XML 34 R20.htm IDEA: XBRL DOCUMENT v3.20.1
Certain Relationships and Related Party Transactions
12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
Certain Relationships and Related Party Transactions
Certain Relationships and Related Party Transactions

Since 2016, we have conducted (and we continue to conduct) business with Wipro, LLC (“Wipro”), whereby Wipro provides us with a variety of technology-related services, including database and software development, database support and analytics, IT infrastructure support, leased facilities and digital campaign management. Additionally, we also provide Wipro with agency services and consulting services.

Effective January 30, 2018, Wipro became a related party when it purchased 9,926 shares of our Series A Preferred Stock (which are convertible at Wipros option into 1,001,614 shares, or 16% of our Common Stock), for aggregate consideration of $9.9 million. For information pertaining to the Company’s preferred stock, See Note E, Convertible Preferred Stock.

During the years ended December 31, 2019 and 2018, we recorded an immaterial amount of revenue for services we provided to Wipro.

During the years ended December 31, 2019 and 2018, we recorded $11.7 million and $12.3 million of expense, respectively, in technology-related services and lease expense for a facility Wipro provided to us.

During the years ended December 31, 2019 and 2018, we capitalized $1.7 million of costs ($1.4 million of which was included in the asset impairment charge for the year ended December 31, 2019) and $2.3 million ($2.1 million of which was included in the asset impairment charge for the year ended December 31, 2018), respectively, for internally developed software services received from Wipro. These remaining capitalized costs are included in Other Assets on the Consolidated Balance Sheet as of December 31, 2019.

As of December 31, 2019 and 2018, we had a trade payable due to Wipro of $1.5 million and $5.0 million, respectively. As of December 31, 2019 and 2018, we had an immaterial amount in trade receivables due from Wipro.

In the third quarter of 2019, we entered a business relationship with Snap Kitchen, the founder of which is a 7% owner of Harte Hanks. We recorded a nominal amount of revenue with them in the year ended December 31, 2019.

As described in Note F, Long-Term Debt, the Company’s Texas Capital Credit Facility is secured by HHS Guaranty, LLC, an entity formed to provide credit support for the Company by certain members of the Shelton family (descendants of one of our founders). Pursuant to the Amended and Restated Fee, Reimbursement and Indemnity Agreement, dated January 9, 2018, between HHS Guaranty, LLC and the Company, HHS Guaranty, LLC has the right to appoint one representative director to the Board of Directors. Currently, David L. Copeland serves as the HHS Guaranty, LLC representative on the Board of Directors.