What changed in this filing

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Item 1. Financial Statements

2020-08-10 compared with 2020-05-08 · 255 added, 198 removed, 432 unchanged (51% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

March 31, 2020

December 31, 2019

June 30, 2020 December 31, 2019

Current assets:

2 unchanged sentences

Accounts receivable, net of allowances of $ 2,772 and $ 1,919 , respectively ($ 2,406 and $ 2,698 of accounts receivable attributable to related parties, respectively)

64,026 71,853

Prepaid expenses and other current assets ($ 1,156 and $ 1,180 attributable to related parties, respectively)

14,755 15,357

Total current assets 134,291 153,983

4 unchanged sentences

Intangible assets, net 65,790 79,559

Goodwill 416,172 416,418

Total assets $ 683,619 $ 723,695

Liabilities and Stockholders' Equity

1 unchanged sentence

Accounts payable ($ 1,084 and $ 2,510 attributable to related parties, respectively)

$ 36,178 $ 44,804

Accrued expenses ($ 7,666 and $ 6,902 attributable to related parties, respectively)

51,071 55,507

Contract liability ($ 1,800 and $ 1,519 attributable to related parties, respectively)

55,422 58,158

Customer advances 8,432 9,886

7 unchanged sentences

Non-current operating lease liabilities 39,480 42,497

Non-current contract liability 6,165 291

Deferred tax liabilities 407 287

4 unchanged sentences

Preferred stock, $ 0.001 par value per share;

5,000,000 shares authorized at March 31, 2020 and December 31, 2019;

no shares issued or outstanding as of March 31, 2020 and December 31, 2019

5,000,000 shares authorized at June 30, 2020 and December 31, 2019;

no shares issued or outstanding as of June 30, 2020 and December 31, 2019

Common stock, $ 0.001 par value per share;

150,000,000 shares authorized as of March 31, 2020 and December 31, 2019;

76,971,713 shares issued and 70,206,917 shares outstanding as of March 31, 2020, and 76,829,926 shares issued and 70,065,130 shares outstanding as of December 31, 2019

150,000,000 shares authorized as of June 30, 2020 and December 31, 2019;

77,629,871 shares issued and 70,865,075 shares outstanding as of June 30, 2020, and 76,829,926 shares issued and 70,065,130 shares outstanding as of December 31, 2019

Additional paid-in capital 1,615,284 1,609,358

1 unchanged sentence

Accumulated deficit ( 1,131,722 ) ( 1,108,137 )

Treasury stock, at cost, 6,764,796 shares as of March 31, 2020 and December 31, 2019

Treasury stock, at cost, 6,764,796 shares as of June 30, 2020 and December 31, 2019

( 229,984 ) ( 229,984 )

Total stockholders' equity 240,007 258,974

4 unchanged sentences

(In thousands, except share and per share data)

Three months ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

$ 88,566 $ 96,888 $ 178,094 $ 199,182

Cost of revenues (1) (2) (3) (4)

44,949 51,994 90,747 105,401

Selling and marketing (2) (3) (4)

16,007 23,329 35,220 48,169

Research and development (2) (3) (4)

9,765 16,883 19,901 35,099

General and administrative (1) (2) (3) (4)

13,741 16,932 29,284 36,477

Investigation and audit related — 2,354 — 3,196

Amortization of intangible assets 6,846 8,076 13,764 16,181

Impairment of goodwill — 224,272 — 224,272

Impairment of intangible asset — 17,308 — 17,308

Settlement of litigation, net — 5,000 — 5,000

Impairment of right-of-use and long-lived assets — — 4,671 —

Restructuring (3)

— 2,949 — 2,879

Total expenses from operations 91,308 369,097 193,587 493,982

1 unchanged sentence

Interest expense, net (1)

Other income, net

Gain from foreign currency transactions

( 8,856 ) ( 8,242 ) ( 17,702 ) ( 15,001 )

Other income (expense), net 1,477 ( 3,081 ) 8,671 ( 112 )

Loss from foreign currency transactions ( 944 ) ( 464 ) ( 140 ) ( 426 )

Loss before income taxes ( 11,065 ) ( 283,996 ) ( 24,664 ) ( 310,339 )

Income tax benefit (provision)

Income tax benefit 664 4,463 1,079 3,292

Net loss $ ( 10,401 ) $ ( 279,533 ) $ ( 23,585 ) $ ( 307,047 )

Net loss per common share:

3 unchanged sentences

Comprehensive loss:

Net loss $ ( 10,401 ) $ ( 279,533 ) $ ( 23,585 ) $ ( 307,047 )

Other comprehensive loss:

4 unchanged sentences

(3) Stock-based compensation expense is included in the line items above as follows:

Three months ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

Cost of revenues $ 487 $ 636 $ 696 $ 1,484

2 unchanged sentences

General and administrative 764 1,913 2,548 5,976

Restructuring — ( 266 ) — ( 266 )

Total stock-based compensation expense $ 2,346 $ 4,038 $ 5,004 $ 10,991

(4) Lease cost, net of sublease income, is included in the line items above as follows:

Three months ended March 31, 2020

Three months ended March 31, 2019

Amortization of Right-of-Use Assets

Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

Operating lease cost

Cost of revenues $ 945 $ 1,155 $ 1,836 $ 2,256

Selling and marketing 1,045 1,218 2,144 2,382

Research and development 716 787 1,317 1,536

General and administrative 507 339 1,190 718

Total operating lease cost $ 3,213 $ 3,499 $ 6,487 $ 6,892

Amortization of right-of-use assets

Operating Lease Cost

Cost of revenues $ 288 $ 578 $ 573 $ 999

2 unchanged sentences

General and administrative 21 44 41 75

Total lease cost

Total amortization of right-of-use assets $ 394 $ 787 $ 784 $ 1,361

See accompanying Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands, except share data)

Common Stock Additional

Capital Accumulated

Comprehensive

Treasury stock, at cost

Loss Accumulated

Deficit Treasury stock, at cost Total

Stockholders'

Shares Amount

Balance as of December 31, 2019 70,065,130 $ 70 $ 1,609,358 $ ( 12,333 ) $ ( 1,108,137 ) $ ( 229,984 ) $ 258,974

Net loss — — — — ( 13,184 ) — ( 13,184 )

Foreign currency translation adjustment — — — ( 2,873 ) — — ( 2,873 )

Restricted stock units vested 157,384 — — — — — —

Payments for taxes related to net share settlement of equity awards

Stock-based compensation

Common stock received from tax withholding ( 15,597 ) — ( 65 ) — — — ( 65 )

Amortization of stock-based compensation — — 2,609 — — — 2,609

Balance as of March 31, 2020 70,206,917 $ 70 $ 1,611,902 $ ( 15,206 ) $ ( 1,121,321 ) $ ( 229,984 ) $ 245,461

Net loss — — — — ( 10,401 ) — ( 10,401 )

Foreign currency translation adjustment — — — 1,564 — — 1,564

Restricted stock units vested 659,244 1 2,241 — — — 2,242

Common stock received from tax withholding ( 1,086 ) — ( 3 ) — — — ( 3 )

Amortization of stock-based compensation — — 1,144 — — — 1,144

Balance as of June 30, 2020 70,865,075 $ 71 $ 1,615,284 $ ( 13,642 ) $ ( 1,131,722 ) $ ( 229,984 ) $ 240,007

Common Stock Additional

Capital Accumulated

Comprehensive

Treasury stock, at cost

Loss Accumulated

Deficit Treasury stock, at cost Total

Stockholders'

Shares Amount

Balance as of December 31, 2018 59,389,830 $ 59 $ 1,561,208 $ ( 10,621 ) $ ( 769,095 ) $ ( 229,984 ) $ 551,567

Adoption of ASC 842 — — — — ( 46 ) — ( 46 )

Net loss — — — — ( 27,514 ) — ( 27,514 )

Foreign currency translation adjustment — — — ( 621 ) — — ( 621 )

Exercise of Common Stock options, net

Exercise of common stock options 68,259 — 1,191 — — — 1,191

Restricted stock units vested 552,651 1 4,610 — — — 4,611

Payments for taxes related to net share settlement of equity awards

Stock-based compensation

Common stock received from tax withholding ( 52,853 ) — ( 1,138 ) — — — ( 1,138 )

Amortization of stock-based compensation — — 5,888 — — — 5,888

Balance as of March 31, 2019 59,957,887 $ 60 $ 1,571,759 $ ( 11,242 ) $ ( 796,655 ) $ ( 229,984 ) $ 533,938

Net loss — — — — ( 279,533 ) — ( 279,533 )

Foreign currency translation adjustment — — — 677 — — 677

Issuance of common stock in connection with CVI Warrants 2,728,513 3 7,575 — — — 7,578

Common stock warrants exercised 323,448 — — — — — —

Interest paid in Common Stock 243,261 — 5,134 — — — 5,134

Restricted stock units vested 46,078 — — — — — —

Common stock received from tax withholding ( 7,218 ) — ( 72 ) — — — ( 72 )

Amortization of stock-based compensation — — 2,354 — — — 2,354

Balance as of June 30, 2019 63,291,969 $ 63 $ 1,586,750 $ ( 10,565 ) $ ( 1,076,188 ) $ ( 229,984 ) $ 270,076

See accompanying Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities:

Net loss $ ( 23,585 ) $ ( 307,047 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation 6,788 6,111

Non-cash operating lease expense 2,978 2,747

1 unchanged sentence

Amortization of intangible assets 13,764 16,181

Bad debt expense 1,590 —

Impairment of goodwill — 224,272

Impairment of intangible asset — 17,308

Stock-based compensation 5,004 10,991

Deferred tax provision

Deferred tax provision (benefit) 324 ( 3,983 )

Change in fair value of financing derivatives ( 4,687 ) ( 1,100 )

4 unchanged sentences

Amortization of deferred financing costs 739 525

Other ( 6 ) ( 20 )

Changes in operating assets and liabilities:

11 unchanged sentences

Financing activities:

Proceeds from private placement, net of issuance costs paid — 19,894

Proceeds from sale-leaseback financing transaction — 4,252

Proceeds from the exercise of stock options — 1,191

2 unchanged sentences

Principal payments on software license arrangements ( 155 ) ( 1,662 )

Net cash used in financing activities

Net cash (used in) provided by financing activities ( 1,046 ) 21,048

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 544 ) 91

Net decrease in cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash ( 11,263 ) 3,628

Cash, cash equivalents and restricted cash at beginning of period 66,773 50,198

Cash, cash equivalents and restricted cash at end of period $ 55,510 $ 53,826

As of March 31,

As of June 30,

Cash and cash equivalents $ 35,899 $ 48,963

1 unchanged sentence

Total cash, cash equivalents and restricted cash $ 55,510 $ 53,826

Three Months Ended March 31,

Six Months Ended June 30,

Supplemental cash flow disclosures:

Interest paid ($ 12,240 and $ 3,046 attributable to related party, respectively)

Income taxes paid (received), net of refunds

$ 13,551 $ 3,413

Income taxes paid, net of refunds 771 373

Supplemental disclosures of non-cash activities:

Change in accounts payable and accrued expenses related to capital expenditures

Settlement of restricted stock unit liability $ 2,241 $ 4,611

Right-of-use assets obtained in exchange for new operating lease liabilities 669 397

Change in accounts payable and accrued expenses related to capital expenditures 456 1,630

Leasehold improvements acquired through lease incentives 218 1,427

Fair value of warrants issued in private placement — 10,798

Interest paid in common stock — 5,134

Right-of-use assets obtained in exchange for new finance lease liabilities — 3,487

See accompanying Notes to Condensed Consolidated Financial Statements.

9 unchanged sentences

The Company's primary need for liquidity is to fund working capital requirements and capital expenditures of its business.

Since 2017, the Company has implemented certain organizational restructuring plans to reduce staffing levels, exit certain geographic regions, and rationalize its leased properties, to enable the Company to decrease its global costs, more effectively align resources to business priorities, and maintain compliance with its financial covenants, as described in Footnote 4 , Long-Term Debt .

For additional information related to the Company's restructuring plans, refer to Footnote 10 , Organizational Restructuring .

The Company has secured the following long-term financing in order to increase its available working capital:

8 unchanged sentences

For additional information, refer to Footnote 4 , Long-term Debt.

As of March 31, 2020 , the Company was in compliance with its covenants under the senior secured convertible notes and the Secured Term Note, inclusive of the Company's restricted cash balances.

As of June 30, 2020, the Company was in compliance with its covenants under the senior secured convertible notes and the Secured Term Note, inclusive of the Company's restricted cash balances.

The COVID-19 pandemic and related government mandates and restrictions have had a significant impact on the media, advertising and entertainment industries in which the Company operates.

While to date, the COVID-19 pandemic has not had a severe direct impact on the Company's business, customer payment delays and requests to modify contractual payment terms have negatively impacted the Company's liquidity and cash flows to some extent and are expected to have a more significant impact in future periods, including the second quarter of 2020.

To date, the COVID-19 pandemic has had some impact on the Company's business, including with respect to the timing of executing new or renewal contracts, the impact of closed movie theaters on the Company's customers, customer payment delays and requests to modify contractual payment terms.

These conditions have negatively impacted the Company's liquidity, net loss, and cash flows to some extent and are expected to continue to have an impact in future periods.

In addition, the spread of COVID-19 has led to disruption and volatility in global capital and credit markets, which, depending on future developments, could impact the Company's ability to access capital resources on terms acceptable to the Company or allowable under its current financing arrangements, or at all.

Liquidity could also be negatively affected by a decrease in demand for the Company's products and services or by additional losses from operations, whether related to the COVID-19 pandemic or otherwise.

While the Company is taking actions to mitigate the impact of COVID-19, further reduce operating costs and improve its working capital balance, these steps may not be successful or adequate to offset declines in cash collections.

If the Company's efforts to reduce costs are not sufficient, or if cash collection efforts are further impacted by the COVID-19 pandemic, the Company may not be able maintain compliance with the affirmative and negative covenants in its senior secured convertible notes and Secured Term Note or to meet its financial obligations to vendors or others.

While the Company has taken, and continues to take, actions to reduce costs and mitigate the impact of COVID-19, these steps may not be successful or adequate to offset declines in cash collections.

If the Company's efforts to manage costs are not sufficient, or if cash collection efforts are further impacted by the COVID-19 pandemic, the Company may not be able to maintain compliance with the affirmative and negative covenants in its senior secured convertible notes and Secured Term Note or to meet its financial obligations to vendors or others.

On March 27, 2020, Congress enacted the Coronavirus Aid, Relief and Economic Security Act ("CARES Act").

tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.

To preserve its cash balances, the Company began deferring certain payroll taxes starting in April 2020, as permitted by the CARES Act.

In addition, the Company plans to claim the refundable employee retention credit created by the CARES Act during the second quarter of 2020.

The CARES Act, among other things, includes tax provisions for the deferral of certain employer payroll tax liabilities, refundable employee retention credits, rollbacks of Tax Cuts and Jobs Act ("TCJA") limitations on net operating losses, the acceleration of alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.

The Company began deferring certain payroll taxes starting in April 2020, as permitted by the CARES Act.

In addition, the Company began claiming the refundable employee retention credit created by the CARES Act during 2020.

The Company continues to assess the effect of the CARES Act and additional legislation and government guidance related to the COVID-19 pandemic.

1 unchanged sentence

If the Company fails to comply with its covenants, it could be required to redeem the senior secured convertible notes and the Secured Term Note at a premium.

As of March 31, 2020, there was $ 217.0 million outstanding under the senior secured convertible notes and the Secured Term Note.

As of June 30, 2020, there was $ 217.0 million outstanding under the senior secured convertible notes and the Secured Term Note.

The source of funds for any redemption of the notes would be the Company's available cash and other financing, to the extent available.

Based on the Company's current plans, including the cost-reduction initiatives described above and other actions within management's control, the Company does not anticipate a breach of these covenants that would result in an event of default under the senior secured convertible notes or the Secured Term Note;

however, subsequent to March 31, 2020, the holders of the senior secured convertible notes have questioned the Company's compliance with the minimum cash balance requirements therein.

Based on the Company's current plans, including continued cost management and other actions within management's control, the Company does not anticipate a breach of these covenants that would result in an event of default under the senior secured convertible notes or the Secured Term Note;

however, during the quarter ended June 30, 2020, the holders of the senior secured convertible notes questioned the Company's compliance with the minimum cash balance requirements therein.

As noted, any breach of covenants under the senior secured convertible notes could have a material impact on the Company's liquidity.

The Company continues to be focused on maintaining flexibility in terms of sources, amounts, and timing of any potential financing, refinancing or strategic transaction, in order to best position the Company for future success.

The Company believes that its sources of funding, after taking into account the restructuring and financing transactions described above and additional cost-reduction initiatives undertaken by management in 2020, will be sufficient to satisfy the Company's estimated liquidity needs and allow the Company to remain in compliance with its covenants under the senior secured convertible notes and the Secured Term Note for at least one year after the date that these financial statements are issued.

The Company believes that its sources of funding, after taking into account the financing transactions described above and the cost-reduction initiatives undertaken by management in 2020, will be sufficient to satisfy the Company's estimated liquidity needs and allow the Company to remain in compliance with its covenants under the senior secured convertible notes and the Secured Term Note for at least one year after the date that these financial statements are issued.

However, the Company cannot predict with certainty the outcome of its actions to generate liquidity, including the availability of additional financing, or whether such actions would generate the expected liquidity as currently planned.

7 unchanged sentences

Specifically, current accrued litigation settlements have been aggregated within other current liabilities on the Condensed Consolidated Balance Sheets.

In addition, non-current contract liability is now separately reported from other non-current liabilities on the Condensed Consolidated Balance Sheets.

Unaudited Interim Financial Information

4 unchanged sentences

These interim Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 (the "2019 10-K").

The Condensed Consolidated Results of Operations for the three months ended March 31, 2020 are not necessarily indicative of the results to be anticipated for the entire year ending December 31, 2020 or thereafter.

All references to March 31, 2020 and 2019 in the Notes to Condensed Consolidated Financial Statements are unaudited.

The Condensed Consolidated Results of Operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be anticipated for the entire year ending December 31, 2020 or thereafter.

All references to June 30, 2020 and 2019 in the Notes to Condensed Consolidated Financial Statements are unaudited.

Use of Estimates and Judgments in the Preparation of the Condensed Consolidated Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expense during the reporting periods.

Significant estimates and judgments are inherent in the analysis and the measurement of management's standalone selling price, principal versus agent revenue recognition, determination of performance obligations, determination of transaction price, including the determination of variable consideration and allocation of transaction price to performance obligations, deferred tax assets and liabilities, including the identification and quantification of income tax liabilities due to uncertain tax positions, the valuation and recoverability of goodwill, intangible and other long-lived assets, the determination of appropriate discount rates for lease accounting, the probability of exercising either lease renewal or termination clauses, the assessment of potential loss from contingencies, the fair value determination of financing derivative liabilities and warrants, the allowance for doubtful accounts, valuation of options and performance-based and market-based stock awards.

Significant estimates and judgments are inherent in the analysis and the measurement of management's standalone selling price, principal versus agent revenue recognition, determination of performance obligations, determination of transaction price, including the determination of variable consideration and allocation of transaction price to performance obligations, deferred tax assets and liabilities, including the identification and quantification of income tax liabilities due to uncertain tax positions, the valuation and recoverability of goodwill, intangible and other long-lived assets, the determination of appropriate discount rates for lease accounting, the probability of exercising either lease renewal or termination clauses, the assessment of potential loss from contingencies, the fair value determination of financing derivative liabilities and warrants, the allowance for doubtful accounts, and valuation of options, performance-based and market-based stock awards.

Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances.

For the three months ended March 31, 2020, management specifically considered the impact of the COVID-19 pandemic and related matters in evaluating the Company's goodwill, intangible and other long-lived assets, lease accounting, contingencies, fair value determinations and allowance for doubtful accounts.

For the three and six months ended June 30, 2020, management specifically considered the impact of the COVID-19 pandemic and related matters in evaluating the Company's goodwill, intangible and other long-lived assets, lease accounting, contingencies, fair value determinations and allowance for doubtful accounts.

Due to the inherent uncertainty involved in making estimates, particularly in the current environment, actual results reported in future periods may be affected by changes in those estimates.

The Company evaluates its estimates and assumptions on an ongoing basis.

Other Income, Net

Three Months Ended March 31,

Other Income (Expense), Net

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2020 2019 2020 2019

Change in fair value of warrants liability

Change in fair value of financing derivatives $ 2,300 $ ( 3,000 ) $ 4,687 $ 1,100

Change in fair value of warrants liability ( 758 ) — 3,893 —

Change in fair value of investment in equity securities — ( 304 ) — ( 2,016 )

Total other income, net

Other ( 65 ) 223 91 804

Total other income (expense), net $ 1,477 $ ( 3,081 ) $ 8,671 $ ( 112 )

Loss Per Share

3 unchanged sentences

The following is a summary of the Common Stock equivalents for the securities outstanding during the respective periods that have been excluded from the computation of diluted net loss per common share, as their effect would be anti-dilutive:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

Stock options, stock appreciation rights, restricted stock units, deferred stock units, senior secured convertible notes and warrants 16,719,624 9,209,577 16,564,285 8,511,550

Goodwill and Intangible Assets

In June 2019, the Company concluded that it was more likely than not that the estimated fair value of its reporting unit was less than its carrying value.

In its assessment, the Company considered the sustained decline in the Company's stock price and market capitalization, changes in management, and lower revenue, among other factors.

The Company performed a quantitative goodwill impairment test using a discounted cash flow model, supported by a market approach.

The Company's reporting unit failed the goodwill impairment test;

and as a result the Company recorded a $ 224.3 million non-cash impairment charge.

Also in June 2019, the Company recorded a $ 17.3 million non-cash impairment charge for the full carrying value of its strategic alliance intangible asset.

Changes in the Company's projected revenue in certain non-U.S.

geographic markets due to the changing international competitive landscape as well as significant reductions in international staffing during the quarter, resulted in a change in the Company's long-term view of the viability of the intangible asset.

As such, the Company's assessment yielded that the benefit of the alliance would not be realized.

The fair value of the strategic alliance intangible asset was estimated using an income approach.

There were no comparable charges in the three or six months ended June 30, 2020.

Impairment of Right-of-use ("ROU") and Long-lived Assets

7 unchanged sentences

The fair value of these ROU assets, and related leasehold improvements, was estimated using an income approach and a discount rate of 12.0 %.

After recognition of the impairment charge, the adjusted carrying values of the ROU assets, and related leasehold improvements, were $ 2.0 million and $ 0.5 million , respectively, as of March 31, 2020.

Although the Company believes that the carrying values of its long-lived assets are appropriately stated, future changes in strategy or market conditions, significant technological developments or significant changes in legal or regulatory factors could significantly impact these judgments and require adjustments to recorded asset balances.

Although the Company believes that the carrying values of its long-lived assets are appropriately stated as of June 30, 2020, future changes in strategy or market conditions, significant technological developments or significant changes in legal or regulatory factors could significantly impact these judgments and require adjustments to recorded asset balances.

Allowance for Doubtful Accounts

1 unchanged sentence

Allowances are based on management's judgment, which considers historical collection experience adjusted for current conditions or expected future conditions based on reasonable and supportable forecasts, a specific review of all significant outstanding receivables, an assessment of company-specific credit conditions and general economic conditions.

For the three months ended March 31, 2020, management specifically considered the impact of the COVID-19 pandemic and related matters, including customer payment delays and requests from customers to revise contractual payment terms, in determining the Company's allowance for doubtful accounts.

The following is a summary of the allowance for doubtful accounts:

Three Months Ended March 31,

For the six months ended June 30, 2020, management considered the impact of the COVID-19 pandemic, including customer payment delays and requests from customers to revise contractual payment terms, in determining the Company's allowance for doubtful accounts.

The table below summarizes the change in balance of the allowance for doubtful accounts:

Six Months Ended June 30,

(In thousands) 2020 2019

Beginning Balance $ ( 1,919 ) $ ( 1,597 )

Bad debt expense ( 1,590 ) —

Recoveries ( 55 ) ( 331 )

Write-offs 792 330

Ending Balance $ ( 2,772 ) $ ( 1,598 )

18 unchanged sentences

as such, the disaggregation of revenue below reconciles directly to its unique reportable segment.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2020 2019 2020 2019

1 unchanged sentence

Ratings and Planning (1)

$ 63,779 $ 68,922 $ 127,300 $ 139,499

Analytics and Optimization (1)

16,894 17,293 32,395 38,751

Movies Reporting and Analytics 7,893 10,673 18,399 20,932

Total $ 88,566 $ 96,888 $ 178,094 $ 199,182

By geographical market:

United States $ 77,527 $ 83,971 $ 154,673 $ 171,947

Europe 6,417 7,504 13,900 15,916

Canada 2,011 1,758 3,573 3,598

Latin America 1,477 2,284 3,497 4,686

Other 1,134 1,371 2,451 3,035

Total $ 88,566 $ 96,888 $ 178,094 $ 199,182

By timing of revenue recognition:

1 unchanged sentence

Products and services transferred at a point in time 19,990 21,708 37,601 47,541

(1) Beginning April 1, 2020, on a prospective basis only, the Company plans to classify revenue from certain new and extended custom agreements for services that utilize its syndicated data set as Ratings and Planning.

Prior to April 1, 2020, revenue from these agreements was classified as Analytics and Optimization.

The Company does not expect a material impact to either Ratings and Planning revenue or Analytics and Optimization revenue from this change, which is intended to better reflect management's categorization of the underlying services.

Total $ 88,566 $ 96,888 $ 178,094 $ 199,182

(1) In the second quarter of 2020, the Company began classifying revenue from certain new and extended custom agreements for services that utilize its syndicated data set, previously classified under Analytics and Optimization, as Ratings and Planning.

The impact was not material to either solution group.

Contract Balances

The following table provides information about receivables, contract assets, contract costs, contract liabilities and customer advances from contracts with customers:

(In thousands)

March 31, 2020

December 31, 2019

(In thousands) June 30, 2020 December 31, 2019

Accounts receivable, net $ 64,026 $ 71,853

6 unchanged sentences

Contract Liability (Current)

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands) 2020 2019

1 unchanged sentence

Cash received or amounts billed in advance and not recognized as revenue 47,596 44,780

For the six months ended June 30, 2020, the Company recorded $ 5.9 million in amounts billed in advance, but not yet recognized as revenue, within non-current contract liabilities.

Transaction Price Allocated to the Remaining Performance Obligations

As of March 31, 2020 , approximately $ 225.0 million of revenue is expected to be recognized from remaining performance obligations that are unsatisfied (or partially unsatisfied) for non-cancelable contracts.

As of June 30, 2020, approximately $ 240.0 million of revenue is expected to be recognized from remaining performance obligations that are unsatisfied (or partially unsatisfied) for non-cancelable contracts.

The Company expects to recognize revenue on approximately 37 % of these remaining performance obligations during the remainder of 2020, approximately 40 % in 2021, and approximately 17 % in 2022, with the remainder recognized thereafter.

Costs to Obtain or Fulfill a Contract

As of March 31, 2020 and December 31, 2019 , the Company had $ 0.7 million and $ 0.8 million , respectively, in capitalized contract costs.

For the three months ended March 31, 2020 , amortized and expensed contract costs were $ 0.3 million .

For the three months ended March 31, 2019 , amortized and expensed contract costs were $ 0.6 million .

As of June 30, 2020 and December 31, 2019, the Company had $ 0.5 million and $ 0.8 million, respectively, in capitalized contract costs.

For the three months ended June 30, 2020 and 2019, amortized and expensed contract costs were $ 0.4 million and $ 0.8 million, respectively.

For the six months ended June 30, 2020 and 2019, amortized and expensed contract costs were $ 0.7 million and $ 1.4 million, respectively.

Long-term Debt

12 unchanged sentences

Any PIK Interest Shares so issued will be valued at the arithmetic average of the VWAP of the Common Stock on each trading day during the 10 consecutive trading days ending immediately preceding the applicable interest payment date.

On each of January 2, 2020 and April 1, 2020, the Company paid quarterly accrued interest of $ 6.1 million in cash.

The accrued interest liability of $ 6.1 million as of March 31, 2020 was classified within accrued expenses in the Condensed Consolidated Financial Statements.

On each of January 2, 2020, April 1, 2020 and July 1, 2020, the Company paid quarterly accrued interest of $ 6.1 million in cash.

The accrued interest liability of $ 6.1 million as of June 30, 2020 was classified within accrued expenses in the Condensed Consolidated Financial Statements.

The Notes contain certain affirmative and restrictive covenants with which the Company must comply, including covenants with respect to (i) limitations on additional indebtedness, (ii) limitations on liens, (iii) limitations on certain payments, (iv) maintenance of certain minimum cash balances (currently $ 40.0 million), and (v) the timely filing of certain disclosures with the SEC.

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Refer to Footnote 6 , Fair Value Measurements , for further information on the Level 3 inputs utilized for the determination of the fair value of the derivatives.

The balance of the Notes as of March 31, 2020 and December 31, 2019 was as follows:

March 31, 2020

(In thousands, except interest rates)

Stated Interest Rate

Effective Interest Rate

Issuance Discount

Deferred Financing Costs

Net Carrying Value

The balance of the Notes as of June 30, 2020 and December 31, 2019 was as follows:

June 30, 2020

(In thousands, except interest rates) Stated Interest Rate Effective Interest Rate Face Value Issuance Discount Deferred Financing Costs Net Carrying Value

Initial Notes, due January 16, 2022 12.0 % 18.8 % $ 153,500 $ ( 11,599 ) $ ( 2,153 ) $ 139,748

Option Notes, due January 16, 2022 12.0 % 14.9 % 50,500 ( 1,852 ) ( 121 ) 48,527

Total $ 204,000 $ ( 13,451 ) $ ( 2,274 ) $ 188,275

December 31, 2019

(In thousands, except interest rates)

Stated Interest Rate

Effective Interest Rate

Issuance Discount

Deferred Financing Costs

Net Carrying Value

(In thousands, except interest rates) Stated Interest Rate Effective Interest Rate Face Value Issuance Discount Deferred Financing Costs Net Carrying Value

Initial Notes, due January 16, 2022 12.0 % 18.8 % $ 153,500 $ ( 14,703 ) $ ( 2,706 ) $ 136,091

Option Notes, due January 16, 2022 12.0 % 14.9 % 50,500 ( 2,365 ) ( 151 ) 47,984

Total $ 204,000 $ ( 17,068 ) $ ( 2,857 ) $ 184,075

Due to the interest rate reset feature of the Notes, the potential future cash flows associated with the Notes are variable.

Accordingly, the accretion schedule of debt discount and the amortization schedule of deferred financing costs are updated annually to reflect periodic changes in the future cash flows using the effective interest rate on a prospective basis.

The Company amortized $ 0.3 million in deferred financing costs related to the Notes during both the three months ended March 31, 2020 and 2019.

The Company accreted $ 1.8 million and $ 1.3 million in issuance discount related to the Notes during the three months ended March 31, 2020 and 2019, respectively.

The estimated fair value of the Notes, using Level 3 inputs based on interest rates available for debt with terms and maturities similar to the Company's Notes, was $ 162.4 million as of March 31, 2020 .

The Company amortized $ 0.3 million and $ 0.6 million in deferred financing costs related to the Notes during the three and six months ended June 30, 2020, respectively;

and $ 0.3 million and $ 0.5 million during the three and six months ended June 30, 2019, respectively.

The Company accreted $ 1.8 million and $ 3.6 million in issuance discount related to the Notes during the three and six months ended June 30, 2020, respectively;

and $ 1.7 million and $ 3.0 million during the three and six months ended June 30, 2019, respectively.

The estimated fair value of the Notes, using Level 3 inputs based on interest rates available for debt with terms and maturities similar to the Company's Notes, was $ 171.0 million as of June 30, 2020.

Guarantee and Security of Notes

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must comply, including (i) maintenance of a minimum cash collateral balance of $ 14.8 million, (ii) provision of certain financial statements, (iii) limitations on additional indebtedness and liens, (iv) limitations on repayment of debt, (v) limitations on repurchase of stock, and (vi) limitations on disposition of assets.

is in compliance with the Secured Term Note covenants as of March 31, 2020.

The balance of the Secured Term Note as of March 31, 2020 and December 31, 2019 was as follows:

March 31, 2020

(In thousands, except interest rates)

Stated Interest Rate

Effective Interest Rate

Deferred Financing Costs

Net Carrying Value

is in compliance with the Secured Term Note covenants as of June 30, 2020.

The balance of the Secured Term Note as of June 30, 2020 and December 31, 2019 was as follows:

June 30, 2020

(In thousands, except interest rates) Stated Interest Rate Effective Interest Rate Face Value Deferred Financing Costs Net Carrying Value

Secured Term Note 9.75 % 12.8 % $ 13,000 $ ( 512 ) $ 12,488

December 31, 2019

(In thousands, except interest rates)

Stated Interest Rate

Effective Interest Rate

Deferred Financing Costs

Net Carrying Value

(In thousands, except interest rates) Stated Interest Rate Effective Interest Rate Face Value Deferred Financing Costs Net Carrying Value

Secured Term Note 9.75 % 12.2 % $ 13,000 $ ( 537 ) $ 12,463

The Company amortized $ 0.1 million in deferred financing costs related to the Secured Term Note during the three months ended March 31, 2020.

The estimated fair value of the Secured Term Note, using Level 2 inputs based on interest rates available for debt with terms and maturities similar to the Company's Secured Term Note, was $ 15.2 million as of March 31, 2020 .

The Company amortized $ 0.1 million and $ 0.2 million in deferred financing costs related to the Secured Term Note during the three and six months ended June 30, 2020, respectively.

Letters of Credit

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to issue standby letters of credit.

As of March 31, 2020 , $ 3.3 million in letters of credit are outstanding and are cash collateralized under the Security Agreement with Wells Fargo Bank, N.A.

As of June 30, 2020, $ 3.3 million in letters of credit are outstanding and are cash collateralized under the Security Agreement with Wells Fargo Bank, N.A.

Failed Sale-Leaseback Transaction

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The assets continue to be depreciated over their useful lives, and payments are allocated between interest expense and repayment of the financing liability.

The financing obligation is included within other current and other non-current liabilities on the Condensed Consolidated Balance Sheet, with $ 1.9 million classified as short-term and $ 1.2 million classified as long-term.

Future minimum payments related to the financing obligations under the failed sale-leaseback transaction as of March 31, 2020 are summarized below:

The remaining financing liability of $ 2.6 million is included within other current liabilities on the Condensed Consolidated Balance Sheet.

Future minimum payments related to the financing obligations under the failed sale-leaseback transaction as of June 30, 2020 are summarized below:

(In thousands)

Remainder of 2020 $ 1,123

Total $ 2,545

Stockholders' Equity

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The Series B-1 Warrants provided the holders the right to purchase an aggregate of up to 2,347,418 shares of Common Stock at an exercise price equal to $ 8.52 and could have been exercised for cash only.

The Series B-1 Warrants expired in January 2020.

The Series B-2 Warrants are exercisable by the holders at any time prior to the twelve-month anniversary of the Closing Date, as adjusted pursuant to the terms of the Series B-2 Warrants.

The Series B-2 Warrants provide the holders the right to purchase an aggregate of up to 1,121,076 shares of Common Stock at an exercise price equal to $ 8.92 and may be exercised for cash only.

If all of the Series B-2 Warrants have not been exercised prior to their expiration date, the Company will have the right, subject to prior notice to the holders and certain equity, volume and other conditions, to force the exercise of any unexercised portion of the Series B-2 Warrants by such holders.

Key conditions that may impact the ability of the Company to force the exercise of these warrants include a $ 3.96 minimum for the VWAP of the Common Stock leading up to the forced exercise date, a minimum threshold for trading volume, and the maintained effectiveness of a registration statement with the SEC.

The forced exercise price for the Series B-2 Warrants, if applicable, will be 85.0 % of the VWAP of the Common Stock on the date immediately preceding the expiration date of the Series B-2 Warrants.

The Series B-1 Warrants expired on January 29, 2020.

The Series B-2 Warrants were exercisable by the holders at any time prior to the twelve-month anniversary of the Closing Date, as adjusted pursuant to the terms of the Series B-2 Warrants.

The Series B-2 Warrants provided the holders the right to purchase an aggregate of up to 1,121,076 shares of Common Stock at an exercise price equal to $ 8.92 and could have been exercised for cash only.

The Series B-2 Warrants expired on August 3, 2020.

The Series A Warrants are exercisable for a period of five years from the Closing Date and are currently exercisable into 5,457,026 shares of Common Stock, which is equal to the Initial Shares plus the number of shares issued pursuant to the exercise of the Series C Warrants (described below).

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The Series A Warrants may be exercised for cash or through a net settlement feature.

The exercise price for the Series A Warrants is subject to anti-dilution adjustment in certain circumstances.

The Series C Warrants are partially prepaid warrants (with a nominal remaining exercise price) that were not exercisable before September 21, 2019 and expire 90 days after the first anniversary of the Closing Date.

CVI exercised the Series C Warrants on October 10, 2019.

Because the VWAP of the Common Stock as of the date of exercise, discounted by 7.5 % , was less than CVI's purchase price for the Initial Shares, the Company was required to issue to CVI a number of shares of Common Stock equal to (i) (x) CVI's purchase price for the Initial Shares divided by (y) 92.5 % of the VWAP of the Common Stock leading up to September 21, 2019, subject to a floor of 50.0 % of the price per Initial Share, less (ii) the number of Initial Shares issued to CVI on the Closing Date.

Because the VWAP of the Common Stock as of the date of exercise, discounted by 7.5 %, was less than CVI's

purchase price for the Initial Shares, the Company was required to issue to CVI a number of shares of Common Stock equal to (i) (x) CVI's purchase price for the Initial Shares divided by (y) 92.5 % of the VWAP of the Common Stock leading up to September 21, 2019, subject to a floor of 50.0 % of the price per Initial Share, less (ii) the number of Initial Shares issued to CVI on the Closing Date.

As a result of this exercise, the Company issued 2,728,513 shares of Common Stock to CVI on October 14, 2019.

In addition, the number of shares issuable under the Company's Series A Warrants was increased by 2,728,513 .

The exercise prices for the Series A and Series B-2 Warrants are subject to anti-dilution adjustment in certain circumstances.

In addition, if and to the extent the exercise of any warrants would, together with the issuances of the Initial Shares and the shares issued pursuant to the exercise of any other warrants, result in the issuance of 20.0 % or more of the outstanding Common Stock of the Company on the Closing Date (the "Exchange Cap"), the Company intends to, in lieu of issuing such shares, settle the obligation to issue such shares in cash.

In addition, CVI will not have the right to exercise any warrant that would result in CVI beneficially owning more than 4.99 % of the outstanding Common Stock after giving effect to such exercise.

CVI will not have the right to exercise any warrant that would result in CVI beneficially owning more than 4.99 % of the outstanding Common Stock after giving effect to such exercise.

CVI has the right, in its discretion, to raise this threshold up to 9.99 % with 60 days' notice to the Company.

If any forced exercise of the Series B-2 Warrants would result in CVI beneficially owning more than 4.99 % of the outstanding Common Stock, CVI will pay the applicable forced exercise price and no shares of Common Stock will be issued, but instead the aggregate number of shares of Common Stock issuable upon any exercise of the Series C Warrants will increase by an equal amount.

Pursuant to the transactions described above, the Company agreed to a 105 -day lock-up period related to any future offering of equity or equity-linked securities and also agreed to provide CVI with registration rights relating to the Initial Shares and any shares issuable upon the exercise of the warrants.

On June 26, 2019, the Company filed a prospectus supplement to its effective registration statement on Form S-3 to permit the resale of such shares.

Management determined each warrant to be a freestanding financial instrument that qualifies for liability treatment as a result of net cash settlement features associated with the Exchange Cap provision or upon a change in control.

Management determined each warrant to be a freestanding financial instrument that qualifies for liability treatment as a result of net cash settlement features associated with an exchange-related limitation or upon a change in control.

Each warrant is initially measured at fair value and classified as a current liability on the Condensed Consolidated Balance Sheet, with subsequent changes in fair value recorded in earnings.

To determine the fair value of each warrant, management utilized a Monte Carlo simulation analysis within an option pricing model.

The estimated fair value of the warrants as of March 31, 2020 was $ 3.1 million .

The estimated fair value of the warrants as of June 30, 2020 was $ 3.8 million.

Refer to Footnote 6 , Fair Value Measurements , for further information on the Level 3 inputs utilized for the determination of the fair value of the warrants.

Fair Value Measurements

The Company's financial instruments measured at fair value in the accompanying Condensed Consolidated Balance Sheets on a recurring and non-recurring basis consist of the following:

March 31, 2020

December 31, 2019

(In thousands)

Recurring fair value measurements

The Company's financial instruments measured at fair value in the accompanying Condensed Consolidated Balance Sheets on a recurring basis consist of the following:

June 30, 2020 December 31, 2019

(In thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Money market funds (1)

Certificates of deposits (2)

$ 20,422 $ — $ — $ 20,422 $ 24,327 $ — $ — $ 24,327

Certificates of deposit (2)

— — — — — 1,009 — 1,009

Total assets $ 20,422 $ — $ — $ 20,422 $ 24,327 $ 1,009 $ — $ 25,336

Financing derivatives:

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Warrants issued:

Series A — — 3,832 3,832 — — 7,508 7,508

Series B-2 (5)

— — — — — — 217 217

Total liabilities $ — $ — $ 20,732 $ 20,732 $ — $ — $ 29,312 $ 29,312

Non-recurring fair value measurements (6)

Operating ROU assets

Leasehold improvements and other

(1) Level 1 cash equivalents are invested in money market funds that are intended to maintain a stable net asset value of $ 1.00 per share by investing in liquid, high quality U.S.

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(4) The fair values of the warrants are derived from techniques which utilize inputs, certain of which are significant and unobservable, that result in classification as Level 3 fair value measurements.

The Series B-1 Warrants expired without exercise in January 2020.

(5) The fair value of the Series B-2 Warrants was estimated as negligible as of March 31, 2020 .

(6) ROU assets and leasehold improvements with a carrying value of $ 7.2 million were written down to a $ 2.5 million fair value as of March 31, 2020.

This resulted in an impairment charge of $ 4.7 million included in net loss for the three months ended March 31, 2020.

There were no changes to the Company's valuation methodologies during the three months ended March 31, 2020 or 2019 , respectively.

The following tables present the changes in the Company's recurring Level 3 fair valued financing derivative liabilities for the three months ended March 31, 2020 and 2019 , respectively:

(In thousands)

Financing Derivative Liabilities

Balance as of December 31, 2019

Total gains included in other income, net (1)

Balance as of March 31, 2020

(1) Represents $ 1.9 million gain due to change in fair value of interest rate reset derivative liability and $ 0.5 million gain due to change in fair value of qualifying change of control redemption derivative liability.

All gains were recorded in other income, net in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

(In thousands)

Financing Derivative Liabilities

The Series B-1 Warrants expired without exercise on January 29, 2020.

(5) The fair value of the Series B-2 Warrants was estimated as negligible as of June 30, 2020.

The Series B-2 Warrants expired without exercise on August 3, 2020.

There were no changes to the Company's valuation methodologies during the three and six months ended June 30, 2020 or 2019, respectively.

The following tables present the changes in the Company's recurring Level 3 fair valued instruments for the six months ended June 30, 2020 and 2019, respectively:

(In thousands) Financing Derivative Liabilities Warrants Liability

Balance as of December 31, 2019 $ 21,587 $ 7,725

Total gains included in other income, net (1)

Balance as of March 31, 2019

(1) Represents $ 4.8 million gain due to change in fair value of interest rate reset derivative liability, offset by $ 0.7 million loss due to change in fair value of the make-whole change of control redemption derivative liability.

All gains and losses were recorded in other income, net in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

The following table presents the changes in the Company's recurring Level 3 fair valued warrants liability for the three months ended March 31, 2020 :

(In thousands)

Warrants Liability

Total gains included in other income (expense), net (1)

( 4,687 ) ( 3,893 )

Balance as of June 30, 2020 $ 16,900 $ 3,832

(1) Represents $ 3.7 million gain due to change in fair value of interest rate reset derivative liability, $ 1.0 million gain due to change in fair value of qualifying change of control redemption derivative liability, $ 3.7 million gain due to change in fair value of the Series A Warrant and $ 0.2 million gain due to change in fair value of the Series B-2 Warrant.

All gains were recorded in other income (expense), net in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

(In thousands) Financing Derivative Liabilities Warrants Liability

Balance as of December 31, 2018 $ 26,100 $ —

Total gains included in other income, net (1)

Balance as of March 31, 2020

(1) Represents $ 4.4 million gain due to change in fair value of the Series A Warrant and $ 0.2 million gain due to change in fair value of the Series B-2 Warrant.

All gains were recorded in other income, net in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

Issuances — 10,798

Total gains included in other income (expense), net (1)

Balance as of June 30, 2019 $ 25,000 $ 10,798

(1) Represents $ 0.5 million gain due to change in fair value of interest rate reset derivative liability, and $ 0.6 million gain due to change in fair value of the make-whole change of control redemption derivative liability.

All gains were recorded in other income (expense), net in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

The following table displays valuation techniques and the significant inputs, certain of which are unobservable, for the Company's Level 3 liabilities, which are measured at fair value on a recurring basis:

Fair Value Measurements

Significant valuation technique

Significant valuation inputs

March 31, 2020

December 31, 2019

Interest rate reset derivative liability

Discounted cash flow

Discount rate

Significant Valuation Technique Significant Valuation Inputs June 30, 2020 December 31, 2019

Interest rate reset derivative liability Discounted cash flow Discount rate 29.0 % 25.0 %

Stock price $ 3.10 $ 4.94

Volatility 104.5 % 74.1 %

Term 1.54 years

Risk-free rate 0.2 % 1.6 %

Make-whole change of control redemption derivative liability

Option pricing model

Change of control probability

Make-whole change of control redemption derivative liability Option pricing model Change of control probability 5.0 % - 10.0 %

5.0 % - 10.0 %

Term 1.54 years

Risk-free rate 0.2 % 1.6 %

Qualifying change of control redemption derivative liability

Discounted cash flow

Change of control probability

Qualifying change of control redemption derivative liability Discounted cash flow Change of control probability 5.0 % 5.0 %

Term 0.10 years

Discount rate 29.0 % 25.0 %

Warrants liability (1)

Option pricing model

Option pricing model Stock price $ 3.10 $ 4.94

Volatility 75.0 % 65.0 %

Term 3.99 years

0.59 - 4.49 years

Change of control probability 5.0 % - 10.0 %

5.0 % - 10.0 %

Risk-free rate 0.2 % 1.6 % - 1.7 %

Cost of debt 14.6 % - 15.6 %

14.7 % - 16.0 %

(1) Warrants liability includes only Series A as of March 31, 2020.

(1) Warrants liability includes only Series A as of June 30, 2020.

Warrants liability includes Series A and Series B-2 as of December 31, 2019.

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Accrued Expenses

(In thousands)

March 31, 2020

December 31, 2019

(In thousands) June 30, 2020 December 31, 2019

Accrued data costs $ 23,015 $ 19,593

3 unchanged sentences

Restructuring accrual 221 992

Other 7,940 9,272

Total accrued expenses $ 51,071 $ 55,507

1 unchanged sentence

Transactions with WPP plc

As of March 31, 2020 (based on public filings), WPP plc and its affiliates ("WPP") owned 11,319,363 shares of the Company's outstanding Common Stock, representing 16.1 % ownership in the Company.

As of June 30, 2020 (based on public filings), WPP plc and its affiliates ("WPP") owned 11,319,363 shares of the Company's outstanding Common Stock, representing 16.0 % ownership in the Company.

The Company provides WPP, in the normal course of business, services amongst its different product lines and receives various services from WPP supporting the Company's data collection efforts.

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The Company's results from transactions with WPP and its affiliates, as reflected in the Condensed Consolidated Statements of Operations and Comprehensive Loss, are detailed below:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2020 2019 2020 2019

Revenues $ 3,749 $ 3,926 $ 6,960 $ 7,771

Cost of revenues 2,364 3,584 4,739 5,679

Selling and marketing

General and administrative 110 180 252 220

The Company has the following balances related to transactions with WPP and its affiliates, as reflected in the Condensed Consolidated Balance Sheets:

(In thousands)

March 31, 2020

December 31, 2019

(In thousands) June 30, 2020 December 31, 2019

Accounts receivable, net $ 2,406 $ 2,542

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As a result of these agreements and the transactions contemplated thereby, Starboard ceased to be a beneficial owner of more than 5.0 % of the Company's outstanding Common Stock on January 16, 2018.

Included in the Condensed Consolidated Statements of Operations and Comprehensive Loss, the Company recorded interest expense related to Starboard of $ 8.2 million during the three months ended March 31, 2020 , and $ 6.7 million during the three months ended March 31, 2019 , respectively.

Included in the Condensed Consolidated Statements of Operations and Comprehensive Loss, the Company recorded interest expense related to Starboard of $ 8.2 million and $ 16.4 million during the three and six months ended June 30, 2020, respectively;

and $ 8.1 million and $ 14.8 million during the three and six months ended June 30, 2019, respectively.

The Company has the following balances related to transactions with Starboard, as reflected in the Condensed Consolidated Balance Sheets:

(In thousands)

March 31, 2020

December 31, 2019

(In thousands) June 30, 2020 December 31, 2019

Accrued expenses $ 6,120 $ 6,120

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03210, was filed in the U.S.

District Court for the Southern District of New York and also names the Company's Chief Financial Officer, Gregory Fink, and the Company's former Chief Executive Officer, Bryan Wiener, as defendants.

The complaint, which was amended on September 30, 2019, purports to bring claims on behalf of all persons and entities that acquired securities of the Company between February 28, 2019 and August 7, 2019 and alleges that the Company, Mr.

District Court for the Southern District of New York and also named the Company's Chief Financial Officer, Gregory Fink, and the Company's former Chief Executive Officer, Bryan Wiener, as defendants.

The complaint, which was amended on September 30, 2019, purported to bring claims on behalf of all persons and entities that acquired securities of the Company between February 28, 2019 and August 7, 2019 and alleged that the Company, Mr.

Wiener, and Mr.

Fink violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, by allegedly failing to disclose in public statements in February and March 2019 material information concerning a disagreement relating to the Company's business strategy.

The complaint also alleges that Mr.

The complaint also alleged that Mr.

Wiener and Mr.

Fink, acting as control persons of the Company, violated Section 20(a) of the Exchange Act in connection with the Company's alleged failure to disclose material information.

The complaint seeks a determination of the propriety of the class, compensatory damages and the award of reasonable costs and expenses incurred in the action.

The defendants deny any wrongdoing or liability and intend to vigorously defend against these claims.

Although the ultimate outcome of this matter is unknown, the Company believes that a material loss was not probable or estimable as of March 31, 2020 .

The complaint sought a determination of the propriety of the class, compensatory damages and the award of reasonable costs and expenses incurred in the action.

On June 24, 2020, the Court granted the defendants' motion to dismiss the complaint for failure to state a claim.

On July 24, 2020, the complaint was dismissed with prejudice.

Other Matters

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The Company has entered into indemnification agreements with each of the Company's directors and certain officers, and the Company's amended and restated certificate of incorporation requires it to indemnify each of its officers and directors, to the fullest extent permitted by Delaware law, who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding by reason of the fact that he or she is or was a director or officer of the Company.

The Company has paid and continues to pay legal counsel fees incurred by the present and former directors and officers who are involved in legal proceedings that require indemnification.

The Company has paid and may in the future pay legal counsel fees incurred by current and former directors and officers who are involved in legal proceedings that require indemnification.

Similarly, certain of the Company's commercial contracts require it to indemnify contract counterparties under specified circumstances, and the Company may incur legal counsel fees and other costs in connection with these obligations.

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In 2019, the Company implemented two reduction in force plans ("May 2019 Restructuring Plan" and "August 2019 Restructuring Plan") in order to reduce costs and more effectively align resources with business priorities.

The May 2019 Restructuring Plan and the August 2019 Restructuring Plan are substantially complete as of March 31, 2020, with remaining payments through March 2021.

The table below summarizes the balance of the restructuring liability as of March 31, 2020 , which is recorded in accrued expenses in the Condensed Consolidated Balance Sheets, and the changes in the accrued amounts for the three months ended March 31, 2020 , by restructuring plan:

(In thousands)

May 2019 Restructuring Plan

August 2019 Restructuring Plan

The May 2019 Restructuring Plan and the August 2019 Restructuring Plan are complete as of June 30, 2020, with remaining payments for the August 2019 Restructuring Plan through March 2021.

The table below summarizes the balance of the restructuring liability as of June 30, 2020, which is recorded in accrued expenses in the Condensed Consolidated Balance Sheets, and the changes in the accrued amounts for the six months ended June 30, 2020, by restructuring plan:

(In thousands) May 2019 Restructuring Plan August 2019 Restructuring Plan

Accrued Balance as of December 31, 2019 $ 294 $ 698

Accrued Balance as of March 31, 2020

( 294 ) ( 477 )

Accrued Balance as of June 30, 2020 $ — $ 221

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements