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Discontinued Operations | 6 Months Ended
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Sep. 30, 2018
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations On April 29, 2018, the Company entered into two distinct disposition agreements with respect to selected assets owned by our subsidiaries. DT APAC and DT Singapore (together, “Pay Seller”), each wholly-owned subsidiaries of the Company, entered into an Asset Purchase Pay Agreement (the “Pay Agreement”), dated as of April 23, 2018, with Chargewave Ptd Ltd (“Pay Purchaser”) to sell certain assets (the “Pay Assets”) owned by the Pay Seller related to the Company’s Direct Carrier Billing business. The Pay Purchaser is principally-owned and controlled by Jon Mooney, an officer of the Pay Seller. At the closing of the asset sale, Mr. Mooney was no longer employed by the Company or Pay Seller. As consideration for this asset sale, Digital Turbine is entitled to receive certain license fees, profit-sharing, and equity participation rights as outlined in the Company’s Form 8-K filed on May 1, 2018 with the SEC. The transaction was completed on July 1, 2018 with an effective date of July 1, 2018. With the sale of these assets, the Company has determined that it will exit the segment of the business previously referred to as the Content business. In accordance with the Pay Agreement, the Company assigned and transferred a material contract to the Pay Purchaser. Subsequent to the transaction closing associated with the Pay Agreement, the Company received notification from the Pay Purchaser that the partner to the material contract had terminated the contract with the Pay Purchaser. Due to the material contract being terminated, the Company has determined that the estimated earn out from the Pay Purchaser to be $0. As all the assets being transferred had been fully impaired prior to the closing of the transaction, the gain/loss on sale related to the Pay Agreement transaction is currently estimated at $0. Furthermore, the Company retained certain receivables and payables for content delivered for the benefit of the partner to the material contract, where these certain receivables and payables were all recognized prior to the closing of the Pay Agreement. These amounts are presented below as assets and liabilities held for disposal. As of September 30, 2018, the Company has determined there to be uncertainty surrounding the collectability of the receivables due to ongoing discussions with the business partner. If at a later date it is determined that the amounts recorded are not collectible due to disputes surrounding the content delivered, the related payables would also be withheld. At this time, the Company does not have enough information to reasonably estimate which receivables and payables, if any, may be uncollectable. The total net exposure to the Company if all of the remaining receivables and payables are determined to be uncollectable is approximately $931. These assets and liabilities remain on our books as a component of discontinued operations as of September 30, 2018. DT Media, a wholly-owned subsidiary of the Company, entered into an Asset Purchase Agreement (the “A&P Agreement”), dated as of April 28, 2018, with Creative Clicks B.V. (the “A&P Purchaser”) to sell business relationships with various advertisers and publishers (the “A&P Assets”) related to the Company’s Advertising and Publishing business. As consideration for this asset sale, we are entitled to receive a percentage of the gross profit derived from these customer agreements, for a period of three years, as outlined in the Company’s Form 8-K filed on May 1, 2018 with the SEC. The transaction was completed on June 28, 2018 with an effective date of June 1, 2018. With the sale of these assets, the Company has determined that it will exit the operating segment of the business previously referred to as the A&P business, which was previously part of Advertising, the Company's sole continuing reporting unit. No gain or loss on sale was recognized related to this divestiture. All transferred assets and liabilities, with the exception of goodwill, were fully amortized prior to entering into the sales agreement. As the consideration given by the purchaser was already materially determined at March 31, 2018, goodwill was impaired to the estimated future cash flows of the divested business, which was effectively the purchase price. With the consummation of the sale, the remaining goodwill asset was netted against the purchase price receivable for a net impact of $0 on the Consolidated Statement of Operations for the three months ended June 30, 2018. These dispositions will allow the Company to benefit from a streamlined business model, simplified operating structure, and enhanced management focus. Additionally, the Company expects to be able to generate additional cash via the announced transactions that can be re-invested into key O&O growth initiatives. The following table summarizes the financial results of our discontinued operations for all periods presented herein: Condensed Statements of Operations and Comprehensive Loss For Discontinued Operations (in thousands, except per share amounts) (Unaudited)
|  | Three months ended September 30, |  | Six months ended September 30,
|  | 2018 |  | 2017 |  | 2018 |  | 2017
Net revenues |  | $7 |  | $11,986 |  | $3,877 |  | $22,953
Total cost of revenues |  | (4) |  | 10,234 |  | 3,070 |  | 19,736
Gross profit |  | 11 |  | 1,752 |  | 807 |  | 3,217
Product development |  | 95 |  | 596 |  | 666 |  | 1,180
Sales and marketing |  | 116 |  | 404 |  | 343 |  | 825
General and administrative |  | 142 |  | 537 |  | 1,052 |  | 1,003
Income / (loss) from operations |  | (342) |  | 215 |  | (1,254) |  | 209
Interest and other income / (expense), net |  | (14) |  | (70) |  | (146) |  | (152)
Net income / (loss) from discontinued operations, net of taxes |  | $(356) |  | $145 |  | $(1,400) |  | $57
Comprehensive income / (loss) |  | $(356) |  | $145 |  | $(1,400) |  | $57
Basic and diluted net loss per common share |  | — |  | — |  | (0.02) |  | —
Weighted-average common shares outstanding, basic |  | 77,193 |  | 66,846 |  | 76,644 |  | 66,723
Weighted-average common shares outstanding, diluted |  | 78,780 |  | 66,846 |  | 79,019 |  | 66,723
Details on assets and liabilities classified as held for disposal in the accompanying consolidated balance sheets are presented in the following table:
|  | September 30, 2018 |  | March 31, 2018
|  | (Unaudited) |  |
Assets held for disposal |  |  |  |
Accounts receivable, net of allowances of $209 and $578, respectively |  | $3,156 |  | $8,013
Property and equipment, net |  | 270 |  | 377
Goodwill |  | — |  | 309
Prepaid expenses and other current assets |  | 246 |  | 54
Current assets held for disposal |  | 3,672 |  | 8,753
Total assets held for disposal |  | $3,672 |  | $8,753
Liabilities held for disposal |  |  |  |
Accounts payable |  | $4,432 |  | $8,789
Accrued license fees and revenue share |  | 1,124 |  | 3,059
Accrued compensation |  | 299 |  | 529
Other current liabilities |  | 60 |  | 349
Current liabilities held for disposal |  | 5,915 |  | 12,726
Total liabilities held for disposal |  | $5,915 |  | $12,726
Assets and liabilities held for disposal as of September 30, 2018 and March 31, 2018 are classified as current since we expect the dispositions to be completed within one year. The following table provides reconciling cash flow information for our discontinued operations:
|  | Six months ended September 30,
|  | 2018 |  | 2017
|  | (Unaudited) |  | (Unaudited)
Cash flows from operating activities |  |  |  |
Net income / (loss) from discontinued operations, net of taxes |  | $(1,400) |  | $57
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |
Depreciation and amortization |  | 214 |  | 519
Change in allowance for doubtful accounts |  | (369) |  | 31
Stock-based compensation |  | 37 |  | 119
Loss on disposal of fixed assets |  | — |  | —
(Increase) / decrease in assets: |  |  |  |
Accounts receivable |  | 5,328 |  | (1,986)
Goodwill |  | 309 |  |  | —
Prepaid expenses and other current assets |  | (406) |  | 14
Increase / (decrease) in liabilities: |  |  |  |
Accounts payable |  | (4,357) |  | (1,290)
Accrued license fees and revenue share |  | (1,935) |  | 1,084
Accrued compensation |  | (230) |  | 138
Other current liabilities |  | (289) |  | (25)
Cash used in operating activities |  | (3,098) |  | (1,339)
Cash flows from investing activities |  |  |  |
Capital expenditures |  | (41) |  | (75)
Cash used in investing activities |  | (41) |  | (75)
Cash used in discontinued operations |  | $(3,139) |  | $(1,414)

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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