Diligent Corp - 10-K/A filing on 2014-04-07

Restatement of previously issued financial statements due to correction of errors (Tables)

12 Months Ended

Dec. 31, 2012

Accounting Changes and Error Corrections [Abstract]

Schedule of Stockholders Equity [Table Text Block]

The restated opening balances within the accompanying consolidated statement of changes in stockholders’ equity as of January 1, 2011, which present the cumulative effect of the errors noted above through January 1, 2011, are as follows:

	January 1, 2011
	As Previously Reported		Adjustments		As Restated
	(in thousands)
Note Receivable from Shareholder	$	-		(3,076)	$	(3,076)
Accumulated deficit	$	(23,100)		435	$	(22,665)
Total stockholders' equity (deficiency)	$	88		(2,641)	$	(2,553)

Schedule of Error Corrections and Prior Period Adjustments to Consolidated Statement of Operations [Table Text Block]

The following is a reconciliation of the previously reported consolidated statements of operations, balance sheet and statement of cash flow amounts to the restated amounts.

Consolidated Statement of Operations	As
(in thousands, except per share amounts)	Previously				As
Year ended December 31, 2012	Reported		Adjustments		Restated

Revenues	$	43,736	$	(4,609)	$	39,127
Cost of revenues (excluding depreciation and amortization)		10,043		(508)		9,535
Gross profit		33,693		(4,101)		29,592

Operating expenses:
Selling and marketing expenses		8,554		103		8,657
General and administrative expenses		9,089		504		9,593
Research and development expenses		2,276		-		2,276
Depreciation and amortization		1,216		(29)		1,187
Special committee expenses		263		-		263
Total operating expenses		21,398		578		21,976
Operating income		12,295		(4,679)		7,616

Other income, net:
Interest income, net		117		(20)		97
Foreign exchange transaction gain (loss)		16		-		16
Total other income, net		133		(20)		113
Income before provision for income taxes		12,428		(4,699)		7,729
Income tax expense (benefit)		3,287		(6,211)		(2,924)
Net income	$	9,141	$	1,512	$	10,653

Accrued preferred stock dividends		(359)		-		(359)
Net income attributable to common stockholders	$	8,782	$	1,512	$	10,294

Earnings per share:
Basic	$	0.11	$	(0.02)	$	0.09
Diluted	$	0.08	$	0.01	$	0.09

Weighted average shares outstanding:
Basic		82,183		32,667		114,850
Diluted		120,015		(418)		119,597

Consolidated Statement of Operations	As
(in thousands, except per share amounts)	Previously				As
Year ended December 31, 2011	Reported		Adjustments		Restated

Revenues	$	17,966	$	(2,382)	$	15,584
Cost of revenues (excluding depreciation and amortization)		5,030		(193)		4,837
Gross profit		12,936		(2,189)		10,747

Operating expenses:
Selling and marketing expenses		5,203		(38)		5,165
General and administrative expenses		4,693		266		4,959
Research and development expenses		1,533		-		1,533
Depreciation and amortization		592		(13)		579
Total operating expenses		12,021		215		12,236
Operating income (loss)		915		(2,404)		(1,489)

Other income, net:
Impairment recovery on note receivable from shareholder		1,200		(1,200)		-
Interest income, net		181		(13)		168
Foreign exchange transaction loss		(95)		-		(95)
Total other income, net		1,286		(1,213)		73
Income (loss) before provision for income taxes		2,201		(3,617)		(1,416)
Income tax expense (benefit)		(1,102)		1,154		52
Net income (loss)	$	3,303	$	(4,771)	$	(1,468)

Accrued preferred stock dividends		(359)	$	-		(359)
Net income (loss) attributable to common stockholders	$	2,944	$	(4,771)	$	(1,827)

Earnings (loss) per share:
Basic	$	0.04	$	(0.06)	$	(0.02)
Diluted	$	0.03	$	(0.05)	$	(0.02)

Weighted average shares outstanding:
Basic		81,965		32,667		114,632
Diluted		117,168		(2,536)		114,632

Schedule of Error Corrections and Prior Period Adjustments to Consolidated Balance Sheet [Table Text Block]

	As
	Previously				As
Consolidated Balance Sheet as of December 31, 2012	Reported		Adjustments		Restated
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	33,311	$	-	$	33,311
Term deposit		103		-		103
Accounts receivable, net		3,018		(1,476)		1,542
Deferred commissions		-		2,081		2,081
Prepaid expenses and other current assets		882		17		899
Deferred tax assets		643		3,296		3,939
Total current assets		37,957		3,918		41,875

Property and equipment, net		5,037		(1,124)		3,913
Deferred tax assets, net of valuation allowance		-		1,532		1,532
Intangible assets, net		217		(217)		-
Security deposits		225		-		225
Other non-current assets		167		-		167
Total assets	$	43,603	$	4,109	$	47,712

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	222	$	-	$	222
Accrued expenses and other liabilities		2,615		2,349		4,964
Income taxes payable		1,640		(249)		1,391
Deferred revenue		17,581		(609)		16,972
Obligations under capital leases		702		-		702
Total current liabilities		22,760		1,491		24,251

Non-current liabilities:
Deferred revenue - less current portion		-		6,964		6,964
Obligations under capital leases, less current portion		1,522		(1,285)		237
Deferred tax liabilities		111		(80)		31
Other non-current liabilities		223		49		272
Total non-current liabilities		1,856		5,648		7,504
Total liabilities		24,616		7,139		31,755

Redeemable preferred stock:
Series A convertible redeemable preferred stock		3,233		-		3,233

Stockholders' equity:
Common Stock		84		-		84
Additional paid-in capital		26,259		(207)		26,052
Accumulated deficit		(10,656)		(2,824)		(13,480)
Accumulated other comprehensive income		67		1		68
Total stockholders' equity		15,754		(3,030)		12,724
Total liabilities, redeemable preferred stock and stockholders' equity	$	43,603	$	4,109	$	47,712

	As
	Previously				As
Consolidated Balance Sheet as of December 31, 2011	Reported		Adjustments		Restated
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	8,931	$	-	$	8,931
Term deposit		97		-		97
Accounts receivable, net		1,956		(795)		1,161
Deferred commissions		-		2,233		2,233
Prepaid expenses and other current assets		765		-		765
Deferred tax assets		301		(272)		29
Note receivable from shareholder, net of valuation allowance - current portion		3,072		(3,072)		-
Total current assets		15,122		(1,906)		13,216

Property and equipment, net		2,088		330		2,418
Deferred tax assets, net of valuation allowance		883		(883)		-
Intangible assets, net		362		(362)		-
Security deposits		98		-		98
Total assets	$	18,553	$	(2,821)	$	15,732

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	858	$	-	$	858
Accrued expenses and other liabilities		1,397		2,465		3,862
Income taxes payable		40		-		40
Deferred revenue		8,496		(554)		7,942
Obligations under capital leases		99		-		99
Total current liabilities		10,890		1,911		12,801

Non-current liabilities:
Deferred revenue - less current portion		-		2,928		2,928
Obligations under capital leases, less current portion		70		-		70
Other non-current liabilities		269		(13)		256
Total non-current liabilities		339		2,915		3,254
Total liabilities		11,229		4,826		16,055

Redeemable preferred stock:
Series A convertible redeemable preferred stock		3,205		-		3,205

Stockholders' equity:
Common Stock		82		-		82
Additional paid-in capital		23,837		(239)		23,598
Note receivable from shareholder		-		(3,072)		(3,072)
Accumulated deficit		(19,797)		(4,336)		(24,133)
Accumulated other comprehensive loss		(3)		-		(3)
Total stockholders' equity		4,119		(7,647)		(3,528)
Total liabilities, redeemable preferred stock and stockholders' equity	$	18,553	$	(2,821)	$	15,732

Schedule of Error Corrections and Prior Period Adjustments to Consolidated Statements of Cash Flows [Table Text Block]

	As
	Previously				As
Consolidated Statements of Cash Flows for the year ended December 31, 2012	Reported		Adjustments		Restated
(in thousands)
Cash flows from operating activities:
Net income	$	9,141		1,512	$	10,653
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred taxes		463		(5,903)		(5,440)
Excess tax benefits realized from share-based compensation		(930)		86		(844)
Depreciation and amortization		1,216		(29)		1,187
Share-based compensation		1,384		-		1,384
Allowance for doubtful accounts		-		50		50
Changes in operating assets and liabilities:
Accounts receivable		(1,061)		630		(431)
Deferred commissions		-		152		152
Prepaid expenses and other assets		(317)		(153)		(470)
Security deposits		(127)		-		(127)
Accounts payable and accrued expenses		1,324		(103)		1,221
Income taxes payable		2,601		(365)		2,236
Deferred revenue		9,086		3,979		13,065
Other		(68)		228		160
Net cash provided by operating activities		22,712		84		22,796
Cash flows from investing activities:
Purchases of property and equipment		(2,460)		-		(2,460)
Net cash used in investing activities		(2,460)		-		(2,460)
Cash flows from financing activities:
Repayment of note receivable from shareholder		3,072		-		3,072
Payment of preferred stock dividend		(120)		-		(120)
Proceeds from exercise of stock options and purchase of shares under stock purchase plan		575		-		575
Excess tax benefits realized from share-based compensation		930		(86)		844
Repayments of obligations under capital leases		(254)		-		(254)
Payments of obligations under software licensing agreements		(145)		-		(145)
Net cash provided by financing activities		4,058		(86)		3,972
Effect of exchange rates on cash and cash equivalents		70		2		72
Net increase in cash and cash equivalents		24,380		-		24,380
Cash and cash equivalents at beginning of year		8,931		-		8,931
Cash and cash equivalents at end of year	$	33,311	$	-	$	33,311

Supplemental disclosure of cash flow information:
Cash paid during the year for :
Interest	$	33	$	-	$	33
Income taxes	$	212	$	-	$	212

Supplemental disclosure of noncash investing and financing activities:
Tender of common stock in lieu of interest payment on note receivable from shareholder	$	200	$	-	$	200
Capital contribution in lieu of preferred stock dividend	$	240	$	-	$	240
Property and equipment acquired under capital leases	$	2,309	$	(1,285)	$	1,024

	As
	Previously				As
Consolidated Statements of Cash Flows for the year ended December 31, 2011	Reported		Adjustments		Restated
(in thousands)
Cash flows from operating activities:
Net income	$	3,302		(4,770)	$	(1,468)
Adjustments to reconcile net income to net cash provided by operating activities:
Impairment recovery on note receivable from shareholder		(1,200)		1,200		-
Deferred taxes		(1,154)		1,154		-
Depreciation and amortization		592		(13)		579
Share-based compensation		908		-		908
Changes in operating assets and liabilities:
Accounts receivable		(1,462)		515		(947)
Deferred commissions		-		(1,512)		(1,512)
Prepaid expenses and other assets		(470)		-		(470)
Security deposits		129		-		129
Accounts payable and accrued expenses		625		1,570		2,195
Income taxes payable		22		(22)		-
Deferred revenue		5,646		1,867		7,513
Other		2		11		13
Net cash provided by operating activities		6,940		-		6,940
Cash flows from investing activities:
Purchases of property and equipment		(663)		-		(663)
Net cash used in investing activities		(663)		-		(663)
Cash flows from financing activities:
Repayment of note receivable from shareholder		4		-		4
Payment of preferred stock dividend		(159)		-		(159)
Proceeds from exercise of stock options and purchase of shares under stock purchase plan		19		-		19
Repayments of obligations under capital leases		(96)		-		(96)
Payments of obligations under software licensing agreements		(72)		-		(72)
Repurchase of common stock		(250)		-		(250)
Net cash provided by financing activities		(554)		-		(554)
Effect of exchange rates on cash and cash equivalents		(4)		-		(4)
Net increase in cash and cash equivalents		5,719		-		5,719
Cash and cash equivalents at beginning of year		3,212		-		3,212
Cash and cash equivalents at end of year	$	8,931	$	-	$	8,931

Supplemental disclosure of cash flow information:
Cash paid during the year for :
Interest	$	27	$	-	$	27
Income taxes	$	51	$	-	$	51

Supplemental disclosure of noncash investing and financing activities:
Capital contribution in lieu of preferred stock dividend	$	440	$	(240)	$	200
Property and equipment acquired under capital leases	$	118	$	-	$	118
Acquisition of software licenses	$	435	$	(46)	$	389
Accounts payable for property and equipment	$	742	$	-	$	742