18. Loss on Long-Term Contract

During the second quarter of 2014, the Company updated its analysis of a long-term partner related contract that originated in 2013. Based on the results of that analysis and an estimate of revenue to be generated in the future under the contract, the Company determined that sufficient revenue would not be generated under the contract for it to meet its minimum annual guarantees of revenue sharing to its partner.

As a result, the Company recorded a $6,200 loss on the long-term contract at June 30, 2014, which represented the amount it expected that the total minimum annual guarantees payable to the partner would exceed the revenue generated under the contract at that time. The loss on the long-term contract was recorded as follows:

The Company continues to re-evaluate this loss contract status. During 2015, the Company reassessed its future revenue projections and operating costs for the remainder of the contract and made the decision to passively pursue revenue and operate the network with the minimum resources needed to maintain service levels as required by the agreement until it terminates on December 31, 2016.  Based on this operating model, the Company revised its loss contract estimates during the year ended December 31, 2015, which resulted in a net gain of $444.  At December 31, 2015 and 2014, the remaining balance on the loss on long-term contract was $616 and $3,685, respectively.