Summary of Significant Accounting Policies

There have been

significant changes to the Company’s accounting policies since it filed its audited consolidated financial statements in its Annual Report on Form

-K for the year ended

March 31, 2018,

except for the changes applied due to the adoption of Accounting Standard Codification (“ASC”)

606,

Revenue from Contracts with Customers

. Refer to “Recent Accounting Pronouncements.”

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Additionally, certain prior period amounts have been reclassified to conform to the current year presentation on the condensed consolidated financial statements. The reclassification of the prior period amounts was

not

material to the previously reported condensed consolidated financial statements.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates these estimates, including, but

not

limited to, those related to the allowance for doubtful accounts, fair values of financial instruments, intangible assets and goodwill, useful lives of intangible assets and property and equipment, fair values of stock-based awards, standalone selling price, the benefit period of deferred commissions and income taxes. Actual results could differ from those estimates.

Revenue Recognition

The Company generates revenues by providing its software-as-a-service solutions through subscription license arrangements and related professional services, and related software maintenance. The Company presents revenue net of sales taxes and any similar assessments.

Revenue recognition

. In accordance with Accounting Standards Codification (“ASC”) Topic

606,

Revenue from Contracts with Customers

, the Company determines revenue recognition through the following

five

-step framework: (

) identification of the contract, or contracts, with a customer; (

) identification of the performance obligations in a contract; (

) determination of the transaction price; (

) allocation of the transaction price to the performance obligations in the contract; and (

) recognition of revenue when, or as, the Company satisfies a performance obligation.

Recurring revenues.

Recurring revenues consist of subscription license sales and services, maintenance revenues from previously sold perpetual licenses and hosting revenues. Recurring revenues are recognized over the stated contractual period, satisfied over time.

Non-recurring revenues.

Non-recurring revenues are comprised of revenues from professional services for system implementations, enhancements and training. For professional services arrangements billed on a time-and-materials basis, services are recognized as revenue as they are rendered, at a point in time. For fixed-fee professional service arrangements, the Company recognizes revenue under the proportional performance method of accounting, using the input method, and estimates the proportional performance utilizing hours incurred to date as a percentage of total estimated hours to complete the project. If the Company does

not

have a sufficient basis to measure progress toward completion, revenue is recognized upon completion. The Company recognizes a loss for a fixed-fee professional service if the total estimated project costs exceed project revenues.

Reimbursements, including those related to travel and out-of-pocket expenses are included in non-recurring revenues, and an equivalent amount of reimbursable expenses are included in non-recurring cost of revenues.

Performance Obligations

The Company enters into arrangements with multiple performance obligations that generally include subscription and professional services. For these arrangements, the Company accounts for individual performance obligations separately if they are distinct. Subscription services and professional services are both distinct performance obligations that are accounted for separately. In agreements with multiple performance obligations, the transaction price is allocated to separate performance obligations on a relative standalone selling price (“SSP”) basis.

If the standalone selling price is

not

observable through past transactions, the Company determines the SSP based on overall pricing objectives, taking into consideration available information such as market conditions and internally approved pricing guidelines related to the performance obligations. This includes a review of historical data related to the size of arrangements, the cloud solutions being sold, customer demographics and the numbers and types of users within the arrangements. The Company uses a range of amounts to estimate SSP for performance obligations. There is typically more than

one

SSP for individual products and services due to the stratification of those products and services by information such as size and type of customer.

Contract Balances:

The timing of revenue recognition

may

differ from the timing of the invoicing for contracts with customers. The Company records a receivable or contract asset when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. Subscription services and certain professional services arrangements are commonly billed in advance which results in a deferred revenue balance amortized as revenue is recognized over time. However, other professional service arrangements, primarily those recognized on a time-and-materials basis, are billed in arrears following services that have been rendered. This

may

result in revenue recognition greater than the invoiced amounts which results in a receivable balance. Receivables represent an unconditional right to payment. Payment terms vary by contract type, however arrangements typically stipulate a requirement for the customer to pay within

days. As of

December 31, 2018

and

March 31, 2018,

the balance of unbilled receivable amounts was

$0.9

million and

$0.8

million, respectively, and was included as a component of prepaid expenses and other current assets on the condensed consolidated balance sheets.

At any point in the contract term, transaction price

may

be allocated to performance obligations that are unsatisfied or partially unsatisfied. These amounts relate to remaining performance obligations on non-cancelable contracts which include both the deferred revenue balance and amounts that will be invoiced and recognized as revenue in future periods. As of

December 31, 2018,

approximately

$20.5

million of revenue is expected to be recognized from remaining performance obligations for subscription contracts, a majority of which is related to multi-year subscriptions. The Company expects to recognize approximately

21%,

$4.3

million, of these remaining performance obligations over the remainder of the current fiscal year, with the balance recognized thereafter. As of

December 31, 2018,

approximately

$1.2

million of revenue is expected to be recognized from remaining performance obligations related to professional services contracts. The Company expects approximately

43%,

$0.5

million, of these remaining performance obligations within the current fiscal year, with the balance recognized thereafter.

Deferred Revenue

. Deferred revenue consists of customer billings or payments received in advance of the recognition of revenue and is recognized as revenue as the revenue recognition criteria are met. The Company generally invoices its customers annually for the forthcoming year of service. Accordingly, the Company's deferred revenue balance does

not

include revenue for future years of multiple-year, non-cancellable contracts that have

not

yet been billed. During the

three

and

nine

months ended

December 31, 2018,

the Company recognized revenue of

$3.8

million that was included in the deferred revenue balance as of

September 30, 2018

and

$8.9

million that was included in the deferred revenue balance as of

March 31, 2018,

respectively.

Deferred Commissions

. Commissions are earned by sales personnel upon the execution of the sales contract by the customer, and commission payments are made shortly after they are earned. Commissions earned by the Company's sales personnel are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized over the life of the contract. The Company determined the period of benefit by taking into consideration its past experience with customers, industry peers and other available information.

The current portion of deferred commissions was

$0.4

million and

$0.5

million at

December 31, 2018

and

March 31, 2018,

respectively, and is recorded as a component of prepaid expenses and other current assets on the condensed consolidated balance sheets. For both the

three

months ended

December 31, 2018

and

2017,

$0.2

million, respectively, of deferred commissions were amortized to sales and marketing expense on the condensed consolidated statements of operations and comprehensive loss, respectively. For both the

nine

months ended

December 31, 2018

and

2017,

$0.6

million, respectively, of deferred commissions were amortized to sales and marketing expense on the condensed consolidated statements of operations and comprehensive loss, respectively. There was

impairment loss in relation to the costs capitalized for the periods presented.

Customer Concentrations

During the

three

and

nine

months ended

December 31, 2018

and

2017,

customer accounted for

10%

or more of the Company’s consolidated revenues or consolidated net accounts receivable, respectively.

Disaggregation of Revenue

International revenues are attributable to countries based on the location of the customer. For the

three

and

nine

months ended

December 31, 2018

and

2017,

sales to international locations were derived primarily from France, the United Kingdom, Ireland, Norway, Australia, Canada, Switzerland, Italy, Germany, Bermuda, the Netherlands, United Arab Emirates, Denmark, China, Hong Kong, Bulgaria, Finland, Belgium, Singapore and Portugal.

	Three Months Ended				Nine Months Ended
	December 31, 2018		December 31, 2017		December 31, 2018		December 31, 2017
	(in thousands)
International revenues
Recurring revenues	$	1,715	$	1,839	$	5,236	$	5,158
Non-recurring revenues		595		810		1,286		1,930
Total international revenues		2,310		2,649		6,522		7,088

Domestic revenues
Recurring revenues		3,176		3,713		9,950		11,239
Non-recurring revenues		456		1,105		1,244		3,016
Total domestic revenues		3,632		4,818		11,194		14,255
Total revenues	$	5,942	$	7,467	$	17,716	$	21,343

Fair Value Measurements

December 2018,

the Company entered into an amendment to its existing Junior Secured Convertible Note Purchase Agreement dated

December 27, 2016

that, among other things, resulted in the issuance of warrants exercisable for up to

10,500,000

shares of the Company’s common stock, as discussed in Note

Credit Facility and Convertible Notes

The Company classified the warrants as a liability at the time of issuance and reevaluates such classification as of each balance sheet date.

The warrant liability is recorded at its estimated fair value using observable, quoted market prices, a Level

input, as defined by ASC

820,

Fair Value Measurements

, given the underlying financial instrument of the liability is the Company’s own publicly-traded stock.

Recent Accounting Pronouncements

June 2018,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2018

07,

Compensation – Stock Compensation (Topic

718

): Improvements to Nonemployee Share-Based Payment Accounting

, which allows companies to account for nonemployee awards in the same manner as employee awards. The guidance is effective for fiscal years beginning after

December 15, 2018,

and interim periods within those annual periods. The Company does

not

expect the adoption of ASU

2018

to have a material impact on its consolidated financial statements.

May 2017,

the FASB issued ASU

2017

09,

Compensation-Stock Compensation (Topic

718

): Scope of Modification Accounting,

which clarifies what constitutes a modification of a share-based payment award. This guidance is effective for fiscal years beginning after

December 15, 2017.

The adoption of this update did

not

have a material impact on the Company’s consolidated financial statements.

January 2017,

the FASB issued ASU

2017

04,

Intangibles – Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment

, which simplifies the accounting for goodwill impairments by eliminating step

two

from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to the excess, limited to the total amount of goodwill allocated to that reporting unit. ASU

2017

also clarifies the requirements for excluding and allocating foreign currency translation adjustments to reporting units related to an entity’s testing of reporting units for goodwill impairment, and clarifies that an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The guidance is effective for annual reporting periods beginning after

December 31, 2019

and interim periods within those fiscal years. The Company is currently assessing the potential impact of the adoption of ASU

2017

on its consolidated financial statements.

January 2017,

the FASB issued ASU

2017

01,

Clarifying the Definition of a Business

. The new guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is

not

a business. The guidance also requires a business to include at least

one

substantive process and narrows the definition of outputs. This guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2017.

The adoption of this update did

not

have a material impact on the Company’s consolidated financial statements.

November 2016,

the FASB issued ASU

2016

18,

Statement of Cash Flows (Topic

230

): Restricted Cash

, which requires restricted cash to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The update is effective for the Company beginning

April 1, 2018.

The adoption of this update did

not

have a material impact on the Company’s consolidated financial statements.

October 2016,

the FASB issued ASU

2016

16,

Accounting for Income Taxes (Topic

740

): Intra-Entity Asset Transfers of Assets Other than Inventory

, which removes the prohibition in ASC

740

against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The update is effective for the Company beginning

April 1, 2018.

The adoption of this update did

not

have a material impact on the Company’s consolidated financial statements.

February 2016,

the FASB issued ASU

2016

02,

Leases

(Topic

842

)

and issued subsequent amendments to the initial guidance in

July 2018

within ASU

2018

and ASU

2018

(ASU

2016

02,

ASU

2018

10,

ASU

2018

and ASU

2018

20,

collectively, “Topic

842”

) which establish a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than

months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years. Early adoption is permitted. A modified retrospective transition approach is required for lessees with capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently assessing the potential impact of the adoption of Topic

842

on its consolidated financial statements.

May 2014,

the FASB issued ASU

2014

09,

Revenue from Contracts with Customers: Topic

606

and issued subsequent amendments to the initial guidance in

August 2015,

March 2016,

April 2016,

May 2016,

September 2017

and

November 2017

within ASU

2015

14,

ASU

2016

08,

ASU

2016

10,

ASU

2016

12,

ASU

2017

and ASU

2017

14,

respectively (ASU

2014

09,

ASU

2015

14,

ASU

2016

08,

ASU

2016

10,

ASU

2016

12,

ASU

2017

and ASU

2017

collectively, “Topic

606”

). Topic

606

supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic

606

is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic

606

defines a

five

-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates

may

be required within the revenue recognition process than are required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. Topic

606

also provides guidance on the recognition of costs related to obtaining customer contracts. ASU

No.

2015

deferred the effective date of the new revenue standard for periods beginning after

December 15, 2016

December 15, 2017.

April 1, 2018,

the Company adopted the new standard under the full retrospective method. The adoption of this update did

not

have a material impact on the Company’s consolidated financial statements.

The Company has reviewed other new accounting pronouncements that were issued as of

December 31, 2018

and does

not

believe that these pronouncements are applicable to the Company, or that they will have a material impact on its financial position or results of operations.