v3.25.1
Stockholders' Equity (Deficit)
 3 Months Ended
Mar. 31, 2025
Equity [Abstract]  
Stockholders' Equity (Deficit)
10. Stockholders' Equity (Deficit)
Common Stock
The common stock has a par value of 0.0001 per share. Each share of common stock is entitled to one vote at all meetings of stockholders. The number of authorized shares of common stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of shares of capital stock of the Company representing a majority of the votes represented by all outstanding shares of capital stock of the Company entitled to vote. The holders of common stock are also entitled to receive dividends, when, if and as declared by our board of directors, whenever funds are legally available therefore, subject to the priority rights of any outstanding preferred stock.
Share repurchase program
In September 2023, the Board of Directors authorized a stock repurchase program (the “Share Repurchase Plan”) in the aggregate amount of up to $25 million that allowed the Company to repurchase shares of its issued and outstanding Common Stock. The Share Repurchase Plan expired in May 2024 when the Company had repurchased all shares authorized for repurchase.
Tax Benefit Preservation Plan and Preferred Stock Purchase Rights
Effective June 5, 2024, the Company entered into the 2024 Tax Benefit Preservation Plan with Broadridge Corporate Issuer Solutions, LLC, as Rights Agent (the “2024 Tax Benefit Preservation Plan”). By adopting the 2024 Tax Benefit Preservation Plan, the Company is seeking to protect its ability to use its net operating loss carryforwards (“NOLs”) and other tax attributes to offset potential future income tax liabilities. The Company’s ability to use such NOLs and other tax attributes would be substantially limited if the Company experiences an “ownership change,” as defined in Section 382 of the Internal Revenue Code. The 2024 Tax Benefit Preservation Plan is intended to make it more difficult for the Company to undergo an ownership change by deterring any person from acquiring 4.9% or more of the outstanding shares of stock without the approval of the Board of Directors.
As part of the 2024 Tax Benefit Preservation Plan, the Board declared a dividend of one preferred stock purchase right (a “2024 Right” and collectively the “2024 Rights”) for each outstanding share of Common Stock payable as of June 15, 2024. In connection with the 2024 Tax Benefit Preservation Plan, 27,030,605 2024 Rights were issued. The description and terms of the 2024 Rights are set forth in the 2024 Tax Benefit Preservation Plan. The 2024 Rights trade with, and are inseparable from, the Common Stock, and the record holders of shares of Common Stock are the record holders of the 2024 Rights. The 2024 Rights are not exercisable until the Distribution Date, as defined in the 2024 Tax Benefit Preservation Plan.
After the Distribution Date, each 2024 Right will be exercisable to purchase from the Company one one-thousandth of a share of Series B Junior Participating Preferred Stock, par value $0.0001 per share, of the Company (the “Series B Preferred”), at a purchase price of $15.25 per one one-thousandth of a share of Series B Preferred, subject to adjustment as provided in the 2024 Tax Benefit Preservation Plan. Until a 2024 Right is exercised or exchanged, the holder thereof, as such, will have no rights as a stockholder of the Company by virtue of holding such Right, including, without limitation, the right to vote and to receive dividends. The Board may adjust the Purchase Price, the number of shares of Series B Preferred issuable and the number of outstanding 2024 Rights to prevent dilution that may occur from a stock dividend, a stock split, a reclassification of the Series B Preferred or Common Stock or certain other specified transactions. No adjustments to the Purchase Price of less than 1% are required to be made.
Each one one-thousandth of a share of Series B Preferred, if issued:
•Will not be redeemable.
•Will entitle holders to quarterly dividend payments of $0.001 per one one-thousandth of a share of Series B Preferred, or an amount equal to the dividend paid on one share of Common Stock, whichever is greater.
•Will entitle holders upon liquidation either to receive $0.001 per one one-thousandth of a share of Series B Preferred, or an amount equal to the payment made on one share of Common Stock, whichever is greater.
•Will have the same voting power as one share of Common Stock.
•If shares of Common Stock are exchanged as a result of a merger, consolidation, or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of Common Stock.
Accumulated Other Comprehensive Income (Loss)
Comprehensive income consists of two elements, net loss and other comprehensive income (loss). Other comprehensive income (loss) items are recorded in the stockholders’ equity section of our condensed consolidated balance sheets and are excluded from net loss. Our other comprehensive income consists primarily of foreign currency translation adjustments for subsidiaries with functional currencies other than the U.S. dollar, unrealized translation losses on intercompany loans with foreign subsidiaries, and realized and unrealized gains on interest rate swaps.
The following table shows the components of accumulated other comprehensive loss, net of income taxes, (“AOCI”) in the stockholders’ equity section of our condensed consolidated balance sheets at the dates indicated (in thousands):
March 31, 2025December 31, 2024
Unrealized foreign currency translation adjustment, net of realized amounts reclassified into loss from divestitures of businesses$(18,193)$(26,172)
Unrealized translation losses on intercompany loans with foreign subsidiaries, net of taxes(4,979)(6,477)
Unrealized gains on interest rate swaps, net of amounts reclassified into interest expense, net6,590 9,033 
Realized gain on interest rate swap sale, net of amounts reclassified into interest expense, net179 1,626 
Total accumulated other comprehensive loss$(16,403)$(21,990)
During the three months ended March 31, 2025, the Company divested certain products lines and reclassified $5.7 million of the cumulative foreign currency translation adjustment as a component of the loss on divestitures. See Note 12. Divestitures. The Company has intercompany loans that were used to fund the acquisitions of foreign subsidiaries. Due to the long-term nature of the loans, the unrealized translation gains (losses) resulting from re-measurement are recognized as a component of AOCI. The unrealized translation losses on intercompany loans with foreign subsidiaries as of March 31, 2025 and December 31, 2024 are net of income tax of $1.4 million and $1.4 million, respectively. The tax impact related to unrealized translation gains (losses) on intercompany loans for the three months ended March 31, 2025 and the three months ended March 31, 2024 was $0.1 million benefit and $0.1 million detriment, respectively. The income tax expense/benefit allocated to each component of other comprehensive income for all other periods and components is not material. The Company reclassifies taxes from AOCI to earnings as the items to which the tax effects relate are similarly reclassified.
The functional currency of our foreign subsidiaries are the local currencies. Results of operations for foreign subsidiaries are translated into United States dollars (“USD”) using the average exchange rates on a monthly basis during the year. The assets and liabilities of those subsidiaries are translated into USD using the exchange rates in effect at the balance sheet date. The related translation adjustments are recorded in a separate component of stockholders' equity in AOCI.
Stock-Based Compensation
The Company’s stock-based compensation generally includes awards of restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”). Key employees, officers and directors of the Company and its consultants or advisors are eligible to receive awards.
The following table summarizes PSU and RSU activity during the three months ended March 31, 2025:
Number of UnitsWeighted-Average Grant Date Fair Value
Unvested restricted units outstanding as of December 31, 20242,277,132 $5.36 
Granted1,455,000 5.88 
Vested(475,744)5.17 
Forfeited(227,210)4.51 
Unvested restricted units outstanding as of March 31, 20253,029,178 $5.70 
The PSU and RSU activity table above includes 100,000 PSUs granted in 2023 and 250,000 PSUs granted in 2025 based on a 100% target payout.
Compensation cost related to awards is based on the fair market value at the time of the grant. The fair value of the RSUs is determined based on the grant date fair value of the award. Compensation expense for RSUs is recognized over the required service period of the grant. The PSUs vest upon the achievement of specified market performance thresholds. The PSUs have a vesting condition that is tied to the Company’s total shareholder return based on the Company’s stock performance up to a maximum of 200% and 300%, depending on the specified performance condition and the level of achievement obtained, for the 2023 PSUs and 2025 PSUs, respectively. The fair value of PSUs is determined using the Monte Carlo simulation model. Compensation expense for PSUs is recognized over the requisite service period and is not subject to adjustment regardless of whether the PSUs meet the performance metric.
The significant assumptions used in the Monte Carlo simulation model for the PSUs granted during the three months ended March 31, 2025 was as follows:
Expected volatility
81.9%
Risk-free interest rate
4.2%
Remaining performance period (in years)
 3.08
Dividend yield—
The Company recognizes stock-based compensation expense from all awards in the following expense categories included in our condensed consolidated statements of income (in thousands):
Three Months Ended March 31,
20252024
Cost of revenue$121 $186 
Research and development290 606 
Sales and marketing252 397 
General and administrative2,012 2,333 
Total$2,675 $3,522