Glowpoint : Annual report

SECURITIES & EXCHANGE COMMISSION EDGAR FILING

GLOWPOINT, INC.

Form: 10-K

Date Filed: 2019-03-08

Corporate Issuer CIK: 746210

© Copyright 2019, Issuer Direct Corporation. All Right Reserved. Distribution of this document is strictly prohibited, subject to the terms of use.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

☑

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

For the fiscal year ended December 31, 2018

OR

❑

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: 001-35376

GLOWPOINT, INC.

(Exact name of registrant as specified in its charter)

Delaware	77-0312442
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)
999 18th Street, Suite 1350S, Denver, CO	80202
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: [phone]

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

Title of each class Common Stock, $0.0001 par value

Name of each exchange on which registered

NYSE American

Securities registered pursuant to Section 12(g) of the Exchange Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ❑No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ❑No ý

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 ý No❑

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ý No❑

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	❑
Non-accelerated filer	ý

Accelerated filer	❑
Smaller reporting company	ý
(Do not check if a 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 Act). Yes ❑No ý

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant computed by reference to the price at which the common equity was last sold on June 30, 2018, the last business day of the Registrant's most recently completed second fiscal quarter, was $8,693,000.

The number of shares of the Registrant's common stock outstanding as of March 4, 2019 was 50,405,832.

GLOWPOINT, INC.

Index

Item

Page

PART I

1.

Business

1A.

1B.

Risk Factors

Unresolved Staff Comments

2.

3.

Properties

Legal Proceedings

4.

Mine Safety Disclosures

PART II

5.

Market for Registrant's Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities

6.

Selected Financial Data

7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

7A.

Qualitative and Quantitative Disclosures About Market Risk

8.

Financial Statements and Supplemental Data

9

Change in and Disagreements with Accountants on Accounting and Financial Disclosure

9A.

Controls and Procedures

9B.

Other Information

10.

Directors, Executive Officers and Corporate Governance

11.

Executive Compensation

PART III

12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

13.

Certain Relationships and Related Transactions, and Director Independence

14.

Principal Accounting Fees and Services

15.

Exhibits and Financial Statement Schedules

3 10 24 24 24 24

25 26 26 34 34 34 34 34

34

40 44 46 46

PART IV

47

16.

Signatures

51

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K (this "Report") contains statements that are considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and its rules and regulations (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended, and its rules and regulations (the "Exchange Act"). These forward-looking statements include, but are not limited to, statements about the plans, objectives, expectations and intentions of Glowpoint, Inc. ("Glowpoint" or "we" or "us" or the "Company"). All statements other than statements of current or historical fact contained in this Report, including statements regarding Glowpoint's future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," and similar expressions, as they relate to Glowpoint, are intended to identify forward-looking statements. These statements are based on Glowpoint's current plans, and Glowpoint's actual future activities and results of operations may be materially different from those set forth in the forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. Any or all of the forward-looking statements in this Report may turn out to be inaccurate. Glowpoint has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions. There are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including our plans, objectives, expectations and intentions and other factors that are discussed in "Item 1A. Risk Factors" and/or listed below. Glowpoint undertakes no obligation to publicly revise these forward-looking statements to reflect events occurring after the date hereof. All subsequent written and oral forward-looking statements attributable to Glowpoint or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this Report. Forward-looking statements in this Report include, among other things: our ability to meet commercial commitments; our expectations and estimates relating to customer attrition, sales cycles, future revenues, expenses, capital expenditures and cash flows; our ability to fund operations; expectations regarding adjustments to our cost of revenue and other operating expenses; matters related to the proposed Merger with SharedLabs, whether it is consummated and, if so, any benefits thereof; our ability to raise capital through sales of additional equity or debt securities and/or loans from financial institutions; our ability to continue as a going concern; our beliefs about employee relations; statements relating to market need, evolution of our solutions and our service platforms; our beliefs about the service offerings of our competitors and our ability to differentiate Glowpoint's services; adequacy of our internal controls; statements regarding our information systems and our ability to protect and prevent security breaches; expectations relating to additional patent protection; and beliefs about the strength of our intellectual property, including patents. For additional information regarding known material factors that could cause our actual results to differ materially from our projected results, please see "Item 1A. Risk Factors." Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, those summarized below:

• • customer acceptance and demand for our video collaboration services and network applications;

• • the quality and reliability of our services;

• • the prices for our services;

• • customer renewal rates;

• • risks related to the concentration of our customers and the degree to which our sales, now or in the future, depend on certain large client relationships;

• • customer acquisition costs;

• • our ability to compete effectively in the video collaboration services and network services businesses;

• • actions by our competitors, including price reductions for their competitive services;

• • potential federal and state regulatory actions;

• • our need for and the availability of adequate working capital;

• • our ability to innovate technologically;

• • our ability to satisfy the standards for continued listing of our common stock on the NYSE American stock exchange;

• • changes in our capital structure and/or stockholder mix;

• • the costs, disruption, and diversion of management's attention associated with campaigns commenced by activist investors;

• • our management's ability to execute its plans, strategies and objectives for future operations;

• • whether we and SharedLabs consummate the proposed Merger, on the terms announced or otherwise, and the expenses incurred in the pursuit of such transaction;

• • the ability of each of us and SharedLabs to meet the various conditions to the closing of the Merger, including obtaining the (i) effectiveness of a Form S-4 Registration Statement, (ii) NYSE American's approval of the combined organization's listing on such stock exchange and (iii) successful completion of SharedLabs' equity and debt financings;

• • the impact of any waiver by either us or SharedLabs of any conditions to the closing of the Merger; and

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