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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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Delaware
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20-1677033
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
o
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Accelerated filer
þ
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Non-accelerated filer
o
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Smaller Reporting Company
o
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(Do not check if a smaller reporting company)
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Page
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PART I. FINANCIAL INFORMATION
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Item 1.
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FINANCIAL STATEMENTS (unaudited)
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Consolidated Balance Sheets as of March 31, 2016 (Unaudited) and December 31, 2015
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Unaudited Consolidated Statements of Operations for the Three Months Ended March 31, 2016 and 2015
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Unaudited Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2016 and 2015
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Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015
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Notes to Unaudited Consolidated Financial Statements
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Item 2.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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Item 3.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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Item 4.
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CONTROLS AND PROCEDURES
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PART II. OTHER INFORMATION
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Item 1.
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LEGAL PROCEEDINGS
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Item 1A.
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RISK FACTORS
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Item 2.
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UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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Item 3.
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DEFAULTS UPON SENIOR SECURITIES
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Item 4.
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MINE SAFETY DISCLOSURES
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Item 5.
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OTHER INFORMATION
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Item 6.
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EXHIBITS
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SIGNATURES
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•
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our expectations regarding revenue, costs and expenses;
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•
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our plans regarding investing in our content delivery network, as well as other products and technologies;
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•
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our beliefs regarding the growth of, and competition within, the content delivery industry;
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•
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our beliefs regarding the growth of our business and how that impacts our liquidity and capital resources requirements;
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•
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the impact of certain new accounting standards and guidance;
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•
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our plans with respect to investments in marketable securities;
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•
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our expectations regarding litigation and other pending or potential disputes;
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•
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our estimations regarding taxes and belief regarding our tax reserves;
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•
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our beliefs regarding the use of Non-GAAP financial measures;
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•
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our approach to identifying, attracting and keeping new and existing customers, as well as our expectations regarding customer turnover;
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•
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the sufficiency of our sources of funding;
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•
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our belief regarding our interest rate risk;
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•
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our beliefs regarding inflation risks;
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•
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our beliefs regarding expense and productivity of and competition for our sales force; and
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•
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our beliefs regarding the significance of our large customers.
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March 31,
2016 |
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December 31,
2015 |
||||
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(Unaudited)
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||||
ASSETS
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Current assets:
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||||
Cash and cash equivalents
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$
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24,141
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$
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44,680
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Marketable securities
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—
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28,322
|
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||
Accounts receivable, net
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27,452
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|
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26,795
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Income taxes receivable
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186
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|
170
|
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||
Deferred income taxes
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83
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|
|
89
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Prepaid expenses and other current assets
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6,054
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9,578
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||
Total current assets
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57,916
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109,634
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||
Property and equipment, net
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33,330
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36,143
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||
Marketable securities, less current portion
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40
|
|
|
40
|
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||
Restricted cash
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62,790
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|
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—
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Deferred income taxes, less current portion
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1,207
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|
|
1,252
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Goodwill
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76,370
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76,143
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Other assets
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2,071
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2,415
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Total assets
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$
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233,724
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$
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225,627
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
|
|
|
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||||
Accounts payable
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$
|
7,585
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|
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$
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9,137
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Deferred revenue
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3,379
|
|
|
2,890
|
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||
Capital lease obligations
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821
|
|
|
466
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Income taxes payable
|
85
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|
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204
|
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Other current liabilities
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8,619
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10,857
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||
Total current liabilities
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20,489
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23,554
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Long-term debt
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12,790
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—
|
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Capital lease obligations, less current portion
|
2,345
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|
|
1,436
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||
Deferred income taxes
|
141
|
|
|
137
|
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||
Deferred revenue, less current portion
|
77
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|
|
92
|
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Other long-term liabilities
|
2,137
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|
2,311
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Total liabilities
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37,979
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|
27,530
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Commitments and contingencies
|
|
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Stockholders’ equity:
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|
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Convertible preferred stock, $0.001 par value; 7,500 shares authorized; no shares issued
and outstanding
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—
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—
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Common stock, $0.001 par value; 300,000 shares authorized; 103,399 and 102,299 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively
|
103
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102
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Additional paid-in capital
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480,092
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477,202
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Accumulated other comprehensive loss
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(10,109
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)
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(10,812
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)
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Accumulated deficit
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(274,341
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)
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(268,395
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)
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Total stockholders’ equity
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195,745
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198,097
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Total liabilities and stockholders’ equity
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$
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233,724
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$
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225,627
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Three Months Ended March 31,
|
||||||
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2016
|
|
2015
|
||||
Revenues
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$
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41,422
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$
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42,329
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Cost of revenue:
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|
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|
||||
Cost of services (1)
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20,110
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21,657
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Depreciation — network
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4,668
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4,153
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Total cost of revenue
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24,778
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25,810
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Gross profit
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16,644
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|
16,519
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|
||
Operating expenses:
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|
|
|
||||
General and administrative
|
6,808
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|
|
6,850
|
|
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Sales and marketing
|
8,903
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|
|
10,276
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Research and development
|
6,325
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6,263
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Depreciation and amortization
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623
|
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|
640
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Total operating expenses
|
22,659
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|
|
24,029
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|
||
Operating loss
|
(6,015
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)
|
|
(7,510
|
)
|
||
Other income (expense):
|
|
|
|
||||
Interest expense
|
(179
|
)
|
|
(4
|
)
|
||
Interest income
|
6
|
|
|
74
|
|
||
Other, net
|
400
|
|
|
1,812
|
|
||
Total other income (expense)
|
227
|
|
|
1,882
|
|
||
Loss before income taxes
|
(5,788
|
)
|
|
(5,628
|
)
|
||
Income tax expense
|
158
|
|
|
55
|
|
||
Net loss
|
(5,946
|
)
|
|
(5,683
|
)
|
||
|
|
|
|
||||
Net loss per share:
|
|
|
|
||||
Basic and diluted
|
$
|
(0.06
|
)
|
|
$
|
(0.06
|
)
|
|
|
|
|
||||
Weighted average shares used in per share calculation:
|
|
|
|
||||
Basic and diluted
|
102,693
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|
|
98,636
|
|
(1)
|
Cost of services excludes amortization related to intangibles, including existing technologies, and customer relationships, which are included in depreciation and amortization.
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Net loss
|
$
|
(5,946
|
)
|
|
$
|
(5,683
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Unrealized gain on investments
|
—
|
|
|
61
|
|
||
Foreign exchange translation gain (loss)
|
659
|
|
|
(3,071
|
)
|
||
Other comprehensive gain (loss), net of tax
|
659
|
|
|
(3,010
|
)
|
||
Comprehensive loss
|
$
|
(5,287
|
)
|
|
$
|
(8,693
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Operating activities
|
|
|
|
||||
Net loss
|
$
|
(5,946
|
)
|
|
$
|
(5,683
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
5,291
|
|
|
4,793
|
|
||
Share-based compensation
|
3,496
|
|
|
3,069
|
|
||
Foreign currency remeasurement gain
|
(301
|
)
|
|
(1,691
|
)
|
||
Deferred income taxes
|
82
|
|
|
(53
|
)
|
||
Accounts receivable charges
|
(116
|
)
|
|
246
|
|
||
Amortization of premium on marketable securities
|
19
|
|
|
58
|
|
||
Realized loss on marketable securities
|
32
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(540
|
)
|
|
(4,980
|
)
|
||
Prepaid expenses and other current assets
|
3,583
|
|
|
1,150
|
|
||
Income taxes receivable
|
(13
|
)
|
|
(2
|
)
|
||
Other assets
|
342
|
|
|
792
|
|
||
Accounts payable and other current liabilities
|
(4,005
|
)
|
|
(1,723
|
)
|
||
Deferred revenue
|
473
|
|
|
(203
|
)
|
||
Income taxes payable
|
(127
|
)
|
|
(52
|
)
|
||
Other long term liabilities
|
900
|
|
|
(269
|
)
|
||
Net cash provided by (used in) operating activities
|
3,170
|
|
|
(4,548
|
)
|
||
Investing activities
|
|
|
|
||||
Purchases of marketable securities
|
—
|
|
|
(9,956
|
)
|
||
Sale and maturities of marketable securities
|
28,315
|
|
|
9,840
|
|
||
Restricted cash
|
(62,790
|
)
|
|
—
|
|
||
Purchases of property and equipment
|
(1,421
|
)
|
|
(6,666
|
)
|
||
Net cash used in investing activities
|
(35,896
|
)
|
|
(6,782
|
)
|
||
Financing activities
|
|
|
|
||||
Principal payments on capital lease obligations
|
(159
|
)
|
|
(358
|
)
|
||
Payments of employee tax withholdings related to restricted stock vesting
|
(646
|
)
|
|
(1,107
|
)
|
||
Cash paid for purchase of common stock
|
—
|
|
|
(957
|
)
|
||
Proceeds from line of credit
|
12,790
|
|
|
—
|
|
||
Proceeds from employee stock plans
|
43
|
|
|
1,975
|
|
||
Net cash provided by (used in) financing activities
|
12,028
|
|
|
(447
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
159
|
|
|
(482
|
)
|
||
Net decrease in cash and cash equivalents
|
(20,539
|
)
|
|
(12,259
|
)
|
||
Cash and cash equivalents, beginning of period
|
44,680
|
|
|
57,767
|
|
||
Cash and cash equivalents, end of period
|
$
|
24,141
|
|
|
$
|
45,508
|
|
Supplemental disclosure of cash flow information
|
|
|
|
||||
Cash paid during the period for interest
|
$
|
154
|
|
|
$
|
4
|
|
Cash paid during the period for income taxes, net of refunds
|
$
|
224
|
|
|
$
|
178
|
|
Property and equipment acquired through capital lease
|
$
|
1,521
|
|
|
$
|
—
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Certificate of deposits
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40
|
|
Total marketable securities
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Available-for-sale securities
|
|
|
|
|
|
|
|
||||||||
Due in one year or less
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Due after one year and through five years
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
||||
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Certificate of deposit
|
$
|
12,480
|
|
|
$
|
1
|
|
|
$
|
17
|
|
|
$
|
12,464
|
|
Corporate notes and bonds
|
15,940
|
|
|
2
|
|
|
44
|
|
|
15,898
|
|
||||
Total marketable securities
|
$
|
28,420
|
|
|
$
|
3
|
|
|
$
|
61
|
|
|
$
|
28,362
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Available-for-sale securities
|
|
|
|
|
|
|
|
||||||||
Due in one year or less
|
$
|
18,075
|
|
|
$
|
2
|
|
|
$
|
12
|
|
|
$
|
18,065
|
|
Due after one year and through five years
|
10,345
|
|
|
1
|
|
|
49
|
|
|
10,297
|
|
||||
|
$
|
28,420
|
|
|
$
|
3
|
|
|
$
|
61
|
|
|
$
|
28,362
|
|
|
March 31,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
Accounts receivable
|
$
|
28,914
|
|
|
$
|
28,599
|
|
Less: credit allowance
|
(350
|
)
|
|
(460
|
)
|
||
Less: allowance for doubtful accounts
|
(1,112
|
)
|
|
(1,344
|
)
|
||
Total accounts receivable, net
|
$
|
27,452
|
|
|
$
|
26,795
|
|
|
March 31,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
Prepaid bandwidth and backbone
|
$
|
3,485
|
|
|
$
|
2,417
|
|
VAT receivable
|
1,152
|
|
|
2,720
|
|
||
Prepaid expenses and insurance
|
602
|
|
|
3,641
|
|
||
Vendor deposits and other
|
815
|
|
|
800
|
|
||
Total prepaid expenses and other current assets
|
$
|
6,054
|
|
|
$
|
9,578
|
|
|
March 31,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
Network equipment
|
$
|
127,444
|
|
|
$
|
129,172
|
|
Computer equipment and software
|
11,585
|
|
|
11,408
|
|
||
Furniture and fixtures
|
2,457
|
|
|
2,472
|
|
||
Leasehold improvements
|
4,977
|
|
|
4,976
|
|
||
Other equipment
|
166
|
|
|
166
|
|
||
Total property and equipment
|
146,629
|
|
|
148,194
|
|
||
Less: accumulated depreciation and amortization
|
(113,299
|
)
|
|
(112,051
|
)
|
||
Total property and equipment, net
|
$
|
33,330
|
|
|
$
|
36,143
|
|
•
|
sustained decline in our stock price due to a decline in our financial performance due to the loss of key customers, loss of key personnel, emergence of new technologies or new competitors and/or unfavorable outcomes of intellectual property disputes;
|
•
|
decline in overall market or economic conditions leading to a decline in our stock price; and
|
•
|
decline in observed control premiums paid in business combinations involving comparable companies.
|
|
March 31,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
Accrued compensation and benefits
|
$
|
3,511
|
|
|
$
|
4,786
|
|
Accrued cost of revenue
|
2,160
|
|
|
2,698
|
|
||
Deferred rent
|
685
|
|
|
782
|
|
||
Accrued legal fees
|
201
|
|
|
143
|
|
||
Other accrued expenses
|
2,062
|
|
|
2,448
|
|
||
Total other current liabilities
|
$
|
8,619
|
|
|
$
|
10,857
|
|
|
March 31,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
Deferred rent
|
$
|
1,743
|
|
|
$
|
1,907
|
|
Income taxes payable
|
394
|
|
|
404
|
|
||
Total other long term liabilities
|
$
|
2,137
|
|
|
$
|
2,311
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Net loss
|
$
|
(5,946
|
)
|
|
$
|
(5,683
|
)
|
Basic and diluted weighted average outstanding shares of common stock
|
102,693
|
|
|
98,636
|
|
||
Basic and diluted net loss per share:
|
$
|
(0.06
|
)
|
|
$
|
(0.06
|
)
|
|
Three Months Ended March 31,
|
||||
|
2016
|
|
2015
|
||
Employee stock purchase plan
|
424
|
|
|
156
|
|
Stock options
|
134
|
|
|
1,261
|
|
Restricted stock units
|
524
|
|
|
2,698
|
|
|
1,082
|
|
|
4,115
|
|
|
|
|
Unrealized
|
|
|
||||||
|
|
|
Gains (Losses) on
|
|
|
||||||
|
Foreign
|
|
Available for
|
|
|
||||||
|
Currency
|
|
Sale Securities
|
|
Total
|
||||||
Balance, December 31, 2015
|
$
|
(10,768
|
)
|
|
$
|
(44
|
)
|
|
$
|
(10,812
|
)
|
Other comprehensive income before reclassifications
|
659
|
|
|
—
|
|
|
659
|
|
|||
Amounts reclassified from accumulated other comprehensive
income (loss)
|
—
|
|
|
44
|
|
|
44
|
|
|||
Net current period other comprehensive income
|
659
|
|
|
44
|
|
|
703
|
|
|||
Balance, March 31, 2016
|
$
|
(10,109
|
)
|
|
$
|
—
|
|
|
$
|
(10,109
|
)
|
|
Three Months Ended
March 31,
|
||||||
|
2016
|
|
2015
|
||||
Share-based compensation expense by type:
|
|
|
|
||||
Stock options
|
$
|
983
|
|
|
$
|
1,182
|
|
Restricted stock units
|
2,360
|
|
|
1,813
|
|
||
ESPP
|
153
|
|
|
74
|
|
||
Total share-based compensation expense
|
$
|
3,496
|
|
|
$
|
3,069
|
|
Share-based compensation expense included in the consolidated statements of operations:
|
|
|
|
||||
Cost of services
|
$
|
473
|
|
|
$
|
513
|
|
General and administrative expense
|
1,826
|
|
|
1,406
|
|
||
Sales and marketing expense
|
737
|
|
|
689
|
|
||
Research and development expense
|
460
|
|
|
461
|
|
||
Total share-based compensation expense
|
$
|
3,496
|
|
|
$
|
3,069
|
|
Remainder of 2016
|
$
|
2,995
|
|
2017
|
3,231
|
|
|
2018
|
3,009
|
|
|
2019
|
1,488
|
|
|
2020
|
566
|
|
|
Thereafter
|
414
|
|
|
Total minimum payments
|
$
|
11,703
|
|
Remainder of 2016
|
$
|
26,638
|
|
2017
|
13,377
|
|
|
2018
|
2,822
|
|
|
2019
|
759
|
|
|
2020
|
70
|
|
|
Thereafter
|
8
|
|
|
Total minimum payments
|
$
|
43,674
|
|
Remainder of 2016
|
$
|
615
|
|
2017
|
994
|
|
|
2018
|
994
|
|
|
2019
|
899
|
|
|
2020
|
47
|
|
|
Thereafter
|
—
|
|
|
Total
|
3,549
|
|
|
Amounts representing interest
|
(383
|
)
|
|
Total minimum lease payments
|
$
|
3,166
|
|
|
March 31,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
Americas
|
$
|
18,595
|
|
|
$
|
19,692
|
|
International
|
14,743
|
|
|
16,466
|
|
||
Total long-lived assets
|
$
|
33,338
|
|
|
$
|
36,158
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
Description
|
Total
|
|
Quoted Prices In Active Markets for Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds (2)
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Certificate of deposit (1)
|
40
|
|
|
—
|
|
|
40
|
|
|
—
|
|
||||
Total assets measured at fair value
|
$
|
41
|
|
|
$
|
1
|
|
|
$
|
40
|
|
|
$
|
—
|
|
(1)
|
Classified in marketable securities
|
(2)
|
Classified in cash and cash equivalents
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
Description
|
Total
|
|
Quoted Prices In Active Markets for Identical Assets
(Level 1) |
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds (2)
|
$
|
725
|
|
|
$
|
725
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate notes and bonds (1)
|
15,898
|
|
|
—
|
|
|
15,898
|
|
|
—
|
|
||||
Certificate of deposit (1)
|
12,464
|
|
|
—
|
|
|
12,464
|
|
|
—
|
|
||||
Total assets measured at fair value
|
$
|
29,087
|
|
|
$
|
725
|
|
|
$
|
28,362
|
|
|
$
|
—
|
|
(1)
|
Classified in marketable securities
|
(2)
|
Classified in cash and cash equivalents
|
|
Three Months Ended March 31,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
Revenues
|
$
|
41,422
|
|
|
100.0
|
%
|
|
$
|
42,329
|
|
|
100.0
|
%
|
Cost of revenue
|
24,778
|
|
|
59.8
|
%
|
|
25,810
|
|
|
61.0
|
%
|
||
Gross profit
|
16,644
|
|
|
40.2
|
%
|
|
16,519
|
|
|
39.0
|
%
|
||
Operating expenses
|
22,659
|
|
|
54.7
|
%
|
|
24,029
|
|
|
56.8
|
%
|
||
Operating loss
|
(6,015
|
)
|
|
(14.5
|
)%
|
|
(7,510
|
)
|
|
(17.7
|
)%
|
||
Total other income (expense)
|
227
|
|
|
0.5
|
%
|
|
1,882
|
|
|
4.4
|
%
|
||
Loss before income taxes
|
(5,788
|
)
|
|
(14.0
|
)%
|
|
(5,628
|
)
|
|
(13.3
|
)%
|
||
Income tax expense
|
158
|
|
|
0.4
|
%
|
|
55
|
|
|
0.1
|
%
|
||
Net loss
|
(5,946
|
)
|
|
(14.4
|
)%
|
|
(5,683
|
)
|
|
(13.4
|
)%
|
•
|
EBITDA and Adjusted EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
|
•
|
these measures do not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
Adjusted EBITDA does not reflect the cash requirements necessary for litigation costs;
|
•
|
these measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt that we may incur;
|
•
|
these measures do not reflect income taxes or the cash requirements for any tax payments;
|
•
|
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will be replaced sometime in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;
|
•
|
while share-based compensation is a component of operating expense, the impact on our financial statements compared to other companies can vary significantly due to such factors as the assumed life of the options and the assumed volatility of our common stock; and
|
•
|
other companies may calculate EBITDA from continuing operations and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.
|
|
Three Months Ended
|
||||||||||
|
March 31,
|
|
December 31,
|
|
March 31,
|
||||||
|
2016
|
|
2015
|
|
2015
|
||||||
U.S. GAAP net loss
|
$
|
(5,946
|
)
|
|
$
|
(4,145
|
)
|
|
$
|
(5,683
|
)
|
Share-based compensation
|
3,496
|
|
|
2,863
|
|
|
3,069
|
|
|||
Litigation expenses
|
1,178
|
|
|
402
|
|
|
19
|
|
|||
Amortization of intangible assets
|
6
|
|
|
461
|
|
|
197
|
|
|||
Non-GAAP net loss
|
$
|
(1,266
|
)
|
|
$
|
(419
|
)
|
|
$
|
(2,398
|
)
|
|
Three Months Ended
|
||||||||||
|
March 31,
|
|
December 31,
|
|
March 31,
|
||||||
|
2016
|
|
2015
|
|
2015
|
||||||
U.S. GAAP net loss
|
$
|
(5,946
|
)
|
|
$
|
(4,145
|
)
|
|
$
|
(5,683
|
)
|
Depreciation and amortization
|
5,291
|
|
|
5,816
|
|
|
4,793
|
|
|||
Interest expense
|
179
|
|
|
25
|
|
|
4
|
|
|||
Interest and other (income) expense
|
(406
|
)
|
|
321
|
|
|
(1,886
|
)
|
|||
Income tax expense
|
158
|
|
|
46
|
|
|
55
|
|
|||
EBITDA
|
$
|
(724
|
)
|
|
$
|
2,063
|
|
|
$
|
(2,717
|
)
|
Share-based compensation
|
3,496
|
|
|
2,863
|
|
|
3,069
|
|
|||
Litigation expenses
|
1,178
|
|
|
402
|
|
|
19
|
|
|||
Adjusted EBITDA
|
$
|
3,950
|
|
|
$
|
5,328
|
|
|
$
|
371
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
|
|
|
|
$
|
|
%
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|
Change
|
|||||||
Revenue
|
$
|
41,422
|
|
|
$
|
42,329
|
|
|
$
|
(907
|
)
|
|
(2.1
|
)%
|
|
Three Months Ended March 31,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
Bandwidth and co-location fees
|
$
|
14,379
|
|
|
34.7
|
%
|
|
$
|
14,269
|
|
|
33.7
|
%
|
Depreciation - network
|
4,668
|
|
|
11.3
|
%
|
|
4,153
|
|
|
9.8
|
%
|
||
Payroll and related employee costs
|
3,964
|
|
|
9.6
|
%
|
|
5,073
|
|
|
12.0
|
%
|
||
Share-based compensation
|
473
|
|
|
1.1
|
%
|
|
513
|
|
|
1.2
|
%
|
||
Other costs
|
1,294
|
|
|
3.1
|
%
|
|
1,802
|
|
|
4.3
|
%
|
||
Total cost of revenue
|
$
|
24,778
|
|
|
59.8
|
%
|
|
$
|
25,810
|
|
|
61.0
|
%
|
•
|
decreased payroll and related employee costs due to lower operations headcount primarily driven by the reorganization of job responsibilities on April 1, 2015 (as further discussed below); and
|
•
|
decreased other costs, which were primarily other recurring cost of sales, professional fees, and facilities costs.
|
|
Three Months Ended March 31,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
Payroll and related employee costs
|
$
|
1,966
|
|
|
4.7
|
%
|
|
$
|
2,959
|
|
|
7.0
|
%
|
Professional fees and outside services
|
826
|
|
|
2.0
|
%
|
|
1,004
|
|
|
2.4
|
%
|
||
Share-based compensation
|
1,826
|
|
|
4.4
|
%
|
|
1,406
|
|
|
3.3
|
%
|
||
Other costs
|
2,190
|
|
|
5.3
|
%
|
|
1,481
|
|
|
3.5
|
%
|
||
Total general and administrative
|
$
|
6,808
|
|
|
16.4
|
%
|
|
$
|
6,850
|
|
|
16.2
|
%
|
|
Three Months Ended March 31,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
Payroll and related employee costs
|
$
|
6,197
|
|
|
15.0
|
%
|
|
$
|
6,755
|
|
|
16.0
|
%
|
Share-based compensation
|
737
|
|
|
1.8
|
%
|
|
689
|
|
|
1.6
|
%
|
||
Marketing programs
|
321
|
|
|
0.8
|
%
|
|
473
|
|
|
1.1
|
%
|
||
Other costs
|
1,648
|
|
|
4.0
|
%
|
|
2,359
|
|
|
5.6
|
%
|
||
Total sales and marketing
|
$
|
8,903
|
|
|
21.5
|
%
|
|
$
|
10,276
|
|
|
24.3
|
%
|
•
|
decreased payroll and related employee costs due to decreased sales and marketing personnel and lower variable compensation;
|
•
|
decreased other costs which was primarily lower travel and entertainment expenses and professional fees (consulting, recruiting, and outside services); and
|
•
|
decreased marketing and public relations spending related to advertising and trade shows.
|
|
Three Months Ended March 31,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
Payroll and related employee costs
|
$
|
4,999
|
|
|
12.1
|
%
|
|
$
|
4,820
|
|
|
11.4
|
%
|
Share-based compensation
|
460
|
|
|
1.1
|
%
|
|
461
|
|
|
1.1
|
%
|
||
Other costs
|
866
|
|
|
2.1
|
%
|
|
982
|
|
|
2.3
|
%
|
||
Total research and development
|
$
|
6,325
|
|
|
15.3
|
%
|
|
$
|
6,263
|
|
|
14.8
|
%
|
•
|
accounts receivable increased $540 during the three months ended March 31, 2016, due to a small increase in days sales outstanding (DSO) as a result of timing of collections as compared to a $4,980 increase in the comparable 2015 period;
|
•
|
prepaid expenses and other current assets decreased $3,583 during the three months ended March 31, 2016, due to the receipt of VAT refunds and the amortization of prepaid bandwidth expenses compared to a $1,150 decrease in the comparable 2015 period;
|
•
|
other assets decreased $342 during the three months ended March 31, 2016, due to a decrease in vendor deposits and other long term assets versus a decrease of $792 for the comparable 2015 period; and
|
•
|
accounts payable and other current liabilities decreased $4,005 during the three months ended March 31, 2016 versus a decrease of $1,723 for the comparable 2015 period due to timing of vendor payments and the payment of 2015 accrued compensation.
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
|
|
Less than
|
|
|
|
|
|
More than
|
||||||||||
|
|
Total
|
|
1 year
|
|
1-3 years
|
|
3-5 years
|
|
5 years
|
||||||||||
Operating Leases
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bandwidth leases
|
|
$
|
26,694
|
|
|
$
|
19,986
|
|
|
$
|
6,497
|
|
|
$
|
210
|
|
|
$
|
1
|
|
Rack space leases
|
|
16,936
|
|
|
12,096
|
|
|
4,460
|
|
|
380
|
|
|
—
|
|
|||||
Real estate leases
|
|
11,703
|
|
|
3,855
|
|
|
6,053
|
|
|
1,487
|
|
|
308
|
|
|||||
Total operating leases
|
|
55,333
|
|
|
35,937
|
|
|
17,010
|
|
|
2,077
|
|
|
309
|
|
|||||
Capital leases
|
|
3,549
|
|
|
867
|
|
|
1,988
|
|
|
694
|
|
|
—
|
|
|||||
Bank debt (1)
|
|
12,790
|
|
|
—
|
|
|
12,790
|
|
|
—
|
|
|
—
|
|
|||||
Interest on bank debt (2)
|
|
826
|
|
|
519
|
|
|
307
|
|
|
—
|
|
|
—
|
|
|||||
Other purchase obligations
|
|
44
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total commitments
|
|
$
|
72,542
|
|
|
$
|
37,367
|
|
|
$
|
32,095
|
|
|
$
|
2,771
|
|
|
$
|
309
|
|
1.
|
Please refer to Note 10 Line of Credit of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information about our bank debt.
|
2.
|
Amounts represent estimate of future interest payments on our bank debt using the interest rate in effect at March 31, 2016.
|
•
|
slowing demand for our services,
|
•
|
increasing competition and competitive pricing pressures,
|
•
|
any inability to provide our services in a cost-effective manner,
|
•
|
the incurrence of unforeseen expenses, difficulties, complications and delays, and
|
•
|
other risks described in this quarterly report on Form 10-Q.
|
•
|
continued price declines arising from significant competition;
|
•
|
increasing settlement fees for certain peering relationships;
|
•
|
failure to increase sales of our Orchestrate Platform services;
|
•
|
increases in electricity, bandwidth and rack space costs or other operating expenses, and failure to achieve decreases in these costs and expenses relative to decreases in the prices we can charge for our Orchestrate Platform services and products;
|
•
|
failure of our current and planned services and software to operate as expected;
|
•
|
loss of any significant customers or loss of existing customers at a rate greater than our increase in new customers or our sales to existing customers;
|
•
|
failure to increase sales of our Orchestrate Platform services to current customers as a result of their ability to reduce their monthly usage of our services to their minimum monthly contractual commitment;
|
•
|
failure of a significant number of customers to pay our fees on a timely basis or at all or to continue to purchase our Orchestrate Platform services in accordance with their contractual commitments; and
|
•
|
inability to attract high quality customers to purchase and implement our current and planned services.
|
•
|
their satisfaction or dissatisfaction with our services;
|
•
|
the quality and reliability of our content delivery network;
|
•
|
the prices of our services;
|
•
|
the prices of services offered by our competitors;
|
•
|
discontinuation by our customers of their Internet or web-based content distribution business;
|
•
|
mergers and acquisitions affecting our customer base; and
|
•
|
reductions in our customers’ spending levels.
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•
|
cease selling, incorporating or using products or services that incorporate the challenged intellectual property;
|
•
|
pay substantial damages;
|
•
|
obtain a license from the holder of the infringed intellectual property right, which license may or may not be available on reasonable terms or at all; or
|
•
|
redesign products or services.
|
•
|
our ability to increase sales to existing customers and attract new customers to our content delivery and other Orchestrate Platform services;
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•
|
the addition or loss of large customers, or significant variation in their use of our content delivery and other Orchestrate Platform services;
|
•
|
costs associated with current or future intellectual property lawsuits and other lawsuits;
|
•
|
service outages or third party security breaches to our platform or to one or more of our customers’ platforms;
|
•
|
the amount and timing of operating costs and capital expenditures related to the maintenance and expansion of our business, operations and infrastructure and the adequacy of available funds to meet those requirements;
|
•
|
the timing and success of new product and service introductions by us or our competitors;
|
•
|
the occurrence of significant events in a particular period that result in an increase in the use of our content delivery and other Orchestrate Platform services, such as a major media event or a customer’s online release of a new or updated video game or operating system;
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•
|
changes in our pricing policies or those of our competitors;
|
•
|
the timing of recognizing revenue;
|
•
|
limitations of the capacity of our global network and related systems;
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•
|
the timing of costs related to the development or acquisition of technologies, services or businesses;
|
•
|
the potential write-down or write-off of intangible or other long-lived assets;
|
•
|
general economic, industry and market conditions (such as fluctuations experienced in the stock and credit markets during times of deteriorated global economic conditions) and those conditions specific to Internet usage;
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•
|
limitations on usage imposed by our customers in order to limit their online expenses; and
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•
|
war, threat of war or terrorist actions, including cyber terrorism targeted at us, our customers, or both, and inadequate cybersecurity.
|
•
|
a general decline in Internet usage;
|
•
|
third party restrictions on on-line content (including copyright restrictions, digital rights management and restrictions in certain geographic regions);
|
•
|
system impairments or outages, including those caused by hacking or cyberattacks; and
|
•
|
a significant increase in the quality or fidelity of off-line media content beyond that available online to the point where users prefer the off-line experience.
|
•
|
increased expenses associated with sales and marketing, deploying services and maintaining our infrastructure in foreign countries;
|
•
|
competition from local content delivery service providers, many of which are very well positioned within their local markets;
|
•
|
challenges caused by distance, language and cultural differences;
|
•
|
unexpected changes in regulatory requirements preventing or limiting us from operating our global network or resulting in unanticipated costs and delays;
|
•
|
interpretations of laws or regulations that would subject us to regulatory supervision or, in the alternative, require us to exit a country, which could have a negative impact on the quality of our services or our results of operations;
|
•
|
longer accounts receivable payment cycles and difficulties in collecting accounts receivable;
|
•
|
corporate and personal liability for violations of local laws and regulations;
|
•
|
currency exchange rate fluctuations and repatriation of funds;
|
•
|
potentially adverse tax consequences;
|
•
|
credit risk and higher levels of payment fraud; and
|
•
|
foreign exchange controls that might prevent us from repatriating cash earned in countries outside the United States.
|
•
|
the difficulty of integrating the operations, services, solutions and personnel of the acquired companies;
|
•
|
the potential disruption of our ongoing business;
|
•
|
the potential distraction of management;
|
•
|
the possibility that our business culture and the business culture of the acquired companies will not be compatible;
|
•
|
the difficulty of incorporating or integrating acquired technology and rights with or into our other services and solutions;
|
•
|
expenses related to the acquisition and to the integration of the acquired companies;
|
•
|
the impairment of relationships with employees and customers as a result of any integration of new personnel;
|
•
|
employee turnover from the acquired companies or from our current operations as we integrate businesses;
|
•
|
risks related to the businesses of acquired companies that may continue to impact the businesses following the merger; and
|
•
|
potential unknown liabilities associated with acquired companies.
|
•
|
implementing customer orders for services;
|
•
|
delivering these services; and
|
•
|
timely and accurate billing for these services.
|
•
|
announcements of technological innovations, new services or service enhancements, strategic alliances or significant agreements by us or by our competitors;
|
•
|
commencement or resolution of, our involvement in and uncertainties arising from, litigation, particularly our current litigation with Akamai and MIT;
|
•
|
changes in the estimates of our operating results or changes in recommendations by any securities analysts that elect to follow our common stock;
|
•
|
establish that members of the board of directors may be removed only for cause upon the affirmative vote of stockholders owning a majority of our capital stock;
|
•
|
authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to increase the number of outstanding shares and thwart a takeover attempt;
|
•
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limit who may call special meetings of stockholders;
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•
|
prohibit stockholder action by written consent, thereby requiring stockholder actions to be taken at a meeting of the stockholders;
|
•
|
establish advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings;
|
•
|
provide for a board of directors with staggered terms; and
|
•
|
provide that the authorized number of directors may be changed only by a resolution of our board of directors.
|
|
|
Incorporated by Reference
|
||||
Exhibit
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing
Date
|
Provided
Herewith
|
|
|
|
|
|
|
|
3.01
|
Amended and Restated Certificate of Incorporation of Limelight Networks, Inc.
|
8-K
|
001-33508
|
3.1
|
6/14/11
|
|
|
|
|
|
|
|
|
3.02
|
Second Amended and Restated Bylaws of Limelight Networks, Inc.
|
8-K
|
001-33508
|
3.2
|
2/19/13
|
|
|
|
|
|
|
|
|
10.1
|
First Amendment to Employment agreement between the Registrant and Robert A. Lento dated as of February 23, 2016.
|
|
|
|
|
X
|
|
|
|
|
|
|
|
10.2
|
Second Amendment to Employment agreement between the Registrant and Sajid Malhotra dated as of February 23, 2016.
|
|
|
|
|
X
|
|
|
|
|
|
|
|
10.3
|
Second Amendment to Employment agreement between the Registrant and George Vonderhaar dated as of February 23, 2016.
|
|
|
|
|
X
|
|
|
|
|
|
|
|
10.4
|
First Amendment to Employment agreement between the Registrant and Kurt Silverman dated as of February 23, 2016.
|
|
|
|
|
X
|
|
|
|
|
|
|
|
10.5
|
Second Amendment to Employment agreement between the Registrant and Michael D. DiSanto dated as of February 23, 2016.
|
|
|
|
|
X
|
|
|
|
|
|
|
|
10.6
|
Form of 2016-2017 Retention Bonus Plan Agreement.
|
|
|
|
|
X
|
|
|
|
|
|
|
|
31.1
|
Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a).
|
|
|
|
|
X
|
|
|
|
|
|
|
|
31.2
|
Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a).
|
|
|
|
|
X
|
|
|
|
|
|
|
|
32.1
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b).*
|
|
|
|
|
X
|
|
|
|
|
|
|
|
32.2
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b).*
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.INS
|
XBRL INSTANCE DOCUMENT
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.SCH
|
XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.CAL
|
XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.DEF
|
XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.LAB
|
XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.PRE
|
XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT
|
|
|
|
|
X
|
|
|
LIMELIGHT NETWORKS, INC.
|
|
|
|
|
|
Date:
|
April 28, 2016
|
By:
|
/
s
/ S
AJID
M
ALHOTRA
|
|
|
|
Sajid Malhotra
Chief Financial Officer
(Principal Financial Officer)
|
2.
|
Full Force and Effect. To the extent not expressly amended hereby, the Agreement remains in full force and effect.
|
ROBERT A. LENTO
|
LIMELIGHT NETWORKS, INC.
|
2.
|
Full Force and Effect. To the extent not expressly amended hereby, the Agreement remains in full force and effect.
|
SAJID MALHOTRA
|
LIMELIGHT NETWORKS, INC.
|
2.
|
Full Force and Effect. To the extent not expressly amended hereby, the Agreement remains in full force and effect.
|
GEORGE VONDERHAAR
|
LIMELIGHT NETWORKS, INC.
|
2.
|
Full Force and Effect. To the extent not expressly amended hereby, the Agreement remains in full force and effect.
|
KURT SILVERMAN
|
LIMELIGHT NETWORKS, INC.
|
2.
|
Full Force and Effect. To the extent not expressly amended hereby, the Agreement remains in full force and effect.
|
MICHAEL D. DISANTO
|
LIMELIGHT NETWORKS, INC.
|
I.
|
2016-2017 RETENTION BONUS PLAN AGREEMENT Overview
|
II.
|
Bonus Payments
. Each payment of the Retention Bonus, if any, will be made after Limelight’s 2016 and 2017 financial results have been reviewed and approved by the Audit Committee of the Board and the calculation and payment of the bonus amounts, if any, have been reviewed and approved by the Compensation Committee of the Board. Payment, if any, will likely occur in February 2016 and 2017 respectively, but will be paid no later than March 15, 2017 and March 15, 2018 respectively. To be eligible to receive a bonus payment, the Participant must be employed with Limelight through the payment date. Employees terminating prior to end of the year
will not
be entitled to a partial or pro-rated bonus amount. The Participant may also elect at the time of payment whether to take the additional payment in cash, stock, or some combination thereof. If payment in stock is elected, there is no vesting period for the shares.
|
III.
|
Retention Bonus Award
|
IV.
|
Non-Transferability of Award.
This Award Agreement or rights to the Retention Bonus may not be sold, assigned, alienated, transferred, pledged, attached or otherwise encumbered, and any purported sale, assignment, alienation, transfer, pledge, attachment or other encumbrance of the Retention Bonus in violation of the provisions of this Section IV.
|
V.
|
Withholding
. Limelight shall deduct from the Retention Bonus payable to you all applicable federal, state and local income and employment taxes and other taxes and withholding required by law.
|
VI.
|
Successors and Assigns of the Company
. The terms and conditions of this Award Agreement shall be binding upon and shall inure to the benefit of Limelight and its successors and assigns.
|
VII.
|
Plan Disputes
|
•
|
The Participant must dispute or protest by written notice to the CEO within thirty (30) days of the events giving rise to the dispute or protest.
|
•
|
Interpretation of this Plan by CEO will be final and binding.
|
•
|
The Participant agrees to keep confidential the existence of, and any information concerning, a dispute described in this Section VII, except that the Participant may disclose information concerning such dispute to the court that is considering such dispute or to his or her legal counsel (provided that such counsel agrees not to disclose any such information other than as necessary to the prosecution or defense of the dispute).
|
VIII.
|
Governing Law
. This Award Agreement shall be deemed to be made in the State of Arizona, and the validity, construction and effect of this Award Agreement in all respects shall be determined in accordance with the laws of the State of Arizona, without giving effect to the conflict of law principles thereof.
|
IX.
|
Headings and Construction
. Headings are given to the Sections and subsections of this Award Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Award Agreement or any provision thereof. Whenever the words “include”, “includes” or “including” are used in this Award Agreement, they shall be deemed to be followed by the words “but not limited to”. The term “or” is not exclusive.
|
X.
|
Amendment of this Award Agreement
. The Compensation Committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate this Award Agreement prospectively or retroactively; provided, however, that any such waiver, amendment, alteration, suspension, discontinuance, cancelation or termination that would materially and adversely impair the Participant’s rights hereunder shall not to that extent be effective without Participant’s consent.
|
XI.
|
Counterparts
. This Award Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
|
XII.
|
Acknowledgement
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Limelight Networks, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
April 28, 2016
|
By:
|
/s/ R
OBERT
A. L
ENTO
|
|
|
Name:
|
Robert A. Lento
|
|
|
Title:
|
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Limelight Networks, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
April 28, 2016
|
By:
|
/s/ S
AJID
M
ALHOTRA
|
|
|
Name:
|
Sajid Malhotra
|
|
|
Title:
|
Chief Financial Officer
(Principal Financial Officer)
|
Date:
|
April 28, 2016
|
By:
|
/s/ R
OBERT
A. L
ENTO
|
|
|
Name:
|
Robert A. Lento
|
|
|
Title:
|
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
Date:
|
April 28, 2016
|
By:
|
/s/ S
AJID
M
ALHOTRA
|
|
|
Name:
|
Sajid Malhotra
|
|
|
Title:
|
Chief Financial Officer
(Principal Financial Officer)
|