Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2015 | Jan. 25, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | TigerLogic CORP | |
Entity Central Index Key | 820,738 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 30,960,013 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Mar. 31, 2015 |
Current assets: | ||
Cash | $ 6,487 | $ 10,251 |
Trade accounts receivable, less allowance for doubtful accounts of $1 and $0, respectively | 954 | 1,291 |
Other current assets | 449 | 460 |
Total current assets | 7,890 | 12,002 |
Property, furniture and equipment, net | 584 | 869 |
Intangible assets, net | 306 | 363 |
Deferred tax assets | 95 | 94 |
Other assets | 51 | 54 |
Total assets | 8,926 | 13,382 |
Current liabilities: | ||
Accounts payable | 250 | 295 |
Accrued liabilities | 824 | 1,525 |
Deferred revenue | 1,568 | 1,905 |
Total current liabilities | 2,642 | 3,725 |
Other long-term liabilities | 144 | 101 |
Total liabilities | $ 2,786 | $ 3,826 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock | ||
Common stock | $ 3,096 | $ 3,096 |
Additional paid-in-capital | 143,712 | 143,389 |
Accumulated other comprehensive income | 2,178 | 2,174 |
Accumulated deficit | (142,846) | (139,103) |
Total stockholders' equity | 6,140 | 9,556 |
Total liabilities and stockholders' equity | $ 8,926 | $ 13,382 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Mar. 31, 2015 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Trade accounts receivable, allowance for doubtful accounts | $ 1 | $ 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net revenues: | ||||
Licenses | $ 599 | $ 515 | $ 1,380 | $ 1,845 |
Subscription | 813 | 532 | 2,356 | 1,415 |
Services | 399 | 866 | 1,267 | 2,250 |
Total net revenues | 1,811 | 1,913 | 5,003 | 5,510 |
Operating expenses: | ||||
Cost of subscription revenues | 199 | 206 | 474 | 546 |
Cost of service revenues | 141 | 102 | 374 | 410 |
Selling and marketing | 697 | 1,260 | 2,444 | 4,679 |
Research and development | 688 | 780 | 1,966 | 3,009 |
General and administrative | 895 | 1,729 | 3,413 | 5,068 |
Impairment of goodwill | 18,183 | 18,183 | ||
Total operating expenses | 2,620 | 22,260 | 8,671 | 31,895 |
Operating loss | (809) | (20,347) | (3,668) | (26,385) |
Other income (expense): | ||||
Interest expense - net | (2) | (2) | ||
Other income (expense) - net | 6 | 33 | (8) | 42 |
Total other income (expense) - net | 6 | 33 | (10) | 40 |
Loss before income taxes | (803) | (20,314) | (3,678) | (26,345) |
Income tax provision | 55 | 78 | 65 | 108 |
Net loss | (858) | (20,392) | (3,743) | (26,453) |
Other comprehensive income: | ||||
Foreign currency translation adjustments | (21) | (66) | 4 | (115) |
Total comprehensive loss | $ (879) | $ (20,458) | $ (3,739) | $ (26,568) |
Basic and diluted net loss per share | ||||
Basic and diluted net loss per share | $ (0.03) | $ (0.65) | $ (0.12) | $ (0.85) |
Weighted average shares used in computing basic and diluted net loss per share | 30,960 | 31,560 | 30,958 | 31,109 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (3,743) | $ (26,453) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Impairment of goodwill | 18,183 | |
Depreciation and amortization of long-lived assets | 348 | 261 |
Provision for (recovery of) bad debt | 1 | (71) |
Stock-based compensation expense | 322 | 531 |
Change in deferred tax assets | (3) | |
Foreign currency exchange gain | (5) | (47) |
Change in operating assets and liabilities: | ||
Trade accounts receivable | 343 | 173 |
Other current assets | 17 | 21 |
Accounts payable | (93) | 17 |
Accrued liabilities and other long term liabilities | (464) | (272) |
Deferred revenue | (339) | 57 |
Net cash used in operating activities | (3,616) | (7,600) |
Cash flow from investing activities: | ||
Purchases of property, furniture and equipment | (159) | (264) |
Net cash used in investing activities | (159) | (264) |
Cash flow from financing activities: | ||
Proceeds from exercise of stock options | 16 | |
Proceeds from issuance of common stock | 1 | 7 |
Proceeds from sale of discontinued operations | 2,200 | |
Net cash provided by financing activities | 1 | 2,223 |
Effect of exchange rate changes on cash | 10 | (115) |
Net decrease in cash | (3,764) | (5,756) |
Cash at beginning of the period | 10,251 | 18,602 |
Cash at end of the period | 6,487 | $ 12,846 |
Supplemental disclosures: | ||
Cash paid for income taxes | $ 81 |
INTERIM FINANCIAL STATEMENTS
INTERIM FINANCIAL STATEMENTS | 9 Months Ended |
Dec. 31, 2015 | |
INTERIM FINANCIAL STATEMENTS | |
INTERIM FINANCIAL STATEMENTS | 1. INTERIM FINANCIAL STATEMENTS The unaudited interim condensed consolidated financial information furnished herein reflects all adjustments, consisting only of normal recurring items, which in the opinion of management are necessary to fairly state TigerLogic Corporation and its subsidiaries’ (collectively, the “Company” or “we,” “us” or “our”) financial position, results of operations and cash flows for the dates and periods presented and to make such information not misleading. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”); nevertheless, management of the Company believes that the disclosures herein are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended March 31, 2015, contained in the Company’s Annual Report on Form 10-K filed with the SEC on June 18, 2015. The results of operations for the three and nine months ended December 31, 2015, are not necessarily indicative of results to be expected for any other interim period or the fiscal year ending March 31, 2016. Certain amounts in prior year’s unaudited condensed consolidated statements of comprehensive loss have been reclassified to conform to current year’s financial statement presentation. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Dec. 31, 2015 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 2. STOCK-BASED COMPENSATION The Company has a stock option plan that provides for the granting of stock options and restricted stock to directors, employees and consultants. The Company also has an employee stock purchase plan allowing employees to purchase the Company’s common stock at a discount. Total stock-based compensation expense included in the unaudited condensed consolidated statements of comprehensive loss for the three and nine months ended December 31, 2015 and 2014, was as follows (in thousands): Three Months Ended December 31, Nine Months Ended December 31, 2015 2014 2015 2014 Cost of service revenue $ $ $ $ Operating expense: Selling and marketing Research and development General and administrative Total stock-based compensation expense Income tax benefit — — — — Net stock-based compensation expense $ $ $ $ As of December 31, 2015, there was approximately $0.9 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. That cost is expected to be recognized over a weighted-average period of 2.66 years. |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 9 Months Ended |
Dec. 31, 2015 | |
FAIR VALUE MEASUREMENT | |
FAIR VALUE MEASUREMENT | 3. FAIR VALUE MEASUREMENT The Company maintains all of its cash on deposit at financial institutions. As such, there were no cash equivalents on the Company’s balance sheets as of December 31, 2015 or March 31, 2015. There were no nonfinancial assets or liabilities that required recognition or disclosure at fair value on a nonrecurring basis in the Company’s balance sheets as of December 31, 2015 or March 31, 2015. |
STOCKHOLDERS' EQUITY AND LOSS P
STOCKHOLDERS' EQUITY AND LOSS PER SHARE | 9 Months Ended |
Dec. 31, 2015 | |
STOCKHOLDERS' EQUITY AND LOSS PER SHARE | |
STOCKHOLDERS' EQUITY AND LOSS PER SHARE | 4. STOCKHOLDERS’ EQUITY AND LOSS PER SHARE Basic loss per share is computed using the net loss and the weighted average number of common shares outstanding during the period. Diluted loss per share is computed using the net loss and the weighted average number of common shares and potential common shares outstanding during the period when the potential common shares are dilutive. Potential dilutive common shares consist of outstanding stock options. Options to purchase 4,273,744 shares and 4,276,777 shares of the Company’s common stock for the three and nine month periods ended December 31, 2015, respectively, and 4,770,892 shares and 4,057,098 shares for the three and nine month periods ended December 31, 2014, respectively, have been excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. The change in accumulated other comprehensive income during the three and nine month periods ended December 31, 2015 and 2014 results from translation of our foreign operations. |
BUSINESS SEGMENT
BUSINESS SEGMENT | 9 Months Ended |
Dec. 31, 2015 | |
BUSINESS SEGMENT | |
BUSINESS SEGMENT | 5. BUSINESS SEGMENT The Company operates in one reportable segment. International operations consist of foreign sales offices selling software combined with local service revenue and a research and development operation in the United Kingdom. The following table summarizes consolidated financial information of the Company’s operations by geographic location (in thousands): For the Three Months Ended December 31, For the Nine Months Ended December 31, Net revenue 2015 2014 2015 2014 United States $ $ $ $ Europe Total $ $ $ $ December 31, March 31, Long-lived assets 2015 2015 United States $ $ Europe Total $ $ The Company engages in the design, development, sale and support of rapid application development software known as Omnis and a subscription based social media visualization platform known as Postano. The following table represents the Company’s net revenue by product line (in thousands): For the Three Months Ended December 31, For the Nine Months Ended December 31, Net revenue 2015 2014 2015 2014 Omnis products $ $ $ $ Postano products Total $ $ $ $ |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Dec. 31, 2015 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 6. RELATED PARTY TRANSACTIONS Following the retirement of Richard Koe from the position of Chief Executive Officer effective September 7, 2014, the Company entered into an expense reimbursement agreement with Mr. Koe where the Company agreed to pay Astoria Capital Management (“ACM”), an entity controlled by Mr. Koe, a rental fee for the use of ACM’s furniture in the Company’s Portland, Oregon office. Beginning in May 2015, the rental fee was reduced from $2,000 per month to $1,000 per month. This agreement will continue for such time as the Company continues to make use of ACM’s furniture and will terminate upon written notice from the Company. Mr. Koe continues to serve as a member of the Company’s Board of Directors. |
GOODWILL IMPAIRMENT
GOODWILL IMPAIRMENT | 9 Months Ended |
Dec. 31, 2015 | |
Goodwill and intangible assets | |
GOODWILL IMPAIRMENT | 7. GOODWILL IMPAIRMENT The Company reviews goodwill and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. During the fiscal quarter ended December 31, 2014, the Company’s market capitalization fell below its net book value for an extended period of time. The Company operates as a single reporting unit. As a result, Company management conducted the first step of a goodwill impairment test as of December 31, 2014 with the assistance of an independent valuation consultant utilizing both a market capitalization approach, including an estimated control premium, as well as a discounted cash flow approach, with key assumptions including projected future cash flows and a risk-adjusted discount rate. Both approaches resulted in an estimated fair value of the Company’s reporting unit below net book value as of December 31, 2014. As such, the Company initiated the second step of the goodwill impairment test to measure the amount of impairment. The Company analyzed the fair value of certain assets including its developed technology, trade names, customer relationships, and property. Based on the work performed, the Company concluded that an impairment loss is probable and can be reasonably estimated. Accordingly, the Company recorded a non-cash goodwill impairment charge to fully write-off the book value of its goodwill in the amount of approximately $18.2 million during the quarter ended December 31, 2014. Also, prior to performing the second step in the goodwill impairment analysis, the Company assessed long-lived assets including property and equipment and intangible assets for impairment. The Company’s conclusion was that such long-lived assets were not impaired as of December 31, 2014. |
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES. | 9 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 8. COMMITMENTS AND CONTINGENCIES Leases The Company leases office space and certain equipment under non-cancelable operating lease agreements with terms expiring through 2020. Rent expense related to operating these leases is recognized ratably on a straight-line basis over the entire lease term. The Company is required to pay property taxes, insurance and normal maintenance costs. As a result of moving its corporate headquarters to Portland, Oregon, the Company vacated its former premises in Irvine, California and subleased the facility for the remainder of the lease term. As a result, the Company recorded a lease loss during its second fiscal quarter totaling $109,000 reflecting the difference between ongoing committed operating lease costs for the facility and sublease income expected to be received over the life of the lease. In addition, the Company accelerated depreciation on property and equipment totaling $125,000 located in the Irvine office upon vacating the premises. Indemnification The Company’s standard customer license and software agreements contain indemnification and warranty provisions which are generally consistent with practice in the Company’s industry. The duration of the Company’s service warranties generally does not exceed 30 days following completion of its services. The Company has not incurred significant obligations under customer indemnification or warranty provisions historically and does not expect to incur significant obligations in the future. Accordingly, the Company does not maintain accruals for potential customer indemnification or warranty-related obligations. The maximum potential amount of future payments that the Company could be required to make is generally limited under the indemnification provisions in its customer license and service agreements. The Company has entered into a standard form of indemnification agreement with each of its directors and executives. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Dec. 31, 2015 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 9. SUBSEQUENT EVENTS Legal Settlement On July 2, 2015, the Company was sued for patent infringement by Monster Patents, LLC (“Monster”) in the United States District Court Southern District of New York. The complaint alleged that the Company’s Postano products infringe a single patent owned by Monster. On January 14, 2016, the Company entered into a settlement agreement with Monster (the “Settlement Agreement”), pursuant to which all outstanding litigation with Monster was settled and the parties stipulated to dismissal of the action with prejudice. Under the terms of the Settlement Agreement, Monster granted the Company a fully paid, worldwide, perpetual license to the Monster patent portfolio in exchange for a cash payment and a limited subscription to the Postano platform for a two-year period. The remaining terms of the Settlement Agreement are confidential. The Company has included the costs of settlement in its financial results for the quarter ended December 31, 2015. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Dec. 31, 2015 | |
STOCK-BASED COMPENSATION | |
Schedule of stock-based compensation expense | Three Months Ended December 31, Nine Months Ended December 31, 2015 2014 2015 2014 Cost of service revenue $ $ $ $ Operating expense: Selling and marketing Research and development General and administrative Total stock-based compensation expense Income tax benefit — — — — Net stock-based compensation expense $ $ $ $ |
BUSINESS SEGMENT (Tables)
BUSINESS SEGMENT (Tables) | 9 Months Ended |
Dec. 31, 2015 | |
BUSINESS SEGMENT | |
Summary of consolidated financial information by geographic location | For the Three Months Ended December 31, For the Nine Months Ended December 31, Net revenue 2015 2014 2015 2014 United States $ $ $ $ Europe Total $ $ $ $ December 31, March 31, Long-lived assets 2015 2015 United States $ $ Europe Total $ $ |
Schedule of net revenue by product line | For the Three Months Ended December 31, For the Nine Months Ended December 31, Net revenue 2015 2014 2015 2014 Omnis products $ $ $ $ Postano products Total $ $ $ $ |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock-based compensation expense | ||||
Total stock-based compensation expense | $ 118 | $ 170 | $ 322 | $ 531 |
Net stock-based compensation expense | 118 | 170 | 322 | 531 |
Total unrecognized compensation cost related to non-vested share-based compensation arrangements | 900 | $ 900 | ||
Weighted average period over which unrecognized compensation cost is expected to be recognized | 2 years 7 months 28 days | |||
Cost of service revenue | ||||
Stock-based compensation expense | ||||
Total stock-based compensation expense | 6 | 7 | $ 19 | 16 |
Selling and marketing | ||||
Stock-based compensation expense | ||||
Total stock-based compensation expense | 13 | 2 | 30 | 132 |
Research and development | ||||
Stock-based compensation expense | ||||
Total stock-based compensation expense | 31 | 24 | 88 | 90 |
General and administrative | ||||
Stock-based compensation expense | ||||
Total stock-based compensation expense | $ 68 | $ 137 | $ 185 | $ 293 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - USD ($) | Dec. 31, 2015 | Mar. 31, 2015 |
Fair value measurement | ||
Cash equivalents | $ 0 | $ 0 |
Nonrecurring | Nonfinancial assets or liabilities | ||
Fair value measurement | ||
Assets, fair value | 0 | 0 |
Liabilities, fair value | $ 0 | $ 0 |
STOCKHOLDERS' EQUITY AND LOSS19
STOCKHOLDERS' EQUITY AND LOSS PER SHARE (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock options | ||||
Potential shares of common stock excluded in the diluted net income (loss) per share calculation | ||||
Options that were excluded from the computation of diluted net loss per shares | 4,273,744 | 4,770,892 | 4,276,777 | 4,057,098 |
BUSINESS SEGMENT - Geography (D
BUSINESS SEGMENT - Geography (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | Mar. 31, 2015USD ($) | |
Segment information | |||||
Number of reportable segments | segment | 1 | ||||
Net revenue | $ 1,811 | $ 1,913 | $ 5,003 | $ 5,510 | |
Long-lived assets | 986 | 986 | $ 1,286 | ||
United States | |||||
Segment information | |||||
Net revenue | 1,197 | 1,283 | 3,406 | 3,346 | |
Long-lived assets | 632 | 632 | 936 | ||
Europe | |||||
Segment information | |||||
Net revenue | 614 | $ 630 | 1,597 | $ 2,164 | |
Long-lived assets | $ 354 | $ 354 | $ 350 |
BUSINESS SEGMENT - Product Info
BUSINESS SEGMENT - Product Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net revenue by product line | ||||
Net revenue | $ 1,811 | $ 1,913 | $ 5,003 | $ 5,510 |
Omnis products | ||||
Net revenue by product line | ||||
Net revenue | 928 | 872 | 2,399 | 3,002 |
Postano products | ||||
Net revenue by product line | ||||
Net revenue | $ 883 | $ 1,041 | $ 2,604 | $ 2,508 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Portland office - Astoria | 9 Months Ended |
Dec. 31, 2015USD ($) | |
Period 1 | |
Related party transactions | |
Furniture rental fee | $ 2,000 |
Period 2 | |
Related party transactions | |
Furniture rental fee | $ 1,000 |
GOODWILL IMPAIRMENT (Details)
GOODWILL IMPAIRMENT (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2014USD ($) | |
Goodwill | |
Impairment write off | $ 18.2 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES | ||
Lease loss | $ 109,000 | |
Accelerated depreciation | $ 125,000 | |
Maximum duration of service warranties | 30 days |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Jan. 14, 2016 |
Subsequent Event | Postano products | Monster Patents LLC [Member] | |
SUBSEQUENT EVENTS | |
Term of limited subscription | 2 years |