Quarterly report pursuant to Section 13 or 15(d)

Guarantor and Non-Guarantor Financial Statements (Tables)

v3.6.0.2
Guarantor and Non-Guarantor Financial Statements (Tables)
9 Months Ended
Dec. 31, 2016
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Condensed Balance Sheet
Condensed Consolidated Balance Sheet
as of December 31, 2016 (Unaudited)
(dollars in thousands)
 
Parent
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated Total
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
1,477

 
$
4,136

 
$
92

 
$

 
$
5,705

Restricted cash
 
156

 
167

 

 

 
323

Accounts receivable, net of allowances of $594 and $464, respectively
 
5

 
18,215

 
1,046

 

 
19,266

Deposits
 

 
114

 
16

 

 
130

Prepaid expenses and other current assets
 
418

 
134

 
1

 

 
553

Intercompany receivable, net
 
125,783

 

 

 
(125,783
)
 

Total current assets
 
127,839

 
22,766

 
1,155

 
(125,783
)
 
25,977

Property and equipment, net
 
66

 
2,357

 
57

 

 
2,480

Cost method investment
 

 

 

 

 

Deferred tax assets
 
288

 

 

 

 
288

Intangible assets, net
 
2

 
3,884

 
2,964

 

 
6,850

Goodwill
 

 
70,377

 
6,244

 

 
76,621

TOTAL ASSETS
 
128,195

 
99,384

 
10,420

 
(125,783
)
 
112,216

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
1,595

 
18,005

 
209

 

 
19,809

Accrued license fees and revenue share
 

 
8,719

 
191

 

 
8,910

Accrued compensation
 
33

 
1,079

 

 

 
1,112

Other current liabilities
 
1,877

 
374

 
(625
)
 

 
1,626

Intercompany payable, net
 

 
109,479

 
16,304

 
(125,783
)
 

Total current liabilities
 
3,505

 
137,656

 
16,079

 
(125,783
)
 
31,457

Convertible notes, net of debt issuance costs and discounts of $6,540 and $0, respectively
 
9,460

 

 

 

 
9,460

Convertible note embedded derivative liability
 
1,270

 

 

 

 
1,270

Warrant liability
 
426

 

 

 

 
426

Other non-current liabilities
 
1,007

 
90

 

 

 
1,097

Total liabilities
 
15,668

 
137,746

 
16,079

 
(125,783
)
 
43,710

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 December 31, 2016;
67,019,703 issued and 66,284,606 outstanding at March 31, 2016;
 
8

 


 


 

 
8

Additional paid-in capital
 
299,045

 

 

 

 
299,045

Treasury stock (754,599 shares at December 31, 2016 and March 31, 2016)
 
(71
)
 

 

 

 
(71
)
Accumulated other comprehensive loss
 
(70
)
 
(1,421
)
 
1,241

 

 
(250
)
Accumulated deficit
 
(186,485
)
 
(36,941
)
 
(6,900
)
 

 
(230,326
)
Total stockholders' equity
 
112,527

 
(38,362
)
 
(5,659
)
 

 
68,506

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 
$
128,195

 
$
99,384

 
$
10,420

 
$
(125,783
)
 
$
112,216

Condensed Consolidated Balance Sheet
as of March 31, 2016 (Unaudited)
(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
 

 
80

 
133

 

 
213

Prepaid expenses and other current assets
 
331

 
239

 
13

 

 
583

Intercompany receivable, net
 
111,909

 


 


 
(111,909
)
 

Total current assets
 
118,976

 
22,154

 
325

 
(111,909
)
 
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
 
119,529

 
103,880

 
10,440

 
(111,909
)
 
121,940

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
1,255

 
13,997

 
48

 

 
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
 

 
10,432

 

 

 
10,432

Deferred tax liabilities
 

 


 

 

 

Other current liabilities
 
1,648

 
1,237

 
(738
)
 

 
2,147

Intercompany payable, net
 

 
95,732

 
16,177

 
(111,909
)
 

Total current liabilities
 
2,359

 
132,747

 
15,657

 
(111,909
)
 
38,854

Other non-current liabilities
 
815

 

 

 

 
815

Total liabilities
 
3,174

 
132,747

 
15,657

 
(111,909
)
 
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

 
(1,394
)
 
1,166

 

 
(202
)
Accumulated deficit
 
(179,131
)
 
(27,473
)
 
(6,383
)
 

 
(212,987
)
Total stockholders' equity
 
116,355

 
(28,867
)
 
(5,217
)
 

 
82,271

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 
119,529

 
103,880

 
10,440

 
(111,909
)
 
121,940

Condensed Income Statement
Consolidated Statement of Operations and Comprehensive Loss
for the three months ended December 31, 2016 (Unaudited)
(dollars in thousands)
 
Parent
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated Total
Net revenues
 

 
30,897

 
751

 
(9,363
)
 
22,285

Cost of revenues
 
 
 
 
 
 
 
 
 
 
License fees and revenue share
 

 
26,176

 
226

 
(9,363
)
 
17,039

Other direct cost of revenues
 

 
1,589

 
289

 

 
1,878

Total cost of revenues
 

 
27,765

 
515

 
(9,363
)
 
18,917

Gross profit
 

 
3,132

 
236

 

 
3,368

Operating expenses
 
 
 
 
 
 
 
 
 
 
Product development
 
15

 
3,082

 
16

 

 
3,113

Sales and marketing
 
77

 
1,558

 
48

 

 
1,683

General and administrative
 
2,468

 
1,444

 
70

 

 
3,982

Total operating expenses
 
2,560

 
6,084

 
134

 

 
8,778

Income / (loss) from operations
 
(2,560
)
 
(2,952
)
 
102

 

 
(5,410
)
Interest and other income / (expense), net
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
(674
)
 
(51
)
 

 

 
(725
)
Foreign exchange transaction loss
 

 
(9
)
 


 

 
(9
)
Change in fair value of convertible note embedded derivative liability
 
2,853

 

 

 

 
2,853

Change in fair value of warrant liability
 
937

 

 

 

 
937

Loss on extinguishment of debt
 

 

 

 

 

Other income / (expense)
 
22

 
46

 

 

 
68

Total interest and other income / (expense), net
 
3,138

 
(14
)
 

 

 
3,124

Income / (loss) from operations before income taxes
 
578

 
(2,966
)
 
102

 

 
(2,286
)
Income tax provision / (benefit)
 
300

 

 

 

 
300

Net gain / (loss)
 
278

 
(2,966
)
 
102

 

 
(2,586
)
Other comprehensive income / (loss)
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
 
5

 

 

 

 
5

Comprehensive income / (loss)
 
283

 
(2,966
)
 
102

 

 
(2,581
)
Consolidated Statement of Operations and Comprehensive Loss
for the nine months ended December 31, 2016 (Unaudited)
(dollars in thousands)
 
Parent
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated Total
Net revenues
 

 
90,839

 
1,331

 
(23,014
)
 
69,156

Cost of revenues
 
 
 
 
 
 
 
 
 
 
License fees and revenue share
 

 
76,600

 
474

 
(23,014
)
 
54,060

Other direct cost of revenues
 

 
4,774

 
866

 

 
5,640

Total cost of revenues
 

 
81,374

 
1,340

 
(23,014
)
 
59,700

Gross profit
 

 
9,465

 
(9
)
 

 
9,456

Operating expenses
 
 
 
 
 
 
 
 
 
 
Product development
 
24

 
8,967

 
74

 

 
9,065

Sales and marketing
 
159

 
4,468

 
28

 

 
4,655

General and administrative
 
9,562

 
4,516

 
(176
)
 

 
13,902

Total operating expenses
 
9,745

 
17,951

 
(74
)
 

 
27,622

Income / (loss) from operations
 
(9,745
)
 
(8,486
)
 
65

 

 
(18,166
)
Interest and other income / (expense), net
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
(680
)
 
(1,349
)
 

 

 
(2,029
)
Foreign exchange transaction loss
 

 
(9
)
 
(4
)
 

 
(13
)
Change in fair value of convertible note embedded derivative liability
 
2,423

 

 

 

 
2,423

Change in fair value of warrant liability
 
797

 

 

 

 
797

Loss on extinguishment of debt
 
(293
)
 

 

 

 
(293
)
Other income / (expense)
 
52

 
49

 

 

 
101

Total interest and other income / (expense), net
 
2,299

 
(1,309
)
 
(4
)
 

 
986

Income / (loss) from operations before income taxes
 
(7,446
)
 
(9,795
)
 
61

 

 
(17,180
)
Income tax provision / (benefit)
 
159

 

 

 

 
159

Net income / (loss)
 
(7,605
)
 
(9,795
)
 
61

 

 
(17,339
)
Other comprehensive income / (loss)
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
 
(48
)
 

 

 

 
(48
)
Comprehensive income / (loss)
 
(7,653
)
 
(9,795
)
 
61

 

 
(17,387
)
Consolidated Statement of Operations and Comprehensive Loss
for the three months ended December 31, 2015 (Unaudited)
(dollars in thousands)
 
Parent
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated Total
Net revenues
 

 
29,641

 
58

 
(5,610
)
 
24,089

Cost of revenues
 
 
 
 
 
 
 
 
 
 
License fees and revenue share
 

 
24,154

 
25

 
(5,610
)
 
18,569

Other direct cost of revenues
 

 
1,815

 
(111
)
 

 
1,704

Total cost of revenues
 

 
25,969

 
(86
)
 
(5,610
)
 
20,273

Gross profit
 

 
3,672

 
144

 

 
3,816

Operating expenses
 
 
 
 
 
 
 
 
 
 
Product development
 
(23
)
 
2,654

 
107

 

 
2,738

Sales and marketing
 
38

 
1,616

 
22

 

 
1,676

General and administrative
 
2,744

 
1,727

 
196

 

 
4,667

Total operating expenses
 
2,759

 
5,997

 
325

 

 
9,081

Loss from operations
 
(2,759
)
 
(2,325
)
 
(181
)
 

 
(5,265
)
Interest and other income / (expense), net
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
1

 
(567
)
 
95

 

 
(471
)
Foreign exchange transaction loss
 
(2
)
 
(6
)
 

 

 
(8
)
Loss on disposal of fixed assets
 

 
(8
)
 

 

 
(8
)
Other income / (expense)
 
(3
)
 
90

 
(95
)
 

 
(8
)
Total interest and other income / (expense), net
 
(4
)
 
(491
)
 

 

 
(495
)
Loss from operations before income taxes
 
(2,763
)
 
(2,816
)
 
(181
)
 

 
(5,760
)
Income tax provision / (benefit)
 
87

 
(84
)
 

 

 
3

Net loss
 
(2,850
)
 
(2,732
)
 
(181
)
 

 
(5,763
)
Other comprehensive income / (loss)
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
 
(65
)
 

 

 

 
(65
)
Comprehensive loss
 
(2,915
)
 
(2,732
)
 
(181
)
 

 
(5,828
)
Consolidated Statement of Operations and Comprehensive Loss
for the nine months ended December 31, 2015 (Unaudited)
(dollars in thousands)
 
Parent
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated Total
Net revenues
 

 
74,227

 
192

 
(10,910
)
 
63,509

Cost of revenues
 
 
 
 
 
 
 
 
 
 
License fees and revenue share
 

 
59,733

 
66

 
(10,910
)
 
48,889

Other direct cost of revenues
 

 
7,980

 
473

 


 
8,453

Total cost of revenues
 

 
67,713

 
539

 
(10,910
)
 
57,342

Gross profit
 

 
6,514

 
(347
)
 

 
6,167

Operating expenses
 
 
 
 
 
 
 
 
 
 
Product development
 
(582
)
 
8,038

 
442

 

 
7,898

Sales and marketing
 
(166
)
 
4,474

 
118

 

 
4,426

General and administrative
 
8,840

 
5,061

 
502

 

 
14,403

Total operating expenses
 
8,092

 
17,573

 
1,062

 

 
26,727

Loss from operations
 
(8,092
)
 
(11,059
)
 
(1,409
)
 

 
(20,560
)
Interest and other income / (expense), net
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
1

 
(1,273
)
 
(95
)
 

 
(1,367
)
Foreign exchange transaction loss
 
(3
)
 
(17
)
 

 

 
(20
)
Loss on disposal of fixed assets
 
(21
)
 
(10
)
 

 

 
(31
)
Other income / (expense)
 
17

 
(8
)
 
11

 

 
20

Total interest and other income / (expense), net
 
(6
)
 
(1,308
)
 
(84
)
 

 
(1,398
)
Loss from operations before income taxes
 
(8,098
)
 
(12,367
)
 
(1,493
)
 

 
(21,958
)
Income tax provision / (benefit)
 
246

 

 

 

 
246

Net loss
 
(8,344
)
 
(12,367
)
 
(1,493
)
 

 
(22,204
)
Other comprehensive income / (loss)
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
 
(3
)
 

 

 

 
(3
)
Comprehensive loss
 
(8,347
)
 
(12,367
)
 
(1,493
)
 

 
(22,207
)
Condensed Cash Flow Statement
Condensed Consolidated Statement of Cash Flows
for the nine months ended December 31, 2016 (Unaudited)
(dollars in thousands)
 
Parent
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated Total
Cash flows from operating activities
 
 
 
 
 
 
 
 
 
 
Net loss
 
(7,605
)
 
(9,795
)
 
61

 

 
(17,339
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
9

 
5,518

 
798

 

 
6,325

Change in allowance for doubtful accounts
 

 
130

 

 

 
130

Amortization of debt discount
 
213

 
237

 

 

 
450

Amortization of debt issuance costs
 
74

 
445

 

 

 
519

Accrued interest
 
388

 
(91
)
 

 

 
297

Stock-based compensation
 
3,335

 

 

 

 
3,335

Stock-based compensation for services rendered
 
276

 

 

 

 
276

Change in fair value of convertible note embedded derivative liability
 
(2,423
)
 

 

 

 
(2,423
)
Change in fair value of warrant liability
 
(797
)
 

 

 

 
(797
)
Loss on extinguishment of debt
 
293

 

 

 

 
293

(Increase) / decrease in assets:
 
 
 
 
 
 
 
 
 
 
Restricted cash transferred to / (from) operating cash
 

 
(323
)
 

 

 
(323
)
Accounts receivable
 
19

 
(976
)
 
(920
)
 

 
(1,877
)
Deposits
 

 
(34
)
 
117

 

 
83

Deferred tax assets
 
212

 

 

 

 
212

Prepaid expenses and other current assets
 
(86
)
 
104

 
12

 

 
30

Increase / (decrease) in liabilities:
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
340

 
4,003

 
166

 

 
4,509

Accrued license fees and revenue share
 

 
(830
)
 
118

 

 
(712
)
Accrued compensation
 
576

 
(720
)
 
(97
)
 

 
(241
)
Other current liabilities
 
(34
)
 
(862
)
 
78

 

 
(818
)
Other non-current liabilities
 
1,927

 
(1,370
)
 
(274
)
 

 
283

Net cash used in operating activities
 
(3,283
)
 
(4,564
)
 
59

 

 
(7,788
)
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
(3
)
 
(1,358
)
 
(20
)
 

 
(1,381
)
Proceeds from sale of cost method investment in Sift
 

 
999

 

 

 
999

Net cash used in investing activities
 
(3
)
 
(359
)
 
(20
)
 

 
(382
)
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
 
Cash received from issuance of convertible notes
 

 
16,000

 

 

 
16,000

Repayment of debt obligations
 

 
(11,000
)
 

 

 
(11,000
)
Payment of debt issuance costs
 
(1,912
)
 
(407
)
 

 

 
(2,319
)
Options exercised
 
11

 

 

 

 
11

Net cash provided in financing activities
 
(1,901
)
 
4,593

 

 

 
2,692

 
 
 
 
 
 
 
 
 
 
 
Effect of exchange rate changes on cash and cash equivalents
 
(48
)
 

 

 

 
(48
)
 
 
 
 
 
 
 
 
 
 
 
Net change in cash and cash equivalents
 
(5,235
)
 
(330
)
 
39

 

 
(5,526
)
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents, beginning of period
 
6,712

 
4,466

 
53

 

 
11,231

 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents, end of period
 
1,477

 
4,136

 
92

 

 
5,705

Condensed Consolidated Statement of Cash Flows
for the nine months ended December 31, 2015 (Unaudited)
(dollars in thousands)
 
Parent
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated Total
Cash flows from operating activities
 
 
 
 
 
 
 
 
 
 
Net loss
 
(8,344
)
 
(12,367
)
 
(1,493
)
 

 
(22,204
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
7

 
8,126

 
473

 

 
8,606

Loss on disposal of fixed assets
 


 
31

 

 

 
31

Change in allowance for doubtful accounts
 

 
26

 

 

 
26

Amortization of debt issuance costs
 

 
355

 

 

 
355

Accrued interest
 

 
(14
)
 

 

 
(14
)
Stock-based compensation
 
3,805

 

 

 

 
3,805

Stock-based compensation for services rendered
 
723

 

 

 

 
723

Stock issued for settlement of liability
 
283

 

 

 

 
283

(Increase) / decrease in assets:
 
 
 
 
 
 
 
 
 
 
Restricted cash transferred to / (from) operating cash
 
200

 

 

 

 
200

Accounts receivable
 

 
(4,472
)
 
(123
)
 

 
(4,595
)
Deposits
 
8

 
(62
)
 
(15
)
 

 
(69
)
Deferred financing costs
 

 
(174
)
 

 

 
(174
)
Prepaid expenses and other current assets
 
(243
)
 
327

 
(44
)
 

 
40

Increase / (decrease) in liabilities:
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
(990
)
 
6,759

 
(41
)
 

 
5,728

Accrued license fees and revenue share
 

 
3,312

 
24

 

 
3,336

Accrued compensation
 
(1,129
)
 
275

 
17

 

 
(837
)
Other current liabilities
 
(2,254
)
 
383

 
1,171

 

 
(700
)
Net cash used in operating activities
 
(7,934
)
 
2,505

 
(31
)
 

 
(5,460
)
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 

 
(1,007
)
 

 

 
(1,007
)
Net cash proceeds from cost method investment in Sift
 

 
875

 

 

 
875

Net cash used in investing activities
 

 
(132
)
 

 

 
(132
)
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
 
Repayment of debt obligations
 

 
(450
)
 

 

 
(450
)
Options exercised
 
51

 

 

 

 
51

Stock issued for cash in stock offering, net
 
12,627

 

 

 

 
12,627

Net cash provided in financing activities
 
12,678