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Share Name | Share Symbol | Market | Type |
---|---|---|---|
RealNetworks Inc | NASDAQ:RNWK | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.73 | 0.6552 | 0.73 | 0 | 01:00:00 |
|
FORM 10-Q
|
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
RealNetworks, Inc.
|
|
||
|
(Exact name of registrant as specified in its charter)
|
|
||
Washington
|
|
91-1628146
|
||
(State of incorporation)
|
|
(I.R.S. Employer
Identification Number)
|
||
1501 First Avenue South, Suite 600
Seattle, Washington
|
|
98134
|
||
(Address of principal executive offices)
|
|
(Zip Code)
|
||
|
(206) 674-2700
|
|
||
|
(Registrant’s telephone number, including area code)
|
|
|
Page
|
|
|
Item 1.
|
Financial Statements
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
37,964
|
|
|
$
|
51,196
|
|
Short-term investments
|
1,172
|
|
|
8,779
|
|
||
Trade accounts receivable, net of allowances of $577 and $937
|
13,090
|
|
|
12,689
|
|
||
Deferred costs, current portion
|
365
|
|
|
426
|
|
||
Prepaid expenses and other current assets
|
4,719
|
|
|
3,715
|
|
||
Current assets of discontinued operations
|
—
|
|
|
17,456
|
|
||
Total current assets
|
57,310
|
|
|
94,261
|
|
||
Equipment, software, and leasehold improvements, at cost:
|
|
|
|
||||
Equipment and software
|
40,016
|
|
|
46,417
|
|
||
Leasehold improvements
|
3,431
|
|
|
3,536
|
|
||
Total equipment, software, and leasehold improvements, at cost
|
43,447
|
|
|
49,953
|
|
||
Less accumulated depreciation and amortization
|
40,531
|
|
|
46,093
|
|
||
Net equipment, software, and leasehold improvements
|
2,916
|
|
|
3,860
|
|
||
Restricted cash equivalents
|
1,630
|
|
|
2,400
|
|
||
Other assets
|
5,723
|
|
|
5,588
|
|
||
Deferred costs, non-current portion
|
593
|
|
|
955
|
|
||
Deferred tax assets, net
|
1,019
|
|
|
1,047
|
|
||
Other intangible assets, net
|
120
|
|
|
325
|
|
||
Goodwill
|
17,060
|
|
|
13,060
|
|
||
Total assets
|
$
|
86,371
|
|
|
$
|
121,496
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
3,914
|
|
|
$
|
3,785
|
|
Accrued and other current liabilities
|
11,916
|
|
|
12,365
|
|
||
Commitment to Napster
|
2,750
|
|
|
2,750
|
|
||
Deferred revenue, current portion
|
1,969
|
|
|
3,097
|
|
||
Current liabilities of discontinued operations
|
—
|
|
|
17,107
|
|
||
Total current liabilities
|
20,549
|
|
|
39,104
|
|
||
Deferred revenue, non-current portion
|
312
|
|
|
443
|
|
||
Deferred rent
|
953
|
|
|
982
|
|
||
Deferred tax liabilities, net
|
170
|
|
|
19
|
|
||
Other long-term liabilities
|
1,082
|
|
|
1,775
|
|
||
Total liabilities
|
23,066
|
|
|
42,323
|
|
||
Commitments and contingencies
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value, no shares issued and outstanding:
|
|
|
|
||||
Series A: authorized 200 shares
|
—
|
|
|
—
|
|
||
Undesignated series: authorized 59,800 shares
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value authorized 250,000 shares; issued and outstanding 37,652 shares in 2018 and 37,341 shares in 2017
|
37
|
|
|
37
|
|
||
Additional paid-in capital
|
641,449
|
|
|
638,727
|
|
||
Accumulated other comprehensive loss
|
(61,077
|
)
|
|
(59,547
|
)
|
||
Retained deficit
|
(517,104
|
)
|
|
(500,044
|
)
|
||
Total shareholders’ equity
|
63,305
|
|
|
79,173
|
|
||
Total liabilities and shareholders’ equity
|
$
|
86,371
|
|
|
$
|
121,496
|
|
|
Quarter Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net revenue (A)
|
$
|
17,579
|
|
|
$
|
18,557
|
|
|
$
|
52,953
|
|
|
$
|
59,853
|
|
Cost of revenue (B)
|
4,239
|
|
|
5,343
|
|
|
14,000
|
|
|
18,199
|
|
||||
Gross profit
|
13,340
|
|
|
13,214
|
|
|
38,953
|
|
|
41,654
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
8,052
|
|
|
7,152
|
|
|
23,398
|
|
|
22,085
|
|
||||
Sales and marketing
|
4,998
|
|
|
4,883
|
|
|
15,878
|
|
|
17,534
|
|
||||
General and administrative
|
4,586
|
|
|
5,081
|
|
|
15,526
|
|
|
15,638
|
|
||||
Restructuring and other charges
|
632
|
|
|
557
|
|
|
1,320
|
|
|
2,271
|
|
||||
Lease exit and related benefit
|
—
|
|
|
—
|
|
|
(454
|
)
|
|
—
|
|
||||
Total operating expenses
|
18,268
|
|
|
17,673
|
|
|
55,668
|
|
|
57,528
|
|
||||
Operating loss
|
(4,928
|
)
|
|
(4,459
|
)
|
|
(16,715
|
)
|
|
(15,874
|
)
|
||||
Other income (expenses):
|
|
|
|
|
|
|
|
||||||||
Interest income, net
|
72
|
|
|
116
|
|
|
270
|
|
|
353
|
|
||||
Equity in net loss of Napster investment
|
(737
|
)
|
|
—
|
|
|
(737
|
)
|
|
(1,097
|
)
|
||||
Other income (expenses), net
|
(112
|
)
|
|
(50
|
)
|
|
(195
|
)
|
|
(289
|
)
|
||||
Total other income (expenses), net
|
(777
|
)
|
|
66
|
|
|
(662
|
)
|
|
(1,033
|
)
|
||||
Loss from continuing operations before income taxes
|
(5,705
|
)
|
|
(4,393
|
)
|
|
(17,377
|
)
|
|
(16,907
|
)
|
||||
Income tax expense
|
272
|
|
|
139
|
|
|
708
|
|
|
954
|
|
||||
Net loss from continuing operations
|
(5,977
|
)
|
|
(4,532
|
)
|
|
$
|
(18,085
|
)
|
|
$
|
(17,861
|
)
|
||
Net income from discontinued operations, net of tax
|
—
|
|
|
198
|
|
|
—
|
|
|
717
|
|
||||
Net loss
|
$
|
(5,977
|
)
|
|
$
|
(4,334
|
)
|
|
$
|
(18,085
|
)
|
|
$
|
(17,144
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share - Basic:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.16
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.48
|
)
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
||||
Net loss per share - Basic
|
$
|
(0.16
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.46
|
)
|
Net income (loss) per share - Diluted
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.16
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.48
|
)
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.02
|
|
||||
Net loss per share - Diluted
|
$
|
(0.16
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.46
|
)
|
Shares used to compute basic net income (loss) per share
|
37,618
|
|
|
37,200
|
|
|
37,549
|
|
|
37,112
|
|
||||
Shares used to compute diluted net income (loss) per share
|
37,618
|
|
|
37,200
|
|
|
37,549
|
|
|
37,112
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Unrealized investment holding gains (losses), net of reclassification adjustments
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10
|
|
Foreign currency translation adjustments, net of reclassification adjustments
|
(322
|
)
|
|
562
|
|
|
(1,530
|
)
|
|
1,802
|
|
||||
Total other comprehensive income (loss)
|
(325
|
)
|
|
562
|
|
|
(1,530
|
)
|
|
1,812
|
|
||||
Net loss
|
(5,977
|
)
|
|
(4,334
|
)
|
|
(18,085
|
)
|
|
(17,144
|
)
|
||||
Comprehensive loss
|
$
|
(6,302
|
)
|
|
$
|
(3,772
|
)
|
|
$
|
(19,615
|
)
|
|
$
|
(15,332
|
)
|
|
|
|
|
|
|
|
|
||||||||
(A) Components of net revenue:
|
|
|
|
|
|
|
|
||||||||
License and product revenue
|
$
|
5,827
|
|
|
$
|
6,873
|
|
|
$
|
17,770
|
|
|
$
|
23,677
|
|
Service revenue
|
11,752
|
|
|
11,684
|
|
|
35,183
|
|
|
36,176
|
|
|
$
|
17,579
|
|
|
$
|
18,557
|
|
|
$
|
52,953
|
|
|
$
|
59,853
|
|
(B) Components of cost of revenue:
|
|
|
|
|
|
|
|
||||||||
License and product revenue
|
$
|
1,523
|
|
|
$
|
2,163
|
|
|
$
|
4,743
|
|
|
$
|
6,683
|
|
Service revenue
|
2,716
|
|
|
3,180
|
|
|
9,257
|
|
|
11,516
|
|
||||
|
$
|
4,239
|
|
|
$
|
5,343
|
|
|
$
|
14,000
|
|
|
$
|
18,199
|
|
|
Nine Months Ended
September 30, |
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(18,085
|
)
|
|
$
|
(17,144
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
1,738
|
|
|
2,402
|
|
||
Stock-based compensation
|
2,113
|
|
|
3,045
|
|
||
Equity in net loss of Napster
|
737
|
|
|
1,097
|
|
||
Deferred income taxes, net
|
5
|
|
|
(55
|
)
|
||
Fair value of warrants granted in 2015 and 2017, net of subsequent mark to market adjustments in 2018 and 2017
|
78
|
|
|
(367
|
)
|
||
Net change in certain operating assets and liabilities:
|
|
|
|
||||
Trade accounts receivable
|
16,754
|
|
|
(3,516
|
)
|
||
Prepaid expenses and other assets
|
(979
|
)
|
|
1,072
|
|
||
Accounts payable
|
(15,235
|
)
|
|
(447
|
)
|
||
Accrued and other liabilities
|
(2,754
|
)
|
|
(3,630
|
)
|
||
Net cash used in operating activities
|
(15,628
|
)
|
|
(17,543
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of equipment, software, and leasehold improvements
|
(698
|
)
|
|
(541
|
)
|
||
Purchases of short-term investments
|
—
|
|
|
(13,905
|
)
|
||
Proceeds from sales and maturities of short-term investments
|
7,607
|
|
|
43,754
|
|
||
Acquisition, net of cash acquired
|
(4,192
|
)
|
|
—
|
|
||
Advance to Napster
|
—
|
|
|
(1,500
|
)
|
||
Net cash provided by investing activities
|
2,717
|
|
|
27,808
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock (stock options and stock purchase plan)
|
114
|
|
|
130
|
|
||
Tax payments from shares withheld upon vesting of restricted stock
|
(243
|
)
|
|
(338
|
)
|
||
Net cash used in financing activities
|
(129
|
)
|
|
(208
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(962
|
)
|
|
1,519
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(14,002
|
)
|
|
11,576
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
53,596
|
|
|
36,421
|
|
||
Cash, cash equivalents, and restricted cash end of period
|
$
|
39,594
|
|
|
$
|
47,997
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash received from income tax refunds
|
$
|
169
|
|
|
$
|
419
|
|
Cash paid for income taxes
|
$
|
862
|
|
|
$
|
1,124
|
|
Non-cash investing activities:
|
|
|
|
||||
Increase (decrease) in accrued purchases of equipment, software, and leasehold improvements
|
$
|
(92
|
)
|
|
$
|
42
|
|
Note 1
|
Description of Business and Summary of Significant Accounting Policies
|
Note 2
|
Recent Accounting Pronouncements
|
Note 3
|
Revenue Recognition
|
|
|
Quarter Ended September 30, 2018
|
|
Nine months ended September 30, 2018
|
||||||||||||||||||||
|
|
Consumer Media
|
|
Mobile Services
|
|
Games
|
|
Consumer Media
|
|
Mobile Services
|
|
Games
|
||||||||||||
Business Line
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software License
|
|
$
|
2,746
|
|
|
$
|
520
|
|
|
$
|
—
|
|
|
$
|
7,891
|
|
|
$
|
2,324
|
|
|
$
|
—
|
|
Subscription Services
|
|
1,232
|
|
|
6,828
|
|
|
2,744
|
|
|
3,742
|
|
|
20,447
|
|
|
8,126
|
|
||||||
Product Sales
|
|
281
|
|
|
—
|
|
|
2,280
|
|
|
920
|
|
|
—
|
|
|
6,635
|
|
||||||
Advertising and Other
|
|
474
|
|
|
—
|
|
|
474
|
|
|
1,547
|
|
|
—
|
|
|
1,321
|
|
||||||
Total
|
|
$
|
4,733
|
|
|
$
|
7,348
|
|
|
$
|
5,498
|
|
|
$
|
14,100
|
|
|
$
|
22,771
|
|
|
$
|
16,082
|
|
|
|
Quarter Ended September 30, 2018
|
|
Nine months ended September 30, 2018
|
||||||||||||||||||||
|
|
Consumer Media
|
|
Mobile Services
|
|
Games
|
|
Consumer Media
|
|
Mobile Services
|
|
Games
|
||||||||||||
Sales Channel
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Business to Business
|
|
$
|
3,220
|
|
|
$
|
7,209
|
|
|
$
|
806
|
|
|
$
|
9,438
|
|
|
$
|
22,312
|
|
|
$
|
2,393
|
|
Direct to Consumer
|
|
1,513
|
|
|
139
|
|
|
4,692
|
|
|
4,662
|
|
|
459
|
|
|
13,689
|
|
||||||
Total
|
|
$
|
4,733
|
|
|
$
|
7,348
|
|
|
$
|
5,498
|
|
|
$
|
14,100
|
|
|
$
|
22,771
|
|
|
$
|
16,082
|
|
Note 4
|
Stock-Based Compensation
|
|
Quarter Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Total stock-based compensation expense
|
$
|
499
|
|
|
$
|
748
|
|
|
$
|
2,113
|
|
|
$
|
3,045
|
|
|
Quarter Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Expected dividend yield
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
Risk-free interest rate
|
2.78
|
%
|
|
1.61
|
%
|
|
2.69
|
%
|
|
1.71
|
%
|
Expected life (years)
|
3.8
|
|
|
3.7
|
|
|
3.9
|
|
|
4.2
|
|
Volatility
|
35
|
%
|
|
34
|
%
|
|
35
|
%
|
|
35
|
%
|
Note 5
|
Napster Joint Venture
|
|
Quarter Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net revenue
|
$
|
34,814
|
|
|
$
|
42,816
|
|
|
$
|
111,343
|
|
|
$
|
134,414
|
|
Gross profit
|
10,029
|
|
|
7,245
|
|
|
28,690
|
|
|
19,927
|
|
||||
Operating income (loss)
|
4,142
|
|
|
179
|
|
|
14,452
|
|
|
(9,692
|
)
|
||||
Net income (loss)
|
2,768
|
|
|
(627
|
)
|
|
9,350
|
|
|
(13,960
|
)
|
Note 6
|
Fair Value Measurements
|
|
Fair Value Measurements as of
|
|
Amortized Cost as of
|
||||||||||||||||
|
September 30, 2018
|
|
September 30, 2018
|
||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
||||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash
|
$
|
26,472
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26,472
|
|
|
$
|
26,472
|
|
Money market funds
|
11,492
|
|
|
—
|
|
|
—
|
|
|
11,492
|
|
|
11,492
|
|
|||||
Total cash and cash equivalents
|
37,964
|
|
|
—
|
|
|
—
|
|
|
37,964
|
|
|
37,964
|
|
|||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate notes and bonds
|
—
|
|
|
1,172
|
|
|
—
|
|
|
1,172
|
|
|
1,172
|
|
|||||
Total short-term investments
|
—
|
|
|
1,172
|
|
|
—
|
|
|
1,172
|
|
|
1,172
|
|
|||||
Restricted cash equivalents
|
—
|
|
|
1,630
|
|
|
—
|
|
|
1,630
|
|
|
1,630
|
|
|||||
Warrants issued by Napster (included in Other assets)
|
—
|
|
|
—
|
|
|
911
|
|
|
911
|
|
|
—
|
|
|||||
Total
|
$
|
37,964
|
|
|
$
|
2,802
|
|
|
$
|
911
|
|
|
$
|
41,677
|
|
|
$
|
40,766
|
|
|
Fair Value Measurements as of
|
|
Amortized Cost as of
|
||||||||||||||||
|
December 31, 2017
|
|
December 31, 2017
|
||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
||||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash
|
$
|
31,065
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31,065
|
|
|
$
|
31,065
|
|
Money market funds
|
20,131
|
|
|
—
|
|
|
—
|
|
|
20,131
|
|
|
20,131
|
|
|||||
Total cash and cash equivalents
|
51,196
|
|
|
—
|
|
|
—
|
|
|
51,196
|
|
|
51,196
|
|
|||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate notes and bonds
|
—
|
|
|
8,779
|
|
|
—
|
|
|
8,779
|
|
|
8,779
|
|
|||||
Total short-term investments
|
—
|
|
|
8,779
|
|
|
—
|
|
|
8,779
|
|
|
8,779
|
|
|||||
Restricted cash equivalents
|
—
|
|
|
2,400
|
|
|
—
|
|
|
2,400
|
|
|
2,400
|
|
|||||
Warrants issued by Napster (included in Other assets)
|
—
|
|
|
—
|
|
|
989
|
|
|
989
|
|
|
—
|
|
|||||
Total
|
$
|
51,196
|
|
|
$
|
11,179
|
|
|
$
|
989
|
|
|
$
|
63,364
|
|
|
$
|
62,375
|
|
|
Estimated
Fair Value
|
||
Within one year
|
$
|
1,172
|
|
Between one year and five years
|
—
|
|
|
Total short-term investments
|
$
|
1,172
|
|
Note 7
|
Other Intangible Assets
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
|
|
Gross
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Amortizing intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Customer relationships
|
|
$
|
31,149
|
|
|
$
|
31,079
|
|
|
$
|
70
|
|
|
$
|
32,286
|
|
|
$
|
31,997
|
|
|
$
|
289
|
|
|
Developed technology
|
|
24,571
|
|
|
24,571
|
|
|
—
|
|
|
25,177
|
|
|
25,177
|
|
|
—
|
|
||||||
|
Patents, trademarks and tradenames
|
|
3,788
|
|
|
3,788
|
|
|
—
|
|
|
3,932
|
|
|
3,896
|
|
|
36
|
|
||||||
|
Service contracts
|
|
5,559
|
|
|
5,509
|
|
|
50
|
|
|
5,576
|
|
|
5,576
|
|
|
—
|
|
||||||
|
Total
|
|
$
|
65,067
|
|
|
$
|
64,947
|
|
|
$
|
120
|
|
|
$
|
66,971
|
|
|
$
|
66,646
|
|
|
$
|
325
|
|
Note 8
|
Goodwill
|
Balance, December 31, 2017
|
$
|
13,060
|
|
Increases due to current year acquisitions
|
4,367
|
|
|
Effects of foreign currency translation
|
(367
|
)
|
|
Balance, September 30, 2018
|
$
|
17,060
|
|
|
September 30,
2018 |
||
Consumer Media
|
$
|
580
|
|
Mobile Services
|
2,086
|
|
|
Games
|
14,394
|
|
|
Total goodwill
|
$
|
17,060
|
|
Note 9
|
Accrued and Other Current Liabilities
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Royalties and other fulfillment costs
|
$
|
3,315
|
|
|
$
|
2,965
|
|
Employee compensation, commissions and benefits
|
3,985
|
|
|
4,384
|
|
||
Sales, VAT and other taxes payable
|
1,463
|
|
|
1,782
|
|
||
Other
|
3,153
|
|
|
3,234
|
|
||
Total accrued and other current liabilities
|
$
|
11,916
|
|
|
$
|
12,365
|
|
Note 10
|
Restructuring Charges
|
|
Employee Separation Costs
|
||
Costs incurred and charged to expense for the nine months ended September 30, 2018
|
$
|
1,320
|
|
Costs incurred and charged to expense for the nine months ended September 30, 2017
|
$
|
2,271
|
|
|
Employee Separation Costs
|
||
Accrued liability at December 31, 2017
|
$
|
244
|
|
Costs incurred and charged to expense for the nine months ended September 30, 2018
|
1,320
|
|
|
Cash payments
|
(976
|
)
|
|
Accrued liability at September 30, 2018
|
$
|
588
|
|
Note 11
|
Lease Exit and Related Charges
|
Accrued loss at December 31, 2017
|
$
|
2,058
|
|
Additions and adjustments to the lease loss accrual, including estimated sublease income
|
(454
|
)
|
|
Less amounts paid, net of sublease amounts
|
(484
|
)
|
|
Accrued loss at September 30, 2018
|
1,120
|
|
|
Less current portion (included in Accrued and other current liabilities)
|
(119
|
)
|
|
Accrued loss, non-current portion (included in Other long term liabilities)
|
$
|
1,001
|
|
Note 12
|
Shareholders’ Equity
|
|
|
|
Quarter Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Investments
|
|
|
|
|
|
|
|
|
|||||||||
|
Accumulated other comprehensive income (loss), beginning of period
|
|
$
|
5
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
(6
|
)
|
|
Unrealized gains (loss), net of tax effects of ($1), $0, $0 and $5
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
|
Net current period other comprehensive income (loss)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
|
Accumulated other comprehensive income balance, end of period
|
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
4
|
|
Foreign currency translation
|
|
|
|
|
|
|
|
|
|||||||||
|
Accumulated other comprehensive loss, beginning of period
|
|
$
|
(60,757
|
)
|
|
$
|
(60,399
|
)
|
|
$
|
(59,549
|
)
|
|
$
|
(61,639
|
)
|
|
Translation adjustments
|
|
(322
|
)
|
|
562
|
|
|
(1,530
|
)
|
|
1,802
|
|
||||
|
Net current period other comprehensive income (loss)
|
|
(322
|
)
|
|
562
|
|
|
(1,530
|
)
|
|
1,802
|
|
||||
|
Accumulated other comprehensive loss balance, end of period
|
|
$
|
(61,079
|
)
|
|
$
|
(59,837
|
)
|
|
$
|
(61,079
|
)
|
|
$
|
(59,837
|
)
|
Total accumulated other comprehensive loss, end of period
|
|
$
|
(61,077
|
)
|
|
$
|
(59,833
|
)
|
|
$
|
(61,077
|
)
|
|
$
|
(59,833
|
)
|
Note 13
|
Income Taxes
|
Note 14
|
Loss Per Share
|
|
Quarter Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net loss from continuing operations
|
$
|
(5,977
|
)
|
|
$
|
(4,532
|
)
|
|
$
|
(18,085
|
)
|
|
$
|
(17,861
|
)
|
Weighted average common shares outstanding used to compute basic EPS
|
37,618
|
|
|
37,200
|
|
|
37,549
|
|
|
37,112
|
|
||||
Dilutive effect of stock based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted average common shares outstanding used to compute diluted EPS
|
37,618
|
|
|
37,200
|
|
|
37,549
|
|
|
37,112
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic EPS from continuing operations
|
$
|
(0.16
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.48
|
)
|
Diluted EPS from continuing operations
|
$
|
(0.16
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.48
|
)
|
Note 15
|
Discontinued Operations
|
|
|
Quarter Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net revenue
|
|
$
|
—
|
|
|
$
|
11,445
|
|
|
$
|
—
|
|
|
$
|
33,837
|
|
Cost of revenue
|
|
—
|
|
|
11,191
|
|
|
—
|
|
|
32,918
|
|
||||
Gross profit
|
|
—
|
|
|
254
|
|
|
—
|
|
|
919
|
|
||||
Income taxes
|
|
—
|
|
|
56
|
|
|
—
|
|
|
202
|
|
||||
Income from discontinued operations, net of tax
|
|
$
|
—
|
|
|
$
|
198
|
|
|
$
|
—
|
|
|
$
|
717
|
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Trade accounts receivable, net
|
|
$
|
—
|
|
|
$
|
17,456
|
|
Total current assets of discontinued operations
|
|
—
|
|
|
17,456
|
|
||
|
|
|
|
|
||||
Accounts payable
|
|
$
|
—
|
|
|
$
|
15,836
|
|
Accrued and other current liabilities
|
|
—
|
|
|
1,271
|
|
||
Total current liabilities of discontinued operations
|
|
$
|
—
|
|
|
$
|
17,107
|
|
Note 16
|
Commitments and Contingencies
|
Note 17
|
Guarantees
|
Note 18
|
Segment Information
|
|
Quarter Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
$
|
4,733
|
|
|
$
|
4,197
|
|
|
$
|
14,100
|
|
|
$
|
16,817
|
|
Cost of revenue
|
955
|
|
|
981
|
|
|
2,976
|
|
|
3,545
|
|
||||
Gross profit
|
3,778
|
|
|
3,216
|
|
|
11,124
|
|
|
13,272
|
|
||||
Operating expenses
|
3,448
|
|
|
3,217
|
|
|
10,805
|
|
|
10,957
|
|
||||
Operating income (loss)
|
$
|
330
|
|
|
$
|
(1
|
)
|
|
$
|
319
|
|
|
$
|
2,315
|
|
|
Quarter Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
$
|
7,348
|
|
|
$
|
7,678
|
|
|
$
|
22,771
|
|
|
$
|
23,597
|
|
Cost of revenue
|
2,052
|
|
|
2,134
|
|
|
6,502
|
|
|
7,750
|
|
||||
Gross profit
|
5,296
|
|
|
5,544
|
|
|
16,269
|
|
|
15,847
|
|
||||
Operating expenses
|
6,825
|
|
|
6,437
|
|
|
21,160
|
|
|
21,261
|
|
||||
Operating loss
|
$
|
(1,529
|
)
|
|
$
|
(893
|
)
|
|
$
|
(4,891
|
)
|
|
$
|
(5,414
|
)
|
|
Quarter Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
$
|
5,498
|
|
|
$
|
6,682
|
|
|
$
|
16,082
|
|
|
$
|
19,439
|
|
Cost of revenue
|
1,228
|
|
|
2,226
|
|
|
4,501
|
|
|
6,842
|
|
||||
Gross profit
|
4,270
|
|
|
4,456
|
|
|
11,581
|
|
|
12,597
|
|
||||
Operating expenses
|
5,447
|
|
|
5,071
|
|
|
15,459
|
|
|
15,108
|
|
||||
Operating loss
|
$
|
(1,177
|
)
|
|
$
|
(615
|
)
|
|
$
|
(3,878
|
)
|
|
$
|
(2,511
|
)
|
|
Quarter Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Cost of revenue
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
21
|
|
|
$
|
62
|
|
Operating expenses
|
2,548
|
|
|
2,948
|
|
|
8,244
|
|
|
10,202
|
|
||||
Operating loss
|
$
|
(2,552
|
)
|
|
$
|
(2,950
|
)
|
|
$
|
(8,265
|
)
|
|
$
|
(10,264
|
)
|
|
Quarter Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
United States
|
$
|
9,026
|
|
|
$
|
10,098
|
|
|
$
|
28,106
|
|
|
$
|
30,727
|
|
Europe
|
3,005
|
|
|
3,337
|
|
|
9,040
|
|
|
9,737
|
|
||||
Rest of the World
|
5,548
|
|
|
5,122
|
|
|
15,807
|
|
|
19,389
|
|
||||
Total net revenue
|
$
|
17,579
|
|
|
$
|
18,557
|
|
|
$
|
52,953
|
|
|
$
|
59,853
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
United States
|
$
|
11,862
|
|
|
$
|
12,236
|
|
Europe
|
7,001
|
|
|
3,437
|
|
||
Rest of the World
|
1,233
|
|
|
1,572
|
|
||
Total long-lived assets
|
$
|
20,096
|
|
|
$
|
17,245
|
|
Note 19
|
Related Party Transactions
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
the expected benefits and other consequences of our growth plans, strategic initiatives, and restructurings;
|
•
|
our expected introduction, distribution and monetization, of new and enhanced products, services and technologies across our businesses;
|
•
|
future revenues, operating expenses, income and other taxes, tax benefits, net income (loss) per diluted share available to common shareholders, acquisition costs and related amortization, and other measures of results of operations;
|
•
|
the effects of our past acquisitions and expectations for future acquisitions and divestitures;
|
•
|
plans, strategies and expected opportunities for future growth, increased profitability and innovation;
|
•
|
the expected financial position, performance, growth and profitability of, and investment in, our businesses and the availability of resources;
|
•
|
the effects of legislation, regulations, administrative proceedings, court rulings, settlement negotiations and other factors that may impact our businesses;
|
•
|
the continuation and expected nature of certain customer relationships;
|
•
|
impacts of competition and certain customer relationships on the future financial performance and growth of our businesses;
|
•
|
our involvement in potential claims, legal proceedings and government investigations, and the potential outcomes and effects of such potential claims, legal proceedings and governmental investigations on our business, prospects, financial condition or results of operations;
|
•
|
the effects of U.S. and foreign income and other taxes on our business, prospects, financial condition or results of operations; and
|
•
|
the effect of economic and market conditions on our business, prospects, financial condition or results of operations.
|
|
Quarter Ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
||||||||||||||
Total revenue
|
$
|
17,579
|
|
|
$
|
18,557
|
|
|
$
|
(978
|
)
|
|
(5
|
)%
|
|
$
|
52,953
|
|
|
$
|
59,853
|
|
|
$
|
(6,900
|
)
|
|
(12
|
)%
|
Cost of revenue
|
4,239
|
|
|
5,343
|
|
|
(1,104
|
)
|
|
(21
|
)%
|
|
14,000
|
|
|
18,199
|
|
|
(4,199
|
)
|
|
(23
|
)%
|
||||||
Gross profit
|
13,340
|
|
|
13,214
|
|
|
126
|
|
|
1
|
%
|
|
38,953
|
|
|
41,654
|
|
|
(2,701
|
)
|
|
(6
|
)%
|
||||||
Gross margin
|
76
|
%
|
|
71
|
%
|
|
|
|
|
|
74
|
%
|
|
70
|
%
|
|
|
|
|
||||||||||
Operating expenses
|
18,268
|
|
|
17,673
|
|
|
595
|
|
|
3
|
%
|
|
55,668
|
|
|
57,528
|
|
|
(1,860
|
)
|
|
(3
|
)%
|
||||||
Operating loss
|
$
|
(4,928
|
)
|
|
$
|
(4,459
|
)
|
|
$
|
(469
|
)
|
|
(11
|
)%
|
|
$
|
(16,715
|
)
|
|
$
|
(15,874
|
)
|
|
$
|
(841
|
)
|
|
(5
|
)%
|
|
Quarter Ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
||||||||||||||
Revenue
|
$
|
4,733
|
|
|
$
|
4,197
|
|
|
$
|
536
|
|
|
13
|
%
|
|
$
|
14,100
|
|
|
$
|
16,817
|
|
|
$
|
(2,717
|
)
|
|
(16
|
)%
|
Cost of revenue
|
955
|
|
|
981
|
|
|
(26
|
)
|
|
(3
|
)%
|
|
2,976
|
|
|
3,545
|
|
|
(569
|
)
|
|
(16
|
)%
|
||||||
Gross profit
|
3,778
|
|
|
3,216
|
|
|
562
|
|
|
17
|
%
|
|
11,124
|
|
|
13,272
|
|
|
(2,148
|
)
|
|
(16
|
)%
|
||||||
Gross margin
|
80
|
%
|
|
77
|
%
|
|
|
|
|
|
79
|
%
|
|
79
|
%
|
|
|
|
|
||||||||||
Operating expenses
|
3,448
|
|
|
3,217
|
|
|
231
|
|
|
7
|
%
|
|
10,805
|
|
|
10,957
|
|
|
(152
|
)
|
|
(1
|
)%
|
||||||
Operating income (loss)
|
$
|
330
|
|
|
$
|
(1
|
)
|
|
$
|
331
|
|
|
NM
|
|
|
$
|
319
|
|
|
$
|
2,315
|
|
|
$
|
(1,996
|
)
|
|
(86
|
)%
|
|
Quarter Ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
||||||||||||||
Revenue
|
$
|
7,348
|
|
|
$
|
7,678
|
|
|
$
|
(330
|
)
|
|
(4
|
)%
|
|
$
|
22,771
|
|
|
$
|
23,597
|
|
|
$
|
(826
|
)
|
|
(4
|
)%
|
Cost of revenue
|
2,052
|
|
|
2,134
|
|
|
(82
|
)
|
|
(4
|
)%
|
|
6,502
|
|
|
7,750
|
|
|
(1,248
|
)
|
|
(16
|
)%
|
||||||
Gross profit
|
5,296
|
|
|
5,544
|
|
|
(248
|
)
|
|
(4
|
)%
|
|
16,269
|
|
|
15,847
|
|
|
422
|
|
|
3
|
%
|
||||||
Gross margin
|
72
|
%
|
|
72
|
%
|
|
|
|
|
|
71
|
%
|
|
67
|
%
|
|
|
|
|
||||||||||
Operating expenses
|
6,825
|
|
|
6,437
|
|
|
388
|
|
|
6
|
%
|
|
21,160
|
|
|
21,261
|
|
|
(101
|
)
|
|
—
|
%
|
||||||
Operating loss
|
$
|
(1,529
|
)
|
|
$
|
(893
|
)
|
|
$
|
(636
|
)
|
|
(71
|
)%
|
|
$
|
(4,891
|
)
|
|
$
|
(5,414
|
)
|
|
$
|
523
|
|
|
10
|
%
|
|
Quarter Ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
||||||||||||||
Revenue
|
$
|
5,498
|
|
|
$
|
6,682
|
|
|
$
|
(1,184
|
)
|
|
(18
|
)%
|
|
$
|
16,082
|
|
|
$
|
19,439
|
|
|
$
|
(3,357
|
)
|
|
(17
|
)%
|
Cost of revenue
|
1,228
|
|
|
2,226
|
|
|
(998
|
)
|
|
(45
|
)%
|
|
4,501
|
|
|
6,842
|
|
|
(2,341
|
)
|
|
(34
|
)%
|
||||||
Gross profit
|
4,270
|
|
|
4,456
|
|
|
(186
|
)
|
|
(4
|
)%
|
|
11,581
|
|
|
12,597
|
|
|
(1,016
|
)
|
|
(8
|
)%
|
||||||
Gross margin
|
78
|
%
|
|
67
|
%
|
|
|
|
|
|
72
|
%
|
|
65
|
%
|
|
|
|
|
||||||||||
Operating expenses
|
5,447
|
|
|
5,071
|
|
|
376
|
|
|
7
|
%
|
|
15,459
|
|
|
15,108
|
|
|
351
|
|
|
2
|
%
|
||||||
Operating loss
|
$
|
(1,177
|
)
|
|
$
|
(615
|
)
|
|
$
|
(562
|
)
|
|
(91
|
)%
|
|
$
|
(3,878
|
)
|
|
$
|
(2,511
|
)
|
|
$
|
(1,367
|
)
|
|
(54
|
)%
|
|
Quarter Ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
||||||||||||||
Cost of revenue
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
(100
|
)%
|
|
$
|
21
|
|
|
$
|
62
|
|
|
$
|
(41
|
)
|
|
66
|
%
|
Operating expenses
|
2,548
|
|
|
2,948
|
|
|
(400
|
)
|
|
(14
|
)%
|
|
8,244
|
|
|
10,202
|
|
|
(1,958
|
)
|
|
(19
|
)%
|
||||||
Operating loss
|
$
|
(2,552
|
)
|
|
$
|
(2,950
|
)
|
|
$
|
398
|
|
|
13
|
%
|
|
$
|
(8,265
|
)
|
|
$
|
(10,264
|
)
|
|
$
|
1,999
|
|
|
19
|
%
|
|
Quarter Ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
||||||||||||||
Research and development
|
$
|
8,052
|
|
|
$
|
7,152
|
|
|
$
|
900
|
|
|
13
|
%
|
|
$
|
23,398
|
|
|
$
|
22,085
|
|
|
$
|
1,313
|
|
|
6
|
%
|
Sales and marketing
|
4,998
|
|
|
4,883
|
|
|
115
|
|
|
2
|
%
|
|
15,878
|
|
|
17,534
|
|
|
(1,656
|
)
|
|
(9
|
)%
|
||||||
General and administrative
|
4,586
|
|
|
5,081
|
|
|
(495
|
)
|
|
(10
|
)%
|
|
15,526
|
|
|
15,638
|
|
|
(112
|
)
|
|
(1
|
)%
|
||||||
Restructuring and other charges
|
632
|
|
|
557
|
|
|
75
|
|
|
13
|
%
|
|
1,320
|
|
|
2,271
|
|
|
(951
|
)
|
|
(42
|
)%
|
||||||
Lease exit and related charges
|
—
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
|
(454
|
)
|
|
—
|
|
|
(454
|
)
|
|
NM
|
|
||||||
Total consolidated operating expenses
|
$
|
18,268
|
|
|
$
|
17,673
|
|
|
$
|
595
|
|
|
3
|
%
|
|
$
|
55,668
|
|
|
$
|
57,528
|
|
|
$
|
(1,860
|
)
|
|
(3
|
)%
|
|
Quarter Ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
2018
|
|
2017
|
|
$ Change
|
||||||||||||
Interest income, net
|
$
|
72
|
|
|
$
|
116
|
|
|
$
|
(44
|
)
|
|
$
|
270
|
|
|
$
|
353
|
|
|
$
|
(83
|
)
|
Equity in net loss of Napster
|
(737
|
)
|
|
—
|
|
|
(737
|
)
|
|
(737
|
)
|
|
(1,097
|
)
|
|
360
|
|
||||||
Other income (expense), net
|
(112
|
)
|
|
(50
|
)
|
|
(62
|
)
|
|
(195
|
)
|
|
(289
|
)
|
|
94
|
|
||||||
Total other income (expense), net
|
$
|
(777
|
)
|
|
$
|
66
|
|
|
$
|
(843
|
)
|
|
$
|
(662
|
)
|
|
$
|
(1,033
|
)
|
|
$
|
371
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Working capital
|
$
|
36,761
|
|
|
$
|
55,157
|
|
Cash, cash equivalents, and short-term investments
|
39,136
|
|
|
59,975
|
|
||
Restricted cash equivalents and investments
|
1,630
|
|
|
2,400
|
|
|
Nine months ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash used in operating activities
|
$
|
(15,628
|
)
|
|
$
|
(17,543
|
)
|
Cash provided by investing activities
|
2,717
|
|
|
27,808
|
|
||
Cash used in financing activities
|
(129
|
)
|
|
(208
|
)
|
•
|
Revenue recognition;
|
•
|
Estimating losses on excess office facilities;
|
•
|
Valuation of equity method investments;
|
•
|
Valuation of definite-lived assets and goodwill; and
|
•
|
Accounting for income taxes.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
•
|
reduced prices or margins,
|
•
|
loss of current and potential customers, or partners and potential partners who distribute our products and services or who provide content that we distribute to our customers,
|
•
|
changes to our products, services, technologies, licenses or business practices or strategies,
|
•
|
lengthened sales cycles,
|
•
|
inability to meet demands for more rapid sales or development cycles,
|
•
|
industry-wide changes in content distribution to customers or in trends in consumer consumption of digital media products and services,
|
•
|
pressure to prematurely release products or product enhancements, or
|
•
|
degradation in our stature or reputation in the market.
|
•
|
periodic local or geographic economic downturns and unstable political conditions;
|
•
|
price and currency exchange controls;
|
•
|
fluctuation in the relative values of currencies;
|
•
|
difficulty in repatriating money, whether as a result of tax laws or otherwise;
|
•
|
compliance with current and changing tax laws, and the coordination of compliance with U.S. tax laws and the laws of any of the jurisdictions in which we do business;
|
•
|
difficulties protecting intellectual property;
|
•
|
compliance with labor laws and other laws governing employees;
|
•
|
local labor disputes;
|
•
|
changes in trading policies, regulatory requirements, tariffs and other barriers, or the termination or renegotiation of existing trade agreements;
|
•
|
impact of changes in immigration or other policies impacting our ability to attract, hire, and retain key talent; and
|
•
|
difficulties in managing a global enterprise, including staffing, collecting accounts receivable, and managing suppliers, distributors and representatives.
|
•
|
difficulties and expenses in assimilating the operations, products, technology, information systems, and/or personnel of the acquired company;
|
•
|
retaining key management or employees of the acquired company;
|
•
|
entrance into unfamiliar markets, industry segments, or types of businesses;
|
•
|
operating, managing and integrating acquired businesses in remote locations or in countries in which we have little or no prior experience;
|
•
|
diversion of management time and other resources from existing operations;
|
•
|
impairment of relationships with employees, affiliates, advertisers or content providers of our business or acquired business; and
|
•
|
assumption of known and unknown liabilities of the acquired company, including intellectual property claims.
|
•
|
elect or defeat the election of our directors;
|
•
|
amend or prevent amendment of our articles of incorporation or bylaws;
|
•
|
effect or prevent a merger, sale of assets or other corporate transaction; and
|
•
|
control the outcome of any other matter submitted to the shareholders for vote.
|
•
|
adopt a plan of merger;
|
•
|
authorize the sale, lease, exchange or mortgage of assets representing more than 50% of the book value of our assets prior to the transaction or on which our long-term business strategy is substantially dependent;
|
•
|
authorize our voluntary dissolution; or
|
•
|
take any action that has the effect of any of the above.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Default Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
|
REALNETWORKS, INC.
|
||
|
|
|
|
|
By:
|
|
/s/ Cary Baker
|
|
|
|
Cary Baker
|
|
Title:
|
|
Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
|
Exhibit
Number
|
Description
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
1 Year RealNetworks Chart |
1 Month RealNetworks Chart |
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