the EBITDA achieved in such countries for the period were £7,500 ($9,356), the Selling Group would receive 1,250,000 shares as the earn-out payment. By contrast, if the EBITDA achieved in such countries for the period were £20,000 ($24,950), the Selling Group would receive 2,500,000 shares as the earn-out payment. In accordance with ASC 815, “Derivatives and Hedging” (“ASC 815”), the earnout shares are not considered indexed to the Company’s own stock and therefore are accounted for as a liability with fair value changes being recorded in the condensed consolidated statements of operations and comprehensive loss. The fair value of the Earnout Consideration is calculated using a Monte Carlo simulation to estimate the variance and relative risk of achieving future EBITDA during the Earnout Period in the Earnout Jurisdictions. This model is a discrete-time model that allows for sources of uncertainty and simulates the movements of the underlying metric and calculates the resulting derivative value for each trial. Such simulations are performed for a number of trials and the average value across all trials is determined in order to arrive at the concluded value of such derivative. The Earnout Consideration was valued at $9,575 at the date of the Merger and $10,478 at March 31, 2017. The key assumptions in applying the Monte Carlo simulation included expected Earnout Period EBITDA in the Earnout Jurisdictions, the expected standard deviation of expected Earnout Period EBITDA, the Company's stock price and a normal distribution of Earnout Period EBITDA. The following table provides a reconciliation of the beginning and ending balances for the earnout liability measured using significant unobservable inputs (Level 3): Balance – September 24, 2016 $ - Initial value of earnout liability 9,575 Change in fair value of earnout liability 879 Foreign currency translation 24 Balance – March 31, 2017 $ 10,478 |
Derivative Liability
Derivative Liability | 6 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | 14. Derivative Liability On December 22, 2016, the Company’s Board of Directors approved the Inspired Entertainment, Inc. Second Long-Term Incentive Plan (the “Second Plan”). The Second Plan was adopted principally to provide a mechanism through which certain management bonuses due in cash to certain members of management of Inspired upon consummation of the Merger could be paid partially in stock in order to preserve liquidity in the Company. Under such arrangement, certain members of management entitled to such cash bonuses agreed to accept 50% of the bonuses due in cash at closing and 50% in restricted stock units (“RSUs”) under the Second Plan, subject to the approval of the Second Plan by the Company’s stockholders, which has not been obtained as of March 31, 2017. The maximum number of RSUs that can be granted under the Second Plan is 200,000. The Board of Directors has approved grants totaling 107,914 RSU’s under the Second Plan conditioned on stockholder approval. If the Second Plan is not approved by stockholders, the balance due will be paid in cash on the three year anniversary of the Merger, based on the average stock price of the Company’s common stock over the prior 30 day period. The obligation to settle the 50% balance due to management was deemed to be a derivative liability due to a potential cash settlement provision which is not within the Company’s control and, as a result, the obligation is accounted for as a derivative liability with fair value changes being recorded in the condensed consolidated statements of operations and comprehensive loss. The fair value of the liability is calculated based on the value of the underlying common stock. Until stockholder approval is obtained, awards under the Second Plan are not considered issued and outstanding. The following table provides a reconciliation of the beginning and ending balances for the derivative liability measured using significant unobservable inputs (Level 3): Balance – September 24, 2016 $ - Initial value of derivative liability 1,055 Change in fair value of derivative liability 79 Foreign currency translation 2 Balance – March 31, 2017 $ 1,136 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 15. Stockholders’ Equity On December 29, 2016, the Company sold 164,536 shares of common stock to certain members of management in private transactions for an aggregate sales price of $1,645, or $10.00 per share. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 16. Stock-Based Compensation The Company’s stockholders approved the Inspired Entertainment, Inc. 2016 Long-Term Incentive Plan (the “2016 Incentive Plan”) in connection with the Merger as of the Closing Date. Under the 2016 Incentive Plan, the Compensation Committee is authorized to grant awards to employees, officers, directors and other service providers of the Company and its affiliates and to determine the number and types of such awards and the terms, conditions, vesting and other limitations applicable to each such award. The 2016 Incentive Plan provides for the issuance of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards (including cash-based performance awards), and other cash-based or stock-based awards. As of March 31, 2017, there were 2,778,818 shares authorized for issuance under the 2016 Incentive Plan and 15,285 shares available for issuance. On December 29, 2016, the Company granted 950,484 shares of restricted stock and 722,466 RSUs under the 2016 Incentive Plan to certain members of management. The restricted stock awards and RSUs contain both market and service conditions. The weighted average fair value of the common stock on the date of grant was $5.63. The grant date fair value of the awards is being recognized as compensation expense over a three-year vesting period. The aggregate grant date fair value of the restricted stock amounted to $5,351, of which the Company recorded $440 and $460 as compensation expense during the three and six months ended March 31, 2017, respectively. The aggregate grant date fair value of the RSUs amounted to $4,067, of which the Company recorded $334 and $350 as compensation expense during the three and six months ended March 31, 2017, respectively. On January 3, 2017, the Company’s Executive Chairman of the Board and the Company’s Chief Strategy Officer were granted 940,583 and 150,000 shares, respectively, of restricted stock under the 2016 Incentive Plan. The weighted average fair value of the common stock on the date of grant was $5.51. The aggregate grant date fair value of the wards amounted to $6,005, which is being recognized as compensation expense over a three-year vesting period. The restricted stock awards contain both market and service conditions. The Company recorded $517 of compensation expense during the three and six months ended March 31, 2017. Stock-based compensation is recognized as an expense on a straight-line basis over the requisite service period, which is generally the vesting period. As of March 31, 2017, there were 2,763,533 shares of non-vested restricted stock and RSUs outstanding. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss (Income) | 6 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss (Income) | 17. Accumulated Other Comprehensive Loss (Income) The accumulated balances for each classification of comprehensive loss (income) are presented below: Foreign Currency Translation Adjustments Unrecognized pension benefit costs Accumulated Other Comprehensive Loss (Income) Balance at September 24, 2016 $ (59,971 ) $ 26,866 $ (33,105 ) Change during the period (18,134 ) 3,123 (15,011 ) Balance at March 31, 2017 $ (78,105 ) $ 29,989 $ (48,116 ) |
Net Loss per Share
Net Loss per Share | 6 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | 18. Net Loss per Share Basic loss per share (“EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding during the period, including stock options, restricted stock and warrants, using the treasury stock method, and convertible debt or convertible preferred stock, using the if-converted method. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive. The computation of diluted EPS excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive: Three and Six Months Ended March 31, 2017 2016 Unvested Restricted Stock Units 722,466 - Unvested Restricted Stock 2,041,067 - Stock Warrants 9,539,615 - 12,303,148 - |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 19. Income Taxes The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter the Company updates its estimate of the annual effective tax rate and, if the Company’s estimated tax rate changes, it makes a cumulative adjustment in that period. The effective income tax rate for the three months ended March 31, 2017 and 2016 was (0.4%) and (1.5%), respectively, resulting in a $32 and $203 income tax expense, respectively. The effective income tax rate for the six months ended March 31, 2017 and 2016 was (0.3%) and (1.0%), respectively, resulting in a $83 and $289 income tax expense, respectively. The income tax expense for the three and six months ended March 31, 2017 and 2016 differs from the amount that would be expected after applying the statutory U.S. federal income tax rate primarily due to the changes in the valuation allowance for deferred taxes and the net losses generated by the Company’s non-US foreign subsidiaries. Income tax expense for the three and six months ended March 31, 2016 differs from the amount that would be expected after applying the statutory U.S. federal income tax rate primarily due to changes in the valuation allowance for deferred taxes and the net losses generated by the Company’s foreign subsidiaries. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considered the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the consideration of these items, management determined that it is more likely than not that the Company will not realize the deferred income tax asset balances and therefore, recorded a full valuation allowance of $33,234 as of March 31, 2017. The utilization of the Company’s pre-Merger net operating losses may be subject to a substantial limitation due to the “change of ownership provisions” under Section 382 of the Internal Revenue Code and similar state provisions. While the Company has not completed its analysis as to whether an ownership changed occurred, such limitation may result in the expiration of the net operating loss carryforwards before their utilization. |
Related Parties
Related Parties | 6 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Parties | 20. Related Parties We have agreements with two service companies with respect to which a member of the current board and a member of Inspired’s prior board had a direct or indirect ownership interest at the time of the transaction, and, in some cases, also served as a director of such other entities. March 31, 2017 March 31, 2016 Transactions Openbet Retail Limited Total revenue $ 797 $ 988 Loxley Strategic Consulting Limited Selling, general and administrative expenses $ (294 ) $ (185 ) March 31, 2017 September 24, 2016 Balances Openbet Retail Limited Accounts receivable $ 142 $ 151 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 21. Commitments and Contingencies Employment Agreements A. Lorne Weil On January 16, 2017, the Company entered into an employment agreement (the “Employment Agreement”) with Mr. Weil, the Company’s Executive Chairman, who began his employment as of December 23, 2016. Under the terms of his employment agreement, Mr. Weil’s annual base salary is $700,000, with a target annual bonus of not less than 100%, and a maximum annual bonus of not more than 200%, of his annual base salary, subject to performance goals determined by the Committee in consultation with Mr. Weil. Mr. Weil will also be eligible to receive additional incentive bonuses and equity on terms that are no less favorable than those offered to any other executive of the Company. Mr. Weil’s Employment Agreement does not have a set term, and his employment as the Company’s Executive Chairman will be non-exclusive. The Employment Agreement may be terminated without cause on three months’ written notice by either party. Mr. Weil may be terminated by the Company immediately upon written notice for cause, as defined in the Employment Agreement. On the occurrence of an event constituting “good reason” (as defined in the Employment Agreement), Mr. Weil may terminate the agreement immediately at any time within 90 days of such event. Under the Employment Agreement, Mr. Weil will remain subject to certain covenants, including, among other things, a covenant not to enter into a directly competing business or solicit employees of the Company, for a period of twelve months after termination of his employment, as well as a covenant not to disclose certain confidential information of the Company. Mr. Weil’s Employment Agreement also reflects the grant to Mr. Weil of 940,583 shares of restricted stock pursuant to the 2016 Incentive Plan. The grant of restricted stock was effective as of January 3, 2017 (see Note 16). Luke Alvarez On March 23, 2017, Inspired Gaming (Gibraltar) Limited (“Gaming Gibraltar”), a subsidiary of the Company, and Luke Alvarez, the President and Chief Executive Officer of the Company, amended his Service Agreement, dated April 1, 2015, by and between Gaming Gibraltar and Mr. Alvarez, with an effective date of January 1, 2017. Under the terms of such agreement, as amended, Mr. Alvarez’s annual base salary is £478,736 per year, with a target annual bonus of not less than 100%, and a maximum annual bonus of not more than 200%, of £525,000, subject to performance goals determined by the compensation committee of the board of directors of the Company. Each party is required to give twelve months’ notice of termination of employment. If Mr. Alvarez leaves, or is required to leave, his employment as a result of injury, disability, ill-health, retirement or redundancy, or is otherwise dismissed (unless Mr. Alvarez is dismissed for gross misconduct or voluntarily resigns before the end of the current fiscal year), Mr. Alvarez would be entitled to receive a pro-rated annual bonus during the twelve-month contractual notice period as if all of the performance conditions of such bonus had been satisfied. In addition, on March 23, 2017, Inspired UK and Mr. Alvarez entered into a letter agreement, pursuant to which, effective January 1, 2017, Mr. Alvarez receives an annual fee of £46,264 per year, in connection with Mr. Alvarez’s position as director of Inspired. Stewart Baker On March 23, 2017, Inspired Gaming (UK) Limited (“Gaming UK”), a subsidiary of the Company, and Stewart Baker, the Chief Financial Officer of the Company, entered into a new employment contract in connection with Mr. Baker’s recent promotion to the position of Chief Financial Officer. Pursuant to such contract, Mr. Baker’s compensation includes a base salary of £160,000, effective January 2017. In addition, Mr. Baker will have the opportunity to receive a target annual bonus of not less than 75%, and a maximum annual bonus of not more than 100%, of his annual base salary, subject to performance goals determined by the compensation committee of the board of directors of the Company. Such agreement includes a notice provision that requires the party electing to terminate the agreement to provide twelve months’ notice. Mr. Baker participates in an employer pension program, under which he receives employer contributions equal to 15% of his base salary. In addition, Mr. Baker receives an annual car allowance in the amount of £13,900. Under the employment agreement, Mr. Baker remains subject to certain restrictive covenants, including, among other things, non-solicitation and non-competition provisions for a period of twelve months after termination of his employment and concerning confidentiality. General Legal Matters From time to time, the Company is involved in legal matters arising in the ordinary course of business. While the Company believes that such matters are currently not material, there can be no assurance that matters arising in the ordinary course of business for which the Company is, or could be, involved in litigation, will not have a material adverse effect on its business, financial condition or results of operations. Performing Rights Society A claim from the Performing Rights Society is ongoing and relates to the alleged infringement of copyrighted material of the Performing Rights Society's members in certain games on Fixed Odds Betting Terminals in UK Licensed Betting Offices. The UK bookmaker defendants (who have formed a joint defense group) filed a defense to the claim (for circa £7M or $8,733) raised in the High Court in London by the Performing Rights Society on December 22, 2015. The parties have previously undertaken a process of mediation in September 2016 and there have been ongoing settlement discussions among the parties. Although the Company is unable to determine the outcome of the claim and intends to defend it vigorously, the Company has made a provision for $312, which management believes to be adequate to cover the total net exposure to the Company, including professional fees. |
Pension Plan
Pension Plan | 6 Months Ended |
Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Pension Plan | 22. Pension Plan We operate a scheme which is comprised of a separately managed defined benefit section and a defined contribution section. The defined benefit section is closed to future accruals for services rendered to the Company. We estimate that $3.2 million will be contributed to the pension plan during the year ending September 30, 2017. The total amount of employer contributions paid during the six months ended March 31, 2017 amounted to $1.6 million. We expect to pay $1.6 million during the remaining part of the fiscal period. For the six months ended March 31, 2017 and 2016, the components of total periodic benefit costs were as follows: Six Months Ended March 31, 2017 2016 Components of net periodic benefit (benefit) cost: Service cost $ - $ - Interest cost 1,624 1,959 Expected return on plan assets (1,518 ) (1,831 ) Net periodic (benefit) cost $ 106 $ 128 |
Segment Reporting and Geographi
Segment Reporting and Geographic Information | 6 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting and Geographic Information | 23. Segment Reporting and Geographic Information The Company operates its business along two operating segments, which are segregated on the basis of revenue stream: Server Based Gaming and Virtual Sports. The Company believes this method of segment reporting reflects both the way its business segments are managed and the way the performance of each segment is evaluated. The following tables present revenue, cost of sales, excluding depreciation and amortization, selling, general and administrative expenses, depreciation and amortization, operating profit/(loss) from continuing operations, total assets and total capital expenditures for the three and six months ended March 31, 2017 and 2016, respectively, by business segment. Certain unallocated corporate function costs have not been allocated to the Company’s reportable operating segments because these costs are not allocable and to do so would not be practical. Corporate function costs consist primarily of selling, general and administrative expenses, depreciation and amortization, capital expenditures, cash, prepaid expenses and property and equipment and software development costs relating to corporate/shared functions. Segment Information Three Months Ended March 31, 2017 Server Based Gaming Virtual Sports Corporate Functions Total Revenue: Service $ 16,933 $ 8,463 $ - $ 25,396 Hardware 2,664 - - 2,664 Total revenue 19,597 8,463 - 28,060 Cost of sales, excluding depreciation and amortization: Cost of service (2,595 ) (637 ) - (3,232 ) Cost of hardware (2,451 ) - - (2,451 ) Selling, general and administrative expenses (3,826 ) (1,454 ) (9,124 ) (14,404 ) Stock-based compensation expense (64 ) (78 ) (1,149 ) (1,291 ) Acquisition related transaction expenses - - (813 ) (813 ) Depreciation and amortization (5,940 ) (1,555 ) (509 ) (8,004 ) Segment operating income (loss) from continuing operations 4,721 4,739 (11,595 ) (2,135 ) Net operating loss (2,135 ) Revenue from major customers: Customer 1 $ 7,422 $ 256 $ - $ 7,678 Customer 2 3,341 232 - 3,573 Total revenue from major customers $ 10,763 $ 488 - $ 11,251 Total assets at March 31, 2017 $ 106,771 $ 73,866 $ 20,894 $ 201,531 Total goodwill at March 31, 2017 $ - $ 43,829 $ - $ 43,829 Total capital expenditures for the three months ended March 31, 2017 $ 6,947 $ 1,565 $ 1,250 $ 9,762 Three Months Ended March 31, 2016 Server Based Gaming Virtual Sports Corporate Functions Total Revenue: Service $ 20,530 $ 8,621 $ - $ 29,151 Hardware 1,289 - - 1,289 Total revenue 21,819 8,621 - $ 30,440 Cost of sales, excluding depreciation and amortization: Cost of service (2,959 ) (1,166 ) - (4,125 ) Cost of hardware (503 ) - - (503 ) Selling, general and administrative expenses (5,723 ) (525 ) (8,347 ) (14,595 ) Acquisition related transaction expenses - - (389 ) (389 ) Depreciation and amortization (6,981 ) (1,420 ) (771 ) (9,172 ) Segment operating income (loss) from continuing operations 5,653 5,510 (9,507 ) 1,656 Net operating loss 1,656 Revenue from major customers: Customer 1 $ 8,659 $ 293 $ - $ 8,952 Customer 2 3,644 17 - 3,661 Total revenue from major customers $ 12,303 $ 310 $ - $ 12,613 Total assets at September 24, 2016 $ 104,117 $ 77,282 $ 8,471 $ 189,870 Total goodwill at September 24, 2016 $ - $ 45,705 $ - $ 45,705 Total capital expenditures for the three months ended March 31, 2016 $ 2,843 $ 2,270 $ 730 $ 5,843 Six Months Ended March 31, 2017 Server Based Virtual Corporate Total Revenue: Service $ 35,154 $ 15,486 $ - $ 50,640 Hardware 4,457 - - 4,457 Total revenue 39,611 15,486 - 55,097 Cost of sales, excluding depreciation and amortization: Cost of service (5,491 ) (1,489 ) - (6,980 ) Cost of hardware (3,612 ) - - (3,612 ) Selling, general and administrative expenses (7,650 ) (3,250 ) (17,235 ) (28,135 ) Stock-based compensation expense (64 ) (78 ) (1,185 ) (1,327 ) Acquisition related transaction expenses - - (11,273 ) (11,273 ) Depreciation and amortization (11,593 ) (2,623 ) (956 ) (15,172 ) Segment operating income (loss) from continuing operations 11,201 8,046 (30,649 ) (11,402 ) Net operating loss (11,402 ) Revenue from major customers: Customer 1 $ 15,228 $ 507 $ - $ 15,735 Customer 2 6,273 323 - 6,596 Total revenue from major customers $ 21,501 $ 830 - $ 22,331 Total capital expenditures for the six months ended March 31, 2017 $ 11,921 $ 3,242 $ 1,744 $ 16,907 Six Months Ended March 31, 2016 Server Based Virtual Corporate Total Revenue: Service $ 42,038 $ 17,185 $ - $ 59,223 Hardware 2,032 - - 2,032 Total revenue 44,070 17,185 - $ 61,255 Cost of sales, excluding depreciation and amortization: Cost of service (6,117 ) (2,375 ) - (8,492 ) Cost of hardware (841 ) - - (841 ) Selling, general and administrative expenses (11,192 ) (2,606 ) (16,973 ) (30,771 ) Acquisition related transaction expenses - - (1,667 ) (1,667 ) Depreciation and amortization (14,489 ) (2,688 ) (1,267 ) (18,444 ) Segment operating income (loss) from continuing operations 11,431 9,516 (19,907 ) 1,040 Net operating loss 1,040 Revenue from major customers: Customer 1 $ 17,921 $ 430 $ - $ 18,351 Customer 2 6,983 19 - 7,002 Total revenue from major customers $ 24,904 $ 449 $ - $ 25,353 Total capital expenditures for the six months ended March 31, 2016 $ 6,602 $ 3,500 $ 1,341 $ 11,443 Geographic Information Geographic information for revenue is set forth below: T hree Months Ended Six Months Ended March 31, 2017 2016 2017 2016 Total revenue UK $ 19,916 $ 22,642 $ 39,069 $ 45,033 Italy 4,075 5,025 8,450 10,374 Rest of world 4,069 2,773 7,578 5,848 Total $ 28,060 $ 30,440 $ 55,097 $ 61,255 Geographic information of our non-current assets excluding goodwill is set forth below: March 31, September 24, Total non-current assets excluding goodwill UK $ 69,501 $ 73,033 Italy 5,920 7,737 Rest of world 21,601 18,655 Total $ 97,022 $ 99,425 Software development costs are included as attributable to the market in which they are utilized. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 24. Subsequent Events On March 21, 2017, the Company received written notice from the NASDAQ Staff of the Listing Qualifications Department that the Company’s common stock and warrants were not in compliance with the minimum 300 and 400 round lot holder requirements set forth in NASDAQ Listing Rules 5505(a)(3) and 5515(a)(4), respectively, and, therefore, the Company’s securities would be subject to delisting. The Company requested a hearing before a NASDAQ Hearings Panel (the “Panel”). On April 26, 2017, the Company received notice that the Panel had determined to grant its request for the continued listing of its common stock on NASDAQ, pursuant to an extension to evidence compliance with the minimum 300 round lot shareholder requirement by September 17, 2017. The continued listing of the Company’s common stock through September 17, 2017 is subject to the Company’s compliance with certain interim milestones evidencing its progress towards compliance with such rule. In addition, the notice informed the Company that the warrants would be delisted due to the Company having less than 400 round lot warrant holders. On April 28, 2017, the Company’s warrants were delisted from NASDAQ and transitioned to the over-the-counter markets operated by OTC Markets Group. |
Nature of Operations, Managem31
Nature of Operations, Management's Plans and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management’s opinion, however, that the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with Inspired’s consolidated financial statements and notes thereto for the periods ended September 24, 2016, September 26, 2015 and September 27, 2014. The financial information as of September 24, 2016 is derived from the audited consolidated financial statements presented in the Form 8-K filed by the Company with the SEC on December 30, 2016. The interim results for the three and six months ended March 31, 2017 are not necessarily indicative of the results to be expected for the year ending September 30, 2017 or for any future interim periods. The Merger has been accounted for as a reverse merger in accordance with US GAAP. This determination was primarily based on Inspired’s business comprising the ongoing operations of the Company following the Merger, Inspired’s senior management comprising the senior management of the Company and Inspired’s stockholders having a majority of the voting power of the Company. For accounting purposes, Hydra is considered the “acquired” company and Inspired is considered the “acquirer.” Accordingly, for accounting purposes, the Merger is treated as the equivalent of Inspired issuing stock for the net assets of Hydra, accompanied by a recapitalization. The net assets of Hydra are stated at historical cost, with no goodwill or other intangible assets recorded. The consolidated assets, liabilities and results of operations prior to the Closing Date of the Merger are those of Inspired, and Hydra’s assets, liabilities and results of operations are consolidated with Inspired beginning on the Closing Date. The shares and corresponding capital amounts and earnings per share available to common stockholders, pre-merger, have been retroactively restated as shares reflecting the exchange ratio in the Merger. The historical financial information and operating results of Hydra prior to the Merger have not been separately presented in these condensed consolidated financial statements as they were not significant or meaningful. Effective September 25, 2016, the Company changed its reporting year end from a 52-week period ending on the last Saturday in September to a September 30 year end, commencing with the year ending September 30, 2017. Accordingly, the period ended March 31, 2017 includes the results of operations for the Company for the period from September 25, 2016 through March 31, 2017. Additionally, the period ended March 31, 2016 includes the results of operations for the Company for the period from September 27, 2015 through March 31, 2016. |
Principles of Consolidation | Principles of Consolidation All monetary values set forth in these unaudited interim condensed consolidated financial statements are in US Dollars (“USD”) unless otherwise stated herein. The accompanying unaudited interim condensed consolidated financial statements include the results of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Reclassification | Reclassification Certain prior year amounts were reclassified to conform to the current year’s presentation. These reclassifications have no effect on the financial position or results of operations reported as of and for the three and six months ended March 31, 2016. |
Use of Estimates | Use of Estimates The preparation of unaudited interim condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates these estimates, including those related to the revenue recognition for contracts involving software and non-software elements, allowance for doubtful accounts, inventory reserve for net realizable value, goodwill and intangible assets, useful lives of long-lived assets, stock-based compensation, valuation allowances on deferred taxes, earnout liability, derivative liabilities, commitments and contingencies and litigation, among others. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. We regularly evaluate these significant factors and make adjustments when facts and circumstances dictate. Actual results may differ from these estimates. |
Common Stock Purchase Warrants and Derivative Financial Instruments | Common Stock Purchase Warrants and Derivative Financial Instruments The Company reviews any common stock purchase warrants and other freestanding derivative financial instruments at each balance sheet date and classifies them on the condensed consolidated balance sheet as: a) Equity if they (i) require physical settlement or net-share settlement, or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement), or b) Assets or liabilities if they (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control), or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its common stock purchase warrants and other freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company determined that its outstanding common stock purchase warrants satisfied the criteria for classification as equity instruments at March 31, 2017. The Company also determined that its obligation to settle certain management bonuses in either cash or stock satisfied the criteria for classification as a derivative financial instrument at March 31, 2017 (see Note 14). |
Share-Based Payment Arrangements | Share-Based Payment Arrangements The Company accounts for stock based compensation in accordance with Accounting Standards Codification (“ASC”) 718, “Compensation - Stock Compensation” (“ASC 718”). ASC 718 requires generally that all equity awards be accounted for at their “fair value.” This fair value is measured on the grant date for stock-settled awards, and at subsequent exercise or settlement for cash-settled awards. Fair value is equal to the underlying value of the stock for “full-value” awards such as restricted stock and performance shares, and is estimated using an option-pricing model with traditional inputs for “appreciation” awards such as stock options and stock appreciation rights. Costs equal to these fair values are recognized ratably over the requisite service period based on the number of awards that are expected to vest, or in the period of grant for awards that vest immediately and have no future service condition. For awards that vest over time, previously recognized compensation cost is reversed if the service or performance conditions are not satisfied and the award is forfeited. The expense resulting from share-based payments is recorded in general and administrative expense in the accompanying consolidated statements of operations. Subsequent modifications to outstanding awards result in incremental cost if the fair value is increased as a result of the modification. |
Customer Concentration | Customer Concentration During the three months ended March 31, 2017, there were two customers that represented at least 10% of revenues, accounting for 27% and 13% of the Company’s revenues. During the three months ended March 31, 2016, two customers represented at least 10% of revenues, accounting for 29% and 12% of the Company’s revenues. During the six months ended March 31, 2017, there were two customers that represented at least 10% of revenues, accounting for 29% and 12% of the Company’s revenues. During the six months ended March 31, 2016, two customers represented at least 10% of revenues, accounting for 30% and 11% of the Company’s revenues. At March 31, 2017, one customer represented at least 10% of accounts receivable, accounting for 30% of the Company’s accounts receivable. At September 24, 2016, there were no customers that represented at least 10% of accounts receivable. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which was subsequently modified in August 2015 by ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date. As a result, the ASU No. 2014-09 is effective retrospectively for fiscal years and interim periods within those years beginning after December 15, 2017. The core principle of ASU No. 2014-09 is that companies should recognize revenue when the transfer of promised goods or services to customers occurs in an amount that reflects what the company expects to receive. It requires additional disclosures to describe the nature, amount, timing and uncertainty of revenue and cash flows from contracts with customers. In 2016, the FASB issued additional ASUs that clarify the implementation guidance on principal versus agent considerations (ASU 2016-08), on identifying performance obligations and licensing (ASU 2016-10), and on narrow-scope improvements and practical expedients (ASU 2016-12) as well as on the revenue recognition criteria and other technical corrections (ASU 2016-20). The Company will adopt the standard on January 1, 2018, using the full retrospective transition method, which may result in a cumulative-effect adjustment for deferred revenue to the opening balance sheet for 2016 and the restatement of the financial statements for all prior periods presented. The Company continues to evaluate the impact of adoption of this standard on its consolidated financial statements and disclosures. In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). ASU 2016-09 was issued as part of the FASB’s simplification initiative and affects all entities that issue share-based payment awards to their employees. The amendments in this update cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016. This guidance can be applied either prospectively, retrospectively or using a modified retrospective transition method, depending on the area covered in this update. Early adoption is permitted. The Company adopted the methodologies prescribed by ASU 2014-15 as of October 1, 2016. The adoption of ASU 2016-09 did not have a material effect on the Company’s financial position or results of operations. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows: Clarification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”), which eliminates the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance on eight specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. ASU 2016-15 provides for retrospective application for all periods presented. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740)” (“ASU 2016-16”), which reduces the complexity in the accounting standards by allowing the recognition of current and deferred income taxes for an intra-entity asset transfer, other than inventory, when the transfer occurs. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted using a modified retrospective transition approach. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805) Clarifying the Definition of a Business” (“ASU 2017-01”). The amendments in ASU 2017-01 is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact of adopting this guidance. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). ASU 2017-04 eliminates Step 2 along with amending other parts of the goodwill impairment test. Under ASU 2017-04, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value with the loss not exceeding the total amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective for annual periods beginning after December 15, 2019, and interim periods therein with early adoption permitted for interim or annual goodwill impairment tests performed after January 1, 2017. At adoption, this update will require a prospective approach. The Company is currently evaluating the impact of adopting this guidance. In March 2017, the FASB issued ASU 2017-07, “Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU 2017-07”). The new guidance requires companies with sponsored defined benefit pension and/or other postretirement benefit plans to present the service cost component of net periodic benefit cost in the same income statement line item as other compensation costs. The other components of net periodic benefit cost will be presented separately and not included in operating income. In addition, only service costs are eligible to be capitalized as an asset. ASU 2017-07 will be effective for fiscal years beginning after December 15, 2017, including interim periods within those years, and the guidance will generally be applied retroactively, whereas the capitalization of the service cost component will be applied prospectively. Early adoption is permitted with all of the amendments adopted in the same period. If an entity early adopts the guidance in an interim period, any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. The Company is currently assessing the effect that ASU 2017-07 will have on its financial position, results of operations, and disclosures. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Schedule of accounts notes loans and financing receivable | Accounts receivable consist of the following: March 31, 2017 September 24, 2016 Trade receivables $ 22,015 $ 16,698 Other receivables 52 88 Allowance for doubtful accounts (315 ) (340 ) Total accounts receivable, net $ 21,752 $ 16,446 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventory consists of the following: March 31, 2017 September 24, 2016 Component parts $ 4,745 $ 6,175 Finished goods 1,957 1,509 Total inventories $ 6,702 $ 7,684 |
Prepaid Expenses and Other As34
Prepaid Expenses and Other Assets (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Prepaid Expense and Other Assets [Abstract] | |
Schedule of prepaid expenses and other assets | Prepaid expenses and other assets consist of the following: March 31, 2017 September 24, 2016 Prepaid expenses $ 7,940 $ 8,678 Unbilled accounts receivable 10,941 10,446 Total prepaid expenses and other assets $ 18,881 $ 19,124 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | March 31, 2017 September 24, 2016 Short-term leasehold property $ 345 $ 360 Video lottery terminals 100,249 104,176 Computer equipment 7,628 7,242 Plant and machinery 3,567 3,215 111,789 114,993 Less: accumulated depreciation (67,014 ) (65,762 ) $ 44,775 $ 49,231 |
Software Development Costs, n36
Software Development Costs, net (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Research and Development [Abstract] | |
Schedule of software development costs, net | Software development costs, net consisted of the following: March 31, 2017 September 24, 2016 Software development costs $ 74,659 $ 67,289 Less: accumulated amortization (33,559 ) (30,329 ) $ 41,100 $ 36,960 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets and goodwill | The following tables present certain information regarding our intangible assets. March 31, 2017 September 24, 2016 Trademarks $ 16,870 $ 17,592 Customer relationships 14,417 15,035 31,287 32,627 Less: accumulated amortization (21,120 ) (20,393 ) $ 10,167 $ 12,234 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued expenses consist of the following: March 31, 2017 September 24, 2016 Interest payable - cash $ 2,781 $ 2,679 Interest payable – payment in kind 573 381 Asset retirement obligations 162 - Accrued corporate cost expenses 2,403 1,914 Direct costs of sales 4,313 7,530 Other creditors 2,916 4,974 $ 13,148 $ 17,478 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other liabilities | Other liabilities consist of the following: March 31, 2017 September 24, 2016 Customer prepayments & deposits $ 3,133 $ 3,115 Total other liabilities, current 3,133 3,115 Foreign exchange contract liabilities - 12 Other payables, net of current portion 2,614 3,454 Asset retirement obligations 659 921 Pension liability 9,501 7,975 Total other liabilities, long-term 12,774 12,362 $ 15,907 $ 15,477 |
Long Term and Other Debt (Table
Long Term and Other Debt (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of debt | The following reflects outstanding debt and capital leases as of the dates indicated below: Principal Unamortized deferred financing charge Book value, March 31, 2017 Senior bank debt $ 117,596 $ (575 ) $ 117,021 Capital leases and hire purchase contract 878 - 878 Total long-term debt outstanding 118,474 (575 ) $ 117,899 Less: current portion of long-term debt (14,207 ) - (14,207 ) Long-term debt, excluding current portion $ 104,267 $ (575 ) $ 103,692 Principal Unamortized deferred financing charge Book value, September 24, 2016 Senior bank debt $ 115,379 $ (1,218 ) $ 114,161 PIK shareholder loan notes 298,248 - 298,248 Capital leases and hire purchase contract 375 - 375 Total long-term debt outstanding 414,002 (1,218 ) 412,784 Less: current portion of long-term debt (10,292 ) - (10,292 ) Long-term debt, excluding current portion $ 403,710 $ (1,218 ) $ 402,492 |
Schedule of maturities of long-term debt | Long term debt for the years ending September 30 matures as follows: Fiscal period Senior bank debt Capital leases and hire purchase contract Total 2017 (six months) $ 13,723 * $ 238 $ 13,961 2018 - 331 331 2019 103,873 273 104,146 2020 - 36 36 Total $ 117,596 $ 878 $ 118,474 * This amount can be rolled over and is not due to be paid until 2019. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value measurements recurring and nonrecurring | For each period, derivative financial instrument assets and liabilities measured at fair value on a recurring basis are included in the financial statements as per the table below. March 31, September 24, Level 2017 2016 Earnout liability 3 $ 10,478 $ - Derivative liability 3 $ 1,136 $ - Foreign exchange contract liabilities (included in other liabilities) 2 $ - $ 12 |
Earnout Liability (Tables)
Earnout Liability (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Earnout Liability [Abstract] | |
Schedule of earnout liability measured using significant unobservable inputs (Level 3) | The following table provides a reconciliation of the beginning and ending balances for the earnout liability measured using significant unobservable inputs (Level 3): Balance – September 24, 2016 $ - Initial value of earnout liability 9,575 Change in fair value of earnout liability 879 Foreign currency translation 24 Balance – March 31, 2017 $ 10,478 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule reconciliation of the beginning and ending balances for the derivative liability | The following table provides a reconciliation of the beginning and ending balances for the derivative liability measured using significant unobservable inputs (Level 3): Balance – September 24, 2016 $ - Initial value of derivative liability 1,055 Change in fair value of derivative liability 79 Foreign currency translation 2 Balance – March 31, 2017 $ 1,136 |
Accumulated Other Comprehensi44
Accumulated Other Comprehensive Loss (Income) (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive (loss) income | The accumulated balances for each classification of comprehensive loss (income) are presented below: Foreign Currency Translation Adjustments Unrecognized pension benefit costs Accumulated Other Comprehensive Loss (Income) Balance at September 24, 2016 $ (59,971 ) $ 26,866 $ (33,105 ) Change during the period (18,134 ) 3,123 (15,011 ) Balance at March 31, 2017 $ (78,105 ) $ 29,989 $ (48,116 ) |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of antidilutive securities excluded from computation of earnings per share | The computation of diluted EPS excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive: Three and Six Months Ended March 31, 2017 2016 Unvested Restricted Stock Units 722,466 - Unvested Restricted Stock 2,041,067 - Stock Warrants 9,539,615 - 12,303,148 - |
Related Parties (Tables)
Related Parties (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | We have agreements with two service companies with respect to which a member of the current board and a member of Inspired’s prior board had a direct or indirect ownership interest at the time of the transaction, and, in some cases, also served as a director of such other entities. March 31, 2017 March 31, 2016 Transactions Openbet Retail Limited Total revenue $ 797 $ 988 Loxley Strategic Consulting Limited Selling, general and administrative expenses $ (294 ) $ (185 ) March 31, 2017 September 24, 2016 Balances Openbet Retail Limited Accounts receivable $ 142 $ 151 |
Pension Plan (Tables)
Pension Plan (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of defined benefit plans | For the six months ended March 31, 2017 and 2016, the components of total periodic benefit costs were as follows: Six Months Ended March 31, 2017 2016 Components of net periodic benefit (benefit) cost: Service cost $ - $ - Interest cost 1,624 1,959 Expected return on plan assets (1,518 ) (1,831 ) Net periodic (benefit) cost $ 106 $ 128 |
Segment Reporting and Geograp48
Segment Reporting and Geographic Information (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information by segment | Segment Information Three Months Ended March 31, 2017 Server Based Gaming Virtual Sports Corporate Functions Total Revenue: Service $ 16,933 $ 8,463 $ - $ 25,396 Hardware 2,664 - - 2,664 Total revenue 19,597 8,463 - 28,060 Cost of sales, excluding depreciation and amortization: Cost of service (2,595 ) (637 ) - (3,232 ) Cost of hardware (2,451 ) - - (2,451 ) Selling, general and administrative expenses (3,826 ) (1,454 ) (9,124 ) (14,404 ) Stock-based compensation expense (64 ) (78 ) (1,149 ) (1,291 ) Acquisition related transaction expenses - - (813 ) (813 ) Depreciation and amortization (5,940 ) (1,555 ) (509 ) (8,004 ) Segment operating income (loss) from continuing operations 4,721 4,739 (11,595 ) (2,135 ) Net operating loss (2,135 ) Revenue from major customers: Customer 1 $ 7,422 $ 256 $ - $ 7,678 Customer 2 3,341 232 - 3,573 Total revenue from major customers $ 10,763 $ 488 - $ 11,251 Total assets at March 31, 2017 $ 106,771 $ 73,866 $ 20,894 $ 201,531 Total goodwill at March 31, 2017 $ - $ 43,829 $ - $ 43,829 Total capital expenditures for the three months ended March 31, 2017 $ 6,947 $ 1,565 $ 1,250 $ 9,762 Three Months Ended March 31, 2016 Server Based Gaming Virtual Sports Corporate Functions Total Revenue: Service $ 20,530 $ 8,621 $ - $ 29,151 Hardware 1,289 - - 1,289 Total revenue 21,819 8,621 - $ 30,440 Cost of sales, excluding depreciation and amortization: Cost of service (2,959 ) (1,166 ) - (4,125 ) Cost of hardware (503 ) - - (503 ) Selling, general and administrative expenses (5,723 ) (525 ) (8,347 ) (14,595 ) Acquisition related transaction expenses - - (389 ) (389 ) Depreciation and amortization (6,981 ) (1,420 ) (771 ) (9,172 ) Segment operating income (loss) from continuing operations 5,653 5,510 (9,507 ) 1,656 Net operating loss 1,656 Revenue from major customers: Customer 1 $ 8,659 $ 293 $ - $ 8,952 Customer 2 3,644 17 - 3,661 Total revenue from major customers $ 12,303 $ 310 $ - $ 12,613 Total assets at September 24, 2016 $ 104,117 $ 77,282 $ 8,471 $ 189,870 Total goodwill at September 24, 2016 $ - $ 45,705 $ - $ 45,705 Total capital expenditures for the three months ended March 31, 2016 $ 2,843 $ 2,270 $ 730 $ 5,843 Six Months Ended March 31, 2017 Server Based Virtual Corporate Total Revenue: Service $ 35,154 $ 15,486 $ - $ 50,640 Hardware 4,457 - - 4,457 Total revenue 39,611 15,486 - 55,097 Cost of sales, excluding depreciation and amortization: Cost of service (5,491 ) (1,489 ) - (6,980 ) Cost of hardware (3,612 ) - - (3,612 ) Selling, general and administrative expenses (7,650 ) (3,250 ) (17,235 ) (28,135 ) Stock-based compensation expense (64 ) (78 ) (1,185 ) (1,327 ) Acquisition related transaction expenses - - (11,273 ) (11,273 ) Depreciation and amortization (11,593 ) (2,623 ) (956 ) (15,172 ) Segment operating income (loss) from continuing operations 11,201 8,046 (30,649 ) (11,402 ) Net operating loss (11,402 ) Revenue from major customers: Customer 1 $ 15,228 $ 507 $ - $ 15,735 Customer 2 6,273 323 - 6,596 Total revenue from major customers $ 21,501 $ 830 - $ 22,331 Total capital expenditures for the six months ended March 31, 2017 $ 11,921 $ 3,242 $ 1,744 $ 16,907 Six Months Ended March 31, 2016 Server Based Virtual Corporate Total Revenue: Service $ 42,038 $ 17,185 $ - $ 59,223 Hardware 2,032 - - 2,032 Total revenue 44,070 17,185 - $ 61,255 Cost of sales, excluding depreciation and amortization: Cost of service (6,117 ) (2,375 ) - (8,492 ) Cost of hardware (841 ) - - (841 ) Selling, general and administrative expenses (11,192 ) (2,606 ) (16,973 ) (30,771 ) Acquisition related transaction expenses - - (1,667 ) (1,667 ) Depreciation and amortization (14,489 ) (2,688 ) (1,267 ) (18,444 ) Segment operating income (loss) from continuing operations 11,431 9,516 (19,907 ) 1,040 Net operating loss 1,040 Revenue from major customers: Customer 1 $ 17,921 $ 430 $ - $ 18,351 Customer 2 6,983 19 - 7,002 Total revenue from major customers $ 24,904 $ 449 $ - $ 25,353 Total capital expenditures for the six months ended March 31, 2016 $ 6,602 $ 3,500 $ 1,341 $ 11,443 |
Schedule of revenue from external customers and long-lived assets by geographical area | Geographic information for revenue is set forth below: Three Months Ended Six Months Ended March 31, 2017 2016 2017 2016 Total revenue UK $ 19,916 $ 22,642 $ 39,069 $ 45,033 Italy 4,075 5,025 8,450 10,374 Rest of world 4,069 2,773 7,578 5,848 Total $ 28,060 $ 30,440 $ 55,097 $ 61,255 Geographic information of our non-current assets excluding goodwill is set forth below: March 31, September 24, Total non-current assets excluding goodwill UK $ 69,501 $ 73,033 Italy 5,920 7,737 Rest of world 21,601 18,655 Total $ 97,022 $ 99,425 |
Nature of Operations, Managem49
Nature of Operations, Management's Plans and Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 24, 2016 | Sep. 26, 2015 | |
Cash on hand | $ 13,345 | $ 2,763 | $ 13,345 | $ 2,763 | $ 1,486 | $ 4,060 |
Working capital | 4,367 | |||||
Net loss | $ (9,120) | $ (13,515) | $ (31,503) | $ (30,389) | ||
Sales Revenue, Net [Member] | Customer One [Member] | ||||||
Concentration risk, percentage | 27.00% | 29.00% | 29.00% | 30.00% | ||
Sales Revenue, Net [Member] | Customer Two [Member] | ||||||
Concentration risk, percentage | 13.00% | 12.00% | 12.00% | 11.00% | ||
Accounts Receivable [Member] | Customer One [Member] | ||||||
Concentration risk, percentage | 30.00% |
Merger (Details Narrative)
Merger (Details Narrative) - $ / shares | 6 Months Ended | |
Mar. 31, 2017 | Sep. 24, 2016 | |
Business Acquisition [Line Items] | ||
Common stock outstanding | 20,363,927 | 11,801,369 |
Hydra Industries Acquisition Corp [Member] | ||
Business Acquisition [Line Items] | ||
Number of common stock issued | 11,815,435 | |
Common stock outstanding | 20,213,466 | |
Number of warrants issued to purchase common stock | 9,539,615 | |
Hydra Industries Acquisition Corp [Member] | Stock Warrants [Member] | ||
Business Acquisition [Line Items] | ||
Number of warrants issued to purchase common stock | 9,539,615 | |
Outstanding warrants | 19,079,230 | |
Number of securities coverted to warrant or Right | 0.5 | |
Warrant exercise price (in dollars per shares) | $ 11.5 | |
Warrant exercisable date | Dec. 23, 2021 | |
Share price (in dollars per share) | $ 24 | |
Warrant redeem price (in dollars per shares) | $ 0.01 | |
Hydra Industries Acquisition Corp [Member] | Stock Warrants [Member] | IPO [Member] | ||
Business Acquisition [Line Items] | ||
Number of warrants issued to purchase common stock | 8,000,000 | |
Hydra Industries Acquisition Corp [Member] | Stock Warrants [Member] | Private Placement [Member] | ||
Business Acquisition [Line Items] | ||
Number of warrants issued to purchase common stock | 11,079,230 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 24, 2016 |
Receivables [Abstract] | ||
Trade receivables | $ 22,015 | $ 16,698 |
Other receivables | 52 | 88 |
Allowance for doubtful accounts | (315) | (340) |
Total accounts receivable, net | $ 21,752 | $ 16,446 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 24, 2016 |
Inventory Disclosure [Abstract] | ||
Component parts | $ 4,745 | $ 6,175 |
Finished goods | 1,957 | 1,509 |
Total inventories | $ 6,702 | $ 7,684 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 24, 2016 |
Inventory Disclosure [Abstract] | ||
Reserves for excess and slow-moving inventory | $ 363 | $ 469 |
Prepaid Expenses and Other As54
Prepaid Expenses and Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 24, 2016 |
Prepaid Expense and Other Assets [Abstract] | ||
Prepaid expenses | $ 7,940 | $ 8,678 |
Unbilled accounts receivable | 10,941 | 10,446 |
Total prepaid expenses and other assets | $ 18,881 | $ 19,124 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 24, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 111,789 | $ 114,993 |
Less: accumulated depreciation | (67,014) | (65,762) |
Property, plant and equipment, net | 44,775 | 49,231 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 7,628 | 7,242 |
Short-Term Leasehold Property [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 345 | 360 |
Video Lottery Terminal [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 100,249 | 104,176 |
Plant and Machinery [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 3,567 | $ 3,215 |
Property and Equipment, net (56
Property and Equipment, net (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization expense | $ 4,519 | $ 5,789 | $ 9,157 | $ 12,073 |
Software Development Costs, n57
Software Development Costs, net (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 24, 2016 |
Research and Development [Abstract] | ||
Software development costs | $ 74,659 | $ 67,289 |
Less: accumulated amortization | (33,559) | (30,329) |
Software development costs, net | $ 41,100 | $ 36,960 |
Software Development Costs, n58
Software Development Costs, net (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 24, 2016 | |
Software development costs | $ 41,100 | $ 41,100 | $ 36,960 | ||
Software costs amortized | 2,444 | $ 2,463 | 4,193 | $ 4,492 | |
Net realizable value software costs | $ 263 | $ 263 | |||
Remaining amortization period | 3 years 2 months 12 days | 3 years 2 months 12 days | 3 years 2 months 12 days | 3 years 2 months 12 days | |
6 months,September 30, 2017 | $ 5,976 | $ 5,976 | |||
September 30, 2018 | 12,971 | 12,971 | |||
September 30, 2019 | 11,147 | 11,147 | |||
September 30, 2020 | 6,808 | 6,808 | |||
September 30, 2021 | 3,286 | 3,286 | |||
September 30, 2022 | 912 | 912 | |||
Software Development [Member] | |||||
Software development costs | 5,158 | 5,158 | |||
Internet Domain Names [Member] | |||||
Software development costs | $ 2,385 | $ 2,385 | $ 1,797 |
Intangible Assets and Goodwil59
Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 24, 2016 |
Intangible assets and goodwill, gross | $ 31,287 | $ 32,627 |
Less: accumulated amortization | (21,120) | (20,393) |
Intangible assets and goodwill, net | 10,167 | 12,234 |
Customer Relationships [Member] | ||
Intangible assets and goodwill, gross | 14,417 | 15,035 |
Trademarks [Member] | ||
Intangible assets and goodwill, gross | $ 16,870 | $ 17,592 |
Intangible Assets and Goodwil60
Intangible Assets and Goodwill (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Aggregate intangible asset amortization expense | $ 777 | $ 920 | $ 1,558 | $ 1,879 |
Estimated useful lives | 10 years | |||
6 months,September 30, 2017 | 1,566 | $ 1,566 | ||
September 30, 2018 | 3,132 | 3,132 | ||
September 30, 2019 | 3,132 | 3,132 | ||
September 30, 2020 | $ 2,337 | $ 2,337 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 24, 2016 |
Payables and Accruals [Abstract] | ||
Interest payable - cash | $ 2,781 | $ 2,679 |
Interest payable - payment in kind | 573 | 381 |
Asset retirement obligations | 162 | 0 |
Accrued corporate cost expenses | 2,403 | 1,914 |
Direct costs of sales | 4,313 | 7,530 |
Other creditors | 2,916 | 4,974 |
Accrued expenses, net | $ 13,148 | $ 17,478 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 24, 2016 |
Other Liabilities Disclosure [Abstract] | ||
Customer prepayments & deposits | $ 3,133 | $ 3,115 |
Total other liabilities, current | 3,133 | 3,115 |
Foreign exchange contract liabilities | 12 | |
Other payables, net of current portion | 2,614 | 3,454 |
Asset retirement obligations | 659 | 921 |
Pension liability | 9,501 | 7,975 |
Total other liabilities, long-term | 12,774 | 12,362 |
Other liabilities | $ 15,907 | $ 15,477 |
Long Term and Other Debt (Detai
Long Term and Other Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 24, 2016 |
Debt Instrument [Line Items] | ||
Capital leases and hire purchase contract | $ 878 | $ 375 |
Total long-term debt outstanding | 118,474 | 414,002 |
Less: current portion of long-term debt | (13,723) | (10,082) |
Long-term debt, excluding current portion | 104,267 | 403,710 |
Unamortized deferred financing charge | (575) | (1,218) |
Unamortized deferred financing charge, Long-term debt, excluding current portion | (575) | (1,218) |
Book value, Total long-term debt outstanding | 117,899 | 412,784 |
Long-term debt, excluding current portion | 103,692 | 402,492 |
Senior Bank Debt [Member] | ||
Debt Instrument [Line Items] | ||
Senior bank debt | 117,596 | 115,379 |
Unamortized deferred financing charge | (575) | (1,218) |
Book value | $ 117,021 | 114,161 |
PIK shareholder loan notes [Member] | ||
Debt Instrument [Line Items] | ||
Senior bank debt | 298,248 | |
Book value | $ 298,248 |
Long Term and Other Debt (Det64
Long Term and Other Debt (Details 1) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 24, 2016 | |
Debt Instrument [Line Items] | |||
Capital leases and hire purchase contract, 2017 (six months) | $ 238 | ||
Capital leases and hire purchase contract, 2018 | 331 | ||
Capital leases and hire purchase contract, 2019 | 273 | ||
Capital leases and hire purchase contract, 2020 | 36 | ||
Capital leases and hire purchase contract, Total | 878 | $ 375 | |
Total, 2017 (six months) | 13,961 | ||
Total, 2018 | 331 | ||
Total, 2019 | 104,146 | ||
Total, 2020 | 36 | ||
Total | 118,474 | 414,002 | |
Senior Bank Debt [Member] | |||
Debt Instrument [Line Items] | |||
Senior bank debt, 2017 (six months) | [1] | 13,723 | |
Senior bank debt, 2018 | 0 | ||
Senior bank debt, 2019 | 103,873 | ||
Senior bank debt, 2020 | 0 | ||
Senior bank debt, Total | $ 117,596 | $ 115,379 | |
[1] | This amount can be rolled over and is not due to be paid until 2019. |
Long Term and Other Debt (Det65
Long Term and Other Debt (Details Narrative) - PIK Loan Notes [Member] - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2017 | Dec. 23, 2016 | |
Debt Instrument [Line Items] | ||
Notes payable | $ 116,790 | $ 291,780 |
Capital contribution | 174,990 | |
Hydra Industries Acquisition Corp [Member] | ||
Debt Instrument [Line Items] | ||
Assets acquired and liabilities | 116,790 | |
Proceeds from contributed capital | $ 116,790 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 24, 2016 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange contract liabilities (included in other liabilities) | $ 12 | |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Earnout liability | 10,478 | |
Derivative liability | $ 1,136 |
Earnout Liability (Details)
Earnout Liability (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2017USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance | |
Initial value of earnout liability | 9,575 |
Change in fair value of earnout liability | (879) |
Foreign currency translation | 24 |
Balance | $ 10,478 |
Earnout Liability (Details Narr
Earnout Liability (Details Narrative) $ / shares in Units, $ in Thousands | 6 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Earnout Liability [Abstract] | |
Earnout shares issuable | shares | 2,500,000 |
Earnout shares issuable value | $ 25,000 |
Earnout shares issuable value (in dollars per share) | $ / shares | $ 10 |
Description of earnout shares issuable | If such EBITDA is equal to or greater than £15,000 ($18,713), the Selling Group will receive an aggregate of 2,500,000 shares. If such EBITDA is less than £15,000 ($18,713), the Selling Group will receive the number of shares equal to the product of (x) 2,500,000 and (y) a fraction, the numerator of which is such EBITDA and the denominator of which is £15,000 ($18,713). For example, if the EBITDA achieved in such countries for the period were £7,500 ($9,356), the Selling Group would receive 1,250,000 shares as the earn-out payment. By contrast, if the EBITDA achieved in such countries for the period were £20,000 ($24,950), the Selling Group would receive 2,500,000 shares as the earn-out payment. |
Earnout consideration | $ 10,478 |
Derivative Liability (Details)
Derivative Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Mar. 31, 2017 | Mar. 31, 2017 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Initial value of derivative liability | $ 1,055 | |
Change in fair value of derivative liability | $ 203 | 79 |
Foreign currency translation | 2 | |
Balance | $ 1,136 | $ 1,136 |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - Second Plan [Member] - Unvested Restricted Stock Units [Member] | 6 Months Ended |
Mar. 31, 2017shares | |
Maximum [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Shares grants in period | 200,000 |
Minimum [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Shares grants in period | 107,914 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended |
Dec. 29, 2016 | Mar. 31, 2017 | |
New shares issues value | $ 1,645 | |
Common stock [Member] | ||
New shares issues value | $ 1,645 | |
New shares issues | 164,536 | 164,536 |
Shares price (in dollars per share) | $ 10 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jan. 03, 2017 | Dec. 29, 2016 | Mar. 31, 2017 | Mar. 31, 2017 |
Shares of non-vested restricted stock and RSUs outstanding | 2,763,533 | 2,763,533 | ||
Incentive Plan [Member] | ||||
Number of shares authorized | 2,778,818 | 2,778,818 | ||
Number of shares available for grant | 15,285 | 15,285 | ||
Vesting period | 3 years | |||
Weighted average fair value of the common stock on the date of grant | $ 5.63 | $ 5.63 | ||
Incentive Plan [Member] | Board of Directors Chairman [Member] | ||||
Number of shares available for grant | 940,583 | |||
Vesting period | 3 years | |||
Weighted average fair value of the common stock on the date of grant | $ 5.51 | |||
Incentive Plan [Member] | Chief Strategy Officer [Member] | ||||
Number of shares available for grant | 150,000 | |||
Vesting period | 3 years | |||
Weighted average fair value of the common stock on the date of grant | $ 5.51 | |||
Incentive Plan [Member] | Executive Chairman/Chief Strategy Officer [Member] | ||||
Restricted stock expense | $ 517 | $ 517 | ||
Aggregate grant date fair value | 6,005 | |||
Incentive Plan [Member] | Unvested Restricted Stock Units [Member] | ||||
Number of shares issued in period | 722,466 | |||
Restricted stock expense | 440 | 460 | ||
Aggregate grant date fair value | 4,067 | |||
Incentive Plan [Member] | Unvested Restricted Stock [Member] | ||||
Number of shares issued in period | 950,484 | |||
Restricted stock expense | $ 334 | 350 | ||
Aggregate grant date fair value | $ 5,351 |
Accumulated Other Comprehensi73
Accumulated Other Comprehensive Loss (Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax [Roll Forward] | ||||
Beginning balance | $ (59,971) | |||
Change during the period | $ 649 | $ 18,706 | 18,134 | $ 18,408 |
Ending balance | (78,105) | (78,105) | ||
Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, After Tax [Roll Forward] | ||||
Beginning balance | 26,866 | |||
Change during the period | 3,123 | |||
Ending balance | 29,989 | 29,989 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Beginning balance | 33,105 | |||
Change during the period | 1,218 | $ (16,208) | (15,011) | $ (14,618) |
Ending balance | $ 48,116 | $ 48,116 |
Net Loss per Share (Details)
Net Loss per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of antidilutive securities excluded from computation of earnings per share | 12,303,148 | 12,303,148 | ||
Stock Warrants [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of antidilutive securities excluded from computation of earnings per share | 9,539,615 | 9,539,615 | ||
Unvested Restricted Stock Units [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of antidilutive securities excluded from computation of earnings per share | 722,466 | 722,466 | ||
Unvested Restricted Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of antidilutive securities excluded from computation of earnings per share | 2,041,067 | 2,041,067 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 32 | $ 203 | $ 83 | $ 289 |
Valuation allowance | $ 33,234 | $ 33,234 | ||
Effective income tax rate | 0.40% | 1.50% | 0.30% | 1.00% |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 24, 2016 | |
Related Party Transaction [Line Items] | |||||
Total revenue | $ 11,251 | $ 12,613 | $ 22,331 | $ 25,353 | |
Selling, general and administrative expense | (14,404) | $ (14,595) | (28,135) | (30,771) | |
Loxley Strategic Consulting Limited [Member] | |||||
Related Party Transaction [Line Items] | |||||
Selling, general and administrative expense | (294) | (185) | |||
Openbet Retail Limited [Member] | |||||
Related Party Transaction [Line Items] | |||||
Total revenue | 797 | $ 988 | |||
Accounts receivable | $ 142 | $ 142 | $ 151 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) $ in Thousands | Mar. 23, 2017GBP (£) | Jan. 16, 2017USD ($) | Dec. 22, 2015USD ($) | Dec. 22, 2015GBP (£) | Mar. 23, 2017GBP (£) | Mar. 31, 2017USD ($)shares | Jan. 03, 2017shares |
Gain Contingencies [Line Items] | |||||||
Loss contingency accrual provision | $ | $ 312 | ||||||
Loss contingency damages sought value | $ | $ 8,733 | ||||||
GBP | |||||||
Gain Contingencies [Line Items] | |||||||
Loss contingency damages sought value | £ 700,000 | ||||||
Incentive Plan [Member] | |||||||
Gain Contingencies [Line Items] | |||||||
Number of shares available for grant | shares | 15,285 | ||||||
Employment Agreements [Member] | |||||||
Gain Contingencies [Line Items] | |||||||
Termination of employment term | 12 months | ||||||
Employment Agreements [Member] | Mr. A. Lorne Weil [Member] | |||||||
Gain Contingencies [Line Items] | |||||||
Annual base salary per year | $ | $ 700 | ||||||
Employment Agreements [Member] | Mr. A. Lorne Weil [Member] | Incentive Plan [Member] | Unvested Restricted Stock [Member] | |||||||
Gain Contingencies [Line Items] | |||||||
Number of shares available for grant | shares | 950,484 | ||||||
Employment Agreements [Member] | Mr. Stewart Baker [Member] | GBP | |||||||
Gain Contingencies [Line Items] | |||||||
Annual base salary per year | £ 160,000 | ||||||
Annual car allowance | £ 13,900 | ||||||
Employment Agreements [Member] | Mr. Luke Alvarez [Member] | GBP | |||||||
Gain Contingencies [Line Items] | |||||||
Annual base salary per year | £ 478,736 | ||||||
Maximum annual bonus | 525,000 | ||||||
Annual fee per year | £ 46,264 |
Pension Plan (Details)
Pension Plan (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Components of net periodic benefit (benefit) cost: | ||
Service cost | ||
Interest cost | 1,624 | 1,959 |
Expected return on plan assets | (1,518) | (1,831) |
Net periodic (benefit) cost | $ 106 | $ 128 |
Pension Plan (Details Narrative
Pension Plan (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Sep. 30, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Contributions by employer | $ 1,600 | |
Scenario, Forecast [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Pension contributions | $ 3,200 | |
Contributions by employer | $ 1,600 |
Segment Reporting and Geograp80
Segment Reporting and Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 24, 2016 | |
Revenue: | |||||
Service | $ 25,396 | $ 29,151 | $ 50,640 | $ 59,223 | |
Hardware | 2,664 | 1,289 | 4,457 | 2,032 | |
Total revenue | 28,060 | 30,440 | 55,097 | 61,255 | |
Cost of sales, excluding depreciation and amortization: | |||||
Cost of service | (3,232) | (4,125) | (6,980) | (8,492) | |
Cost of hardware | (2,451) | (503) | (3,612) | (841) | |
Selling, general and administrative expense | (14,404) | (14,595) | (28,135) | (30,771) | |
Stock-based compensation expense | (1,291) | (1,327) | |||
Acquisition related transaction expenses | (813) | (389) | (11,273) | (1,667) | |
Depreciation and amortization | (8,004) | (9,172) | (15,172) | (18,444) | |
Segment operating income (loss) from continuing operations | (2,135) | 1,656 | (11,402) | 1,040 | |
Net operating loss | (2,135) | 1,656 | (11,402) | 1,040 | |
Revenue from major customers: | |||||
Revenues | 11,251 | 12,613 | 22,331 | 25,353 | |
Total assets | 201,531 | 189,870 | 201,531 | 189,870 | $ 189,870 |
Total goodwill | 43,829 | 45,705 | 43,829 | 45,705 | $ 45,705 |
Total capital expenditures | 9,762 | 5,843 | 16,907 | 11,443 | |
Server Based Gaming [Member] | |||||
Revenue: | |||||
Service | 16,933 | 20,530 | 35,154 | 42,038 | |
Hardware | 2,664 | 1,289 | 4,457 | 2,032 | |
Total revenue | 19,597 | 21,819 | 39,611 | 44,070 | |
Cost of sales, excluding depreciation and amortization: | |||||
Cost of service | (2,595) | (2,959) | (5,491) | (6,117) | |
Cost of hardware | (2,451) | (503) | (3,612) | (841) | |
Selling, general and administrative expense | (3,826) | (5,723) | (7,650) | (11,192) | |
Stock-based compensation expense | (64) | (64) | |||
Acquisition related transaction expenses | |||||
Depreciation and amortization | (5,940) | (6,981) | (11,593) | (14,489) | |
Segment operating income (loss) from continuing operations | 4,721 | 5,653 | 11,201 | 11,431 | |
Revenue from major customers: | |||||
Revenues | 10,763 | 12,303 | 21,501 | 24,904 | |
Total assets | 106,771 | 104,117 | 106,771 | 104,117 | |
Total goodwill | |||||
Total capital expenditures | 6,947 | 2,843 | 11,921 | 6,602 | |
Virtual Sports [Member] | |||||
Revenue: | |||||
Service | 8,463 | 8,621 | 15,486 | 17,185 | |
Hardware | |||||
Total revenue | 8,463 | 8,621 | 15,486 | 17,185 | |
Cost of sales, excluding depreciation and amortization: | |||||
Cost of service | (637) | (1,166) | (1,489) | (2,375) | |
Cost of hardware | |||||
Selling, general and administrative expense | (1,454) | (525) | (3,250) | (2,606) | |
Stock-based compensation expense | (78) | (78) | |||
Acquisition related transaction expenses | |||||
Depreciation and amortization | (1,555) | (1,420) | (2,623) | (2,688) | |
Segment operating income (loss) from continuing operations | 4,739 | 5,510 | 8,046 | 9,516 | |
Revenue from major customers: | |||||
Revenues | 488 | 310 | 830 | 449 | |
Total assets | 73,866 | 77,282 | 73,866 | 77,282 | |
Total goodwill | 43,829 | 45,705 | 43,829 | 45,705 | |
Total capital expenditures | 1,565 | 2,270 | 3,242 | 3,500 | |
Corporate Functions [Member] | |||||
Revenue: | |||||
Service | |||||
Hardware | |||||
Total revenue | |||||
Cost of sales, excluding depreciation and amortization: | |||||
Cost of service | |||||
Cost of hardware | |||||
Selling, general and administrative expense | (9,124) | (8,347) | (17,235) | (16,973) | |
Stock-based compensation expense | (1,149) | (1,185) | |||
Acquisition related transaction expenses | (813) | (389) | (11,273) | (1,667) | |
Depreciation and amortization | (509) | (771) | (956) | (1,267) | |
Segment operating income (loss) from continuing operations | (11,595) | (9,507) | (30,649) | (19,907) | |
Revenue from major customers: | |||||
Revenues | |||||
Total assets | 20,894 | 8,471 | 20,894 | 8,471 | |
Total goodwill | |||||
Total capital expenditures | 1,250 | 730 | 1,744 | 1,341 | |
Customer One [Member] | |||||
Revenue from major customers: | |||||
Revenues | 7,678 | 8,952 | 15,735 | 18,351 | |
Customer One [Member] | Server Based Gaming [Member] | |||||
Revenue from major customers: | |||||
Revenues | 7,422 | 8,659 | 15,228 | 17,921 | |
Customer One [Member] | Virtual Sports [Member] | |||||
Revenue from major customers: | |||||
Revenues | 256 | 293 | 507 | 430 | |
Customer One [Member] | Corporate Functions [Member] | |||||
Revenue from major customers: | |||||
Revenues | |||||
Customer Two [Member] | |||||
Revenue from major customers: | |||||
Revenues | 3,573 | 3,661 | 6,596 | 7,002 | |
Customer Two [Member] | Server Based Gaming [Member] | |||||
Revenue from major customers: | |||||
Revenues | 3,341 | 3,644 | 6,273 | 6,983 | |
Customer Two [Member] | Virtual Sports [Member] | |||||
Revenue from major customers: | |||||
Revenues | 232 | $ 17 | 323 | $ 19 | |
Customer Two [Member] | Corporate Functions [Member] | |||||
Revenue from major customers: | |||||
Revenues |
Segment Reporting and Geograp81
Segment Reporting and Geographic Information (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 28,060 | $ 30,440 | $ 55,097 | $ 61,255 |
UK [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 19,916 | 22,642 | 39,069 | 45,033 |
Italy [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 4,075 | 5,025 | 8,450 | 10,374 |
Rest of World [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 4,069 | $ 2,773 | $ 7,578 | $ 5,848 |
Segment Reporting and Geograp82
Segment Reporting and Geographic Information (Details 2) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 24, 2016 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | $ 97,022 | $ 99,425 |
UK [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | 69,501 | 73,033 |
Italy [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | 5,920 | 7,737 |
Rest of World [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-Lived Assets | $ 21,601 | $ 18,655 |