UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
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(State of Incorporation) |
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(I.R.S. Employer Identification Number) |
(Address of Principal Executive Offices)
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(Registrant’s Telephone Number, Including Area Code)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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☒ |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class |
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Outstanding at November 5, 2020 |
Common Stock, par value $0.01 per share |
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Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of Each Class |
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Trading Symbols(s) |
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Name of Exchange on Which Registered |
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INDEX
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Page Number |
PART I — FINANCIAL INFORMATION |
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Item 1. |
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Financial Statements (Unaudited) |
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Condensed Consolidated Balance Sheets at September 30, 2020 (unaudited) and December 31, 2019 |
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3 |
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4 |
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5 |
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7 |
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8 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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29 |
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Item 4. |
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29 |
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Item 1. |
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30 |
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Item 1A. |
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30 |
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Item 2. |
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30 |
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Item 3. |
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30 |
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Item 4. |
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30 |
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Item 5. |
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30 |
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Item 6. |
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31 |
2
ZIX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and par value data) |
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September 30, 2020 |
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December 31, 2019 |
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(unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Receivables, net |
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Prepaid and other current assets |
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Total current assets |
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Property and equipment, net |
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Operating lease assets |
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Intangible assets, net |
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Goodwill |
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Deferred tax assets |
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Deferred costs and other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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Deferred revenue |
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Current portion of long-term debt |
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Operating lease liabilities, current |
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Finance lease liabilities, current |
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Total current liabilities |
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Long-term liabilities: |
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Deferred revenue |
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Noncurrent operating lease liabilities |
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Noncurrent finance lease liabilities |
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Long-term debt |
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Total long-term liabilities |
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Total liabilities |
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Commitments and contingencies (see Note 11) |
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Preferred stock: |
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Series A convertible preferred stock, $ |
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Total preferred stock |
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Stockholders’ equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Treasury stock, at cost; |
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Accumulated deficit |
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Accumulated other comprehensive income (loss) |
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Total stockholders’ equity |
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Total liabilities, preferred stock and stockholders’ equity |
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$ |
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$ |
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See notes to condensed consolidated financial statements.
3
ZIX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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(In thousands, except share and per share data) |
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2020 |
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2019 |
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2020 |
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2019 |
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Revenue |
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$ |
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$ |
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$ |
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$ |
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Cost of revenue |
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Gross margin |
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Operating expenses: |
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Research and development |
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Selling, general and administrative |
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Total operating expenses |
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Operating income (loss) |
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( |
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Other income (expense): |
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Investment and other income |
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Interest expense |
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( |
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( |
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( |
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Total other expense |
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( |
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( |
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( |
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Income (loss) before income taxes |
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( |
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( |
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( |
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Income tax (expense) benefit |
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( |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Deemed and accrued dividends on preferred stock |
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Net loss attributable to common stockholders |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Basic loss per share attributable to common stockholders |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Diluted loss per common share attributable to common stockholders |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Basic weighted average common shares outstanding |
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Diluted weighted average common shares outstanding |
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Other comprehensive income (loss), net of tax |
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Foreign currency translation adjustments |
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( |
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( |
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Comprehensive loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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See notes to condensed consolidated financial statements
4
ZIX CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
(Unaudited)
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Preferred Stock and Stockholders’ Equity |
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Preferred Stock |
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Common Stock |
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Additional Paid-In |
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Treasury |
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Accumulated |
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Accumulated Other Comprehensive |
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Total Stockholders |
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(In thousands, except shares) |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Stock |
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Deficit |
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Income (Loss) |
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Equity |
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Balances, December 31, 2019, as reported |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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$ |
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Cumulative effect adjustment from changes in accounting standard (Note 2) |
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$ |
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( |
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Balances, January 1, 2020 |
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100,206 |
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83,393,514 |
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( |
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( |
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Accretion of beneficial conversion feature of Series A Preferred Shares (Participating) |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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Accrued dividend on Series A preferred stock |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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Net issuance of common stock upon exercise of stock options |
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— |
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— |
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— |
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— |
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— |
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Net issuance of common stock upon vesting of restricted stock units |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Net issuance of common stock upon vesting of performance stock units |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Net issuance of restricted common stock |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Net issuance of restricted performance common stock |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Employee stock-based compensation costs |
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— |
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— |
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— |
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— |
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( |
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— |
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— |
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Adjustment from foreign currency translation |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Balances, March 31, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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Accretion of beneficial conversion feature of Series A Preferred Shares (Participating) |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Accrued dividend on Series A preferred stock |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Net issuance of common stock upon exercise of stock options |
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— |
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— |
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— |
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— |
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— |
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Net issuance of common stock upon vesting of restricted stock units |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Net issuance of common stock upon vesting of performance stock units |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Net issuance of restricted common stock |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Net issuance of restricted performance common stock |
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— |
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— |
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( |
) |
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— |
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— |
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— |
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— |
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— |
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— |
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Employee stock-based compensation costs |
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— |
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— |
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— |
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— |
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( |
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— |
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— |
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Adjustment from foreign currency translation |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
Balances, June 30, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
Accretion of beneficial conversion feature of Series A Preferred Shares (Participating) |
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— |
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— |
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— |
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— |
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— |
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