qumu-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-20728

QUMU CORPORATION

(Exact name of registrant as specified in its charter)


Minnesota		41-1577970
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
400 S 4th St,	Suite 401-412
Minneapolis,	Minnesota	55415
(Address of principal executive offices)		(Zip Code)

(612) 638-9100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol

Name of each exchange on which registered

Common Stock, $0.01 par value

QUMU

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company (as defined in Rule 12b-2 of the Exchange Act):

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

As of May 5, 2021, the registrant had 17,591,773 outstanding shares of $.01 par value common stock.

Table of Contents

QUMU CORPORATION

FORM 10-Q

TABLE OF CONTENTS

FOR THE QUARTER ENDED MARCH 31, 2021


	Description	Page

PART 1	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Loss	5
	Condensed Consolidated Statements of Stockholders' Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	23
Item 4.	Controls and Procedures	24
PART II	OTHER INFORMATION	25
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	26
SIGNATURES		27

Table of Contents

PART 1 – FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

QUMU CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


	March 31, 2021		December 31, 2020
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	27,575	$	11,878
Receivables, net of allowance for credit losses of $42 and $42, respectively	4,274		5,612
Contract assets	470		467
Income tax receivable	592		479
Prepaid expenses and other current assets	2,685		2,302
Total current assets	35,596		20,738
Property and equipment, net of accumulated depreciation of $1,413 and $1,376, respectively	307		249
Right of use assets – operating leases	288		332
Intangible assets, net	1,959		2,143
Goodwill	7,513		7,455
Deferred income taxes, non-current	19		19
Other assets, non-current	462		490
Total assets	$	46,144	$	31,426
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and other accrued liabilities	$	2,525	$	2,705
Accrued compensation	1,678		2,145
Deferred revenue	11,993		12,918
Operating lease liabilities	691		735
Financing obligations	313		406
Note payable	—		1,800
Derivative liability	—		37
Warrant liability	1,993		2,910
Total current liabilities	19,193		23,656
Long-term liabilities:
Deferred revenue, non-current	2,817		3,488
Income taxes payable, non-current	613		608
Operating lease liabilities, non-current	441		554
Financing obligations, non-current	133		75
Other liabilities, non-current	160		160
Total long-term liabilities	4,164		4,885
Total liabilities	23,357		28,541
Commitments and contingencies (Note 3)
Stockholders’ equity:
Preferred stock, $0.01 par value, authorized 250,000 shares, no shares issued and outstanding	—		—
Common stock, $0.01 par value, authorized 29,750,000 shares, issued and outstanding 17,590,586 and 13,780,823, respectively	176		138
Additional paid-in capital	103,824		79,489
Accumulated deficit	(78,778)		(74,328)
Accumulated other comprehensive loss	(2,435)		(2,414)
Total stockholders’ equity	22,787		2,885
Total liabilities and stockholders’ equity	$	46,144	$	31,426

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

QUMU CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited – in thousands, except per share data)


	Three Months Ended March 31,
	2021		2020
Revenues:
Software licenses and appliances	$	108	$	1,540
Service	5,712		4,687
Total revenues	5,820		6,227
Cost of revenues:
Software licenses and appliances	64		648
Service	1,503		1,439
Total cost of revenues	1,567		2,087
Gross profit	4,253		4,140
Operating expenses:
Research and development	2,030		1,780
Sales and marketing	4,476		2,218
General and administrative	2,527		2,593
Amortization of purchased intangibles	162		164
Total operating expenses	9,195		6,755
Operating loss	(4,942)		(2,615)
Other income (expense):
Interest income (expense), net	(54)		17
Decrease in fair value of derivative liability	37		—
Decrease in fair value of warrant liability	357		36
Other, net	62		(160)
Total other income (expense), net	402		(107)
Loss before income taxes	(4,540)		(2,722)
Income tax benefit	(90)		(50)
Net loss	$	(4,450)	$	(2,672)

Net loss per share – basic:
Net loss per share – basic	$	(0.27)	$	(0.20)
Weighted average shares outstanding – basic	16,443		13,552
Net loss per share – diluted:
Loss attributable to common shareholders	$	(4,807)	$	(2,838)
Net loss per share – diluted	$	(0.29)	$	(0.21)
Weighted average shares outstanding – diluted	16,679		13,589

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

QUMU CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited - in thousands)


	Three Months Ended March 31,
	2021		2020
Net loss	$	(4,450)	$	(2,672)
Other comprehensive loss:
Net change in foreign currency translation adjustments	(21)		(480)
Total other comprehensive loss	(21)		(480)
Total comprehensive loss	$	(4,471)	$	(3,152)

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

QUMU CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(unaudited – in thousands)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount
Balance at December 31, 2019	13,553	$	136	$	78,061	$	(65,128)	$	(2,861)	$	10,208
Net loss	—	—		—		(2,672)		—		(2,672)
Other comprehensive loss, net of taxes	—	—		—		—		(480)		(480)
Issuance of stock under employee stock plan, net of forfeitures	4	—		—		—		—		—
Redemption of stock related to tax withholdings on employee stock plan issuances	(29)	—		(53)		—		—		(53)
Stock-based compensation	—	—		245		—		—		245
Balance at March 31, 2020	13,528	$	136	$	78,253	$	(67,800)	$	(3,341)	$	7,248


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount
Balance at December 31, 2020	13,780	$	138	$	79,489	$	(74,328)	$	(2,414)	$	2,885
Net loss	—	—		—		(4,450)		—		(4,450)
Other comprehensive loss, net of taxes	—	—		—		—		(21)		(21)
Issuance of common stock	3,709	37		23,048		—		—		23,085
Warrant exercise	50	—		560		—		—		560
Issuance of stock under employee stock plan, net of forfeitures	52	1		141		—		—		142
Redemption of stock related to tax withholdings on employee stock plan issuances	—	—		(3)		—		—		(3)
Stock-based compensation	—	—		589		—		—		589
Balance at March 31, 2021	17,591	$	176	$

SEC Form 10-Q filed by Qumu Corporation