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Washington, D.C. 20549
Form 10-Q

For the quarterly period ended September 30, 2018 
Commission file number: 000-50580
(Exact name of registrant as specified in the charter)

(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
3901 Stonecroft Boulevard,
Chantilly, Virginia
(Address of principal executive office)
(Zip Code)
(703) 488-6100
(Registrant’s telephone number including area code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes      No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non accelerated filer
☐ (Do not check if a smaller reporting company)
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).    Yes  ☐    No  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date:
As of November 2, 2018 there were 28,535,502 shares of common stock, $0.01 par value, issued and 24,428,246 shares outstanding, with 4,107,256 shares of treasury stock.

Form 10-Q
September 30, 2018

Table of Contents


Item 1.  Financial Statements
(in thousands, except per share data)
Three Months Ended
September 30, 
Nine Months Ended
September 30, 
REVENUE:$37,485 $39,248 $115,182 $119,631 
Marketing631 2,682 2,455 9,294 
Commission8,743 9,462 26,949 28,966 
Cost of revenue12,481 13,126 37,284 39,694 
General and administrative14,038 14,827 41,675 49,169 
Loss on dispositions of Captira and Habits at Work   106 
Depreciation1,587 1,378 4,604 3,966 
Amortization20 29 118 123 
Total operating expenses37,500 41,504 113,085 131,318 
(LOSS) INCOME FROM OPERATIONS(15)(2,256)2,097 (11,687)
Interest expense, net(930)(701)(2,284)(1,895)
Loss on extinguishment of debt   (1,525)
Other income (expense), net56 (3)(29)133 
Income tax (expense) benefit(220)(6)303 23 
Loss from discontinued operations, net of tax (1,030) (2,449)
NET (LOSS) INCOME$(1,109)$(3,996)$87 $(17,400)
Basic (loss) earnings per common share:
From continuing operations$(0.05)$(0.12)$ $(0.63)
From discontinued operations (0.05) (0.10)
Basic net (loss) income per common share$(0.05)$(0.17)$ $(0.73)
Diluted (loss) earnings per common share:
From continuing operations $(0.05)$(0.12)$ $(0.63)
From discontinued operations (0.05) (0.10)
Diluted net (loss) income per common share:$(0.05)$(0.17)$ $(0.73)
Weighted average common shares outstanding—basic 24,395 23,953 24,306 23,818 
Weighted average common shares outstanding—diluted24,395 23,953 24,687 23,818 
See Notes to Condensed Consolidated Financial Statements

(in thousands, except par value)
September 30, 2018 December 31, 2017 
Cash and cash equivalents$5,789 $8,502 
Accounts receivable, net of allowance for doubtful accounts of $67 (2018) and $34 (2017)6,147 8,225 
Contract assets638  
Prepaid expenses and other current assets3,783 3,232 
Income tax receivable1,301 2,545 
Deferred subscription solicitation and commission costs 1,655 
Total current assets17,658 24,159 
PROPERTY AND EQUIPMENT, net8,509 11,040 
GOODWILL9,763 9,763 
OTHER ASSETS1,246 1,459 
TOTAL ASSETS$37,736 $46,479 
Accounts payable$2,746 $3,498 
Accrued expenses and other current liabilities8,538 8,533 
Accrued payroll and employee benefits552 1,501 
Commissions payable356 141 
Capital leases, current portion328 423 
Contract liabilities, current4,075 7,759 
Total current liabilities16,595 21,855 
LONG-TERM DEBT, net18,235 20,736 
Common stock at $0.01 par value, shares authorized 50,000; shares issued 28,504 (2018) and 28,194 (2017); shares outstanding 24,397 (2018) and 24,102 (2017)285 282 
Additional paid-in capital152,063 150,305 
Warrants2,840 2,840 
Treasury stock, shares at cost; 4,107 (2018) and 4,092 (2017)(35,781)(35,745)
Accumulated deficit(118,552)(117,088)
See Notes to Condensed Consolidated Financial Statements

(in thousands; unaudited)
Nine Months Ended September 30, 
Net income (loss)$87 $(17,400)
Less: loss from discontinued operations, net of tax (2,449)
Income (loss) from continuing operations87 (14,951)
Adjustments to reconcile net income (loss) to cash flows from operating activities:
Depreciation and amortization4,722 4,089 
Deferred income tax, net213  
Amortization of debt issuance costs159 184 
Accretion of debt discount364 66 
Provision for doubtful accounts34 (15)
Share based compensation1,979 6,582 
Amortization of deferred subscription solicitation costs 8,482 
Amortization of contract costs646  
Loss on dispositions of Captira Analytical and Habits at Work 106 
Loss on extinguishment of debt 1,525 
Changes in assets and liabilities:
Accounts receivable1,583 1,483 
Contract assets(1,537) 
Prepaid expenses, other current assets and other assets(139)(412)
Income tax receivable, net1,243 766 
Deferred subscription solicitation and commission costs (6,336)
Contract costs(704) 
Accounts payable and accrued liabilities(1,620)(677)
Commissions payable(3)29 
Contract liabilities, current(2,323)(2,411)
Other long-term liabilities(1,184)(329)
Cash flows provided by (used in) continuing operations3,520 (1,819)
Cash flows used in discontinued operations (2,313)
Net cash provided by (used in) operating activities3,520 (4,132)
Net cash paid for the disposition of Captira Analytical (315)
Decrease in restricted cash 115 
Cash paid for withholding tax on vesting of RSUs in exchange for promissory note (130)
Acquisition of property and equipment(2,265)(3,964)
Cash flows used in continuing operations(2,265)(4,294)
Cash flows provided by discontinued operations 4 
Net cash used in investing activities(2,265)(4,290)
Proceeds from issuance of debt4,000 20,000 
Repayments of debt (including fees of $90 thousand in 2018)(7,135)(13,920)
Repurchase of common stock (1,510)
Proceeds from issuance of warrants 1,500 
Cash paid for debt and equity issuance costs(212)(323)
Capital lease payments(366)(411)
Withholding tax payment on vesting of restricted stock units(255)(1,122)
Cash flows (used in) provided by financing activities(3,968)4,214 
CASH AND CASH EQUIVALENTS — Beginning of period8,502 10,857 
Cash reclassified to assets held for sale at beginning of period 321 
CASH AND CASH EQUIVALENTS — end of period$5,789 $6,970 


Equipment obtained under capital lease, including acquisition costs$ $40 
Equipment additions accrued but not paid$128 $209 
Intangible asset placed in service but paid in prior year$240 $ 
Shares withheld in lieu of withholding taxes on vesting of restricted stock awards$ $117 
Debt issuance costs accrued but not paid$45 $ 
Right of use asset obtained under financing arrangement$249 $ 
See Notes to Condensed Consolidated Financial Statements

1. Organization and Business
We provide innovative software and data monitoring and analytics solutions that help consumers manage financial and personal risks associated with the proliferation of their personal data in the virtual and financial world. Under our Identity Guard® brand and other brands that comprise our Personal Information Services segment, we have helped consumers monitor, manage and protect against the risks associated with their identities and personal information for more than twenty years. We offer identity theft and privacy protection as well as credit monitoring services for consumers to understand, monitor, manage and protect their personal information and privacy. Under our Identity Guard® and Identity Guard® with Watson™ suite of services (collectively, "Identity Guard® Services"), we help protect consumers against the risks associated with the inappropriate exposure of their personal information that can result in fraudulent use or reputation damage. Identity Guard® with Watson™ offers robust early detection of potential risks, stretching beyond credit-centric risks to include online privacy risks, and provides personalized threat alerts with actionable steps to help keep our customers’ information private from the earliest stage possible. Identity Guard® Services are offered through large and small organizations as an embedded service for either its employees or consumers, as well as directly to consumers through our direct marketing efforts. We believe that our suite of services offers consumers the most proactive and comprehensive identity theft monitoring and online privacy services available on the market today.
 Our Insurance and Other Consumer Services segment includes insurance and membership services for consumers, delivered on a subscription basis. We are not planning to develop new business in this segment and are experiencing normal subscriber attrition due to ceased marketing and retention efforts. Some of our legacy subscriber portfolios have been cancelled, and our continued servicing of other subscribers may be cancelled as a result of actions taken by one or more financial institutions. Corporate headquarter office transactions including, but not limited to, payroll, share based compensation and other expenses related to our Chairman and non-employee Board of Directors are reported in our Corporate business unit.
2. Basis of Presentation, Significant Accounting Policies and Liquidity
Basis of Presentation and Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared by us in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and applicable rules and regulations of the Securities and Exchange Commission, and in management’s opinion reflect all normal and recurring adjustments necessary for a fair presentation of results of operations, financial position and cash flows for the periods presented. They include the accounts of the Company and our subsidiaries.
The information in our condensed consolidated financial statements is presented for the nine months ended September 30, 2017 giving effect to the disposal of i4c Innovations LLC (“i4c” or “Voyce”), with the historical financial results of the Voyce business recast as discontinued operations. In accordance with U.S. GAAP, we did not allocate corporate overhead expenses to discontinued operations in the year ended December 31, 2017. Additionally, we considered, and made the necessary adjustments to the historical financial results for, the allocation of other costs to either discontinued or continuing operations, including, but not limited to, rent expense, severance expense and other wind-down costs. The result of these adjustments changed the historical operating results for certain segments as well as the presentation of the condensed consolidated financial statements to include discontinued operations for the year ended December 31, 2017. Unless otherwise indicated, the information in the notes to the condensed consolidated financial statements refer only to our continuing operations and do not include discussion of balances or activity of i4c. For additional information, please see Note 5.
All intercompany transactions have been eliminated from the condensed consolidated statements of operations. The condensed consolidated results of operations for the interim periods are not necessarily indicative of results for the full year.

These condensed consolidated financial statements do not include all the information or notes necessary for a complete presentation and, accordingly, should be read in conjunction with our audited consolidated financial statements and accompanying notes for the year ended December 31, 2017, as filed in our Annual Report on Form 10-K.
On June 8, 2018, we entered into Amendment No. 4 to the Credit Agreement (as defined in Note 16), which set forth required monthly principal payments beginning June 30, 2018, and shortened the maturity date of the secured indebtedness evidenced by the Credit Agreement to December 31, 2018. In June and September 2018, we entered into the Bridge Notes (as defined in Note 16) in the aggregate amount of $4.0 million ($3.0 million on June 27, 2018 and $1.0 million on September 24, 2018), which were convertible into a qualified future financing and had a maturity date of June 30, 2019. As of September 30, 2018, the outstanding balance of the Credit Agreement was $14.5 million, the outstanding balances of the Bridge Notes totaled $4.0 million, and our cash on hand was approximately $5.8 million.
On October 31, 2018, we entered into a note purchase and exchange agreement (the “Note Purchase Agreement”), pursuant to which we sold to WC SACD One Parent, Inc. (“Parent”) Senior Secured Convertible Notes (the “Notes”) in the aggregate principal amount of $30.0 million for a purchase price in cash of $30.0 million, and issued to Loeb Holding Corporation and David A. McGough (together with Parent, the “Purchasers” and each a “Purchaser”) additional Notes in the aggregate principal amount of $4.0 million in exchange for the Bridge Notes previously issued by us to such Purchasers (who received payment in cash of the accrued and unpaid interest on the Bridge Notes). We used approximately $14.6 million of the net proceeds from the sale of the Notes to repay in full the principal outstanding under the Credit Agreement and to pay related interest thereon. We intend to use the balance of the net proceeds for general corporate purposes. The Notes mature on October 31, 2021 and are convertible in whole or in part, together with accrued and unpaid interest with respect to the principal amount converted, into shares of the Company’s common stock and preferred stock. For additional information on the Note Purchase Agreement as well as the Agreement and Plan of Merger, which we also entered into on October 31, 2018, please see Note 21.
We evaluated these conditions and determined it is probable that we will be able to meet all our obligations over the next twelve months. In accordance with U.S. GAAP, we reclassified the indebtedness in the Credit Agreement and Bridge Notes from short-term to long-term in our condensed consolidated balance sheets as of September 30, 2018.
Revision to Previously Issued Financial Statements
The results of operations for the three and nine months ended September 30, 2017 have been updated to reflect an adjustment to our share based compensation expense, which is recorded in general and administrative expenses in our condensed consolidated statements of operations. The change in share based compensation from the amount as reported to the amount as revised was a $404 thousand decrease and a $2.0 million increase for the three and nine months ended September 30, 2017, respectively. These changes are reflected in the loss from operations, loss from continuing operations before income taxes, net loss and basic and diluted net loss per common share figures in these condensed consolidated financial statements. For additional information, please see Note 21 to the consolidated financial statements contained in our most recent Annual Report on Form 10-K.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Restricted Cash
We classify cash as restricted when the cash is unavailable for withdrawal or usage for general operations. Our restricted cash represents cash collateral to one commercial bank for corporate credit cards and electronic payments. Restricted cash is included in prepaid expenses and other current assets in our condensed consolidated balance sheets.
Revenue Recognition
For a full description of our revenue recognition policy, please see Note 4.

Goodwill, Identifiable Intangibles and Other Long-Lived Assets
We record, as goodwill, the excess of the purchase price over the fair value of the identifiable net assets acquired in purchase transactions. We review our goodwill for impairment annually, as of October 31, or more frequently if indicators of impairment exist. Goodwill is reflected as an asset in our Personal Information Services and Insurance and Other Consumer Services segments’ balance sheets, resulting from our acquisitions of Health at Work Wellness Actuaries LLC ("Habits at Work") and White Sky, Inc. ("White Sky") in 2015 as well as our prior acquisition of IISI Insurance Services Inc. ("IISI"), formerly known as Intersections Insurance Services Inc., in 2006.
We continuously evaluate whether indicators of impairment exist and perform an initial assessment of qualitative factors to determine whether it is necessary to perform the goodwill impairment test (commonly referred to as the step zero approach). For reporting units in which the qualitative assessment concludes it is more likely than not that the fair value is more than its carrying value, U.S. GAAP eliminates the requirement to perform further goodwill impairment testing. In addition, we are not required to perform a qualitative assessment for our reporting units with zero or negative carrying amounts. For those reporting units where a significant change or event occurs, and where potential impairment indicators exist, we perform the quantitative assessment to test goodwill for impairment. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others (a) a significant decline in our expected future cash flows; (b) a sustained, significant decline in our stock price and market capitalization; (c) a significant adverse change in legal factors or in the business climate; (d) unanticipated competition; (e) the testing for recoverability of a significant asset group within a reporting unit; and (f) slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of these assets and could have a material impact in our condensed consolidated financial statements.
The quantitative assessment is a comparison of each reporting unit’s fair value to its carrying value. We estimate fair value using the best information available, using a combined income approach (discounted cash flow) and market based approach. The income approach measures the value of the reporting units by the present values of its economic benefits. These benefits can include revenue and cost savings. The market based approach measures the value of an entity through an analysis of recent sales or offerings of comparable companies and using revenue and other multiples of comparable companies as a reasonable basis to estimate our implied multiples. Value indications are developed by discounting expected cash flows to their present value at a rate of return that incorporates the risk-free rate for use of funds, trends within the industry, and risks associated with particular investments of similar type and quality as of the valuation date. In addition, we consider the uncertainty of realizing the projected cash flows in the analysis.
The estimated fair values of our reporting units are dependent on several significant assumptions, including our earnings projections, and cost of capital (discount rate). The projections use management’s best estimates of economic and market conditions over the projected period including business plans, growth rates in sales, costs, and estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates, estimates of future capital expenditures, changes in future working capital requirements and overhead cost allocation, based on each reporting unit’s relative benefit received from the functions that reside in our Corporate business unit. We perform a detailed analysis of our Corporate overhead costs for purposes of establishing the overhead allocation baseline for the projection period. Overhead allocation methods include, but are not limited to, the percentage of the payroll within each reporting unit, allocation of existing support function costs based on estimated usage by the reporting units, and vendor specific costs incurred by Corporate that can be reasonably attributed to a particular reporting unit. These allocations are adjusted over the projected period in our discounted cash flow analysis based on the forecasted changing relative needs of the reporting units. Throughout the forecast period, the majority of Corporate’s total overhead expenses are allocated to our Personal Information Services reporting unit. We believe this overhead allocation method fairly allocates costs to each reporting unit, and we will continue to review, and possibly refine, these allocation methods as our businesses grow and mature. There are inherent uncertainties related to these factors and management’s judgment in applying each to the analysis of the recoverability of goodwill.
We estimate fair value giving consideration to both the income and market approaches. Consideration is given to the line of business and operating performance of the entities being valued relative to those of actual transactions, potentially subject to corresponding economic, environmental, and political factors considered to be reasonable investment alternatives.
If the estimated fair value of a reporting unit exceeds its carrying value, goodwill of the reporting unit is not impaired. If the carrying value of a reporting unit exceeds its estimated fair value, then a goodwill impairment loss is recognized for

the amount that the carrying value of the reporting unit (including goodwill) exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit.
As of September 30, 2018, goodwill of $347 thousand resided in our Insurance and Other Consumer Services reporting unit and goodwill of $9.4 million resided in our Personal Information Services reporting unit.
We review long-lived assets, including finite-lived intangible assets, property and equipment, non-current contract costs and other long-term assets, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. Significant judgments in this area involve determining whether a triggering event has occurred and determining the future cash flows for assets involved. In conducting our analysis, we would compare the undiscounted cash flows expected to be generated from the long-lived assets to the related net book values. If the undiscounted cash flows exceed the net book value, the long-lived assets are considered not to be impaired. If the net book value exceeds the undiscounted cash flows, an impairment charge is measured and recognized. An impairment charge is measured as the difference between the net book value and the fair value of the long-lived assets. Fair value is estimated by discounting the future cash flows associated with these assets.
Intangible assets subject to amortization may include customer, marketing and technology related intangibles, as well as trademarks. Such intangible assets, excluding customer related intangibles, are amortized on a straight-line basis over their estimated useful lives, which are generally two to ten years. Customer related intangible assets are amortized on either a straight-line or accelerated basis, depending upon the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up.
Debt Issuance Costs
Debt issuance costs are capitalized and amortized to interest expense using the effective interest method over the life of the related debt agreements. The effective interest rate applied to the amortization is reviewed periodically and may change if actual principal repayments of the term loan differ from estimates. In accordance with U.S. GAAP, short-term and long-term debt are presented net of the unamortized debt issuance costs in our condensed consolidated balance sheets.
Share Based Compensation
We currently issue equity and equity-based awards under the 2014 Stock Incentive Plan (the "Plan"), and we have three inactive stock incentive plans: the 1999 Stock Option Plan, the 2004 Stock Option Plan and the 2006 Stock Incentive Plan. Individual awards under the 2014 Stock Incentive Plan may take the form of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards and/or restricted stock units.
The Compensation Committee administers the Plan, and the grants are approved by either the Compensation Committee or by appropriate members of Management in accordance with authority delegated by the Compensation Committee. Restricted stock units in the Plan that have expired, terminated, or been canceled or forfeited are available for issuance or use in connection with future awards.
We use the Black-Scholes option-pricing model to value all options and the straight-line method to amortize this fair value as compensation cost over the requisite service period. The fair value of each option granted has been estimated as of the date of grant with the following weighted-average assumptions for the nine months ended September 30, 2018 and 2017:
Expected Dividend Yield. Under the Credit Agreement, we are currently prohibited from declaring and paying dividends and therefore, the expected dividend yield was zero.
Expected Volatility. The expected volatility of options granted was estimated based upon our historical share price volatility based on the expected term of the underlying grants, or approximately 52% and 49% for 2018 and 2017, respectively.
Risk-free Interest Rate. The yield on actively traded non-inflation indexed U.S. Treasury notes was used to extrapolate an average risk-free interest rate based on the expected term of the underlying grants, or approximately 2.7% and 1.8% for 2018 and 2017, respectively.
Expected Term. The expected term of options granted was determined by considering employees’ historical exercise patterns or homogeneous management pools, which we determined is approximately 5.0 years for both 2018 and 2017. We will continue to review our estimate in the future and adjust it, if necessary, due to changes in our historical exercises.

Income Taxes
We account for income taxes under the applicable provisions of U.S. GAAP, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence, including projected future taxable income and future reversal of existing deferred tax assets and liabilities, sufficient sources of taxable income in available carryback periods, tax-planning strategies, and historical results of recent operations. The assumptions about future taxable income require significant judgment and are consistent with the plans and estimates we are using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, we consider three trailing years of cumulative operating income (loss). Valuation allowances are provided, if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Changes in tax laws and rates may affect recorded deferred tax assets and liabilities and our effective tax rate in the future.
Accounting for income taxes in interim periods provides that at the end of each interim period we are required to make our best estimate of the consolidated effective tax rate expected to be applicable for our full calendar year. The rate so determined shall be used in providing for income taxes on a consolidated current year-to-date basis. Further, the rate is reviewed, if necessary, as of the end of each successive interim period during the year to our best estimate of our annual effective tax rate.
In addition to the amount of tax resulting from applying the estimated annual effective tax rate to income from operations before income taxes, we may include certain items treated as discrete events to arrive at an estimated overall tax amount.
We believe that our tax positions comply with applicable tax law. As a matter of course, we may be audited by various taxing authorities and these audits may result in proposed assessments where the ultimate resolution may result in us owing additional taxes. U.S. GAAP addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. We may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. We have elected to include principal and penalties expense related to uncertain tax positions as part of income tax expense and include interest expense related to uncertain tax positions as part of interest expense in our condensed consolidated financial statements. The accrued interest is included as a component of other long-term liabilities in our condensed consolidated balance sheets. U.S. GAAP provides guidance on how an enterprise should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits.
Our income tax expense and liability and/or receivable, deferred tax assets and liabilities, and liabilities for uncertain tax benefits reflect management’s best assessment of estimated current and future taxes to be paid or received. Significant judgments and estimates are required in determining the consolidated income tax expense.

Contingent Liabilities
We may become involved in litigation or other financial claims as a result of our normal business operations. We periodically analyze currently available information and make a determination of the probability of loss and provide a range of possible loss when we believe that sufficient and appropriate information is available. We accrue a liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a loss is probable and a range of amounts can be reasonably estimated but no amount within the range is a better estimate than any other amount in the range, then the minimum of the range is accrued. We do not accrue a liability when the likelihood that the liability has been incurred is believed to be probable but the amount cannot be reasonably estimated or when the likelihood that a liability has been incurred is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and the impact could potentially be material, we disclose the nature of the contingency and, where feasible, an estimate of the possible loss or range of loss.
Variable Interest Entities 
Our decision to consolidate an entity is based on our assessment that we have a controlling financial interest in such entity. We continuously evaluate our related party relationships and any ownership interests, including controlling or financial interests of our executive management team such as our Executive Chairman and President's non-controlling interest in One Health Group, LLC ("OHG"). In accordance with U.S. GAAP, since the total equity investment at risk is not sufficient for OHG to finance its activities without additional subordinated financial support, as well as economic interests of the holders of OHG that are disproportionate to their voting interests, we concluded OHG is a variable interest entity ("VIE"). We further analyzed which related party would be the primary beneficiary in a tiebreaker test. Given that neither we nor our de facto agent have the power to direct the activities of OHG that most significantly impact its economic performance, we determined that we are not the primary beneficiary of the VIE and therefore are not required to consolidate the results of OHG. We do not have any assets or liabilities in our condensed consolidated balance sheets that relate to our variable interest in OHG. Other than the potential participation in future revenue if and when earned, we have no material, continuing economic or other involvement in OHG, including no exposure to loss as a result of our involvement with OHG. Please see Note 5 for additional information related to the divestiture.
Internally Developed Capitalized Software
We develop software for our internal use and capitalize the estimated software development costs incurred during the application development stage in accordance with U.S. GAAP. Costs incurred prior to and after the application development stage are charged to expense. When the software is ready for its intended use, capitalization ceases and such costs are amortized on a straight-line basis over the estimated life, which is generally three years. We record depreciation for internally developed capitalized software in depreciation expense in our condensed consolidated statements of operations. Significant judgments and estimates are required in measuring capitalized software. We regularly review our capitalized software projects for impairment.
Contract Costs
In accordance with ASU 2014-09, "Revenue from Contracts with Customers" ("Topic 606"), which was adopted January 1, 2018, we recognize certain commission costs, which are included in commission expenses in our condensed consolidated statements of operations, and certain fulfillment costs, which are included in cost of revenue.
Our commissions are generally monthly commissions paid to partners, affiliates and our internal sales team, most of which have commensurate renewal terms or useful lives of one year or less. Therefore, we apply the practical expedient on a portfolio basis and recognize those incremental costs of obtaining contracts as an expense when incurred. We also have a minority population of commission fees that we believe meet the capitalization guidance in U.S. GAAP and are amortized based on the systematic transfer of the underlying contractual service terms, which includes our estimate of subscriber renewal behavior based on acquisition channel from historical data, if available, which is typically on a straight-line basis for one to two years. If we determine that our incremental costs to fulfill a contract are capitalizable under Topic 606, the costs are amortized based on the systematic transfer of the underlying contractual service terms.
Contract Assets and Contract Liabilities
In accordance with Topic 606 and the practical expedient to apply the guidance on a portfolio of contracts, which effectively treats contracts with similar characteristics as a single contract, we presented a net contract asset or contract

liability for the majority of our subscribers. This presentation effectively reduced our total accounts receivable as of September 30, 2018 from December 31, 2017 and was offset by a comparable decrease in contract liabilities. In addition, we separately state unbilled contract assets in our condensed consolidated balance sheet as of September 30, 2018, which we previously included in accounts receivable. For additional information, please see Notes 3 and 4.
We receive payments from subscribers based on a billing schedule as established in the terms of our monthly and annual contract service agreements. Contract assets relate to our conditional right to consideration for our unbilled completed performance under the contract. Accounts receivable are recorded when the right to consideration for our completed performance is billed and is therefore, no longer unconditional. Contract liabilities (that is, deferred revenue) relate to payments received in advance of performance under the contract. Contract liabilities that are payable in greater than one year are included in other long-term liabilities in our condensed consolidated balance sheets. 
3. Accounting Standards Updates
We consider the applicability and impact of all Accounting Standards Updates ("ASUs"). Recently issued ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations.
Standard Description Date of Adoption Application Effect on the Consolidated Financial Statements (or Other Significant Matters) 
ASU 2014-09,
Revenue from Contracts with Customers
(Topic 606)
This update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, by creating a new Topic 606, Revenue from Contracts with Customers. The guidance in this update affects most entities that either enter into contracts with customers to transfer goods or services or enter into contracts for the trade of nonfinancial assets. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, various updates have been issued during 2015 and 2016 to clarify the guidance in Topic 606. January 1, 2018Modified retrospective with the cumulative effect of initially applying these updates recognized at the date of initial application. See "Topic 606" below. 
ASU 2016-02,
(Topic 842)
The primary amendments in this update require the recognition of lease assets and lease liabilities on the balance sheet, as well as certain qualitative disclosures regarding leasing arrangements. January 1, 2019Modified retrospective with the cumulative effect of initially applying these updates recognized at the date of initial application. See "Topic 842" below. 
ASU 2016-15,
Statement of Cash Flows
(Topic 230)
This update clarifies the guidance regarding the classification of operating, investing, and financing activities for certain types of cash receipts and payments. January 1, 2018Retrospective We adopted this update as of January 1, 2018, and there was no material impact to our condensed consolidated financial statements. 
ASU 2017-09,
Compensation—Stock Compensation
(Topic 718)
This update clarifies the guidance regarding changes in the terms or conditions of a share based payment award. Under the amendments of this update, an entity should account for the effects of a modification unless certain criteria remain the same immediately before and after the modification. January 1, 2018Prospective Upon adoption, there was no material impact to our condensed consolidated financial statements. 
ASU 2018-15, Intangibles (Topic 350)
The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with those incurred to develop or obtain internal-use software. The update requires the entity to determine which implementation costs to capitalize and expense over the term of the hosting arrangement.  January 1, 2020Prospective or Retrospective We are currently in the planning stage and have not yet begun implementation of the new standard. We have not yet determined the potential impact to our condensed consolidated financial statements. 
Topic 606
We adopted the provisions of Topic 606 as of January 1, 2018 on a modified retrospective basis to open contracts at the date of adoption only. Our assessment of the impact included review of a significant majority of our revenue streams, contracts and contract costs incremental to obtaining the contract. We evaluated our service offerings and determined that the service offerings' obligations are not distinct within the context of the contracts and, as such, are considered to be a

series of promised services treated as a single performance obligation. Therefore, we concluded the impact to the way we recognize revenue is immaterial because our revenue is primarily generated from monthly subscriptions of a single performance obligation and longer-term breach contracts, which will continue to be recognized ratably over the service delivery periods.
We also concluded that direct-response advertising costs previously included in deferred subscription solicitation and advertising costs must be expensed as incurred under the new standard. Since we previously deferred and amortized these costs over the period during which benefits were expected to be received not to exceed twelve months, we believe this is a significant change that impacts our results of operations in each reportable period after adoption. Any other costs previously included in deferred subscription solicitation and advertising costs, such as annual renewal commission costs, that could continue to be capitalized and amortized over the transfer of the underlying service period under Topic 606 were reclassified to contract costs in our condensed consolidated balance sheet as of September 30, 2018.
In addition, we elected a practical expedient to immediately expense the majority of our incremental one-time commission costs, which is not expected to have a material impact to our future results of operations.
As a result of our comprehensive assessment, we recorded a cumulative adjustment of approximately $1.6 million to reduce the opening balance of retained earnings, which is primarily due to expensing direct-response advertising costs as well as immediately expensing certain incremental one-time commission costs. Given the continued valuation allowance on our net deferred taxes, the tax effect of these cumulative adjustments at adoption is also immaterial to the consolidated financial statements.
The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The following tables summarize the impacts of adopting Topic 606 on select lines of our unaudited condensed consolidated financial statements (all tables in thousands):
Statements of Operations
(select lines)
As Reported Adjustments Balances without Adoption of 606 
Three Months Ended September 30, 2018 
Revenue $37,485 $ $37,485 
Marketing expenses 631 72 703 
Commission expenses 8,743 5 8,748 
Loss from operations (15)(77)(92)
Net loss (1,109)(77)(1,186)
Nine Months Ended September 30, 2018 
Revenue $115,182 $ $115,182 
Marketing expenses 2,455 613 3,068 
Commission expenses 26,949 (3)26,946 
Income from operations 2,097 (610)1,487 
Net income (loss) 87 (610)(523)

Balance Sheet
As of September 30, 2018 
(select lines)
As Reported Adjustments Balances without Adoption of 606 
Accounts receivable $6,147 $1,850 $7,997 
Contract assets 638 (638) 
Prepaid expenses and other current assets 3,783 26 3,809 
Deferred subscription solicitation and commission costs  1,027 1,027 
Contact costs 380 (380) 
Total assets 37,736 1,885 39,621 
Commissions payable $356 $(267)$89 
Contract liabilities, current 4,075 1,212 5,287 
Other long-term liabilities 1,711  1,711 
Accumulated deficit (118,552)940 (117,612)
Total liabilities and stockholders' equity 37,736 1,885 39,621 
Statement of Cash Flows
Nine Months Ended September 30, 2018 
(select lines)
As Reported Adjustments Balances without Adoption of 606 
Net income (loss) $87 $(610)$(523)
Adjustments to reconcile net income to cash flows from operating activities: 
Amortization of deferred subscription solicitation costs  2,432 2,432 
Amortization of contract costs 646 (646) 
Changes in assets and liabilities: 
Accounts receivable 1,583 (1,387)196 
Contract assets (1,537)1,537  
Prepaid expenses, other current assets and other assets (139)(26)(165)
Deferred subscription solicitation and commission costs  (1,804)(1,804)
Contract costs (704)704  
Commissions payable (3)(49)(52)
Contract liabilities, current (2,323)(151)(2,474)
Net cash provided by operating activities3,520  3,520 
Topic 842
We plan to adopt the provisions of ASU 2016-02 ("Topic 842"), as amended, as of January 1, 2019. We are evaluating the standard in accordance with our adoption plan, which includes controls for performing a completeness assessment over the lease population, reviewing and measuring all forms of leases and analyzing the practical expedients. In accordance with ASU 2018-11 "Targeted Improvements," issued in July 2018, we expect to apply the new lease requirements as of January 1, 2019 under the modified retrospective approach and recognize a cumulative-effect adjustment, if any, at the date of initial application, rather than restate comparative periods.
We did not identify any embedded leases in our existing contracts that require bifurcation under Topic 842. However, we expect the adoption of Topic 842 will have a material impact to our condensed consolidated balance sheets due to the recognition of right-of-use assets and lease liabilities principally for certain leases currently accounted for as operating leases. As of September 30, 2018, we had an estimated $4.2 million in undiscounted future minimum lease commitments,

as reported in Note 14, of which $1.6 million has a commencement date of January 1, 2019 and will not be included in the adoption impact but will be evaluated under Topic 842 in the year ended December 31, 2019.
In addition, we evaluated our deferred rent amount in our condensed consolidated balance sheets, which is exclusively for our operating leases, and concluded that the balance of the historical lease incentives would appropriately reduce the right of use asset at adoption. As of September 30, 2018, our deferred rent balance was $657 thousand, as reported in Note 15.
We are continuing to finalize the impact of adoption to our condensed consolidated financial statements, including disclosures, accounting policies, business processes and internal controls, as well as income tax impacts, which we anticipate will not have a financial statement impact due to the valuation allowance.
4. Revenue Recognition 
We account for revenue in accordance with Topic 606, which was adopted January 1, 2018. For additional information about the adoption impact, please see Note 3.
We recognize revenue on identity theft protection services, as well as insurance services and other monthly membership and transaction services. The following is a description of principal activities, separated by reportable segments, from which we generate revenues. For additional information about reportable segments, please see Note 20.
Accounting Policy, Nature of Services and Timing of Satisfaction of Performance Obligations
Personal Information Services segment
We offer identity theft and privacy protection services to subscribers through multiple marketing channels including, but not limited to, direct-to-consumer, affiliates and partners, and as an embedded service for either its employees or consumers. We also offer breach-response services to large and small organizations by providing affected individuals with identity theft recovery and credit monitoring services.
With the exception of breach-response services, revenue is measured based on the stated consideration specified in the monthly renewable individual subscription contract. Subscription fees billed by our clients are generally billed directly to the subscriber’s credit card, mortgage bill or demand deposit accounts. Subscription fees billed by us are generally billed directly to the subscriber’s credit card except for arrangements under which subscription fees are paid to us by our clients on behalf of the subscriber. These payment mechanisms significantly reduce the risk of uncertain cash flows and a significant portion of our subscribers are billed in advance of fulfillment, which also mitigates uncertainty of cash flows. The prices to subscribers of various configurations of our non-breach services range generally from $4.99 to $25.00 per month. As a means of allowing customers to become familiar with our services, our subscriptions periodically may be offered with trial, delayed billing or guaranteed refund periods. No revenues are recognized until applicable trial periods are completed. We are the principal in almost all of our transactions and therefore, revenue is recorded on a gross basis in the amount that we bill subscribers from the sale of subscriptions and is recognized ratably on a straight-line basis over the contractual term of the service agreement, ranging from one month to one year. In a minority of transactions, we also provide services to certain legacy partners in which we are the agent in the transactions and therefore, we record revenue on a net basis in the amount that we bill certain partners. Revenue from these arrangements is also recognized ratably on a straight-line basis over the contractual term of the service agreement. Based on the short-term nature of our monthly subscription services and the service terms, we do not have any unsatisfied, or partially unsatisfied, future performance obligations, in addition to the amounts included in contract liabilities. In addition, and for the same reasons noted above, we do not have any contracts that have a significant financing component. Revenues are presented net of the taxes that are collected from members and remitted to governmental authorities.
Revenue for annual subscription fees and breach-response services, which the contract term is one year or greater, are deferred and recognized ratably on a straight-line basis over the contractual term of the service agreement, which is as the services are systematically transferred to the subscriber.
Our monthly contractual subscription terms do not have stated refund provisions, however, we considered whether our refund history would be variable consideration in determining the estimated transaction price. Discretionary refunds for our monthly subscriptions are generally consistent, processed within the service term and are appropriately reflected as reductions to revenue. Discretionary refunds in excess of one month of service are insignificant. Annual subscriptions include subscribers with pro-rata refund provisions. Revenue related to annual subscribers with pro-rata provisions is

recognized based on a pro-rata share of revenue earned. An allowance for discretionary subscription refunds is established based on our historical experience. For subscriptions with refund provisions whereby only the prorated subscription fee is refunded upon cancellation by the subscriber, deferred subscription fees are recorded when billed and amortized as subscription fee revenue on a straight-line basis over the subscription period, generally one year.
We also generate revenue through a collaborative arrangement, which involves joint marketing and servicing activities. We recognize our share of revenues and expenses from this arrangement in our condensed consolidated financial statements and account for third-party revenue and contract costs in accordance with U.S. GAAP.
Insurance and Other Consumer Services Segment
We offer insurance and other membership services to subscribers on a monthly basis. We are not planning to develop new business in this segment and are experiencing normal attrition due to ceased marketing and retention efforts. We provide these insurance services to certain legacy partners in which we are the agent in the transactions and therefore, we record revenue on a net basis in the amount that we bill certain partners. Revenue from these arrangements is also recognized ratably on a straight-line basis over the contractual term of the service agreements. Revenues are presented net of the taxes that are collected from members and remitted to governmental authorities. 

Disaggregation of Revenue
The following table disaggregates our revenue by major source for the three and nine months ended September 30, 2018 (in thousands):
Personal Information Services Insurance and Other Consumer Services Total 
Three months ended September 30, 2018 
Primary geographical markets: 
United States $32,723 $1,501 $34,224 
Canada 3,261  3,261 
Total revenue $35,984 $1,501 $37,485 
Major service lines: 
Identity Guard® and Identity Guard® with Watson™ $13,270 $ $13,270 
Canadian business 3,261  3,261 
U.S. financial institutions 18,527  18,527 
Breach services & other 926 1,501 2,427 
Total revenue $35,984 $1,501 $37,485 
Timing of revenue recognition: 
Products and services transferred over time $35,984 $1,501 $37,485 
Products transferred at a point in time    
Total revenue $35,984 $1,501 $37,485 
Nine months ended September 30, 2018 
Primary geographical markets: 
United States $100,993 $4,531 $105,524 
Canada 9,658  9,658 
Total revenue $110,651 $4,531 $115,182 
Major service lines: 
Identity Guard® and Identity Guard® with Watson™ $40,178 $ $40,178 
Canadian business 9,658  9,658 
U.S. financial institutions 56,941  56,941 
Breach services & other 3,874 4,531 8,405 
Total revenue $110,651 $4,531 $115,182 
Timing of revenue recognition: 
Products and services transferred over time $110,258 $4,531 $114,789 
Products transferred at a point in time 393  393 
Total revenue $110,651 $4,531 $115,182 
Contract Balances
The opening and closing balances of our accounts receivable, contract assets and contract liabilities are as follows (in thousands):
Accounts Receivable Contract Assets Contract Liabilities, Current Contract Liabilities, Non-Current 
Balance as of December 31, 2017 $8,225 $ $7,759 $ 
Increase (decrease), net (2,078)638 (3,684)30 
Balance as of September 30, 2018 $6,147 $638 $4,075 $30 
We recognized $906 thousand and $7.4 million of revenue in the three and nine months ended September 30, 2018, respectively, that was included in the contract liability balance as of December 31, 2017. The decreasing trend of this revenue recognized in the three months ended September 30, 2018 as compared to the three months ended March 31,

2018 is consistent with the pro-rata recognition of revenue earned from our monthly subscriptions. Our longer-term breach contracts have performance obligations that will continue to be satisfied in future periods and reduce the December 31, 2017 contract liability balance.
5. Discontinued Operations and Assets and Liabilities Held for Sale
On July 31, 2017, we divested i4c to One Health Group, LLC (the "Purchaser"), pursuant to the terms and conditions of a membership interest purchase agreement (the "Purchase Agreement"). i4c conducted our Pet Health Monitoring business known as Voyce. The purchase price for the assets was equal to (i) the sum of $100, plus (ii) a revenue participation of up to $20.0 million, payable pursuant to the terms and conditions of the Purchase Agreement. We have determined that the revenue participation is a gain contingency and therefore will be recognized if and when it is earned.
The total value of the consideration paid pursuant to the Purchase Agreement was determined through negotiations that took into account a number of factors of the Pet Health Monitoring business, including historical revenues, operating history, business contracts, obligations and commitments and other factors. The terms of the transaction were approved by our independent directors of the Board of Directors and required the consent of our lender.
The Purchaser is a newly-formed entity of which Michael R. Stanfield, our Executive Chairman and President, is a minority investor, and certain former members of the i4c management team are the managing member and investors. Except as described above, there are no material relationships between the Purchaser, on the one hand, and us or any of our affiliates, directors, officers, or any associate of such directors or officers, on the other hand. For our policy on identifying a controlling financial interest, please see "—Variable Interest Entities" in Note 2.
These condensed consolidated financial statements present our results of operations for the three and nine months ended September 30, 2018 and 2017 and our financial position as of September 30, 2018 and December 31, 2017 giving effect to the disposal of i4c, with the historical financial results of the Pet Health Monitoring segment reflected as discontinued operations, since the disposal constituted a strategic business shift. We made adjustments to our historical financial results for certain costs and overhead allocations to either discontinued or continuing operations for the three and nine months ended September 30, 2017; for additional information, please see "—Variable Interest Entities" in Note 2.
In the three and nine months ended September 30, 2017, we recorded a loss on sale of $528 thousand (including $516 thousand of transaction costs), which is included in loss from discontinued operations, net of tax in our condensed consolidated statements of operations. The following table summarizes the components of loss from discontinued operations, net of income taxes included in the condensed consolidated statements of operations (in thousands):
Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 
Major classes of line items constituting loss from discontinued operations: 
Marketing expenses $(1)$(18)
Cost of revenue  (4)
General and administrative expenses (500)(1,718)
Impairment  (180)
Depreciation and amortization (1)(1)
Loss from discontinued operations before income taxes (502)(1,921)
Loss on disposal of discontinued operations (528)(528)
Total loss from discontinued operations, net of tax $(1,030)$(2,449)
In 2016, our Board of Directors approved a plan to sell Captira, which comprised our Bail Bonds Industry Solutions segment. Effective January 31, 2017, we completed the sale of Captira for a nominal amount, which resulted in a loss on sale of $130 thousand in the nine months ended September 30, 2017 and marked the conclusion of our operations in the Bail Bonds Industry Solutions segment. The disposal did not represent a strategic shift that would have a major effect on operations and financial results, and therefore, it is not classified as discontinued operations. For information on the operating results of the Bail Bonds Industry Solutions segment, please see "Item 2. — Management’s Discussion and Analysis of Financial Condition and Results of Operations."
In March 2017, we executed an agreement to dispose of our Habits at Work business, the results of which are recorded in our Personal Information Services segment. Habits at Work met all the criteria under U.S. GAAP to classify its assets

and liabilities as held for sale in our consolidated balance sheets as of March 31, 2017. Effective June 1, 2017, we completed the sale of Habits at Work for a nominal amount, which resulted in a gain on sale of $24 thousand in the three and nine months ended September 30, 2017. The disposal did not represent a strategic shift that would have a major effect on operations and financial results, and therefore, it is not classified as discontinued operations.
6. Earnings (Loss) Per Common Share
Basic and diluted earnings (loss) per common share is determined in accordance with the applicable provisions of U.S. GAAP. Basic earnings (loss) per common share is computed using the weighted average number of shares of common stock outstanding for the period. Diluted earnings per common share is computed using the weighted average number of shares of common stock, adjusted for the dilutive effect of potential common stock. Potential common stock, computed using the treasury stock method, includes the potential exercise of outstanding stock options and warrants and vesting of restricted stock units. Diluted loss per common share is equivalent to basic loss per common share, as the effect of potential common stock would be anti-dilutive.
For the three months ended September 30, 2018, options to purchase common stock, unvested restricted stock units and outstanding warrants totaling approximately 6.1 million shares were excluded from the computation of diluted loss per common share, as their effect would be anti-dilutive. For the nine months ended September 30, 2018, options to purchase common stock, unvested restricted stock units and outstanding warrants totaling approximately 5.7 million shares were excluded from the computation of diluted income per common share, as their effect would be anti-dilutive. For the three and nine months ended September 30, 2017, options to purchase common stock, unvested restricted stock units and outstanding warrants totaling approximately 6.9 million shares were excluded from the computation of diluted loss per common share, as their effect would be anti-dilutive. These shares could dilute earnings per common share in the future.
A reconciliation of basic earnings (loss) per common share to diluted earnings (loss) per common share is as follows (in thousands, except per share data):
Three Months Ended September 30, Nine Months Ended
September 30, 
Net (loss) income—basic and diluted: 
(Loss) income from continuing operations $(1,109)$(2,966)$87 $(14,951)
Loss from discontinued operations  (1,030) (2,449)
Net (loss) income—basic and diluted $(1,109)$(3,996)$87 $(17,400)
Weighted average common shares outstanding: 
Weighted average common shares outstanding—basic 24,395 23,953 24,306 23,818 
Dilutive effect of common stock equivalents   381  
Weighted average common shares outstanding—diluted 24,395 23,953 24,687 23,818 
Basic (loss) earnings per common share: 
(Loss) income from continuing operations $(0.05)$(0.12)$ $(0.63)
Loss from discontinued operations  (0.05) (0.10)
Basic net (loss) income per common share $(0.05)$(0.17)$ $(0.73)
Diluted (loss) earnings per common share: 
(Loss) income from continuing operations $(0.05)$(0.12)$ $(0.63)
Loss from discontinued operations  (0.05) (0.10)
Diluted net (loss) income per common share $(0.05)$(0.17)$