Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2018	Jul. 31, 2018
Document And Entity Information
Entity Registrant Name	Turtle Beach Corporation
Entity Central Index Key	0001493761
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Document Type	10-Q/A
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Amendment Flag	true
Amendment Description	Restatement of condensed consolidated financial statements to correct for change in accounting treatment
Entity Common Stock, Shares Outstanding		13,796,031

Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current Assets:
Cash and cash equivalents	$ 9,108	$ 5,247
Accounts receivable, net	34,582	50,534
Inventories	28,043	27,518
Prepaid expenses and other current assets	5,190	3,467
Total Current Assets	76,923	86,766
Property and equipment, net	2,839	4,677
Intangible assets, net	1,196	1,404
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent	127	362
Other assets	1,095	1,042
Total Assets	82,180	94,251
Current Liabilities:
Revolving credit facility	0	38,467
Term loans	375	4,173
Accounts payable	29,976	13,459
Other current liabilities	14,061	11,451
Total Current Liabilities	44,412	67,550
Term loans, long-term portion, net of unamortized debt issuance costs of $734 and $759	11,391	6,789
Series B redeemable preferred stock	0	18,921
Subordinated notes - related party, net of unamortized discount of $811 and $1,075	19,092	20,836
Financial instrument obligation	11,176	0
Other liabilities	2,311	2,312
Total Liabilities	88,382	116,408
Stockholders' Equity (Deficit)
Common stock, $0.001 par value - 25,000,000 shares authorized; 13,794,251 and 12,349,449 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively	14	12
Additional paid-in capital	165,111	148,082
Accumulated deficit	(171,009)	(170,048)
Accumulated other comprehensive loss	(318)	(203)
Total Stockholders' Equity (Deficit)	(6,202)	(22,157)
Total Liabilities and Stockholders' Equity (Deficit)	$ 82,180	$ 94,251

Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Stockholders' Equity (Deficit)
Preferred stock par value (in dollars per share)	$ 0	$ 0
Preferred stock shares authorized	0	0
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Common stock par value (in dollars per share)	$ 0.001	$ 0.001
Common stock shares authorized	25,000,000	25,000,000
Common stock shares issued	13,794,251	12,349,449
Common stock shares outstanding	13,794,251	12,349,449

Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Net revenue	$ 60,805,000	$ 19,112,000	$ 101,691,000	$ 33,464,000
Cost of revenue	40,528,000	12,811,000	66,385,000	24,947,000
Gross profit	20,277,000	6,301,000	35,306,000	8,517,000
Operating expenses:
Selling and marketing	6,818,000	5,529,000	12,747,000	9,978,000
Research and development	1,327,000	1,697,000	2,656,000	3,087,000
General and administrative	3,863,000	4,070,000	7,848,000	8,241,000
Restructuring Charges	0	(30,000)	0	268,000
Total operating expenses	12,008,000	11,266,000	23,251,000	21,574,000
Operating income (loss)	8,269,000	(4,965,000)	12,055,000	(13,057,000)
Interest expense	1,258,000	1,835,000	3,263,000	3,675,000
Other non-operating expense (income), net	9,029,000	(214,000)	8,784,000	(265,000)
Income (loss) before income tax	(2,018,000)	(6,586,000)	8,000	(16,467,000)
Income tax expense	300,000	475,000	364,000	520,000
Net income (loss)	$ (2,318,000)	$ (7,061,000)	$ (356,000)	$ (16,987,000)
Net income (loss) per share:
Basic (in dollars per share)	$ (0.17)	$ (0.57)	$ (0.03)	$ (1.38)
Diluted (in dollars per share)	$ (0.17)	$ (0.57)	$ (0.03)	$ (1.38)
Weighted average number of shares:
Basic (in shares)	13,401	12,337	12,877	12,325
Diluted (in shares)	13,401	12,337	12,877	12,325

Condensed Consolidated Statements of Comprehensive Income (Loss) Statement - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (2,318)	$ (7,061)	$ (356)	$ (16,987)
Foreign currency translation adjustment	(270)	118	(115)	158
Other comprehensive income (loss)	(270)	118	(115)	158
Comprehensive income (loss)	$ (2,588)	$ (6,943)	$ (471)	$ (16,829)

Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ (356,000)	$ (16,987,000)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	2,204,000	2,213,000
Amortization of intangible assets	156,000	170,000
Amortization of debt financing costs	642,000	781,000
Stock-based compensation	822,000	817,000
Accrued interest on Series B redeemable preferred stock	501,000	702,000
Paid-in-kind interest	1,256,000	1,196,000
Deferred income taxes	235,000	(43,000)
Reversal of sales returns reserve	(489,000)	(2,438,000)
Provision for Doubtful Accounts	144,000	3,000
Provision for obsolete inventory	1,766,000	1,689,000
Gain (Loss) on Disposition of Property Plant Equipment	(93,000)	0
Unrealized loss on financial instrument obligation	8,619,000	0
Changes in operating assets and liabilities:
Accounts receivable	15,692,000	47,073,000
Inventories	(2,291,000)	(907,000)
Accounts payable	16,461,000	(601,000)
Prepaid expenses and other assets	(1,723,000)	(505,000)
Income taxes payable	293,000	329,000
Other liabilities	2,316,000	(6,845,000)
Net cash provided by operating activities	46,341,000	26,647,000
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	(402,000)	(506,000)
Net cash used for investing activities	(402,000)	(506,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on revolving credit facilities	81,991,000	51,909,000
Repayment of revolving credit facilities	(120,458,000)	(82,638,000)
Repayment of capital leases	0	(4,000)
Proceeds from Issuance of Long-term Debt	3,265,000	0
Repayment of term loan	(2,485,000)	(427,000)
Repayments of Subordinated Debt	3,265,000	0
Retirement of Series B Preferred Stock	(1,390,000.000)	(0.000)
Proceeds from Stock Options Exercised	734,000	0
Debt financing costs	(405,000)	0
Net cash used for financing activities	(42,013,000)	(31,160,000)
Effect of exchange rate changes on cash and cash equivalents	(65,000)	74,000
Net decrease in cash and cash equivalents	3,861,000	(4,945,000)
Cash and cash equivalents, beginning of period	5,247,000	6,183,000
Cash and cash equivalents, end of period	9,108,000
SUPPLEMENTAL DISCLOSURE OF INFORMATION
Cash paid for interest	763,000	918,000
Cash paid for income taxes	$ 0	$ 0

Condensed Consolidated Statement of Stockholders' Equity Statement - 6 months ended Jun. 30, 2018 - USD ($)	Total	Common stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income
Beginning balance, shares at Dec. 31, 2017		12,349,000
Beginning balance at Dec. 31, 2017	$ (22,157,000)	$ 12,000	$ 148,082,000	$ (170,048,000)	$ (203,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(356,000)
Cumulative Effect on Retained Earnings, Net of Tax	(605,000)			(605,000)
Share-based Compensation Arrangement, Series B Transaction		1,307,143
Stock Issued During Period, Value, Series B Exchange	15,475,000	$ 1,000	15,474,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Period Increase (Decrease)		27,978
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures	0	$ 0
Other comprehensive income	$ (115,000)				(115,000)
Stock options exercised and related tax activity, shares	109,681	110,000
Stock Issued During Period, Value, Stock Options Exercised	$ 734,000	$ 1,000	733,000
Share-based compensation	822,000		822,000
Ending balance, shares at Jun. 30, 2018		13,794,000
Ending balance at Jun. 30, 2018	$ (6,202,000)	$ 14,000	$ 165,111,000	$ (171,009,000)	$ (318,000)

Background and Basis of Presentation

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Background and Basis of Presentation

Organization

Turtle Beach Corporation (“Turtle Beach” or the “Company”), headquartered in San Diego, California, is the global leader in gaming headsets and has been an innovator in premier audio technology for over 40 years. The Turtle Beach® brand is highly regarded among the over 700 million gamers in North America and Europe where the Company has a leading market share in gaming headsets for Xbox and PlayStation® consoles. In addition to its gaming headset business, the Company acquired and developed an innovative and patent-protected sound technology that delivers immersive, directional audio called HyperSound®.

Turtle Beach was incorporated in the state of Nevada in 2010 and the Company’s stock is traded on the Nasdaq Global Market under the symbol HEAR.

VTB Holdings, Inc. (“VTBH”), a wholly-owned subsidiary of Turtle Beach and the parent holding company of Voyetra Turtle Beach, Inc. (“VTB”) and Turtle Beach Europe Limited (“TB Europe”), together the headset business, was incorporated in the state of Delaware in 2010 with operations principally located in Valhalla, New York. VTB was incorporated in the state of Delaware in 1975.

Basis of Presentation

The accompanying interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, reflect all adjustments (which include normal recurring adjustments) considered necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), have been condensed or omitted pursuant to those rules and regulations. The Company believes that the disclosures made are adequate to make the information presented not misleading. The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire fiscal year.

The December 31, 2017 Condensed Consolidated Balance Sheet has been derived from the Company’s audited financial statements included in its Annual Report on Form 10-K filed with the SEC on March 6, 2018 (“Annual Report”).

These financial statements should be read in conjunction with the annual financial statements and the notes thereto included in the Annual Report that contains information useful to understanding the Company's businesses and financial statement presentations.

Reverse Split

On April 6, 2018, the Company effected a one-for-four reverse stock split of its common stock pursuant to which every four shares of common stock outstanding immediately prior to the reverse split were combined into one share of common stock. As a result of the reverse split, all outstanding share amounts and computations using such amounts in the Company’s financial statements and notes thereto have been retroactively adjusted to reflect the reverse stock split.

Restatement

On March 13, 2019, the Audit Committee of the Board of Directors (the “Audit Committee”) of Turtle Beach Corporation (the “Company”), after considering the recommendations of management and consulting with BDO USA, LLP, the Company’s independent registered public accounting firm, concluded that its unaudited condensed consolidated financial statements included in the quarterly reports on Form 10-Q for the interim periods ended June 30, 2018, and September 30, 2018 (the “Initial Filings”) should not be relied upon because the Company had improperly accounted for the fully-funded warrants issued in connection with the Company’s exchange of Series B Preferred Stock on April 23, 2018.

The warrants are exercisable for a fixed number of shares of the Company’s common stock, except that the warrant holders have the right to receive cash in connection with the completion of a transaction defined as a Fundamental Transaction under the warrant agreement. Upon subsequent review, the Company determined that the proper accounting treatment for the warrants due to this possible future cash conversion option was as a financial instrument obligation rather than as an equity instrument, as originally reported. Accounting for the warrants as a financial instrument obligation results in the Company reporting a liability equal to the fair value of the warrants at the time of the transaction, with subsequent changes in fair value reported quarterly in earnings based on a Black-Scholes mark-to-market valuation.

As a result of these terms regarding the possible future cash payment, the Company has accounted for the warrants issued in connection with the retirement of the Series B Preferred Stock as a financial instrument obligation that is marked to market each period, with subsequent changes in fair value reported in earnings. The fair value of the warrants upon issuance and at June 30, 2018, was $2.6 million and $11.2 million, respectively. This Form 10-Q/A for the period ended June 30, 2018 reflects a $8.6 million reduction of net income from the reported amounts for the quarter resulting in a net loss of $2.3 million, or a diluted loss per share of $(0.17), compared to net income originally reported of $6.3 million, or diluted earnings per share of $0.40.

Impact of the Restatement

The following table presents the Company’s condensed consolidated statements of income (loss) as previously reported, restatement adjustments and the condensed consolidated statements of income (loss) as restated for the three and six months ended June 30, 2018:

Condensed Consolidated Statements of Operations (unaudited)



	Three Months Ended								Six Months Ended
	As Reported		Adjustment			As Restated			As Reported		Adjustment			As Restated
	(in thousands, except per-share data)
Operating income (loss)	$	8,269	$	—		$	8,269		$	12,055	$	—		$	12,055
Interest expense	1,258		—			1,258			3,263		—			3,263
Other non-operating expense (income), net	410		8,619			9,029			165		8,619			8,784
Income (loss) before income tax	6,601		(8,619		)	(2,018		)	8,627		(8,619		)	8
Income tax expense	300		—			300			364		—			364
Net income (loss)	$	6,301	$	(8,619	)	$	(2,318	)	$	8,263	$	(8,619	)	$	(356	)

Net income (loss) per share:
Basic	$	0.47	$	(0.64	)	$	(0.17	)	$	0.64	$	(0.67	)	$	(0.03	)
Diluted	$	0.40	$	(0.57	)	$	(0.17	)	$	0.56	$	(0.59	)	$	(0.03	)
Weighted average number of shares:
Basic	13,401		—			13,401			12,877		—			12,877
Diluted	15,644		(2,243		)	13,401			14,816		(1,939		)	12,877

The following table presents the condensed consolidated balance sheet as previously reported, restatement adjustments and the condensed consolidated balance sheet as restated at June 30, 2018:

Condensed Consolidated Balance Sheet (unaudited)



	June 30, 2018
	As Reported			Adjustment			As Restated
	(in thousands)
Total Current Liabilities	$	44,412		$	—		$	44,412
Term loans, long-term portion	11,391			—			11,391
Series B redeemable preferred stock	—			—			—
Deferred income taxes	—			—			—
Subordinated notes - related party	19,092			—			19,092
Financial instrument obligation	—			11,176			11,176
Other liabilities	2,311			—			2,311
Total Liabilities	77,206			11,176			88,382
Stockholders' Equity (Deficit)
Common stock	14			—			14
Additional paid-in capital	167,668			(2,557		)	165,111
Accumulated deficit	(162,390		)	(8,619		)	(171,009		)
Accumulated other comprehensive loss	(318		)	—			(318		)
Total Stockholders' Equity (Deficit)	4,974			(11,176		)	(6,202		)
Total Liabilities and Stockholders' Equity (Deficit)	$	82,180		$	—		$	82,180

The following table presents the Company’s condensed consolidated statement of cash flows as previously reported, restatement adjustments and the condensed consolidated statement of cash flows as restated for the six months ended June 30, 2018:

Condensed Consolidated Statements of Cash Flows (unaudited)



	Six Months Ended
	As Reported		Adjustment			As Restated
	(in thousands)
Net income (loss)	$	8,263	$	(8,619	)	$	(356	)

Unrealized loss on financial instrument obligation	$	—	$	8,619		$	8,619

Net cash provided by operating activities	$	46,341	$	—		$	46,341

Summary of Significant Accounting Policies	6 Months Ended
Summary of Significant Accounting Policies	Jun. 30, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies The preparation of consolidated annual and quarterly financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. The Company can give no assurance that actual results will not differ from those estimates. The Company's significant accounting policies are included in Note 1 of the Annual Report on Form 10-K for the year ended December 31, 2017. As described further in “Recent Accounting Pronouncements” below, on January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. Turtle Beach's transition to the new revenue standard did not result in a material adjustment to opening retained earnings and the Company expects the adoption of the new standard to have an immaterial impact to its results of operations on an ongoing basis. Revenue Recognition and Sales Return Reserve Net revenue consists primarily of revenue from the sale of gaming headsets and accessories to wholesalers, retailers and to a lesser extent, on-line customers. These headsets function on a standalone basis (in connection with a readily available gaming console, personal computer or stereo) and are not sold with additional services or rights to future goods or services. Revenue is recorded for a contract through the following steps: (i) identifying the contract with the customer; (ii) identifying the performance obligations in the contract; (iii) determining the transaction price; (iv) allocating the transaction price to the performance obligations; and (v) recognizing revenue when or as each performance obligation is satisfied. Each contract at inception is evaluated to determine whether the contract should be accounted for as having one or more performance obligations. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs at a point in time when the transfer of risk and title to the product transfers to the customer. Our standard terms of delivery are included in our contracts of sale, order confirmation documents, and invoices. The Company excludes sales taxes collected from customers from “Net Revenue” in its Consolidated Statements of Operations. Certain customers may receive cash-based incentives (including: cash discounts, quantity rebates, price concessions), which are accounted for as variable consideration. Provisions for sales returns are recognized in the period the sale is recorded, based upon our prior experience and current trends. These revenue reductions are established by the Company based upon management’s best estimates at the time of sale following the historical trend, adjusted to reflect known changes in the factors that impact such reserves and allowances, and the terms of agreements with customers. We do not expect to have significant changes in our estimates for variable considerations. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In 2018, the Company adopted ASU 2014-09 using the modified retrospective approach, and recorded a net decrease to beginning retained earnings of $0.6 million reflecting the cumulative impact of adoption. The impact to beginning retained earnings was due to certain price concessions and right of return arrangements recorded as part of the transaction price determination. Results for reporting periods beginning January 1, 2018 are presented under Topic 606, Revenue from Contracts with Customers while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 605, Revenue Recognition. In February 2016, the FASB issued ASU No. 2016-02, Leases, that introduces the recognition of a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term, and a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis for all leases (with the exception of short-term leases). The guidance will be effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years with early adoption permitted. The Company has not yet selected a transition method or determined the effect on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, to provide clarity and reduce diversity in practice and cost and complexity when applying the guidance to a change to the terms or conditions of a share-based payment award. This update provides that an entity will not have to account for the effects of a modification if: (i) the fair value of the modified award is the same immediately before and after the modification; (ii) the vesting conditions of the modified award are the same immediately before and after the modification; and (iii) the classification of the modified award as either an equity instrument or liability instrument is the same immediately before and after the modification. The Company adopted these amendments in the first quarter of 2018, which did not have a material impact upon our financial condition or results of operations. In June 2018, the FASB issued ASU 2018-07, Improvements to Non-employee Share-Based Payment Accounting that expands the scope of Topic 718, Compensation—Stock Compensation, to include share-based payments issued to non-employees for goods or services and substantially aligned the accounting for share-based payments to non-employees and employees. The amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company is evaluating the effect that this guidance will have on the financial statements and related disclosures.

Fair Value Measurement

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurement

The Company follows a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:


•	Level 1 — Quoted prices in active markets for identical assets or liabilities.


•	Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for markets that are not active, or other inputs that are observable or can be corroborated by observable market data.


•	Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

Financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, and debt instruments. As of June 30, 2018 and December 31, 2017, there were no outstanding financial assets and liabilities recorded at fair value on a recurring basis and the Company had not elected the fair value option for any financial assets and liabilities for which such an election would have been permitted.

The following is a summary of the carrying amounts and estimated fair values of our financial instruments at June 30, 2018 and December 31, 2017:



	June 30, 2018				December 31, 2017
	Reported		Fair Value		Reported		Fair Value
	(in thousands)
Financial Assets and Liabilities:
Cash and cash equivalents	$	9,108	$	9,108	$	5,247	$	5,247
Revolving credit facility	—		—		38,467		38,467
Term loans	12,500		13,020		11,721		11,329
Subordinated notes	19,903		22,394		21,911		22,442
Financial instrument obligation	11,176		11,176		—		—

Cash equivalents are stated at amortized cost, which approximates fair value as of the consolidated balance sheet dates, due to the short period of time to maturity; and accounts receivable and accounts payable are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment. The carrying value of the revolving credit facility equals fair value as the stated interest rate approximates market rates currently available to the Company, which are considered Level 2 inputs. The fair values of our term loans and subordinated notes are based upon an estimated market value calculation that factors principal, time to maturity, interest rate and current cost of debt, which is considered a Level 3 input. The liability-classified warrants reported as a financial instrument obligation are classified within Level 3 because the Company uses a Black-Scholes pricing model to estimate the fair value based on inputs that are not observable in any market.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Allowance for Sales Return

6 Months Ended

Jun. 30, 2018

Allowance for Sales Returns [Abstract]

Allowance for Sales Returns

The following table provides the changes in our sales return reserve, which is classified as a reduction of accounts receivable:



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
	(in thousands)
Balance, beginning of period	$	4,260		$	3,033		$	5,533		$	4,591
Reserve accrual	5,184			951			8,441			2,082
Recoveries and deductions, net	(4,400		)	(1,831		)	(8,930		)	(4,520		)
Balance, end of period	$	5,044		$	2,153		$	5,044		$	2,153

Composition of Certain Financial Statement Items

6 Months Ended

Jun. 30, 2018

Condensed Consolidated Balance Sheet Components [Abstract]

Composition of Certain Financial Statement Items

Inventories

Inventories consist of the following:



	June 30, 2018		December 31, 2017
	(in thousands)
Raw materials	$	1,581	$	837
Finished goods	26,462		26,681
Total inventories	$	28,043	$	27,518

Property and Equipment, net

Property and equipment, net, consists of the following:



	June 30, 2018			December 31, 2017
	(in thousands)
Machinery and equipment	$	1,506		$	1,396
Software and software development	300			383
Furniture and fixtures	530			525
Tooling	1,997			1,968
Leasehold improvements	1,327			1,318
Demonstration units and convention booths	9,308			11,719
Total property and equipment, gross	14,968			17,309
Less: accumulated depreciation and amortization	(12,129		)	(12,632		)
Total property and equipment, net	$	2,839		$	4,677

Other Current Liabilities

Other current liabilities consist of the following:



	June 30, 2018		December 31, 2017
	(in thousands)
Accrued vendor expenses	$	242	$	652
Accrued royalties	4,361		2,848
Accrued employee expenses	2,302		2,510
Accrued freight	2,242		130
Accrued expenses	4,914		5,311
Total other current liabilities	$	14,061	$	11,451

Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Acquired Intangible Assets

Acquired identifiable intangible assets, and related accumulated amortization, as of June 30, 2018 and December 31, 2017 consist of:



	June 30, 2018
	Gross Carrying Value			Accumulated Amortization			Net Book Value
	(in thousands)
Customer relationships	$	5,796		$	4,356		$	1,440
Foreign currency	(997		)	(753		)	(244		)
Total Intangible Assets	$	4,799		$	3,603		$	1,196


	December 31, 2017
	Gross Carrying Value			Accumulated Amortization			Net Book Value
	(in thousands)
Customer relationships	$	5,796		$	4,173		$	1,623
Foreign currency	(899		)	(680		)	(219		)
Total Intangible Assets	$	4,897		$	3,493		$	1,404

In connection with the October 2012 acquisition of TB Europe, the acquired intangible asset related to customer relationships is being amortized over an estimated useful life of thirteen years with the amortization being included within sales and marketing expense.

Amortization expense related to definite lived intangible assets of $0.1 million and $0.2 million was recognized for the three and six months ended June 30, 2018, respectively, and $0.1 million and $0.2 million for the three and six months ended June 30, 2017, respectively.

As of June 30, 2018, estimated annual amortization expense related to definite lived intangible assets in future periods is as follows:



	(in thousands)
2018	$	183
2019	307
2020	258
2021	217
2022	182
Thereafter	293
Total	$	1,440

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Credit Facilities and Long-Term Debt

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Credit Facilities and Long-Term Debt

Credit Facility and Long-Term Debt



	June 30, 2018			December 31, 2017
	(in thousands)
Revolving credit facility, maturing March 2023	$	—		$	38,467

Term Loan Due 2018	—			1,923
Term Loan Due 2019	—			9,798
Term Loan Due 2023	12,500			—
Less: unamortized deferred financing fees	734			759
Total Term Loans	11,766			10,962

Subordinated notes - related party	19,903			21,911
Less: unamortized debt discount	811			1,075
Total Subordinated notes	19,092			20,836
Total outstanding debt	30,858			70,265
Less: current portion of revolving credit facility	—			(38,467		)
Less: current portion of term loans	(375		)	(4,173		)
Total noncurrent portion of long-term debt	$	30,483		$	27,625

Total interest expense, inclusive of amortization of deferred financing costs, on long-term debt obligations was $1.0 million and $2.5 million for the three and six months ended June 30, 2018, respectively, and $1.3 million and $2.7 million for three and six months ended June 30, 2017, respectively. This includes related party interest of $0.7 million and $1.3 million for the three and six months ended June 30, 2018, respectively, and $0.6 million and $1.2 million for the three and six months ended June 30, 2017, respectively, incurred in connection with the subordinated notes.

Amortization of deferred financing costs was $0.2 million and $0.6 million for the three and six months ended June 30, 2018, respectively, and $0.4 million and $0.8 million for the three and six months ended June 30, 2017, respectively. In connection with the Company's amendment and restatement of its Credit Facility (as noted below), the Company incurred $0.4 million of financing costs that have been deferred and will be recognized over the term of the respective agreements.

Revolving Credit Facility

On March 5, 2018, Turtle Beach and certain of its subsidiaries entered into an amended and restated loan, guaranty and security agreement (“Credit Facility”) with Bank of America, N.A. (“Bank of America”), as Agent, Sole Lead Arranger and Sole Bookrunner, which replaced the then existing asset-based revolving loan agreement. The Credit Facility, which expires on March 5, 2023, provides for a line of credit of up to $60 million inclusive of a sub-facility limit of $12 million for TB Europe, a wholly-owned subsidiary of Turtle Beach. The Credit Facility may be used for working capital, the issuance of bank guarantees, letters of credit and other corporate purposes.

The maximum credit availability for loans and letters of credit under the Credit Facility is governed by a borrowing base determined by the application of specified percentages to certain eligible assets, primarily eligible trade accounts receivable and inventories, and is subject to discretionary reserves and revaluation adjustments.

Amounts outstanding under the Credit Facility bear interest at a rate equal to either a rate published by Bank of America or the LIBOR rate, plus in each case, an applicable margin, which is between 0.50% to 1.25% for U.S. base rate loans and between 1.50% to 2.25% for U.S. LIBOR loans and U.K. loans. As of June 30, 2018, interest rates for outstanding borrowings were 5.50% for base rate loans and 3.74% for LIBOR rate loans. In addition, Turtle Beach is required to pay a commitment fee on the unused revolving loan commitment at a rate ranging from 0.25% to 0.50%, and letter of credit fees and agent fees.

The Company is subject to monthly financial covenant testing for so long as revolving commitments or obligations are outstanding. The Credit Facility requires the Company and its restricted subsidiaries to maintain a fixed charge coverage ratio of at least 1.10 to 1.00 on the last day of each month, a consolidated leverage ratio of greater than 3.00 to 1.00, as well as a limit to Capital Expenditures and HyperSound Division Net Operating Disbursement (as defined in the Credit Facility).

The Credit Facility also contains affirmative and negative covenants that, subject to certain exceptions, limit our ability to take certain actions, including the Company's ability to incur debt, pay dividends and repurchase stock, make certain investments and other payments, enter into certain mergers and consolidations, engage in sale leaseback transactions and transactions with affiliates and encumber and dispose of assets. Obligations under the Credit Facility are secured by a security interest and lien upon substantially all of the Company's assets.

As of June 30, 2018, the Company was in compliance with all financial covenants, as amended, and excess borrowing availability was approximately $30.5 million.

Term Loans

Term Loan Due 2018

On December 29, 2014, the Company amended the Credit Facility with Bank of America to enter in to an additional loan (the “Term Loan Due 2018”) for the repayment of $7.7 million of then existing subordinated debt and accrued interest. The Term Loan Due 2018 resulted in modified financial covenants while it was outstanding, had an interest rate of LIBOR plus 5% and was subject to equal monthly installments beginning on April 1, 2015 and ending on October 1, 2018, reflecting a six month waiver. On March 5, 2018, the Company repaid the remaining $1.3 million principal balance.

Term Loan Due 2019

On July 22, 2015, the Company and its subsidiaries, entered into a term loan, guaranty and security agreement (the “Term Loan Due 2019”) with Crystal Financial LLC, as agent, sole lead arranger and sole bookrunner, Crystal Financial SPV LLC and the other persons party thereto (“Crystal”), which provided for an aggregate term loan commitment of $15 million with an interest rate per annum equal to the 90-day LIBOR rate plus 10.25%. Under the terms of the Term Loan Due 2019, the Company was required to make payments of interest in arrears on the first day of each month beginning August 1, 2015 and repay the principal in monthly payments that began January 1, 2016, inclusive of a nine month waiver, with a final payment on June 28, 2019, the maturity date.

Term Loan Due 2023

On March 5, 2018, the Company and its subsidiaries, entered into an amended, extended and restated term loan, guaranty and security agreement (the “Term Loan Due 2023”) with Crystal, as agent, sole lead arranger and sole bookrunner and the Lenders from time to time party thereto, which replaced the then existing Term Loan Due 2019 and provides for a maximum aggregate term loan of $12.5 million, at an interest rate per annum equal to the 90-day LIBOR rate plus 6.75%. As of June 30, 2018, $12.5 million was outstanding with the additional $3.3 million borrowed on May 2, 2018. Under the terms of the Term Loan Due 2023, the Company is required to make payments of interest in arrears on the first day of each month and will repay the principal in monthly payments beginning April 1, 2019, with a final payment on March 5, 2023, the maturity date.

The Term Loan Due 2023 is secured by a security interest in substantially all of the Company and each of its subsidiaries' working capital assets and is subject to the first-priority lien of Bank of America, as agent, under the Credit Facility, other than with respect to equipment, fixtures, real property interests, intellectual property, intercompany property, intercompany indebtedness, equity interest in their subsidiaries, and certain other assets specified in an inter-creditor agreement between Bank of America and Crystal.

The Company and its subsidiaries are required to comply with various customary covenants including, (i) maintaining a fixed charge coverage ratio of at least 1.10 to 1.00, (ii) maintaining a Consolidated Leverage Ratio (as defined in the Term Loan Due 2023) to be measured on the last day of each month while the term loans are outstanding of no more than 3.00:1, (iii) not making capital expenditures in excess of the amount stated therein in any year until December 31, 2023, (iv) restrictions on the Company’s and its subsidiaries ability to prepay its subordinated notes, pay dividends, incur debt, create or suffer liens and engage in certain fundamental transactions and (v) an obligation to provide certain financial and other information.

The Term Loan Due 2023 contains customary representations, mandatory prepayment events and events of default, including defaults triggered by the failure to make payments when due, breaches of covenants and representations, material impairment in the perfection of Crystal’s security interest in the collateral and events related to bankruptcy and insolvency of the Company and its subsidiaries. Upon an event of default, Crystal may declare all outstanding obligations immediately due and payable (along with a prepayment fee), impose a default rate of an additional 2.0% to amounts outstanding and may take other actions including collecting or taking such other action with respect to the collateral pledged in connection with the term loan.

As of June 30, 2018, the Company was in compliance with all the financial covenants.

Subordination Agreement

On November 16, 2015, as a condition precedent to the Company's lenders permitting the Company to enter into certain subordinated notes, the Company entered into a subordination agreement with and between Bank of America and Crystal, pursuant to which the parties agreed that the Company's obligations under any such notes would be subordinate in right of payment to the payment in full of all the Company’s obligations under the Credit Facility, the then existing Term Loan Due 2019 and the current Term Loan Due 2023.

Subordinated Notes - Related Party

During 2015, the Company issued a $5.0 million subordinated note (the “April Note”), subordinated notes (the “May Notes”) with an aggregate principal amount of $3.8 million and a subordinated note (the “June Note”) with an aggregate principal amount of $9.0 million to SG VTB Holdings, LLC, the Company’s largest stockholder (“SG VTB”), and a trust affiliated with Ronald Doornink, the Chairman of the Company's board of directors (the “Board”). The subordinated notes were issued with an interest rate of (i) 10% per annum for the first year and (ii) 20% per annum for all periods thereafter, with interest accruing and being added to the principal amount of the note quarterly.

On July 22, 2015, the Company amended and restated each of its outstanding subordinated notes (the “Amended Notes”). The obligations of the Company under the Amended Notes are subordinate and junior to the prior payment of amounts due under the then existing credit facility and term loans. In addition, the stated maturity date of the Amended Notes was extended to September 29, 2019, subject to acceleration in certain circumstances, such as a change of control in the Company. The Amended Notes were issued with an interest rate per annum equal to LIBOR plus 10.5% and were paid-in-kind by adding the amount to the principal amount due. Further, as consideration for the concessions in the Amended Notes, the Company issued warrants to purchase 0.4 million of the Company’s common stock at an exercise price of $10.16 per share.

On November 16, 2015, the Company issued a $2.5 million subordinated note (the “November Note”) to SG VTB, the proceeds of which, as set forth in the amendment to the Term Loan Due 2019, were applied against the outstanding balance of the Term Loan Due 2019. The November Note was issued with an interest rate of 15% per annum until its maturity date, which was September 29, 2019, and was subordinated to all senior debt of the Company.

In consideration of the credit extended under the November Note, VTB and VTBH entered into a Third Lien Continuing Guaranty, (as amended, the “Third Lien Guaranty”), under which they guarantee and promise to pay to SG VTB, any and all obligations of the Company under the November Note. To secure the Company's obligations under the November Note and the Third Lien Guaranty, the Company entered into a Third Lien Security Agreement, dated as of November 16, 2015, pursuant to which Stripes was granted a security interest upon all property of the VTB and VTBH until the payment in full of the Amended Notes and November Note or the release of the guarantee or collateral, as applicable. Concurrent with entering into the November Note and Third Lien Guaranty, the Company also issued a warrant to purchase 0.3 million shares of the Company’s common stock at an exercise price of $8.00 per share.

On March 5, 2018, the Company amended and restated the Amended Notes with an aggregate principal amount of $18.9 million and the November Note with an aggregate principal amount of $3.5 million. The amended subordinated notes bear in-kind interest at a rate of (i) LIBOR plus 9.1% per annum until March 5, 2020 (or, solely with respect to the November Note, until September 5, 2018) or until its maturity date, which is June 5, 2023, provided that its principal amount is reduced by a specified amount by the six month anniversary of the restatement effective date and (ii) LIBOR plus 10.5% per annum (or, solely with respect to the November Note, 15.0% if the prepayment described above does not occur) until its maturity date.

On May 4, 2018, the Company satisfied the repayment provision with a $3.3 million repayment of the November Note with funds from the Term Loan Due 2023. Further, on August 3, 2018, the Company paid down an additional $5.0 million with funds from operations.

SG VTB is an affiliate of Stripes Group LLC (“Stripes”), a private equity firm focused on internet, software, healthcare IT and branded consumer products businesses. Kenneth A. Fox, one of our directors, is the managing general partner of Stripes and the sole manager of SG VTB, and Ronald Doornink, our Chairman of the Board, is an operating partner of Stripes.

Income Taxes

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

In order to determine the quarterly provision for income taxes, we use an estimated annual effective tax rate (“ETR”), which is based on expected annual income and statutory tax rates in the various jurisdictions. However, to the extent that application of the estimated annual effective tax rate is not representative of the quarterly portion of actual tax expense expected to be recorded for the year, we determine the quarterly provision for income taxes based on actual year-to-date income (loss). Certain significant or unusual items are separately recognized as discrete items in the quarter during which they occur and can be a source of variability in the effective tax rates from quarter to quarter.

The following table presents our income tax expense (benefit) and effective income tax rate:



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
	(in thousands)
Income tax expense	$	300		$	475		$	364		$	520
Effective income tax rate	(14.9		)%	(7.2		)%	4,550.0		%	(3.2		)%

Income tax expense for the three and six months ended June 30, 2018 was $0.3 million at an effective tax rate of (14.9)% and, $0.4 million at an effective tax rate of 4,550.0%, respectively. Income tax expense for the three and six months ended June 30, 2017 was $0.5 million at an effective tax rate of (7.2)% and $0.5 million at an effective tax rate of (3.2)%, respectively. The effective tax rate was primarily impacted by the full valuation allowance on domestic earnings, foreign entity tax benefits and certain state tax expense.

The Company is subject to income taxes domestically and in various foreign jurisdictions. Significant judgment is required in evaluating uncertain tax positions and determining its provision for income taxes.

The Company recognizes only those tax positions that meet the more-likely-than-not recognition threshold, and establishes tax reserves for uncertain tax positions that do not meet this threshold. Interest and penalties associated with income tax matters are included in the provision for income taxes in the condensed consolidated statement of operations. As of June 30, 2018, the Company had uncertain tax positions of $2.3 million, inclusive of $0.8 million of interest and penalties.

The Company files U.S., state and foreign income tax returns in jurisdictions with various statutes of limitations. The federal tax years open under the statute of limitations are 2013 through 2016, and the state tax years open under the statute of limitations are 2012 through 2016. The Company's federal income tax return for year ended December 31, 2015 is currently under IRS examination.

Stock-Based Compensation

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Total estimated stock-based compensation expense for employees and non-employees, related to all of the Company's stock-based awards, was comprised as follows:



	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2018		2017			2018		2017
	(in thousands)
Cost of revenue	$	313	$	(1	)	$	331	$	(86	)
Selling and marketing	30		20			55		56
Research and development	33		63			63		120
General and administrative	223		349			373		727
Total stock-based compensation	$	599	$	431		$	822	$	817

The following table presents the stock activity and the total number of shares available for grant as of June 30, 2018:



	(in thousands)
Balance at December 31, 2017	387
Plan Amendment	1,500
Options granted	(445	)
Restricted Stock granted	(198	)
Forfeited/Expired shares added back	142
Balance at June 30, 2018	1,386

Stock Option Activity



	Options Outstanding
	Number of Shares Underlying Outstanding Options		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
					(In years)
Outstanding at December 31, 2017	1,740,103		$	6.20	6.64	$	6
Granted	445,195		3.55
Exercised	(109,681	)	6.69
Forfeited	(142,297	)	7.83
Outstanding at June 30, 2018	1,933,320		$	5.44	7.40	$	28,762,929
Vested and expected to vest at June 30, 2018	1,875,294		$	5.56	7.34	$	27,788,808
Exercisable at June 30, 2018	949,598		$	7.42	5.69	$	12,348,636

Stock options are time-based and the majority are exercisable within 10 years of the date of grant, but only to the extent they have vested. The options generally vest as specified in the option agreements subject to acceleration in certain circumstances. In the event participants in the 2013 Plan cease to be employed or engaged by the Company, then all of the options would be forfeited if they are not exercised within 90 days. Forfeitures on option grants are estimated at 10% for non-executives and 0% for executives based on evaluation of historical and expected future turnover. Stock-based compensation expense was recorded net of estimated forfeitures, such that expense was recorded only for those stock-based awards expected to vest. The Company reviews this assumption periodically and will adjust it if it is not representative of future forfeiture data and trends within employee types (executive vs. non-executive).

Aggregate intrinsic value represents the difference between the estimated fair value of the underlying common stock and the exercise price of outstanding, in-the-money options. The aggregate intrinsic value of options exercised was $1.1 million for the six months ended June 30, 2018.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of options granted as of the grant date. The following are the assumptions for options granted during the six months ended June 30, 2018.



Expected term (in years)	6.1
Risk-free interest rate	2.3% - 3.0%
Expected volatility	38.2% - 39.5%
Dividend rate	0%

Each of these inputs is subjective and generally requires significant judgment to determine.

The weighted average grant date fair value of options granted during the six months ended June 30, 2018 was $1.49. The total estimated fair value of employee options vested during the six months ended June 30, 2018 was $0.4 million. As of June 30, 2018, total unrecognized compensation cost related to non-vested stock options granted to employees was $1.4 million, which is expected to be recognized over a remaining weighted average vesting period of 3.0 years.

Restricted Stock Activity



	Shares		Weighted Average Grant Date Fair Value Per Share
Nonvested restricted stock at December 31, 2017	41,867		3.84
Granted	198,247		17.60
Vested	(27,978	)	4.02
Nonvested restricted stock at June 30, 2018	212,136		16.68

As of June 30, 2018, total unrecognized compensation cost related to the nonvested restricted stock awards, which will be recognized over a remaining weighted average vesting period of 3.0 years was minimal.

Stock Warrants

In connection with and as consideration for the concessions in the Amended Notes, the Company issued to SG VTB and a trust affiliated with Ronald Doornink, the Chairman of the Board, warrants to purchase an aggregate 0.4 million shares of the Company’s common stock at an exercise price of $10.16 per share. The warrants are exercisable for a period of five years beginning on the date of issuance, July 22, 2015. The exercise price and the number of purchasable shares of common stock are subject to adjustment and do not carry any voting rights or other rights as a stockholder of the Company prior to exercise.

In connection with the November Note, the Company issued warrants to purchase 0.3 million shares of the Company’s common stock at an exercise price of $8.00 per share to SG VTB. The exercise price and the number of purchasable shares of common stock are subject to standard anti-dilution adjustments and do not carry any voting rights as a stockholder of the Company prior to exercise. The warrants are exercisable for a period of ten years beginning on the date of issuance and do not entitle the holder to any voting rights or other rights as a stockholder of the Company prior to exercise.

The warrants entitle the holder to purchase a stated amount of shares of common stock at a fixed exercise price that are not puttable (either the warrant or the shares) to the Company or redeemable for cash, and as such are classified within equity. The shares issuable upon exercise of the warrants are also subject to the “demand” and “piggyback” registration rights set forth in the in the Company’s Stockholder Agreement, dated August 5, 2013, as amended July 10, 2014.

Net Income (Loss) Per Share

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

The following table sets forth the computation of basic and diluted net income (loss) per share of common stock attributable to common stockholders:



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
	(in thousands, except per-share data)
Net income (loss)	$	(2,318	)	$	(7,061	)	$	(356	)	$	(16,987	)

Weighted average common shares outstanding — Basic	13,401			12,337			12,877			12,325
Plus incremental shares from assumed conversions:
Dilutive effect of restricted stock	—			—			—			—
Dilutive effect of stock options	—			—			—			—
Dilutive effect of warrants	—			—			—			—
Weighted average common shares outstanding — Diluted	13,401			12,337			12,877			12,325
Net income (loss) per share:
Basic	$	(0.17	)	$	(0.57	)	$	(0.03	)	$	(1.38	)
Diluted	$	(0.17	)	$	(0.57	)	$	(0.03	)	$	(1.38	)

Incremental shares from stock options and restricted stock awards are computed by the treasury stock method. The weighted average shares listed below were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented or were otherwise excluded under the treasury stock method. The treasury stock method calculates dilution assuming the exercise of all in-the-money options and vesting of restricted stock, reduced by the repurchase of shares with the proceeds from the assumed exercises, unrecognized compensation expense for outstanding awards and the estimated tax benefit of the assumed exercises.



	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2018	2017	2018	2017
	(in thousands)
Stock options	1,945	1,602	1,833	1,591
Warrants	1,314	765	965	766
Unvested restricted stock awards	62	34	52	30
Total	3,321	2,401	2,850	2,387

Segment and Geographical Information

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Geographical Information

Geographic Information

The following tables show our net revenues, operating income and total assets by our reporting segments:



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Net Revenues	(in thousands)
Headset	$	60,805		$	19,084		$	101,673		$	33,344
HyperSound	—			28			18			120
Total	$	60,805		$	19,112		$	101,691		$	33,464

Operating Income (Loss)
Headset	$	8,369		$	(4,542	)	$	12,166		$	(11,598	)
HyperSound	(100		)	(423		)	(111		)	(1,459		)
Total	8,269			(4,965		)	12,055			(13,057		)
Interest Expense	1,258			1,835			3,263			3,675
Other non-operating expense (income), net	9,029			(214		)	8,784			(265		)
Income (loss) before income tax	$	(2,018	)	$	(6,586	)	$	8		$	(16,467	)



	June 30, 2018			December 31, 2017
Total Assets	(in thousands)
Headset	$	82,194		$	94,114
HyperSound⁽¹⁾	36,402			26,787
Eliminations	(36,416		)	(26,650		)
Total	$	82,180		$	94,251

(1) At June 30, 2018, HyperSound assets excluding eliminations, totaled less than $0.1 million.

The following table represents total net revenues based on where customers are physically located:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
	(in thousands)
North America	$	45,967	$	12,996	$	78,951	$	24,051
United Kingdom	7,628		2,124		11,657		3,978
Europe	5,858		2,769		9,105		3,937
Other	1,352		1,223		1,978		1,498
Total net revenues	$	60,805	$	19,112	$	101,691	$	33,464

Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Litigation

The Company is subject to various legal proceedings and claims that arise in the ordinary course of its business. Although the amount of any liability that could arise with respect to these actions cannot be determined with certainty, in the Company’s opinion, any such liability will not have a material adverse effect on its consolidated financial position, consolidated results of operations or liquidity.

Shareholders Class Action: On August 5, 2013, VTBH and the Company (f/k/a Parametric) announced that they had entered into the Merger Agreement pursuant to which VTBH would acquire an approximately 80% ownership interest and existing shareholders would maintain an approximately 20% ownership interest in the combined company. Following the announcement, several shareholders filed class action lawsuits in California and Nevada seeking to enjoin the Merger. The plaintiffs in each case alleged that members of the Company’s Board of Directors breached their fiduciary duties to the shareholders by agreeing to a Merger that allegedly undervalued the Company. VTBH and the Company were named as defendants in these lawsuits under the theory that they had aided and abetted the Company's Board of Directors in allegedly violating their fiduciary duties. The plaintiffs in both cases sought a preliminary injunction seeking to enjoin closing of the Merger, which, by agreement, was heard by the Nevada court with the California plaintiffs invited to participate. On December 26, 2013, the court in the Nevada cases denied the plaintiffs’ motion for a preliminary injunction. Following the closing of the Merger, the Nevada plaintiffs filed a second amended complaint, which made essentially the same allegations and sought monetary damages as well as an order rescinding the Merger. The California plaintiffs dismissed their action without prejudice, and sought to intervene in the Nevada action, which was granted. Subsequent to the intervention, the plaintiffs filed a third amended complaint, which made essentially the same allegations as prior complaints and sought monetary damages. On June 20, 2014, VTBH and the Company moved to dismiss the action, but that motion was denied on August 28, 2014. On September 14, 2017, a unanimous en banc panel of the Nevada Supreme Court granted defendants’ petition for writ of mandamus and ordered the trial court to dismiss the complaint but provided a limited basis upon which plaintiffs could seek to amend their complaint. Plaintiffs amended their complaint on December 1, 2017 to assert the same claims in a derivative capacity on behalf of the Company, as a well as in a direct capacity, against VTBH, Stripes Group, LLC, SG VTB Holdings, LLC, and the former members of the Company’s Board of Directors. All defendants moved to dismiss this amended complaint on January 2, 2018, and those motions were denied on March 13, 2018. Defendants petitioned the Nevada Supreme Court to reverse this ruling on April 18, 2018. On June 15, 2018, the Nevada Supreme Court denied defendants’ writ petition without prejudice. The district court subsequently entered a pretrial schedule and set trial for November 2019.

Commercial Dispute: On July 20, 2016, Bigben Interactive S.A. (“BigBen”) filed a statement of claim before the Regional Court of Berlin, Germany against VTB, which statement of claim was formally serviced upon VTB on June 28, 2017. The statement of claim alleges that VTB’s termination of a distribution agreement by and between BigBen and VTB breached the terms thereof and was invalid, and that BigBen is entitled to damages amounting to €5.0 million plus accrued interests thereon plus certain additional damages as a result of such invalid termination. VTB filed its statement of defense with the court on September 21, 2017. VTB maintains that its termination of the agreement was valid and that BigBen’s claims against it are without merit. VTB's statement of defense was submitted to the plaintiff. BigBen submitted additional written pleadings on January 4, 2018 and on April 19, 2018. VTB submitted further written pleadings on March 20, 2018 and March 29, 2018. VTB argues inter alia that the courts of Berlin do not have jurisdiction. On April 23, 2018, an oral hearing was held at the Regional Court of Berlin that focused exclusively on the question of jurisdiction. Following such oral hearing, the court rendered an interim judgment by which it accepted jurisdiction. The parties are currently awaiting the court's decision on the further process in the litigation.

The Company will continue to vigorously defend itself in the foregoing matters. However, litigation and investigations are inherently uncertain. Accordingly, the Company cannot predict the outcome of these matters. The Company has not recorded any accrual at June 30, 2018 for contingent losses associated with these matters based on its belief that losses, while possible, are not probable. Further, any possible range of loss cannot be reasonably estimated at this time. The unfavorable resolution of these matters could have a material adverse effect on the Company’s business, results of operations, financial condition or cash flows. The Company is engaged in other legal actions not described above arising in the ordinary course of its business and, while there can be no assurance, believes that the ultimate outcome of these other legal actions will not have a material adverse effect on its business, results of operations, financial condition or cash flows.

Warranties

We warrant our products against certain manufacturing and other defects. These product warranties are provided for specific periods of time depending on the nature of the product. Warranties are generally fulfilled by replacing defective products with new products. The following table provides the changes in our product warranties, which are included in accrued liabilities:



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
	(in thousands)
Warranty, beginning of period	$	534		$	589		$	472		$	639
Warranty costs accrued	210			54			444			114
Settlements of warranty claims	(162		)	(113		)	(334		)	(223		)
Warranty, end of period	$	582		$	530		$	582		$	530

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

Reverse Split

Restatement

Impact of the Restatement

Condensed Consolidated Statements of Operations (unaudited)



	Three Months Ended								Six Months Ended
	As Reported		Adjustment			As Restated			As Reported		Adjustment			As Restated
	(in thousands, except per-share data)
Operating income (loss)	$	8,269	$	—		$	8,269		$	12,055	$	—		$	12,055
Interest expense	1,258		—			1,258			3,263		—			3,263
Other non-operating expense (income), net	410		8,619			9,029			165		8,619			8,784
Income (loss) before income tax	6,601		(8,619		)	(2,018		)	8,627		(8,619		)	8
Income tax expense	300		—			300			364		—			364
Net income (loss)	$	6,301	$	(8,619	)	$	(2,318	)	$	8,263	$	(8,619	)	$	(356	)

Net income (loss) per share:
Basic	$	0.47	$	(0.64	)	$	(0.17	)	$	0.64	$	(0.67	)	$	(0.03	)
Diluted	$	0.40	$	(0.57	)	$	(0.17	)	$	0.56	$	(0.59	)	$	(0.03	)
Weighted average number of shares:
Basic	13,401		—			13,401			12,877		—			12,877
Diluted	15,644		(2,243		)	13,401			14,816		(1,939		)	12,877

The following table presents the condensed consolidated balance sheet as previously reported, restatement adjustments and the condensed consolidated balance sheet as restated at June 30, 2018:

Condensed Consolidated Balance Sheet (unaudited)



	June 30, 2018
	As Reported			Adjustment			As Restated
	(in thousands)
Total Current Liabilities	$	44,412		$	—		$	44,412
Term loans, long-term portion	11,391			—			11,391
Series B redeemable preferred stock	—			—			—
Deferred income taxes	—			—			—
Subordinated notes - related party	19,092			—			19,092
Financial instrument obligation	—			11,176			11,176
Other liabilities	2,311			—			2,311
Total Liabilities	77,206			11,176			88,382
Stockholders' Equity (Deficit)
Common stock	14			—			14
Additional paid-in capital	167,668			(2,557		)	165,111
Accumulated deficit	(162,390		)	(8,619		)	(171,009		)
Accumulated other comprehensive loss	(318		)	—			(318		)
Total Stockholders' Equity (Deficit)	4,974			(11,176		)	(6,202		)
Total Liabilities and Stockholders' Equity (Deficit)	$	82,180		$	—		$	82,180

Condensed Consolidated Statements of Cash Flows (unaudited)



	Six Months Ended
	As Reported		Adjustment			As Restated
	(in thousands)
Net income (loss)	$	8,263	$	(8,619	)	$	(356	)

Unrealized loss on financial instrument obligation	$	—	$	8,619		$	8,619

Net cash provided by operating activities	$	46,341	$	—		$	46,341

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In 2018, the Company adopted ASU 2014-09 using the modified retrospective approach, and recorded a net decrease to beginning retained earnings of $0.6 million reflecting the cumulative impact of adoption. The impact to beginning retained earnings was due to certain price concessions and right of return arrangements recorded as part of the transaction price determination. Results for reporting periods beginning January 1, 2018 are presented under Topic 606, Revenue from Contracts with Customers while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 605, Revenue Recognition.

In February 2016, the FASB issued ASU No. 2016-02, Leases, that introduces the recognition of a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term, and a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis for all leases (with the exception of short-term leases). The guidance will be effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal years with early adoption permitted. The Company has not yet selected a transition method or determined the effect on its consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, to provide clarity and reduce diversity in practice and cost and complexity when applying the guidance to a change to the terms or conditions of a share-based payment award. This update provides that an entity will not have to account for the effects of a modification if: (i) the fair value of the modified award is the same immediately before and after the modification; (ii) the vesting conditions of the modified award are the same immediately before and after the modification; and (iii) the classification of the modified award as either an equity instrument or liability instrument is the same immediately before and after the modification. The Company adopted these amendments in the first quarter of 2018, which did not have a material impact upon our financial condition or results of operations.

In June 2018, the FASB issued ASU 2018-07, Improvements to Non-employee Share-Based Payment Accounting that expands the scope of Topic 718, Compensation—Stock Compensation, to include share-based payments issued to non-employees for goods or services and substantially aligned the accounting for share-based payments to non-employees and employees. The amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company is evaluating the effect that this guidance will have on the financial statements and related disclosures.

Background and Basis of Presentation (Tables)

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Impact of Restatement

Condensed Consolidated Statements of Operations (unaudited)



	Three Months Ended								Six Months Ended
	As Reported		Adjustment			As Restated			As Reported		Adjustment			As Restated
	(in thousands, except per-share data)
Operating income (loss)	$	8,269	$	—		$	8,269		$	12,055	$	—		$	12,055
Interest expense	1,258		—			1,258			3,263		—			3,263
Other non-operating expense (income), net	410		8,619			9,029			165		8,619			8,784
Income (loss) before income tax	6,601		(8,619		)	(2,018		)	8,627		(8,619		)	8
Income tax expense	300		—			300			364		—			364
Net income (loss)	$	6,301	$	(8,619	)	$	(2,318	)	$	8,263	$	(8,619	)	$	(356	)

Net income (loss) per share:
Basic	$	0.47	$	(0.64	)	$	(0.17	)	$	0.64	$	(0.67	)	$	(0.03	)
Diluted	$	0.40	$	(0.57	)	$	(0.17	)	$	0.56	$	(0.59	)	$	(0.03	)
Weighted average number of shares:
Basic	13,401		—			13,401			12,877		—			12,877
Diluted	15,644		(2,243		)	13,401			14,816		(1,939		)	12,877

The following table presents the condensed consolidated balance sheet as previously reported, restatement adjustments and the condensed consolidated balance sheet as restated at June 30, 2018:

Condensed Consolidated Balance Sheet (unaudited)



	June 30, 2018
	As Reported			Adjustment			As Restated
	(in thousands)
Total Current Liabilities	$	44,412		$	—		$	44,412
Term loans, long-term portion	11,391			—			11,391
Series B redeemable preferred stock	—			—			—
Deferred income taxes	—			—			—
Subordinated notes - related party	19,092			—			19,092
Financial instrument obligation	—			11,176			11,176
Other liabilities	2,311			—			2,311
Total Liabilities	77,206			11,176			88,382
Stockholders' Equity (Deficit)
Common stock	14			—			14
Additional paid-in capital	167,668			(2,557		)	165,111
Accumulated deficit	(162,390		)	(8,619		)	(171,009		)
Accumulated other comprehensive loss	(318		)	—			(318		)
Total Stockholders' Equity (Deficit)	4,974			(11,176		)	(6,202		)
Total Liabilities and Stockholders' Equity (Deficit)	$	82,180		$	—		$	82,180

Condensed Consolidated Statements of Cash Flows (unaudited)



	Six Months Ended
	As Reported		Adjustment			As Restated
	(in thousands)
Net income (loss)	$	8,263	$	(8,619	)	$	(356	)

Unrealized loss on financial instrument obligation	$	—	$	8,619		$	8,619

Net cash provided by operating activities	$	46,341	$	—		$	46,341

Fair Value Measurement Fair Value Measurement (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Fair Value, by Balance Sheet Grouping [Table Text Block]

The following is a summary of the carrying amounts and estimated fair values of our financial instruments at June 30, 2018 and December 31, 2017:



	June 30, 2018				December 31, 2017
	Reported		Fair Value		Reported		Fair Value
	(in thousands)
Financial Assets and Liabilities:
Cash and cash equivalents	$	9,108	$	9,108	$	5,247	$	5,247
Revolving credit facility	—		—		38,467		38,467
Term loans	12,500		13,020		11,721		11,329
Subordinated notes	19,903		22,394		21,911		22,442
Financial instrument obligation	11,176		11,176		—		—

Allowance for Sales Return (Tables)

6 Months Ended

Jun. 30, 2018

Allowance for Sales Returns [Abstract]

Schedule of allowances for sales returns

The following table provides the changes in our sales return reserve, which is classified as a reduction of accounts receivable:



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
	(in thousands)
Balance, beginning of period	$	4,260		$	3,033		$	5,533		$	4,591
Reserve accrual	5,184			951			8,441			2,082
Recoveries and deductions, net	(4,400		)	(1,831		)	(8,930		)	(4,520		)
Balance, end of period	$	5,044		$	2,153		$	5,044		$	2,153

Composition of Certain Financial Statement Items (Tables)

6 Months Ended

Jun. 30, 2018

Condensed Consolidated Balance Sheet Components [Abstract]

Schedule of inventory

Inventories consist of the following:



	June 30, 2018		December 31, 2017
	(in thousands)
Raw materials	$	1,581	$	837
Finished goods	26,462		26,681
Total inventories	$	28,043	$	27,518

Schedule of property and equipment

Property and equipment, net, consists of the following:



	June 30, 2018			December 31, 2017
	(in thousands)
Machinery and equipment	$	1,506		$	1,396
Software and software development	300			383
Furniture and fixtures	530			525
Tooling	1,997			1,968
Leasehold improvements	1,327			1,318
Demonstration units and convention booths	9,308			11,719
Total property and equipment, gross	14,968			17,309
Less: accumulated depreciation and amortization	(12,129		)	(12,632		)
Total property and equipment, net	$	2,839		$	4,677

Other Current Liabilities [Table Text Block]

Other current liabilities consist of the following:



	June 30, 2018		December 31, 2017
	(in thousands)
Accrued vendor expenses	$	242	$	652
Accrued royalties	4,361		2,848
Accrued employee expenses	2,302		2,510
Accrued freight	2,242		130
Accrued expenses	4,914		5,311
Total other current liabilities	$	14,061	$	11,451

Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2018

Finite-Lived Intangible Assets [Line Items]

Schedule of Intangible Assets

Acquired identifiable intangible assets, and related accumulated amortization, as of June 30, 2018 and December 31, 2017 consist of:



	June 30, 2018
	Gross Carrying Value			Accumulated Amortization			Net Book Value
	(in thousands)
Customer relationships	$	5,796		$	4,356		$	1,440
Foreign currency	(997		)	(753		)	(244		)
Total Intangible Assets	$	4,799		$	3,603		$	1,196


	December 31, 2017
	Gross Carrying Value			Accumulated Amortization			Net Book Value
	(in thousands)
Customer relationships	$	5,796		$	4,173		$	1,623
Foreign currency	(899		)	(680		)	(219		)
Total Intangible Assets	$	4,897		$	3,493		$	1,404

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

As of June 30, 2018, estimated annual amortization expense related to definite lived intangible assets in future periods is as follows:



	(in thousands)
2018	$	183
2019	307
2020	258
2021	217
2022	182
Thereafter	293
Total	$	1,440

Credit Facilities and Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Schedule of Long-Term Debt Instruments



	June 30, 2018			December 31, 2017
	(in thousands)
Revolving credit facility, maturing March 2023	$	—		$	38,467

Term Loan Due 2018	—			1,923
Term Loan Due 2019	—			9,798
Term Loan Due 2023	12,500			—
Less: unamortized deferred financing fees	734			759
Total Term Loans	11,766			10,962

Subordinated notes - related party	19,903			21,911
Less: unamortized debt discount	811			1,075
Total Subordinated notes	19,092			20,836
Total outstanding debt	30,858			70,265
Less: current portion of revolving credit facility	—			(38,467		)
Less: current portion of term loans	(375		)	(4,173		)
Total noncurrent portion of long-term debt	$	30,483		$	27,625

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21475-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=64930739&loc=d3e28878-108400

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21538-112644

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28541-108399

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28551-108399

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21521-112644

+ Details

Income Taxes (Tables)

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Schedule of income tax benefit

The following table presents our income tax expense (benefit) and effective income tax rate:



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
	(in thousands)
Income tax expense	$	300		$	475		$	364		$	520
Effective income tax rate	(14.9		)%	(7.2		)%	4,550.0		%	(3.2		)%

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2018

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Stock-based compensation cost

Total estimated stock-based compensation expense for employees and non-employees, related to all of the Company's stock-based awards, was comprised as follows:



	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2018		2017			2018		2017
	(in thousands)
Cost of revenue	$	313	$	(1	)	$	331	$	(86	)
Selling and marketing	30		20			55		56
Research and development	33		63			63		120
General and administrative	223		349			373		727
Total stock-based compensation	$	599	$	431		$	822	$	817

Stock activity and total number of shares available for grant

The following table presents the stock activity and the total number of shares available for grant as of June 30, 2018:



	(in thousands)
Balance at December 31, 2017	387
Plan Amendment	1,500
Options granted	(445	)
Restricted Stock granted	(198	)
Forfeited/Expired shares added back	142
Balance at June 30, 2018	1,386

Stock option activity



	Options Outstanding
	Number of Shares Underlying Outstanding Options		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
					(In years)
Outstanding at December 31, 2017	1,740,103		$	6.20	6.64	$	6
Granted	445,195		3.55
Exercised	(109,681	)	6.69
Forfeited	(142,297	)	7.83
Outstanding at June 30, 2018	1,933,320		$	5.44	7.40	$	28,762,929
Vested and expected to vest at June 30, 2018	1,875,294		$	5.56	7.34	$	27,788,808
Exercisable at June 30, 2018	949,598		$	7.42	5.69	$	12,348,636

Schedule of weighted-average assumptions

The following are the assumptions for options granted during the six months ended June 30, 2018.



Expected term (in years)	6.1
Risk-free interest rate	2.3% - 3.0%
Expected volatility	38.2% - 39.5%
Dividend rate	0%

Restricted stock awards

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Stock option activity



	Shares		Weighted Average Grant Date Fair Value Per Share
Nonvested restricted stock at December 31, 2017	41,867		3.84
Granted	198,247		17.60
Vested	(27,978	)	4.02
Nonvested restricted stock at June 30, 2018	212,136		16.68

Net Income (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Schedule of computation of basic and diluted net (loss) income per share of common stock

The following table sets forth the computation of basic and diluted net income (loss) per share of common stock attributable to common stockholders:



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
	(in thousands, except per-share data)
Net income (loss)	$	(2,318	)	$	(7,061	)	$	(356	)	$	(16,987	)

Weighted average common shares outstanding — Basic	13,401			12,337			12,877			12,325
Plus incremental shares from assumed conversions:
Dilutive effect of restricted stock	—			—			—			—
Dilutive effect of stock options	—			—			—			—
Dilutive effect of warrants	—			—			—			—
Weighted average common shares outstanding — Diluted	13,401			12,337			12,877			12,325
Net income (loss) per share:
Basic	$	(0.17	)	$	(0.57	)	$	(0.03	)	$	(1.38	)
Diluted	$	(0.17	)	$	(0.57	)	$	(0.03	)	$	(1.38	)

Schedule of antidilutive securities excluded from computation of diluted net income per share of common stock



	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2018	2017	2018	2017
	(in thousands)
Stock options	1,945	1,602	1,833	1,591
Warrants	1,314	765	965	766
Unvested restricted stock awards	62	34	52	30
Total	3,321	2,401	2,850	2,387

Segment and Geographical Information (Tables) - USD ($)
$ in Thousands

3 Months Ended

6 Months Ended

Jun. 30, 2018

Jun. 30, 2017

Jun. 30, 2018

Jun. 30, 2017

Segment Reporting Information [Line Items]

Other Nonoperating Income (Expense)

$ (9,029)

$ 214

$ (8,784)

$ 265

Operating Income (Loss)

8,269

(4,965)

12,055

(13,057)

Interest expense

1,258

1,835

3,263

3,675

Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest

$ (2,018)

$ (6,586)

$ 8

$ (16,467)

Reconciliation of Assets from Segment to Consolidated [Table Text Block]



	June 30, 2018			December 31, 2017
Total Assets	(in thousands)
Headset	$	82,194		$	94,114
HyperSound⁽¹⁾	36,402			26,787
Eliminations	(36,416		)	(26,650		)
Total	$	82,180		$	94,251

Schedule of Segment Reporting Information, by Segment [Table Text Block]

The following tables show our net revenues, operating income and total assets by our reporting segments:



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Net Revenues	(in thousands)
Headset	$	60,805		$	19,084		$	101,673		$	33,344
HyperSound	—			28			18			120
Total	$	60,805		$	19,112		$	101,691		$	33,464

Operating Income (Loss)
Headset	$	8,369		$	(4,542	)	$	12,166		$	(11,598	)
HyperSound	(100		)	(423		)	(111		)	(1,459		)
Total	8,269			(4,965		)	12,055			(13,057		)
Interest Expense	1,258			1,835			3,263			3,675
Other non-operating expense (income), net	9,029			(214		)	8,784			(265		)
Income (loss) before income tax	$	(2,018	)	$	(6,586	)	$	8		$	(16,467	)

Schedule of total revenues based on where customers are physically located

The following table represents total net revenues based on where customers are physically located:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
	(in thousands)
North America	$	45,967	$	12,996	$	78,951	$	24,051
United Kingdom	7,628		2,124		11,657		3,978
Europe	5,858		2,769		9,105		3,937
Other	1,352		1,223		1,978		1,498
Total net revenues	$	60,805	$	19,112	$	101,691	$	33,464

Commitment and Contingencies (Tables)

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of Product Warranty Liability

The following table provides the changes in our product warranties, which are included in accrued liabilities:



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
	(in thousands)
Warranty, beginning of period	$	534		$	589		$	472		$	639
Warranty costs accrued	210			54			444			114
Settlements of warranty claims	(162		)	(113		)	(334		)	(223		)
Warranty, end of period	$	582		$	530		$	582		$	530

Background and Basis of Presentation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Apr. 23, 2018	Dec. 31, 2017
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Financial instrument obligation	$ 11,176		$ 11,176		$ 2,600	$ 0
Net income (loss)	$ (2,318)	$ (7,061)	$ (356)	$ (16,987)
Diluted earnings (loss) per share (in dollars per share)	$ (0.17)	$ (0.57)	$ (0.03)	$ (1.38)
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Financial instrument obligation	$ 0		$ 0
Net income (loss)	$ 6,301		$ 8,263
Diluted earnings (loss) per share (in dollars per share)	$ 0.40		$ 0.56
Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Financial instrument obligation	$ 11,176		$ 11,176
Net income (loss)	$ (8,619)		$ (8,619)
Diluted earnings (loss) per share (in dollars per share)	$ (0.57)		$ (0.59)

Background and Basis of Presentation - Impact on Income Statement (Details) - USD ($) $ / shares in Units, shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Operating income (loss)	$ 8,269,000	$ (4,965,000)	$ 12,055,000	$ (13,057,000)
Interest expense	1,258,000	1,835,000	3,263,000	3,675,000
Other non-operating expense (income), net	9,029,000	(214,000)	8,784,000	(265,000)
Income (loss) before income tax	(2,018,000)	(6,586,000)	8,000	(16,467,000)
Income tax expense	300,000	475,000	364,000	520,000
Net income (loss)	$ (2,318,000)	$ (7,061,000)	$ (356,000)	$ (16,987,000)
Net income (loss) per share:
Basic (in dollars per share)	$ (0.17)	$ (0.57)	$ (0.03)	$ (1.38)
Diluted (in dollars per share)	$ (0.17)	$ (0.57)	$ (0.03)	$ (1.38)
Weighted average number of shares:
Basic (in shares)	13,401	12,337	12,877	12,325
Diluted (in shares)	13,401	12,337	12,877	12,325
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Operating income (loss)	$ 8,269,000		$ 12,055,000
Interest expense	1,258,000		3,263,000
Other non-operating expense (income), net	410,000		165,000
Income (loss) before income tax	6,601,000		8,627,000
Income tax expense	300,000		364,000
Net income (loss)	$ 6,301,000		$ 8,263,000
Net income (loss) per share:
Basic (in dollars per share)	$ 0.47		$ 0.64
Diluted (in dollars per share)	$ 0.40		$ 0.56
Weighted average number of shares:
Basic (in shares)	13,401		12,877
Diluted (in shares)	15,644		14,816
Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Operating income (loss)	$ 0		$ 0
Interest expense	0		0
Other non-operating expense (income), net	8,619,000		8,619,000
Income (loss) before income tax	(8,619,000)		(8,619,000)
Income tax expense	0		0
Net income (loss)	$ (8,619,000)		$ (8,619,000)
Net income (loss) per share:
Basic (in dollars per share)	$ (0.64)		$ (0.67)
Diluted (in dollars per share)	$ (0.57)		$ (0.59)
Weighted average number of shares:
Basic (in shares)	0		0
Diluted (in shares)	(2,243)		(1,939)

Background and Basis of Presentation - Impact on Balance Sheet (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Apr. 23, 2018	Dec. 31, 2017
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total Current Liabilities	$ 44,412		$ 67,550
Term loans, long-term portion	11,391		6,789
Series B redeemable preferred stock	0	$ 19,400	18,921
Deferred income taxes	0
Subordinated notes - related party	19,092		20,836
Financial instrument obligation	11,176	$ 2,600	0
Other liabilities	2,311		2,312
Total Liabilities	88,382		116,408
Stockholders' Equity (Deficit)
Common stock	14		12
Additional paid-in capital	165,111		148,082
Accumulated deficit	(171,009)		(170,048)
Accumulated other comprehensive loss	(318)		(203)
Total Stockholders' Equity (Deficit)	(6,202)		(22,157)
Total Liabilities and Stockholders' Equity (Deficit)	82,180		$ 94,251
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total Current Liabilities	44,412
Term loans, long-term portion	11,391
Series B redeemable preferred stock	0
Deferred income taxes	0
Subordinated notes - related party	19,092
Financial instrument obligation	0
Other liabilities	2,311
Total Liabilities	77,206
Stockholders' Equity (Deficit)
Common stock	14
Additional paid-in capital	167,668
Accumulated deficit	(162,390)
Accumulated other comprehensive loss	(318)
Total Stockholders' Equity (Deficit)	4,974
Total Liabilities and Stockholders' Equity (Deficit)	82,180
Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total Current Liabilities	0
Term loans, long-term portion	0
Series B redeemable preferred stock	0
Deferred income taxes	0
Subordinated notes - related party	0
Financial instrument obligation	11,176
Other liabilities	0
Total Liabilities	11,176
Stockholders' Equity (Deficit)
Common stock	0
Additional paid-in capital	(2,557)
Accumulated deficit	(8,619)
Accumulated other comprehensive loss	0
Total Stockholders' Equity (Deficit)	(11,176)
Total Liabilities and Stockholders' Equity (Deficit)	$ 0

Background and Basis of Presentation - Impact on Statement of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)	$ (2,318)	$ (7,061)	$ (356)	$ (16,987)
Unrealized loss on financial instrument obligation			8,619	0
Net cash provided by operating activities			46,341	$ 26,647
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)	6,301		8,263
Unrealized loss on financial instrument obligation			0
Net cash provided by operating activities			46,341
Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)	$ (8,619)		(8,619)
Unrealized loss on financial instrument obligation			8,619
Net cash provided by operating activities			$ 0

Fair Value Measurement (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Apr. 23, 2018	Dec. 31, 2017
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial instrument obligation	$ 11,176	$ 2,600	$ 0
Reported Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and Cash Equivalents, Fair Value Disclosure	9,108		5,247
Financial instrument obligation	11,176		0
Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and Cash Equivalents, Fair Value Disclosure	9,108		5,247
Financial instrument obligation	11,176		0
Loans Payable [Member] \| Reported Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	12,500		11,721
Loans Payable [Member] \| Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	13,020		11,329
Subordinated Debt [Member] \| Reported Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	19,903		21,911
Subordinated Debt [Member] \| Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	22,394		22,442
Revolving credit facility, maturing March 2023 \| Line of Credit [Member] \| Reported Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	0		38,467
Revolving credit facility, maturing March 2023 \| Line of Credit [Member] \| Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	$ 0		$ 38,467

Allowance for Sales Return (Details) - Allowance for Sales Returns - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Movement in Valuation Allowances and Reserves [Roll Forward]
Sales returns reserve, beginning balance	$ 4,260	$ 3,033	$ 5,533	$ 4,591
Reserve accrual	5,184	951	8,441	2,082
Valuation Allowances and Reserves, Deductions	(4,400)	(1,831)	(8,930)	(4,520)
Sales returns reserve, ending balance	$ 5,044	$ 2,153	$ 5,044	$ 2,153

Composition of Certain Financial Statement Items Inventory (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Condensed Consolidated Balance Sheet Components [Abstract]
Raw materials	$ 1,581	$ 837
Finished goods	26,462	26,681
Total inventories	$ 28,043	$ 27,518

Composition of Certain Financial Statement Items Property and equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 14,968	$ 17,309
Less: accumulated depreciation and amortization	(12,129)	(12,632)
Total property and equipment, net	2,839	4,677
Machinery and equipment
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	1,506	1,396
Software and software development
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	300	383
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	530	525
Tooling
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	1,997	1,968
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	1,327	1,318
Demonstration units and convention booths
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 9,308	$ 11,719

Composition of Certain Financial Statement Items Other Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Condensed Consolidated Balance Sheet Components [Abstract]
Accrued Vendor Expenses, Current	$ 242	$ 652
Accrued Royalties, Current	4,361	2,848
Employee-related Liabilities, Current	2,302	2,510
Accrued Freight, Current	2,242	130
Other Accrued Liabilities, Current	4,914	5,311
Other current liabilities	$ 14,061	$ 11,451

Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Schedule of Goodwill, Finite and Indefinite-lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 100	$ 100	$ 156	$ 170
Finite-lived Intangible Assets [Roll Forward]
Total intangible assets, gross carrying value	4,799		4,799		$ 4,897
Finite-lived intangible assets, accumulated amortization	3,603		3,603		3,493
Total intangible assets, net book value	1,196		1,196		1,404
Total	1,440		1,440
Foreign Currency [Member]
Finite-lived Intangible Assets [Roll Forward]
Finite-lived intangible assets, gross carrying value	(997)		(997)		(899)
Finite-lived intangible assets, accumulated amortization	(753)		(753)		(680)
Total	(244)		(244)		(219)
Customer relationships
Finite-lived Intangible Assets [Roll Forward]
Finite-lived intangible assets, gross carrying value	5,796		5,796		5,796
Finite-lived intangible assets, accumulated amortization	4,356		4,356		4,173
Total	$ 1,440		$ 1,440		$ 1,623

Goodwill and Other Intangible Assets - Estimated Future Amortization Expense (Details) $ in Thousands	Jun. 30, 2018 USD ($)
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
2014	$ 183
2015	307
2016	258
2017	217
2018	182
Thereafter	293
Total	$ 1,440

Goodwill and Other Intangible Assets - Additional Disclosures (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 100	$ 100	$ 156	$ 170
Acquisition of Lygo International Limited \| Customer relationships
Finite-Lived Intangible Assets [Line Items]
Useful life			13 years

Credit Facilities and Long-Term Debt (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Mar. 05, 2018	Dec. 31, 2017	Jul. 22, 2015
Debt Instrument [Line Items]
Total outstanding debt	$ 30,858,000		$ 30,858,000			$ 70,265,000
Total noncurrent portion of long-term debt	30,483,000		30,483,000			27,625,000
Interest Expense, Debt	1,000,000	$ 1,300,000	2,500,000	$ 2,700,000
Interest Expense, Related Party	700,000	600,000	1,300,000	1,200,000
Amortization of debt financing costs	248,000	$ 393,000	642,000	$ 781,000
Revolving credit facilities \| Revolving credit facility, maturing March 2023
Debt Instrument [Line Items]
Total outstanding debt	0		0			38,467,000
Current maturities of outstanding debt	0		0			(38,467,000)
Term Loan Due 2018 [Member]
Debt Instrument [Line Items]
Total outstanding debt	0		0			1,923,000
Loans Payable
Debt Instrument [Line Items]
Total outstanding debt	11,766,000		11,766,000			10,962,000
Current maturities of outstanding debt	(375,000)		(375,000)			(4,173,000)
Term Loan Due 2019
Debt Instrument [Line Items]
Total outstanding debt	0		0			9,798,000	$ 15,000,000
Unamortized Debt Issuance Expense						759,000
Term Loan Due 2023 [Member]
Debt Instrument [Line Items]
Total outstanding debt	12,500,000		12,500,000		$ 12,500,000.0	0
Unamortized Debt Issuance Expense	734,000		734,000
Subordinated Debt
Debt Instrument [Line Items]
Total outstanding debt	19,903,000		19,903,000			21,911,000
Debt Instrument, Unamortized Discount	811,000		811,000			1,075,000
Notes Payable, Other Payables [Member]
Debt Instrument [Line Items]
Total outstanding debt	$ 19,092,000		$ 19,092,000			$ 20,836,000

Credit Facilities and Long-Term Debt - Credit Facility (Details)		3 Months Ended		6 Months Ended
	Mar. 05, 2018 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Mar. 16, 2015	Dec. 29, 2014 USD ($)
Line of Credit Facility [Line Items]
Interest Expense, Debt		$ 1,000,000	$ 1,300,000	$ 2,500,000	$ 2,700,000
Expiration date				Mar. 05, 2023
Repayments of Notes Payable	$ 1,300,000			$ 2,485,000	427,000
Interest Expense, Related Party		700,000	$ 600,000	1,300,000	$ 1,200,000
Revolving credit facility, maturing March 2023
Line of Credit Facility [Line Items]
Maximum borrowing capacity		60,000,000		60,000,000
Remaining borrowing capacity		30,500,000		$ 30,500,000
Debt Instrument, Covenant, Current Fixed Charge Ratio Required, Minimum	1.10
Debt Instrument, Covenant, Leverage Ratio, Minimum						3.00
Revolving credit facility, maturing March 2023 \| Minimum
Line of Credit Facility [Line Items]
Unused commitment fee, percent				0.25%
Revolving credit facility, maturing March 2023 \| Maximum
Line of Credit Facility [Line Items]
Unused commitment fee, percent				0.50%
Revolving credit facility, maturing March 2023 \| Base rate
Line of Credit Facility [Line Items]
Basis spread on variable rate				5.50%
Revolving credit facility, maturing March 2023 \| Base rate \| Minimum
Line of Credit Facility [Line Items]
Basis spread on variable rate				0.50%
Revolving credit facility, maturing March 2023 \| Base rate \| Maximum
Line of Credit Facility [Line Items]
Basis spread on variable rate				1.25%
Revolving credit facility, maturing March 2023 \| London Interbank Offered Rate (LIBOR) [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate				3.74%
Revolving credit facility, maturing March 2023 \| London Interbank Offered Rate (LIBOR) [Member] \| Minimum
Line of Credit Facility [Line Items]
Basis spread on variable rate				1.50%
Revolving credit facility, maturing March 2023 \| London Interbank Offered Rate (LIBOR) [Member] \| Maximum
Line of Credit Facility [Line Items]
Basis spread on variable rate				2.25%
Revolving credit facility, maturing March 2023 \| UK Borrower
Line of Credit Facility [Line Items]
Maximum borrowing capacity		$ 12,000,000		$ 12,000,000
Loans Payable
Line of Credit Facility [Line Items]
Debt Instrument, Amended Credit Agreement, Principal Amount Permitted to be Repaid							$ 7,700,000
Loans Payable \| London Interbank Offered Rate (LIBOR) [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate				5.00%

Credit Facilities and Long-Term Debt - Subordinated Note (Details) - USD ($) $ / shares in Units, shares in Millions			3 Months Ended	6 Months Ended		12 Months Ended
	Mar. 05, 2018	Jul. 22, 2015	Sep. 30, 2018	Jun. 30, 2018	Jun. 30, 2017	Apr. 21, 2016	Dec. 31, 2017	Nov. 30, 2015	Nov. 16, 2015	May 13, 2015	Apr. 23, 2015
Line of Credit Facility [Line Items]
Repayments of Subordinated Debt				$ 3,265,000	$ 0
Risk-free interest rate, minimum				2.30%
Total outstanding debt				$ 30,858,000			$ 70,265,000
Subordinated Debt
Line of Credit Facility [Line Items]
Total outstanding debt				19,903,000			21,911,000
Term Loan Due 2023 [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Maturity Date	Mar. 05, 2023
Total outstanding debt	$ 12,500,000.0			$ 12,500,000			$ 0
Chief Executive Officer, Director, and Shareholder \| VTB Holdings, Inc \| Issuance Of Debt, April Notes [Member]
Line of Credit Facility [Line Items]
Related Party Transaction, Rate, Initial Period						10.00%
Related Party Transaction, Rate, Subsequent Period						20.00%
Chief Executive Officer, Director, and Shareholder \| VTB Holdings, Inc \| Issuance Of Debt, November Notes [Member]
Line of Credit Facility [Line Items]
Related Party Transaction, Rate, Subsequent Period				15.00%
Chief Executive Officer, Director, and Shareholder \| VTB Holdings, Inc \| Issuance Of Debt, Amended Notes [Domain]
Line of Credit Facility [Line Items]
Related Party Transaction, Rate, Initial Period				9.10%
Related Party Transaction, Rate, Subsequent Period				10.50%
Chief Executive Officer, Director, and Shareholder \| Subordinated Debt \| VTB Holdings, Inc
Line of Credit Facility [Line Items]
Debt Instrument, Maturity Date	Jun. 05, 2023
Chief Executive Officer, Director, and Shareholder \| Subordinated Debt \| VTB Holdings, Inc \| Issuance Of Debt, June Notes [Member]
Line of Credit Facility [Line Items]
Total outstanding debt		$ 9,000,000
Chief Executive Officer, Director, and Shareholder \| Subordinated Debt \| VTB Holdings, Inc \| Issuance Of Debt, April Notes [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Face Amount											$ 5,000,000
Chief Executive Officer, Director, and Shareholder \| Subordinated Debt \| VTB Holdings, Inc \| Issuance Of Debt, May Notes [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Face Amount										$ 3,800,000.0
Chief Executive Officer, Director, and Shareholder \| Subordinated Debt \| VTB Holdings, Inc \| Issuance Of Debt, November Notes [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Face Amount	$ 3,500,000.0								$ 2,500,000.0
Debt Instrument, Interest Rate, Stated Percentage									15.00%
Debt Instrument, Maturity Date		Sep. 29, 2019
Chief Executive Officer, Director, and Shareholder \| Subordinated Debt \| VTB Holdings, Inc \| Issuance Of Debt, Amended Notes [Domain]
Line of Credit Facility [Line Items]
Debt Instrument, Face Amount	$ 18,900,000.0
Debt Instrument, Maturity Date		Sep. 29, 2019
London Interbank Offered Rate (LIBOR) [Member] \| Term Loan Due 2023 [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate	6.75%
London Interbank Offered Rate (LIBOR) [Member] \| Chief Executive Officer, Director, and Shareholder \| Subordinated Debt \| VTB Holdings, Inc
Line of Credit Facility [Line Items]
Basis spread on variable rate		10.50%
VTB Holdings, Inc
Line of Credit Facility [Line Items]
Class of Warrant or Right, Outstanding		0.4						0.3
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 10.16						$ 8.00
Subsequent Event [Member] \| Term Loan Due 2023 [Member]
Line of Credit Facility [Line Items]
Repayments of Subordinated Debt			$ 5,000,000

Credit Facilities and Long-Term Debt - Deferred Financing Costs, Invoice Factoring and Subordinated Notes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Debt Instrument [Line Items]
Total outstanding debt	$ 30,858		$ 30,858		$ 70,265
Amortization of debt financing costs	248	$ 393	642	$ 781
Debt Issuance Costs, Gross	400		400
Subordinated Debt
Debt Instrument [Line Items]
Total outstanding debt	$ 19,903		$ 19,903		$ 21,911

Credit Facilities and Long-Term Debt - Term Loan Due 2019 (Details)			3 Months Ended	6 Months Ended
	Mar. 05, 2018 USD ($)	Jul. 22, 2015 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Line of Credit Facility [Line Items]
Total outstanding debt			$ 30,858,000	$ 30,858,000		$ 70,265,000
Repayments of Notes Payable	$ 1,300,000			2,485,000	$ 427,000
Term Loan Due 2019
Line of Credit Facility [Line Items]
Total outstanding debt		$ 15,000,000	0	0		9,798,000
Term Loan Due 2023 [Member]
Line of Credit Facility [Line Items]
Total outstanding debt	$ 12,500,000.0		12,500,000	$ 12,500,000		$ 0
Proceeds from Issuance of Debt			$ 3,300,000
Debt Instrument, Maturity Date	Mar. 05, 2023
London Interbank Offered Rate (LIBOR) [Member] \| Term Loan Due 2019
Line of Credit Facility [Line Items]
Basis spread on variable rate		10.25%
London Interbank Offered Rate (LIBOR) [Member] \| Term Loan Due 2023 [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate	6.75%
Additional Default Rate [Member] \| Term Loan Due 2019
Line of Credit Facility [Line Items]
Basis spread on variable rate		2.00%
Year Ended December 31, 2017 [Member] \| Term Loan Due 2023 [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Covenant, Consolidated Leverage Ratio	3.00

Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($)	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Operating Loss Carryforwards [Line Items]
Income tax expense	$ 300,000	$ 475,000	$ 364,000	$ 520,000
Effective tax rate	(14.90%)	(7.20%)	4550.00%	(3.20%)
Unrecognized Tax Benefits, Inclusive of Interest and Penalties	$ 2,300,000		$ 2,300,000
Interest and penalties	$ 800,000		$ 800,000

Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	1,933,320		1,933,320		1,740,103
Stock-based compensation	$ 599	$ 431	$ 822	$ 817
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period			142,297
Forfeited/Expired shares added back			142,000
Cost of revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	313	(1)	$ 331	(86)
Selling and marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	30	20	55	56
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	33	63	63	120
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 223	$ 349	$ 373	$ 727

Stock-Based Compensation - Shares Available for Grant (Details)	6 Months Ended
	Jun. 30, 2018 shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Shares Available for Grant [Roll Forward]
Balance, beginning of period (in shares)	387,000
Options granted	(445,195)
RSAs granted (in shares)	(198,000)
Forfeited/Expired shares added back	142,000
Balance, end of period (in shares)	1,386,000

Stock-Based Compensation - Stock Option Activity (Details) - USD ($)	3 Months Ended	6 Months Ended
	Mar. 31, 2015	Jun. 30, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding beginning of period (in shares)		1,740,103
Options granted		445,195
Exercised (in shares)		(109,681)
Forfeited (in shares)		(142,297)
Outstanding end of period (in shares)		1,933,320
Vested and expected to vest (in shares)		1,875,294
Exercisable (in shares)		949,598
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Outstanding beginning of period (in dollars per share)		$ 6.20
Granted (in dollars per share)		3.55
Exercised (in dollars per share)		6.69
Forfeited (in dollars per share)		7.83
Outstanding end of period (in dollars per share)		5.44
Vested and expected to vest (in dollars per share)		5.56
Exercisable (in dollars per share)		$ 7.42
Outstanding, weighted average remaining contractual term	6 years 7 months 20 days	7 years 4 months 25 days
Vested and expected to vest, weighted average remaining contractual term		7 years 4 months 4 days
Exercisable, weighted average remaining contractual term		5 years 8 months 10 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Outstanding, intrinsic value		$ 28,762,929	$ 6
Vested and expected to vest, intrinsic value		27,788,808
Exercisable, intrinsic value		$ 12,348,636
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		3 years

Stock-Based Compensation - Weighted-Average Assumptions (Details)	6 Months Ended
	Jun. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate, minimum	2.30%
Risk-free interest rate, maximum	3.00%
Expected volatility, minimum	38.20%
Expected volatility, maximum	39.50%
Expected dividend rate	0.00%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	6 years 6 months

Stock-Based Compensation - RSA Activity (Details)	6 Months Ended
Stock-Based Compensation - RSA Activity (Details)	Jun. 30, 2018 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Granted (in shares)	198,000
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding beginning of period (in shares)	41,867
Granted (in shares)	198,247
Vested (in shares)	(27,978)
Outstanding end of period (in shares)	212,136
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Outstanding beginning of period (in dollars per share) \| $ / shares	$ 3.84
Granted (in dollars per share) \| $ / shares	17.60
Outstanding end of period (in dollars per share) \| $ / shares	$ 16.68
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	3 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value \| $ / shares	$ 4.02

Stock-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions	6 Months Ended
	Jun. 30, 2018	Apr. 23, 2018	Dec. 31, 2017	Nov. 30, 2015	Jul. 22, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award expiration period	10 years
Forfeiture Period after Ending Employment	90 days
Options exercised, intrinsic value	$ 1,100
Weighted average grant date fair value of options granted (in dollars per share)	$ 1.49
Estimated grant date fair value of options vested	$ 400
Total unrecognized compensation cost related to stock options	1,400
Series B redeemable preferred stock	$ 0	$ 19,400	$ 18,921
VTB Holdings, Inc
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Class of Warrant or Right, Outstanding				0.3	0.4
Class of Warrant or Right, Exercise Price of Warrants or Rights				$ 8.00	$ 10.16
Non-Executives [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Forfeiture rate	10.00%
Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Forfeiture rate	0.00%

Net Income (Loss) Per Share - Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Basic and diluted:
Net income (loss)	$ (2,318)	$ (7,061)	$ (356)	$ (16,987)
Basic:
Weighted-average common shares outstanding, basic (in shares)	13,401	12,337	12,877	12,325
Incremental Common Shares Attributable to Dilutive Effect of Restricted Stock Awards	0	0	0	0
Dilutive effect of stock options	0	0	0	0
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants	0	0	0	0
Diluted:
Weighted-average common shares outstanding, diluted (in shares)	13,401	12,337	12,877	12,325
Net income (loss) per share:
Basic (in dollars per share)	$ (0.17)	$ (0.57)	$ (0.03)	$ (1.38)
Diluted (in dollars per share)	$ (0.17)	$ (0.57)	$ (0.03)	$ (1.38)

Net Income (Loss) Per Share - Antidilutive Securities (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	3,321	2,401	2,850	2,387
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	1,945	1,602	1,833	1,591
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	1,314	765	965	766
Restricted stock awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	62	34	52	30

Segment and Geographical Information - Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Revenues from External Customers and Long-Lived Assets [Line Items]
Assets	$ 82,180		$ 82,180		$ 94,251
Revenues	60,805	$ 19,112	101,691	$ 33,464
Operating Income (Loss)	8,269	(4,965)	12,055	(13,057)
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	45,967	12,996	78,951	24,051
Other
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	1,352	1,223	1,978	1,498
United Kingdom
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	7,628	2,124	11,657	3,978
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	5,858	2,769	9,105	3,937
Headset Business [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Assets	82,194		82,194		94,114
Revenues	60,805	19,084	101,673	33,344
Operating Income (Loss)	8,369	(4,542)	12,166	(11,598)
HyperSound Business [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Assets	36,402		36,402		26,787
Revenues	0	28	18	120
Operating Income (Loss)	(100)	$ (423)	(111)	$ (1,459)
Consolidation, Eliminations [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Assets	$ (36,416)		$ (36,416)		$ (26,650)

Commitments and Contingencies (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Aug. 05, 2013
Movement in Standard Product Warranty Accrual [Roll Forward]
Warranty accrual, beginning balance	$ 534	$ 589	$ 472	$ 639
Warranty costs accrued	210	54	444	114
Settlements of warranty claims	(162)	(113)	(334)	(223)
Warranty accrual, ending balance	$ 582	$ 530	$ 582	$ 530
Merger of VTB Holdings, Inc. and Parametric Sound Corporation \| VTB Holdings, Inc
Business Acquisition [Line Items]
Ownership percentage					80.00%
Merger of VTB Holdings, Inc. and Parametric Sound Corporation \| Parametric Sound Corporation
Business Acquisition [Line Items]
Ownership percentage					20.00%

Series B Preferred Stock Exchange (Details) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended
	Apr. 23, 2018	Feb. 18, 2015	Sep. 30, 2010	Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Common stock shares outstanding				13,794,251	12,349,449
Series B redeemable preferred stock	$ 19,400			$ 0	$ 18,921
Pending Litigation [Member] \| Bonanno vs. VTBH [Member]
Debt Instrument [Line Items]
Loss Contingency, Damages Sought, Value		$ 15,100
Payments for Legal Settlements	1,000
Contingent Legal Settlements	$ 1,250
Series B Redeemable Preferred Stock
Debt Instrument [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period			1,000,000
Mandatorily Redeemable Preferred Stock, Fair Value Disclosure			$ 12,400
Preferred Stock, Par or Stated Value Per Share				$ 12.425371
Common stock
Debt Instrument [Line Items]
Common stock shares outstanding	1,307,143
Warrant [Member]
Debt Instrument [Line Items]
Common stock shares outstanding	550,000