x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 22-3509099 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
7195 Oakport Street Oakland, California | 94621 | |
(Address of principal executive offices) | (Zip code) |
Large accelerated filer | ¨ | Accelerated filer | x | |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Page | ||
PART I. FINANCIAL INFORMATION | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II. OTHER INFORMATION | ||
Item 1. | ||
Item 1A. | ||
Item 6. | ||
September 30, 2016 | December 31, 2015 | ||||||
NOT REVIEWED1 | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 34,375 | $ | 10,015 | |||
Restricted cash | 5,218 | 3,844 | |||||
Short-term investments | — | — | |||||
Accounts receivable, net of allowances for sales returns and doubtful accounts of $5,492 as of September 30, 2016 and $868 as of December 31, 2015 | 39,306 | 32,728 | |||||
Other receivables | 12,892 | 13,010 | |||||
Current deferred income tax assets | — | 327 | |||||
Inventories, net | 31,957 | 13,900 | |||||
Prepaid expenses and other current assets | 3,878 | 951 | |||||
Total current assets | 127,626 | 74,775 | |||||
Property and equipment, net | 6,258 | 2,251 | |||||
Intangible assets, net | 22,573 | 696 | |||||
Non-current deferred income tax assets | 2,114 | 1,058 | |||||
Other assets | 1,778 | 4,811 | |||||
Total assets | $ | 160,349 | $ | 83,591 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 20,609 | $ | 14,936 | |||
Short-term debt | 21,941 | 21,848 | |||||
Accrued and other liabilities | 26,735 | 4,467 | |||||
Total current liabilities | 69,285 | 41,251 | |||||
Long-term debt - Related Party | 5,000 | — | |||||
Other long-term liabilities | 8,024 | 510 | |||||
Total liabilities | 82,309 | 41,761 | |||||
Stockholders’ equity: | |||||||
Common stock, authorized 180,000 shares, 81,874 shares of the Company as of September 30, 2016 at $0.001 par value. 353,678 shares of DNS outstanding as of December 31, 2015 at $0.144 and $1 per share. | 81,874 | 56,579 | |||||
Additional paid-in capital | 7,283 | (8,890 | ) | ||||
Other comprehensive loss | 908 | (1,775 | ) | ||||
Accumulated deficit | (12,743 | ) | (4,222 | ) | |||
Non-controlling interest | 718 | 138 | |||||
Total stockholders’ equity | 78,040 | 41,830 | |||||
Total liabilities and stockholders’ equity | $ | 160,349 | $ | 83,591 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
NOT REVIEWED1 | |||||||||||||||
Net revenue | $ | 32,166 | $ | 22,591 | $ | 93,256 | $ | 93,339 | |||||||
Cost of revenue | 22,693 | 16,774 | 68,997 | 69,287 | |||||||||||
Gross profit | 9,473 | 5,817 | 24,259 | 24,052 | |||||||||||
Operating expenses: | |||||||||||||||
Research and product development | 5,885 | 4,859 | 15,582 | 16,546 | |||||||||||
Selling, general and administrative | 8,202 | 3,939 | 16,903 | 12,458 | |||||||||||
Amortization of intangible assets | 299 | — | 299 | — | |||||||||||
Total operating expenses | 14,386 | 8,798 | 32,784 | 29,004 | |||||||||||
Operating loss | (4,913 | ) | (2,981 | ) | (8,525 | ) | (4,952 | ) | |||||||
Interest expense, net | (173 | ) | (87 | ) | (463 | ) | (286 | ) | |||||||
Other income, net | 52 | 583 | 117 | 780 | |||||||||||
Loss before income taxes | (5,034 | ) | (2,485 | ) | (8,871 | ) | (4,458 | ) | |||||||
Income tax expense (benefit) | (153 | ) | 295 | (584 | ) | 480 | |||||||||
Net loss | (4,881 | ) | (2,780 | ) | (8,287 | ) | (4,938 | ) | |||||||
Less: Net income attributable to non-controlling interest | 38 | — | 234 | — | |||||||||||
Net loss attributable to DASAN Zhone Solutions, Inc. | (4,919 | ) | (2,780 | ) | (8,521 | ) | (4,938 | ) | |||||||
Other comprehensive income, net of foreign currency translation adjustments | 2,269 | 1,009 | 2,670 | 107 | |||||||||||
Comprehensive loss | $ | (2,612 | ) | $ | (1,771 | ) | $ | (5,617 | ) | $ | (4,831 | ) | |||
Less: Comprehensive income attributable to non-controlling interest | 44 | 0 | 303 | 0 | |||||||||||
Comprehensive loss attributable to DASAN Zhone Solutions, Inc. | $ | (2,656 | ) | $ | (1,771 | ) | $ | (5,920 | ) | $ | (4,831 | ) | |||
Basic and diluted net loss per share | $ | (0.06 | ) | $ | (0.01 | ) | $ | (0.10 | ) | $ | (0.01 | ) | |||
Weighted average shares outstanding used to compute basic net loss per share | 81,839 | 347,005 | 81,739 | 347,005 | |||||||||||
Weighted average shares outstanding used to compute diluted net loss per share | 81,839 | 347,005 | 81,739 | 347,005 |
Nine Months Ended | |||||||
September 30, | |||||||
2016 | 2015 | ||||||
NOT REVIEWED1 | |||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (8,287 | ) | $ | (4,938 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 1,165 | 1,112 | |||||
Stock-based compensation | 128 | — | |||||
Sales returns and doubtful accounts | (48 | ) | — | ||||
Loss on foreign currency translation | 2,189 | 727 | |||||
Deferred income taxes | (612 | ) | 480 | ||||
Gain on foreign currency translation | (534 | ) | (3,069 | ) | |||
Other | 174 | 23 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 11,931 | 11,160 | |||||
Other receivables | 2,670 | (2,385 | ) | ||||
Inventories | (2,779 | ) | 1,270 | ||||
Prepaid expenses and other assets | (409 | ) | (119 | ) | |||
Accounts payable | (6,064 | ) | (16,779 | ) | |||
Accrued and other liabilities | 13,657 | 5,019 | |||||
Net cash provided by (used in) operating activities | 13,181 | (7,499 | ) | ||||
Cash flows from investing activities: | |||||||
Decrease in restricted cash | (1,374 | ) | 2,526 | ||||
Increase in short-term loans to others | 1,561 | 285 | |||||
Acquisition of other current financial assets | — | — | |||||
Proceeds from other current financial assets | 319 | 86 | |||||
Proceeds from disposal of property and equipment | 98 | 6 | |||||
Acquisition of property and equipment | (402 | ) | (541 | ) | |||
Acquisition of intangible assets | (91 | ) | — | ||||
Proceeds of other non-current financial assets | — | 106 | |||||
Increase in short-term loans to others | (1,386 | ) | — | ||||
Decrease in long-term loans to others | 330 | — | |||||
Increase in long-term loans to others | — | (645 | ) | ||||
Net cash (used in) provided by investing activities | (945 | ) | 1,823 | ||||
Cash flows from financing activities: | |||||||
(Repayments of) proceeds from short-term borrowings | (3,320 | ) | 5,770 | ||||
Proceeds from long-term borrowings | 6,800 | — | |||||
Government grants received | 31 | 156 | |||||
Proceeds from issuance of common stock | — | 1,600 | |||||
Decrease in capital surplus | — | (3,002 | ) | ||||
Net cash provided by financing activities | 3,511 | 4,524 | |||||
Effect of exchange rate changes on cash | 1,600 | (440 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 17,347 | (1,592 | ) | ||||
Cash and cash equivalents at beginning of period | 17,028 | 6,786 | |||||
Cash and cash equivalents at end of period | $ | 34,375 | $ | 5,194 |
(1) | Organization and Summary of Significant Accounting Policies |
(a) | Description of Business |
(b) | Basis of Presentation |
(c) | Risks and Uncertainties |
• | increasing its vulnerability to adverse economic conditions in its industry or the economy in general; |
• | requiring substantial amounts of cash to be used for debt servicing, rather than other purposes, including operations; |
• | limiting its ability to plan for, or react to, changes in its business and industry; and |
• | influencing investor and customer perceptions about its financial stability and limiting its ability to obtain financing or acquire customers. |
• | Potential deferment of purchases and orders by customers; |
• | Customers’ inability to obtain financing to make purchases from the Company and/or maintain their business; |
• | Negative impact from increased financial pressures on third-party dealers, distributors and retailers; |
• | Intense competition in the communication equipment market; |
• | Commercial acceptance of the Company’s products; and |
• | Negative impact from increased financial pressures on key suppliers. |
(e) | Use of Estimates |
(f) | Revenue Recognition |
(g) | Fair Value of Financial Instruments |
(h) | Concentration of Risk |
(i) | Comprehensive Loss |
(j) | Recent Accounting Pronouncements |
(2) | Merger |
Shares | Estimated Fair Value | ||||||
NOT REVIEWED | |||||||
Shares of Legacy Zhone stock as of September 8, 2016 | 34,371 | $ | 40,902 | ||||
Legacy Zhone stock options | 1,323 | 715 | |||||
Assumed liabilities | 25,717 | ||||||
Total Purchase Consideration | $ | 67,334 |
Fair Value of Total Assets | NOT REVIEWED | |||
Current tangible assets | 40,747 | |||
Non-current tangible assets | 4,464 | |||
Total tangible assets | $ | 45,211 | ||
Identifiable Intangible Assets | ||||
Developed technology | 3,040 | |||
Customer relationships | 6,740 | |||
Backlog | 2,017 | |||
Total Intangible Assets | $ | 11,797 | ||
Goodwill | $ | 10,326 | ||
Total Indicated Fair Value of Assets | $ | 67,334 |
Useful life (in Years) | Fair Value | Accumulated Amortization | Net | ||||||||
NOT REVIEWED | |||||||||||
Developed technology | 5 | 3,040 | (51 | ) | 2,989 | ||||||
Customer relationships | 7 | 6,740 | (80 | ) | 6,660 | ||||||
Backlog | 1 | 2,017 | (168 | ) | 1,849 | ||||||
11,797 | (299 | ) | 11,498 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
NOT REVIEWED | NOT REVIEWED | |||||||||||||||
Pro forma total net revenue | $ | 40,666 | $ | 44,719 | $ | 144,954 | $ | 170,082 | ||||||||
Pro forma net income (loss) | (17,786 | ) | (8,665 | ) | (28,058 | ) | (13,585 | ) |
(3) | Cash and Cash Equivalents and Restricted Cash |
(4) | Inventories |
September 30, 2016 | December 31, 2015 | ||||||
NOT REVIEWED | |||||||
Raw materials | $ | 12,935 | $ | 5,519 | |||
Work in process | 3,369 | 2,074 | |||||
Finished goods | 12,529 | 5,022 | |||||
Other | $ | 3,124 | $ | 1,285 | |||
$ | 31,957 | $ | 13,900 |
(5) | Property and Equipment, net |
September 30, 2016 | December 31, 2015 | ||||||
NOT REVIEWED | |||||||
Machinery and equipment | $ | 14,468 | $ | 3,173 | |||
Computers and software | 3,868 | — | |||||
Facilities | 22,237 | 20,472 | |||||
Furniture and fixtures | 1,333 | 1,052 | |||||
Leasehold improvements | 4,640 | — | |||||
Other | 77 | 74 | |||||
46,623 | 24,771 | ||||||
Less accumulated depreciation and amortization | (40,022 | ) | (22,121 | ) | |||
Less government grants | $ | (343 | ) | $ | (399 | ) | |
$ | 6,258 | $ | 2,251 |
(6) | Intangible Assets, net |
September 30, 2016 | December 31, 2015 | ||||||
NOT REVIEWED | |||||||
Goodwill | $ | 11,019 | $ | 693 | |||
Developed Technology | 3,040 | — | |||||
Customer Relationships | 6,740 | — | |||||
Backlog | 2,017 | — | |||||
Other | 137 | 40 | |||||
Less accumulated amortization | (380 | ) | (37 | ) | |||
Other intangible assets, net | 11,554 | 3 | |||||
Intangible assets, net | $ | 22,573 | $ | 696 |
(7) | Debt |
(8) | Related Party Borrowings |
(9) | Net Loss Per Share |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
NOT REVIEWED | NOT REVIEWED | |||||||||||||||
Net loss: | $ | (4,881 | ) | $ | (2,780 | ) | $ | (8,287 | ) | $ | (4,938 | ) | ||||
Weighted average number of shares outstanding: | ||||||||||||||||
Basic | 81,839 | 347,005 | 81,739 | 347,005 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Stock options and share awards | — | — | — | — | ||||||||||||
Diluted | 81,839 | 347,005 | 81,739 | 347,005 | ||||||||||||
Net loss per share | ||||||||||||||||
Basic | $ | (0.06 | ) | $ | (0.01 | ) | $ | (0.10 | ) | $ | (0.01 | ) | ||||
Diluted | $ | (0.06 | ) | $ | (0.01 | ) | $ | (0.10 | ) | $ | (0.01 | ) |
Three Months Ended September 30, 2016 | Weighted Average Exercise Price | Nine Months Ended September 30, 2016 | Weighted Average Exercise Price | ||||||||||||
NOT REVIEWED | |||||||||||||||
Outstanding stock options | $ | 4,019 | $ | 1.38 | $ | 4,019 | $ | 1.38 |
(10) | Commitments and Contingencies |
Operating Leases | |||
NOT REVIEWED | |||
Year ending December 31: | |||
2016 (remainder of the year) | $ | 272 | |
2017 | 1,470 | ||
2018 | 1,066 | ||
2019 | 597 | ||
2020 and thereafter | 4,237 | ||
Total minimum lease payments | $ | 7,642 |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
NOT REVIEWED | |||||||
Beginning balance | $ | 1,093 | $ | 389 | |||
Charged to cost of revenue | 703 | 289 | |||||
Claims and settlements | (805 | ) | (297 | ) | |||
Ending balance | $ | 991 | $ | 381 |
Guarantor | Amount Guaranteed | Description of Obligations Guaranteed | ||||
NOT REVIEWED | ||||||
DASAN | $ | 4,378 | Borrowings from Shinhan Bank | |||
DASAN | 4,800 | Borrowings from KEB Hana Bank | ||||
DASAN | 11,684 | Borrowings from Industrial Bank of Korea | ||||
DASAN | 6,000 | Letter of credit from Nonghyup Bank | ||||
Industrial Bank of Korea | 3,593 | Letter of credit | ||||
NongHyup Bank | 2,156 | Letter of credit | ||||
Other | 1,438 | Purchasing card and performance payment guarantee1 | ||||
$ | 34,049 |
(11) | Enterprise-Wide Information |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
NOT REVIEWED | NOT REVIEWED | ||||||||||||||
Revenue by Geography: | |||||||||||||||
United States | $ | 3,382 | $ | 550 | $ | 7,240 | $ | 3,988 | |||||||
Canada | 255 | — | 255 | — | |||||||||||
Total North America | 3,637 | 550 | 7,495 | 3,988 | |||||||||||
Latin America | 1,406 | — | 1,406 | — | |||||||||||
Europe, Middle East, Africa | 1,301 | — | 1,301 | — | |||||||||||
Korea | 18,721 | 18,453 | 52,882 | 67,116 | |||||||||||
Other Asia Pacific | 7,101 | 3,588 | 30,172 | 22,235 | |||||||||||
Total International | 28,529 | 22,041 | 85,761 | 89,351 | |||||||||||
$ | 32,166 | $ | 22,591 | $ | 93,256 | $ | 93,339 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
NOT REVIEWED | NOT REVIEWED | ||||||||||||||
Revenue by Products and Services: | |||||||||||||||
Products | $ | 28,988 | $ | 21,633 | $ | 86,584 | $ | 88,922 | |||||||
Services | 3,178 | 958 | 6,672 | 4,417 | |||||||||||
Total | $ | 32,166 | $ | 22,591 | $ | 93,256 | $ | 93,339 |
(12) | Income Taxes |
• Federal | 2012 – 2015 | |
• California and Canada | 2011 – 2015 | |
• Brazil | 2010 – 2015 | |
• Germany | 2008 – 2015 | |
• Japan | 2011 – 2015 | |
• Korea | 2014 – 2015 | |
• United Kingdom | 2011 – 2015 |
• | Increasing revenue while continuing to carefully control costs; |
• | Continued investments in strategic research and product development activities that will provide the maximum potential return on investment; and |
• | Minimizing consumption of our cash and cash equivalents. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||
NOT REVIEWED | NOT REVIEWED | ||||||||||
Net revenue | 100 | % | 100 | % | 100 | % | 100 | % | |||
Cost of revenue | 71 | % | 74 | % | 74 | % | 74 | % | |||
Gross profit | 29 | % | 26 | % | 26 | % | 26 | % | |||
Operating expenses: | |||||||||||
Research and product development | 18 | % | 22 | % | 17 | % | 18 | % | |||
Selling, general and administrative | 25 | % | 17 | % | 18 | % | 13 | % | |||
Amortization of intangible assets | 1 | % | 0 | % | 0 | % | 0 | % | |||
Total operating expenses | 45 | % | 39 | % | 35 | % | 31 | % | |||
Operating loss | (15 | )% | (13 | )% | (9 | )% | (5 | )% | |||
Interest expense, net | (1 | )% | 0 | % | 0 | % | 0 | % | |||
Other income, net | 0 | % | 3 | % | 0 | % | 1 | % | |||
Loss before income taxes | (16 | )% | (11 | )% | (10 | )% | (5 | )% | |||
Income tax provision (benefit) | 0 | % | 1 | % | (1 | )% | 1 | % | |||
Net loss | (15 | )% | (12 | )% | (9 | )% | (5 | )% | |||
Less: Net loss attributable to non-controlling interest | 0 | % | 0 | % | 0 | % | 0 | % | |||
Net loss attributable to DASAN Zhone Solutions, Inc. | (15 | )% | (12 | )% | (9 | )% | (5 | )% | |||
Other comprehensive income, net of foreign currency translation adjustments | 0 | % | 4 | % | 3 | % | 0 | % | |||
Comprehensive loss | (8 | )% | (8 | )% | (6 | )% | (5 | )% | |||
Less: Comprehensive income attributable to non-controlling interest | 0 | % | 0 | % | 0 | % | 0 | % | |||
Comprehensive loss attributable to DASAN Zhone Solutions, Inc. | (8 | )% | (8 | )% | (6 | )% | (5 | )% |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2016 | 2015 | Decrease | % change | 2016 | 2015 | Decrease | % change | ||||||||||||||||||||||
NOT REVIEWED | |||||||||||||||||||||||||||||
Products | $ | 29.0 | $ | 21.6 | $ | 7.4 | 34 | % | $ | 86.6 | $ | 88.9 | $ | (2.3 | ) | (3 | )% | ||||||||||||
Services | 3.2 | 1.0 | 2.2 | 220 | % | 6.7 | 4.4 | 2.3 | 52 | % | |||||||||||||||||||
Total | $ | 32.2 | $ | 22.6 | $ | 9.6 | 42 | % | $ | 93.3 | $ | 93.3 | $ | — | 0 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2016 | 2015 | Increase (Decrease) | % change | 2016 | 2015 | Increase (Decrease) | % change | ||||||||||||||||||||||
NOT REVIEWED | |||||||||||||||||||||||||||||
Revenue by geography: | |||||||||||||||||||||||||||||
United States | $ | 3.4 | $ | 0.6 | $ | 2.8 | 467 | % | $ | 7.2 | $ | 4.0 | $ | 3.2 | 80 | % | |||||||||||||
Canada | 0.3 | — | 0.3 | 100 | % | 0.3 | — | 0.3 | 100 | % | |||||||||||||||||||
Total North America | 3.7 | 0.6 | 3.1 | 517 | % | 7.5 | 4.0 | 3.5 | 88 | % | |||||||||||||||||||
Latin America | 1.4 | — | 1.4 | 100 | % | 1.4 | — | 1.4 | 100 | % | |||||||||||||||||||
Europe, Middle East, Africa | 1.3 | — | 1.3 | 100 | % | 1.3 | — | 1.3 | 100 | % | |||||||||||||||||||
Korea | 18.7 | 18.5 | 0.2 | 1 | % | 52.9 | 67.1 | (14.2 | ) | (21 | )% | ||||||||||||||||||
Asia Pacific | 7.1 | 3.6 | 3.5 | 97 | % | 30.2 | 22.2 | 8.0 | 36 | % | |||||||||||||||||||
Total International | 28.5 | 22.1 | 6.4 | 29 | % | 85.8 | 89.4 | (3.6 | ) | (4 | )% | ||||||||||||||||||
Total | $ | 32.2 | $ | 22.6 | $ | 9.6 | 42 | % | $ | 93.3 | $ | 93.3 | $ | — | 0 | % |
• | Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual requirements; |
• | Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; |
• | Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debts; |
• | although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; |
• | non-cash compensation is and will remain a key element of our overall long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period; and |
• | other companies in our industry may calculate Adjusted EBITDA and similar measures differently than we do, limiting its usefulness as a comparative measure. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
NOT REVIEWED | |||||||||||||||
Net loss | $ | (4,881 | ) | $ | (2,780 | ) | $ | (8,287 | ) | $ | (4,938 | ) | |||
Add: | |||||||||||||||
Interest expense | 204 | 114 | 600 | 378 | |||||||||||
Provision for taxes | (153 | ) | 295 | (584 | ) | 480 | |||||||||
Depreciation and amortization | 628 | 338 | 1,165 | 1,112 | |||||||||||
Merger-related costs | 3,536 | — | 3,536 | — | |||||||||||
Non-cash equity-based compensation expense | 128 | — | 128 | — | |||||||||||
Adjusted EBITDA | $ | (538 | ) | $ | (2,033 | ) | $ | (3,442 | ) | $ | (2,968 | ) |
Payments due by period | |||||||||||||||||||||||
Total | 2016 | 2017 | 2018 | 2019 | 2020 and thereafter | ||||||||||||||||||
NOT REVIEWED | |||||||||||||||||||||||
Operating leases | $ | 7,642 | $ | 272 | $ | 1,470 | $ | 1,066 | $ | 597 | $ | 4,237 | |||||||||||
Purchase commitments | 10,215 | 6,329 | 1,398 | 1,383 | 1,106 | — | |||||||||||||||||
Lines of credit | 5,749 | 5,749 | — | — | — | — | |||||||||||||||||
Related party debt | 6,800 | — | 1,800 | — | — | 5,000 | |||||||||||||||||
Total future contractual commitments | $ | 30,406 | $ | 12,350 | $ | 4,668 | $ | 2,449 | $ | 1,703 | $ | 9,237 |
• | commercial acceptance of our products and services; |
• | fluctuations in demand for network access products; |
• | the timing and size of orders from customers; |
• | the ability of our customers to finance their purchase of our products as well as their own operations; |
• | new product introductions, enhancements or announcements by our competitors; |
• | our ability to develop, introduce and ship new products and product enhancements that meet customer requirements in a timely manner; |
• | changes in our pricing policies or the pricing policies of our competitors; |
• | the ability of our company and our contract manufacturers to attain and maintain production volumes and quality levels for our products; |
• | our ability to obtain sufficient supplies of sole or limited source components; |
• | increases in the prices of the components we purchase, or quality problems associated with these components; |
• | unanticipated changes in regulatory requirements which may require us to redesign portions of our products; |
• | changes in accounting rules, such as recording expenses for employee stock option grants; |
• | integrating and operating any acquired businesses; |
• | our ability to achieve targeted cost reductions; |
• | how well we execute on our strategy and operating plans; and |
• | general economic conditions as well as those specific to the communications, internet and related industries. |
DASAN ZHONE SOLUTIONS, INC. | |||
Date: November 14, 2016 | By: | /s/ JAMES NORROD | |
Name: | James Norrod | ||
Title: | Co-Chief Executive Officer | ||
By: | /s/ IL YUNG KIM | ||
Name: | Il Yung Kim | ||
Title: | Co-Chief Executive Officer | ||
By: | /s/ KIRK MISAKA | ||
Name: | Kirk Misaka | ||
Title: | Chief Financial Officer |
Exhibit Number | Description |
3.1 | Restated Certificate of Incorporation of DASAN Zhone Solutions, Inc., as amended through September 9, 2016 |
3.2 | Amended and Restated Bylaws of DASAN Zhone Solutions, Inc. (incorporated by reference to Exhibit 3.2 of registrant’s Current Report on Form 8-K dated September 6, 2016 and filed on September 12, 2016) |
10.1# | DASAN Zhone Solutions, Inc. Amended and Restated 2001 Stock Incentive Plan, as amended (incorporated by reference to Exhibit 10.6 of registrant’s Current Report on Form 8-K dated September 8, 2016 and filed on September 13, 2016) |
10.2# | Form of Stock Option Agreement for the DASAN Zhone Solutions, Inc. Amended and Restated 2001 Stock Incentive Plan, as amended (incorporated by reference to Exhibit 10.7 of registrant’s Current Report on Form 8-K dated September 8, 2016 and filed on September 13, 2016) |
10.3# | Form of Restricted Stock Unit Award Agreement for the DASAN Zhone Solutions, Inc. Amended and Restated 2001 Stock Incentive Plan, as amended |
10.4# | Employment Agreement, dated as of September 9, 2016, by and between DASAN Zhone Solutions, Inc. and Il Yung Kim (incorporated by reference to Exhibit 10.1 of registrant’s Current Report on Form 8-K dated September 8, 2016 and filed on September 13, 2016) |
10.5# | Amended and Restated Employment Agreement, dated as of September 9, 2016, by and between DASAN Zhone Solutions, Inc. and James Norrod (incorporated by reference to Exhibit 10.2 of registrant’s Current Report on Form 8-K dated September 8, 2016 and filed on September 13, 2016) |
10.6# | Employment Agreement, dated as of September 9, 2016, by and between DASAN Zhone Solutions, Inc. and Kirk Misaka (incorporated by reference to Exhibit 10.3 of registrant’s Current Report on Form 8-K dated September 8, 2016 and filed on September 13, 2016) |
10.7# | Transaction Bonus Agreement, dated as of September 9, 2016, by and between DASAN Zhone Solutions, Inc. and James Norrod (incorporated by reference to Exhibit 10.4 of registrant’s Current Report on Form 8-K dated September 8, 2016 and filed on September 13, 2016) |
10.8# | Transaction Bonus Agreement, dated as of September 9, 2016, by and between DASAN Zhone Solutions, Inc. and Kirk (incorporated by reference to Exhibit 10.5 of registrant’s Current Report on Form 8-K dated September 8, 2016 and filed on September 13, 2016) |
10.9# | Letter Agreement, dated November 10, 2016, between DASAN Zhone Solutions, Inc. and Eric Presworsky (incorporated by reference to Exhibit 10.1 of registrant’s Current Report on Form 8-K dated November 8, 2016 and filed on November 14, 2016) |
10.10 | Stockholder Agreement, dated as of September 9, 2016, by and between DASAN Zhone Solutions, Inc. and DASAN Networks, Inc. (incorporated by reference to Exhibit 10.1 of registrant’s Current Report on Form 8-K dated September 6, 2016 and filed on September 12, 2016) |
10.11 | Lock-Up Agreement, dated as of September 9, 2016, by and among DASAN Zhone Solutions, Inc., DASAN Networks, Inc. and the other parties thereto (incorporated by reference to Exhibit 10.2 of registrant’s Current Report on Form 8-K dated September 6, 2016 and filed on September 12, 2016) |
10.12 | Registration Rights Agreement, dated as of September 9, 2016, by and between DASAN Zhone Solutions, Inc. and DASAN Networks, Inc. (incorporated by reference to Exhibit 10.3 of registrant’s Current Report on Form 8-K dated September 6, 2016 and filed on September 12, 2016) |
10.13 | Loan Agreement, dated as of September 9, 2016, by and between DASAN Zhone Solutions, Inc. and DASAN Networks, Inc. (incorporated by reference to Exhibit 10.4 of registrant’s Current Report on Form 8-K dated September 6, 2016 and filed on September 12, 2016) |
10.14 | Sixth Amendment to Credit and Security Agreements and Consent, dated as of September 9, 2016, by and among Zhone Technologies, Inc., ZTI Merger Subsidiary III, Inc., Premisys Communications, Inc., Zhone Technologies International, Inc., Paradyne Networks, Inc., Paradyne Corporation and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.5 of registrant’s Current Report on Form 8-K dated September 6, 2016 and filed on September 12, 2016) |
10.15 | Joinder and Seventh Amendment to Credit and Security Agreements, dated as of October 7, 2016, by and among DASAN Zhone Solutions, Inc., ZTI Merger Subsidiary III, Inc., Premisys Communications, Inc., Zhone Technologies International, Inc., Paradyne Networks, Inc., Paradyne Corporation, Dasan Network Solutions, Inc. and Wells Fargo Bank, National Association |
31.1 | Certification of Co-Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) |
31.2 | Certification of Co-Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) |
31.3 | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) |
32.1 | Section 1350 Certification of Co-Chief Executive Officers and Chief Financial Officer |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase |
101.DEF | XBRL Taxonomy Extension Definition Linkbase |
101.LAB | XBRL Taxonomy Extension Labels Linkbase |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
Grantee: | |
Grant Date: | |
Total Number of RSUs: | |
Vesting Schedule: | Twenty five percent (25%) of the Restricted Stock Units will vest on each of the first four (4) anniversaries of the Grant Date, subject to the Grantee continuing in service as a Director through each such vesting date. In addition, all of the Restricted Stock Units will vest upon the occurrence of a Change in Control. |
DASAN ZHONE SOLUTIONS, INC. | GRANTEE | ||
By: | By: | ||
Print Name: | Print Name: | ||
Title: | Title: | ||
Address: | 7195 Oakport Street Oakland, CA 94621 | Address: |
1. | Attached as Schedule 5.1(b) is a complete and accurate description of (i) the authorized capital Stock of DNS, by class and, as of the Seventh Amendment Effective Date, a description of the number of shares of each such class that are issued and outstanding, (ii) all subscriptions, options, warrants or calls relating to any shares of DNS’ capital Stock, including any right of conversion or exchange under any outstanding security or other instrument; (iii) each stockholders’ agreement, restrictive agreement, voting agreement or similar agreement relating to any such capital Stock; and (iv) an organization chart of DNS and its Subsidiaries. |
2. | Attached as Schedule 5.1(c) is a complete and accurate list of (i) DNS’ direct and indirect Subsidiaries, showing the number of shares of each class of common or preferred Stock authorized for each such Subsidiary and the number and percentage of outstanding shares, by class, that are owned, directly or indirectly, by DNS, as of the Seventh Amendment Effective Date, and (ii) all subscriptions, options, warrants or calls relating to any shares of any such Subsidiary’s capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. |
3. | DNS uses the following trade name(s) in the operation of its business (e.g. billing, advertising, etc.): |
4. | DNS is a registered organization of the following type: |
5. | The exact legal name (within the meaning of Section 9-503 of the Code) of DNS as set forth in its certificate of incorporation, organization or formation, or other public organic document, as amended to date, is set forth in Schedule 5.6(a). |
6. | DNS is organized solely under the laws of the State set forth on Schedule 5.6(a). DNS is in good standing in the State of its organization. |
7. | The chief executive office and mailing address of DNS is located at the address set forth on Schedule 5.6(b) hereto. |
8. | The books and records of DNS (if any) pertaining to Accounts, contract rights, Inventory, and other assets are located at the addresses specified on Schedule 5.6(b). |
9. | The identity and Federal Employer Identification Number of DNS and organizational identification number, if any, is set forth on Schedule 5.6(c). |
10. | DNS does not have any Commercial Tort Claims, except as set forth on Schedule 5.6(d). |
11. | There are no judgments, actions, suits, proceedings or other litigation pending by or against or threatened by or against DNS, any of its Subsidiaries or any of their respective officers or principals, in each case as of the Seventh Amendment Effective Date, except as set forth on Schedule 5.7(b). |
12. | During the past five (5) years, the name as set forth in DNS’ organizational documentation filed of record with the applicable state authority has been changed as follows: |
13. | Since the date of its organization, DNS has made or entered into the following Acquisitions: |
14. | DNS’ assets are owned and held free and clear of Liens (other than Permitted Liens and other than those certain Security Interests granted under the Credit Agreement), except as set forth below: |
15. | DNS and its Subsidiaries have been and remain in compliance with all Environmental Laws applicable to their business or operations except as set forth on Schedule 5.12. |
16. | DNS does not have any Deposit Accounts, investment accounts, Securities Accounts or similar accounts with any bank, securities intermediary or other financial institution, except as set forth on Schedule 5.15 for the purposes and of the types indicated therein. |
17. | DNS is not a party to or bound by a collective bargaining or similar agreement with any union, labor organization or other bargaining agent except as set forth below: (indicate date of agreement, parties to agreement, description of employees covered, and date of termination) |
18. | Set forth on Schedule 5.17 is a reasonably detailed description of each Material Contract of DNS as of the Seventh Amendment Effective Date. |
19. | Set forth on Schedule 5.19 is a true and complete list of all Indebtedness of DNS and its Subsidiaries outstanding as of September 30, 2016. DNS has no Indebtedness outstanding as of the Seventh Amendment Effective Date. |
20. | DNS has not made any loans or advances or guaranteed or otherwise become liable for the obligations of any others (other than pursuant to a Guaranty), except as set forth below: |
21. | DNS does not have any Chattel Paper (whether tangible or electronic) or instruments as of the Seventh Amendment Effective Date, except as follows: |
23. | Schedule 5.26(a) sets forth all Real Property owned by DNS as of the Seventh Amendment Effective Date. |
22. | DNS does not own or licenses any Trademarks, Patents, Copyrights or other Intellectual Property, and is not a party to any Intellectual Property License, in each case as of the Seventh Amendment Effective Date, except as set forth on Schedule 5.26(b) (indicate type of Intellectual Property and whether owned or licensed, registration number, date of registration, and, if licensed, the name and address of the licensor). |
24. | The Inventory, Equipment and other goods of DNS are located only at the locations set forth on Schedule 5.29. |
25. | DNS maintains Cash Management Services of a type and on terms reasonably satisfactory to Lender at one or more of the banks set forth on Schedule 6.12(j). |
26. | As of the Seventh Amendment Effective Date, DNS has no delinquent taxes due (including, but not limited to, all payroll taxes, personal property taxes, real estate taxes or income taxes) except as follows: |
27. | Except as set forth on Schedule 7.15, DNS has no consignment, bill and hold, sale or return, sale on approval or conditional sale arrangements. |
Loan Party | Authorized Shares/Issued Shares | Holder | Type of Rights/Stock (common/preferred/option/ class) | Percent Interest (on a fully diluted basis) |
DASAN NETWORK SOLUTIONS, INC. | 100/10 | DASAN Zhone Solutions, Inc. | Common | 100% |
Subsidiary | State or Other Jurisdiction of Incorporation or Organization | Authorized Shares/ Issued Shares Owned (Directly or Indirectly) By DNS | Percentage Ownership |
Dasan Network Solutions, Inc. | Republic of Korea | 1,000,000,000/10,000,000 | 100% |
Dasan Network Solutions Japan, Inc. | Japan | 24,640/6,400 | 69.06% |
Dasan Vietnam Co., Ltd. | Vietnam | 1/1 | 100% |
Name | Jurisdiction of Organization |
DASAN NETWORK SOLUTIONS, INC. | California |
Name | Organizational Identification Number |
DASAN NETWORK SOLUTIONS, INC. | FEIN: 27-3063221 California ID: C3303680 |
Name and Address of Bank | Loan Party | Account No.(1) | Purpose∗ |
Bank of America - Dasan Network Solutions | Dasan Network Solutions, Inc. | 3340 4679 4814 | Not in use |
Bank of America - Dasan Solutions | Dasan Network Solutions, Inc. | 3340 4446 5896 | Not in use |
Bank of America - Sales (9987) | Dasan Network Solutions, Inc. | 3340 4109 9987 | Payments to suppliers and vendors |
Bank of America - Dasan Main Account | Dasan Network Solutions, Inc. | 0012 6287 3420 | Payment of operational expenses, payroll and benefits, & office expenses |
Bank of America - Busi. Interest Maximizer | Dasan Network Solutions, Inc. | 0012 6287 3449 | Not in use |
Bank of America - Business Checking | Dasan Network Solutions, Inc. | 4815 8810 0437 8832 | Not in use |
* | For “Purpose” indicate either: “collection account” if proceeds of receivables or other assets are deposited in it, and note “lockbox” if it is subject to lockbox servicing arrangements with the applicable bank or “disbursement account” if it is a checking account or account used for transferring funds to third parties and note if it is used for a specific purpose, e.g., “payroll”, “medical”, “insurance”, “escrow” etc. Also, please note any “zero balance” or other automatic sweep or investment accounts. |
Obligor | Bank or Financial Institution | Type of Indebtedness | Facility size | Principal Amount Outstanding as of September 30, 2016 |
DNS Korea | Industrial Bank of Korea, Bundang Sunaeyeok Branch, 216, Hwangsaeul-ro, Bundang-gu, Seongnam-si, Gyeonggi-do, Korea | B2B payment | KRW 3,000,000,000 | KRW 703,775,563 |
Employee loans secured by DNS Korea deposit | KRW 1,600,000,000 | KRW 711,065,375 | ||
Letter of credit facility | USD 7,000,000 | USD 3,728,783.55 | ||
DNS Korea | Shinhan Bank, Gwanggyo Corporate Finance Center, 54, Cheonggyecheon-ro, Jung-gu, Seoul, Korea | B2B payment | KRW 6,000,000,000 | KRW 1,092,547,359 |
Short-term loans | KRW 4,000,000,000 | KRW 4,000,000,000 | ||
Discounting of bills | Not applicable | USD 3,100,000 | ||
DNS Korea | NH Bank, Eunhaeng-dong Branch, 469, Sanseong-daero, Sujeong-gu, Seongnam-si, Gyeonggi-do, Korea | B2B payment | KRW 1,000,000,000 | - |
Letter of credit facility | USD 5,000,000 | USD 2,544,809.17 | ||
DNS Korea | The Export-Import Bank of Korea, 38, Eunhaeng-ro, Yeongdeungpo-gu, Seoul, Korea | Revolving line of credit | KRW 9,000,000,000 | KRW 9,000,000,000 |
DNS Korea | KEB Hanabank, Sunaedong Branch, 12, Sunae-ro 46beon-gil, Bundang-gu, Seongnam-si, Gyeonggi-do, Korea | Revolving line of credit | USD 4,000,000 | JPY 408,100,000(1) |
Issuance of guaranty bonds | Not applicable | EUR 56,653.67 | ||
DNS Korea | State bank of India, Seoul Branch, 20th Floor, Kyobo Life Building, Jongno 1-ga , Jongno-gu , Seoul, Korea | Issuance of guaranty bonds | Not applicable | INR 5,000,000 |
DNS Korea | Samsung Futures, 67, Sejong-daero, Jung-gu, Seoul, Korea | Hedging arrangements | Not applicable | USD 10,400,000 and JPY 132,000,000 |
Address | Owned/Leased/Third Party∗ | Name/Address of Lessor or Third Party, as Applicable |
7195 Oakport Street Oakland, California | Leased | LBA Realty, LLC |
4400 College Blvd. Suite# 325, Overland Park, KS 66211 (1) | Third Party | Dixon Lumber Company, P.O. Box 907, Galax, VA 24333 |
800 Atlanta South Parkway # 100, College Park, GA 30349 (2) | Third Party | Top Trans Logistics, LLC. |
7340 Bryan Dairy Road, Largo, Florida 33777 | Leased | BACM 2005-3 BRYAN DAIRY INDUSTRIAL, LLC 1601 Washington Avenue, Suite 700 Miami Beach, Florida 33139 |
1317, Jungwon-daero, Janghowon-eup, Icheon-si, Gyeonggi-do, Korea | Third Party | Dasan Networks Inc. |
49, Daewangpangyo-ro 644beon-gil, Bundang-gu, Seongnam-si, Gyeonggi-do, Korea | Third Party | Dasan Networks Inc. |
Kirk Misaka | Chief Financial Officer |
James Norrod | Co-Chief Executive Officer |
Katheryn Root | Assistant Controller |
1. | I have reviewed this Quarterly Report on Form 10-Q of DASAN Zhone Solutions, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ JAMES NORROD | |
James Norrod | |
Co-Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of DASAN Zhone Solutions, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ IL YUNG KIM | |
Il Yung Kim | |
Co-Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of DASAN Zhone Solutions, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ KIRK MISAKA | |
Kirk Misaka | |
Chief Financial Officer |
1. | The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ JAMES NORROD | /s/ IL YUNG KIM | /s/ KIRK MISAKA | ||
James Norrod | Il Yung Kim | Kirk Misaka | ||
Co-Chief Executive Officer | Co-Chief Executive Officer | Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Nov. 02, 2016 |
|
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | ZHNE | |
Entity Registrant Name | DASAN ZHONE SOLUTIONS INC | |
Entity Central Index Key | 0001101680 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 81,873,848 |
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands |
Sep. 30, 2016 |
[1] | Dec. 31, 2015 |
||||
---|---|---|---|---|---|---|---|
Current assets: | |||||||
Cash and cash equivalents | [2] | $ 34,375 | $ 17,028 | ||||
Restricted cash | 5,218 | 3,844 | |||||
Short-term investments | 0 | 0 | |||||
Accounts receivable, net of allowances for sales returns and doubtful accounts of $5,492 as of September 30, 2016 and $868 as of December 31, 2015 | 39,306 | 32,728 | |||||
Other receivables | 12,892 | 13,010 | |||||
Current deferred income tax assets | 0 | 327 | |||||
Inventories, net | 31,957 | 13,900 | |||||
Prepaid expenses and other current assets | 3,878 | 951 | |||||
Total current assets | 127,626 | 74,775 | |||||
Property and equipment, net | 6,258 | 2,251 | |||||
Intangible assets, net | 22,573 | 696 | |||||
Non-current deferred income tax assets | 2,114 | 1,058 | |||||
Other assets | 1,778 | 4,811 | |||||
Total assets | 160,349 | 83,591 | |||||
Current liabilities: | |||||||
Accounts payable | 20,609 | 14,936 | |||||
Short-term debt | 21,941 | 21,848 | |||||
Accrued and other liabilities | 26,735 | 4,467 | |||||
Total current liabilities | 69,285 | 41,251 | |||||
Long-term debt - Related Party | 5,000 | 0 | |||||
Other long-term liabilities | 8,024 | 510 | |||||
Total liabilities | 82,309 | 41,761 | |||||
Stockholders’ equity: | |||||||
Common stock, $0.001 par value. Authorized 180,000 shares; 81,874 shares and 353,678,362 shares of DNS outstanding as of September 30, 2016 and December 31, 2015, respectively | 81,874 | 56,579 | |||||
Additional paid-in capital | 7,283 | (8,890) | |||||
Other comprehensive loss | 908 | (1,775) | |||||
Accumulated deficit | (12,743) | (4,222) | |||||
Non-controlling interest | 718 | 138 | |||||
Total stockholders’ equity | 78,040 | 41,830 | |||||
Total liabilities and stockholders’ equity | $ 160,349 | 83,591 | |||||
Predecessor | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ 10,015 | ||||||
|
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances for sales returns and doubtful accounts | $ 5,492 | $ 868 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.144 |
Common stock, authorized (in shares) | 180,000,000 | |
Common stock, issued (in shares) | 81,874,000 | 353,678,000 |
Common stock, outstanding (in shares) | 81,874,000 | 353,678,000 |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
||||||||
Income Statement [Abstract] | |||||||||||
Net revenue | [1] | $ 32,166 | $ 22,591 | $ 93,256 | $ 93,339 | ||||||
Cost of revenue | [1] | 22,693 | 16,774 | 68,997 | 69,287 | ||||||
Gross profit | [1] | 9,473 | 5,817 | 24,259 | 24,052 | ||||||
Operating expenses: | |||||||||||
Research and product development | [1] | 5,885 | 4,859 | 15,582 | 16,546 | ||||||
Selling, general and administrative | [1] | 8,202 | 3,939 | 16,903 | 12,458 | ||||||
Amortization of intangible assets | [1] | 299 | 0 | 299 | 0 | ||||||
Total operating expenses | [1] | 14,386 | 8,798 | 32,784 | 29,004 | ||||||
Operating loss | [1] | (4,913) | (2,981) | (8,525) | (4,952) | ||||||
Interest expense, net | [1] | (173) | (87) | (463) | (286) | ||||||
Other income, net | [1] | 52 | 583 | 117 | 780 | ||||||
Loss before income taxes | [1] | (5,034) | (2,485) | (8,871) | (4,458) | ||||||
Income tax expense (benefit) | [1] | (153) | 295 | (584) | 480 | ||||||
Net loss | [1] | (4,881) | (2,780) | (8,287) | [2] | (4,938) | [2] | ||||
Less: Net income attributable to non-controlling interest | [1] | 38 | 0 | 234 | 0 | ||||||
Net loss attributable to DASAN Zhone Solutions, Inc. | [1] | (4,919) | (2,780) | (8,521) | (4,938) | ||||||
Foreign currency translation adjustments | [1] | 2,269 | 1,009 | 2,670 | 107 | ||||||
Comprehensive loss | [1] | (2,612) | (1,771) | (5,617) | (4,831) | ||||||
Less: Comprehensive income attributable to non-controlling interest | [1] | 44 | 0 | 303 | 0 | ||||||
Comprehensive loss attributable to DASAN Zhone Solutions, Inc. | [1] | $ (2,656) | $ (1,771) | $ (5,920) | $ (4,831) | ||||||
Basic and diluted net loss per share (in USD per share) | [1] | $ (0.06) | $ (0.01) | $ (0.10) | $ (0.01) | ||||||
Weighted average shares outstanding used to compute basic net loss per share (in shares) | [1] | 81,839 | 347,005 | 81,739 | 347,005 | ||||||
Weighted average shares outstanding used to compute diluted net loss per share (in shares) | [1] | 81,839 | 347,005 | 81,739 | 347,005 | ||||||
|
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands |
9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|||||||||
Statement of Cash Flows [Abstract] | ||||||||||
Net loss | [1],[2] | $ (8,287) | $ (4,938) | |||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||
Depreciation and amortization | [2] | 1,165 | 1,112 | |||||||
Stock-based compensation | [2] | 128 | 0 | |||||||
Sales returns and doubtful accounts | [2] | (48) | 0 | |||||||
Loss on foreign currency translation | [2] | 2,189 | 727 | |||||||
Deferred income taxes | [2] | (612) | 480 | |||||||
Gain on foreign currency translation | [2] | (534) | (3,069) | |||||||
Other | [2] | 174 | 23 | |||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | [2] | 11,931 | 11,160 | |||||||
Other receivables | [2] | 2,670 | (2,385) | |||||||
Other receivables | [2] | (2,779) | 1,270 | |||||||
Prepaid expenses and other assets | [2] | (409) | (119) | |||||||
Accounts payable | [2] | (6,064) | (16,779) | |||||||
Accrued and other liabilities | [2] | 13,657 | 5,019 | |||||||
Net cash provided by (used in) operating activities | [2] | 13,181 | (7,499) | |||||||
Cash flows from investing activities: | ||||||||||
Decrease in restricted cash | [2] | (1,374) | 2,526 | |||||||
Increase in short-term loans to others | [2] | 1,561 | 285 | |||||||
Acquisition of other current financial assets | [2] | 0 | 0 | |||||||
Proceeds from other current financial assets | [2] | 319 | 86 | |||||||
Proceeds from disposal of property and equipment | [2] | 98 | 6 | |||||||
Acquisition of property and equipment | [2] | (402) | (541) | |||||||
Acquisition of intangible assets | [2] | (91) | 0 | |||||||
Proceeds of other non-current financial assets | [2] | 0 | 106 | |||||||
Increase in short-term loans to others | [2] | (1,386) | 0 | |||||||
Decrease in long-term loans to others | [2] | 330 | 0 | |||||||
Increase in long-term loans to others | [2] | 0 | (645) | |||||||
Net cash (used in) provided by investing activities | [2] | (945) | 1,823 | |||||||
Cash flows from financing activities: | ||||||||||
(Repayments of) proceeds from short-term borrowings | [2] | (3,320) | 5,770 | |||||||
Proceeds from long-term borrowings | [2] | 6,800 | 0 | |||||||
Government grants received | [2] | 31 | 156 | |||||||
Proceeds from issuance of common stock | [2] | 0 | 1,600 | |||||||
Decrease in capital surplus | [2] | 0 | (3,002) | |||||||
Net cash provided by financing activities | [2] | 3,511 | 4,524 | |||||||
Effect of exchange rate changes on cash | [2] | 1,600 | (440) | |||||||
Net increase (decrease) in cash and cash equivalents | [2] | 17,347 | (1,592) | |||||||
Cash and cash equivalents at beginning of period | [2] | 17,028 | 6,786 | |||||||
Cash and cash equivalents at end of period | [2] | $ 34,375 | [3] | $ 5,194 | ||||||
|
Organization and Summary of Significant Accounting Policies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies
DASAN Zhone Solutions, Inc. (formerly known as Zhone Technologies, Inc. and referred to, collectively with its subsidiaries, as "DASAN Zhone" or the "Company") is a global leader in broad-based network access solutions. The Company provides solutions in five major product areas: broadband access, mobile backhaul, Ethernet switching, passive optical LAN ("POLAN") and software defined networks ("SDN"). More than 750 of the world's most innovative network operators, service providers and enterprises turn to DASAN Zhone for fiber access transformation. DASAN Zhone was incorporated under the laws of the state of Delaware in June 1999. On September 9, 2016, the Company acquired Dasan Network Solutions, Inc. ("DNS") through the merger of a wholly owned subsidiary of the Company with and into DNS, with DNS surviving as a wholly owned subsidiary of the Company (the "Merger"). In connection with the Merger, the Company changed its name from Zhone Technologies, Inc. to DASAN Zhone Solutions, Inc. For periods through September 8, 2016, Zhone Technologies, Inc. is referred to as "Legacy Zhone." The Company’s common stock continues to be traded on the Nasdaq Capital Market, and the Company’s ticker symbol was changed from "ZHNE" to "DZSI" effective September 12, 2016. The Company is headquartered in Oakland, California.
The condensed consolidated financial statements are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). All significant inter-company transactions and balances have been eliminated in consolidation. The results of operations for the current interim period are not necessarily indicative of results to be expected for the current year or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of DNS and notes thereto included in the Company’s Definitive Proxy Statement filed with the Securities and Exchange Commission on August 8, 2016. As discussed more fully in Note 2, on September 9, 2016, the Company acquired DNS through the Merger of a wholly owned subsidiary of the Company ("Merger Sub") with and into DNS, with DNS surviving as a wholly owned subsidiary of the Company. The Merger is treated as a reverse acquisition for accounting purposes, with DNS as the acquirer of the Company. As such, the financial results of the Company for the three and nine months ended September 30, 2016 presented in this Form 10-Q reflect the operating results of DNS and its consolidated subsidiaries for the period commencing on the first day of the applicable period through September 8, 2016, and reflect the operating results of both DNS and Legacy Zhone and their respective consolidated subsidiaries for the period September 9 through September 30, 2016. Such results are compared to the financial results for DNS and its consolidated subsidiaries for the three and nine months ended September 30, 2015. The balance sheet of the Company reflects the fair value of the assets and liabilities of Legacy Zhone as of the effective date of the Merger. Those assets include the fair value of acquired intangible assets and goodwill. Due to the foregoing, the Company’s financial results for the three and nine months ended September 30, 2016 are not comparable to its financial results for the three and nine months ended September 30, 2015. The fourth quarter ending December 31, 2016 will be the first quarter in which the Company’s financial results reflect a full quarter of operating results for both DNS and Legacy Zhone and their respective consolidated subsidiaries. Except as otherwise specifically noted herein, all references to the "Company" refer to (i) DNS and its consolidated subsidiaries for periods through September 8, 2016 and (ii) the Company and its consolidated subsidiaries for periods on or after September 9, 2016.
The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company incurred a net loss of $3.0 million for the year ended December 31, 2015 and a net loss of $8.3 million for the nine months ended September 30, 2016, which net losses have continued to reduce cash and cash equivalents. As of September 30, 2016, the Company had approximately $34.4 million in cash and cash equivalents and $26.9 million in aggregate principal amount of outstanding borrowings under short-term loans and the Company's loan agreement with DASAN Networks, Inc ("DASAN"). In addition, the Company had an aggregate of $37.0 million in revolving line of credit facilities as of September 30, 2016, which included the Company's $25.0 million revolving line of credit and letter of credit facility (the “WFB Facility”) with Wells Fargo Bank (“WFB”). The Company had no borrowings outstanding under the WFB Facility and $5.7 million in aggregate principal amount of borrowings under its other revolving line of credit facilities at September 30, 2016. See Note 7 and Note 8 for additional information. The Company’s current lack of liquidity could harm it by:
In order to meet the Company’s liquidity needs and finance its capital expenditures and working capital needs for the business, the Company may be required to sell assets, issue debt or equity securities, purchase credit insurance or borrow on unfavorable terms. In addition, the Company may be required to reduce its operations in low margin regions, including reductions in headcount. The Company may be unable to sell assets, issue securities or access additional indebtedness to meet these needs on favorable terms, or at all. If additional capital is raised through the issuance of debt securities or other debt financing, the terms of such debt may include covenants, restrictions and financial ratios that may restrict the Company’s ability to operate its business. Likewise, any equity financing could result in additional dilution of the Company’s stockholders. If the Company is unable to sell assets, issue securities or access additional indebtedness to meet these needs on favorable terms, or at all, the Company may become unable to pay its ordinary expenses, including its debt service, on a timely basis and may be required to reduce the scope of its planned product development and sales and marketing efforts beyond the reductions it has previously taken. Based on the Company’s current plans and business conditions, it believes that its focused operating expense discipline along with its existing cash, cash equivalents and available credit facilities will be sufficient to satisfy its anticipated cash requirements for at least the next twelve months. The Company's financial condition and results of operations could be materially and adversely affected by various factors, including:
The Company may experience material adverse impacts on its business, operating results and financial condition as a result of weak or recessionary economic or market conditions in the United States, Korea or the rest of the world.
The preparation of the condensed consolidated financial statements in conformity with generally accepted accounting principles in the United States of America 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.
The Company recognizes revenue when the earnings process is complete. The Company recognizes product revenue upon shipment of product under contractual terms which transfer title to customers upon shipment, under normal credit terms, net of estimated sales returns and allowances at the time of shipment. Revenue is deferred if there are significant post-delivery obligations or if the fees are not fixed or determinable. When significant post-delivery obligations exist, revenue is deferred until such obligations are fulfilled. The Company’s arrangements generally do not have any significant post-delivery obligations. If the Company’s arrangements include customer acceptance provisions, revenue is recognized upon obtaining the signed acceptance certificate from the customer, unless the Company can objectively demonstrate that the delivered products or services meet all the acceptance criteria specified in the arrangement prior to obtaining the signed acceptance. In those instances where revenue is recognized prior to obtaining the signed acceptance certificate, the Company uses successful completion of customer testing as the basis to objectively demonstrate that the delivered products or services meet all the acceptance criteria specified in the arrangement. The Company also considers historical acceptance experience with the customer, as well as the payment terms specified in the arrangement, when revenue is recognized prior to obtaining the signed acceptance certificate. When collectability is not reasonably assured, revenue is recognized when cash is collected. The Company makes certain sales to product distributors. These customers are given certain privileges to return a portion of inventory. Return privileges generally allow distributors to return inventory based on a percent of purchases made within a specific period of time. The Company recognizes revenue on sales to distributors that have contractual return rights when the products have been sold by the distributors, unless there is sufficient customer specific sales and sales returns history to support revenue recognition upon shipment. In those instances when revenue is recognized upon shipment to distributors, the Company uses historical rates of return from the distributors to provide for estimated product returns. The Company derives revenue primarily from stand-alone sales of its products. In certain cases, the Company’s products are sold along with services, which include education, training, installation, and/or extended warranty services. As such, some of the Company’s sales have multiple deliverables. The Company’s products and services qualify as separate units of accounting and are deemed to be non-contingent deliverables as the Company’s arrangements typically do not have any significant performance, cancellation, termination and refund type provisions. Products are typically considered delivered upon shipment. Revenue from services is recognized ratably over the period during which the services are to be performed. For multiple deliverable revenue arrangements, the Company allocates revenue to products and services using the relative selling price method to recognize revenue when the revenue recognition criteria for each deliverable are met. The selling price of a deliverable is based on a hierarchy and if the Company is unable to establish vendor-specific objective evidence of selling price (“VSOE”) it uses third-party evidence of selling price (“TPE”), and if no such data is available, it uses a best estimated selling price (“BSP”). In most instances, particularly as it relates to products, the Company is not able to establish VSOE for all deliverables in an arrangement with multiple elements. This may be due to infrequently selling each element separately, not pricing products within a narrow range, or only having a limited sales history. When VSOE cannot be established, the Company attempts to establish the selling price of each element based on TPE. Generally, the Company’s marketing strategy differs from that of the Company’s peers and the Company’s offerings contain a significant level of customization and differentiation such that the comparable pricing of products with similar functionality cannot be obtained. Furthermore, the Company is unable to reliably determine what similar competitor products’ selling prices are on a stand-alone basis. Therefore, the Company is typically not able to determine TPE for the Company’s products. When the Company is unable to establish selling price using VSOE or TPE, the Company uses BSP. The objective of BSP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand-alone basis. The BSP of each deliverable is determined using average discounts from list price from historical sales transactions or cost plus margin approaches based on the factors, including but not limited to, the Company’s gross margin objectives and pricing practices plus customer and market specific considerations. The Company has established TPE for its training, education and installation services. TPE is determined based on competitor prices for similar deliverables when sold separately. These service arrangements are typically short term in nature and are largely completed shortly after delivery of the product. Training and education services are based on a daily rate per person and vary according to the type of class offered. Installation services are based on daily rate per person and vary according to the complexity of the products being installed. Extended warranty services are priced based on the type of product and are sold in one to five year durations. Extended warranty services include the right to warranty coverage beyond the standard warranty period. In substantially all of the arrangements with multiple deliverables pertaining to arrangements with these services, the Company has used and intends to continue using VSOE to determine the selling price for the services. The Company determines VSOE based on its normal pricing practices for these specific services when sold separately.
As of September 30, 2016 and December 31, 2015, the Company's financial instruments included cash and cash equivalents, short-term investments, trade and other receivables, other current assets, accounts payable, other current liabilities and debt. Due to the short-term maturities of cash and cash equivalents, trade and other receivables, other current assets, accounts payable and other current liabilities, the carrying amounts approximate fair value at the applicable balance sheet date. The carrying value of debt approximated its fair value based on a comparison with then-prevailing market interest rates. Due to the short-term maturities of the Company’s investments, carrying amounts approximated fair value at the applicable balance sheet date. The fair value of these instruments would be categorized as Level 2 in the fair value hierarchy, with the exception of cash and cash equivalents, which would be categorized as Level 1.
The Company’s customers include competitive and incumbent local exchange carriers, competitive access providers, Internet service providers, wireless carriers and resellers serving these markets. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Allowances are maintained for potential doubtful accounts. For the three months ended September 30, 2016 and 2015, three customers represented 46% and 63% of net revenue, respectively. For the nine months ended September 30, 2016 and 2015, three customers represented 44% and 56% of net revenue, respectively. Three customers accounted for 37% and 66% of net accounts receivable as of September 30, 2016 and December 31, 2015, respectively. As of September 30, 2016 and December 31, 2015, receivables from customers in countries other than the United States represented 80% and 93%, respectively, of net accounts receivable.
There have been no items reclassified out of accumulated other comprehensive loss and into net loss. The Company’s other comprehensive loss for the nine months ended September 30, 2016 and 2015 is comprised of only foreign exchange translation adjustments.
On May 28, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The standard permits the use of either the retrospective or cumulative effect transition method. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of the guidance in ASU No. 2014-09, Revenue from Contracts with Customer, for all entities by one year. With the deferral, the new standard is effective for the Company on January 1, 2018. Early adoption is permitted, but not before the original effective date of January 1, 2017. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which describes how an entity should assess its ability to meet obligations and sets rules for how this information should be disclosed in financial statements. The new standard is effective for the Company on January 1, 2017. Early application is permitted. The Company is evaluating the effect that ASU 2014-15 will have on its consolidated financial statements and related disclosures. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which requires an entity to measure inventory at the lower of cost and net realizable value. The guidance does not apply to inventory that is measured using last-in, first-out ("LIFO") or the retail inventory method. The guidance applies to all other inventory, which includes inventory that is measured using first-in, first-out ("FIFO") or average cost. The guidance is effective for the Company on January 1, 2017. ASU No. 2015-11 should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is evaluating the effect that ASU 2015-11 will have on its consolidated financial statements and related disclosures. In November 2015, the FASB issued ASU 2015-17, Income Taxes, Balance Sheet Classification of Deferred Taxes, which simplifies the classification of deferred tax assets and liabilities as non-currrent in the balance sheet. The updated guidance is effective for the Company on January 1, 2017, and early adoption is permitted. The Company has not yet evaluated the impact of the guidance on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. The updated guidance is effective for the Company on January 1, 2019, and early adoption is permitted. The Company has not yet evaluated the impact of the guidance on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which requires entities to simplify several aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on statements of cash flows. The guidance is effective for the Company on January 1, 2017, and early adoption is permitted. The Company has not yet evaluated the impact of the guidance on its consolidated financial statements and related disclosures. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients, which provides clarification on how to assess collectibility, present sales tax, treat noncash consideration, and account for completed and modified contracts at the time of transition of ASU 2014-09. The effective date of this updated guidance for the Company is the same as the effective date of ASU 2014-09, which is January 1, 2018. The Company has not yet evaluated the impact of the guidance on its consolidated financial statements and related disclosures. In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows, Classification of Certain Cash Receipts and Cash Payments, which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The updated guidance is effective for the Company on January 1, 2018, and early adoption is permitted. The Company has not yet evaluated the impact of the guidance on its consolidated financial statements and related disclosures. |
Merger |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Merger | Merger On September 9, 2016, the Company acquired DNS through the Merger of a wholly owned subsidiary of the Company with and into DNS, with DNS surviving as a wholly owned subsidiary of the Company. At the effective time of the Merger, all issued and outstanding shares of capital stock of DNS held by DASAN were canceled and converted into the right to receive shares of the Company's common stock in an amount equal to 58% of the issued and outstanding shares of the Company's commons stock immediately following the Merger. Accordingly, at the effective time of the Merger, the Company issued 47,465,082 shares of the Company’s common stock to DASAN as consideration in the Merger, of which 4,746,508 shares are being held in escrow as security for claims for indemnifiable losses in accordance with the merger agreement relating to the Merger. As a result, immediately following the effective time of the Merger, DASAN held 58% of the outstanding shares of the Company's common stock and the holders of the Company's common stock immediately prior to the Merger retained, in the aggregate, 42% of the outstanding shares of the Company's common stock. As described in Note 1, the Company accounted for the Merger as a reverse acquisition under the acquisition method of accounting in accordance with ASC 805, "Business Combination." Consequently, for the purpose of the Purchase Price Allocation ("PPA") DNS' assets and liabilities have been retained at their carrying values and Legacy Zhone's assets acquired, and liabilities assumed, by DNS (as the accounting acquirer in the Merger) have been recorded at their fair value measured as of September 9, 2016. The Merger combines leading technology platforms with a broadened customer base. The total purchase consideration in the Merger is based on the number of shares of Legacy Zhone common stock and Legacy Zhone stock options outstanding immediately prior to the closing of the Merger, and was determined based on the closing price of $1.19 per share of the Company's common stock on the September 9, 2016 (the effective date of the Merger) and the 34,371,266 shares. The estimated total purchase consideration is calculated as follows (in thousands):
The Company has performed a preliminary valuation analysis of the market value of the assets and liabilities of Legacy Zhone. The following table summarizes the preliminary allocation of the fair value consideration transferred as of the acquisition date (unaudited, in thousands):
The fair value of the assets acquired includes trade receivables of $17.1 million. During the three months period ended September 30, 2016, the Company recorded $3.5 million in Merger-related costs. These expenses are included in general and administrative expense. The goodwill is mainly attributable to the fair values assigned to the acquired intangible assets. The following table presents the preliminary fair values of the acquired intangible assets at the effective date of the Merger (in thousands, except years):
The following unaudited pro forma condensed combined financial information for the three and nine months ended September 30, 2016 and 2015 gives effect to the Merger as if it had occurred at the beginning of each period presented. The unaudited pro forma condensed combined financial information has been included for comparative purposes only and is not necessarily indicative of the combined company's financial position or results of operations might have been had the Merger been completed as of the dates indicated. In addition, the unaudited pro forma condensed combined financial information does not purport to project the future financial position or results of operations of the combined company. The unaudited pro forma condensed combined financial information reflects adjustments related to the Merger, such as to record certain incremental expenses resulting from purchase accounting adjustments (such as amortization expenses in connection with the fair value adjustments to intangible assets and Merger-related costs).
For the period from September 9, 2016 (the effective date of the Merger) through September 30, 2016, the Company's income statement included $5.7 million of revenues and $2.5 million of net loss from the Legacy Zhone business. |
Cash and Cash Equivalents and Restricted Cash |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash As of September 30, 2016 and December 31, 2015, the Company's cash and cash equivalents comprised financial deposits. Restricted cash comprised cash restricted for research and development activities and collateral for borrowings. |
Inventories |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories as of September 30, 2016 and December 31, 2015 were as follows (in thousands):
|
Property and Equipment, Net |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net | Property and Equipment, net Property and equipment, net, as of September 30, 2016 and December 31, 2015 were as follows (in thousands):
Depreciation expense associated with property and equipment for the three months ended September 30, 2016 and 2015 amounted to $0.6 million and $0.4 million, respectively. Depreciation expense associated with property and equipment for the nine months ended September 30, 2016 and 2015 amounted to $1.2 million and $1.1 million, respectively. The Company receives grants from the government mainly to support capital expenditures. Such grants are deferred and are generally refundable to the extent the Company does not utilize the funds for qualifying expenditures. Once earned, the Company records the grants as a contra amount to the assets and amortizes such amount over the useful lives of the related assets as a reduction to depreciation expense. |
Intangible Assets, net |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets, net | Intangible Assets, net Intangible assets, net, as of September 30, 2016 and December 31, 2015 were as follows (in thousands):
Impairment and amortization expense associated with intangible assets for the three months ended September 30, 2016 and 2015 amounted to $0.3 million and less than $0.1 million, respectively. Impairment and amortization expense associated with intangible assets for the nine months ended September 30, 2016 and 2015 amounted to $0.4 million and less than $0.1 million, respectively. |
Debt |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt WFB Facility As of September 30, 2016, the Company had a $25.0 million revolving line of credit and letter of credit facility with WFB. Under the WFB Facility, the Company has the option of borrowing funds at agreed upon interest rates. The amount that the Company is able to borrow under the WFB Facility varies based on eligible accounts receivable and inventory, as defined in the agreement, as long as the aggregate amount outstanding does not exceed $25.0 million less the amount committed as security for letters of credit, which at September 30, 2016 was $3.8 million To maintain availability of funds under the WFB Facility, the Company pays a commitment fee on the unused portion. The commitment fee is 0.25% per annum and is recorded as interest expense. The Company had no outstanding borrowings and $3.8 million committed as security for letters of credit under its WFB Facility at September 30, 2016. The Company had $2.9 million of borrowing availability remaining under the WFB Facility as of September 30, 2016. The maturity date under the WFB Facility is March 31, 2019. The amounts borrowed under the WFB Facility bear interest, payable monthly, at a floating rate equal to the three-month LIBOR plus a margin based on our average excess availability (as calculated under the WFB Facility). The interest rate on the WFB Facility was 3.35% at September 30, 2016. The Company’s obligations under the WFB Facility are secured by substantially all of its personal property assets and those of its subsidiaries that guarantee the WFB Facility, including their intellectual property. The WFB Facility contains certain financial covenants, and customary affirmative covenants and negative covenants. If the Company defaults under the WFB Facility due to a covenant breach or otherwise, WFB may be entitled to, among other things, require the immediate repayment of all outstanding amounts and sell the Company’s assets to satisfy the obligations under the WFB Facility. As of September 30, 2016, the Company was in compliance with these covenants. Bank and Trade Facilities - Foreign Operations Certain of the Company's foreign subsidiaries have entered into various financing arrangements with foreign banks and other lending institutions consisting primarily of revolving lines of credit, trade facilities, term loans and export development loans. These facilities are renewed on an annual basis and are generally secured by a security interest in certain assets of the applicable foreign subsidiaries. Payments under such facilities are made in accordance with the given lender’s amortization schedules. As of September 30, 2016 and December 31, 2015, the Company had an aggregate outstanding balance of $20.1 million and $21.8 million, respectively, under such financing arrangements, and the interest rate per annum applicable to outstanding borrowings under these financing arrangements as of September 30, 2016 and December 31, 2015 ranged from 1.66% to 4.26% and 2.04% to 3.55%, respectively. |
Related Party Borrowings |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Borrowings | Related Party Borrowings In connection with the Merger, on September 9, 2016, the Company entered into a Loan Agreement with DASAN for a $5.0 million unsecured subordinated term loan facility. Under the Loan Agreement, the Company was permitted to request drawdowns of one or more term loans in an aggregate principal amount not to exceed $5.0 million. As of September 30, 2016, $5.0 million in term loans was outstanding under the facility. Such term loans mature in September 2021 and are pre-payable at any time by the Company without premium or penalty. The interest rate as of September 30, 2016 under this facility was 4.6% per annum. In addition, the Company's subsidiary DNS borrowed $1.8 million from DASAN for capital investment in February 2016, which amount was outstanding as of September 30, 2016. This loan matures in March 2017 with an option of renewal by mutual agreement, and bears interest at a rate of 6.9% per annum, payable annually. |
Net Loss Per Share |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by dividing the net loss applicable to holders of common stock for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common equivalent shares are excluded if their effect is antidilutive. Potential common equivalent shares are composed of incremental shares of common equivalent shares issuable upon the exercise of stock options and warrants. The following table is a reconciliation of the numerator and denominator in the basic and diluted net loss per share calculation (in thousands, except per share data):
The following tables set forth potential shares of the Company's common stock that are not included in the diluted net loss per share calculation for the three and nine months ended September 30,2 016 because their effect would be antidilutive for the periods indicated (in thousands, except exercise price per share data):
There were no shares that had anti-dilutive effect on the calculation of diluted net loss per share for the three and nine months ended September 30, 2015. |
Commitments and Contingencies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company has entered into operating leases for certain office space and equipment, some of which contain renewal options. Estimated future lease payments under all non-cancelable operating leases with terms in excess of one year, including taxes and service fees, are as follows (in thousands):
Warranties The Company accrues for warranty costs based on historical trends for the expected material and labor costs to provide warranty services. Warranty periods are generally up to two years from the date of shipment. The following table reconciles changes in the Company’s accrued warranties and related costs for the nine months ended September 30, 2016 and 2015 (in thousands):
Performance Bonds In the normal course of operations, from time to time, the Company arranges for the issuance of various types of surety bonds, such as bid and performance bonds, which are agreements under which the surety company guarantees that the Company will perform in accordance with contractual or legal obligations. As of September 30, 2016, the Company did not have any outstanding surety bonds. Purchase Commitments The Company has agreements with various contract manufacturers which include non-cancellable inventory purchase commitments. The Company’s inventory purchase commitments typically allow for cancellation of orders 30 days in advance of the required inventory availability date as set by the Company at time of order. The amount of non-cancellable purchase commitments outstanding, net of reserve, was $5.5 million as of September 30, 2016. Payment Guarantees Provided by Third Parties The following table sets forth third parties that have provided payment guarantees of the Company's indebtedness and other obligations as of September 30, 2016 (in thousands):
1The Company is responsible for the warranty liabilities generally for a period of up to two years for major product sales and has obtained surety insurance with respect to part of such warranty liabilities. Royalties The Company has certain royalty commitments associated with the shipment and licensing of certain products. Royalty expense is generally based on a dollar amount per unit shipped or a percentage of the underlying revenue and is recorded in cost of revenue. Legal Proceedings The Company is subject to various legal proceedings, claims and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, the Company does not expect that the ultimate costs to resolve these matters will have a material adverse effect on its consolidated financial position or results of operations. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the results of operations of the period in which the ruling occurs, or future periods. |
Enterprise-Wide Information |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Enterprise-Wide Information | Enterprise-Wide Information The Company is a global leader in broad-based network access solutions. The Company provides solutions in five major product areas: broadband access, Ethernet switching, mobile backhaul, POLAN and SDN. The Company’s chief operating decision makers are the Company’s Co-Chief Executive Officers. The Co-Chief Executive Officers review financial information presented on a consolidated basis accompanied by disaggregated information about revenues by geographic region for purposes of making operating decisions and assessing financial performance. The Company has determined that it has operated within one discrete reportable business segment since inception. The following summarizes required disclosures about geographic concentrations and revenue by products and services (in thousands):
|
Income Taxes |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The total amount of unrecognized tax benefits, including interest and penalties, at September 30, 2016 was not material. The amount of tax benefits that would impact the effective income tax rate, if recognized, is not expected to be material. There were no significant changes to unrecognized tax benefits during the quarters ended September 30, 2016 and 2015. The Company does not anticipate any significant changes with respect to unrecognized tax benefits within the next 12 months. The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The open tax years for the major jurisdictions are as follows:
However, due to the fact the Company had net operating losses and credits carried forward in most jurisdictions, certain items attributable to technically closed years are still subject to adjustment by the relevant taxing authority through an adjustment to tax attributes carried forward to open years. The Company estimates that its foreign income will generally be subject to taxation in the United States on a current basis and that its foreign subsidiaries and representative offices will therefore not have any material untaxed earnings subject to deferred taxes. In addition, to the extent the Company is deemed to have a sufficient connection to a particular taxing jurisdiction to enable that jurisdiction to tax the Company but the Company has not filed an income tax return in that jurisdiction for the year(s) at issue, the jurisdiction would typically be able to assert a tax liability for such years without limitation on the number of years it may examine. The Company is not currently under examination for income taxes in any material jurisdiction. |
Organization and Summary of Significant Accounting Policies (Policies) |
9 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2016 | |||||
Accounting Policies [Abstract] | |||||
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). All significant inter-company transactions and balances have been eliminated in consolidation. The results of operations for the current interim period are not necessarily indicative of results to be expected for the current year or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of DNS and notes thereto included in the Company’s Definitive Proxy Statement filed with the Securities and Exchange Commission on August 8, 2016. |
||||
Use of Estimates |
The preparation of the condensed consolidated financial statements in conformity with generally accepted accounting principles in the United States of America 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates |
||||
Revenue Recognition |
The Company recognizes revenue when the earnings process is complete. The Company recognizes product revenue upon shipment of product under contractual terms which transfer title to customers upon shipment, under normal credit terms, net of estimated sales returns and allowances at the time of shipment. Revenue is deferred if there are significant post-delivery obligations or if the fees are not fixed or determinable. When significant post-delivery obligations exist, revenue is deferred until such obligations are fulfilled. The Company’s arrangements generally do not have any significant post-delivery obligations. If the Company’s arrangements include customer acceptance provisions, revenue is recognized upon obtaining the signed acceptance certificate from the customer, unless the Company can objectively demonstrate that the delivered products or services meet all the acceptance criteria specified in the arrangement prior to obtaining the signed acceptance. In those instances where revenue is recognized prior to obtaining the signed acceptance certificate, the Company uses successful completion of customer testing as the basis to objectively demonstrate that the delivered products or services meet all the acceptance criteria specified in the arrangement. The Company also considers historical acceptance experience with the customer, as well as the payment terms specified in the arrangement, when revenue is recognized prior to obtaining the signed acceptance certificate. When collectability is not reasonably assured, revenue is recognized when cash is collected. The Company makes certain sales to product distributors. These customers are given certain privileges to return a portion of inventory. Return privileges generally allow distributors to return inventory based on a percent of purchases made within a specific period of time. The Company recognizes revenue on sales to distributors that have contractual return rights when the products have been sold by the distributors, unless there is sufficient customer specific sales and sales returns history to support revenue recognition upon shipment. In those instances when revenue is recognized upon shipment to distributors, the Company uses historical rates of return from the distributors to provide for estimated product returns. The Company derives revenue primarily from stand-alone sales of its products. In certain cases, the Company’s products are sold along with services, which include education, training, installation, and/or extended warranty services. As such, some of the Company’s sales have multiple deliverables. The Company’s products and services qualify as separate units of accounting and are deemed to be non-contingent deliverables as the Company’s arrangements typically do not have any significant performance, cancellation, termination and refund type provisions. Products are typically considered delivered upon shipment. Revenue from services is recognized ratably over the period during which the services are to be performed. For multiple deliverable revenue arrangements, the Company allocates revenue to products and services using the relative selling price method to recognize revenue when the revenue recognition criteria for each deliverable are met. The selling price of a deliverable is based on a hierarchy and if the Company is unable to establish vendor-specific objective evidence of selling price (“VSOE”) it uses third-party evidence of selling price (“TPE”), and if no such data is available, it uses a best estimated selling price (“BSP”). In most instances, particularly as it relates to products, the Company is not able to establish VSOE for all deliverables in an arrangement with multiple elements. This may be due to infrequently selling each element separately, not pricing products within a narrow range, or only having a limited sales history. When VSOE cannot be established, the Company attempts to establish the selling price of each element based on TPE. Generally, the Company’s marketing strategy differs from that of the Company’s peers and the Company’s offerings contain a significant level of customization and differentiation such that the comparable pricing of products with similar functionality cannot be obtained. Furthermore, the Company is unable to reliably determine what similar competitor products’ selling prices are on a stand-alone basis. Therefore, the Company is typically not able to determine TPE for the Company’s products. When the Company is unable to establish selling price using VSOE or TPE, the Company uses BSP. The objective of BSP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand-alone basis. The BSP of each deliverable is determined using average discounts from list price from historical sales transactions or cost plus margin approaches based on the factors, including but not limited to, the Company’s gross margin objectives and pricing practices plus customer and market specific considerations. The Company has established TPE for its training, education and installation services. TPE is determined based on competitor prices for similar deliverables when sold separately. These service arrangements are typically short term in nature and are largely completed shortly after delivery of the product. Training and education services are based on a daily rate per person and vary according to the type of class offered. Installation services are based on daily rate per person and vary according to the complexity of the products being installed. Extended warranty services are priced based on the type of product and are sold in one to five year durations. Extended warranty services include the right to warranty coverage beyond the standard warranty period. In substantially all of the arrangements with multiple deliverables pertaining to arrangements with these services, the Company has used and intends to continue using VSOE to determine the selling price for the services. The Company determines VSOE based on its normal pricing practices for these specific services when sold separately |
||||
Fair Value of Financial Instruments |
As of September 30, 2016 and December 31, 2015, the Company's financial instruments included cash and cash equivalents, short-term investments, trade and other receivables, other current assets, accounts payable, other current liabilities and debt. Due to the short-term maturities of cash and cash equivalents, trade and other receivables, other current assets, accounts payable and other current liabilities, the carrying amounts approximate fair value at the applicable balance sheet date. The carrying value of debt approximated its fair value based on a comparison with then-prevailing market interest rates. Due to the short-term maturities of the Company’s investments, carrying amounts approximated fair value at the applicable balance sheet date. The fair value of these instruments would be categorized as Level 2 in the fair value hierarchy, with the exception of cash and cash equivalents, which would be categorized as Level 1 |
||||
Concentration of Risk |
The Company’s customers include competitive and incumbent local exchange carriers, competitive access providers, Internet service providers, wireless carriers and resellers serving these markets. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Allowances are maintained for potential doubtful accounts |
||||
Comprehensive Loss |
There have been no items reclassified out of accumulated other comprehensive loss and into net loss. The Company’s other comprehensive loss for the nine months ended September 30, 2016 and 2015 is comprised of only foreign exchange translation adjustments |
||||
Recent Accounting Pronouncements | May 28, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The standard permits the use of either the retrospective or cumulative effect transition method. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of the guidance in ASU No. 2014-09, Revenue from Contracts with Customer, for all entities by one year. With the deferral, the new standard is effective for the Company on January 1, 2018. Early adoption is permitted, but not before the original effective date of January 1, 2017. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which describes how an entity should assess its ability to meet obligations and sets rules for how this information should be disclosed in financial statements. The new standard is effective for the Company on January 1, 2017. Early application is permitted. The Company is evaluating the effect that ASU 2014-15 will have on its consolidated financial statements and related disclosures. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which requires an entity to measure inventory at the lower of cost and net realizable value. The guidance does not apply to inventory that is measured using last-in, first-out ("LIFO") or the retail inventory method. The guidance applies to all other inventory, which includes inventory that is measured using first-in, first-out ("FIFO") or average cost. The guidance is effective for the Company on January 1, 2017. ASU No. 2015-11 should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is evaluating the effect that ASU 2015-11 will have on its consolidated financial statements and related disclosures. In November 2015, the FASB issued ASU 2015-17, Income Taxes, Balance Sheet Classification of Deferred Taxes, which simplifies the classification of deferred tax assets and liabilities as non-currrent in the balance sheet. The updated guidance is effective for the Company on January 1, 2017, and early adoption is permitted. The Company has not yet evaluated the impact of the guidance on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. The updated guidance is effective for the Company on January 1, 2019, and early adoption is permitted. The Company has not yet evaluated the impact of the guidance on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which requires entities to simplify several aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on statements of cash flows. The guidance is effective for the Company on January 1, 2017, and early adoption is permitted. The Company has not yet evaluated the impact of the guidance on its consolidated financial statements and related disclosures. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients, which provides clarification on how to assess collectibility, present sales tax, treat noncash consideration, and account for completed and modified contracts at the time of transition of ASU 2014-09. The effective date of this updated guidance for the Company is the same as the effective date of ASU 2014-09, which is January 1, 2018. The Company has not yet evaluated the impact of the guidance on its consolidated financial statements and related disclosures. In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows, Classification of Certain Cash Receipts and Cash Payments, which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The updated guidance is effective for the Company on January 1, 2018, and early adoption is permitted. The Company has not yet evaluated the impact of the guidance on its consolidated financial statements and related disclosures. |
Merger (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | The estimated total purchase consideration is calculated as follows (in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following table summarizes the preliminary allocation of the fair value consideration transferred as of the acquisition date (unaudited, in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The following table presents the preliminary fair values of the acquired intangible assets at the effective date of the Merger (in thousands, except years):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information | The following unaudited pro forma condensed combined financial information for the three and nine months ended September 30, 2016 and 2015 gives effect to the Merger as if it had occurred at the beginning of each period presented. The unaudited pro forma condensed combined financial information has been included for comparative purposes only and is not necessarily indicative of the combined company's financial position or results of operations might have been had the Merger been completed as of the dates indicated. In addition, the unaudited pro forma condensed combined financial information does not purport to project the future financial position or results of operations of the combined company. The unaudited pro forma condensed combined financial information reflects adjustments related to the Merger, such as to record certain incremental expenses resulting from purchase accounting adjustments (such as amortization expenses in connection with the fair value adjustments to intangible assets and Merger-related costs).
|
Inventories (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories as of September 30, 2016 and December 31, 2015 were as follows (in thousands):
|
Property and Equipment, Net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net | Property and equipment, net, as of September 30, 2016 and December 31, 2015 were as follows (in thousands):
|
Intangible Assets, net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets and Goodwill | Intangible assets, net, as of September 30, 2016 and December 31, 2015 were as follows (in thousands):
|
Net Loss Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table is a reconciliation of the numerator and denominator in the basic and diluted net loss per share calculation (in thousands, except per share data):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Potential Common Stock not Included in Diluted Net Income (Loss) Per Share Calculation | The following tables set forth potential shares of the Company's common stock that are not included in the diluted net loss per share calculation for the three and nine months ended September 30,2 016 because their effect would be antidilutive for the periods indicated (in thousands, except exercise price per share data):
|
Commitments and Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Lease Payments under All Non Cancelable Operating Leases | Estimated future lease payments under all non-cancelable operating leases with terms in excess of one year, including taxes and service fees, are as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Changes in Accrued Warranties and Related Costs | The following table reconciles changes in the Company’s accrued warranties and related costs for the nine months ended September 30, 2016 and 2015 (in thousands):
|
Enterprise-Wide Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue by Geography | The Company is a global leader in broad-based network access solutions. The Company provides solutions in five major product areas: broadband access, Ethernet switching, mobile backhaul, POLAN and SDN. The Company’s chief operating decision makers are the Company’s Co-Chief Executive Officers. The Co-Chief Executive Officers review financial information presented on a consolidated basis accompanied by disaggregated information about revenues by geographic region for purposes of making operating decisions and assessing financial performance. The Company has determined that it has operated within one discrete reportable business segment since inception. The following summarizes required disclosures about geographic concentrations and revenue by products and services (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue by Products and Services |
|
Income Taxes (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Open Tax Years for Major Jurisdictions | The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The open tax years for the major jurisdictions are as follows:
|
Organization and Summary of Significant Accounting Policies - Additional Information (Detail) |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016
USD ($)
customer
|
Sep. 30, 2015
USD ($)
customer
|
Sep. 30, 2016
USD ($)
product
customer
|
Sep. 30, 2015
USD ($)
customer
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
customer
|
|||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Number of product areas | product | 5 | |||||||||||||||
Net loss | $ (4,919,000) | [1] | $ (2,780,000) | [1] | $ (8,521,000) | [1] | $ (4,938,000) | [1] | $ (3,000,000) | |||||||
Cash and cash equivalents | [3] | 34,375,000 | [2] | $ 5,194,000 | 34,375,000 | [2] | $ 5,194,000 | $ 17,028,000 | $ 6,786,000 | |||||||
Outstanding debt | 26,940,000 | 26,940,000 | ||||||||||||||
Maximum borrowing amount | $ 37,000,000.0 | $ 37,000,000.0 | ||||||||||||||
Minimum | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Extended product warranty, term | 1 year | |||||||||||||||
Maximum | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Extended product warranty, term | 5 years | |||||||||||||||
Net Revenue | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Number of customers | customer | 3 | 3 | 3 | 3 | ||||||||||||
Net Revenue | Customer Concentration Risk | Three major customers | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Percentage of net revenue | 46.00% | 63.00% | 44.00% | 56.00% | ||||||||||||
Accounts Receivable | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Number of customers | customer | 3 | 3 | ||||||||||||||
Accounts Receivable | Customer Concentration Risk | Three major customers | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Percentage of net revenue | 37.00% | 66.00% | 53.00% | |||||||||||||
Accounts Receivable | Geographic Concentration Risk | Other than the United States | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Percentage of net revenue | 80.00% | 93.00% | ||||||||||||||
WFB Facility | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Maximum borrowing amount | $ 25,000,000.0 | $ 25,000,000.0 | ||||||||||||||
Revolving Credit Facility | ||||||||||||||||
Significant Accounting Policies [Line Items] | ||||||||||||||||
Short-term Debt | $ 5,700,000 | $ 5,700,000 | ||||||||||||||
|
Merger (Details) - USD ($) $ / shares in Units, $ in Millions |
1 Months Ended | ||||
---|---|---|---|---|---|
Sep. 09, 2016 |
Sep. 30, 2016 |
Sep. 08, 2016 |
Apr. 11, 2016 |
Dec. 31, 2015 |
|
Business Acquisition [Line Items] | |||||
Common stock, outstanding (in shares) | 81,874,000 | 34,371,266 | 353,678,000 | ||
Merger Agreement with Dragon Acquisition Company | |||||
Business Acquisition [Line Items] | |||||
Percent of voting interest acquired | 58.00% | ||||
Shares issued in merger (in shares) | 47,465,082 | ||||
Shares issued in merger held in escrow (in shares) | 4,746,508 | ||||
Percent of voting interest retained by existing shareholders | 42.00% | ||||
Business acquisition, share price (in dollars per share) | $ 1.19 | ||||
Common stock, outstanding (in shares) | 34,371,000 | ||||
Business combination, fair value of trade receivables acquired | $ 17.1 | ||||
Merger related costs | $ 3.5 | ||||
Business combination, revenues since acquisition | $ 5.7 | ||||
Business combination, net income (loss) since acquisition | $ (2.5) |
Merger - Estimated Purchase Consideration (Details) - USD ($) $ in Thousands |
Sep. 09, 2016 |
Sep. 30, 2016 |
Sep. 08, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Shares issued in merger (in shares) | 81,874,000 | 34,371,266 | 353,678,000 | |
Merger Agreement with Dragon Acquisition Company | ||||
Business Acquisition [Line Items] | ||||
Shares issued in merger (in shares) | 34,371,000 | |||
Shares issued in merger, fair value | $ 40,902 | |||
Stock options assumed in merger (in shares) | 1,323,000 | |||
Stock options assumed in merger, fair value | 715 | |||
Assumed liabilities | 25,717 | |||
Total Purchase Consideration | $ 67,334 |
Merger - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Sep. 09, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 11,019 | $ 693 | |
Merger Agreement with Dragon Acquisition Company | |||
Business Acquisition [Line Items] | |||
Current net tangible assets | $ 40,747 | ||
Non-current net tangible assets | 4,464 | ||
Total net tangible assets | 45,211 | ||
Identifiable Intangible Assets | 11,797 | ||
Goodwill | 10,326 | ||
Total Indicated Value of Assets | 67,334 | ||
Developed Technology | Merger Agreement with Dragon Acquisition Company | |||
Business Acquisition [Line Items] | |||
Identifiable Intangible Assets | 3,040 | ||
Customer Relationships | Merger Agreement with Dragon Acquisition Company | |||
Business Acquisition [Line Items] | |||
Identifiable Intangible Assets | 6,740 | ||
Backlog | Merger Agreement with Dragon Acquisition Company | |||
Business Acquisition [Line Items] | |||
Identifiable Intangible Assets | $ 2,017 |
Merger - Fair Value of Intangible Assets Acquired (Details) - Merger Agreement with Dragon Acquisition Company $ in Thousands |
Sep. 09, 2016
USD ($)
|
---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 11,797 |
Accumulated Amortization | (299) |
Net | $ 11,498 |
Developed Technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life (in Years) | 5 years |
Fair Value | $ 3,040 |
Accumulated Amortization | (51) |
Net | $ 2,989 |
Customer Relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life (in Years) | 7 years |
Fair Value | $ 6,740 |
Accumulated Amortization | (80) |
Net | $ 6,660 |
Backlog | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful life (in Years) | 1 year |
Fair Value | $ 2,017 |
Accumulated Amortization | (168) |
Net | $ 1,849 |
Merger - Proforma Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|||||||
Business Acquisition [Line Items] | ||||||||||
Pro forma net income (loss) | [1] | $ (4,881) | $ (2,780) | $ (8,287) | [2] | $ (4,938) | [2] | |||
Merger Adjustments | Merger Agreement with Dragon Acquisition Company | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Pro forma total net revenue | 40,666 | 44,719 | 144,954 | 170,082 | ||||||
Pro forma net income (loss) | $ (17,786) | $ (8,665) | $ (28,058) | $ (13,585) | ||||||
|
Inventories (Detail) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
|||
---|---|---|---|---|---|
Inventory Disclosure [Abstract] | |||||
Raw materials | $ 12,935 | $ 5,519 | |||
Work in process | 3,369 | 2,074 | |||
Finished goods | 12,529 | 5,022 | |||
Other | 3,124 | 1,285 | |||
Inventories | $ 31,957 | [1] | $ 13,900 | ||
|
Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|||||
Property, Plant and Equipment [Abstract] | ||||||||
Depreciation and amortization associated with property and equipment | $ 600 | $ 400 | $ 1,165 | [1] | $ 1,112 | [1] | ||
|
Intangible Assets, net (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
Goodwill | $ 11,019,000 | $ 11,019,000 | $ 693,000 | ||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Less accumulated amortization | (380,000) | (380,000) | (37,000) | ||||||
Other intangible assets, net | 11,554,000 | 11,554,000 | 3,000 | ||||||
Intangible assets, net | 22,573,000 | [1] | 22,573,000 | [1] | 696,000 | ||||
Amortization of Intangible Assets | 300,000 | $ 100,000 | 400,000 | $ 100,000 | |||||
Developed Technology | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Finite-lived intangible assets, gross | 3,040,000 | 3,040,000 | 0 | ||||||
Customer Relationships | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Finite-lived intangible assets, gross | 6,740,000 | 6,740,000 | 0 | ||||||
Backlog | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Finite-lived intangible assets, gross | 2,017,000 | 2,017,000 | 0 | ||||||
Other | |||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||
Finite-lived intangible assets, gross | $ 137,000 | $ 137,000 | $ 40,000 | ||||||
|
Debt - Additional Information (Detail) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Line of Credit Facility [Line Items] | ||
WFB credit facility, maximum borrowing capacity | $ 37,000,000.0 | |
WFB credit facility, commitment as security for various letters of credit | 3,800,000 | |
WFB credit facility, unused borrowing availability | $ 2,900,000 | |
WFB credit facility, interest rate | 3.35% | |
WFB Facility | ||
Line of Credit Facility [Line Items] | ||
WFB credit facility, maximum borrowing capacity | $ 25,000,000.0 | |
Letters of credit outstanding | $ 3,800,000 | |
WFB credit facility, commitment fee on unused capacity, percentage | 0.25% | |
Financing Arrangements of Foreign Subsidiaries | ||
Line of Credit Facility [Line Items] | ||
Short-term Debt | $ 20,100,000 | $ 21,800,000 |
Minimum | Financing Arrangements of Foreign Subsidiaries | ||
Line of Credit Facility [Line Items] | ||
Stated interest rate | 1.66% | 2.04% |
Maximum | Financing Arrangements of Foreign Subsidiaries | ||
Line of Credit Facility [Line Items] | ||
Stated interest rate | 4.26% | 3.55% |
Related Party Borrowings (Details) - USD ($) |
Sep. 09, 2016 |
Sep. 30, 2016 |
---|---|---|
Related Party Transaction [Line Items] | ||
Maximum borrowing amount | $ 37,000,000.0 | |
Junior Lien [Member] | DASAN [Member] | Majority Shareholder [Member] | Loan Agreement [Member] | DNS US | ||
Related Party Transaction [Line Items] | ||
Origination of Notes Receivable from Related Parties | $ 1,800,000 | |
Stated interest rate | 6.90% | |
Unsecured Debt [Member] | Junior Lien [Member] | DASAN [Member] | Term Loan [Member] | Majority Shareholder [Member] | Loan Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Maximum borrowing amount | $ 5,000,000 | |
Origination of Notes Receivable from Related Parties | $ 5,000,000 | |
Stated interest rate | 4.60% |
Related Party Borrowings - Schedule of Related Party Debt Outstanding (Details) $ in Thousands |
Sep. 30, 2016
USD ($)
|
---|---|
Related Party Transaction [Line Items] | |
Debt, Long-term and Short-term, Combined Amount | $ 26,940 |
Net Loss Per Share - Reconciliation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
||||||||
Earnings Per Share [Abstract] | |||||||||||
Net loss | [1] | $ (4,881) | $ (2,780) | $ (8,287) | [2] | $ (4,938) | [2] | ||||
Weighted average number of shares outstanding: | |||||||||||
Basic (in shares) | 81,839 | 347,005 | 81,739 | 347,005 | |||||||
Dilutive effect of stock options and share awards (in shares) | 0 | 0 | 0 | 0 | |||||||
Diluted (in shares) | [1] | 81,839 | 347,005 | 81,739 | 347,005 | ||||||
Net loss per share | |||||||||||
Basic (in dollars per share) | $ (0.06) | $ (0.01) | $ (0.10) | $ (0.01) | |||||||
Diluted (in dollars per share) | $ (0.06) | $ (0.01) | $ (0.10) | $ (0.01) | |||||||
|
Net Loss Per Share - Potential Common Stock not Included in Diluted Net Income (Loss) Per Share Calculation (Details) - Outstanding stock options - $ / shares shares in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2016 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of loss per share calculation, shares | 4,019 | 4,019 |
Weighted average exercise price of outstanding stock options and unvested restricted shares (in USD per share) | $ 1.38 | $ 1.38 |
Commitments and Contingencies - Estimated Future Lease Payments under All Non-Cancelable Operating Leases (Details) $ in Thousands |
Sep. 30, 2016
USD ($)
|
---|---|
Operating leases | |
2016 (remainder of the year) | $ 272 |
2017 | 1,470 |
2018 | 1,066 |
2019 | 597 |
2020 and thereafter | 4,237 |
Total minimum lease payments | $ 7,642 |
Commitments and Contingencies - Additional Information (Detail) |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Guarantor Obligations [Line Items] | |
Product warranty period from the date of shipment | 2 years |
Maximum borrowing amount | $ 37,000,000.0 |
Purchase Commitment | |
Guarantor Obligations [Line Items] | |
Number of notice days required to notice in advance for cancellation of orders | 30 days |
Amount of non-cancellable purchase commitments outstanding | $ 5,500,000 |
Commitments and Contingencies - Reconciliation of Changes in Accrued Warranties and Related Costs (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 1,093 | $ 389 |
Charged to cost of revenue | 703 | 289 |
Claims and settlements | (805) | (297) |
Ending balance | $ 991 | $ 381 |
Commitments and Contingencies - Payment Guarantees to Third Parties (Details) $ in Thousands |
Sep. 30, 2016
USD ($)
|
---|---|
Guarantor Obligations [Line Items] | |
Amount Guaranteed | $ 34,049 |
DNS US | Payment Guarantee | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 6,000 |
DNS US | Shinhan Bank, General Loan | Payment Guarantee | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 4,378 |
DNS US | KEB Hana Bank Credit Loan | Payment Guarantee | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 4,800 |
DNS US | Industrial Bank of Korea Facility | Payment Guarantee | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 11,684 |
Industrial Bank of Korea | Payment Guarantee | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 3,593 |
NongHyup Bank | Payment Guarantee | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | 2,156 |
Other | Payment Guarantee | |
Guarantor Obligations [Line Items] | |
Amount Guaranteed | $ 1,438 |
Enterprise-Wide Information - Revenue by Geography (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|||
Revenue from External Customer [Line Items] | ||||||
Net revenue | [1] | $ 32,166 | $ 22,591 | $ 93,256 | $ 93,339 | |
United States | ||||||
Revenue from External Customer [Line Items] | ||||||
Net revenue | 3,382 | 550 | 7,240 | 3,988 | ||
Canada | ||||||
Revenue from External Customer [Line Items] | ||||||
Net revenue | 255 | 0 | 255 | 0 | ||
Total North America | ||||||
Revenue from External Customer [Line Items] | ||||||
Net revenue | 3,637 | 550 | 7,495 | 3,988 | ||
Latin America | ||||||
Revenue from External Customer [Line Items] | ||||||
Net revenue | 1,406 | 0 | 1,406 | 0 | ||
Europe, Middle East, Africa | ||||||
Revenue from External Customer [Line Items] | ||||||
Net revenue | 1,301 | 0 | 1,301 | 0 | ||
Korea | ||||||
Revenue from External Customer [Line Items] | ||||||
Net revenue | 18,721 | 18,453 | 52,882 | 67,116 | ||
Asia Pacific | ||||||
Revenue from External Customer [Line Items] | ||||||
Net revenue | 7,101 | 3,588 | 30,172 | 22,235 | ||
Total International | ||||||
Revenue from External Customer [Line Items] | ||||||
Net revenue | $ 28,529 | $ 22,041 | $ 85,761 | $ 89,351 | ||
|
Enterprise-Wide Information - Revenue by Products and Services (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|||
Revenue from External Customer [Line Items] | ||||||
Net revenue | [1] | $ 32,166 | $ 22,591 | $ 93,256 | $ 93,339 | |
Products | ||||||
Revenue from External Customer [Line Items] | ||||||
Net revenue | 28,988 | 21,633 | 86,584 | 88,922 | ||
Services | ||||||
Revenue from External Customer [Line Items] | ||||||
Net revenue | $ 3,178 | $ 958 | $ 6,672 | $ 4,417 | ||
|
Income Taxes (Details) |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Maximum | Federal | |
Operating Loss Carryforwards [Line Items] | |
Open Tax Year | 2015 |
Maximum | United States And Canada | |
Operating Loss Carryforwards [Line Items] | |
Open Tax Year | 2015 |
Maximum | BRAZIL | |
Operating Loss Carryforwards [Line Items] | |
Open Tax Year | 2015 |
Maximum | Germany | |
Operating Loss Carryforwards [Line Items] | |
Open Tax Year | 2015 |
Maximum | United Kingdom | |
Operating Loss Carryforwards [Line Items] | |
Open Tax Year | 2015 |
Minimum | Federal | |
Operating Loss Carryforwards [Line Items] | |
Open Tax Year | 2012 |
Minimum | United States And Canada | |
Operating Loss Carryforwards [Line Items] | |
Open Tax Year | 2011 |
Minimum | BRAZIL | |
Operating Loss Carryforwards [Line Items] | |
Open Tax Year | 2010 |
Minimum | Germany | |
Operating Loss Carryforwards [Line Items] | |
Open Tax Year | 2008 |
Minimum | United Kingdom | |
Operating Loss Carryforwards [Line Items] | |
Open Tax Year | 2011 |
)^;=YE=7X*8?=
MA7]+9FP9FA^6?ZPH]__X+#LO<6W[JZ"?S([!^F!C*N?::C/L&]63"ZM?SJV^
M 'V?UV R5A5^
M5EI.Q1$SV#X"T_0Z]F!ZO2,P]:]6WWYH-[P+?9CF?BOOE+K9?_=E]N8[+*C^
M?@C_ E!+ P04 " !9C6Y)0_B._3X! !I P $0 &1O8U!R;W!S+V-O
M "(&LIM1&MHVA13^F ^P1_Y#G>3 ^=C:NQ#8%1L
M37T0K=E? WNHWI#-<0]I7\<+FKQ+H*-16=+-%TH*SK 3ZZ"%:& ?[9R8:9R,7;[(!4.B=T4X><:-4?_ \633 B+SC/73Z
M2\4%(TIO1>W)7@ I;1"C7NC[B<=(V^$\LVFV[NAJ'3"=5\2N\[P[#^WOH<8J&\0.0
M!F#L $T#]&D &'& H0'F-$#&6\+;BPF2D/H@W*KHBL6\J=\G[;'HMQ/,/+SI
M@_C($Z]6ZQ=BB-D,2[&8ORW0S).W/LXG" Z0)4&N(U:$L-
&PO=V]R:W-H965TS)A):
M%\(''YMTI5+B<%@>R/I*JW]02P,$% @ 68UN2=>Z8." ! L1< !D
M !X;"]W;W)K
"]M.]
M;;X\%G\!4$L#!!0 ( %F-;DF7>E7D 0( *0& 9 >&PO=V]R:W-H
M965T
MW$
G&]O .4-_0*DJ% W6VXK!,8:&>EJF]$!!&]@D0'<_.(13 ?V
MIUG*]X]G*4="_$%@NP8&]=4Y#".JS)$BUT[HR&@(M*R7@"F1TB/IEJO;")I"
M42&9M^N(Z"@-%,K6A.
20,=6_>
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M-JQ]J* >UB0G%G:EPE
M0CCGOD4>V-T]*U_L/>3H6*%F^U82,JG]>H