KLDISCOVERY INC., 10-K filed on 3/28/2024
Annual Report
v3.24.1
Cover Page - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Mar. 28, 2024
Jun. 30, 2023
Cover [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Dec. 31, 2023    
Document Fiscal Period Focus FY    
Document Fiscal Year Focus 2023    
Entity Registrant Name KLDiscovery Inc.    
Entity Central Index Key 0001752474    
Current Fiscal Year End Date --12-31    
Entity Filer Category Non-accelerated Filer    
Entity Emerging Growth Company true    
Entity Ex Transition Period false    
Entity Small Business true    
Entity Interactive Data Current Yes    
Entity Current Reporting Status Yes    
ICFR Auditor Attestation Flag false    
Entity Shell Company false    
Entity Common Stock, Shares Outstanding   43,086,267  
Entity Public Float     $ 21.5
Entity File Number 001-38789    
Entity Tax Identification Number 61-1898603    
Entity Address, Address Line One 9023 Columbine Road    
Entity Address, City or Town Eden Prairie    
Entity Address, State or Province MN    
Entity Address, Postal Zip Code 55347    
City Area Code 703    
Local Phone Number 288-3380    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Incorporation, State or Country Code DE    
Document Annual Report true    
Document Transition Report false    
Auditor Name Ernst & Young LLP    
Auditor Firm ID 42    
Auditor Location Tysons, Virginia    
Documents Incorporated by Reference

DOCUMENTS INCORPORATED BY REFERENCE

 

Portions of the registrant’s definitive proxy statement relating to its annual meeting of stockholders to be held in 2024 (the “2024 Annual Meeting”), to be filed with the Securities and Exchange Commission (the “SEC”) within 120 days after the end of the fiscal year to which this Annual Report on Form 10-K relates, are incorporated herein by reference where indicated. Except with respect to information specifically incorporated by reference in this Annual Report on Form 10-K, such proxy statement is not deemed to be filed as part hereof.

    
Document Financial Statement Error Correction [Flag] false    
v3.24.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Current assets    
Cash and cash equivalents $ 15,351 $ 32,629
Accounts receivable, net of allowance for doubtful accounts of $3,642 and $5,403, respectively 101,257 95,727
Prepaid expenses 15,787 10,726
Other current assets 1,585 1,175
Total current assets 133,980 140,257
Property and equipment    
Accumulated depreciation (73,045) (79,958)
Property and equipment, net 17,261 19,840
Operating lease right of use assets, net 10,078 12,412
Intangible assets, net 39,729 46,862
Goodwill 396,283 391,114
Other assets 8,262 8,957
Total assets 605,593 619,442
Current liabilities    
Current portion of long-term debt, net 546,845 3,000
Accounts payable and accrued expense 25,957 25,009
Operating lease liabilities 5,906 7,850
Current portion of contingent consideration 650  
Deferred revenue 3,181 4,536
Total current liabilities 582,539 40,395
Long-term debt, net   524,529
Deferred tax liabilities 8,941 7,793
Long term operating lease liabilities 7,870 10,340
Other liabilities 2,176 2,694
Total liabilities 601,526 585,751
Commitments and contingencies
Stockholders' equity    
Common stock $0.0001 par value, 200,000,000 shares authorized, 43,086,267 and 42,920,136 issued and outstanding as of December 31, 2023 and December 31, 2022, respectively 4 4
Preferred stock $0.0001 par value, 1,000,000 shares authorized,zero issued and outstanding as of December 31, 2023 and December 31, 2022
Additional paid-in capital 395,461 391,977
Accumulated deficit (393,954) (359,141)
Accumulated other comprehensive income 2,556 851
Total stockholders' equity 4,067 33,691
Total liabilities and stockholders' equity 605,593 619,442
Computer software and hardware    
Property and equipment    
Property and equipment, gross 61,731 71,720
Leasehold improvements    
Property and equipment    
Property and equipment, gross 26,313 25,869
Furniture, fixtures and other equipment    
Property and equipment    
Property and equipment, gross $ 2,262 $ 2,209
v3.24.1
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Allowance for doubtful accounts $ 3,642 $ 5,403
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 43,086,267 42,920,136
Common stock, shares outstanding 43,086,267 42,920,136
Preferred Stock, per share $ 0.0001 $ 0.0001
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
v3.24.1
Consolidated Statements of Comprehensive Loss - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income Statement [Abstract]    
Revenues $ 345,799 $ 317,432
Cost of revenues 171,912 165,454
Gross profit 173,887 151,978
Operating expenses    
General and administrative 65,159 63,294
Research and development 13,133 13,486
Sales and marketing 41,165 43,570
Depreciation and amortization 20,133 19,593
Total operating expenses 139,590 139,943
Income from operations 34,297 12,035
Other (income) expenses    
Other (income) expense (20) 54
Change in fair value of Private Warrants (572) (1,207)
Interest expense 66,743 54,650
Loss before income taxes (31,854) (41,462)
Income tax provision 2,959 1,712
Net loss (34,813) (43,174)
Other comprehensive income (loss), net of tax    
Foreign currency translation 1,705 (6,937)
Total other comprehensive gain (loss), net of tax 1,705 (6,937)
Comprehensive loss $ (33,108) $ (50,111)
Net loss per share - basic $ (0.81) $ (1.01)
Net loss per share - diluted $ (0.81) $ (1.01)
Weighted average shares outstanding - basic 43,013,825 42,709,706
Weighted average shares outstanding - diluted 43,013,825 42,709,706
v3.24.1
Consolidated Statements of Stockholders' Equity - USD ($)
$ in Thousands
Total
Common stock
Additional Paid-In Capital
Accumulated Deficit
Accumulated Other Comprehensive Income
Balance at Dec. 31, 2021 $ 77,854 $ 4 $ 386,028 $ (315,967) $ 7,789
Balance (in shares) at Dec. 31, 2021   42,684,549      
Share-based compensation 5,282   5,282    
Stock issued in exchange for vested units (in Shares)   106,991      
Acquisition related contingent consideration 667   667    
Acquisition related contingent consideration (in Shares)   128,596      
Foreign exchange translation (6,938)       (6,938)
Net loss (43,174)     (43,174)  
Balance at Dec. 31, 2022 33,691 $ 4 391,977 (359,141) 851
Balance (in shares) at Dec. 31, 2022   42,920,136      
Share-based compensation 3,484   3,484    
Stock issued in exchange for vested units (in Shares)   166,131      
Foreign exchange translation 1,705       1,705
Net loss (34,813)     (34,813)  
Balance at Dec. 31, 2023 $ 4,067 $ 4 $ 395,461 $ (393,954) $ 2,556
Balance (in shares) at Dec. 31, 2023   43,086,267      
v3.24.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Operating activities    
Net loss $ (34,813) $ (43,174)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:    
Depreciation and amortization 27,719 31,237
Paid in kind interest 22,551 19,995
Stock-based compensation 3,365 5,137
Provision for losses on accounts receivable 3,209 3,148
Deferred income taxes 2,057 771
Change in fair value of contingent consideration (3) 21
Change in fair value of Private Warrants (572) (1,207)
Changes in operating assets and liabilities:    
Accounts receivable (8,267) (6,672)
Prepaid expenses and other assets (5,526) (3,458)
Accounts payable and accrued expenses (3,299) 2,320
Deferred revenue (1,395) (168)
Net cash provided by operating activities 5,026 7,950
Investing activities    
Acquisitions, net of cash acquired (3,029)  
Purchases of property and equipment (14,314) (16,189)
Net cash used in investing activities (17,343) (16,189)
Financing activities    
Payments for finance lease obligations (2,278) (1,981)
Payment on long-term debt (3,000) (3,000)
Net cash used in financing activities (5,278) (4,981)
Effect of foreign exchange rates 317 (619)
Net decrease in cash (17,278) (13,839)
Cash at beginning of period 32,629 46,468
Cash at end of period 15,351 32,629
Supplemental disclosure:    
Cash paid for interest 44,639 34,869
Net income taxes paid 971 705
Significant noncash investing and financing activities    
Contingent consideration related to acquisitions 1,300  
Purchases of property and equipment in accounts payable and accrued expenses on the consolidated balance sheets $ 54 $ 125
v3.24.1
Organization, Business and Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization, business and summary of significant accounting policies

Note 1 – Organization, business and summary of significant accounting policies

Organization

KLDiscovery Inc. (the “Company,” “we” or “us”) is a leading global provider of eDiscovery, information governance and data recovery solutions to corporations, law firms, insurance companies and individuals in 17 countries around the world. We provide technology solutions to help our clients solve complex data challenges. The Company’s headquarters are located in Eden Prairie, Minnesota. The Company has 26 locations in 17 countries, as well as 9 data centers and 13 data recovery labs globally.

The Company was originally incorporated under the name Pivotal Acquisition Corp. (“Pivotal”) as a blank check company on August 2, 2018 under the laws of the State of Delaware for the purpose of entering into a merger, capital stock exchange, stock purchase, reorganization or similar business combination with one or more businesses or entities.

On December 19, 2019, Pivotal acquired the outstanding shares of LD Topco, Inc. via a reverse capitalization (the “Business Combination”) and was renamed KLDiscovery Inc.

Principles of consolidation

The accompanying consolidated financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The accompanying consolidated financial statements include the accounts of KLDiscovery and all its subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation.

 

Liquidity and going concern evaluation

 

Under Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company is required to evaluate each reporting period, including interim periods, whether there is substantial doubt regarding its ability to meet its obligations when they come due within one year from the financial statement issuance date. On February 8, 2021, certain subsidiaries of the Company (the “Loan Parties”), entered into a new secured credit agreement (the “2021 Credit Agreement”) and on March 3, 2023, the Loan Parties entered into the First Amendment to the 2021 Credit Agreement (as amended, the “Amended 2021 Credit Agreement”). In addition, on December 19, 2019, the Company issued Convertible Debentures, which mature in 2024, in an aggregate principal amount of $200 million (the “Debentures” or the “Convertible Debentures”). The Amended 2021 Credit Agreement provides for (i) initial term loans in an aggregate principal amount of $300 million (the “Initial Term Loans”), (ii) delayed draw term loans in an aggregate principal amount of $50 million (the “Delayed Draw Term Loans”), and (iii) revolving credit loans in an aggregate principal amount of $40 million, with a letter of credit sublimit of $10 million (the Revolving Credit Loans”). The Initial Term Loans and Revolving Credit Loans are each scheduled to mature on February 8, 2026, unless the Convertible Debentures are outstanding six months prior to the December 19, 2024 maturity date thereof, in which case the Amended 2021 Credit Agreement matures on June 19, 2024. The Company has historically incurred losses and in certain years cash flows have been negative. As of December 31, 2023, the Company’s cash balance was $15.4 million and the Company’s debt balance was $546.8 million, including a balance of $260.9 million under the Convertible Debentures and a balance of $291.8 million in Initial Term Loans under the Amended 2021 Credit Agreement (no amounts were outstanding under the Delayed Draw Term Loans or Revolving Credit Loans). As of December 31, 2023, the Company does not anticipate repaying the Convertible Debentures by June 19, 2024 and as such, the Initial Term Loans debt of $291.8 million and the Convertible Debentures of $260.9 million are included in the current portion of long-term debt in the Consolidated Balance Sheet at December 31, 2023. As of December 31, 2023, the Company does not have sufficient cash on hand, and does not expect to generate sufficient liquidity from forecasted future cash flows to repay its current obligations including the Initial Term Loans, at the accelerated maturity date, or the Convertible Debentures.

 

The Company is reviewing potential alternatives, including renegotiating the terms of the Convertible Debentures and/or the Amended 2021 Credit Agreement and identifying alternative sources for cash or additional financing. The Company's current debt structure, however, raises substantial doubt regarding the Company’s ability to continue as a going concern because these or other alternatives may not be achievable on favorable terms and conditions or at all. The Company’s consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty and have been prepared assuming the Company will continue as a going concern.

 

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. Although actual results could differ from those estimates, management does not believe that such differences would be material.

 

Significant estimates include, but are not limited to, the allowance for doubtful accounts, determining the fair values of assets acquired and liabilities assumed, including the fair value of Private Warrants (as defined in Note 2), the determination of the incremental borrowing rate used to measure right-of-use assets and liabilities, the recoverability and useful lives of property and equipment, intangible assets, and other long-lived assets, the evaluation of goodwill for impairment, the valuation and realization of deferred income taxes, the fair value of the Company’s common stock, stock based compensation equity awards and acquisition-related contingent consideration.

Segments, concentration of credit risk, major customers and liquidity

The Company operates in one business segment, providing technology-based litigation support solutions and services.

Financial instruments, which potentially expose the Company to concentrations of credit risk, consist principally of cash and accounts receivable. The Company places its cash with a banking institution where the balances, at times, exceed federally insured limits. Management believes the risks associated with these deposits are limited.

 

With respect to accounts receivable, the Company performs ongoing evaluations of its customers, generally grants uncollateralized credit terms to its customers, and maintains an allowance for doubtful accounts based on historical experience and management’s expectations of future losses. As of and for the year ended December 31, 2023, the Company did not have a single customer that represented more than five percent (5%) or more of their consolidated revenues or accounts receivable and, as of and for the year ended December 31, 2022 the Company had one single customer that represented approximately six percent (6%) of our consolidated revenues and one single customer that represented approximately six percent (6%) of our consolidated accounts receivable. The Company believes that the geographic and industry diversity of the Company’s customer base throughout the U.S. and internationally minimizes the risk of incurring material losses due to concentrations of credit risk. The Company’s foreign revenues, principally from businesses in the UK and Germany, totaled approximately $52.6 million and $49.6 million in 2023 and 2022, respectively. The Company’s long-lived assets in foreign countries, principally in the UK and Germany, totaled approximately $27.0 million and 25.9 for the years ended December 31, 2023 and 2022, respectively.

 

As disclosed in Note 6, the Company has significant outstanding debt that comes due in 2024. While the Company is exploring various options to refinance the debt, new financings may not be available to the Company on commercially acceptable terms, or at all.

Foreign currency

Results of operations for the Company’s non-U.S. subsidiaries are translated from the designated functional currency to the reporting currency of the U.S. dollar. Revenues and expenses are translated at average exchange rates for each month, while assets and liabilities are translated at balance sheet date exchange rates. Resulting net translation adjustments are recorded as a component of stockholders’ equity in “Accumulated other comprehensive income.”

Transaction gains and losses arising from currency exchange rate fluctuations on transactions denominated in a currency other than the local functional currency are included in “Other expense” on the Company’s Consolidated Statements of Comprehensive Loss. Such transaction gains and losses may be realized or unrealized depending upon whether the transaction settled during the period or remains outstanding at the balance sheet date.

Cash and cash equivalents

The Company considers all highly liquid financial instruments with an original maturity of three months or less when purchased to be cash equivalents.

 

Accounts receivable

The Company maintains an allowance for credit losses for its financial instruments, which is primarily comprised of accounts receivable. The measurement and recognition of credit losses involves the use of judgment and represents management’s estimate of expected lifetime credit losses based on historical experience and trends, current conditions and reasonable and supportable forecasts. Management’s assessment of expected credit losses includes consideration of current and expected economic, market and industry factors affecting the Company’s customers, including their financial condition; the aging of account balances; historical credit loss experience; customer concentrations; customer credit-worthiness; and other sources of payment, among other factors.

 

Management evaluates its experience with historical losses and then applies this historical loss ratio to financial assets with similar characteristics. The Company’s historical loss ratio or its determination of risk pools may be adjusted for changes in customer, economic, market or other circumstances. The Company may also establish an allowance for credit losses for specific receivables when it is probable that a specific receivable will not be collected and the loss can be reasonably estimated. Amounts are written off against the allowance when they are considered to be uncollectible, and reversals of previously reserved amounts are recognized if a specifically reserved item is settled for an amount exceeding the previous estimate. Recoveries of trade accounts receivable previously written off are recorded when received.

 

Estimates of collectability are subject to significant change during times of economic weakness or uncertainty in either the overall economy or within the industries served by the Company. Management actively monitors these factors and assesses the sufficiency of its allowance for credit losses on an ongoing basis, including the potential effects of trends in end-market volatility and/or other macroeconomic factors on the credit quality of the Company’s customers and/or its financial assets, such as the current market environment of elevated interest rates and inflation.

A rollforward of the allowance for doubtful accounts is presented below (in thousands):

 

Balance at December 31, 2021

 

$

9,774

 

Charged to/reversed from expense

 

 

3,148

 

Deductions (write offs)

 

 

(7,519

)

Balance at December 31, 2022

 

$

5,403

 

Charged to/reversed from expense

 

 

3,210

 

Deductions (write offs)

 

 

(4,971

)

Balance at December 31, 2023

 

$

3,642

 

Fixed Assets

Computer software, property and equipment are recorded at cost. Depreciation is calculated using the straight-line method over the following estimated useful lives of the assets:

 

Computer software and hardware

 

3 to 5 years

Leasehold improvements

 

Shorter of lease term or useful life

Furniture, fixtures and other equipment

 

3 to 5 years

 

Gains or losses on disposals are included in results of operations at amounts equal to the difference between the net book value of the disposed assets and the proceeds received upon disposal. Costs for replacements and betterments are capitalized, while the costs of maintenance and repairs are expensed as incurred. Finance leases right of use assets are included in Property and equipment and are stated at the present value of minimum lease payments and subsequently amortized using the straight-line method over the earlier of the end of the asset's useful life or the end of the lease term.

Depreciation expense totaled $10.0 million and $9.6 million for the years ended December 31, 2023 and 2022, respectively, and includes amortization of assets recorded under finance leases. For additional information on leases, refer to Note 5 – Leases.

Internal-use software development costs

The Company capitalizes certain internal computer software costs incurred during the application development stage. The application development stage generally includes software design and configuration, coding, testing and installation activities. Training and maintenance costs are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditure will result in additional functionality. Capitalized software costs are depreciated over the estimated useful life of the underlying project on a straight-line basis. The Company’s estimated useful life of capitalized software costs varies between three and five years, depending on management’s expectation of the economic life of various software. Capitalized software amortization costs are recorded as a component of cost of revenue.

Capitalized software costs are reflected as part of the “Intangible assets, net” in the Company’s Consolidated Balance Sheets and totaled $20.0 million and $17.5 million, net of accumulated amortization, as of December 31, 2023 and 2022, respectively.

 

The Company also enters into certain cloud-based software hosting arrangements that are accounted for as service contracts. For internal use software obtained through a hosting arrangement that is in the nature of a service contract, the Company incurs certain implementation costs such as integrating, configuring, and software customization, which are consistent with costs incurred during the application development stage for on-premise software. The Company applies the same guidance to determine costs that are eligible for capitalization. For these arrangements, the Company amortizes the capitalized development costs straight-line over the fixed, non-cancellable term of the associated hosting arrangement plus any reasonably certain renewal periods. The Company also applies the same impairment model to both internal-use software and capitalized implementation costs in a software hosting arrangement that is in the nature of a service contract.

 

Capitalized implementation costs of cloud-based hosting arrangements are classified as part of Prepaid Expenses and Other Assets, totaling $1.8 million and $9.8 million, respectively, as of December 31, 2023, and $1.7 million and $7.8 million, respectively, as of December 31, 2022. Amortization of capitalized implementation costs related to hosting arrangements totaled $1.8 million and $1.7 million for the years ended December 31, 2023 and 2022.

Intangible assets and other long-lived assets

The Company evaluates the recoverability of its long-lived assets, including finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of any asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the difference between the fair value of the asset compared to its carrying amount.

Amortization expense totaled $15.9 million and $20.1 million for the years ended December 31, 2023 and 2022, respectively; $5.8 million and $10.0 million of which was classified as part of the “Cost of revenues” line in the Company’s Consolidated Statements of Comprehensive Loss.

Goodwill

Goodwill represents the excess of the total consideration paid over identified intangible and tangible assets of the business acquired. The Company tests its goodwill for impairment at the reporting unit level on an annual basis on October 1, and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. As of the October 1 testing date the Company determined there is one reporting unit.

Goodwill impairment exists when the estimated fair value of the reporting unit is less than its carrying value. If impairment exists, the carrying value of the goodwill is reduced by the excess through an impairment charge recorded in the Company’s statements of operations. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points during the analysis.

The fair value of the Company’s reporting unit is estimated using a combination of a discounted cash flow (“DCF”) analysis and market-based valuation methodologies such as comparable public company trading values. Determining fair value requires the exercise of significant judgments, including the amount and timing of expected future cash flows, long-term growth rates, discount rates and relevant comparable public company earnings multiples. The cash flows employed in the DCF analyses are based on the Company’s best estimate of future sales, earnings and cash flows after considering factors such as general market conditions, changes in working capital, long term business plans and recent operating performance. The carrying value of the reporting unit includes the assets and liabilities employed in its operations and goodwill.

Based on the results of the annual impairment test as of October 1, 2023 and the quantitative assessment performed as of December 31, 2023, the Company concluded that the fair value of its reporting unit exceeded the individual reporting unit’s carrying value, and goodwill was not impaired.

The following table provides a rollforward of the carrying amount of goodwill (in thousands):

 

Balance at December 31, 2021

 

$

395,759

 

Foreign currency translation

 

 

(4,645

)

Balance at December 31, 2022

 

 

391,114

 

Acquisitions

 

 

4,459

 

Foreign currency translation

 

 

710

 

Balance at December 31, 2023

 

$

396,283

 

 

Business Combinations

The Company applies ASC 805, Business Combinations, when accounting for business combinations, utilizing the acquisition method. Under the acquisition method, the assets acquired, liabilities assumed, and any noncontrolling interest are recorded at their respective fair values on the acquisition date. Goodwill is identified as the excess of the purchase price over the fair value of the net assets acquired. Management relies on significant estimates and assumptions, utilizing third-party valuations like appraisals or internal valuations based on discounted cash flow analyses or other methods, to assess the values of assets and liabilities. While these estimates and assumptions are considered reasonable and appropriate, they remain inherently uncertain and subject to change. If additional information about facts and circumstances related to the fair value of acquired assets and assumed liabilities emerges within the measurement period (not exceeding one year), the Company may adjust its estimates to account for subsequent changes to the provisional amounts recognized at the acquisition date, resulting in an offsetting adjustment to the goodwill associated with the acquired business. Other revisions to fair value estimates for acquisitions are reflected as income or expense, as appropriate. The Company expenses acquisition-related costs as they are incurred.

Consideration paid generally consists of cash and, from time to time, shares, and potential future payments that are contingent upon the acquired business achieving certain levels of earnings in the future, also referred to as

“contingent consideration” or “earn-outs.” Any contingent consideration is estimated at fair value at the acquisition date. Liability-classified contingent consideration is remeasured each reporting period, with changes in fair value recognized in earnings until the contingent consideration is settled.
 

On November 20, 2023, the Company closed the acquisition of certain assets of Cenza Technologies Private Limited ("Cenza"), a leading firm in the legal outsourcing and technology services sector. The consideration for this acquisition comprised an initial cash payment of $3.0 million, primarily allocated to goodwill, and deferred contingent consideration of $1.3 million. The contingent consideration, a two-year liability, is contingent upon Cenza meeting specific revenue targets at the end of each year. The earnout, if achieved in a given year, will be paid in the amount of $650,000 distributed at the end of the corresponding year in which the target is achieved. If the initial target is not achieved at the end of the first year, but the full target is achieved at the end of the second year, the full $1.3 million will be distributed at such time.

Debt issuance costs

Debt issuance costs are stated at cost, net of accumulated amortization, and are amortized over the term of the debt using both the straight-line and the effective yield methods. U.S. GAAP requires that the effective yield method be used to amortize debt acquisition costs; however, if the effect of using the straight-line method is not materially different from the results that would have been obtained under the effective yield method, the straight-line method may be used. The amortization for funded term debt is calculated according to the effective yield method and revolving and unfunded term debt is calculated according to the straight-line method. Debt issuance costs related to funded term debt is presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts or premiums. Debt issuance costs related to revolving and unfunded term debt is presented in the Consolidated Balance Sheets within “Other assets.” For additional information on leases, refer to Note 6 – Long Term Debt.

Revenue recognition

Revenues are recognized when the Company satisfies a performance obligation by transferring goods or services promised in a contract to a customer, in an amount that reflects the consideration that it expects to receive in exchange for those services. Performance obligations in the Company's contracts represent distinct or separate service streams that the Company provides to its customers.

The Company evaluates its revenue contracts with customers based on the five-step model under Accounting Standards Codification (“ASC”) 606, Revenue Recognition: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to separate performance obligations; and (5) recognize revenues when (or as) each performance obligation is satisfied.

The Company provides Legal Technology services to its clients through several technology solutions including Nebula Ecosystem (“Nebula”) its internally developed end-to-end fully integrated proprietary solution. The Company also provide Data Recovery solutions.

The following table summarizes revenue from contracts with customers for the years ended December 31, 2023 and 2022 (in thousands):

 

 

 

2023

 

 

2022

 

 

 

Technology Solutions

 

Nebula

 

Consolidated

 

 

Technology Solutions

 

Nebula

 

Consolidated

 

Legal technology

 

$

266,448

 

$

46,088

 

$

312,536

 

 

$

254,356

 

$

28,441

 

$

282,797

 

Data recovery

 

 

33,263

 

 

—

 

 

33,263

 

 

 

34,635

 

 

—

 

 

34,635

 

Total revenue

 

$

299,711

 

$

46,088

 

$

345,799

 

 

$

288,991

 

$

28,441

 

$

317,432

 

 

Performance Obligations and Timing of Revenue Recognition

The Company primarily sells services and products that fall into the categories discussed below. Each category contains one or more performance obligations that are either (1) capable of being distinct (i.e., the customer can benefit from the product or service on its own or together with readily available resources, including those purchased separately from us) and distinct within the context of the contract (i.e., separately identified from other promises in the contract) or (2) a series of distinct products or services that are substantially the same and have the same pattern of transfer to the customer.

 

(1)
Legal Technology, including Nebula and the Company's expansive suite of technology solutions, such as its end-to-end eDiscovery technology solutions, managed review solutions, collections, processing, analytics, hosting, production and professional services, and
(2)
Data recovery solutions, which provides data restoration, data erasure and data management services

The Company generates the majority of its revenues by providing Legal Technology services to our clients. Most of our eDiscovery service contracts are time and materials types of arrangements.

Time and materials arrangements are based on units of data stored or processed. Unit-based revenues are recognized as services are provided, based on either the amount of data stored or processed, the number of concurrent users accessing the information, or the number of pages or images processed for a client, at agreed upon per unit rates. We recognize revenues for these arrangements at a point in time utilizing a right-to-invoice practical expedient because we have a right to consideration for services completed to date.

Certain other eDiscovery contracts are subscription-based, fixed-fee arrangements, which have tiered pricing based on the quantity of data hosted. For a fixed monthly fee, our clients receive a variety of optional eDiscovery services, which are included in addition to the data hosting. The Company recognizes revenues for these arrangements at a point in time based on predetermined monthly fees as determined in our contractual agreements, utilizing a right-to-invoice practical expedient because the Company has a right to consideration for services completed to date.

Other eDiscovery agreements are time and material arrangements that require the client to pay us based on the number of hours worked at contractually agreed-upon rates. The Company recognizes revenues for these arrangements at a point in time based on hours incurred and contracted rates utilizing a right-to-invoice practical expedient because it has a contractual right to consideration for services completed to date.

Data recovery services are mainly fixed fee arrangements requiring the client to pay a pre-established fee in exchange for the successful completion of a data recovery on a predetermined device. For the recovery services performed by the Company’s technicians, the revenue is recognized at a point in time, when the recovered data is sent to the customer.

Data erasure services are fixed fee arrangements for which revenue is recognized at a point in time, when the certificate of erasure is sent to the customer.

 

The Company offers term license subscriptions to Ontrack PowerControls software to customers with on-premises installations of the software pursuant to contracts that are historically one to four years in length. The term license subscriptions include maintenance and support, as well as access to future software upgrades and patches. The license and the additional support services are deemed to be one performance obligation, and thus revenue for these arrangements is recognized ratably over the term of the agreement.

 

 

Share-based compensation

The Company measures and recognizes compensation expense for all share-based awards to employees based on estimated grant date fair values on a straight-line basis over the requisite service period. The Company uses the Black-Scholes valuation model, depending on terms, facts and circumstances of each share-based award. The expected vesting of the Company’s performance-based RSUs is based upon the probability of a liquidity event, such

as a change in control as defined under the 2019 Plan. The probability of achievement of the liquidity event, if any, is re-evaluated quarterly.

Advertising

Advertising costs consist of marketing, advertising through print and other media, professional event sponsorship and public relations. These costs are expensed as incurred. Advertising costs totaled $3.1 million and $4.3 million for the years ended December 31, 2023 and 2022, respectively. Advertising costs are reflected within “Sales and marketing” in the accompanying Consolidated Statements of Comprehensive Loss.

Research and development expense

Costs incurred in the research and development of the Company’s technologies primarily consist of developer salaries. Research and development expenses were $13.1 million and $13.5 million for the years ended December 31, 2023 and 2022, respectively.

Income taxes

Income taxes are accounted for using the asset and liability method. Deferred income taxes are provided for temporary differences in recognizing certain income, expense and credit items for financial reporting purposes and tax reporting purposes. Such deferred income taxes primarily relate to the difference between the tax bases of assets and liabilities and their financial reporting amounts. Deferred tax assets and liabilities are measured by applying enacted statutory tax rates applicable to the future years in which deferred tax assets or liabilities are expected to be settled or realized. Excess tax benefits and tax deficiencies are recognized in the income tax provision in the period in which they occur.

The Company records a valuation allowance when it determines, based on available positive and negative evidence, that it is more-likely-than-not that some portion, or all its deferred tax assets will not be realized. The Company determines the realizability of its deferred tax assets primarily based on the reversal of existing taxable temporary differences. In addition, the Company considers the time frame over which it would take to utilize the deferred tax assets prior to their expiration.

For uncertain tax positions, the Company uses a more-likely-than-not threshold based on the technical merits of the tax position taken. Tax positions that meet the more-likely-than-not recognition threshold are measured at the largest amount of tax benefits determined on a cumulative probability basis, which are more-likely-than-not to be realized upon ultimate settlement in the financial statements. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense.

Net Loss per Common Share

Basic net loss per common share is determined by dividing net loss by the weighted average number of common shares outstanding during the year. Diluted net loss per common share is determined by dividing net loss by the weighted average number of common shares outstanding during the year, plus the dilutive effect of common stock equivalents, including stock options and restricted shares. Common stock and common stock equivalents included in the computation represent shares issuable upon assumed exercise of outstanding stock options and release of restricted shares, except when the effect of their inclusion would be antidilutive.

 

Recently Adopted Accounting Standards

 

On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments using a modified retrospective approach. This guidance is intended to introduce a revised approach to the recognition and measurement of credit losses, emphasizing an updated model based on expected losses rather than incurred losses. The adoption did not have a material impact on the Company's consolidated financial statements.

 

On January 1, 2022, the Company adopted ASU No. 2016-02, Leases (Topic 842), and related amendments, on a modified retrospective approach, which allows entities to initially apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings, if any, in the period of adoption with no restatement of comparative periods. Upon adoption, the Company applied the guidance to all existing leases.

 

The new guidance requires the lease rights and obligations arising from the leasing arrangements, including operating leases, to be recognized as assets and liabilities on the balance sheet based on the present value of lease payments over the lease term. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available at the lease commencement date. As the Company’s leases do not have readily determinable implicit discount rates, the Company adjusts its incremental borrowing rate to determine the present value of the lease payments. There were estimates and judgments made in determining the Company’s incremental borrowing rates based on term, country and currency, including developing a secured credit rating and spreading market yield data across maturities.

 

Upon adoption of the new guidance, the most significant impact was the recognition of right-of-use assets and lease liabilities relating to operating leases in the amounts of $21.2 million and $23.8 million, respectively, reported within Operating lease right-of-use assets and Long-term operating lease liabilities, respectively, with the current portion of the liability reported within current portion of operating lease liabilities, in the Company's consolidated balance sheet as of January 1, 2022. Accounting for finance leases remained substantially unchanged and continues to be reported within "Property and equipment, net" and “Other liabilities”, with the current portion of the debt reported within “Accounts payable and accrued expense”, in the Company's consolidated balance sheets. There was no cumulative effect of applying the new standard and accordingly there was no adjustment to our retained earnings upon adoption. The Company has elected not to recognize operating right-of-use assets and lease liabilities for short-term leases for all classes of underlying assets. Short-term leases are leases with terms greater than 1 month, but less than 12 months. The Company elected to apply the package of transitional practical expedients under which the Company did not reassess prior conclusions about lease identification, lease classification. For additional information on leases, refer to Note 5 – Leases.

Accounting Standards Not Yet Adopted

The Company has elected to be an Emerging Growth Company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act and take advantage of the extended transition period of delaying the adoption of new or revised accounting standards until such time as those standards apply to private companies. This may make the comparison of the Company’s consolidated financial statements to other public companies not meaningful due to the differences in accounting standards being applied.

 

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU requires enhanced disclosures about significant segment expenses and other segment items and requires companies to disclose all annual disclosures about segments in interim periods. This ASU also requires public entities with a single reportable segment to provide all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 280. The amendments in this ASU are intended to improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments should be applied retrospectively to all periods presented. The Company is currently evaluating the impact of the new guidance on the Company's consolidated financial statements and related disclosures.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures. Investors, lenders, creditors, and other allocators of capital (collectively, “investors”) indicated that the existing income tax disclosures should be enhanced to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. Investors currently rely on the rate reconciliation table and other disclosures, including total income taxes paid, to evaluate income tax risks and opportunities. While investors find these disclosures helpful, they suggested possible enhancements to better (1)

understand an entity’s exposure to potential changes in jurisdictional tax legislation and the ensuing risks and opportunities, (2) assess income tax information that affects cash flow forecasts and capital allocation decisions, and (3) identify potential opportunities to increase future cash flows.

 

The amendments in this ASU addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

 

This ASU also includes certain other amendments to improve the effectiveness of income tax disclosures. This ASU is effective for the Company for annual periods beginning after December 15, 2025. The Company does not expect ASU 2023-09 to have a material impact on the Company’s consolidated financial statements and related disclosures.
v3.24.1
Fair Value Measurements
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 2 – Fair value measurements

The Company accounts for recurring and non-recurring fair value measurements in accordance with ASC 820, Fair Value Measurements. ASC 820 defines fair value, establishes a fair value hierarchy for assets and liabilities measured at fair value, and requires expanded disclosures about fair value measurements. The ASC 820 hierarchy ranks the quality of reliability of inputs, or assumptions, used in the determination of fair value, and requires assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories:

Level 1 – Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets and liabilities.

Level 2 – Fair value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets and liabilities in inactive markets. Related inputs can also include those used in valuation or other pricing models, such as interest rates and yield curves that can be corroborated by observable market data.

Level 3 – Fair value is determined by inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgments to be made by a reporting entity – e.g., determining an appropriate adjustment to a discount factor for illiquidity associated with a given security.

The Company evaluates financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them each reporting period. This determination requires significant judgments to be made by the Company.

The Company believes that the fair values of its current assets and current liabilities (cash, accounts receivable, accounts payable, and other current liabilities) approximate their reported carrying amounts.

 

The Company estimates the fair value of contingent purchase consideration based on the present value of the consideration expected to be paid during the remainder of the earn-out period, based on management’s assessment of the acquired operations’ forecasted earnings. This fair value measurement is based on significant inputs not observed in the market and thus represents a Level 3 measurement. The fair value of future expected acquisition-related contingent purchase consideration obligations was $1.3 million at December 31, 2023. During 2022, the Company settled $0.6 million earn-out obligation by issuing 128,596 shares of common stock.

 

The Company has determined that the 6,350,000 warrants to purchase Common Stock (the “Private Warrants”) issued in connection with the consummation of the Business Combination in December 2019 should be accounted for as liabilities in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of Private Warrants in the Consolidated Statements of Comprehensive Loss. The fair value of the Private Warrants was $0.1 million as of December 31, 2023.

The following table provides a reconciliation of liabilities measured at fair value using significant unobservable inputs (Level 3) for the years ended December 31, 2023 and 2022 (in thousands):

 

Balance at December 31, 2021

 

$

2,486

 

Change in fair value of Private Warrants

 

 

(1,207

)

Change in fair value of contingent consideration

 

 

21

 

Balance at December 31, 2022

 

 

1,300

 

Change in fair value of Private Warrants

 

 

(572

)

Change in fair value of contingent consideration

 

 

(3

)

Balance at December 31, 2023

 

$

725

 

 

 

 

 

 

 

Management estimates the carrying amount of the Company’s long-term debt approximates its fair value because the interest rates on these instruments are subject to changes in market interest rates or are consistent with prevailing interest rates.

v3.24.1
Intangible Assets
 12 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets

Note 3 – Intangible assets

Intangible assets consist of the following (in thousands):

 

Description

 

Weighted
Average
Remaining
Useful
Life in
Years

 

 

December 31, 2023

 

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

Trademark and tradenames

 

 

2.2

 

 

$

20,565

 

 

$

20,565

 

Accumulated amortization

 

 

 

 

 

(17,780

)

 

 

(15,210

)

Trademark and tradenames, net

 

 

 

 

 

2,785

 

 

 

5,355

 

Developed technology

 

 

3.3

 

 

 

96,271

 

 

 

87,593

 

Accumulated amortization

 

 

 

 

 

(76,166

)

 

 

(69,712

)

Developed technology, net

 

 

 

 

 

20,105

 

 

 

17,881

 

Customer relationships

 

 

5.6

 

 

 

95,747

 

 

 

95,348

 

Accumulated amortization

 

 

 

 

 

(78,908

)

 

 

(71,722

)

Customer relationships, net

 

 

 

 

 

16,839

 

 

 

23,626

 

Intangible assets, net of amortization

 

 

 

 

$

39,729

 

 

$

46,862

 

 

Future amortization of intangible assets is as follows (in thousands):

 

December 31,

 

Amount

 

2024

 

$

12,463

 

2025

 

 

9,532

 

2026

 

 

9,315

 

2027

 

 

4,327

 

2028

 

 

2,931

 

Thereafter

 

 

1,161

 

Total

 

$

39,729

 
v3.24.1
Accrued Expenses
 12 Months Ended
Dec. 31, 2023
Payables and Accruals [Abstract]  
Accrued Expenses

Note 4 – Accrued expenses

Accrued expenses consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2023

 

 

2022

 

Accrued expenses:

 

 

 

 

 

 

Accrued interest

 

$

532

 

 

$

402

 

Accrued salaries

 

 

14,229

 

 

 

12,826

 

Current taxes payable

 

 

742

 

 

 

755

 

Other accrued expenses

 

 

1,301

 

 

 

1,191

 

Total

 

$

16,804

 

 

$

15,174

 
v3.24.1
Leases
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Leases

Note 5 – Leases

 

The Company’s operating leases are primarily for office space expiring in various years through 2029. Certain leases contain annual rent escalation clauses. The Company’s finance leases are primarily for data centers. As part of the Company’s efforts to optimize its real estate footprint, the Company terminated leases in three locations and partially abandoned two locations in 2023.

 

The Company’s lease terms vary depending upon the class of asset and some leases include options to extend or terminate. Generally, the Company does not include renewal or termination options as a component of its present value calculation of operating leases. However, for certain real estate leases, the Company includes them if the Company is reasonably certain to exercise these renewal or termination options, the options are considered in determining the lease term and associated potential option payments or penalties are included as lease payments. In addition, the Company has lease agreements that include lease and non-lease components, which are accounted for separately. Non-lease components consist primarily of common area maintenance expenses and property taxes. Non-lease components are expensed as incurred.

 

The Company’s operating lease assets and liabilities are reported separately in the Consolidated Balance Sheet. The classification of the Company’s finance leases in the Consolidated Balance Sheet was as follows (in thousands):

 

 

 

Consolidated Statement Balance Sheet Classification

 

As of December 31, 2023

 

As of December 31, 2022

 

Finance lease right of use asset, net

 

Property and equipment

 

$

1,749

 

$

1,965

 

Finance lease liabilities

 

Accounts payable and accrued expense

 

 

135

 

 

1,020

 

Non-current finance lease liabilities

 

Other liabilities

 

 

—

 

 

—

 

 

The components of lease cost were as follows (in thousands):

 

 

 

Consolidated Statement of Comprehensive Loss Classification

 

Year Ended
December 31, 2023

 

Year Ended
December 31, 2022

 

 

 

 

 

 

 

 

Operating lease cost

 

Cost of Revenue

 

$

1,591

 

$

1,682

 

Operating lease cost

 

General and Administrative

 

 

6,455

 

 

6,460

 

Finance lease cost:

 

 

 

 

 

 

 

Amortization of right of use assets

 

Cost of Revenue

 

 

1,465

 

 

1,184

 

Amortization of right of use assets

 

General and Administrative

 

 

542

 

 

442

 

Interest on lease liabilities

 

Interest expense

 

 

84

 

 

142

 

Sublease income

 

Cost of Revenue

 

 

(1,865

)

 

(1,772

)

Sublease income

 

General and Administrative

 

 

(877

)

 

(844

)

      Total lease cost

 

 

 

$

7,395

 

$

7,294

 

 

Supplemental cash flow information related to leases was as follows (in thousands):

 

 

 

Year Ended
December 31, 2023

 

Year Ended
December 31, 2022

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

Operating cash used for operating leases

 

$

10,353

 

$

8,104

 

Financing cash used for finance leases

 

 

2,278

 

 

1,981

 

 

Maturities of lease liabilities as of December 31, 2023 were as follows:

 

December 31,

 

Finance
Leases

 

 

Operating
Leases

 

2024

 

$

138

 

 

$

7,026

 

2025

 

 

—

 

 

 

4,120

 

2026

 

 

—

 

 

 

2,462

 

2027

 

 

—

 

 

 

809

 

2028

 

 

—

 

 

 

704

 

Thereafter

 

 

—

 

 

 

269

 

Total undiscounted lease payments

 

$

138

 

 

$

15,390

 

Less: interest on lease obligations

 

 

(3

)

 

 

(1,614

)

Non-current

 

$

135

 

 

$

13,776

 

 

 
v3.24.1
Long Term Debt
 12 Months Ended
Dec. 31, 2023
Long-Term Debt, Unclassified [Abstract]  
Long Term Debt

Note 6 – Long term debt

The table below summarizes the components of the Company’s long-term debt (in thousands):

 

 

 

December 31,

 

 

 

2023

 

 

2022

 

Convertible Debenture notes due 2024

 

 

260,926

 

 

 

244,808

 

2021 Credit Agreement due 2026 (1) (2)

 

 

291,750

 

 

 

294,750

 

Total debt

 

 

552,676

 

 

 

539,558

 

Less: unamortized original issue discount

 

 

(5,254

)

 

 

(10,751

)

Less: unamortized debt issuance costs

 

 

(577

)

 

 

(1,278

)

Total debt, net

 

 

546,845

 

 

 

527,529

 

 

 

 

 

 

 

 

Current portion of debt

 

 

552,676

 

 

 

3,000

 

Less: current portion of unamortized original
   issue discount

 

 

(5,254

)

 

 

—

 

Less: current portion of unamortized debt
   issuance costs

 

 

(577

)

 

 

—

 

Total current portion of debt, net

 

 

546,845

 

 

 

3,000

 

Total long-term debt, net

 

$

—

 

 

$

524,529

 

 

 

(1)
The 2021 Credit Agreement was amended on March 3, 2023.
(2)
The Amended 2021 Credit Agreement matures on February 8, 2026, unless the Convertible Debentures are outstanding six months prior to the December 19, 2024 maturity date thereof, in which case the Amended 2021 Credit Agreement matures on June 19, 2024. As of December 31, 2023, the Company does not anticipate repaying the Convertible Debentures by June 19, 2024 and as such, the Term Loan debt of $291.8 million and the Convertible Debentures of $260.9 million are included in the current portion of long-term debt.

 

Amended 2021 Credit Agreement

On February 8, 2021, the Loan Parties entered into the 2021 Credit Agreement, a new secured credit agreement. Proceeds were used to pay in full all outstanding loans and terminate all lending commitments under the previously outstanding 2016 Credit Agreement.

 

On March 3, 2023, the Loan Parties entered into the First Amendment to the 2021 Credit Agreement. The First Amendment to the 2021 Credit Agreement provides for the revision of the benchmark interest rate from LIBOR to the secured overnight financing rate, (“SOFR”). At March 31, 2023, all outstanding indebtedness under the Amended 2021 Credit Agreement automatically converted from a LIBOR based loan to the new SOFR based loan at the end of the then-current applicable Interest Period. Additionally, the First Amendment to the 2021 Credit Agreement provides for the addition of the Term SOFR Adjustment of 0.10%, based on the term of the applicable Interest Period, to be added to the Applicable Rate for both SOFR Loans and Base Rate Loans (capitalized terms as defined in the Amended 2021 Credit Agreement).

The Amended 2021 Credit Agreement provides for (i) Initial Term Loans in an aggregate principal amount of $300 million, (ii) Delayed Draw Term Loans in an aggregate principal amount of $50 million, and (iii) Revolving Credit Loans in an aggregate principal amount of $40 million, with a letter of credit sublimit of $10 million. The Delayed Draw Term Loans were available to the Loan Parties at any time prior to February 8, 2023, subject to certain conditions. As of December 31, 2023, there were no outstanding Delayed Draw Term Loans and they are no longer available under the Amended 2021 Credit Agreement.

The Initial Term Loans bear, and while they were available, the Delayed Draw Term Loans bore, interest, at the Loan Parties’ option, at the rate of (x) with respect to SOFR Rate Loans, the Term SOFR Rate with a 1.00% floor, plus 6.50% per annum, plus the Term SOFR Adjustment of 0.10% or (y) with respect to Base Rate Loans, the Base Rate plus 5.50% per annum, plus the Term SOFR Adjustment of 0.10%.

The Revolving Credit Loans bear interest, at our option, at the rate of (x) with respect to SOFR Rate Loans, the Term SOFR Rate plus 4.00% per annum, or (y) with respect to Base Rate Loans, the Base Rate plus 3.00% per annum. The Initial Term Loans amortize at a rate of 1.00% of the aggregate principal amount of Initial Term Loans outstanding, payable in consecutive quarterly installments of $0.8 million, beginning on June 30, 2021. On December 31, 2023, the balance due was $291.8 million with a Term SOFR Rate of 5.348140% plus the Term SOFR Adjustment of 0.10%, plus 6.50% per annum.

The Initial Term Loans and Revolving Credit Loans are each scheduled to mature on February 8, 2026, unless the Convertible Debentures are outstanding six months prior to the December 19, 2024 maturity date thereof, in which case the Amended 2021 Credit Agreement matures on June 19, 2024. The Initial Term Loans may be voluntarily repaid at any time, but may be subject to a prepayment premium. The Initial Term Loans are required to be repaid under certain circumstances, including with Excess Cash Flow (as defined in the Amended 2021 Credit Agreement), the proceeds of an Asset Sale or Casualty Event (each as defined in the Amended 2021 Credit Agreement) and the proceeds of certain refinancing indebtedness.

The obligations under the Amended 2021 Credit Agreement are secured by substantially all of the Loan Parties’ assets. The Amended 2021 Credit Agreement contains customary affirmative and negative covenants as well as a financial maintenance covenant that requires the Loan Parties to maintain a First Lien Net Leverage Ratio (as defined in the Amended 2021 Credit Agreement) of less than or equal to 7.00 to 1.00, tested at the end of each fiscal quarter. The Company was in compliance with all Amended 2021 Credit Agreement covenants as of December 31, 2023.

 

Revolving Credit Loans

The 2021 Credit Agreement also provides for an unfunded revolver commitment for borrowing up to $40.0 million (the “Revolving Credit Loans”). As of December 31, 2023, there was $39.4 million available capacity for borrowing under the revolving loan commitment due to the $0.6 million of letters of credit outstanding (See Note 14 – Commitments and contingencies).

Convertible Debentures

On December 19, 2019, the Company issued Convertible Debentures, which mature in 2024, in an aggregate principal amount of $200 million (the “Debentures” or the “Convertible Debentures”). At December 31, 2023 and December 31, 2022, the balance due under the Debentures was $260.9 million and $244.8 million, respectively.

The Debentures will mature on December 19, 2024 unless earlier converted, redeemed or repurchased, and bear interest at an annual rate of 4.00% in cash, payable quarterly, and 4.00% in kind, accrued quarterly, on the last business day of March, June, September and December. In addition, on each anniversary of December 19, 2019 (the "Closing Date"), the Company will increase the principal amount of the Debentures by an amount equal to 3.00% of the original aggregate principal amount of the Debentures outstanding (subject to reduction for any principal amount repaid). The additional payment will accrue from the last payment date for the additional payment (or the Closing Date if no prior payment has been made), and will also be payable at maturity, upon conversion and upon an optional redemption.

At any time, upon notice as set forth in the Debentures, the Debentures will be redeemable at the Company’s option, in whole or in part, at a price equal to 100% of the principal amount of the Debentures redeemed, plus accrued and unpaid interest thereon.

The Debentures are convertible into shares of common stock at the option of the Debenture holders at any time and from time to time at a price of $18 per share, subject to certain adjustments. However, in the event the Company elects to redeem any Debentures, the holders have a right to purchase common stock from the Company in an amount equal to the amount redeemed at the conversion price.

The Debentures contain covenants that limit the Company’s ability to, among other things: (i) incur additional debt; (ii) create liens on assets; (iii) engage in certain transactions with affiliates; or (iv) designate the Company’s subsidiaries as unrestricted subsidiaries. The Debentures provide for customary events of default, including non-payment, failure to comply with covenants or other agreements in the Debentures and certain events of bankruptcy or insolvency. Non-payment of, and certain failures to comply with the covenants under, the Amended 2021 Credit Agreement also constitute events of default under the Debentures. If an event of default occurs and continues, the holders of at least 25% in aggregate principal amount of the outstanding Debentures may declare the entire principal amount of all the Debentures to be due and payable immediately. As of December 31, 2023 and 2022 the Company was in compliance with all Debenture covenants.

Future principal payments, including in kind interest, are as follows (in thousands):

 

December 31,

 

Amount

 

2024 (1)

 

$

568,840

 

2025

 

 

—

 

2026

 

 

—

 

2027

 

 

—

 

Thereafter

 

 

—

 

Total

 

$

568,840

 

 

 

(1)
The Amended 2021 Credit Agreement matures on February 8, 2026, unless the Convertible Debentures are outstanding six months prior to the December 19, 2024 maturity date thereof, in which case the Amended 2021 Credit Agreement matures on June 19, 2024. As of December 31, 2023, the Company does not anticipate repaying the Convertible Debentures by June 19, 2024 and as such, the Term Loan debt of $291.8 million and the Convertible Debentures of $260.9 million are included in the current portion of long-term debt.

 

The Initial Term Loan borrowings related to the 2021 Credit Agreement were issued at an original issue discount of $6.0 million. The Convertible Debentures were issued at an original discount of $13.7 million. The original issue discount is amortized using the effective yield method over the respective term of each facility or debenture. Accretion of the original issue discount totaled $5.5 million and $4.0 million during the years ended December 31,

2023 and 2022, respectively. Amortization is recorded as interest expense in the accompanying Consolidated Statements of Comprehensive Loss.

The Company incurred Initial Term Loan closing fees related to the 2021 Credit Agreement of $1.3 million, along with Revolving Credit Loans closing fees of $0.7 million. The Initial Term Loan and Revolving Credit Loans closing fees were deferred on February 8, 2021 and are amortized over their respective terms. The Company incurred closing fees related to the Convertible Debentures of $0.9 million which were deferred on December 19, 2019 and are amortized over the term of the debentures. Amortization of debt issuance costs totaled $1 million and $0.6 million during the years ended December 31, 2023 and 2022, respectively. Amortization is recorded as interest expense in the accompanying Consolidated Statements of Comprehensive Loss.

The future amortization of debt issuance costs and original issue discount related to the Initial Term Loans and Revolving Credit Loans under the 2021 Credit Agreement, and Convertible Debentures are as follows (in thousands):

 

 

 

December 31,

 

Amount

 

2023

 

$

5,822

 

2024

 

 

—

 

2025

 

 

—

 

2026

 

 

—

 

Thereafter

 

 

—

 

Total

 

$

5,822

 
v3.24.1
Employee Benefit Plan
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
Employee Benefit Plan

Note 7 – Employee benefit plan

The Company’s 401(k) plan covers employees who are at least 21 years of age. Employees may elect to defer a percentage of their salary up to the maximum allowed under the Internal Revenue Service Code. The Company moved back to a safe harbor plan as of January 1, 2022 and reinstated the company matching contributions to the 401(k) plan, which had been discontinued in 2020. Company match is 100% for first 3% and 50% for next 2% of employee’s contributions. The employee contributions are 100% vested immediately. Employer contributions to the 401(k) plan were $3.5 million and $2.9 million for the years ended December 31, 2023 and 2022, respectively.
v3.24.1
Equity Incentive Plan
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Equity Incentive Plan

Note 8 – Equity incentive plan

On December 19, 2019, the Company adopted the 2019 Incentive Award Plan (the “2019 Plan”) under which eligible employees, officers, directors and consultants of the Company may be granted incentive or non-qualified stock options, restricted stock, restricted stock units, or other stock-based awards, including shares of common stock. Pursuant to the 2019 Plan, the number of shares of Common Stock available for issuance under the 2019 Plan automatically increases on each January 1 (commencing with January 1, 2021) until and including January 1, 2029, by an amount equal to the lesser of: (a) 5% of the shares of Common Stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as is determined by our Board of Directors (the “Board”). The Compensation Committee of the Board approved an increase to the share reserve as set out in the 2019 Plan in the amount of 2,416,007 shares in April 2023 and 2,134,227 shares in February 2022, respectively. As of December 31, 2023, 14,176,685 shares of Common Stock were reserved under the 2019 Plan, of which 2,771,329 shares of Common Stock remained available for issuance.

Stock option activity

The following table summarizes the Company’s stock option activity under the 2019 Plan:

Description

 

Options
Outstanding

 

 

Weighted
Average
Exercise
Price

 

 

Weighted
Average
Remaining
Contractual
Term (Years)

 

 

Aggregate
Intrinsic
Value (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options outstanding, December 31, 2021

 

 

5,093,682

 

 

$

8.34

 

 

 

8.4

 

 

$

—

 

Granted

 

 

1,135,850

 

 

 

6.00

 

 

 

—

 

 

 

—

 

Exercised

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Forfeited

 

 

(273,195

)

 

 

7.51

 

 

 

—

 

 

 

—

 

Expired

 

 

(198,558

)

 

 

8.24

 

 

 

—

 

 

 

—

 

Options outstanding, December 31, 2022

 

 

5,757,779

 

 

$

7.92

 

 

 

7.6

 

 

$

—

 

Granted

 

 

997,796

 

 

 

1.05

 

 

 

—

 

 

 

—

 

Exercised

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Forfeited

 

 

(35,791

)

 

 

5.07

 

 

 

—

 

 

 

—

 

Expired

 

 

(190,692

)

 

 

8.12

 

 

 

—

 

 

 

—

 

Options outstanding, December 31, 2023

 

 

6,529,092

 

 

$

6.88

 

 

 

7.1

 

 

$

—

 

Options vested and exercisable, December 31, 2023

 

 

4,503,751

 

 

$

8.21

 

 

 

6.4

 

 

$

—

 

Options vested and expected to vest, December 31, 2023

 

 

6,529,092

 

 

$

6.88

 

 

 

7.1

 

 

$

—

 

 

 

(1)
Aggregate intrinsic value (in thousands) represents the difference between the estimated fair value of the underlying common stock and the exercise price of outstanding, in-the-money options.

The following table summarizes additional information on stock option grants and vesting (in thousands):

 

 

 

2019 Plan

 

 

 

Year Ended
December 31, 2023

 

 

Year Ended
December 31, 2022

 

Total fair value of stock options granted

 

$

942

 

 

$

2,898

 

Total fair value of options vested

 

 

1,835

 

 

 

3,306

 

 

Time-based vesting stock options

Time-based vesting stock options generally vest over a three-year period, are subject to graded vesting schedules, and expire ten years from the date of grant or within 90 days of termination. The weighted-average fair value per share of time-based vesting stock options granted by the Company was $1.05 and $2.55 during the years ended December 31, 2023 and 2022, respectively.

For the years ended December 31, 2023, and 2022 the Company recognized $1.9 million and $3.9 million of stock-based compensation expense in connection with time-based stock options, respectively. As of December 31, 2023 and 2022, there was $1.9 million and $2.8 million of unrecognized stock-based compensation expense, respectively, related to unvested time-based stock options that is expected to be recognized over a weighted-average period of 1.53 and 1.84 years, respectively.

Stock Option Valuation

The Company used valuation models to value the time-based vesting stock options granted during 2023 and 2022. The following table summarizes the assumptions used in the valuation models to determine the fair value of awards granted to employees and non-employee directors under the 2019 Plan:

 

 

Year Ended
December 31, 2023

 

Year Ended
December 31, 2022

Expected volatility

 

41.26%

 

42.78 - 42.90%

Expected term (in years)

 

6.0

 

6.0

Dividend yield

 

0%

 

0%

Risk free interest rate

 

3.61%

 

1.0 - 1.62%

A discussion of management’s methodology for developing each of the assumptions used in the valuation model follows:

•
Expected volatility – Volatility is a measure of the amount by which a financial variable such as a share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company uses an estimated volatility based on the historical and implied volatilities of comparable companies.
•
Expected term – This is the period that the options granted are expected to remain unexercised. For options granted during the years ended December 31, 2023 and 2022, the Company derived the expected life of the option based on the average midpoint between vesting and the contractual term as there is little exercise history.
•
Dividend yield – The Company has never declared or paid dividends and have no plans to do so in the foreseeable future.
•
Risk-free interest rate – This is the U.S. Treasury rate for securities with similar terms that most closely resembles the expected life of the option.
•
Forfeiture rate - Forfeitures are included in compensation cost as they occur.

Stock-based compensation expense

Stock-based compensation expense is included in the Consolidated Statements of Comprehensive Loss within the following line items (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2023

 

 

2022

 

Cost of revenues

 

$

917

 

 

$

1,640

 

General and administrative

 

 

1,727

 

 

 

2,088

 

Research and development

 

 

373

 

 

 

584

 

Sales and marketing

 

 

348

 

 

 

824

 

Total

 

$

3,365

 

 

$

5,136

 

 

Restricted stock units

Periodically, the Company granted RSUs to certain employees which are subject to certain vesting criteria. These RSUs become eligible to begin vesting upon a liquidity event (as defined in the award agreements governing the RSUs). The amount and timing of the vesting of the RSUs depends on the type and timing of the liquidity event as it relates to the Closing Date. Generally, a portion of the RSUs were scheduled to first vest upon the occurrence of the liquidity event and the remainder were scheduled to vest in up to three annual installments thereafter. Because no liquidity event occurred before the third anniversary of the Closing Date, all RSUs are scheduled to vest immediately upon a future liquidity event.

 

The Company determined the achievement of the liquidity event was not probable and therefore no expense has been recorded related to the performance-based awards that vest solely upon a liquidity event.

 

Performance based restricted stock units

During 2023 and 2022, the Company granted 369,056 and 463,000 performance based RSUs to certain employees, respectively, 50% of which vest based on the achievement of annual consolidated revenue targets and 50% of which vest based on the achievement of certain annual Nebula revenue targets. These units will vest over three annual installments based on the achievement of the annual consolidated revenue and Nebula revenue performance conditions and are not subject to any liquidity event vesting condition. In the event that the performance conditions are not met in the first or second year, all units granted will vest in the third year if the cumulative performance conditions are met at that time. The grant of awards with performance conditions supports the Company’s goal of aligning executive incentives with long-term stockholder value and ensuring that executive officers have a continuing stake in the long-term success of the Company.

 

The Company determined the three-year achievement of the overall Company revenue and Nebula revenue targets was probable and incurred $0.9 million and $0.7 million of stock-based compensation expense for the years-ended December 31, 2023 and 2022, respectively, for the performance based RSUs.

 

The vesting of the RSUs held by a grantee is generally subject to his or her continued employment with the Company.

 

During the year ended December 31, 2023, the Company’s Board of Directors approved the vesting of 73,726 performance-based RSUs previously granted to certain employees. The shares issued upon the vesting of the RSUs were distributed to the employees during the second quarter.

Time-based restricted stock units

During the years ended December 31, 2023 and 2022, the Company granted to certain non-employee directors 338,349 and 100,000 stock awards, respectively. These stock awards were issued to non-employee directors in satisfaction of their annual retainer payments and vest over a one-year or three-year period. Accordingly, the Company recognized the grant-date fair value of the restricted stock units of $0.7 million as stock-based compensation expense for each of the years ended years ended December 31, 2023 and 2022, respectively.

 

The following table summarizes the Company’s RSU activity for performance based RSUs awarded to employees and for time-based RSUs granted to non-employee directors under the 2019 Plan:

Description

 

RSUs
Outstanding

 

Outstanding at December 31, 2022

 

1,876,669

 

Granted

 

792,000

 

Vested

 

 

(190,059

)

Forfeited

 

(49,321

)

Expired

 

—

 

Outstanding at December 31, 2023

 

2,429,289

 

 
v3.24.1
Equity
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Equity

Note 9 – Equity

The Company is authorized to issue up to 200,000,000 shares of common stock, $0.0001 par value per share and 1,000,000 shares of preferred stock, $0.0001 par value per share. Each holder of Common Stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. The holders of the Common Stock are entitled to receive dividends out of assets legally available at the time and in the amounts as the Company’s Board of Directors may from time to time determine. In the event of any liquidation, dissolution or winding up of the Company, the assets of the Company shall be distributed ratably among the holders of the then outstanding common stock.

 

During 2022, the Company settled earn-out obligations by issuing 128,596 shares of common stock.

Warrants

On the Closing Date, in connection with the consummation of the Business Combination, the Company assumed (i) 23,000,000 warrants (the “Public Warrants”) to purchase shares of Common Stock and (ii) 6,350,000 Private Warrants (together with the Public Warrants, the “Warrants”). The Public Warrants qualify for equity accounting as these warrants do not fall within the scope of ASC Topic 480, Distinguishing Liabilities from Equity. The Public Warrants were measured at fair value at the time of issuance and classified as equity. The Company has determined that the Private Warrants fall within the scope of ASC Topic 480, Distinguishing Liabilities from Equity, and therefore these warrants are classified as liabilities and measured at fair value at each reporting period.

Each warrant entitles the holder to purchase one share of common stock for $11.50 per share. If held by the initial purchaser of the Private Warrant or certain permitted transferees, the purchase can occur on a cashless basis. The warrants will expire on December 19, 2024 or earlier upon redemption or liquidation.

If the reported last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders, the Company may redeem all the Public Warrants at a price of $0.01 per warrant upon not less than 30 days’ prior written notice.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. The warrants will not be adjusted for issuance of common stock at a price below its exercise price. The Company will not be required to net cash settle the warrants.

The Private Warrants are identical to the Public Warrants except that the Private Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

Shares Subject to Forfeiture

On the Closing Date, in connection with the consummation of the Business Combination, 550,000 shares of common stock held by Pivotal Acquisition Holdings LLC are subject to an additional lockup that will be released only if the last reported sale price of the common stock equals or exceeds $15.00 for a period of 20 consecutive trading days during the five-year period following the Closing Date. If the last reported sale price of common stock does not equal or exceed $15.00 within five years from the Closing Date, such shares will be forfeited to the Company for no consideration. These shares are reported as outstanding in our financial statements and continue to be subject to the additional lockup as of December 31, 2023.
v3.24.1
Loss Per Share
 12 Months Ended
Dec. 31, 2023
Earnings Per Share [Abstract]  
Loss Per Share

Note 10 – Loss per share

Basic loss per common share is calculated by dividing the net loss for the year by the weighted-average number of common shares outstanding during the period. Due to the Company’s net loss for the years ended December 31, 2023 and 2022, all potential common stock equivalents were anti-dilutive.

The following table summarizes basic and diluted loss per share for the years ended December 31, 2023 and 2022 (in thousands, except per share amounts):

 

 

 

Year Ended
December 31, 2023

 

 

Year Ended
December 31, 2022

 

Basic and diluted loss per share:

 

 

 

 

 

 

Net loss

 

$

(34,813

)

 

$

(43,174

)

Weighted average common shares
   outstanding - basic

 

 

43,013,825

 

 

 

42,709,706

 

Dilutive effect of potentially
   issuable shares

 

 

—

 

 

 

—

 

Weighted average common shares
   outstanding - diluted

 

 

43,013,825

 

 

 

42,709,706

 

Basic loss per share

 

$

(0.81

)

 

$

(1.01

)

Dilutive effect of potentially
   issuable shares

 

 

—

 

 

 

—

 

Diluted loss per share

 

$

(0.81

)

 

$

(1.01

)

Common share equivalents
   excluded due to anti-dilutive effect

 

 

55,046,280

 

 

 

52,784,891

 
v3.24.1
Foreign Currency
 12 Months Ended
Dec. 31, 2023
Foreign Currency [Abstract]  
Foreign Currency

Note 11 – Foreign currency

The Company had immaterial foreign currency losses that are reflected in “Other expense” on the Company’s Consolidated Statements of Comprehensive Loss for years December 31, 2023 and 2022. Transaction gains and losses, both realized and unrealized, relate to the remeasurement or settlement of monetary assets and liabilities that are denominated in a currency other than an entity’s functional currency. These monetary assets and liabilities include cash as well as third party receivables and payables.

v3.24.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

Note 12 – Income taxes

The components of income tax expense for the years ended December 31, 2023 and 2022 are presented below (in thousands):

 

 

 

Year Ended
December 31, 2023

 

 

Year Ended
December 31, 2022

 

Current

 

 

 

 

 

 

Federal

 

$

—

 

 

$

—

 

State

 

 

70

 

 

 

56

 

Foreign

 

 

832

 

 

 

885

 

Deferred

 

 

 

 

 

 

Federal

 

 

307

 

 

 

370

 

State

 

 

999

 

 

 

697

 

Foreign

 

 

751

 

 

 

(296

)

Total income tax provision

 

$

2,959

 

 

$

1,712

 

 

The actual income tax expense amounts for the years ended December 31, 2023 and 2022 differed from the expected tax amounts computed by applying the U.S. federal corporate income tax rate of 21% for 2023 and 2022 to the amounts of loss before income taxes as presented below (in thousands):

 

 

Year Ended
December 31, 2023

 

 

Year Ended
December 31, 2022

 

Pre-tax book loss

 

$

(31,854

)

 

$

(41,462

)

 

 

 

 

 

 

 

Tax at Federal statutory rate of 21%

 

 

(6,690

)

 

 

(8,707

)

State taxes

 

 

1,069

 

 

 

754

 

Taxes on Foreign Earnings

 

 

709

 

 

 

1,162

 

Foreign rate differential

 

 

(1,227

)

 

 

(635

)

Unrecognized tax benefit

 

 

(283

)

 

 

—

 

Other adjustments

 

 

252

 

 

 

805

 

Valuation allowance

 

 

9,129

 

 

 

8,333

 

Total income tax provision (benefit)

 

$

2,959

 

 

$

1,712

 

 

The domestic and foreign components of loss before income taxes for the years ended December 31, 2023 and 2022 are as follows (in thousands):

 

 

 

Year Ended
December 31, 2023

 

 

Year Ended
December 31, 2022

 

Domestic

 

$

(35,259

)

 

$

(40,326

)

Foreign

 

 

3,405

 

 

 

(1,136

)

Total

 

$

(31,854

)

 

$

(41,462

)

 

The tax effects of temporary differences at December 31, 2023 and 2022 are as follows (in thousands):

 

 

 

Year Ended
December 31, 2023

 

 

Year Ended
December 31, 2022

 

 

 

 

 

 

 

 

Net operating losses and other carryforwards

 

$

38,603

 

 

$

42,084

 

Interest expense carryforward

 

 

69,762

 

 

 

53,204

 

Property and equipment

 

 

4,302

 

 

 

3,884

 

Lease liability

 

 

2,599

 

 

 

3,409

 

Accrued expenses

 

 

919

 

 

 

720

 

Payroll tax deferral

 

 

—

 

 

 

—

 

Allowance for doubtful accounts

 

 

827

 

 

 

1,307

 

Stock-based compensation

 

 

3,288

 

 

 

2,786

 

Other

 

 

332

 

 

 

491

 

Deferred tax asset

 

 

120,632

 

 

 

107,885

 

Valuation allowance

 

 

(103,291

)

 

 

(91,866

)

Total deferred tax assets, net of valuation allowance

 

 

17,341

 

 

 

16,019

 

 

 

 

 

 

 

 

Right of Use Asset

 

 

(1,793

)

 

 

(2,029

)

Intangible assets

 

 

(24,068

)

 

 

(20,419

)

Prepaid expenses

 

 

(21

)

 

 

(21

)

Other

 

 

(400

)

 

 

(474

)

Deferred tax liability

 

 

(26,282

)

 

 

(22,943

)

Net deferred tax liability

 

$

(8,941

)

 

$

(6,924

)

 

At December 31, 2023 and 2022, the Company had tax effected U.S. federal net operating loss carryforwards of approximately $29.2 million and $31.5 million, respectively, of which $0.5 million begin to expire in 2027, approximately $20.2 million begin to expire between 2028 and 2036, and $8.5 million have no expiration. At December 31, 2023 and 2022, the Company had tax effected state net operating loss carryforwards of approximately $7.0 million and $7.4 million, respectively. The majority of the state tax losses will not begin expiring until 2035 or later.

The tax effected foreign net operating loss at December 31, 2023 and 2022 is approximately $2.4 million and $3.0 million, respectively, the majority of which has an unlimited carryforward period.

The Company operates in multiple tax jurisdictions and, in the normal course of business, its tax returns are subject to examination by various taxing authorities. Such examinations may result in future assessments by these taxing authorities. The Company is subject to examination by U.S. tax authorities beginning with the year ended December 31, 2020. The Company is also subject to examination in various foreign jurisdictions. In material foreign jurisdictions, the statute of limitations ranges one – four years from the filing of a tax return.

Valuation Allowance

As of December 31, 2023 and 2022, the Company had a valuation allowance of $103.3 million and $91.9 million, respectively, against certain deferred tax assets. The valuation allowance relates to the deferred tax assets of the Company’s U.S. entities, including federal and state tax attributes and timing differences, as well as the deferred tax assets of certain foreign subsidiaries. The increase in the valuation allowance during 2023 is primarily related to operating losses incurred during the year and the limitation on deductibility of interest expense. To the extent the Company determines that, based on the weight of available evidence, all or a portion of its valuation allowance is no longer necessary, the Company will recognize an income tax benefit in the period such determination is made for the reversal of the valuation allowance. If management determines that, based on the weight of available evidence, it is more-likely-than-not that all or a portion of the net deferred tax assets will not be realized; the Company may recognize income tax expense in the period such determination is made to increase the valuation allowance. It is possible that such reduction of or addition to the Company’s valuation allowance may have a material impact on the Company’s results from operations. The U.S. federal and foreign changes to valuation allowance of approximately $9.1 million is presented in the effective tax rate reconciliation as part of the valuation allowance. The U.S. state changes to valuation allowance of approximately $3.2 million is presented as part of the state taxes in the effective tax rate reconciliation. As of December 31, 2023, there is approximately $0.1 million of valuation allowance movement that is attributable to translation adjustment and $1.0 million of valuation allowance included in the effective tax rate reconciliation as part of the other adjustments.

A summary of the deferred tax asset valuation allowance is as follows (in thousands):

 

 

 

Year Ended
December 31, 2023

 

 

Year Ended
December 31, 2022

 

Beginning Balance

 

$

91,866

 

 

$

80,449

 

Additions

 

 

12,302

 

 

 

11,425

 

Reductions

 

 

(877

)

 

 

(8

)

Ending Balance

 

$

103,291

 

 

$

91,866

 

 

Uncertain Tax Positions

 

As of December 31, 2023 and 2022, the total amount of unrecognized tax benefits was $0.5 million and $1.0 million, respectively, that would favorably impact the Company’s effective income tax rate if realized. However, due to the Company’s determination that the deferred tax asset would not more-likely-than-not be realized, a full valuation allowance would be recorded if the unrecognized tax benefits were realized. The Company’s uncertain income tax position liability has been recorded to deferred income taxes to offset the tax attribute carryforward amounts. There was no change to the uncertain tax position liability during the year.
v3.24.1
Severance and Retention
 12 Months Ended
Dec. 31, 2023
Restructuring and Related Activities [Abstract]  
Severance and Retention

Note 13 – Severance and retention

2023 Severance and retention expense reflects cost incurred in ordinary course of business. 2022 Severance and retention expense primarily reflects cost in connection with the Company’s continued integration and realignment efforts following the 2016 acquisition of Kroll Ontrack, LLC which resulted in a 2022 reduction in workforce of 57 employees. The Company recorded severance and retention expense of $0.6 million and $2.9 million during the years ended December 31, 2023 and 2022, respectively, comprised of employee severance and other employee-related costs. Severance and retention expense are included in the Consolidated Statements of Comprehensive Loss as follows (in thousands):

 

 

 

Year Ended
December 31, 2023

 

 

Year Ended
December 31, 2022

 

Costs of revenues

 

$

137

 

 

$

884

 

General and administrative

 

 

20

 

 

 

55

 

Sales and marketing

 

 

406

 

 

 

1,643

 

Research and development

 

 

14

 

 

 

270

 

Total

 

$

577

 

 

$

2,852

 

 

The activity and balance of severance-related liabilities, which are recorded within Accounts payable and accrued expense in our Consolidated Balance Sheet are as follows (in thousands):

 

Balance at December 31, 2021

 

$

443

 

Payments

 

 

(1,569

)

Expense

 

 

2,852

 

Balance at December 31, 2022

 

$

1,726

 

Payments

 

 

(1,557

)

Expense

 

 

577

 

Balance at December 31, 2023

 

$

746

 
v3.24.1
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2023
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 14 – Commitments and contingencies

The Company is involved in various legal proceedings, which may arise occasionally in the normal course of business. While the ultimate results of such matters generally cannot be predicted with certainty, management does not expect such matters to have a material effect on the financial position and results of operations as of December 31, 2023. The Company has two letters of credit totaling $0.6 million as additional security for lease guarantees related to leased properties.

v3.24.1
Related Parties
 12 Months Ended
Dec. 31, 2023
Related Party Transactions [Abstract]  
Related Parties

Note 15 – Related parties

As of December 31, 2023, $130.5 million including paid-in kind interest of the Company’s Debentures are owed to affiliates of MGG Investment Group, which is an affiliate of a director of the Company. For the years ended December 31, 2023 and December 31, 2022, the Company recognized $14.7 million and $13.8 million in interest expense, respectively related to the Debentures owned by the MGG Investment Group.
v3.24.1
Subsequent Events
 12 Months Ended
Dec. 31, 2023
Subsequent Events [Abstract]  
Subsequent Events

Note 16 – Subsequent events

The Company has evaluated subsequent events through March 28, 2024, the date on which these financial statements were issued. Based upon this evaluation, it was determined that the following subsequent events occurred that require recognition or disclosure in the financial statements. On March 8, 2024, the Loan Parties entered into the Second Amendment to the Amended 2021 Credit Agreement. The Second Amendment to the Amended 2021 Credit Agreement provides that the Loan Parties may deliver to the Administrative Agent annual, audited financial statements of the Company accompanied by a report and opinion of the Company's independent certified public accountant that is subject to a “going concern” qualification if such qualification results from an upcoming maturity date under any Indebtedness (as defined in the Amended 2021 Credit Agreement).
v3.24.1
Organization, Business and Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization

Organization

KLDiscovery Inc. (the “Company,” “we” or “us”) is a leading global provider of eDiscovery, information governance and data recovery solutions to corporations, law firms, insurance companies and individuals in 17 countries around the world. We provide technology solutions to help our clients solve complex data challenges. The Company’s headquarters are located in Eden Prairie, Minnesota. The Company has 26 locations in 17 countries, as well as 9 data centers and 13 data recovery labs globally.

The Company was originally incorporated under the name Pivotal Acquisition Corp. (“Pivotal”) as a blank check company on August 2, 2018 under the laws of the State of Delaware for the purpose of entering into a merger, capital stock exchange, stock purchase, reorganization or similar business combination with one or more businesses or entities.

On December 19, 2019, Pivotal acquired the outstanding shares of LD Topco, Inc. via a reverse capitalization (the “Business Combination”) and was renamed KLDiscovery Inc.
Principles of consolidation

Principles of consolidation

The accompanying consolidated financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The accompanying consolidated financial statements include the accounts of KLDiscovery and all its subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation.

Liquidity and going concern evaluation

Liquidity and going concern evaluation

 

Under Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company is required to evaluate each reporting period, including interim periods, whether there is substantial doubt regarding its ability to meet its obligations when they come due within one year from the financial statement issuance date. On February 8, 2021, certain subsidiaries of the Company (the “Loan Parties”), entered into a new secured credit agreement (the “2021 Credit Agreement”) and on March 3, 2023, the Loan Parties entered into the First Amendment to the 2021 Credit Agreement (as amended, the “Amended 2021 Credit Agreement”). In addition, on December 19, 2019, the Company issued Convertible Debentures, which mature in 2024, in an aggregate principal amount of $200 million (the “Debentures” or the “Convertible Debentures”). The Amended 2021 Credit Agreement provides for (i) initial term loans in an aggregate principal amount of $300 million (the “Initial Term Loans”), (ii) delayed draw term loans in an aggregate principal amount of $50 million (the “Delayed Draw Term Loans”), and (iii) revolving credit loans in an aggregate principal amount of $40 million, with a letter of credit sublimit of $10 million (the Revolving Credit Loans”). The Initial Term Loans and Revolving Credit Loans are each scheduled to mature on February 8, 2026, unless the Convertible Debentures are outstanding six months prior to the December 19, 2024 maturity date thereof, in which case the Amended 2021 Credit Agreement matures on June 19, 2024. The Company has historically incurred losses and in certain years cash flows have been negative. As of December 31, 2023, the Company’s cash balance was $15.4 million and the Company’s debt balance was $546.8 million, including a balance of $260.9 million under the Convertible Debentures and a balance of $291.8 million in Initial Term Loans under the Amended 2021 Credit Agreement (no amounts were outstanding under the Delayed Draw Term Loans or Revolving Credit Loans). As of December 31, 2023, the Company does not anticipate repaying the Convertible Debentures by June 19, 2024 and as such, the Initial Term Loans debt of $291.8 million and the Convertible Debentures of $260.9 million are included in the current portion of long-term debt in the Consolidated Balance Sheet at December 31, 2023. As of December 31, 2023, the Company does not have sufficient cash on hand, and does not expect to generate sufficient liquidity from forecasted future cash flows to repay its current obligations including the Initial Term Loans, at the accelerated maturity date, or the Convertible Debentures.

 

The Company is reviewing potential alternatives, including renegotiating the terms of the Convertible Debentures and/or the Amended 2021 Credit Agreement and identifying alternative sources for cash or additional financing. The Company's current debt structure, however, raises substantial doubt regarding the Company’s ability to continue as a going concern because these or other alternatives may not be achievable on favorable terms and conditions or at all. The Company’s consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty and have been prepared assuming the Company will continue as a going concern.
Use of estimates

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. Although actual results could differ from those estimates, management does not believe that such differences would be material.

 

Significant estimates include, but are not limited to, the allowance for doubtful accounts, determining the fair values of assets acquired and liabilities assumed, including the fair value of Private Warrants (as defined in Note 2), the determination of the incremental borrowing rate used to measure right-of-use assets and liabilities, the recoverability and useful lives of property and equipment, intangible assets, and other long-lived assets, the evaluation of goodwill for impairment, the valuation and realization of deferred income taxes, the fair value of the Company’s common stock, stock based compensation equity awards and acquisition-related contingent consideration.
Segments, concentration of credit risk, major customers and liquidity

Segments, concentration of credit risk, major customers and liquidity

The Company operates in one business segment, providing technology-based litigation support solutions and services.

Financial instruments, which potentially expose the Company to concentrations of credit risk, consist principally of cash and accounts receivable. The Company places its cash with a banking institution where the balances, at times, exceed federally insured limits. Management believes the risks associated with these deposits are limited.

 

With respect to accounts receivable, the Company performs ongoing evaluations of its customers, generally grants uncollateralized credit terms to its customers, and maintains an allowance for doubtful accounts based on historical experience and management’s expectations of future losses. As of and for the year ended December 31, 2023, the Company did not have a single customer that represented more than five percent (5%) or more of their consolidated revenues or accounts receivable and, as of and for the year ended December 31, 2022 the Company had one single customer that represented approximately six percent (6%) of our consolidated revenues and one single customer that represented approximately six percent (6%) of our consolidated accounts receivable. The Company believes that the geographic and industry diversity of the Company’s customer base throughout the U.S. and internationally minimizes the risk of incurring material losses due to concentrations of credit risk. The Company’s foreign revenues, principally from businesses in the UK and Germany, totaled approximately $52.6 million and $49.6 million in 2023 and 2022, respectively. The Company’s long-lived assets in foreign countries, principally in the UK and Germany, totaled approximately $27.0 million and 25.9 for the years ended December 31, 2023 and 2022, respectively.

 

As disclosed in Note 6, the Company has significant outstanding debt that comes due in 2024. While the Company is exploring various options to refinance the debt, new financings may not be available to the Company on commercially acceptable terms, or at all.
Foreign currency

Foreign currency

Results of operations for the Company’s non-U.S. subsidiaries are translated from the designated functional currency to the reporting currency of the U.S. dollar. Revenues and expenses are translated at average exchange rates for each month, while assets and liabilities are translated at balance sheet date exchange rates. Resulting net translation adjustments are recorded as a component of stockholders’ equity in “Accumulated other comprehensive income.”

Transaction gains and losses arising from currency exchange rate fluctuations on transactions denominated in a currency other than the local functional currency are included in “Other expense” on the Company’s Consolidated Statements of Comprehensive Loss. Such transaction gains and losses may be realized or unrealized depending upon whether the transaction settled during the period or remains outstanding at the balance sheet date.

Cash and cash equivalents

Cash and cash equivalents

The Company considers all highly liquid financial instruments with an original maturity of three months or less when purchased to be cash equivalents.

Accounts receivable

Accounts receivable

The Company maintains an allowance for credit losses for its financial instruments, which is primarily comprised of accounts receivable. The measurement and recognition of credit losses involves the use of judgment and represents management’s estimate of expected lifetime credit losses based on historical experience and trends, current conditions and reasonable and supportable forecasts. Management’s assessment of expected credit losses includes consideration of current and expected economic, market and industry factors affecting the Company’s customers, including their financial condition; the aging of account balances; historical credit loss experience; customer concentrations; customer credit-worthiness; and other sources of payment, among other factors.

 

Management evaluates its experience with historical losses and then applies this historical loss ratio to financial assets with similar characteristics. The Company’s historical loss ratio or its determination of risk pools may be adjusted for changes in customer, economic, market or other circumstances. The Company may also establish an allowance for credit losses for specific receivables when it is probable that a specific receivable will not be collected and the loss can be reasonably estimated. Amounts are written off against the allowance when they are considered to be uncollectible, and reversals of previously reserved amounts are recognized if a specifically reserved item is settled for an amount exceeding the previous estimate. Recoveries of trade accounts receivable previously written off are recorded when received.

 

Estimates of collectability are subject to significant change during times of economic weakness or uncertainty in either the overall economy or within the industries served by the Company. Management actively monitors these factors and assesses the sufficiency of its allowance for credit losses on an ongoing basis, including the potential effects of trends in end-market volatility and/or other macroeconomic factors on the credit quality of the Company’s customers and/or its financial assets, such as the current market environment of elevated interest rates and inflation.

A rollforward of the allowance for doubtful accounts is presented below (in thousands):

 

Balance at December 31, 2021

 

$

9,774

 

Charged to/reversed from expense

 

 

3,148

 

Deductions (write offs)

 

 

(7,519

)

Balance at December 31, 2022

 

$

5,403

 

Charged to/reversed from expense

 

 

3,210

 

Deductions (write offs)

 

 

(4,971

)

Balance at December 31, 2023

 

$

3,642

 
Fixed Assets

Fixed Assets

Computer software, property and equipment are recorded at cost. Depreciation is calculated using the straight-line method over the following estimated useful lives of the assets:

 

Computer software and hardware

 

3 to 5 years

Leasehold improvements

 

Shorter of lease term or useful life

Furniture, fixtures and other equipment

 

3 to 5 years

 

Gains or losses on disposals are included in results of operations at amounts equal to the difference between the net book value of the disposed assets and the proceeds received upon disposal. Costs for replacements and betterments are capitalized, while the costs of maintenance and repairs are expensed as incurred. Finance leases right of use assets are included in Property and equipment and are stated at the present value of minimum lease payments and subsequently amortized using the straight-line method over the earlier of the end of the asset's useful life or the end of the lease term.

Depreciation expense totaled $10.0 million and $9.6 million for the years ended December 31, 2023 and 2022, respectively, and includes amortization of assets recorded under finance leases. For additional information on leases, refer to Note 5 – Leases.
Internal-use software development costs

Internal-use software development costs

The Company capitalizes certain internal computer software costs incurred during the application development stage. The application development stage generally includes software design and configuration, coding, testing and installation activities. Training and maintenance costs are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditure will result in additional functionality. Capitalized software costs are depreciated over the estimated useful life of the underlying project on a straight-line basis. The Company’s estimated useful life of capitalized software costs varies between three and five years, depending on management’s expectation of the economic life of various software. Capitalized software amortization costs are recorded as a component of cost of revenue.

Capitalized software costs are reflected as part of the “Intangible assets, net” in the Company’s Consolidated Balance Sheets and totaled $20.0 million and $17.5 million, net of accumulated amortization, as of December 31, 2023 and 2022, respectively.

 

The Company also enters into certain cloud-based software hosting arrangements that are accounted for as service contracts. For internal use software obtained through a hosting arrangement that is in the nature of a service contract, the Company incurs certain implementation costs such as integrating, configuring, and software customization, which are consistent with costs incurred during the application development stage for on-premise software. The Company applies the same guidance to determine costs that are eligible for capitalization. For these arrangements, the Company amortizes the capitalized development costs straight-line over the fixed, non-cancellable term of the associated hosting arrangement plus any reasonably certain renewal periods. The Company also applies the same impairment model to both internal-use software and capitalized implementation costs in a software hosting arrangement that is in the nature of a service contract.

 

Capitalized implementation costs of cloud-based hosting arrangements are classified as part of Prepaid Expenses and Other Assets, totaling $1.8 million and $9.8 million, respectively, as of December 31, 2023, and $1.7 million and $7.8 million, respectively, as of December 31, 2022. Amortization of capitalized implementation costs related to hosting arrangements totaled $1.8 million and $1.7 million for the years ended December 31, 2023 and 2022.
Intangible assets and other long-lived assets

Intangible assets and other long-lived assets

The Company evaluates the recoverability of its long-lived assets, including finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of any asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the difference between the fair value of the asset compared to its carrying amount.

Amortization expense totaled $15.9 million and $20.1 million for the years ended December 31, 2023 and 2022, respectively; $5.8 million and $10.0 million of which was classified as part of the “Cost of revenues” line in the Company’s Consolidated Statements of Comprehensive Loss.

Goodwill

Goodwill

Goodwill represents the excess of the total consideration paid over identified intangible and tangible assets of the business acquired. The Company tests its goodwill for impairment at the reporting unit level on an annual basis on October 1, and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. As of the October 1 testing date the Company determined there is one reporting unit.

Goodwill impairment exists when the estimated fair value of the reporting unit is less than its carrying value. If impairment exists, the carrying value of the goodwill is reduced by the excess through an impairment charge recorded in the Company’s statements of operations. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points during the analysis.

The fair value of the Company’s reporting unit is estimated using a combination of a discounted cash flow (“DCF”) analysis and market-based valuation methodologies such as comparable public company trading values. Determining fair value requires the exercise of significant judgments, including the amount and timing of expected future cash flows, long-term growth rates, discount rates and relevant comparable public company earnings multiples. The cash flows employed in the DCF analyses are based on the Company’s best estimate of future sales, earnings and cash flows after considering factors such as general market conditions, changes in working capital, long term business plans and recent operating performance. The carrying value of the reporting unit includes the assets and liabilities employed in its operations and goodwill.

Based on the results of the annual impairment test as of October 1, 2023 and the quantitative assessment performed as of December 31, 2023, the Company concluded that the fair value of its reporting unit exceeded the individual reporting unit’s carrying value, and goodwill was not impaired.

The following table provides a rollforward of the carrying amount of goodwill (in thousands):

 

Balance at December 31, 2021

 

$

395,759

 

Foreign currency translation

 

 

(4,645

)

Balance at December 31, 2022

 

 

391,114

 

Acquisitions

 

 

4,459

 

Foreign currency translation

 

 

710

 

Balance at December 31, 2023

 

$

396,283

 
Business Combinations

Business Combinations

The Company applies ASC 805, Business Combinations, when accounting for business combinations, utilizing the acquisition method. Under the acquisition method, the assets acquired, liabilities assumed, and any noncontrolling interest are recorded at their respective fair values on the acquisition date. Goodwill is identified as the excess of the purchase price over the fair value of the net assets acquired. Management relies on significant estimates and assumptions, utilizing third-party valuations like appraisals or internal valuations based on discounted cash flow analyses or other methods, to assess the values of assets and liabilities. While these estimates and assumptions are considered reasonable and appropriate, they remain inherently uncertain and subject to change. If additional information about facts and circumstances related to the fair value of acquired assets and assumed liabilities emerges within the measurement period (not exceeding one year), the Company may adjust its estimates to account for subsequent changes to the provisional amounts recognized at the acquisition date, resulting in an offsetting adjustment to the goodwill associated with the acquired business. Other revisions to fair value estimates for acquisitions are reflected as income or expense, as appropriate. The Company expenses acquisition-related costs as they are incurred.

Consideration paid generally consists of cash and, from time to time, shares, and potential future payments that are contingent upon the acquired business achieving certain levels of earnings in the future, also referred to as

“contingent consideration” or “earn-outs.” Any contingent consideration is estimated at fair value at the acquisition date. Liability-classified contingent consideration is remeasured each reporting period, with changes in fair value recognized in earnings until the contingent consideration is settled.
 

On November 20, 2023, the Company closed the acquisition of certain assets of Cenza Technologies Private Limited ("Cenza"), a leading firm in the legal outsourcing and technology services sector. The consideration for this acquisition comprised an initial cash payment of $3.0 million, primarily allocated to goodwill, and deferred contingent consideration of $1.3 million. The contingent consideration, a two-year liability, is contingent upon Cenza meeting specific revenue targets at the end of each year. The earnout, if achieved in a given year, will be paid in the amount of $650,000 distributed at the end of the corresponding year in which the target is achieved. If the initial target is not achieved at the end of the first year, but the full target is achieved at the end of the second year, the full $1.3 million will be distributed at such time.
Debt issuance costs

Debt issuance costs

Debt issuance costs are stated at cost, net of accumulated amortization, and are amortized over the term of the debt using both the straight-line and the effective yield methods. U.S. GAAP requires that the effective yield method be used to amortize debt acquisition costs; however, if the effect of using the straight-line method is not materially different from the results that would have been obtained under the effective yield method, the straight-line method may be used. The amortization for funded term debt is calculated according to the effective yield method and revolving and unfunded term debt is calculated according to the straight-line method. Debt issuance costs related to funded term debt is presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts or premiums. Debt issuance costs related to revolving and unfunded term debt is presented in the Consolidated Balance Sheets within “Other assets.” For additional information on leases, refer to Note 6 – Long Term Debt.
Revenue recognition

Revenue recognition

Revenues are recognized when the Company satisfies a performance obligation by transferring goods or services promised in a contract to a customer, in an amount that reflects the consideration that it expects to receive in exchange for those services. Performance obligations in the Company's contracts represent distinct or separate service streams that the Company provides to its customers.

The Company evaluates its revenue contracts with customers based on the five-step model under Accounting Standards Codification (“ASC”) 606, Revenue Recognition: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to separate performance obligations; and (5) recognize revenues when (or as) each performance obligation is satisfied.

The Company provides Legal Technology services to its clients through several technology solutions including Nebula Ecosystem (“Nebula”) its internally developed end-to-end fully integrated proprietary solution. The Company also provide Data Recovery solutions.

The following table summarizes revenue from contracts with customers for the years ended December 31, 2023 and 2022 (in thousands):

 

 

 

2023

 

 

2022

 

 

 

Technology Solutions

 

Nebula

 

Consolidated

 

 

Technology Solutions

 

Nebula

 

Consolidated

 

Legal technology

 

$

266,448

 

$

46,088

 

$

312,536

 

 

$

254,356

 

$

28,441

 

$

282,797

 

Data recovery

 

 

33,263

 

 

—

 

 

33,263

 

 

 

34,635

 

 

—

 

 

34,635

 

Total revenue

 

$

299,711

 

$

46,088

 

$

345,799

 

 

$

288,991

 

$

28,441

 

$

317,432

 

 

Performance Obligations and Timing of Revenue Recognition

The Company primarily sells services and products that fall into the categories discussed below. Each category contains one or more performance obligations that are either (1) capable of being distinct (i.e., the customer can benefit from the product or service on its own or together with readily available resources, including those purchased separately from us) and distinct within the context of the contract (i.e., separately identified from other promises in the contract) or (2) a series of distinct products or services that are substantially the same and have the same pattern of transfer to the customer.

 

(1)
Legal Technology, including Nebula and the Company's expansive suite of technology solutions, such as its end-to-end eDiscovery technology solutions, managed review solutions, collections, processing, analytics, hosting, production and professional services, and
(2)
Data recovery solutions, which provides data restoration, data erasure and data management services

The Company generates the majority of its revenues by providing Legal Technology services to our clients. Most of our eDiscovery service contracts are time and materials types of arrangements.

Time and materials arrangements are based on units of data stored or processed. Unit-based revenues are recognized as services are provided, based on either the amount of data stored or processed, the number of concurrent users accessing the information, or the number of pages or images processed for a client, at agreed upon per unit rates. We recognize revenues for these arrangements at a point in time utilizing a right-to-invoice practical expedient because we have a right to consideration for services completed to date.

Certain other eDiscovery contracts are subscription-based, fixed-fee arrangements, which have tiered pricing based on the quantity of data hosted. For a fixed monthly fee, our clients receive a variety of optional eDiscovery services, which are included in addition to the data hosting. The Company recognizes revenues for these arrangements at a point in time based on predetermined monthly fees as determined in our contractual agreements, utilizing a right-to-invoice practical expedient because the Company has a right to consideration for services completed to date.

Other eDiscovery agreements are time and material arrangements that require the client to pay us based on the number of hours worked at contractually agreed-upon rates. The Company recognizes revenues for these arrangements at a point in time based on hours incurred and contracted rates utilizing a right-to-invoice practical expedient because it has a contractual right to consideration for services completed to date.

Data recovery services are mainly fixed fee arrangements requiring the client to pay a pre-established fee in exchange for the successful completion of a data recovery on a predetermined device. For the recovery services performed by the Company’s technicians, the revenue is recognized at a point in time, when the recovered data is sent to the customer.

Data erasure services are fixed fee arrangements for which revenue is recognized at a point in time, when the certificate of erasure is sent to the customer.

 

The Company offers term license subscriptions to Ontrack PowerControls software to customers with on-premises installations of the software pursuant to contracts that are historically one to four years in length. The term license subscriptions include maintenance and support, as well as access to future software upgrades and patches. The license and the additional support services are deemed to be one performance obligation, and thus revenue for these arrangements is recognized ratably over the term of the agreement.
Share-based compensation

Share-based compensation

The Company measures and recognizes compensation expense for all share-based awards to employees based on estimated grant date fair values on a straight-line basis over the requisite service period. The Company uses the Black-Scholes valuation model, depending on terms, facts and circumstances of each share-based award. The expected vesting of the Company’s performance-based RSUs is based upon the probability of a liquidity event, such

as a change in control as defined under the 2019 Plan. The probability of achievement of the liquidity event, if any, is re-evaluated quarterly.
Advertising

Advertising

Advertising costs consist of marketing, advertising through print and other media, professional event sponsorship and public relations. These costs are expensed as incurred. Advertising costs totaled $3.1 million and $4.3 million for the years ended December 31, 2023 and 2022, respectively. Advertising costs are reflected within “Sales and marketing” in the accompanying Consolidated Statements of Comprehensive Loss.

Research and development expense

Research and development expense

Costs incurred in the research and development of the Company’s technologies primarily consist of developer salaries. Research and development expenses were $13.1 million and $13.5 million for the years ended December 31, 2023 and 2022, respectively.

Income taxes

Income taxes

Income taxes are accounted for using the asset and liability method. Deferred income taxes are provided for temporary differences in recognizing certain income, expense and credit items for financial reporting purposes and tax reporting purposes. Such deferred income taxes primarily relate to the difference between the tax bases of assets and liabilities and their financial reporting amounts. Deferred tax assets and liabilities are measured by applying enacted statutory tax rates applicable to the future years in which deferred tax assets or liabilities are expected to be settled or realized. Excess tax benefits and tax deficiencies are recognized in the income tax provision in the period in which they occur.

The Company records a valuation allowance when it determines, based on available positive and negative evidence, that it is more-likely-than-not that some portion, or all its deferred tax assets will not be realized. The Company determines the realizability of its deferred tax assets primarily based on the reversal of existing taxable temporary differences. In addition, the Company considers the time frame over which it would take to utilize the deferred tax assets prior to their expiration.

For uncertain tax positions, the Company uses a more-likely-than-not threshold based on the technical merits of the tax position taken. Tax positions that meet the more-likely-than-not recognition threshold are measured at the largest amount of tax benefits determined on a cumulative probability basis, which are more-likely-than-not to be realized upon ultimate settlement in the financial statements. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense.
Net Loss per Common Share

Net Loss per Common Share

Basic net loss per common share is determined by dividing net loss by the weighted average number of common shares outstanding during the year. Diluted net loss per common share is determined by dividing net loss by the weighted average number of common shares outstanding during the year, plus the dilutive effect of common stock equivalents, including stock options and restricted shares. Common stock and common stock equivalents included in the computation represent shares issuable upon assumed exercise of outstanding stock options and release of restricted shares, except when the effect of their inclusion would be antidilutive.

Recently Adopted Accounting Standards and Accounting Standards Not Yet Adopted

Recently Adopted Accounting Standards

 

On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments using a modified retrospective approach. This guidance is intended to introduce a revised approach to the recognition and measurement of credit losses, emphasizing an updated model based on expected losses rather than incurred losses. The adoption did not have a material impact on the Company's consolidated financial statements.

 

On January 1, 2022, the Company adopted ASU No. 2016-02, Leases (Topic 842), and related amendments, on a modified retrospective approach, which allows entities to initially apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings, if any, in the period of adoption with no restatement of comparative periods. Upon adoption, the Company applied the guidance to all existing leases.

 

The new guidance requires the lease rights and obligations arising from the leasing arrangements, including operating leases, to be recognized as assets and liabilities on the balance sheet based on the present value of lease payments over the lease term. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available at the lease commencement date. As the Company’s leases do not have readily determinable implicit discount rates, the Company adjusts its incremental borrowing rate to determine the present value of the lease payments. There were estimates and judgments made in determining the Company’s incremental borrowing rates based on term, country and currency, including developing a secured credit rating and spreading market yield data across maturities.

 

Upon adoption of the new guidance, the most significant impact was the recognition of right-of-use assets and lease liabilities relating to operating leases in the amounts of $21.2 million and $23.8 million, respectively, reported within Operating lease right-of-use assets and Long-term operating lease liabilities, respectively, with the current portion of the liability reported within current portion of operating lease liabilities, in the Company's consolidated balance sheet as of January 1, 2022. Accounting for finance leases remained substantially unchanged and continues to be reported within "Property and equipment, net" and “Other liabilities”, with the current portion of the debt reported within “Accounts payable and accrued expense”, in the Company's consolidated balance sheets. There was no cumulative effect of applying the new standard and accordingly there was no adjustment to our retained earnings upon adoption. The Company has elected not to recognize operating right-of-use assets and lease liabilities for short-term leases for all classes of underlying assets. Short-term leases are leases with terms greater than 1 month, but less than 12 months. The Company elected to apply the package of transitional practical expedients under which the Company did not reassess prior conclusions about lease identification, lease classification. For additional information on leases, refer to Note 5 – Leases.

Accounting Standards Not Yet Adopted

The Company has elected to be an Emerging Growth Company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act and take advantage of the extended transition period of delaying the adoption of new or revised accounting standards until such time as those standards apply to private companies. This may make the comparison of the Company’s consolidated financial statements to other public companies not meaningful due to the differences in accounting standards being applied.

 

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU requires enhanced disclosures about significant segment expenses and other segment items and requires companies to disclose all annual disclosures about segments in interim periods. This ASU also requires public entities with a single reportable segment to provide all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 280. The amendments in this ASU are intended to improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments should be applied retrospectively to all periods presented. The Company is currently evaluating the impact of the new guidance on the Company's consolidated financial statements and related disclosures.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures. Investors, lenders, creditors, and other allocators of capital (collectively, “investors”) indicated that the existing income tax disclosures should be enhanced to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. Investors currently rely on the rate reconciliation table and other disclosures, including total income taxes paid, to evaluate income tax risks and opportunities. While investors find these disclosures helpful, they suggested possible enhancements to better (1)

understand an entity’s exposure to potential changes in jurisdictional tax legislation and the ensuing risks and opportunities, (2) assess income tax information that affects cash flow forecasts and capital allocation decisions, and (3) identify potential opportunities to increase future cash flows.

 

The amendments in this ASU addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

 

This ASU also includes certain other amendments to improve the effectiveness of income tax disclosures. This ASU is effective for the Company for annual periods beginning after December 15, 2025. The Company does not expect ASU 2023-09 to have a material impact on the Company’s consolidated financial statements and related disclosures.
v3.24.1
Organization, Business and Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Rollforward of Allowance for Doubtful Accounts

A rollforward of the allowance for doubtful accounts is presented below (in thousands):

 

Balance at December 31, 2021

 

$

9,774

 

Charged to/reversed from expense

 

 

3,148

 

Deductions (write offs)

 

 

(7,519

)

Balance at December 31, 2022

 

$

5,403

 

Charged to/reversed from expense

 

 

3,210

 

Deductions (write offs)

 

 

(4,971

)

Balance at December 31, 2023

 

$

3,642

 
Estimated Useful Lives of Assets Depreciation is calculated using the straight-line method over the following estimated useful lives of the assets:

 

Computer software and hardware

 

3 to 5 years

Leasehold improvements

 

Shorter of lease term or useful life

Furniture, fixtures and other equipment

 

3 to 5 years
Rollforward of Carrying Amount of Goodwill

The following table provides a rollforward of the carrying amount of goodwill (in thousands):

 

Balance at December 31, 2021

 

$

395,759

 

Foreign currency translation

 

 

(4,645

)

Balance at December 31, 2022

 

 

391,114

 

Acquisitions

 

 

4,459

 

Foreign currency translation

 

 

710

 

Balance at December 31, 2023

 

$

396,283

 
Summary of Revenue from Contracts with Customers

The following table summarizes revenue from contracts with customers for the years ended December 31, 2023 and 2022 (in thousands):

 

 

 

2023

 

 

2022

 

 

 

Technology Solutions

 

Nebula

 

Consolidated

 

 

Technology Solutions

 

Nebula

 

Consolidated

 

Legal technology

 

$

266,448

 

$

46,088

 

$

312,536

 

 

$

254,356

 

$

28,441

 

$

282,797

 

Data recovery

 

 

33,263

 

 

—

 

 

33,263

 

 

 

34,635

 

 

—

 

 

34,635

 

Total revenue

 

$

299,711

 

$

46,088

 

$

345,799

 

 

$

288,991

 

$

28,441

 

$

317,432

 

 
v3.24.1
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Schedule of Black Scholes model for the Private Warrants The following table summarizes the assumptions used in the valuation models to determine the fair value of awards granted to employees and non-employee directors under the 2019 Plan:

 

 

Year Ended
December 31, 2023

 

Year Ended
December 31, 2022

Expected volatility

 

41.26%

 

42.78 - 42.90%

Expected term (in years)

 

6.0

 

6.0

Dividend yield

 

0%

 

0%

Risk free interest rate

 

3.61%

 

1.0 - 1.62%
Summary of Reconciliation of Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)

The following table provides a reconciliation of liabilities measured at fair value using significant unobservable inputs (Level 3) for the years ended December 31, 2023 and 2022 (in thousands):

 

Balance at December 31, 2021

 

$

2,486

 

Change in fair value of Private Warrants

 

 

(1,207

)

Change in fair value of contingent consideration

 

 

21

 

Balance at December 31, 2022

 

 

1,300

 

Change in fair value of Private Warrants

 

 

(572

)

Change in fair value of contingent consideration

 

 

(3

)

Balance at December 31, 2023

 

$

725

 

 

 

 

 

 
v3.24.1
Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Intangible Assets

Intangible assets consist of the following (in thousands):

 

Description

 

Weighted
Average
Remaining
Useful
Life in
Years

 

 

December 31, 2023

 

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

Trademark and tradenames

 

 

2.2

 

 

$

20,565

 

 

$

20,565

 

Accumulated amortization

 

 

 

 

 

(17,780

)

 

 

(15,210

)

Trademark and tradenames, net

 

 

 

 

 

2,785

 

 

 

5,355

 

Developed technology

 

 

3.3

 

 

 

96,271

 

 

 

87,593

 

Accumulated amortization

 

 

 

 

 

(76,166

)

 

 

(69,712

)

Developed technology, net

 

 

 

 

 

20,105

 

 

 

17,881

 

Customer relationships

 

 

5.6

 

 

 

95,747

 

 

 

95,348

 

Accumulated amortization

 

 

 

 

 

(78,908

)

 

 

(71,722

)

Customer relationships, net

 

 

 

 

 

16,839

 

 

 

23,626

 

Intangible assets, net of amortization

 

 

 

 

$

39,729

 

 

$

46,862

 
Schedule of Future Amortization of Intangible Assets

Future amortization of intangible assets is as follows (in thousands):

 

December 31,

 

Amount

 

2024

 

$

12,463

 

2025

 

 

9,532

 

2026

 

 

9,315

 

2027

 

 

4,327

 

2028

 

 

2,931

 

Thereafter

 

 

1,161

 

Total

 

$

39,729

 
v3.24.1
Accrued Expenses (Tables)
 12 Months Ended
Dec. 31, 2023
Payables and Accruals [Abstract]  
Schedule of Accrued Expenses

Accrued expenses consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2023

 

 

2022

 

Accrued expenses:

 

 

 

 

 

 

Accrued interest

 

$

532

 

 

$

402

 

Accrued salaries

 

 

14,229

 

 

 

12,826

 

Current taxes payable

 

 

742

 

 

 

755

 

Other accrued expenses

 

 

1,301

 

 

 

1,191

 

Total

 

$

16,804

 

 

$

15,174

 
v3.24.1
Leases (Tables)
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Schedule of Classification of Finance Leases in Consolidated Balance Sheet

The Company’s operating lease assets and liabilities are reported separately in the Consolidated Balance Sheet. The classification of the Company’s finance leases in the Consolidated Balance Sheet was as follows (in thousands):

 

 

 

Consolidated Statement Balance Sheet Classification

 

As of December 31, 2023

 

As of December 31, 2022

 

Finance lease right of use asset, net

 

Property and equipment

 

$

1,749

 

$

1,965

 

Finance lease liabilities

 

Accounts payable and accrued expense

 

 

135

 

 

1,020

 

Non-current finance lease liabilities

 

Other liabilities

 

 

—

 

 

—

 
Schedule of Components of Lease Cost

The components of lease cost were as follows (in thousands):

 

 

 

Consolidated Statement of Comprehensive Loss Classification

 

Year Ended
December 31, 2023

 

Year Ended
December 31, 2022

 

 

 

 

 

 

 

 

Operating lease cost

 

Cost of Revenue

 

$

1,591

 

$

1,682

 

Operating lease cost

 

General and Administrative

 

 

6,455

 

 

6,460

 

Finance lease cost:

 

 

 

 

 

 

 

Amortization of right of use assets

 

Cost of Revenue

 

 

1,465

 

 

1,184

 

Amortization of right of use assets

 

General and Administrative

 

 

542

 

 

442

 

Interest on lease liabilities

 

Interest expense

 

 

84

 

 

142

 

Sublease income

 

Cost of Revenue

 

 

(1,865

)

 

(1,772

)

Sublease income

 

General and Administrative

 

 

(877

)

 

(844

)

      Total lease cost

 

 

 

$

7,395

 

$

7,294

 
Schedule of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases was as follows (in thousands):

 

 

 

Year Ended
December 31, 2023

 

Year Ended
December 31, 2022

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

Operating cash used for operating leases

 

$

10,353

 

$

8,104

 

Financing cash used for finance leases

 

 

2,278

 

 

1,981

 

 
Schedule of Future Minimum Payments for Finance and Operating Lease Obligations

Maturities of lease liabilities as of December 31, 2023 were as follows:

 

December 31,

 

Finance
Leases

 

 

Operating
Leases

 

2024

 

$

138

 

 

$

7,026

 

2025

 

 

—

 

 

 

4,120

 

2026

 

 

—

 

 

 

2,462

 

2027

 

 

—

 

 

 

809

 

2028

 

 

—

 

 

 

704

 

Thereafter

 

 

—

 

 

 

269

 

Total undiscounted lease payments

 

$

138

 

 

$

15,390

 

Less: interest on lease obligations

 

 

(3

)

 

 

(1,614

)

Non-current

 

$

135

 

 

$

13,776

 
v3.24.1
Long Term Debt (Tables)
 12 Months Ended
Dec. 31, 2023
Long-Term Debt, Unclassified [Abstract]  
Summary of Components of Long-term Debt

The table below summarizes the components of the Company’s long-term debt (in thousands):

 

 

 

December 31,

 

 

 

2023

 

 

2022

 

Convertible Debenture notes due 2024

 

 

260,926

 

 

 

244,808

 

2021 Credit Agreement due 2026 (1) (2)

 

 

291,750

 

 

 

294,750

 

Total debt

 

 

552,676

 

 

 

539,558

 

Less: unamortized original issue discount

 

 

(5,254

)

 

 

(10,751

)

Less: unamortized debt issuance costs

 

 

(577

)

 

 

(1,278

)

Total debt, net

 

 

546,845

 

 

 

527,529

 

 

 

 

 

 

 

 

Current portion of debt

 

 

552,676

 

 

 

3,000

 

Less: current portion of unamortized original
   issue discount

 

 

(5,254

)

 

 

—

 

Less: current portion of unamortized debt
   issuance costs

 

 

(577

)

 

 

—

 

Total current portion of debt, net

 

 

546,845

 

 

 

3,000

 

Total long-term debt, net

 

$

—

 

 

$

524,529

 

 

 

(1)
The 2021 Credit Agreement was amended on March 3, 2023.
(2)
The Amended 2021 Credit Agreement matures on February 8, 2026, unless the Convertible Debentures are outstanding six months prior to the December 19, 2024 maturity date thereof, in which case the Amended 2021 Credit Agreement matures on June 19, 2024. As of December 31, 2023, the Company does not anticipate repaying the Convertible Debentures by June 19, 2024 and as such, the Term Loan debt of $291.8 million and the Convertible Debentures of $260.9 million are included in the current portion of long-term debt.
Summary of Future Principal Payments, Including in Kind Interest

Future principal payments, including in kind interest, are as follows (in thousands):

 

December 31,

 

Amount

 

2024 (1)

 

$

568,840

 

2025

 

 

—

 

2026

 

 

—

 

2027

 

 

—

 

Thereafter

 

 

—

 

Total

 

$

568,840

 

 

 

(1)
The Amended 2021 Credit Agreement matures on February 8, 2026, unless the Convertible Debentures are outstanding six months prior to the December 19, 2024 maturity date thereof, in which case the Amended 2021 Credit Agreement matures on June 19, 2024. As of December 31, 2023, the Company does not anticipate repaying the Convertible Debentures by June 19, 2024 and as such, the Term Loan debt of $291.8 million and the Convertible Debentures of $260.9 million are included in the current portion of long-term debt.
Schedule of Future Amortization of Debt Issuance Costs and Original Issue Discount

The future amortization of debt issuance costs and original issue discount related to the Initial Term Loans and Revolving Credit Loans under the 2021 Credit Agreement, and Convertible Debentures are as follows (in thousands):

 

 

 

December 31,

 

Amount

 

2023

 

$

5,822

 

2024

 

 

—

 

2025

 

 

—

 

2026

 

 

—

 

Thereafter

 

 

—

 

Total

 

$

5,822

 
v3.24.1
Equity Incentive Plan (Tables)
 12 Months Ended
Dec. 31, 2023
Schedule of Additional Information on Stock Option Grants And Vesting

The following table summarizes additional information on stock option grants and vesting (in thousands):

 

 

 

2019 Plan

 

 

 

Year Ended
December 31, 2023

 

 

Year Ended
December 31, 2022

 

Total fair value of stock options granted

 

$

942

 

 

$

2,898

 

Total fair value of options vested

 

 

1,835

 

 

 

3,306

 
Schedule of Black Scholes model for the Private Warrants The following table summarizes the assumptions used in the valuation models to determine the fair value of awards granted to employees and non-employee directors under the 2019 Plan:

 

 

Year Ended
December 31, 2023

 

Year Ended
December 31, 2022

Expected volatility

 

41.26%

 

42.78 - 42.90%

Expected term (in years)

 

6.0

 

6.0

Dividend yield

 

0%

 

0%

Risk free interest rate

 

3.61%

 

1.0 - 1.62%
Stock Based Compensation Expense Included In Consolidated Statements of Comprehensive Loss

Stock-based compensation expense is included in the Consolidated Statements of Comprehensive Loss within the following line items (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2023

 

 

2022

 

Cost of revenues

 

$

917

 

 

$

1,640

 

General and administrative

 

 

1,727

 

 

 

2,088

 

Research and development

 

 

373

 

 

 

584

 

Sales and marketing

 

 

348

 

 

 

824

 

Total

 

$

3,365

 

 

$

5,136

 

 

R
Restricted Stock Units [Member]  
Schedule of RSUs Activity Under 2019 Plan

The following table summarizes the Company’s RSU activity for performance based RSUs awarded to employees and for time-based RSUs granted to non-employee directors under the 2019 Plan:

Description

 

RSUs
Outstanding

 

Outstanding at December 31, 2022

 

1,876,669

 

Granted

 

792,000

 

Vested

 

 

(190,059

)

Forfeited

 

(49,321

)

Expired

 

—

 

Outstanding at December 31, 2023

 

2,429,289

 

 
2019 Plan [Member]  
Schedule of Stock Option Activity Under 2019 Plan

The following table summarizes the Company’s stock option activity under the 2019 Plan:

Description

 

Options
Outstanding

 

 

Weighted
Average
Exercise
Price

 

 

Weighted
Average
Remaining
Contractual
Term (Years)

 

 

Aggregate
Intrinsic
Value (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options outstanding, December 31, 2021

 

 

5,093,682

 

 

$

8.34

 

 

 

8.4

 

 

$

—

 

Granted

 

 

1,135,850

 

 

 

6.00

 

 

 

—

 

 

 

—

 

Exercised

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Forfeited

 

 

(273,195

)

 

 

7.51

 

 

 

—

 

 

 

—

 

Expired

 

 

(198,558

)

 

 

8.24

 

 

 

—

 

 

 

—

 

Options outstanding, December 31, 2022

 

 

5,757,779

 

 

$

7.92

 

 

 

7.6

 

 

$

—

 

Granted

 

 

997,796

 

 

 

1.05

 

 

 

—

 

 

 

—

 

Exercised

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Forfeited

 

 

(35,791

)

 

 

5.07

 

 

 

—

 

 

 

—

 

Expired

 

 

(190,692

)

 

 

8.12

 

 

 

—

 

 

 

—

 

Options outstanding, December 31, 2023

 

 

6,529,092

 

 

$

6.88

 

 

 

7.1

 

 

$

—

 

Options vested and exercisable, December 31, 2023

 

 

4,503,751

 

 

$

8.21

 

 

 

6.4

 

 

$

—

 

Options vested and expected to vest, December 31, 2023

 

 

6,529,092

 

 

$

6.88

 

 

 

7.1

 

 

$

—

 

 

 

(1)
Aggregate intrinsic value (in thousands) represents the difference between the estimated fair value of the underlying common stock and the exercise price of outstanding, in-the-money options.
v3.24.1
Loss Per Share (Tables)
 12 Months Ended
Dec. 31, 2023
Earnings Per Share [Abstract]  
Summary of Basic and Diluted Loss Per Share

The following table summarizes basic and diluted loss per share for the years ended December 31, 2023 and 2022 (in thousands, except per share amounts):

 

 

 

Year Ended
December 31, 2023

 

 

Year Ended
December 31, 2022

 

Basic and diluted loss per share:

 

 

 

 

 

 

Net loss

 

$

(34,813

)

 

$

(43,174

)

Weighted average common shares
   outstanding - basic

 

 

43,013,825

 

 

 

42,709,706

 

Dilutive effect of potentially
   issuable shares

 

 

—

 

 

 

—

 

Weighted average common shares
   outstanding - diluted

 

 

43,013,825

 

 

 

42,709,706

 

Basic loss per share

 

$

(0.81

)

 

$

(1.01

)

Dilutive effect of potentially
   issuable shares

 

 

—

 

 

 

—

 

Diluted loss per share

 

$

(0.81

)

 

$

(1.01

)

Common share equivalents
   excluded due to anti-dilutive effect

 

 

55,046,280

 

 

 

52,784,891

 
v3.24.1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Tax Expense

The components of income tax expense for the years ended December 31, 2023 and 2022 are presented below (in thousands):

 

 

 

Year Ended
December 31, 2023

 

 

Year Ended
December 31, 2022

 

Current

 

 

 

 

 

 

Federal

 

$

—

 

 

$

—

 

State

 

 

70

 

 

 

56

 

Foreign

 

 

832

 

 

 

885

 

Deferred

 

 

 

 

 

 

Federal

 

 

307

 

 

 

370

 

State

 

 

999

 

 

 

697

 

Foreign

 

 

751

 

 

 

(296

)

Total income tax provision

 

$

2,959

 

 

$

1,712

 
Schedule of Loss Before Income Taxes

The actual income tax expense amounts for the years ended December 31, 2023 and 2022 differed from the expected tax amounts computed by applying the U.S. federal corporate income tax rate of 21% for 2023 and 2022 to the amounts of loss before income taxes as presented below (in thousands):

 

 

Year Ended
December 31, 2023

 

 

Year Ended
December 31, 2022

 

Pre-tax book loss

 

$

(31,854

)

 

$

(41,462

)

 

 

 

 

 

 

 

Tax at Federal statutory rate of 21%

 

 

(6,690

)

 

 

(8,707

)

State taxes

 

 

1,069

 

 

 

754

 

Taxes on Foreign Earnings

 

 

709

 

 

 

1,162

 

Foreign rate differential

 

 

(1,227

)

 

 

(635

)

Unrecognized tax benefit

 

 

(283

)

 

 

—

 

Other adjustments

 

 

252

 

 

 

805

 

Valuation allowance

 

 

9,129

 

 

 

8,333

 

Total income tax provision (benefit)

 

$

2,959

 

 

$

1,712

 
Components of Loss Before Income Taxes from Continuing Operations

The domestic and foreign components of loss before income taxes for the years ended December 31, 2023 and 2022 are as follows (in thousands):

 

 

 

Year Ended
December 31, 2023

 

 

Year Ended
December 31, 2022

 

Domestic

 

$

(35,259

)

 

$

(40,326

)

Foreign

 

 

3,405

 

 

 

(1,136

)

Total

 

$

(31,854

)

 

$

(41,462

)
Summary of Tax Effects of Temporary Differences

The tax effects of temporary differences at December 31, 2023 and 2022 are as follows (in thousands):

 

 

 

Year Ended
December 31, 2023

 

 

Year Ended
December 31, 2022

 

 

 

 

 

 

 

 

Net operating losses and other carryforwards

 

$

38,603

 

 

$

42,084

 

Interest expense carryforward

 

 

69,762

 

 

 

53,204

 

Property and equipment

 

 

4,302

 

 

 

3,884

 

Lease liability

 

 

2,599

 

 

 

3,409

 

Accrued expenses

 

 

919

 

 

 

720

 

Payroll tax deferral

 

 

—

 

 

 

—

 

Allowance for doubtful accounts

 

 

827

 

 

 

1,307

 

Stock-based compensation

 

 

3,288

 

 

 

2,786

 

Other

 

 

332

 

 

 

491

 

Deferred tax asset

 

 

120,632

 

 

 

107,885

 

Valuation allowance

 

 

(103,291

)

 

 

(91,866

)

Total deferred tax assets, net of valuation allowance

 

 

17,341

 

 

 

16,019

 

 

 

 

 

 

 

 

Right of Use Asset

 

 

(1,793

)

 

 

(2,029

)

Intangible assets

 

 

(24,068

)

 

 

(20,419

)

Prepaid expenses

 

 

(21

)

 

 

(21

)

Other

 

 

(400

)

 

 

(474

)

Deferred tax liability

 

 

(26,282

)

 

 

(22,943

)

Net deferred tax liability

 

$

(8,941

)

 

$

(6,924

)
Summary of Deferred Tax Asset Valuation Allowance

A summary of the deferred tax asset valuation allowance is as follows (in thousands):

 

 

 

Year Ended
December 31, 2023

 

 

Year Ended
December 31, 2022

 

Beginning Balance

 

$

91,866

 

 

$

80,449

 

Additions

 

 

12,302

 

 

 

11,425

 

Reductions

 

 

(877

)

 

 

(8

)

Ending Balance

 

$

103,291

 

 

$

91,866

 
v3.24.1
Severance and Retention (Tables)
 12 Months Ended
Dec. 31, 2023
Restructuring and Related Activities [Abstract]  
Summary of Severance and Retention Expense Severance and retention expense are included in the Consolidated Statements of Comprehensive Loss as follows (in thousands):

 

 

 

Year Ended
December 31, 2023

 

 

Year Ended
December 31, 2022

 

Costs of revenues

 

$

137

 

 

$

884

 

General and administrative

 

 

20

 

 

 

55

 

Sales and marketing

 

 

406

 

 

 

1,643

 

Research and development

 

 

14

 

 

 

270

 

Total

 

$

577

 

 

$

2,852

 
Summary of Severance Related Liabilities within Accounts Payable and Accrued Expense

The activity and balance of severance-related liabilities, which are recorded within Accounts payable and accrued expense in our Consolidated Balance Sheet are as follows (in thousands):

 

Balance at December 31, 2021

 

$

443

 

Payments

 

 

(1,569

)

Expense

 

 

2,852

 

Balance at December 31, 2022

 

$

1,726

 

Payments

 

 

(1,557

)

Expense

 

 

577

 

Balance at December 31, 2023

 

$

746

 
v3.24.1
Organization, Business and Summary of Significant Accounting Policies - Additional Information (Detail)
 12 Months Ended
Nov. 20, 2023
USD ($)
Oct. 01, 2021
ReportingUnit
Dec. 31, 2023
USD ($)
Customer
Datacenter
Location
Country
Segment
Lab
$ / shares
Dec. 31, 2022
USD ($)
Customer
$ / shares
Mar. 03, 2023
USD ($)
Jan. 01, 2022
USD ($)
Dec. 19, 2019
USD ($)
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Number of countries | Country     17        
Number of data centers | Datacenter     9        
Number of data recovery labs | Lab     13        
Date of incorporation     Aug. 02, 2018        
Common stock, par value | $ / shares     $ 0.0001 $ 0.0001      
Number of business segment | Segment     1        
Cash balance     $ 15,400,000        
Debt amount, balance due     552,676,000 $ 539,558,000      
Debt balance amount     546,845,000 527,529,000      
Revenues     345,799,000 317,432,000      
Depreciation expense     10,000,000 9,600,000      
Amortization of capitalized implementation costs     1,800,000 1,700,000      
Amortization expense     15,900,000 20,100,000      
Number of reporting unit | ReportingUnit   1          
Advertising costs     3,100,000 4,300,000      
Research and development     13,133,000 13,486,000      
Operating lease right of use assets, net     10,078,000 12,412,000      
Operating lease liability     13,776,000        
Cost of Revenues [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Amortization expense     5,800,000 10,000,000      
Prepaid Expenses [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Capitalized implementation costs     1,800,000 1,700,000      
Other Assets [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Capitalized implementation costs     $ 9,800,000 $ 7,800,000      
ASU 2016-13 [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Change in Accounting Principle, Accounting Standards Update, Adoption Date     Jan. 01, 2023        
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]     true        
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false]     true        
ASU 2016-02 [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Change in Accounting Principle, Accounting Standards Update, Adoption Date       Jan. 01, 2022      
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]       true      
Operating lease right of use assets, net           $ 21,200,000  
Operating lease liability           $ 23,800,000  
Internal-Use Software Development [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Capitalized software costs     $ 20,000,000 $ 17,500,000      
UK and Germany [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Revenues     52,600,000 49,600,000      
Long-lived assets     27,000,000 25,900,000      
Convertible Debentures Due 2024 [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Debt principal amount             $ 200,000,000
Debt amount, balance due     260,926,000 $ 244,808,000      
Convertible Debentures Due 2024 [Member] | Current Portion of Long Term Debt [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Debt amount, balance due     260,900,000        
Amended 2021 Credit Agreement [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Debt principal amount         $ 300,000,000    
Delayed draw term loans     0   50,000,000    
Debt amount, balance due     291,800,000        
Amended 2021 Credit Agreement [Member] | Current Portion of Long Term Debt [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Debt amount, balance due     291,800,000        
Amended 2021 Credit Agreement [Member] | Revolving Credit Facility [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Line Of Credit     0   40,000,000    
Amended 2021 Credit Agreement [Member] | Letter of Credit [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Line Of Credit     600,000   $ 10,000,000    
Cenza [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Business acquisition, initial cash payment $ 3,000,000            
Goodwill and deferred contingent consideration     $ 1,300,000        
Contingent consideration, earnout period     2 years        
Payment of earnout amount over two year earnout period     $ 650,000        
Initial target distributed at the end of second year     $ 1,300,000        
Consolidated Revenues [Member] | Customer Concentration Risk [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Number of customers representing more than 5% of consolidated revenues or accounts receivable | Customer     0        
Number of customers representing 6% of consolidated revenues and accounts receivable | Customer       1      
Accounts Receivable [Member] | Customer Concentration Risk [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Number of customers representing more than 5% of consolidated revenues or accounts receivable | Customer     0        
Number of customers representing 6% of consolidated revenues and accounts receivable | Customer       1      
Minimum [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Number of locations | Location     26        
Minimum [Member] | Internal-Use Software Development [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Estimated useful life     3 years        
Maximum [Member] | Internal-Use Software Development [Member]              
Organization Business And Summary Of Significant Accounting Policies [Line Items]              
Estimated useful life     5 years        
v3.24.1
Organization, Business and Summary of Significant Accounting Policies - Rollforward of Allowance for Doubtful Accounts (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Allowance for Doubtful Accounts [Roll Forward]    
Balance at beginning $ 5,403 $ 9,774
Charged to/reversed from expense 3,210 3,148
Deductions (write offs) (4,971) (7,519)
Balance at ending $ 3,642 $ 5,403
v3.24.1
Organization, Business and Summary of Significant Accounting Policies - Estimated Useful Lives of Assets (Detail)
Dec. 31, 2023
Computer software and hardware | Minimum [Member]  
Property Plant And Equipment [Line Items]  
Estimated useful lives of assets 3 years
Computer software and hardware | Maximum [Member]  
Property Plant And Equipment [Line Items]  
Estimated useful lives of assets 5 years
Leasehold improvements  
Property Plant And Equipment [Line Items]  
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] us-gaap:UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember
Furniture, fixtures and other equipment | Minimum [Member]  
Property Plant And Equipment [Line Items]  
Estimated useful lives of assets 3 years
Furniture, fixtures and other equipment | Maximum [Member]  
Property Plant And Equipment [Line Items]  
Estimated useful lives of assets 5 years
v3.24.1
Organization, Business and Summary of Significant Accounting Policies - Rollforward of Carrying Amount of Goodwill (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Goodwill [Roll Forward]    
Balance at beginning $ 391,114 $ 395,759
Acquisitions 4,459  
Foreign currency translation 710 (4,645)
Balance at end $ 396,283 $ 391,114
v3.24.1
Organization, Business and Summary of Significant Accounting Policies - Summary of Revenue from Contracts with Customers (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Disaggregation Of Revenue [Line Items]    
Revenues $ 345,799 $ 317,432
Technology Solutions    
Disaggregation Of Revenue [Line Items]    
Revenues 299,711 288,991
Nebula    
Disaggregation Of Revenue [Line Items]    
Revenues 46,088 28,441
Legal Technology    
Disaggregation Of Revenue [Line Items]    
Revenues 312,536 282,797
Legal Technology | Technology Solutions    
Disaggregation Of Revenue [Line Items]    
Revenues 266,448 254,356
Legal Technology | Nebula    
Disaggregation Of Revenue [Line Items]    
Revenues 46,088 28,441
Data Recovery    
Disaggregation Of Revenue [Line Items]    
Revenues 33,263 34,635
Data Recovery | Technology Solutions    
Disaggregation Of Revenue [Line Items]    
Revenues $ 33,263 $ 34,635
v3.24.1
Fair Value Measurements - Additional Information (Detail) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2023
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Fair value of future expected acquisition-related contingent consideration obligations   $ 1.3
Settled earnout obligations amount $ 0.6  
Settled earnout obligation and issued of common shares 128,596  
Fair value of warrants   $ 0.1
Liability [Member]    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Warrants outstanding   6,350,000
v3.24.1
Fair Value Measurements - Summary of Reconciliation of Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]    
Balance at beginning $ 1,300 $ 2,486
Change in fair value of Private Warrants (572) (1,207)
Change in fair value of contingent consideration (3) 21
Balance at ending $ 725 $ 1,300
v3.24.1
Intangibles Assets - Schedule of Intangible Assets (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Finite Lived Intangible Assets [Line Items]    
Intangible assets, net of amortization $ 39,729 $ 46,862
Trademarks and Trade Names [Member]    
Finite Lived Intangible Assets [Line Items]    
Weighted Average Remaining Useful Life in Years 2 years 2 months 12 days  
Gross intangible assets $ 20,565 20,565
Accumulated amortization (17,780) (15,210)
Intangible assets, net of amortization $ 2,785 5,355
Developed Technology [Member]    
Finite Lived Intangible Assets [Line Items]    
Weighted Average Remaining Useful Life in Years 3 years 3 months 18 days  
Gross intangible assets $ 96,271 87,593
Accumulated amortization (76,166) (69,712)
Intangible assets, net of amortization $ 20,105 17,881
Customer Relationships [Member]    
Finite Lived Intangible Assets [Line Items]    
Weighted Average Remaining Useful Life in Years 5 years 7 months 6 days  
Gross intangible assets $ 95,747 95,348
Accumulated amortization (78,908) (71,722)
Intangible assets, net of amortization $ 16,839 $ 23,626
v3.24.1
Intangibles Assets - Schedule of Future Amortization of Intangible Assets (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]    
2024 $ 12,463  
2025 9,532  
2026 9,315  
2027 4,327  
2028 2,931  
Thereafter 1,161  
Intangible assets, net of amortization $ 39,729 $ 46,862
v3.24.1
Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Accrued expenses:    
Accrued interest $ 532 $ 402
Accrued salaries 14,229 12,826
Current taxes payable 742 755
Other accrued expenses 1,301 1,191
Total $ 16,804 $ 15,174
v3.24.1
Leases - Additional Information (Detail)
 12 Months Ended
Dec. 31, 2023
Location
Leases [Abstract]  
Operating and capital lease agreements lease expiring year 2029
Number of lease agreement terminated locations 3
Number of partially abandoned lease location 2
v3.24.1
Leases - Schedule of Classification of Finance Leases in Consolidated Balance Sheet (Details) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Leases [Abstract]    
Finance lease right of use asset, net $ 1,749 $ 1,965
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] Property, Plant and Equipment, Net Property, Plant and Equipment, Net
Finance lease liabilities $ 135 $ 1,020
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] Accounts Payable and Accrued Liabilities, Current Accounts Payable and Accrued Liabilities, Current
v3.24.1
Leases - Schedule of Components of Lease Cost (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Lease Cost [Line Items]    
Total lease cost $ 7,395 $ 7,294
Cost of Revenues [Member]    
Lease Cost [Line Items]    
Operating lease cost 1,591 1,682
Amortization of right of use assets 1,465 1,184
Sublease income (1,865) (1,772)
General and Administrative [Member]    
Lease Cost [Line Items]    
Operating lease cost 6,455 6,460
Amortization of right of use assets 542 442
Sublease income (877) (844)
Interest expense [Member]    
Lease Cost [Line Items]    
Interest on lease liabilities $ 84 $ 142
v3.24.1
Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:    
Operating cash used for operating leases $ 10,353 $ 8,104
Financing cash used for finance leases $ 2,278 $ 1,981
v3.24.1
Leases - Schedule of Future Minimum Payments for Finance and Operating Lease Obligations (Details)
$ in Thousands
Dec. 31, 2023
USD ($)
Finance Leases  
2024 $ 138
Total undiscounted lease payments 138
Less: interest on lease obligations (3)
Non-current $ 135
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] us-gaap:OtherLiabilities
Operating Leases  
2024 $ 7,026
2025 4,120
2026 704
2027 2,462
2028 809
Thereafter 269
Total undiscounted lease payments 15,390
Less: interest on lease obligations (1,614)
Non-current $ 13,776
v3.24.1
Long Term Debt - Summary of Components of Long-term Debt (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Debt Instrument [Line Items]    
Total debt $ 552,676 $ 539,558
Less: unamortized original issue discount (5,254) (10,751)
Less: unamortized debt issuance costs (577) (1,278)
Total debt, net 546,845 527,529
Current portion of debt 552,676 3,000
Less: current portion of unamortized original issue discount (5,254)  
Less: current portion of unamortized debt issuance costs (577)  
Total current portion of debt, net 546,845 3,000
Long-term debt, net   524,529
Convertible Debenture Notes Due 2024    
Debt Instrument [Line Items]    
Total debt 260,926 244,808
Amended 2021 Credit Agreement Due 2026    
Debt Instrument [Line Items]    
Total debt [1],[2] $ 291,750 $ 294,750
[1] The 2021 Credit Agreement was amended on March 3, 2023.
[2] The Amended 2021 Credit Agreement matures on February 8, 2026, unless the Convertible Debentures are outstanding six months prior to the December 19, 2024 maturity date thereof, in which case the Amended 2021 Credit Agreement matures on June 19, 2024. As of December 31, 2023, the Company does not anticipate repaying the Convertible Debentures by June 19, 2024 and as such, the Term Loan debt of $291.8 million and the Convertible Debentures of $260.9 million are included in the current portion of long-term debt.
v3.24.1
Long term debt - Summary of Components of Long-term Debt (Parenthetical) (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Debt Instrument [Line Items]    
Debt instrument, maturity description The Amended 2021 Credit Agreement matures on February 8, 2026, unless the Convertible Debentures are outstanding six months prior to the December 19, 2024 maturity date thereof, in which case the Amended 2021 Credit Agreement matures on June 19, 2024. As of December 31, 2023, the Company does not anticipate repaying the Convertible Debentures by June 19, 2024 and as such, the Term Loan debt of $291.8 million and the Convertible Debentures of $260.9 million are included in the current portion of long-term debt.  
Term loan debt $ 552,676 $ 539,558
Amended 2021 Credit Agreement Due 2026    
Debt Instrument [Line Items]    
Term loan debt [1],[2] 291,750 $ 294,750
Amended 2021 Credit Agreement Due 2026 | Current Portion of Long Term Debt [Member]    
Debt Instrument [Line Items]    
Term loan debt 291,800  
Convertible Debentures | Current Portion of Long Term Debt [Member]    
Debt Instrument [Line Items]    
Term loan debt $ 260,900  
[1] The 2021 Credit Agreement was amended on March 3, 2023.
[2] The Amended 2021 Credit Agreement matures on February 8, 2026, unless the Convertible Debentures are outstanding six months prior to the December 19, 2024 maturity date thereof, in which case the Amended 2021 Credit Agreement matures on June 19, 2024. As of December 31, 2023, the Company does not anticipate repaying the Convertible Debentures by June 19, 2024 and as such, the Term Loan debt of $291.8 million and the Convertible Debentures of $260.9 million are included in the current portion of long-term debt.
v3.24.1
Long Term Debt - Additional Information (Detail) - USD ($)
 12 Months Ended
Mar. 03, 2023
Dec. 19, 2019
Dec. 09, 2016
Dec. 31, 2023
Dec. 31, 2022
Debt Instrument [Line Items]          
Debt instrument, maturity description       The Amended 2021 Credit Agreement matures on February 8, 2026, unless the Convertible Debentures are outstanding six months prior to the December 19, 2024 maturity date thereof, in which case the Amended 2021 Credit Agreement matures on June 19, 2024. As of December 31, 2023, the Company does not anticipate repaying the Convertible Debentures by June 19, 2024 and as such, the Term Loan debt of $291.8 million and the Convertible Debentures of $260.9 million are included in the current portion of long-term debt.  
Debt amount, balance due       $ 552,676,000 $ 539,558,000
Accretion of original issue discount       5,500,000 4,000,000.0
Amortization of debt issuance costs       1,000,000 600,000
Convertible Debentures Due 2024 [Member]          
Debt Instrument [Line Items]          
Debt principal amount   $ 200,000,000      
Term loan maturity date   Dec. 19, 2024      
Debt amount, balance due       $ 260,926,000 $ 244,808,000
Debt interest rate in cash   4.00%      
Debt interest rate in kind   4.00%      
Debt periodic payment       bear interest at an annual rate of 4.00% in cash, payable quarterly, and 4.00% in kind, accrued quarterly, on the last business day of March, June, September and December.  
Percentage of amount will add to principal amount       3.00%  
Principal amount of debt redeemed   100.00%      
Debt conversion price per share   $ 18      
Percentage of principal amount paid in event of default       25.00%  
Original issue discount   $ 13,700,000      
Deferred closing fees   $ 900,000      
2016 Credit Agreement [Member]          
Debt Instrument [Line Items]          
Debt closing fees       $ 1,300,000  
Deferred closing fees     $ 700,000    
2016 Credit Agreement [Member] | First Lien Facility          
Debt Instrument [Line Items]          
Original issue discount     $ 6,000,000.0    
Term Loans and Delayed Draw Term Loans [Member]          
Debt Instrument [Line Items]          
Floor interest rate 1.00%        
Term loan balance due       $ 291,800,000  
SOFR [Member] | Term Loans and Delayed Draw Term Loans [Member]          
Debt Instrument [Line Items]          
Loan variable interest rate       6.50%  
Term loan interest rate per annum during period       5.34814%  
Adjusted SOFR Rate [Member] | Term Loans and Delayed Draw Term Loans [Member]          
Debt Instrument [Line Items]          
Loan variable interest rate       0.10%  
Amended 2021 Credit Agreement [Member]          
Debt Instrument [Line Items]          
Debt principal amount $ 300,000,000        
Delayed draw term loans $ 50,000,000     $ 0  
Debt instrument, maturity description       The Initial Term Loans and Revolving Credit Loans are each scheduled to mature on February 8, 2026, unless the Convertible Debentures are outstanding six months prior to the December 19, 2024 maturity date thereof, in which case the Amended 2021 Credit Agreement matures on June 19, 2024. The Initial Term Loans may be voluntarily repaid at any time, but may be subject to a prepayment premium. The Initial Term Loans are required to be repaid under certain circumstances, including with Excess Cash Flow (as defined in the Amended 2021 Credit Agreement), the proceeds of an Asset Sale or Casualty Event (each as defined in the Amended 2021 Credit Agreement) and the proceeds of certain refinancing indebtedness.  
Debt amount, balance due       $ 291,800,000  
Amended 2021 Credit Agreement [Member] | Maximum [Member]          
Debt Instrument [Line Items]          
Debt instrument, net leverage ratio 7        
Amended 2021 Credit Agreement [Member] | Minimum [Member]          
Debt Instrument [Line Items]          
Debt instrument, net leverage ratio 1        
Amended 2021 Credit Agreement [Member] | Term Loans and Delayed Draw Term Loans [Member]          
Debt Instrument [Line Items]          
Loans amortize rate 1.00%        
Quarterly installment $ 800,000        
Amended 2021 Credit Agreement [Member] | Base Rate [Member] | Term Loans and Delayed Draw Term Loans [Member]          
Debt Instrument [Line Items]          
Loan variable interest rate 5.50%        
Amended 2021 Credit Agreement [Member] | SOFR [Member]          
Debt Instrument [Line Items]          
Loan variable interest rate 0.10%        
Amended 2021 Credit Agreement [Member] | SOFR [Member] | Term Loans and Delayed Draw Term Loans [Member]          
Debt Instrument [Line Items]          
Loan variable interest rate 0.10%        
Amended 2021 Credit Agreement [Member] | Adjusted SOFR Rate [Member] | Term Loans and Delayed Draw Term Loans [Member]          
Debt Instrument [Line Items]          
Loan variable interest rate 6.50%        
Amended 2021 Credit Agreement [Member] | Revolving Credit Facility [Member]          
Debt Instrument [Line Items]          
Revolving credit loans $ 40,000,000     0  
Amended 2021 Credit Agreement [Member] | Revolving Credit Facility [Member] | Base Rate [Member]          
Debt Instrument [Line Items]          
Loan variable interest rate 3.00%        
Amended 2021 Credit Agreement [Member] | Revolving Credit Facility [Member] | SOFR [Member]          
Debt Instrument [Line Items]          
Loan variable interest rate 4.00%        
Amended 2021 Credit Agreement [Member] | Letter of Credit [Member]          
Debt Instrument [Line Items]          
Revolving credit loans $ 10,000,000     600,000  
Amended 2021 Credit Agreement [Member] | Revolving Credit Loans [Member]          
Debt Instrument [Line Items]          
Revolving credit loans $ 40,000,000.0        
Available borrowing capacity       $ 39,400,000  
v3.24.1
Long Term Debt - Summary of Future Principal Payments, Including in Kind Interest (Detail)
$ in Thousands
Dec. 31, 2023
USD ($)
Debt Instrument [Line Items]  
2024 $ 568,840 [1]
Total debt, net $ 568,840
[1] The Amended 2021 Credit Agreement matures on February 8, 2026, unless the Convertible Debentures are outstanding six months prior to the December 19, 2024 maturity date thereof, in which case the Amended 2021 Credit Agreement matures on June 19, 2024. As of December 31, 2023, the Company does not anticipate repaying the Convertible Debentures by June 19, 2024 and as such, the Term Loan debt of $291.8 million and the Convertible Debentures of $260.9 million are included in the current portion of long-term debt.
v3.24.1
Long term debt - Summary of Future Principal Payments, Including in Kind Interest (Parenthetical) (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Debt Instrument [Line Items]    
Term loan debt $ 552,676 $ 539,558
Amended 2021 Credit Agreement Due 2026    
Debt Instrument [Line Items]    
Term loan debt [1],[2] 291,750 $ 294,750
Current Portion of Long Term Debt [Member] | Amended 2021 Credit Agreement Due 2026    
Debt Instrument [Line Items]    
Term loan debt $ 291,800  
[1] The 2021 Credit Agreement was amended on March 3, 2023.
[2] The Amended 2021 Credit Agreement matures on February 8, 2026, unless the Convertible Debentures are outstanding six months prior to the December 19, 2024 maturity date thereof, in which case the Amended 2021 Credit Agreement matures on June 19, 2024. As of December 31, 2023, the Company does not anticipate repaying the Convertible Debentures by June 19, 2024 and as such, the Term Loan debt of $291.8 million and the Convertible Debentures of $260.9 million are included in the current portion of long-term debt.
v3.24.1
Long Term Debt - Summary of Future Amortization of Debt Issuance Costs and Original Issue Discount (Detail)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
Long-Term Debt, Unclassified [Abstract]  
2023 $ 5,822
Total $ 5,822
v3.24.1
Employee Benefit Plan - Additional Information (Detail) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
401(k) plan [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Defined contribution plan, description The Company’s 401(k) plan covers employees who are at least 21 years of age. Employees may elect to defer a percentage of their salary up to the maximum allowed under the Internal Revenue Service Code. The Company moved back to a safe harbor plan as of January 1, 2022 and reinstated the company matching contributions to the 401(k) plan, which had been discontinued in 2020. Company match is 100% for first 3% and 50% for next 2% of employee’s contributions. The employee contributions are 100% vested immediately. Employer c  
Defined contribution plan, employee eligibility age 21 years  
Defined contribution plan, cost $ 3.5 $ 2.9
Employee contribution vested 100.00%  
401(k) plan Matching First 3% [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Employer matching contributions 100.00%  
401(k) plan Matching Next 2% [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Employer matching contributions 50.00%  
v3.24.1
Equity Incentive Plan - Additional Information (Detail)
$ / shares in Units, $ in Thousands
 1 Months Ended 12 Months Ended
Apr. 30, 2023
shares
Feb. 28, 2022
shares
Dec. 31, 2023
USD ($)
Installment
$ / shares
shares
Dec. 31, 2022
USD ($)
Installment
$ / shares
shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Stock-based compensation | $     $ 3,365 $ 5,137
Nebula        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Stock-based compensation | $     $ 900 $ 700
Performance Based Restricted Stock Option [Member]        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Granted     369,056 463,000
Performance Based Restricted Stock Option [Member] | Annual Consolidated Revenue [Member]        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Vesting maximum number of annual installments | Installment     3 3
Share based compensation arrangement by share based payment award vest based on achievement     50.00% 50.00%
Performance Based Restricted Stock Option [Member] | Nebula        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Vesting maximum number of annual installments | Installment     3 3
Share based compensation arrangement by share based payment award achievement period     3 years  
Share based compensation arrangement by share based payment award vest based on achievement     50.00% 50.00%
Time-Based Restricted Stock Units [Member] | Non Employee Director [Member]        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Stock-based compensation | $     $ 700 $ 700
Options granted     338,349 100,000
Time-Based Restricted Stock Units [Member] | Maximum [Member] | Non Employee Director [Member]        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Vesting period     3 years  
Time-Based Restricted Stock Units [Member] | Minimum [Member] | Non Employee Director [Member]        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Vesting period     1 year  
Performance-Based RSUs [Member]        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Vested     73,726  
Restricted Stock Units [Member]        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Vesting maximum number of annual installments | Installment     3  
2019 Plan [Member]        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Percentage of share increase     5.00%  
Shares increases in period 2,416,007 2,134,227    
Common stock options authorized under plan     14,176,685  
Common stock options available for issuance     2,771,329  
Options granted     997,796 1,135,850
2019 Plan [Member] | Time Based Vesting Stock Option [Member]        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Vesting period     3 years  
Weighted average fair value granted | $ / shares     $ 1.05 $ 2.55
Stock-based compensation | $     $ 1,900 $ 3,900
Unrecognized stock-based compensation expense | $     $ 1,900 $ 2,800
Unrecognized stock-based compensation expense, period     1 year 6 months 10 days 1 year 10 months 2 days
2019 Plan [Member] | Time Based Vesting Stock Option [Member] | Maximum [Member]        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Expiration period     10 years  
2019 Plan [Member] | Restricted Stock Units [Member]        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Vested     190,059  
Granted     792,000  
v3.24.1
Equity Incentive Plan - Schedule of Stock Option Activity Under 2019 Plan (Detail) - 2019 Plan [Member] - $ / shares
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Options outstanding, beginning balance 5,757,779 5,093,682  
Options granted 997,796 1,135,850  
Options forfeited (35,791) (273,195)  
Options expired (190,692) (198,558)  
Options outstanding, ending balance 6,529,092 5,757,779 5,093,682
Options vested and exercisable 4,503,751    
Options vested and expected to vest 6,529,092    
Weighted average exercise price, beginning balance $ 7.92 $ 8.34  
Weighted average exercise price, granted 1.05 6  
Weighted average exercise price, forfeited 5.07 7.51  
Weighted average exercise price, expired 8.12 8.24  
Weighted average exercise price, ending balance 6.88 $ 7.92 $ 8.34
Weighted average exercise price, vested and exercisable 8.21    
Weighted average exercise price, vested and expected to vest $ 6.88    
Weighted average remaining contractual term, balance 7 years 1 month 6 days 7 years 7 months 6 days 8 years 4 months 24 days
Options vested and exercisable, December 31, 2023 6 years 4 months 24 days    
Options vested and expected to vest, December 31, 2023 7 years 1 month 6 days    
v3.24.1
Equity Incentive Plan - Schedule of Additional Information on Stock Option Grants And Vesting (Detail) - 2019 Plan [Member] - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Total fair value of stock options granted $ 942 $ 2,898
Total fair value of options vested $ 1,835 $ 3,306
v3.24.1
Equity Incentive Plan - Summary of Valuation Models of Fair Value of Awards Granted To Employees and Non-Employees Under 2019 Plan (Detail) - 2019 Plan [Member]
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Expected volatility, Minimum 41.26% 42.78%
Expected volatility, Maximum   42.90%
Expected term (in years) 6 years 6 years
Dividend yield 0.00% 0.00%
Risk-free interest rate, Minimum 3.61% 1.00%
Risk-free interest rate, Maximum   1.62%
v3.24.1
Equity Incentive Plan - Stock Based Compensation Expense Included In Consolidated Statements of Comprehensive Loss (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Stock-based compensation expense $ 3,365 $ 5,136
Cost of revenues [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Stock-based compensation expense 917 1,640
General and administrative [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Stock-based compensation expense 1,727 2,088
Research and development [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Stock-based compensation expense 373 584
Sales and marketing [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Stock-based compensation expense $ 348 $ 824
v3.24.1
Equity Incentive Plan - Schedule of RSUs Activity for Performance-based RSUs Awarded to Employees Under 2019 Plan (Detail) - 2019 Plan [Member] - Restricted Stock Units [Member]
 12 Months Ended
Dec. 31, 2023
shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Outstanding balance 1,876,669
Granted 792,000
Vested- non-employee directors awards (190,059)
Forfeited (49,321)
Outstanding balance 2,429,289
v3.24.1
Equity - Additional Information (Detail) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Class Of Stock [Line Items]      
Common stock, shares authorized 200,000,000 200,000,000  
Common stock, par value $ 0.0001 $ 0.0001  
Preferred stock, shares authorized 1,000,000 1,000,000  
Preferred Stock, per share $ 0.0001 $ 0.0001  
Common stock, voting rights one vote for each share    
Common Stock [Member]      
Class Of Stock [Line Items]      
Common stock, shares issued   128,596  
Recapitalization transaction (in shares)   128,596  
Pivotal Acquisition Corp. [Member]      
Class Of Stock [Line Items]      
Description of warrants Each warrant entitles the holder to purchase one share of common stock for $11.50 per share. If held by the initial purchaser of the Private Warrant or certain permitted transferees, the purchase can occur on a cashless basis. The warrants will expire on December 19, 2024 or earlier upon redemption or liquidation.    
Exercise price $ 11.50    
Warrants expiration date Dec. 19, 2024    
Sale price of common stock $ 18.00    
Number of business days 3 days    
Pivotal Acquisition Corp. [Member] | Minimum [Member]      
Class Of Stock [Line Items]      
Number of trading days 20 days    
Pivotal Acquisition Corp. [Member] | Maximum [Member]      
Class Of Stock [Line Items]      
Number of trading days 30 days    
Pivotal Acquisition Corp. [Member] | Common Stock [Member]      
Class Of Stock [Line Items]      
Number of securities eligible for each warrant 1    
Pivotal Acquisition Holdings LLC [Member]      
Class Of Stock [Line Items]      
Recapitalization transaction (in shares) 550,000    
Number of consecutive trading days 20 days   20 days
Reverse merger transaction, sale of common stock description On the Closing Date, in connection with the consummation of the Business Combination, 550,000 shares of common stock held by Pivotal Acquisition Holdings LLC are subject to an additional lockup that will be released only if the last reported sale price of the common stock equals or exceeds $15.00 for a period of 20 consecutive trading days during the five-year period following the Closing Date. If the last reported sale price of common stock does not equal or exceed $15.00 within five years from the Closing Date, such shares will be forfeited to the Company for no consideration. These shares are reported as outstanding in our financial statements and continue to be subject to the additional lockup as of December 31, 2023    
Closing stock price period 5 years    
Forfeited amount $ 0    
Pivotal Acquisition Holdings LLC [Member] | Minimum [Member]      
Class Of Stock [Line Items]      
Closing sale price of company's common stock $ 15.00    
Pivotal Acquisition Holdings LLC [Member] | Maximum [Member]      
Class Of Stock [Line Items]      
Closing sale price of company's common stock $ 15.00    
Public Warrants [Member] | Pivotal Acquisition Corp. [Member]      
Class Of Stock [Line Items]      
Warrants outstanding 23,000,000    
Exercise price $ 0.01    
Public Warrants [Member] | Pivotal Acquisition Corp. [Member] | Maximum [Member]      
Class Of Stock [Line Items]      
Minimum prior written notice period 30 days    
Private Warrants [Member] | Pivotal Acquisition Corp. [Member]      
Class Of Stock [Line Items]      
Warrants outstanding 6,350,000    
v3.24.1
Loss Per Share - Summary of Basic and Diluted Loss Per Share (Detail) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Basic and diluted loss per share:    
Net loss $ (34,813) $ (43,174)
Weighted average common shares outstanding - basic 43,013,825 42,709,706
Weighted average common shares outstanding - diluted 43,013,825 42,709,706
Basic loss per share $ (0.81) $ (1.01)
Diluted loss per share $ (0.81) $ (1.01)
Common share equivalents excluded due to anti-dilutive effect 55,046,280 52,784,891
v3.24.1
Income Taxes - Schedule of Components of Income Tax Expense (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Current    
State $ 70 $ 56
Foreign 832 885
Deferred    
Federal 307 370
State 999 697
Foreign 751 (296)
Total income tax provision $ 2,959 $ 1,712
v3.24.1
Income Taxes - Additional Information (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Operating Loss Carryforwards [Line Items]      
Federal corporate income tax rate 21.00% 21.00%  
Valuation allowance $ 103,291 $ 91,866 $ 80,449
Deferred tax asset valuation allowance foreign currency translation adjustment 100    
Valuation allowance included in effective tax ate reconciliation 1,000    
Unrecognized tax benefits 500 1,000  
Changes in uncertain tax positions $ 0    
Minimum [Member]      
Operating Loss Carryforwards [Line Items]      
Limitation range for income tax examination year 1 year    
Maximum [Member]      
Operating Loss Carryforwards [Line Items]      
Limitation range for income tax examination year 4 years    
Federal [Member]      
Operating Loss Carryforwards [Line Items]      
Net operating loss carryforwards $ 29,200 31,500  
Federal [Member] | Expire Till 2027 [Member]      
Operating Loss Carryforwards [Line Items]      
Net operating loss carryforwards 500    
Federal [Member] | Expire Between 2028 And 2036 [Member]      
Operating Loss Carryforwards [Line Items]      
Net operating loss carryforwards 20,200    
Federal [Member] | No Expiration [Member]      
Operating Loss Carryforwards [Line Items]      
Net operating loss carryforwards 8,500    
State and Local Jurisdiction [Member]      
Operating Loss Carryforwards [Line Items]      
Net operating loss carryforwards 7,000 7,400  
Changes in valuation allowance 3,200    
Foreign [Member]      
Operating Loss Carryforwards [Line Items]      
Net operating loss carryforwards 2,400 $ 3,000  
Federal And Foreign Tax [Member]      
Operating Loss Carryforwards [Line Items]      
Changes in valuation allowance $ 9,100    
v3.24.1
Income Taxes - Schedule of Loss Before Income Taxes (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income Tax Disclosure [Abstract]    
Pre-tax book loss $ (31,854) $ (41,462)
Tax at federal statutory rate (6,690) (8,707)
State taxes 1,069 754
Taxes on Foreign Earnings 709 1,162
Foreign rate differential (1,227) (635)
Unrecognized tax benefit (283)  
Other adjustments 252 805
Valuation allowance 9,129 8,333
Total income tax provision $ 2,959 $ 1,712
v3.24.1
Income Taxes - Schedule of Loss Before Income Taxes (Parenthetical) (Detail)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income Tax Disclosure [Abstract]    
Federal Statutory rate 21.00% 21.00%
v3.24.1
Income Taxes - Components of Loss Before Income Taxes from Continuing Operations (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income Tax Disclosure [Abstract]    
Domestic $ (35,259) $ (40,326)
Foreign 3,405 (1,136)
Loss before income taxes $ (31,854) $ (41,462)
v3.24.1
Income Taxes - Summary of Tax Effects of Temporary Differences (Detail) - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]      
Net operating losses and other carryforwards $ 38,603 $ 42,084  
Interest expense carryforward 69,762 53,204  
Property and equipment 4,302 3,884  
Lease liability 2,599 3,409  
Accrued expenses 919 720  
Allowance for doubtful accounts 827 1,307  
Stock-based compensation 3,288 2,786  
Other 332 491  
Deferred tax asset 120,632 107,885  
Valuation allowance (103,291) (91,866) $ (80,449)
Total deferred tax assets, net of valuation allowance 17,341 16,019  
Right of Use Asset (1,793) (2,029)  
Intangible assets (24,068) (20,419)  
Prepaid expenses (21) (21)  
Other (400) (474)  
Deferred tax liability (26,282) (22,943)  
Net deferred tax liability $ (8,941) $ (6,924)  
v3.24.1
Income Taxes - Summary of Deferred Tax Asset Valuation Allowance (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income Tax Disclosure [Abstract]    
Beginning Balance $ 91,866 $ 80,449
Additions 12,302 11,425
Reductions (877) (8)
Ending Balance $ 103,291 $ 91,866
v3.24.1
Severance and Retention - Additional Information (Detail)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Employee
Restructuring and Related Activities [Abstract]    
Severance and retention expense | $ $ 577 $ 2,852
Number of employees associated with reduction in workforce | Employee   57
v3.24.1
Severance and Retention - Summary of Severance and Retention Expense (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Restructuring Cost And Reserve [Line Items]    
Severance and retention expense $ 577 $ 2,852
Cost of Revenues [Member]    
Restructuring Cost And Reserve [Line Items]    
Severance and retention expense 137 884
General and Administrative [Member]    
Restructuring Cost And Reserve [Line Items]    
Severance and retention expense 20 55
Sales and Marketing [Member]    
Restructuring Cost And Reserve [Line Items]    
Severance and retention expense 406 1,643
Research and Development [Member]    
Restructuring Cost And Reserve [Line Items]    
Severance and retention expense $ 14 $ 270
v3.24.1
Severance and Retention - Summary of Severance Related Liabilities within Accounts Payable and Accrued Expense (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Restructuring and Related Activities [Abstract]    
Balance at beginning of year $ 1,726 $ 443
Payments (1,557) (1,569)
Expense 577 2,852
Balance at ending of year $ 746 $ 1,726
v3.24.1
Commitments and Contingencies - Additional Information (Detail)
$ in Millions
Dec. 31, 2023
USD ($)
LetterofCredit
Commitments And Contingencies Disclosure [Abstract]  
Number of letters of credit | LetterofCredit 2
Letters of credit as additional security for lease guarantees | $ $ 0.6
v3.24.1
Related Parties - Additional Information (Detail) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Related Party Transaction [Line Items]    
Interest expense $ 66,743 $ 54,650
MGG Investment Group [Member] | Convertible Debenture [Member]    
Related Party Transaction [Line Items]    
Debt instrument outstanding 130,500  
MGG Investment Group [Member] | Convertible Debenture [Member] | Related Party [Member]    
Related Party Transaction [Line Items]    
Interest expense $ 14,700 $ 13,800