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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Digital Turbine Inc | NASDAQ:APPS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.05 | 2.48% | 2.07 | 2.07 | 2.09 | 2.19 | 1.99 | 2.10 | 1,121,659 | 22:10:06 |
ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
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22-2267658
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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1300 Guadalupe Street, Suite 302, Austin TX
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78701
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(Address of Principal Executive Offices)
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(Zip Code)
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Large Accelerated Filer
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¨
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Accelerated Filer
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ý
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|
|
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Non-accelerated Filer
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¨
(do not check if smaller reporting company)
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Smaller Reporting Company
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¨
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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||
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Item 1 (A).
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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September 30, 2016
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March 31, 2016
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||||
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(Unaudited)
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|
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||||
ASSETS
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
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$
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9,416
|
|
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$
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11,231
|
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Restricted cash
|
|
321
|
|
|
—
|
|
||
Accounts receivable, net of allowances of $471 and $464, respectively
|
|
17,477
|
|
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17,519
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|
||
Deposits
|
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152
|
|
|
213
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|
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Prepaid expenses and other current assets
|
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515
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583
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Total current assets
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27,881
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29,546
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Property and equipment, net
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2,462
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1,784
|
|
||
Cost method investment
|
|
999
|
|
|
999
|
|
||
Deferred tax assets
|
|
401
|
|
|
500
|
|
||
Intangible assets, net
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|
8,729
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|
|
12,490
|
|
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Goodwill
|
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76,621
|
|
|
76,621
|
|
||
TOTAL ASSETS
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|
$
|
117,093
|
|
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$
|
121,940
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LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
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||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
20,071
|
|
|
$
|
15,300
|
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Accrued license fees and revenue share
|
|
8,613
|
|
|
9,622
|
|
||
Accrued compensation
|
|
1,073
|
|
|
1,353
|
|
||
Short-term debt, net of debt issuance costs and discounts of $0 and $568, respectively
|
|
—
|
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10,432
|
|
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Other current liabilities
|
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1,660
|
|
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2,147
|
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Total current liabilities
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31,417
|
|
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38,854
|
|
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Convertible notes, net of debt issuance costs and discounts of $6,616 and $0, respectively
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9,384
|
|
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—
|
|
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Convertible note embedded derivative liability
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4,123
|
|
|
—
|
|
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Warrant liability
|
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1,363
|
|
|
—
|
|
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Other non-current liabilities
|
|
835
|
|
|
815
|
|
||
Total liabilities
|
|
47,122
|
|
|
39,669
|
|
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Stockholders' equity
|
|
|
|
|
||||
Preferred stock
|
|
|
|
|
||||
Series A convertible preferred stock at $0.0001 par value;
2,000,000 shares authorized, 100,000 issued and outstanding (liquidation preference of $1,000) |
|
100
|
|
|
100
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|
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Common stock
|
|
|
|
|
||||
$0.0001 par value: 200,000,000 shares authorized;
67,368,462 issued and 66,634,006 outstanding at September 30, 2016; 67,019,703 issued and 66,284,606 outstanding at March 31, 2016; |
|
8
|
|
|
8
|
|
||
Additional paid-in capital
|
|
297,929
|
|
|
295,423
|
|
||
Treasury stock (754,599 shares at September 30, 2016 and March 31, 2016)
|
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(71
|
)
|
|
(71
|
)
|
||
Accumulated other comprehensive loss
|
|
(255
|
)
|
|
(202
|
)
|
||
Accumulated deficit
|
|
(227,740
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)
|
|
(212,987
|
)
|
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Total stockholders' equity
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69,971
|
|
|
82,271
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$
|
117,093
|
|
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$
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121,940
|
|
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Three Months Ended September 30,
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Six Months Ended September 30,
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||||||||||||
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2016
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2015
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2016
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2015
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||||||||
Net revenues
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$
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22,832
|
|
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$
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20,734
|
|
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$
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46,871
|
|
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$
|
39,420
|
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Cost of revenues
|
|
|
|
|
|
|
|
|
||||||||
License fees and revenue share
|
|
17,797
|
|
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16,099
|
|
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37,021
|
|
|
30,320
|
|
||||
Other direct cost of revenues
|
|
1,882
|
|
|
4,558
|
|
|
3,762
|
|
|
6,749
|
|
||||
Total cost of revenues
|
|
19,679
|
|
|
20,657
|
|
|
40,783
|
|
|
37,069
|
|
||||
Gross profit
|
|
3,153
|
|
|
77
|
|
|
6,088
|
|
|
2,351
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Product development
|
|
3,117
|
|
|
2,406
|
|
|
5,952
|
|
|
5,160
|
|
||||
Sales and marketing
|
|
1,528
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|
|
1,468
|
|
|
2,972
|
|
|
2,750
|
|
||||
General and administrative
|
|
4,815
|
|
|
4,347
|
|
|
9,920
|
|
|
9,736
|
|
||||
Total operating expenses
|
|
9,460
|
|
|
8,221
|
|
|
18,844
|
|
|
17,646
|
|
||||
Loss from operations
|
|
(6,307
|
)
|
|
(8,144
|
)
|
|
(12,756
|
)
|
|
(15,295
|
)
|
||||
Interest and other expense, net
|
|
|
|
|
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|
|
|
||||||||
Interest expense, net
|
|
(622
|
)
|
|
(405
|
)
|
|
(1,304
|
)
|
|
(896
|
)
|
||||
Foreign exchange transaction loss
|
|
(1
|
)
|
|
(13
|
)
|
|
(4
|
)
|
|
(12
|
)
|
||||
Change in fair value of convertible note embedded derivative liability
|
|
(430
|
)
|
|
—
|
|
|
(430
|
)
|
|
—
|
|
||||
Change in fair value of warrant liability
|
|
(140
|
)
|
|
—
|
|
|
(140
|
)
|
|
—
|
|
||||
Loss on extinguishment of debt
|
|
(293
|
)
|
|
—
|
|
|
(293
|
)
|
|
—
|
|
||||
Loss on disposal of fixed assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
||||
Other income
|
|
15
|
|
|
11
|
|
|
33
|
|
|
28
|
|
||||
Total interest and other expense, net
|
|
(1,471
|
)
|
|
(407
|
)
|
|
(2,138
|
)
|
|
(903
|
)
|
||||
Loss from operations before income taxes
|
|
(7,778
|
)
|
|
(8,551
|
)
|
|
(14,894
|
)
|
|
(16,198
|
)
|
||||
Income tax provision / (benefit)
|
|
(437
|
)
|
|
(229
|
)
|
|
(141
|
)
|
|
243
|
|
||||
Net loss
|
|
(7,341
|
)
|
|
(8,322
|
)
|
|
(14,753
|
)
|
|
(16,441
|
)
|
||||
Other comprehensive income / (loss)
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
|
(80
|
)
|
|
111
|
|
|
(53
|
)
|
|
62
|
|
||||
Comprehensive loss
|
|
$
|
(7,421
|
)
|
|
$
|
(8,211
|
)
|
|
$
|
(14,806
|
)
|
|
$
|
(16,379
|
)
|
Basic and diluted net loss per common share
|
|
$
|
(0.11
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.29
|
)
|
Weighted-average common shares outstanding, basic and diluted
|
|
66,457
|
|
|
57,274
|
|
|
66,358
|
|
|
57,328
|
|
|
|
Six Months Ended September 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
||
Net loss
|
|
$
|
(14,753
|
)
|
|
$
|
(16,441
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
4,199
|
|
|
6,850
|
|
||
Loss on disposal of fixed assets
|
|
—
|
|
|
23
|
|
||
Change in allowance for doubtful accounts
|
|
7
|
|
|
3
|
|
||
Amortization of debt discount
|
|
237
|
|
|
236
|
|
||
Amortization of debt issuance costs
|
|
444
|
|
|
—
|
|
||
Accrued interest
|
|
(91
|
)
|
|
(16
|
)
|
||
Stock-based compensation
|
|
2,310
|
|
|
2,524
|
|
||
Stock-based compensation for services rendered
|
|
166
|
|
|
600
|
|
||
Change in fair value of convertible note embedded derivative liability
|
|
430
|
|
|
—
|
|
||
Change in fair value of warrant liability
|
|
140
|
|
|
—
|
|
||
Loss on extinguishment of debt
|
|
293
|
|
|
—
|
|
||
Stock issued for settlement of liability
|
|
—
|
|
|
283
|
|
||
(Increase) / decrease in assets:
|
|
|
|
|
||||
Restricted cash transferred to / (from) operating cash
|
|
(321
|
)
|
|
200
|
|
||
Accounts receivable
|
|
35
|
|
|
(2,313
|
)
|
||
Deposits
|
|
61
|
|
|
(1
|
)
|
||
Deferred tax assets
|
|
99
|
|
|
—
|
|
||
Deferred financing costs
|
|
—
|
|
|
(187
|
)
|
||
Prepaid expenses and other current assets
|
|
68
|
|
|
243
|
|
||
Increase / (decrease) in liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
4,771
|
|
|
5,177
|
|
||
Accrued license fees and revenue share
|
|
(1,009
|
)
|
|
2,336
|
|
||
Accrued compensation
|
|
(280
|
)
|
|
(597
|
)
|
||
Other current liabilities
|
|
(393
|
)
|
|
(585
|
)
|
||
Other non-current liabilities
|
|
20
|
|
|
—
|
|
||
Net cash used in operating activities
|
|
(3,567
|
)
|
|
(1,665
|
)
|
||
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
||
Capital expenditures
|
|
(1,115
|
)
|
|
(610
|
)
|
||
Net cash used in investing activities
|
|
(1,115
|
)
|
|
(610
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
|
||
Cash received in convertible notes issuance
|
|
16,000
|
|
|
—
|
|
||
Repayment of debt obligations
|
|
(11,000
|
)
|
|
(300
|
)
|
||
Payment of debt issuance costs
|
|
(2,091
|
)
|
|
—
|
|
||
Options exercised
|
|
11
|
|
|
49
|
|
||
Net cash provided / (used) in financing activities
|
|
2,920
|
|
|
(251
|
)
|
||
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
|
(53
|
)
|
|
39
|
|
||
|
|
|
|
|
||||
Net change in cash and cash equivalents
|
|
(1,815
|
)
|
|
(2,487
|
)
|
||
|
|
|
|
|
||||
Cash and cash equivalents, beginning of period
|
|
11,231
|
|
|
7,069
|
|
||
|
|
|
|
|
||||
Cash and cash equivalents, end of period
|
|
$
|
9,416
|
|
|
$
|
4,582
|
|
•
|
Operator and OEM ("O&O"), an advertiser solution for unique and exclusive carrier and OEM inventory which is comprised of services including:
|
◦
|
Ignite™ ("Ignite"), a mobile device management platform with targeted application distribution capabilities,
|
◦
|
Discover™ ("Discover"), an intelligent application discovery platform, and
|
◦
|
Other professional services directly related to the Ignite platform.
|
•
|
Advertiser and Publisher ("A&P"), a worldwide mobile user acquisition network which is comprised of services including:
|
◦
|
Syndicated network, and
|
◦
|
Real Time Bidding ("RTB" or "programmatic advertising").
|
•
|
Marketplace™ ("Marketplace"), an application and content store, and
|
•
|
Pay™ ("Pay"), a content management and mobile payment solution.
|
•
|
Accounting for Income Taxes:
All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity also should recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period.
|
•
|
Classification of Excess Tax Benefits on the Statement of Cash Flows:
Excess tax benefits should be classified along with other income tax cash flows as an operating activity.
|
•
|
Forfeitures:
An entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur.
|
•
|
Minimum Statutory Tax Withholding Requirements:
The threshold to qualify for equity classification permits withholding up to the maximum statutory tax rates in the applicable jurisdictions.
|
•
|
Classification of Employee Taxes Paid on the Statement of Cash Flows When an Employer Withholds Shares for Tax-Withholding Purposes:
Cash paid by an employer when directly withholding shares for taxwithholding purposes should be classified as a financing activity.
|
•
|
Practical Expedient—Expected Term:
A nonpublic entity can make an accounting policy election to apply a practical expedient to estimate the expected term for all awards with performance or service conditions that meet certain conditions.
|
•
|
Intrinsic Value:
A nonpublic entity can make a one-time accounting policy election to switch from measuring all liability-classified awards at fair value to intrinsic value.
|
|
|
September 30, 2016
|
|
March 31, 2016
|
||||
Billed
|
|
$
|
11,332
|
|
|
$
|
13,220
|
|
Unbilled
|
|
6,616
|
|
|
4,763
|
|
||
Allowance for doubtful accounts
|
|
(471
|
)
|
|
(464
|
)
|
||
Accounts receivable, net
|
|
$
|
17,477
|
|
|
$
|
17,519
|
|
|
|
September 30, 2016
|
|
March 31, 2016
|
||||
Computer-related equipment
|
|
$
|
3,680
|
|
|
$
|
2,775
|
|
Furniture and fixtures
|
|
22
|
|
|
33
|
|
||
Leasehold improvements
|
|
246
|
|
|
74
|
|
||
|
|
3,948
|
|
|
2,882
|
|
||
Accumulated depreciation
|
|
(1,486
|
)
|
|
(1,098
|
)
|
||
Property and equipment, net
|
|
$
|
2,462
|
|
|
$
|
1,784
|
|
|
|
As of September 30, 2016
|
||||||||||
|
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||
Software
|
|
$
|
11,544
|
|
|
$
|
(6,192
|
)
|
|
$
|
5,352
|
|
Trade name / trademark
|
|
380
|
|
|
(380
|
)
|
|
—
|
|
|||
Customer list
|
|
11,300
|
|
|
(8,016
|
)
|
|
3,284
|
|
|||
License agreements
|
|
355
|
|
|
(262
|
)
|
|
93
|
|
|||
Total
|
|
$
|
23,579
|
|
|
$
|
(14,850
|
)
|
|
$
|
8,729
|
|
|
|
As of March 31, 2016
|
||||||||||
|
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||
Software
|
|
$
|
11,544
|
|
|
$
|
(4,949
|
)
|
|
$
|
6,595
|
|
Trade name / trademark
|
|
380
|
|
|
(380
|
)
|
|
—
|
|
|||
Customer list
|
|
11,300
|
|
|
(5,534
|
)
|
|
5,766
|
|
|||
License agreements
|
|
355
|
|
|
(226
|
)
|
|
129
|
|
|||
Total
|
|
$
|
23,579
|
|
|
$
|
(11,089
|
)
|
|
$
|
12,490
|
|
|
|
September 30, 2016
|
|
March 31, 2016
|
||||
Short-term debt
|
|
|
|
|
||||
Revolving line of credit, principal
|
|
$
|
—
|
|
|
$
|
3,000
|
|
Secured debenture, net of debt issuance costs and discounts of $0 and $568, respectively
|
|
—
|
|
|
7,432
|
|
||
Total short-term debt
|
|
$
|
—
|
|
|
$
|
10,432
|
|
|
|
September 30, 2016
|
|
March 31, 2016
|
||||
Long-term debt
|
|
|
|
|
||||
Convertible notes, net of debt issuance costs and discounts of $6,616 and $0, respectively
|
|
$
|
9,384
|
|
|
$
|
—
|
|
Total long-term debt
|
|
$
|
9,384
|
|
|
$
|
—
|
|
•
|
a “person” or “group” within the meaning of Section 13(d) of the Exchange Act other than the Company, the Company’s Subsidiaries or the Company’s or the Company’s Subsidiaries’ employee benefit plans files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Company’s common equity representing more than
50%
of the voting power of all outstanding classes of the Company’s common equity entitled to vote generally in the election of the Company’s directors;
|
•
|
consummation of (A) any share exchange, consolidation or merger involving the Company pursuant to which the Common Stock will be converted into cash, securities or other property or (B) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and the Company’s Subsidiaries, taken as a whole, to any person other than one or more of the Company’s Subsidiaries; provided, however, that a share exchange, consolidation or merger transaction described in clause (A) above in which the holders of more than
50%
of all shares of Common Stock entitled to vote generally in the election of the Company’s directors immediately prior to such transaction own, directly or indirectly, more than
50%
of all shares of Common Stock entitled to vote generally in the election of the directors of the continuing or surviving entity or the parent entity thereof immediately after such transaction in substantially the same proportions (relative to each other) as such ownership immediately prior to such transaction will not, in either case, be a Fundamental Change;
|
•
|
the Company’s shareholders approve any plan or proposal for the liquidation or dissolution of the Company; or
|
•
|
the Common Stock (or other Capital Stock into which the Notes are then convertible pursuant to the terms of this Indenture) ceases to be listed on any of The New York Stock Exchange, The NASDAQ Global Select Market, The NASDAQ Global Market, The NASDAQ Capital Market or The NYSE MKT (or their respective successors) (each, an “ Eligible Market ”).
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance as of September 28, 2016
|
||||||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Convertible note embedded derivative liability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,693
|
|
|
$
|
3,693
|
|
Warrant liability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,223
|
|
|
$
|
1,223
|
|
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,916
|
|
|
$
|
4,916
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance as of September 30, 2016
|
||||||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Convertible note embedded derivative liability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,123
|
|
|
$
|
4,123
|
|
Warrant liability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,363
|
|
|
$
|
1,363
|
|
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,486
|
|
|
$
|
5,486
|
|
|
|
Level 3
|
||
Balance at September 28, 2016
|
|
$
|
3,693
|
|
Change in fair value of convertible note embedded derivative liability
|
|
$
|
430
|
|
Balance at September 30, 2016
|
|
$
|
4,123
|
|
|
September 30, 2016
|
|
September 28, 2016
|
||
Stock price volatility
|
70
|
%
|
|
70
|
%
|
Probability of change in control
|
1.75
|
%
|
|
1.75
|
%
|
Stock price (per share)
|
$1.05
|
|
$0.99
|
||
Expected term
|
4 years
|
|
|
4 years
|
|
Risk-free rate (1)
|
1.00
|
%
|
|
1.00
|
%
|
Assumed early conversion/exercise price (per share)
|
$2.73
|
|
$2.73
|
|
|
Level 3
|
||
Balance at September 28, 2016
|
|
$
|
1,223
|
|
Change in fair value of warrant liability
|
|
$
|
140
|
|
Balance at September 30, 2016
|
|
$
|
1,363
|
|
|
September 30, 2016
|
|
September 28, 2016
|
||
Stock price volatility
|
70
|
%
|
|
70
|
%
|
Probability of change in control
|
1.75
|
%
|
|
1.75
|
%
|
Stock price (per share)
|
$1.05
|
|
$0.99
|
||
Expected term
|
4 years
|
|
|
4 years
|
|
Risk-free rate (1)
|
1.00
|
%
|
|
1.00
|
%
|
Assumed early conversion/exercise price (per share)
|
$2.73
|
|
$2.73
|
|
|
Number of
Shares |
|
Weighted Average
Exercise Price (per share) |
|
Weighted Average
Remaining Contractual Life (in years) |
|
Aggregate Intrinsic
Value (in thousands) |
|||||
Options Outstanding, March 31, 2016
|
|
7,824,395
|
|
|
$
|
3.61
|
|
|
8.24
|
|
$
|
110
|
|
Granted
|
|
1,037,000
|
|
|
1.13
|
|
|
|
|
|
|||
Forfeited / Cancelled
|
|
(860,954
|
)
|
|
0.64
|
|
|
|
|
|
|||
Exercised
|
|
(18,038
|
)
|
|
2.96
|
|
|
|
|
|
|||
Options Outstanding, September 30, 2016
|
|
7,982,403
|
|
|
3.37
|
|
|
7.94
|
|
65
|
|
||
Vested and expected to vest (net of estimated forfeitures) at September 30, 2016 (a)
|
|
6,413,005
|
|
|
3.69
|
|
|
7.67
|
|
64
|
|
||
Exercisable, September 30, 2016
|
|
3,498,410
|
|
|
$
|
5.04
|
|
|
6.50
|
|
$
|
61
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Exercise Price
|
|
Number of Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Life (Years)
|
|
Number of Shares
|
|
Weighted-Average Exercise Price
|
||||||
$0.00 - 0.50
|
|
8,065
|
|
|
$
|
0.24
|
|
|
3.48
|
|
8,065
|
|
|
$
|
0.24
|
|
$0.51 - 1.00
|
|
159,923
|
|
|
$
|
0.70
|
|
|
6.50
|
|
136,136
|
|
|
$
|
0.65
|
|
$1.01 - 1.50
|
|
2,852,559
|
|
|
$
|
1.29
|
|
|
2.96
|
|
165,056
|
|
|
$
|
1.26
|
|
$1.51 - 2.00
|
|
316,055
|
|
|
$
|
1.51
|
|
|
9.10
|
|
74,250
|
|
|
$
|
1.51
|
|
$2.01 - 2.50
|
|
253,776
|
|
|
$
|
2.43
|
|
|
4.33
|
|
187,109
|
|
|
$
|
2.41
|
|
$2.51 - 3.00
|
|
1,162,456
|
|
|
$
|
2.62
|
|
|
8.01
|
|
657,341
|
|
|
$
|
2.61
|
|
$3.51 - 4.00
|
|
1,332,314
|
|
|
$
|
3.95
|
|
|
8.18
|
|
780,976
|
|
|
$
|
3.95
|
|
$4.01 - 4.50
|
|
1,367,255
|
|
|
$
|
4.20
|
|
|
7.08
|
|
984,477
|
|
|
$
|
4.22
|
|
$4.51 - 5.00
|
|
60,000
|
|
|
$
|
4.65
|
|
|
6.49
|
|
60,000
|
|
|
$
|
4.65
|
|
$5.01 and over
|
|
470,000
|
|
|
$
|
16.32
|
|
|
2.26
|
|
445,000
|
|
|
$
|
16.90
|
|
|
|
7,982,403
|
|
|
|
|
|
|
3,498,410
|
|
|
|
|
|
September 30,
|
||||
|
|
2016
|
|
2015
|
||
Total fair value of options vested
|
|
2,452
|
|
|
2,847
|
|
Total intrinsic value of options exercised (a)
|
|
8
|
|
|
110
|
|
|
|
September 30, 2016
|
Risk-free interest rate
|
|
1.06% to 1.69%
|
Expected life of the options
|
|
5.69 to 9.93 years
|
Expected volatility
|
|
86% to 130%
|
Expected dividend yield
|
|
—%
|
Expected forfeitures
|
|
10% to 35%
|
|
|
Number of Warrants Outstanding
|
|
Weighted-Average Exercise Price
|
||
Outstanding as of March 31, 2016
|
|
2,085,356
|
|
|
2.78
|
|
Issued
|
|
4,385,600
|
|
|
1.36
|
|
Exercised
|
|
—
|
|
|
—
|
|
Cancelled
|
|
(400,000
|
)
|
|
0.01
|
|
Expired
|
|
(60,000
|
)
|
|
2.15
|
|
Outstanding as of September 30, 2016
|
|
6,010,956
|
|
|
1.94
|
|
|
|
Number of Shares
|
|
Weighted-Average Grant Date Fair Value
|
||
Unvested restricted stock outstanding as of March 31, 2016
|
|
110,046
|
|
|
1.45
|
|
Granted
|
|
331,363
|
|
|
1.10
|
|
Vested
|
|
(110,046
|
)
|
|
1.99
|
|
Cancelled
|
|
—
|
|
|
—
|
|
Unvested restricted stock outstanding as of September 30, 2016
|
|
331,363
|
|
|
1.10
|
|
|
|
Three Months Ended September 30,
|
|
Six Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net loss
|
|
(7,341
|
)
|
|
(8,322
|
)
|
|
(14,753
|
)
|
|
(16,441
|
)
|
||||
Weighted-average common shares outstanding, basic and diluted
|
|
66,457
|
|
|
57,274
|
|
|
66,358
|
|
|
57,328
|
|
||||
Basic and diluted net loss per common share
|
|
$
|
(0.11
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.29
|
)
|
Common stock equivalents excluded from net loss per diluted share because their effect would have been anti-dilutive
|
|
156
|
|
|
559
|
|
|
81
|
|
|
836
|
|
|
|
Content
|
|
Advertising
|
|
Total
|
||||||
Three months ended September 30, 2016
|
|
|
|
|
|
|
||||||
Net revenues
|
|
$
|
7,626
|
|
|
$
|
15,206
|
|
|
$
|
22,832
|
|
Loss from operations
|
|
(1,346
|
)
|
|
(4,961
|
)
|
|
(6,307
|
)
|
|||
Three months ended September 30, 2015
|
|
|
|
|
|
|
||||||
Net revenues
|
|
7,070
|
|
|
13,664
|
|
|
20,734
|
|
|||
Loss from operations
|
|
$
|
(3,512
|
)
|
|
$
|
(4,632
|
)
|
|
$
|
(8,144
|
)
|
|
|
Content
|
|
Advertising
|
|
Total
|
||||||
Six months ended September 30, 2016
|
|
|
|
|
|
|
||||||
Net revenues
|
|
$
|
18,856
|
|
|
$
|
28,015
|
|
|
$
|
46,871
|
|
Loss from operations
|
|
(2,751
|
)
|
|
(10,005
|
)
|
|
(12,756
|
)
|
|||
Six months ended September 30, 2015
|
|
|
|
|
|
|
||||||
Net revenues
|
|
14,140
|
|
|
25,280
|
|
|
39,420
|
|
|||
Loss from operations
|
|
$
|
(5,517
|
)
|
|
$
|
(9,778
|
)
|
|
$
|
(15,295
|
)
|
|
|
Three Months Ended September 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Net revenues
|
|
|
|
|
||||
United States and Canada
|
|
$
|
8,811
|
|
|
$
|
6,133
|
|
Europe, Middle East, and Africa
|
|
4,047
|
|
|
3,395
|
|
||
Asia Pacific and China
|
|
9,558
|
|
|
11,144
|
|
||
Mexico, Central America, and South America
|
|
416
|
|
|
62
|
|
||
Consolidated net revenues
|
|
$
|
22,832
|
|
|
$
|
20,734
|
|
|
|
Six Months Ended September 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Net revenues
|
|
|
|
|
||||
United States and Canada
|
|
$
|
15,480
|
|
|
$
|
13,267
|
|
Europe, Middle East, and Africa
|
|
7,805
|
|
|
6,693
|
|
||
Asia Pacific and China
|
|
22,954
|
|
|
19,210
|
|
||
Mexico, Central America, and South America
|
|
632
|
|
|
250
|
|
||
Consolidated net revenues
|
|
$
|
46,871
|
|
|
$
|
39,420
|
|
•
|
The parent company;
|
•
|
The subsidiary guarantors on a combined basis;
|
•
|
Any other subsidiaries of the parent company on a combined basis;
|
•
|
Consolidating adjustments; and
|
•
|
The total consolidated amounts.
|
(dollars in thousands)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Total
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
3,546
|
|
|
$
|
5,815
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
9,416
|
|
Restricted cash
|
|
—
|
|
|
321
|
|
|
—
|
|
|
—
|
|
|
321
|
|
|||||
Accounts receivable, net of allowances of $471
|
|
7
|
|
|
17,035
|
|
|
435
|
|
|
—
|
|
|
17,477
|
|
|||||
Deposits
|
|
—
|
|
|
116
|
|
|
36
|
|
|
—
|
|
|
152
|
|
|||||
Prepaid expenses and other current assets
|
|
380
|
|
|
130
|
|
|
5
|
|
|
—
|
|
|
515
|
|
|||||
Total current assets
|
|
3,933
|
|
|
23,417
|
|
|
531
|
|
|
—
|
|
|
27,881
|
|
|||||
Property and equipment, net
|
|
69
|
|
|
2,333
|
|
|
60
|
|
|
—
|
|
|
2,462
|
|
|||||
Cost method investment
|
|
—
|
|
|
999
|
|
|
—
|
|
|
—
|
|
|
999
|
|
|||||
Deferred tax assets
|
|
401
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
401
|
|
|||||
Intangible assets, net
|
|
1
|
|
|
5,475
|
|
|
3,253
|
|
|
—
|
|
|
8,729
|
|
|||||
Goodwill
|
|
—
|
|
|
75,621
|
|
|
1,000
|
|
|
—
|
|
|
76,621
|
|
|||||
TOTAL ASSETS
|
|
4,404
|
|
|
107,845
|
|
|
4,844
|
|
|
—
|
|
|
117,093
|
|
|||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
|
1,488
|
|
|
18,559
|
|
|
24
|
|
|
—
|
|
|
20,071
|
|
|||||
Accrued license fees and revenue share
|
|
—
|
|
|
8,330
|
|
|
283
|
|
|
—
|
|
|
8,613
|
|
|||||
Accrued compensation
|
|
38
|
|
|
1,035
|
|
|
—
|
|
|
—
|
|
|
1,073
|
|
|||||
Other current liabilities
|
|
1,606
|
|
|
789
|
|
|
(735
|
)
|
|
—
|
|
|
1,660
|
|
|||||
Total current liabilities
|
|
3,132
|
|
|
28,713
|
|
|
(428
|
)
|
|
—
|
|
|
31,417
|
|
|||||
Convertible notes, net of debt issuance costs and discounts of $6,616
|
|
9,384
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,384
|
|
|||||
Convertible note embedded derivative liability
|
|
4,123
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,123
|
|
|||||
Warrant liability
|
|
1,363
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,363
|
|
|||||
Other non-current liabilities
|
|
835
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
835
|
|
|||||
Total liabilities
|
|
18,837
|
|
|
28,713
|
|
|
(428
|
)
|
|
—
|
|
|
47,122
|
|
|||||
Stockholders' equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Preferred stock
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Series A convertible preferred stock at $0.0001 par value;
2,000,000 shares authorized, 100,000 issued and outstanding (liquidation preference of $1,000) |
|
100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100
|
|
|||||
Common stock
|
|
|
|
|
|
|
|
|
|
|
||||||||||
$0.0001 par value: 200,000,000 shares authorized;
67,368,462 issued and 66,634,006 outstanding at September 30, 2016 |
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||
Additional paid-in capital
|
|
297,929
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
297,929
|
|
|||||
Treasury stock (754,599 shares at September 30, 2016)
|
|
(71
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(71
|
)
|
|||||
Accumulated other comprehensive loss
|
|
16
|
|
|
(583
|
)
|
|
312
|
|
|
—
|
|
|
(255
|
)
|
|||||
Accumulated deficit
|
|
(186,766
|
)
|
|
(38,742
|
)
|
|
(2,232
|
)
|
|
—
|
|
|
(227,740
|
)
|
|||||
Total stockholders' equity
|
|
111,216
|
|
|
(39,325
|
)
|
|
(1,920
|
)
|
|
—
|
|
|
69,971
|
|
|||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
$
|
130,053
|
|
|
$
|
(10,612
|
)
|
|
$
|
(2,348
|
)
|
|
$
|
—
|
|
|
$
|
117,093
|
|
(dollars in thousands)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Total
|
|||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
|
6,712
|
|
|
4,466
|
|
|
53
|
|
|
—
|
|
|
11,231
|
|
Restricted cash
|
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Accounts receivable, net of allowances of $464
|
|
24
|
|
|
17,369
|
|
|
126
|
|
|
—
|
|
|
17,519
|
|
Deposits
|
|
—
|
|
|
133
|
|
|
80
|
|
|
—
|
|
|
213
|
|
Prepaid expenses and other current assets
|
|
331
|
|
|
239
|
|
|
13
|
|
|
—
|
|
|
583
|
|
Total current assets
|
|
7,067
|
|
|
22,207
|
|
|
272
|
|
|
|
|
|
29,546
|
|
Property and equipment, net
|
|
53
|
|
|
1,690
|
|
|
41
|
|
|
—
|
|
|
1,784
|
|
Cost method investment
|
|
—
|
|
|
999
|
|
|
—
|
|
|
—
|
|
|
999
|
|
Deferred tax assets
|
|
500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500
|
|
Intangible assets, net
|
|
—
|
|
|
8,660
|
|
|
3,830
|
|
|
—
|
|
|
12,490
|
|
Goodwill
|
|
—
|
|
|
70,377
|
|
|
6,244
|
|
|
—
|
|
|
76,621
|
|
TOTAL ASSETS
|
|
7,620
|
|
|
103,933
|
|
|
10,387
|
|
|
—
|
|
|
121,940
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts payable
|
|
1,255
|
|
|
14,002
|
|
|
43
|
|
|
—
|
|
|
15,300
|
|
Accrued license fees and revenue share
|
|
—
|
|
|
9,549
|
|
|
73
|
|
|
—
|
|
|
9,622
|
|
Accrued compensation
|
|
(544
|
)
|
|
1,800
|
|
|
97
|
|
|
—
|
|
|
1,353
|
|
Short-term debt, net of debt issuance costs and discounts of $568
|
|
7,432
|
|
|
3,000
|
|
|
—
|
|
|
—
|
|
|
10,432
|
|
Deferred tax liabilities
|
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other current liabilities
|
|
152
|
|
|
737
|
|
|
1,258
|
|
|
—
|
|
|
2,147
|
|
Total current liabilities
|
|
8,295
|
|
|
29,088
|
|
|
1,471
|
|
|
—
|
|
|
38,854
|
|
Other non-current liabilities
|
|
815
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
815
|
|
Total liabilities
|
|
9,110
|
|
|
29,088
|
|
|
1,471
|
|
|
—
|
|
|
39,669
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
|
|
|
|||||
Preferred stock
|
|
|
|
|
|
|
|
|
|
|
|||||
Series A convertible preferred stock at $0.0001 par value;
2,000,000 shares authorized, 100,000 issued and outstanding (liquidation preference of $1,000) |
|
100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100
|
|
Common stock
|
|
|
|
|
|
|
|
|
|
|
|||||
$0.0001 par value: 200,000,000 shares authorized;
67,019,703 issued and 66,284,606 outstanding at March 31, 2016; |
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
Additional paid-in capital
|
|
295,423
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
295,423
|
|
Treasury stock (754,599 shares at March 31, 2016)
|
|
(71
|
)
|
|
|
|
|
—
|
|
|
—
|
|
|
(71
|
)
|
Accumulated other comprehensive loss
|
|
26
|
|
|
(440
|
)
|
|
212
|
|
|
—
|
|
|
(202
|
)
|
Accumulated deficit
|
|
(179,131
|
)
|
|
(31,231
|
)
|
|
(2,625
|
)
|
|
—
|
|
|
(212,987
|
)
|
Total stockholders' equity
|
|
116,355
|
|
|
(31,671
|
)
|
|
(2,413
|
)
|
|
—
|
|
|
82,271
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
125,465
|
|
|
(2,583
|
)
|
|
(942
|
)
|
|
—
|
|
|
121,940
|
|
(dollars in thousands)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Total
|
|||||
Net revenues
|
|
—
|
|
|
30,338
|
|
|
462
|
|
|
(7,968
|
)
|
|
22,832
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|||||
License fees and revenue share
|
|
—
|
|
|
25,547
|
|
|
218
|
|
|
(7,968
|
)
|
|
17,797
|
|
Other direct cost of revenues
|
|
—
|
|
|
1,594
|
|
|
288
|
|
|
—
|
|
|
1,882
|
|
Total cost of revenues
|
|
—
|
|
|
27,141
|
|
|
506
|
|
|
(7,968
|
)
|
|
19,679
|
|
Gross profit
|
|
—
|
|
|
3,197
|
|
|
(44
|
)
|
|
—
|
|
|
3,153
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||
Product development
|
|
9
|
|
|
3,079
|
|
|
29
|
|
|
—
|
|
|
3,117
|
|
Sales and marketing
|
|
42
|
|
|
1,480
|
|
|
6
|
|
|
—
|
|
|
1,528
|
|
General and administrative
|
|
3,083
|
|
|
1,704
|
|
|
28
|
|
|
—
|
|
|
4,815
|
|
Total operating expenses
|
|
3,134
|
|
|
6,263
|
|
|
63
|
|
|
—
|
|
|
9,460
|
|
Income / (loss) from operations
|
|
(3,134
|
)
|
|
(3,066
|
)
|
|
(107
|
)
|
|
—
|
|
|
(6,307
|
)
|
Interest and other expense, net
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense, net
|
|
(6
|
)
|
|
(616
|
)
|
|
—
|
|
|
—
|
|
|
(622
|
)
|
Foreign exchange transaction loss
|
|
—
|
|
|
(1
|
)
|
|
|
|
|
—
|
|
|
(1
|
)
|
Change in fair value of convertible note embedded derivative liability
|
|
(430
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(430
|
)
|
Change in fair value of warrant liability
|
|
(140
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(140
|
)
|
Loss on extinguishment of debt
|
|
(293
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(293
|
)
|
Other income
|
|
14
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
15
|
|
Total interest and other expense, net
|
|
(855
|
)
|
|
(616
|
)
|
|
—
|
|
|
—
|
|
|
(1,471
|
)
|
Income / (loss) from operations before income taxes
|
|
(3,989
|
)
|
|
(3,682
|
)
|
|
(107
|
)
|
|
—
|
|
|
(7,778
|
)
|
Income tax benefit
|
|
(437
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(437
|
)
|
Net gain / (loss)
|
|
(3,552
|
)
|
|
(3,682
|
)
|
|
(107
|
)
|
|
—
|
|
|
(7,341
|
)
|
Other comprehensive income / (loss)
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustment
|
|
(80
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
Comprehensive income / (loss)
|
|
(3,632
|
)
|
|
(3,682
|
)
|
|
(107
|
)
|
|
—
|
|
|
(7,421
|
)
|
(dollars in thousands)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Total
|
|||||
Net revenues
|
|
—
|
|
|
59,942
|
|
|
580
|
|
|
(13,651
|
)
|
|
46,871
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|||||
License fees and revenue share
|
|
—
|
|
|
50,424
|
|
|
248
|
|
|
(13,651
|
)
|
|
37,021
|
|
Other direct cost of revenues
|
|
—
|
|
|
3,185
|
|
|
577
|
|
|
—
|
|
|
3,762
|
|
Total cost of revenues
|
|
—
|
|
|
53,609
|
|
|
825
|
|
|
(13,651
|
)
|
|
40,783
|
|
Gross profit
|
|
—
|
|
|
6,333
|
|
|
(245
|
)
|
|
—
|
|
|
6,088
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||
Product development
|
|
9
|
|
|
5,885
|
|
|
58
|
|
|
—
|
|
|
5,952
|
|
Sales and marketing
|
|
82
|
|
|
2,910
|
|
|
(20
|
)
|
|
—
|
|
|
2,972
|
|
General and administrative
|
|
7,094
|
|
|
3,072
|
|
|
(246
|
)
|
|
—
|
|
|
9,920
|
|
Total operating expenses
|
|
7,185
|
|
|
11,867
|
|
|
(208
|
)
|
|
—
|
|
|
18,844
|
|
Income / (loss) from operations
|
|
(7,185
|
)
|
|
(5,534
|
)
|
|
(37
|
)
|
|
—
|
|
|
(12,756
|
)
|
Interest and other expense, net
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense, net
|
|
(6
|
)
|
|
(1,298
|
)
|
|
—
|
|
|
—
|
|
|
(1,304
|
)
|
Foreign exchange transaction loss
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
(4
|
)
|
Change in fair value of convertible note embedded derivative liability
|
|
(430
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(430
|
)
|
Change in fair value of warrant liability
|
|
(140
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(140
|
)
|
Loss on extinguishment of debt
|
|
(293
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(293
|
)
|
Other income
|
|
31
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
33
|
|
Total interest and other expense, net
|
|
(838
|
)
|
|
(1,298
|
)
|
|
(2
|
)
|
|
—
|
|
|
(2,138
|
)
|
Income / (loss) from operations before income taxes
|
|
(8,023
|
)
|
|
(6,832
|
)
|
|
(39
|
)
|
|
—
|
|
|
(14,894
|
)
|
Income tax benefit
|
|
(141
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
Net income / (loss)
|
|
(7,882
|
)
|
|
(6,832
|
)
|
|
(39
|
)
|
|
—
|
|
|
(14,753
|
)
|
Other comprehensive income / (loss)
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustment
|
|
(53
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
Comprehensive income / (loss)
|
|
(7,935
|
)
|
|
(6,832
|
)
|
|
(39
|
)
|
|
—
|
|
|
(14,806
|
)
|
(dollars in thousands)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Total
|
|||||
Net revenues
|
|
—
|
|
|
23,808
|
|
|
52
|
|
|
(3,126
|
)
|
|
20,734
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|||||
License fees and revenue share
|
|
—
|
|
|
19,208
|
|
|
17
|
|
|
(3,126
|
)
|
|
16,099
|
|
Other direct cost of revenues
|
|
—
|
|
|
4,056
|
|
|
502
|
|
|
—
|
|
|
4,558
|
|
Total cost of revenues
|
|
—
|
|
|
23,264
|
|
|
519
|
|
|
(3,126
|
)
|
|
20,657
|
|
Gross profit
|
|
—
|
|
|
544
|
|
|
(467
|
)
|
|
—
|
|
|
77
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||
Product development
|
|
(560
|
)
|
|
2,803
|
|
|
163
|
|
|
—
|
|
|
2,406
|
|
Sales and marketing
|
|
(206
|
)
|
|
1,628
|
|
|
46
|
|
|
—
|
|
|
1,468
|
|
General and administrative
|
|
2,338
|
|
|
1,872
|
|
|
137
|
|
|
—
|
|
|
4,347
|
|
Total operating expenses
|
|
1,571
|
|
|
6,303
|
|
|
346
|
|
|
—
|
|
|
8,221
|
|
Loss from operations
|
|
(1,571
|
)
|
|
(5,759
|
)
|
|
(813
|
)
|
|
—
|
|
|
(8,144
|
)
|
Interest and other expense, net
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense, net
|
|
—
|
|
|
(405
|
)
|
|
—
|
|
|
—
|
|
|
(405
|
)
|
Foreign exchange transaction loss
|
|
(1
|
)
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
Other income
|
|
10
|
|
|
(97
|
)
|
|
98
|
|
|
—
|
|
|
11
|
|
Total interest and other expense, net
|
|
9
|
|
|
(514
|
)
|
|
98
|
|
|
—
|
|
|
(407
|
)
|
Loss from operations before income taxes
|
|
(1,562
|
)
|
|
(6,273
|
)
|
|
(715
|
)
|
|
—
|
|
|
(8,551
|
)
|
Income tax provision / (benefit)
|
|
(229
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(229
|
)
|
Net loss
|
|
(1,333
|
)
|
|
(6,273
|
)
|
|
(715
|
)
|
|
—
|
|
|
(8,322
|
)
|
Other comprehensive income / (loss)
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustment
|
|
111
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111
|
|
Comprehensive loss
|
|
(1,222
|
)
|
|
(6,273
|
)
|
|
(715
|
)
|
|
—
|
|
|
(8,211
|
)
|
(dollars in thousands)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Total
|
|||||
Net revenues
|
|
—
|
|
|
44,586
|
|
|
134
|
|
|
(5,300
|
)
|
|
39,420
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|||||
License fees and revenue share
|
|
—
|
|
|
35,579
|
|
|
41
|
|
|
(5,300
|
)
|
|
30,320
|
|
Other direct cost of revenues
|
|
—
|
|
|
6,165
|
|
|
584
|
|
|
|
|
|
6,749
|
|
Total cost of revenues
|
|
—
|
|
|
41,744
|
|
|
625
|
|
|
(5,300
|
)
|
|
37,069
|
|
Gross profit
|
|
—
|
|
|
2,842
|
|
|
(491
|
)
|
|
—
|
|
|
2,351
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||
Product development
|
|
(559
|
)
|
|
5,384
|
|
|
335
|
|
|
—
|
|
|
5,160
|
|
Sales and marketing
|
|
(204
|
)
|
|
2,858
|
|
|
96
|
|
|
—
|
|
|
2,750
|
|
General and administrative
|
|
6,096
|
|
|
3,334
|
|
|
306
|
|
|
—
|
|
|
9,736
|
|
Total operating expenses
|
|
5,333
|
|
|
11,576
|
|
|
737
|
|
|
—
|
|
|
17,646
|
|
Loss from operations
|
|
(5,333
|
)
|
|
(8,734
|
)
|
|
(1,228
|
)
|
|
—
|
|
|
(15,295
|
)
|
Interest and other expense, net
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense, net
|
|
1
|
|
|
(802
|
)
|
|
(95
|
)
|
|
—
|
|
|
(896
|
)
|
Foreign exchange transaction loss
|
|
(1
|
)
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
Loss on disposal of fixed assets
|
|
(22
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
Other income
|
|
19
|
|
|
(98
|
)
|
|
107
|
|
|
—
|
|
|
28
|
|
Total interest and other expense, net
|
|
(3
|
)
|
|
(912
|
)
|
|
12
|
|
|
—
|
|
|
(903
|
)
|
Loss from operations before income taxes
|
|
(5,336
|
)
|
|
(9,646
|
)
|
|
(1,216
|
)
|
|
—
|
|
|
(16,198
|
)
|
Income tax provision / (benefit)
|
|
159
|
|
|
84
|
|
|
—
|
|
|
—
|
|
|
243
|
|
Net loss
|
|
(5,495
|
)
|
|
(9,730
|
)
|
|
(1,216
|
)
|
|
—
|
|
|
(16,441
|
)
|
Other comprehensive income / (loss)
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustment
|
|
62
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62
|
|
Comprehensive loss
|
|
(5,433
|
)
|
|
(9,730
|
)
|
|
(1,216
|
)
|
|
—
|
|
|
(16,379
|
)
|
(dollars in thousands)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Total
|
|||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|||||
Net loss
|
|
(7,882
|
)
|
|
(6,832
|
)
|
|
(39
|
)
|
|
—
|
|
|
(14,753
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
|
5
|
|
|
3,616
|
|
|
578
|
|
|
—
|
|
|
4,199
|
|
Change in allowance for doubtful accounts
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
Amortization of debt discount
|
|
—
|
|
|
237
|
|
|
—
|
|
|
—
|
|
|
237
|
|
Amortization of debt issuance costs
|
|
—
|
|
|
444
|
|
|
—
|
|
|
—
|
|
|
444
|
|
Accrued interest
|
|
—
|
|
|
(91
|
)
|
|
—
|
|
|
—
|
|
|
(91
|
)
|
Stock-based compensation
|
|
2,310
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,310
|
|
Stock-based compensation for services rendered
|
|
166
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
166
|
|
Change in fair value of convertible note embedded derivative liability
|
|
430
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
430
|
|
Change in fair value of warrant liability
|
|
140
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
140
|
|
Loss on extinguishment of debt
|
|
293
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
293
|
|
(Increase) / decrease in assets:
|
|
|
|
|
|
|
|
|
|
|
|||||
Restricted cash transferred to / (from) operating cash
|
|
—
|
|
|
(321
|
)
|
|
—
|
|
|
—
|
|
|
(321
|
)
|
Accounts receivable
|
|
17
|
|
|
325
|
|
|
(307
|
)
|
|
—
|
|
|
35
|
|
Deposits
|
|
—
|
|
|
17
|
|
|
44
|
|
|
—
|
|
|
61
|
|
Deferred tax assets
|
|
99
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
99
|
|
Prepaid expenses and other current assets
|
|
(49
|
)
|
|
108
|
|
|
9
|
|
|
—
|
|
|
68
|
|
Increase / (decrease) in liabilities:
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts payable
|
|
233
|
|
|
4,562
|
|
|
(24
|
)
|
|
—
|
|
|
4,771
|
|
Accrued license fees and revenue share
|
|
—
|
|
|
(1,219
|
)
|
|
210
|
|
|
—
|
|
|
(1,009
|
)
|
Accrued compensation
|
|
582
|
|
|
(765
|
)
|
|
(97
|
)
|
|
—
|
|
|
(280
|
)
|
Other current liabilities
|
|
1,539
|
|
|
61
|
|
|
(1,993
|
)
|
|
—
|
|
|
(393
|
)
|
Other non-current liabilities
|
|
(1,004
|
)
|
|
(617
|
)
|
|
1,641
|
|
|
—
|
|
|
20
|
|
Net cash used in operating activities
|
|
(3,121
|
)
|
|
(468
|
)
|
|
22
|
|
|
—
|
|
|
(3,567
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|||||
Capital expenditures
|
|
(3
|
)
|
|
(1,092
|
)
|
|
(20
|
)
|
|
—
|
|
|
(1,115
|
)
|
Net cash used in investing activities
|
|
(3
|
)
|
|
(1,092
|
)
|
|
(20
|
)
|
|
—
|
|
|
(1,115
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash received in convertible notes issuance
|
|
—
|
|
|
16,000
|
|
|
—
|
|
|
—
|
|
|
16,000
|
|
Repayment of debt obligations
|
|
—
|
|
|
(11,000
|
)
|
|
—
|
|
|
—
|
|
|
(11,000
|
)
|
Payment of debt issuance costs
|
|
—
|
|
|
(2,091
|
)
|
|
—
|
|
|
—
|
|
|
(2,091
|
)
|
Options exercised
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
Warrant exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net cash provided / (used) in financing activities
|
|
11
|
|
|
2,909
|
|
|
—
|
|
|
—
|
|
|
2,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
(53
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net change in cash and cash equivalents
|
|
(3,166
|
)
|
|
1,349
|
|
|
2
|
|
|
—
|
|
|
(1,815
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents, beginning of period
|
|
6,712
|
|
|
4,466
|
|
|
53
|
|
|
—
|
|
|
11,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents, end of period
|
|
3,546
|
|
|
5,815
|
|
|
55
|
|
|
—
|
|
|
9,416
|
|
(dollars in thousands)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Total
|
|||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|||||
Net loss
|
|
(5,495
|
)
|
|
(9,730
|
)
|
|
(1,216
|
)
|
|
—
|
|
|
(16,441
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
|
2,408
|
|
|
3,994
|
|
|
448
|
|
|
—
|
|
|
6,850
|
|
Loss on disposal of fixed assets
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
Change in allowance for doubtful accounts
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
Amortization of debt issuance costs
|
|
—
|
|
|
236
|
|
|
—
|
|
|
—
|
|
|
236
|
|
Accrued interest
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
Stock-based compensation
|
|
2,524
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,524
|
|
Stock-based compensation for services rendered
|
|
600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
600
|
|
Stock issued for settlement of liability
|
|
283
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
283
|
|
(Increase) / decrease in assets:
|
|
|
|
|
|
|
|
|
|
|
|||||
Restricted cash transferred to / (from) operating cash
|
|
200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200
|
|
Accounts receivable
|
|
—
|
|
|
(2,276
|
)
|
|
(37
|
)
|
|
—
|
|
|
(2,313
|
)
|
Deposits
|
|
8
|
|
|
(8
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
Deferred financing costs
|
|
(187
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(187
|
)
|
Prepaid expenses and other current assets
|
|
46
|
|
|
188
|
|
|
9
|
|
|
—
|
|
|
243
|
|
Increase / (decrease) in liabilities:
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts payable
|
|
114
|
|
|
5,085
|
|
|
(22
|
)
|
|
—
|
|
|
5,177
|
|
Accrued license fees and revenue share
|
|
—
|
|
|
2,317
|
|
|
19
|
|
|
—
|
|
|
2,336
|
|
Accrued compensation
|
|
(977
|
)
|
|
365
|
|
|
15
|
|
|
—
|
|
|
(597
|
)
|
Other current liabilities
|
|
(345
|
)
|
|
(1,000
|
)
|
|
760
|
|
|
—
|
|
|
(585
|
)
|
Net cash used in operating activities
|
|
(798
|
)
|
|
(845
|
)
|
|
(22
|
)
|
|
—
|
|
|
(1,665
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|||||
Capital expenditures
|
|
—
|
|
|
(610
|
)
|
|
—
|
|
|
—
|
|
|
(610
|
)
|
Net cash used in investing activities
|
|
—
|
|
|
(610
|
)
|
|
—
|
|
|
—
|
|
|
(610
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|||||
Repayment of debt obligations
|
|
—
|
|
|
(300
|
)
|
|
—
|
|
|
—
|
|
|
(300
|
)
|
Options exercised
|
|
49
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49
|
|
Net cash provided / (used) in financing activities
|
|
49
|
|
|
(300
|
)
|
|
—
|
|
|
—
|
|
|
(251
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net change in cash and cash equivalents
|
|
(710
|
)
|
|
(1,755
|
)
|
|
(22
|
)
|
|
—
|
|
|
(2,487
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents, beginning of period
|
|
4,156
|
|
|
2,827
|
|
|
86
|
|
|
—
|
|
|
7,069
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents, end of period
|
|
3,446
|
|
|
1,072
|
|
|
64
|
|
|
—
|
|
|
4,582
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
O&O, an advertiser solution for unique and exclusive carrier and OEM inventory which is comprised of services including:
|
◦
|
Ignite, a mobile device management platform with targeted application distribution capabilities,
|
◦
|
Discover, an intelligent application discovery platform, and
|
◦
|
Other professional services directly related to the Ignite platform.
|
•
|
A&P, a leading worldwide mobile user acquisition network which is comprised of services including:
|
◦
|
Syndicated network, and
|
◦
|
RTB or programmatic advertising.
|
•
|
Marketplace, an application and content store, and
|
•
|
Pay, a content management and mobile payment solution.
|
|
|
Three Months Ended September 30,
|
|
|
|
Six Months Ended September 30,
|
|
|
||||||||||||||
|
|
2016
|
|
2015
|
|
% of Change
|
|
2016
|
|
2015
|
|
% of Change
|
||||||||||
|
|
(in thousands, except per share amounts)
|
|
|
|
(in thousands, except per share amounts)
|
|
|
||||||||||||||
Net revenues
|
|
$
|
22,832
|
|
|
$
|
20,734
|
|
|
10.1
|
%
|
|
$
|
46,871
|
|
|
$
|
39,420
|
|
|
18.9
|
%
|
License fees and revenue share
|
|
17,797
|
|
|
16,099
|
|
|
10.5
|
%
|
|
37,021
|
|
|
30,320
|
|
|
22.1
|
%
|
||||
Other direct cost of revenues
|
|
1,882
|
|
|
4,558
|
|
|
(58.7
|
)%
|
|
3,762
|
|
|
6,749
|
|
|
(44.3
|
)%
|
||||
Gross profit
|
|
3,153
|
|
|
77
|
|
|
3,994.8
|
%
|
|
6,088
|
|
|
2,351
|
|
|
159.0
|
%
|
||||
Total operating expenses
|
|
9,460
|
|
|
8,221
|
|
|
15.1
|
%
|
|
18,844
|
|
|
17,646
|
|
|
6.8
|
%
|
||||
Loss from operations
|
|
(6,307
|
)
|
|
(8,144
|
)
|
|
(22.6
|
)%
|
|
(12,756
|
)
|
|
(15,295
|
)
|
|
(16.6
|
)%
|
||||
Interest expense, net
|
|
(622
|
)
|
|
(405
|
)
|
|
53.6
|
%
|
|
(1,304
|
)
|
|
(896
|
)
|
|
45.5
|
%
|
||||
Foreign exchange transaction loss
|
|
(1
|
)
|
|
(13
|
)
|
|
(92.3
|
)%
|
|
(4
|
)
|
|
(12
|
)
|
|
(66.7
|
)%
|
||||
Change in fair value of convertible note embedded derivative liability
|
|
(430
|
)
|
|
—
|
|
|
100.0
|
%
|
|
(430
|
)
|
|
—
|
|
|
100.0
|
%
|
||||
Change in fair value of warrant liability
|
|
(140
|
)
|
|
—
|
|
|
100.0
|
%
|
|
(140
|
)
|
|
—
|
|
|
100.0
|
%
|
||||
Loss on extinguishment of debt
|
|
(293
|
)
|
|
—
|
|
|
100.0
|
%
|
|
(293
|
)
|
|
—
|
|
|
100.0
|
%
|
||||
Loss on disposal of fixed assets
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
(23
|
)
|
|
(100.0
|
)%
|
||||
Other income
|
|
15
|
|
|
11
|
|
|
36.4
|
%
|
|
33
|
|
|
28
|
|
|
17.9
|
%
|
||||
Loss from operations before income taxes
|
|
(7,778
|
)
|
|
(8,551
|
)
|
|
(9.0
|
)%
|
|
(14,894
|
)
|
|
(16,198
|
)
|
|
(8.1
|
)%
|
||||
Income tax provision / (benefit)
|
|
(437
|
)
|
|
(229
|
)
|
|
90.8
|
%
|
|
(141
|
)
|
|
243
|
|
|
(158.0
|
)%
|
||||
Net loss
|
|
$
|
(7,341
|
)
|
|
$
|
(8,322
|
)
|
|
(11.8
|
)%
|
|
$
|
(14,753
|
)
|
|
$
|
(16,441
|
)
|
|
(10.3
|
)%
|
Basic and diluted net loss per common share
|
|
$
|
(0.11
|
)
|
|
$
|
(0.14
|
)
|
|
(21.4
|
)%
|
|
$
|
(0.22
|
)
|
|
$
|
(0.29
|
)
|
|
(24.1
|
)%
|
Weighted-average common shares outstanding, basic and diluted
|
|
66,457
|
|
|
57,274
|
|
|
16.0
|
%
|
|
66,358
|
|
|
57,328
|
|
|
15.8
|
%
|
|
|
Three Months Ended September 30,
|
|
|
|
Six Months Ended September 30,
|
|
|
||||||||||||||
|
|
2016
|
|
2015
|
|
% of Change
|
|
2016
|
|
2015
|
|
% of Change
|
||||||||||
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||
Revenues by type:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Content
|
|
$
|
7,626
|
|
|
$
|
7,070
|
|
|
7.9
|
%
|
|
$
|
18,856
|
|
|
$
|
14,140
|
|
|
33.4
|
%
|
Advertising
|
|
15,206
|
|
|
13,664
|
|
|
11.3
|
%
|
|
28,015
|
|
|
25,280
|
|
|
10.8
|
%
|
||||
Total
|
|
$
|
22,832
|
|
|
$
|
20,734
|
|
|
10.1
|
%
|
|
$
|
46,871
|
|
|
$
|
39,420
|
|
|
18.9
|
%
|
|
|
Three Months Ended September 30,
|
|
|
|
Six Months Ended September 30,
|
|
|
||||||||||||
|
|
2016
|
|
2015
|
|
% of Change
|
|
2016
|
|
2015
|
|
% of Change
|
||||||||
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||
Gross margin by type:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Content gross margin $
|
|
$
|
781
|
|
|
(1,656
|
)
|
|
(147.2
|
)%
|
|
$
|
1,970
|
|
|
(858
|
)
|
|
(329.6
|
)%
|
Content gross margin %
|
|
10.2
|
%
|
|
(23.4
|
)%
|
|
|
|
10.4
|
%
|
|
(6.1
|
)%
|
|
|
||||
Advertising gross margin $
|
|
$
|
2,372
|
|
|
1,733
|
|
|
36.9
|
%
|
|
$
|
4,118
|
|
|
3,209
|
|
|
28.3
|
%
|
Advertising gross margin %
|
|
15.6
|
%
|
|
12.7
|
%
|
|
|
|
14.7
|
%
|
|
12.7
|
%
|
|
|
||||
Total gross margin $
|
|
$
|
3,153
|
|
|
77
|
|
|
3,994.8
|
%
|
|
$
|
6,088
|
|
|
2,351
|
|
|
159.0
|
%
|
Total gross margin %
|
|
13.8
|
%
|
|
0.4
|
%
|
|
|
|
13.0
|
%
|
|
6.0
|
%
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
Six Months Ended September 30,
|
|
|
||||||||||||||
|
|
2016
|
|
2015
|
|
% of Change
|
|
2016
|
|
2015
|
|
% of Change
|
||||||||||
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||
Product development
|
|
$
|
3,117
|
|
|
$
|
2,406
|
|
|
29.6
|
%
|
|
$
|
5,952
|
|
|
$
|
5,160
|
|
|
15.3
|
%
|
Sales and marketing
|
|
1,528
|
|
|
1,468
|
|
|
4.1
|
%
|
|
2,972
|
|
|
2,750
|
|
|
8.1
|
%
|
||||
General and administrative
|
|
4,815
|
|
|
4,347
|
|
|
10.8
|
%
|
|
9,920
|
|
|
9,736
|
|
|
1.9
|
%
|
||||
Total operating expenses
|
|
$
|
9,460
|
|
|
$
|
8,221
|
|
|
15.1
|
%
|
|
$
|
18,844
|
|
|
$
|
17,646
|
|
|
6.8
|
%
|
|
|
Three Months Ended September 30,
|
|
|
|
Six Months Ended September 30,
|
|
|
||||||||||||||
|
|
2016
|
|
2015
|
|
% of Change
|
|
2016
|
|
2015
|
|
% of Change
|
||||||||||
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||
Interest expense, net
|
|
$
|
(622
|
)
|
|
$
|
(405
|
)
|
|
53.6
|
%
|
|
$
|
(1,304
|
)
|
|
$
|
(896
|
)
|
|
45.5
|
%
|
Foreign exchange transaction loss
|
|
(1
|
)
|
|
(13
|
)
|
|
(92.3
|
)%
|
|
(4
|
)
|
|
(12
|
)
|
|
(66.7
|
)%
|
||||
Change in fair value of convertible note embedded derivative liability
|
|
(430
|
)
|
|
—
|
|
|
100.0
|
%
|
|
(430
|
)
|
|
—
|
|
|
100.0
|
%
|
||||
Change in fair value of warrant liability
|
|
(140
|
)
|
|
—
|
|
|
100.0
|
%
|
|
(140
|
)
|
|
—
|
|
|
100.0
|
%
|
||||
Loss on extinguishment of debt
|
|
(293
|
)
|
|
—
|
|
|
100.0
|
%
|
|
(293
|
)
|
|
—
|
|
|
100.0
|
%
|
||||
Loss on disposal of fixed assets
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
(23
|
)
|
|
(100.0
|
)%
|
||||
Other income
|
|
15
|
|
|
11
|
|
|
36.4
|
%
|
|
33
|
|
|
28
|
|
|
17.9
|
%
|
||||
Total interest and other expense, net
|
|
$
|
(1,471
|
)
|
|
$
|
(407
|
)
|
|
261.4
|
%
|
|
$
|
(2,138
|
)
|
|
$
|
(903
|
)
|
|
136.8
|
%
|
|
|
Six Months Ended September 30, 2016
|
|
Six Months Ended September 30, 2015
|
|
% of Change
|
|||||||||||
|
|
Dollars
|
|
% of Net Revenues
|
|
Dollars
|
|
% of Net Revenues
|
|
||||||||
Net revenues
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
|
|||||||
Pay
|
|
$
|
17,912
|
|
|
38.2
|
%
|
|
$
|
11,904
|
|
|
30.2
|
%
|
|
50.5
|
%
|
Ignite
|
|
16,126
|
|
|
34.4
|
%
|
|
6,745
|
|
|
17.1
|
%
|
|
139.1
|
%
|
||
Syndicated Network
|
|
11,000
|
|
|
23.5
|
%
|
|
18,016
|
|
|
45.7
|
%
|
|
(38.9
|
)%
|
||
Other
|
|
1,833
|
|
|
3.9
|
%
|
|
2,755
|
|
|
7.0
|
%
|
|
(33.5
|
)%
|
||
Total net revenues
|
|
$
|
46,871
|
|
|
100.0
|
%
|
|
$
|
39,420
|
|
|
100.0
|
%
|
|
18.9
|
%
|
|
|
September 30, 2016
|
|
March 31, 2016
|
||||
|
|
(in thousands)
|
||||||
Cash and cash equivalents
|
|
$
|
9,416
|
|
|
$
|
11,231
|
|
|
|
|
|
|
||||
Short-term debt
|
|
|
|
|
||||
Revolving line of credit, principal
|
|
—
|
|
|
3,000
|
|
||
Secured debenture, net of debt issuance costs and discounts of $0 and $568, respectively
|
|
—
|
|
|
7,432
|
|
||
Total short-term debt
|
|
$
|
—
|
|
|
$
|
10,432
|
|
|
|
|
|
|
||||
Long-term debt
|
|
|
|
|
||||
Convertible notes, net of debt issuance costs and discounts of $6,616 and $0, respectively
|
|
$
|
9,384
|
|
|
$
|
—
|
|
Total long-term debt
|
|
9,384
|
|
|
—
|
|
||
Total debt
|
|
$
|
9,384
|
|
|
$
|
10,432
|
|
|
|
|
|
|
||||
Working capital
|
|
|
|
|
||||
Current assets
|
|
$
|
27,881
|
|
|
$
|
29,546
|
|
Current liabilities
|
|
31,417
|
|
|
38,854
|
|
||
Working capital
|
|
$
|
(3,536
|
)
|
|
$
|
(9,308
|
)
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
Total
|
|
Less Than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than 5 Years
|
||||||||||
Contractual cash obligations
|
|
(in thousands)
|
||||||||||||||||||
Convertible notes (a)
|
|
$
|
16,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,000
|
|
|
$
|
—
|
|
Operating leases (b)
|
|
3,801
|
|
|
938
|
|
|
1,601
|
|
|
887
|
|
|
375
|
|
|||||
Employment agreements and other obligations (c)
|
|
1,429
|
|
|
808
|
|
|
621
|
|
|
—
|
|
|
—
|
|
|||||
Interest
|
|
5,600
|
|
|
1,400
|
|
|
1,400
|
|
|
2,800
|
|
|
—
|
|
|||||
Uncertain tax positions (d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual cash obligations
|
|
$
|
26,830
|
|
|
$
|
3,146
|
|
|
$
|
3,622
|
|
|
$
|
19,687
|
|
|
$
|
375
|
|
|
|
Six Months Ended September 30,
|
|
|
|||||||
|
|
2016
|
|
2015
|
|
% of Change
|
|||||
|
|
(in thousands)
|
|
|
|||||||
Consolidated statement of cash flows data:
|
|
|
|
|
|
|
|||||
Net cash used in operating activities
|
|
$
|
(3,567
|
)
|
|
$
|
(1,665
|
)
|
|
114.2
|
%
|
Capital expenditures
|
|
(1,115
|
)
|
|
(610
|
)
|
|
82.8
|
%
|
||
Cash received in convertible notes issuance
|
|
16,000
|
|
|
—
|
|
|
100.0
|
%
|
||
Repayment of debt obligations
|
|
(11,000
|
)
|
|
(300
|
)
|
|
3,566.7
|
%
|
||
Payment of debt issuance costs
|
|
(2,091
|
)
|
|
—
|
|
|
100.0
|
%
|
||
Options exercised
|
|
11
|
|
|
49
|
|
|
(77.6
|
)%
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
(53
|
)
|
|
39
|
|
|
(235.9
|
)%
|
•
|
Hired a Chief Accounting Officer, “CAO,” on February 27, 2015 (who resigned during our first quarter of fiscal 2017; Mr. David Wesch is our current Acting CAO).
|
•
|
Hired a Chief Financial Officer, “CFO,” on September 12, 2016 with a strong background in internal control design and implementation in a public company environment.
|
•
|
Finalized the system implementation related to SAP.
|
•
|
Evaluate accounting and finance headcount resources globally to ensure that resources are sufficient to meet the accounting and finance requirements of the Company.
|
•
|
Continue to utilize third-party accounting experts to augment Company accounting staff as necessary.
|
•
|
Implement a billing and disbursement, and stock option accounting system and integrate with SAP.
|
•
|
Identify deficient internal control procedures for significant accounting areas and implement additional documented review and approval procedures and/or automated controls to address them.
|
•
|
Conduct formal training related to key accounting policies, internal controls, and SEC compliance for all key personnel who have a direct and indirect impact on the transactions underlying the financial statements.
|
•
|
Implement and document internal control procedures around information technology that have an impact on financial reporting.
|
4.1
|
|
Indenture, dated as of September 28, 2016, between Digital Turbine, Inc., certain Guarantors, and US Bank National Association as trustee.*
|
|
|
|
4.2
|
|
Warrant Agreement, dated as of September 28, 2016, between Digital Turbine, Inc. and US Bank National Association as warrant agent.*
|
|
|
|
4.3
|
|
Registration Rights Agreement, dated as of September 28, 2016, between Digital Turbine, Inc. and BTIG, LLC.*
|
|
|
|
10.1
|
|
Initial Purchaser Agreement, dated as of September 23, 2016, between Digital Turbine, Inc., certain Guarantors, and BTIG, LLC as initial purchaser.*
|
|
|
|
10.2
|
|
Employment Agreement, dated August 31, 2016, between Digital Turbine, Inc. and Barrett Garrison.**
|
31.1
|
|
Certification of William Stone, Principal Executive Officer.***
|
|
|
|
31.2
|
|
Certification of Barrett Garrison, Principal Financial Officer.***
|
|
|
|
32.1
|
|
Certification of William Stone, Principal Executive Officer pursuant to U.S.C. Section 1350.+
|
|
|
|
32.2
|
|
Certification of Barrett Garrison, Principal Financial Officer pursuant to U.S.C. Section 1350.+
|
|
|
|
101
|
|
INS XBRL Instance Document.***
|
|
|
|
101
|
|
SCH XBRL Schema Document.***
|
|
|
|
101
|
|
CAL XBRL Taxonomy Extension Calculation Linkbase Document.***
|
|
|
|
101
|
|
DEF XBRL Taxonomy Extension Definition Linkbase Document.***
|
|
|
|
101
|
|
LAB XBRL Taxonomy Extension Label Linkbase Document.***
|
|
|
|
101
|
|
PRE XBRL Taxonomy Extension Presentation Linkbase Document.***
|
*
|
Incorporated by reference to our Current Report on Form 8-K (File No. 001-35958), filed with the Commission on September 29, 2016.
|
**
|
Incorporated by reference to our Current Report on Form 8-K (File No. 001-35958), filed with the Commission on August 31, 2016.
|
***
|
Filed herewith.
|
+
|
In accordance with SEC Release No. 33-8212, these exhibits are being furnished, and are not being filed, as part of the Report on Form 10-Q or as a separate disclosure document, and are not being incorporated by reference into any Securities Act registration statement.
|
|
|
Digital Turbine, Inc.
|
||
Dated: November 10, 2016
|
|
|
||
|
|
By:
|
|
/s/ William Stone
|
|
|
|
|
William Stone
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
|
|
Digital Turbine, Inc.
|
||
Dated: November 10, 2016
|
|
|
||
|
|
By:
|
|
/s/ Barrett Garrison
|
|
|
|
|
Barrett Garrison
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer)
|
1 Year Digital Turbine Chart |
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