NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2018

The principal assumptions used in applying the model were as follows:



Assumptions:	For Three and Six Months Ended June 30, 2018
Risk-free interest rate	2.3% - 2.5%
Expected life	2.2 - 2.5 Years
Expected volatility	65% - 70%
Dividends	0.0%

Schedule of Earnings Per Share, Basic and Diluted

Diluted net income (loss) per common share is based on the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding and computed as follows:



	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018		2017
	(In thousands, except share and per share data)
Numerator:
Net income (loss) to common stockholders	$	7,039	$	(6,755	)	$	35,332	$	9,195

Denominator:
Weighted-average common shares, basic	27,503,356		23,257,492			27,610,924		23,195,775
Weighted-average common shares, diluted*	29,737,679		23,257,492			30,010,329		24,233,724
Net income (loss) per common share:
Basic:	$	0.26	$	(0.29	)	$	1.28	$	0.40
Diluted:	$	0.24	$	(0.29	)	$	1.18	$	0.38

* The diluted earnings per common share included 613,712 unvested RSU's and the weighted average effect of 1,620,611 stock options that are potentially dilutive to earnings per share for the three months ended June 30, 2018; 613,712 unvested RSU's and the weighted average effect of 1,785,693 stock options for the six months ended June 30, 2018. For the six months ended June 30, 2017 the diluted earnings per common share included the effect of 317,311 unvested RSU's and the weighted average effect of 720,637 stock options that were potentially dilutive to earnings per share. For the three months ended June 30, 2017, the securities would be anti-dilutive and were excluded.

Summary of Components Excluded from Computation of Diluted Net Loss Per Share

Potentially dilutive common shares from employee equity plans are determined by applying the treasury stock method to the assumed exercise of warrants and share options and were excluded from the computation of diluted net income (loss) per share because their inclusion would be anti-dilutive and consist of the following:



	June 30,
	2018	2017
Stock options	2,590,920	1,652,347
Restricted stock units	613,712	317,311
Warrants	2,355,506	2,309,136
Total	5,560,138	4,278,794

Schedule of Cumulative Effect of ASU 2014-09

In accordance with the new revenue recognition standards, the impact of adoption of ASC-606 to our condensed consolidated statement of operations and balance sheet for the period ended June 30, 2018 was as follows (in thousands):



Income Statement	Three Months ended June 30, 2018						Six Months ended June 30, 2018
	As reported		Balance without adoption - ASC-606		Effect of change		As reported		Balance without adoption - ASC-606		Effect of change

Revenue	$	17,300	$	14,700	$	2,600	$	82,300	$	79,700	$	2,600

Provision for income tax	1,864		1,136		$	728	13,387		12,659		728

Net Income	15,436		13,564		1,872		68,913		67,041		1,872



	June 30, 2018
Balance Sheet	As reported		Balance without ASC-606		Effect of change
Current Assets
Accounts receivable	$	5,150	$	—	$	(5,150	)
Other long-term assets⁽¹⁾	$	678	$	—	$	(678	)

Liabilities and Stockholders' Equity
Accrued income tax	5,054		4,326		728
Retained earnings	41,660		36,560		5,100
⁽¹⁾ Deferred tax assets related to the adoption of ASC-606

The Company also adopted the following standards in the first half of 2018, none of which had a material impact on the Company's condensed consolidated financial statements:



Standard	Description	Effective date
2016-09	Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting	January 1, 2018
2016-15	Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments	January 1, 2018
2018-07	Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share Based Payment Accounting	June 1, 2018

The cumulative effect of the changes made to our condensed consolidated balance sheet as of January 1, 2018 under current assets for the adoption ASU 2014-09, Revenue - Revenue from Contracts with Customers were as follows (in thousands):



Balance Sheet	Balance at December 31, 2017		Adjustments due to ASU 2014-09		Balance at January 1, 2018
Current Assets
Accounts receivable	$	2,606	$	2,550	$	5,156

Liabilities and Stockholders' Equity
Retained earnings	$	5,555	$	2,550	$	8,105