SEC Info - Adesto Technologies Corp - ‘10-Q’ for 9/30/19

Adesto Technologies Corp – ‘10-Q’ for 9/30/19 – ‘R20’

On: Friday, 11/8/19, at 5:11pm ET · For: 9/30/19 · Accession #: 1558370-19-10624 · File #: 1-37582

As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 11/08/19 Adesto Technologies Corp 10-Q 9/30/19 123:12M Toppan Merrill Bridge/FA

Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 1.25M 2: EX-31.1 Certification -- §302 - SOA'02 HTML 44K 3: EX-31.2 Certification -- §302 - SOA'02 HTML 44K 4: EX-32.1 Certification -- §906 - SOA'02 HTML 42K 5: EX-32.2 Certification -- §906 - SOA'02 HTML 41K 36: R1 Document and Entity Information HTML 93K 70: R2 Condensed Consolidated Balance Sheets HTML 141K 115: R3 Condensed Consolidated Balance Sheets HTML 55K (Parenthetical) 46: R4 Condensed Consolidated Statements of Operations HTML 95K 38: R5 Condensed Consolidated Statements of Comprehensive HTML 50K Loss 71: R6 Condensed Consolidated Statements of Stockholders? HTML 135K Equity 117: R7 Condensed Consolidated Statements of Stockholders? HTML 39K Equity (Parenthetical) 51: R8 Condensed Consolidated Statements of Cash Flows HTML 153K 34: R9 Organization and Summary of Significant Accounting HTML 202K Policies 58: R10 Acquisitions HTML 118K 14: R11 Balance Sheet Components HTML 128K 87: R12 Fair Value Measurements HTML 143K 101: R13 Intangible Assets, net HTML 171K 57: R14 Investment in Unconsolidated Affiliates HTML 39K 13: R15 Borrowings HTML 46K 86: R16 Convertible Senior Notes HTML 63K 100: R17 Segment Information HTML 113K 54: R18 Commitments and Contingencies HTML 101K 16: R19 Common Stock, Common Stock Warrants and Stock HTML 257K Option Plan 80: R20 Stock-based Compensation HTML 110K 123: R21 Income Taxes HTML 45K 53: R22 Net Loss Per Share HTML 70K 41: R23 Related Party Transactions HTML 40K 79: R24 Restructuring HTML 39K 122: R25 Organization and Summary of Significant Accounting HTML 222K Policies (Policies) 52: R26 Organization and Summary of Significant Accounting HTML 180K Policies (Tables) 40: R27 Acquisitions (Tables) HTML 119K 81: R28 Balance Sheet Components (Tables) HTML 132K 121: R29 Fair Value Measurements (Tables) HTML 142K 96: R30 Intangible Assets, net (Tables) HTML 175K 83: R31 Convertible Senior Notes (Tables) HTML 56K 18: R32 Segment Information (Tables) HTML 114K 60: R33 Commitments and Contingencies (Tables) HTML 103K 97: R34 Common Stock, Common Stock Warrants and Stock HTML 253K Option Plan (Tables) 84: R35 Stock-based Compensation (Tables) HTML 104K 19: R36 Net Loss Per Share (Tables) HTML 71K 61: R37 Organization and Summary of Significant Accounting HTML 47K Policies - Organization and Nature of Operations (Details) 98: R38 Organization and Summary of Significant Accounting HTML 40K Policies - Adoption of ASC 842 - Practical Expedients (Details) 82: R39 Organization and Summary of Significant Accounting HTML 42K Policies - Adoption of ASC 842 - General information (Details) 118: R40 Organization and Summary of Significant Accounting HTML 74K Policies - Adoption of ASC 842 - Tabular Disclosure (Details) 77: R41 Organization and Summary of Significant Accounting HTML 38K Policies - Revenue Recognition - Practical Expedients (Details) 28: R42 Organization and Summary of Significant Accounting HTML 44K Policies - Revenue Recognition - Timing of Revenue Recognition (Details) 42: R43 Organization and Summary of Significant Accounting HTML 47K Policies - Revenue Recognition - Contract Assets and Liabilities (Details) 119: R44 Organization and Summary of Significant Accounting HTML 50K Policies - Product Warranty (Details) 78: R45 Organization and Summary of Significant Accounting HTML 45K Policies - Foreign Currency Translation (Details) 29: R46 Organization and Summary of Significant Accounting HTML 38K Policies - Concentrations Risk - Allowance for Doubtful Accounts (Details) 43: R47 Organization and Summary of Significant Accounting HTML 48K Policies - Concentrations Risk - Revenue (Details) 120: R48 Organization and Summary of Significant Accounting HTML 43K Policies - Concentrations Risk - Accounts Receivable (Details) 76: R49 Organization and Summary of Significant Accounting HTML 54K Policies - Recent Accounting Pronouncements (Details) 94: R50 Acquisitions - General Information (Details) HTML 47K 110: R51 Acquisitions - Consideration Transferred (Details) HTML 49K 63: R52 Acquisitions - Fair Values of Assets Acquired and HTML 91K Liabilities Assumed (Details) 21: R53 Acquisitions - Intangible Assets (Details) HTML 64K 93: R54 Balance Sheet Components - Accounts Receivable, HTML 47K Net (Details) 109: R55 Balance Sheet Components - Inventories - Tabular HTML 47K Disclosure (Details) 62: R56 Balance Sheet Components - Inventories - HTML 40K Additional Information (Details) 20: R57 Balance Sheet Components - Property and Equipment HTML 57K - Tabular Disclosure (Details) 95: R58 Balance Sheet Components - Property and Equipment HTML 39K - Useful Lives (Details) 108: R59 Balance Sheet Components - Property and Equipment HTML 38K - Depreciation and Amortization (Details) 50: R60 Balance Sheet Components - Accrued Expenses and HTML 54K Other Current Liabilities (Details) 33: R61 Fair Value Measurements - Financial Assets and HTML 60K Liabilities Measured at Fair Value (Details) 75: R62 Fair Value Measurements - Earn-out Liability - HTML 43K General Information (Details) 114: R63 Fair Value Measurements - Earn-out Liability - HTML 41K Roll Forward (Details) 47: R64 Intangible Assets, net - Acquisitions (Details) HTML 44K 30: R65 Intangible Assets, net - Estimated Useful Life HTML 64K (Details) 72: R66 Intangible Assets, net - Schedule of Intangible HTML 61K Assets (Details) 111: R67 Intangible Assets, net - Amortization Expense HTML 44K (Details) 45: R68 Intangible Assets, net - Estimated Future HTML 52K Amortization Expense (Details) 37: R69 Investment in Unconsolidated Affiliates (Details) HTML 49K 24: R70 Borrowings - Western Alliance Bank Term Loan HTML 86K (Details) 64: R71 Borrowings - Tennenbaum Capital Partners, LLC Term HTML 84K Loan (Details) 104: R72 Borrowings - Outstanding Borrowings (Details) HTML 41K 89: R73 Borrowings - Interest Expense (Details) HTML 38K 27: R74 Convertible Senior Notes (Details) HTML 90K 67: R75 Convertible Senior Notes - equity and liability HTML 53K components (Details) 107: R76 Segment Information - General Information HTML 38K (Details) 92: R77 Segment Information - Revenue by Geographic Region HTML 51K (Details) 22: R78 Segment Information - Long-Lived Assets by HTML 46K Geographic Region - Property and Equipment, Net (Details) 68: R79 Segment Information - Long-Lived Assets by HTML 44K Geographic Region - Right-of-use Assets (Details) 25: R80 Commitments and Contingencies - Operating Leases - HTML 42K Lease Assets and Lease Liabilities (Details) 65: R81 Commitments and Contingencies - Operating Leases - HTML 37K Lease Cost (Details) 105: R82 Commitments and Contingencies - Operating Leases - HTML 50K Maturity of Operating Lease Liabilities (Details) 90: R83 Commitments and Contingencies - Operating Leases - HTML 42K Present Value of Lease Liabilities (Details) 26: R84 Commitments and Contingencies - Operating Leases - HTML 40K Lease Term and Discount Rate (Details) 66: R85 Commitments and Contingencies - Operating Leases - HTML 40K Other Information (Details) 106: R86 Commitments and Contingencies - Purchase HTML 40K Commitments (Details) 91: R87 Common Stock, Common Stock Warrants and Stock HTML 47K Option Plan - Common Stock (Details) 23: R88 Common Stock, Common Stock Warrants and Stock HTML 47K Option Plan - Public Offering (Details) 69: R89 Common Stock, Common Stock Warrants and Stock HTML 55K Option Plan - Stock Reserved for Future Issuance (Details) 49: R90 Common Stock, Common Stock Warrants and Stock HTML 55K Option Plan - Common Stock Warrants - Warrant Issued (Details) 32: R91 Common Stock, Common Stock Warrants and Stock HTML 52K Option Plan - Common Stock Warrants - Fair Value Measurement Inputs (Details) 74: R92 Common Stock, Common Stock Warrants and Stock HTML 48K Option Plan - Common Stock Warrants - Tabular Disclosure (Details) 113: R93 Common Stock, Common Stock Warrants and Stock HTML 42K Option Plan - Common Stock Warrants - Additional Information (Details) 48: R94 Common Stock, Common Stock Warrants and Stock HTML 66K Option Plan - 2007 Equity Incentive Plan (Details) 31: R95 Common Stock, Common Stock Warrants and Stock HTML 58K Option Plan - 2015 Equity Incentive Plan (Details) 73: R96 Common Stock, Common Stock Warrants and Stock HTML 66K Option Plan - 2015 Employee Stock Purchase Plan (Details) 112: R97 Common Stock, Common Stock Warrants and Stock HTML 94K Option Plan - Stock Option Activity (Details) 44: R98 Common Stock, Common Stock Warrants and Stock HTML 73K Option Plan - Restricted Stock Units - Activity (Details) 35: R99 Stock-based Compensation - General Information HTML 43K (Details) 15: R100 Stock-based Compensation - Weighted Average HTML 48K Assumptions Used to Value Options (Details) 59: R101 Stock-based Compensation - Options Granted and HTML 41K Weighted Average Grant Date Fair Value of Options Granted (Details) 102: R102 Stock-based Compensation - Performance-based RSUs HTML 65K (Details) 88: R103 Stock-based Compensation - Share-based HTML 47K Compensation (Details) 12: R104 Stock-based Compensation - Unrecognized HTML 50K Compensation Cost (Details) 56: R105 Income Taxes - Provision (Details) HTML 38K 99: R106 Income Taxes - Rate (Details) HTML 39K 85: R107 Net Loss Per Share (Details) HTML 50K 17: R108 Related Party Transactions (Details) HTML 55K 55: R109 Restructuring (Details) HTML 41K 116: XML IDEA XML File -- Filing Summary XML 238K 39: EXCEL IDEA Workbook of Financial Reports XLSX 123K 6: EX-101.INS XBRL Instance -- iots-20190930 XML 3.49M 8: EX-101.CAL XBRL Calculations -- iots-20190930_cal XML 232K 9: EX-101.DEF XBRL Definitions -- iots-20190930_def XML 891K 10: EX-101.LAB XBRL Labels -- iots-20190930_lab XML 1.71M 11: EX-101.PRE XBRL Presentations -- iots-20190930_pre XML 1.46M 7: EX-101.SCH XBRL Schema -- iots-20190930 XSD 218K 103: ZIP XBRL Zipped Folder -- 0001558370-19-010624-xbrl Zip 225K

Note 12. Stock-based Compensation.

We record stock-based compensation based on fair value as of the grant date using the Black-Scholes option-pricing model for stock options granted and Monte Carlo simulation techniques for certain RSUs with performance-based vesting conditions. We recognize such costs as compensation expense on a straight-line basis over the employee’s requisite service period, which is generally four years. Our valuation assumptions for stock options are as follows:

Risk-free interest rate. We base the risk-free interest rate used in the Black-Scholes option-pricing model on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent expected term of the options for each option group.

Expected term. The expected term represents the period that our stock-based awards are expected to be outstanding. The expected term assumption is based on the simplified method in which the expected term is equal to the average of the stock-based award’s weighted-average vesting period and its contractual term. We expect to continue using the simplified method until sufficient information about historical behavior is available.

Volatility. We determine volatility based on the historical stock volatility of our publicly traded stock.

Dividend yield. We have never declared or paid any cash dividend and do not currently plan to pay a cash dividend in the foreseeable future. Consequently, we used an expected dividend yield of zero.

The following table summarizes the weighted-average assumptions used in the Black-Scholes option-pricing model to determine fair value of stock options:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Volatility	57	%	77	%	65	%	72	%
Expected dividend yield	—		—		—		—
Risk-free rate	1.90	%	2.80	%	2.22	%	2.84	%
Expected term (in years)	6		5		6		6

The weighted-average grant date fair value of the options granted under the 2015 Equity Incentive Plan as calculated using the Black-Scholes option-pricing model was $4.40 and $3.68 per share for the three months and nine months ended September 30, 2019, respectively. There were no options granted during the three months ended September 30, 2019.

On April 1, 2017, our compensation committee granted 204,220 RSUs that do not begin vesting unless certain performance goals are met. All performance goals must be met in order for the shares to begin vesting. Vesting would begin on the one-year anniversary of the grant date. These performance goals relate to a) the price performance of our common stock one year from the grant date as compared to a threshold established by our compensation committee and b) revenue, gross profit and EBITDA performance relative to plan targets for fiscal 2017 established by our compensation committee. As a result of these performance-based vesting conditions we valued these RSUs using Monte Carlo simulation techniques to establish a fair value per share of $0.81 at the time of grant.

On April 1, 2018, our compensation committee granted 102,283 RSUs that do not begin vesting unless certain performance goals are met. Vesting will not begin unless the stock performance goals are met and the number of shares eligible to begin vesting are based on Adesto’s share performance as compared to the Russell 2000 stock index which is the performance threshold established by the compensation committee. The evaluation period for the stock performance is from April 2, 2018 through June 30, 2019. Vesting would begin on the one-year anniversary of the grant date with 20% of the shares vesting immediately and the remaining 80% of the shares vesting over the next eight quarters. As a result of these performance-based vesting conditions we valued these RSUs using Monte Carlo simulation techniques to establish a fair value per share of $4.92 at the time of grant. As of September 30, 2019, Adesto’s share price did not meet the performance threshold and the PRSU’s were not awarded.

On March 25, 2019, our compensation committee granted 147,954 RSUs that do not begin vesting unless certain performance goals are met. Vesting of these shares will not begin unless the stock price performance goals are met and the number of shares eligible to begin vesting are based on Adesto’s share performance as compared to the Russell 2000 stock index which is the performance threshold established by the compensation committee. The evaluation period for the stock performance is from March 15, 2019 through March 15, 2020. Vesting would begin on the one-year anniversary of the grant date with 20% of the shares vesting immediately and the remaining 80% of the shares vesting over the next eight quarters. As a result of these performance-based vesting conditions we valued these RSUs using Monte Carlo simulation techniques to establish a fair value per share of $4.05 at the time of grant. Expense for these RSUs is being amortized over three years.

The following table presents the effects of stock-based compensation for stock options, RSUs (including performance-based RSUs), and ESPP purchase rights (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Cost of revenue	$	80	$	56	$	212	$	129
Research and development		638		356		1,517		786
Selling, general and administrative		917		528		2,345		1,188
Total	$	1,635	$	940	$	4,074	$	2,103

Stock-based compensation expense capitalized to inventories was not material during the nine months ended September 30, 2019 and 2018.

We did not realize any income tax benefit from stock option exercises in any of the periods presented due to recurring losses and valuation allowances.

As of September 30, 2019, the total unrecognized compensation cost related to stock options, net of estimated forfeitures, was approximately $2.6 million, and this amount is expected to be recognized over a weighted-average period of approximately 2.2 years.

As of September 30, 2019, the total unrecognized compensation cost related to RSUs (including performance-based RSUs) and ESPP purchase rights was $7.9 million and $163,000, respectively, and these amounts are expected to be recognized over 2.4 years and 0.3 years, respectively.

This ‘10-Q’ Filing

Date

Other Filings

3/15/20

Filed on:

11/8/19

For Period end:

9/30/19

6/30/19

10-Q

3/25/19

4, 8-K

3/15/19

9/30/18

10-Q

4/2/18

4/1/18

4/1/17

4, 8-K

List all Filings

Adesto Technologies Corp – ‘10-Q’ for 9/30/19 – ‘R20’

On: Friday, 11/8/19, at 5:11pm ET · For: 9/30/19 · Accession #: 1558370-19-10624 · File #: 1-37582

Previous ‘10-Q’: ‘10-Q’ on 8/9/19 for 6/30/19 · Next & Latest: ‘10-Q’ on 6/22/20 for 3/31/20

Quarterly Report — Form 10-Q — Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

‘R20’ — Stock-based Compensation

This is an IDEA Financial Report. [ Alternative Formats ]

Dates Referenced Herein and Documents Incorporated by Reference

Adesto Technologies Corp – ‘10-Q’ for 9/30/19 – ‘R20’

On: Friday, 11/8/19, at 5:11pm ET · For: 9/30/19 · Accession #: 1558370-19-10624 · File #: 1-37582

Previous ‘10-Q’: ‘10-Q’ on 8/9/19 for 6/30/19 · Next & Latest: ‘10-Q’ on 6/22/20 for 3/31/20

Quarterly Report — Form 10-Q — Sect. 13 / 15(d) – SEA’34Filing Table of Contents

‘R20’ — Stock-based Compensation

This is an IDEA Financial Report. [ Alternative Formats ]

Dates Referenced Herein and Documents Incorporated by Reference

Quarterly Report — Form 10-Q — Sect. 13 / 15(d) – SEA’34
Filing Table of Contents