[X]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
33-0711569
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification Number)
|
|
18872 MacArthur Boulevard, Suite 200, Irvine, California
|
92612
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer [ ]
|
Accelerated filer [X]
|
Non-accelerated filer [ ]
|
Smaller reporting company [ ]
|
(Do not check if a smaller
reporting company)
|
Page
|
|||
PART I. FINANCIAL INFORMATION
|
|||
1
|
|||
2
|
|||
3
|
|||
4
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|||
16
|
|||
23
|
|||
23
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|||
PART II. OTHER INFORMATION
|
|||
24
|
|||
26
|
|||
June 30,
2016
|
December 31,
2015*
|
|
||||||
Assets
|
(Unaudited)
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
27,137
|
$
|
23,993
|
||||
Accounts receivable, net of allowances for bad debts and customer credits of $1,001 and $1,045 at June 30, 2016 and December 31, 2015, respectively
|
28,687
|
28,091
|
||||||
Deferred tax asset
|
4,163
|
3,642
|
||||||
Prepaid expenses and other current assets
|
1,004
|
1,276
|
||||||
Total current assets
|
60,991
|
57,002
|
||||||
Property and equipment, net
|
4,976
|
4,296
|
||||||
Investments
|
680
|
680
|
||||||
Intangible assets, net
|
26,681
|
29,515
|
||||||
Goodwill
|
42,821
|
42,903
|
||||||
Long-term deferred tax asset
|
17,820
|
17,820
|
||||||
Other assets
|
1,631
|
1,372
|
||||||
Total assets
|
$
|
155,600
|
$
|
153,588
|
||||
Liabilities and Stockholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
9,857
|
$
|
7,643
|
||||
Accrued expenses and other current liabilities
|
9,707
|
10,744
|
||||||
Current portion of term loan payable
|
5,250
|
5,250
|
||||||
Total current liabilities
|
24,814
|
23,637
|
||||||
Convertible note payable
|
1,000
|
1,000
|
||||||
Long-term portion of term loan payable
|
10,125
|
12,750
|
||||||
Borrowings under revolving credit facility
|
8,000
|
8,000
|
||||||
Total liabilities
|
43,939
|
45,387
|
||||||
Commitments and contingencies
|
—
|
—
|
||||||
Stockholders’ equity:
|
||||||||
Preferred stock, $0.001 par value, 11,445,187 shares authorized
|
||||||||
Series A Preferred stock, none issued and outstanding
|
—
|
—
|
||||||
Series B Preferred stock, 168,007 shares issued and outstanding
|
—
|
—
|
||||||
Common stock, $0.001 par value; 55,000,000 shares authorized and 10,785,097 and 10,626,624 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively
|
11
|
11
|
||||||
Additional paid-in capital
|
346,190
|
342,485
|
||||||
Accumulated deficit
|
(234,540
|
)
|
(234,295
|
)
|
||||
Total stockholders’ equity
|
111,661
|
108,201
|
||||||
Total liabilities and stockholders’ equity
|
$
|
155,600
|
$
|
153,588
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Revenues:
|
||||||||||||||||
Lead fees
|
$
|
30,508
|
$
|
27,854
|
$
|
62,504
|
$
|
52,022
|
||||||||
Advertising
|
5,275
|
2,036
|
9,041
|
3,635
|
||||||||||||
Other revenues
|
365
|
497
|
850
|
973
|
||||||||||||
Total revenues
|
36,148
|
30,387
|
72,395
|
56,630
|
||||||||||||
Cost of revenues
|
22,227
|
18,617
|
44,839
|
34,762
|
||||||||||||
Gross profit
|
13,921
|
11,770
|
27,556
|
21,868
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Sales and marketing
|
4,384
|
3,736
|
10,061
|
7,320
|
||||||||||||
Technology support
|
3,645
|
2,546
|
7,832
|
4,377
|
||||||||||||
General and administrative
|
3,686
|
3,208
|
7,059
|
6,254
|
||||||||||||
Depreciation and amortization
|
1,254
|
604
|
2,540
|
1,089
|
||||||||||||
Litigation settlements
|
4
|
(25
|
)
|
(1
|
)
|
(50
|
)
|
|||||||||
Total operating expenses
|
12,973
|
10,069
|
27,491
|
18,990
|
||||||||||||
Operating income
|
948
|
1,701
|
65
|
2,878
|
||||||||||||
Interest and other income (expense), net
|
(213
|
)
|
(183
|
)
|
(437
|
)
|
(330
|
)
|
||||||||
Income (loss) before income tax provision (benefit)
|
735
|
1,518
|
(372
|
)
|
2,548
|
|||||||||||
Income tax provision (benefit)
|
305
|
647
|
(127
|
)
|
903
|
|||||||||||
Net income (loss) and comprehensive income (loss)
|
$
|
430
|
$
|
871
|
$
|
(245
|
)
|
$
|
1,645
|
|||||||
Basic earnings (loss) per common share
|
$
|
0.04
|
$
|
0.09
|
$
|
(0.02
|
)
|
$
|
0.17
|
|||||||
Diluted earnings (loss) per common share
|
$
|
0.03
|
$
|
0.08
|
$
|
(0.02
|
)
|
$
|
0.16
|
Six Months Ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
|
$ | (245 | ) | $ | 1,645 | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
3,620 | 1,354 | ||||||
Provision for bad debts
|
141 | 146 | ||||||
Provision for customer credits
|
340 | 252 | ||||||
Share-based compensation
|
2,230 | 1,205 | ||||||
Change in deferred tax asset
|
(521 | ) | 4,414 | |||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable
|
(995 | ) | (195 | ) | ||||
Prepaid expenses and other current assets
|
280 | (1,897 | ) | |||||
Other assets
|
116 | (3,667 | ) | |||||
Accounts payable
|
2,214 | 2,604 | ||||||
Accrued expenses and other current liabilities
|
(1,037 | ) | (3,137 | ) | ||||
Non-current liabilities
|
25 | (261 | ) | |||||
Net cash provided by operating activities
|
6,168 | 2,463 | ||||||
Cash flows from investing activities:
|
||||||||
Purchase of Dealix/Autotegrity
|
— | (25,011 | ) | |||||
Investment in GoMoto
|
(375 | ) | — | |||||
Purchases of property and equipment
|
(1,466 | ) | (809 | ) | ||||
Net cash used in investing activities
|
(1,841 | ) | (25,820 | ) | ||||
Cash flows from financing activities:
|
||||||||
Borrowings under credit facility
|
— | 2,750 | ||||||
Borrowings under term loan
|
— | 15,000 | ||||||
Payments on term loan borrowings
|
(2,625 | ) | (1,125 | ) | ||||
Proceeds from exercise of stock options
|
1,467 | 113 | ||||||
Proceeds from exercise of warrant
|
— | 1,860 | ||||||
Payment of contingent fee arrangement
|
(25 | ) | (13 | ) | ||||
Net cash (used in) provided by financing activities
|
(1,183 | ) | 18,585 | |||||
Net increase (decrease) in cash and cash equivalents
|
3,144 | (4,772 | ) | |||||
Cash and cash equivalents, beginning of period
|
23,993 | 20,747 | ||||||
Cash and cash equivalents, end of period
|
$ | 27,137 | $ | 15,975 | ||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid for income taxes
|
$ | 155 | $ | 189 | ||||
Cash paid for interest
|
$ | 450 | $ | 370 |
(in thousands)
|
||||
Series B Preferred Stock
|
$
|
20,989
|
||
Series B Preferred warrants to purchase 148,240 shares of Series B Preferred Stock
|
2,542
|
|||
Cash
|
279
|
|||
Fair value of prior ownership in AutoWeb
|
4,016
|
|||
$
|
27,826
|
Valuation Method
|
Estimated
Fair Value
|
Estimated
Useful Life (1)
|
|||||||
(in thousands)
|
(years)
|
||||||||
Customer relationships
|
Excess of earnings
(2)
|
$
|
7,470
|
4
|
|||||
Trademark/trade names
|
Relief from Royalty
(3)
|
2,600
|
6
|
||||||
Developed technology
|
Excess of earnings
(4)
|
7,620
|
7
|
||||||
Total purchased intangible assets
|
$
|
17,690
|
(1)
|
Determination of the estimated useful lives of the individual categories of purchased intangible assets was based on the nature of the applicable intangible asset and the expected future cash flows to be derived from such intangible asset. Amortization of intangible assets with definite lives is recognized over the shorter of the respective life of the agreement or the period of time the assets are expected to contribute to future cash flows.
|
|
(2)
|
The excess of earnings method estimates a purchased intangible asset's value based on the present value of the prospective net cash flows (or excess earnings) attributable to it. The value attributed to these intangibles was based on projected net cash inflows from existing contracts or relationships.
|
|
(3)
|
The relief from royalty method is an earnings approach which assesses the royalty savings an entity realizes since it owns the asset and isn’t required to pay a third party a license fee for its use.
|
|
(4)
|
The excess of earnings method estimates a purchased intangible asset's value based on the present value of the prospective net cash flows (or excess earnings) attributable to it. The method takes into account technological and economic obsolescence of the technology.
|
(in thousands)
|
||||
Net identifiable assets acquired:
|
||||
Total tangible assets acquired
|
$
|
9,778
|
||
Total liabilities assumed
|
2,520
|
|||
Net identifiable assets acquired
|
7,258
|
|||
Definite-lived intangible assets acquired
|
7,655
|
|||
Indefinite-lived intangible assets acquired
|
2,200
|
|||
Goodwill
|
7,358
|
|||
$
|
24,471
|
Valuation Method
|
Estimated
Fair Value
|
Estimated
Useful Life
(1)
|
||||
(in thousands)
|
(years)
|
|||||
Customer relationships
|
Excess of earnings (2)
|
$
|
7,020
|
10
|
||
Trademark/trade names – Autotegrity
|
Relief from Royalty (3)
|
120
|
3
|
|||
Trademark/trade names – UsedCars.com
|
Relief from Royalty (3)
|
2,200
|
Indefinite
|
|||
Developed technology
|
Cost Approach (4)
|
515
|
3
|
|||
Total purchased intangible assets
|
$
|
9,855
|
(1)
|
Determination of the estimated useful lives of the individual categories of purchased intangible assets was based on the nature of the applicable intangible asset and the expected future cash flows to be derived from such intangible asset. Amortization of intangible assets with definite lives is recognized over the shorter of the respective life of the agreement or the period of time the assets are expected to contribute to future cash flows.
|
|
(2)
|
The excess of earnings method estimates a purchased intangible asset's value based on the present value of the prospective net cash flows (or excess earnings) attributable to it. The value attributed to these intangibles was based on projected net cash inflows from existing contracts or relationships.
|
|
(3)
|
The relief from royalty method is an earnings approach which assesses the royalty savings an entity realizes since it owns the asset and isn’t required to pay a third party a license fee for its use.
|
|
(4)
|
The cost approach estimates the cost required to repurchase or reproduce the intangible assets. The method takes into account technological and economic obsolescence of the technology.
|
Three Months
Ended
June 30, 2015
|
Six Months
Ended
June 30, 2015
|
|||||||
(in thousands)
|
||||||||
Unaudited pro forma consolidated results:
|
||||||||
Revenues
|
$ | 37,466 | $ | 76,100 | ||||
Net income
|
$ | 1,190 | $ | 2,692 |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Basic Shares:
|
||||||||||||||||
Weighted average common shares outstanding
|
10,711,404
|
10,017,204
|
10,672,656
|
9,451,967
|
||||||||||||
Weighted average unvested restricted stock
|
(118,773
|
)
|
(93,407
|
)
|
(121,887
|
)
|
(46,961
|
)
|
||||||||
Basic Shares
|
10,592,631
|
9,923,797
|
10,550,769
|
9,405,006
|
||||||||||||
Diluted Shares:
|
||||||||||||||||
Basic shares
|
10,592,631
|
9,923,797
|
10,550,769
|
9,405,006
|
||||||||||||
Weighted average dilutive securities
|
2,702,724
|
1,133,317
|
—
|
1,013,759
|
||||||||||||
Diluted Shares
|
13,295,355
|
11,057,114
|
10,550,769
|
10,418,765
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Share-based compensation expense:
|
||||||||||||||||
Cost of revenues
|
$
|
14
|
$
|
38
|
$
|
28
|
$
|
63
|
||||||||
Sales and marketing
[1]
|
341
|
146
|
974
|
287
|
||||||||||||
Technology support
[2]
|
98
|
153
|
429
|
227
|
||||||||||||
General and administrative
[3]
|
418
|
217
|
807
|
634
|
||||||||||||
Share-based compensation costs
|
871
|
554
|
2,238
|
1,211
|
||||||||||||
Amount capitalized to internal use software
|
5
|
2
|
8
|
6
|
||||||||||||
Total share-based compensation costs
|
$
|
866
|
$
|
552
|
$
|
2,230
|
$
|
1,205
|
(1)
|
Certain awards were modified in connection with the termination of an executive officer’s employment with the Company and their vesting accelerated in accordance with the terms of the applicable option agreements. The total expense related to these modifications and acceleration of vested awards was approximately $0.3 million in the six months ended June 30, 2016.
|
(2)
|
The vesting of certain awards was accelerated in accordance with the terms of the applicable option agreements in connection with the termination of an executive officer’s employment with the Company. The total expense related to acceleration of vested awards was approximately $0.2 million in the six months ended June 30, 2016.
|
(3)
|
Certain awards were modified in accordance with the Company’s former Chief Financial Officer’s consulting agreement and their vesting accelerated in accordance with the terms of the applicable option agreements. The total expense related to these modifications and acceleration of vested awards was approximately $0.2 million in the six months ended June 30, 2015.
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Number of service-based options granted
|
62,500
|
269,500
|
491,400
|
584,550
|
||||||||||||
Weighted average grant date fair value
|
$
|
6.75
|
$
|
6.75
|
$
|
7.94
|
$
|
5.62
|
||||||||
Weighted average exercise price
|
$
|
14.18
|
$
|
14.60
|
$
|
16.75
|
$
|
12.24
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Number of stock options exercised
|
104,634
|
18,821
|
158,473
|
19,074
|
||||||||||||
Weighted average exercise price
|
$
|
7.35
|
$
|
5.90
|
$
|
9.26
|
$
|
5.92
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Dividend yield
|
—
|
—
|
—
|
—
|
||||||||||||
Volatility
|
59
|
%
|
57%
|
58
|
%
|
56
|
%
|
|||||||||
Risk-free interest rate
|
1.1
|
%
|
1.3%
|
1.3
|
%
|
1.3
|
%
|
|||||||||
Expected life (years)
|
4.4
|
4.4
|
4.4
|
4.4
|
June 30,
|
December 31,
|
|||||||
2016
|
2015
|
|||||||
(in thousands)
|
||||||||
Computer software and hardware and capitalized internal use software
|
$
|
17,189
|
$
|
15,741
|
||||
Furniture and equipment
|
1,431
|
1,419
|
||||||
Leasehold improvements
|
1,429
|
1,424
|
||||||
20,049
|
18,584
|
|||||||
Less – Accumulated depreciation and amortization
|
(15,073
|
)
|
(14,288
|
)
|
||||
Property and equipment, net
|
$
|
4,976
|
$
|
4,296
|
June 30, 2016
|
December 31, 2015
|
|||||||||||||||||||||||||||
Intangible Asset
|
Estimated
Useful Life
|
Gross
|
Accumulated
Amortization
|
Net
|
Gross
|
Accumulated Amortization
|
Net
|
|||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||
Trademarks/trade names/licenses/domains
|
5 years – Indefinite
|
$ | 11,494 | $ | (6,416 | ) | $ | 5,078 | $ | 11,494 | $ | (6,071 | ) | $ | 5,423 | |||||||||||||
Software and publications
|
3 years
|
1,300 | (1,300 | ) | — | 1,300 | (1,300 | ) | — | |||||||||||||||||||
Customer relationships
|
2-10 years
|
19,563 | (5,903 | ) | 13,660 | 19,563 | (4,341 | ) | 15,222 | |||||||||||||||||||
Employment/non-compete agreements
|
5 years
|
1,510 | (1,064 | ) | 446 | 1,510 | (849 | ) | 661 | |||||||||||||||||||
Developed technology
|
1-5 years
|
8,955 | (1,458 | ) | 7,497 | 8,955 | (746 | ) | 8,209 | |||||||||||||||||||
$ | 42,822 | $ | (16,141 | ) | $ | 26,681 | $ | 42,822 | $ | (13,307 | ) | $ | 29,515 |
Year
|
Amortization Expense
|
|||
(in thousands)
|
||||
2016
|
$
|
2,807
|
||
2017
|
5,427
|
|||
2018
|
5,052
|
|||
2019
|
3,655
|
|||
2020
|
2,224
|
|||
2021
|
2,116
|
|||
$
|
21,281
|
Goodwill as of December 31, 2015
|
$
|
42,903
|
||
Current year activity
|
(82
|
)
|
||
Goodwill as of June 30, 2016
|
$
|
42,821
|
June 30,
|
December 31,
|
|||||||
2016
|
2015
|
|||||||
(in thousands)
|
||||||||
Compensation and related costs and professional fees
|
$
|
2,907
|
$
|
3,981
|
||||
Other accrued expenses
|
5,722
|
5,715
|
||||||
Amounts due to customers
|
556
|
486
|
||||||
Other current liabilities
|
522
|
562
|
||||||
Total accrued expenses and other current liabilities
|
$
|
9,707
|
$
|
10,744
|
|
●
|
The effect of unemployment on the number of vehicle purchasers;
|
|
●
|
Pricing and purchase incentives for vehicles;
|
|
●
|
The expectation that consumers will be purchasing fewer vehicles overall during their lifetime as a result of better quality vehicles and longer warranties;
|
|
●
|
The impact of fuel prices on demand for the number and types of vehicles;
|
|
●
|
Increases or decreases in the number of retail Dealers or in the number of Manufacturers and other wholesale customers in our customer base;
|
|
●
|
Volatility in spending by Manufacturers and others in their marketing budgets and allocations; and
|
|
●
|
The competitive impact of consolidation in the online automotive referral industry.
|
2016
|
% of total revenues
|
2015
|
% of total revenues
|
$ Change
|
% Change
|
|||||||||||||||||||
(Dollar amounts in thousands)
|
||||||||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
Lead fees
|
$
|
30,508
|
84
|
%
|
$
|
27,854
|
92
|
%
|
$
|
2,654
|
10
|
%
|
||||||||||||
Advertising
|
5,275
|
15
|
2,036
|
7
|
3,239
|
159
|
||||||||||||||||||
Other revenues
|
365
|
1
|
497
|
1
|
(132
|
)
|
(27
|
)
|
||||||||||||||||
Total revenues
|
36,148
|
100
|
30,387
|
100
|
5,761
|
19
|
||||||||||||||||||
Cost of revenues
|
22,227
|
61
|
18,617
|
61
|
3,610
|
19
|
||||||||||||||||||
Gross profit
|
13,921
|
39
|
11,770
|
39
|
2,151
|
18
|
||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Sales and marketing
|
4,384
|
12
|
3,736
|
12
|
648
|
17
|
||||||||||||||||||
Technology support
|
3,645
|
10
|
2,546
|
8
|
1,099
|
43
|
||||||||||||||||||
General and administrative
|
3,686
|
10
|
3,208
|
11
|
478
|
15
|
||||||||||||||||||
Depreciation and amortization
|
1,254
|
4
|
604
|
2
|
650
|
108
|
||||||||||||||||||
Litigation settlements
|
4
|
—
|
(25
|
)
|
—
|
29
|
(116
|
)
|
||||||||||||||||
Total operating expenses
|
12,973
|
36
|
10,069
|
33
|
2,904
|
29
|
||||||||||||||||||
Operating income
|
948
|
3
|
1,701
|
6
|
(753
|
)
|
(44
|
)
|
||||||||||||||||
Interest and other income (expense), net
|
(213
|
)
|
(1
|
)
|
(183
|
)
|
(1
|
)
|
(30
|
)
|
16
|
|||||||||||||
Income before income tax provision
|
735
|
2
|
1,518
|
5
|
(783
|
)
|
(52
|
)
|
||||||||||||||||
Income tax provision
|
305
|
1
|
647
|
2
|
(342
|
)
|
(53
|
)
|
||||||||||||||||
Net income
|
$
|
430
|
|
1
|
%
|
$
|
871
|
3
|
%
|
$
|
(441
|
)
|
(51
|
%)
|
2016
|
% of total revenues
|
2015
|
% of total revenues
|
$ Change
|
% Change
|
|||||||||||||||||||
(Dollar amounts in thousands)
|
||||||||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
Lead fees
|
$ |
62,504
|
86
|
%
|
$
|
52,022
|
92
|
%
|
$
|
10,482
|
20
|
%
|
||||||||||||
Advertising
|
9,041
|
13
|
3,635
|
6
|
5,406
|
149
|
||||||||||||||||||
Other revenues
|
850
|
1
|
973
|
2
|
(123
|
)
|
(13
|
)
|
||||||||||||||||
Total revenues
|
72,395
|
100
|
56,630
|
100
|
15,765
|
28
|
||||||||||||||||||
Cost of revenues
|
44,839
|
62
|
34,762
|
61
|
10,077
|
29
|
||||||||||||||||||
Gross profit
|
27,556
|
38
|
21,868
|
39
|
5,688
|
26
|
||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Sales and marketing
|
10,061
|
14
|
7,320
|
13
|
2,741
|
37
|
||||||||||||||||||
Technology support
|
7,832
|
11
|
4,377
|
8
|
3,455
|
79
|
||||||||||||||||||
General and administrative
|
7,059
|
10
|
6,254
|
11
|
805
|
13
|
||||||||||||||||||
Depreciation and amortization
|
2,540
|
3
|
1,089
|
2
|
1,451
|
133
|
||||||||||||||||||
Litigation settlements
|
(1
|
) |
—
|
(50
|
)
|
—
|
49
|
(98
|
)
|
|||||||||||||||
Total operating expenses
|
27,491
|
38
|
18,990
|
34
|
8,501
|
45
|
||||||||||||||||||
Operating income
|
65
|
—
|
2,878
|
5
|
(2,813
|
)
|
(98
|
)
|
||||||||||||||||
Interest and other income (expense), net
|
(437
|
)
|
—
|
(330
|
)
|
—
|
|
(107
|
)
|
32
|
||||||||||||||
Income (loss) before income tax provision (benefit)
|
(372
|
)
|
—
|
2,548
|
5
|
(2,920
|
)
|
(115
|
)
|
|||||||||||||||
Income tax provision (benefit)
|
(127
|
)
|
—
|
903
|
2
|
(1,030
|
)
|
(114
|
)
|
|||||||||||||||
Net income (loss)
|
$ |
(245
|
)
|
—
|
%)
|
$
|
1,645
|
3
|
%
|
$
|
(1,890
|
)
|
(115
|
%)
|
Six Months Ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
(in thousands)
|
||||||||
Net cash provided by operating activities
|
$
|
6,168
|
$
|
2,463
|
||||
Net cash used in investing activities
|
(1,841
|
)
|
(25,820
|
)
|
||||
Net cash (used in) provided by financing activities
|
(1,183
|
)
|
18,585
|
2.1‡
|
Membership Interest Purchase Agreement dated as of January 13, 2014 by and among Autobytel Inc., a Delaware corporation, AutoNation, Inc., a Delaware corporation, and AutoNationDirect.com, Inc., a Delaware corporation, which is incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on January 17, 2014 (SEC File No. 001-34761)
|
2.2‡
|
Stock Purchase Agreement dated as of May 21, 2015 by and among Autobytel Inc., a Delaware corporation, CDK Global, LLC, a Delaware limited liability company, Dealix Corporation, a California corporation, and Autotegrity, Inc., a Delaware corporation, which is incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on May 27, 2015 (SEC File No. 001-34761)
|
2.3‡
|
Agreement and Plan of Merger dated as of October 1, 2015 by and among Autobytel Inc., a Delaware corporation, New Horizon Acquisition Corp., a Delaware corporation, AutoWeb, Inc., a Delaware corporation, and Jose Vargas, which is incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on October 6, 2015 (SEC File No. 001-34761) (“
October 2015 Form 8-K
”)
|
3.1
|
Fifth Amended and Restated Certificate of Incorporation of Autobytel Inc. (formerly Autobytel.com Inc.) certified by the Secretary of State of Delaware (filed December 14, 1998), as amended by Certificate of Amendment dated March 1, 1999, Second Certificate of Amendment of the Fifth Amended and Restated Certificate of Incorporation of Autobytel Inc. dated July 22, 1999, Third Certificate of Amendment of the Fifth Amended and Restated Certificate of Incorporation of Autobytel Inc. dated August 14, 2001, and Amended Certificate of Designation of Series A Junior Participating Preferred Stock dated April 24, 2009, which are incorporated herein by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2009 filed with the SEC on April 24, 2009 (SEC File No. 000-22239); Fourth Certificate of Amendment to Fifth Amended and Restated Certificate of Incorporation of Autobytel Inc. dated July 10, 2012, which is incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on July 12, 2012 (SEC File No. 001-34761); and Fifth Certificate of Amendment to Fifth Amended and Restated Certificate of Incorporation of Autobytel Inc. dated July 3, 2013, which is incorporated herein by reference to Exhibit 3.3 to the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013 filed with the SEC on August 1, 2013 (SEC File No. 001-34761); and Certificate of Designations of Series B Junior Participating Convertible Preferred Stock of Autobytel Inc. dated October 1, 2015, which is incorporated herein by reference to Exhibit 3.1 to the October 2015 Form 8-K
|
3.2
|
Fifth Amended and Restated Bylaws of Autobytel Inc. dated October 1, 2015, which is incorporated herein by reference to Exhibit 3.2 to the October 2015 Form 8-K
|
4.1
|
Form of Common Stock Certificate of Autobytel Inc., which is incorporated herein by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2001 filed with the SEC on November 14, 2001 (SEC File No. 000-22239)
|
4.2
|
Tax Benefit Preservation Plan dated as of May 26, 2010 between Autobytel Inc. and Computershare Trust Company, N.A., as rights agent, together with the following exhibits thereto: Exhibit A – Form of Right Certificate; and Exhibit B – Summary of Rights to Purchase Shares of Preferred Stock of Autobytel Inc., which is incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on June 2, 2010 (SEC File No. 000-22239), as amended by Amendment No. 1 to Tax Benefit Preservation Plan dated as of April 14, 2014, between Autobytel Inc. and Computershare Trust Company, N.A., as rights agent, which is incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on April 16, 2014 (SEC File No. 001-34761)
|
4.3
|
Certificate of Adjustment Under Section 11(m) of the Tax Benefit Preservation Plan dated July 12, 2012, which is incorporated by reference to Exhibit 4.3 to the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2012 filed with the SEC on November 8, 2012 (SEC File No. 001-34761)
|
10.1
|
Autobytel Inc. Amended and Restated 2014 Equity Incentive Plan, which is incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on June 23, 2016 (SEC File No. 001-34761)
|
10.2*
|
Form of Non-Employee Director Stock Option Award Agreement (Non-Qualified Stock Option) under the Autobytel Inc. Amended and Restated 2014 Equity Incentive Plan
|
10.3*
|
Form of Employee Stock Option Award Agreement (Non-Qualified Stock Option) (Executive) under the Autobytel Inc. Amended and Restated 2014 Equity Incentive Plan,
|
10.4*
|
Form of Employee Stock Option Award Agreement (Non-Qualified Stock Option) (Non-Executive) under the Autobytel Inc. Amended and Restated 2014 Equity Incentive Plan
|
10.5* | Fourth Amendment to Loan Agreement dated as of June 1, 2016 (amending Loan Agreement dated as of February 26, 2013 by and between Autobytel Inc., a Delaware corporation, and Union Bank, N.A., a national banking association, as amended) |
‡
|
Certain schedules in this Exhibit have been omitted in accordance with Item 601(b)(2) of Regulation S-K. Autobytel will furnish supplementally a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request; provided, however, that Autobytel may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedule or exhibit so furnished.
|
††
|
Furnished with this report. In accordance with Rule 406T of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
|
AUTOBYTEL INC.
|
||||
Date: August 4, 2016
|
By:
|
/s/ Kimberly S. Boren
|
||
Kimberly S. Boren
|
||||
Senior Vice President and Chief Financial Officer
|
||||
(Duly Authorized Officer and Principal Financial Officer)
|
Date: August 4, 2016
|
By:
|
/s/ Wesley Ozima
|
||
Wesley Ozima
|
||||
Vice President and Controller
|
||||
(Principal Accounting Officer)
|
2.1‡
|
Membership Interest Purchase Agreement dated as of January 13, 2014 by and among Autobytel Inc., a Delaware corporation, AutoNation, Inc., a Delaware corporation, and AutoNationDirect.com, Inc., a Delaware corporation, which is incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on January 17, 2014 (SEC File No. 001-34761)
|
2.2‡
|
Stock Purchase Agreement dated as of May 21, 2015 by and among Autobytel Inc., a Delaware corporation, CDK Global, LLC, a Delaware limited liability company, Dealix Corporation, a California corporation, and Autotegrity, Inc., a Delaware corporation, which is incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on May 27, 2015 (SEC File No. 001-34761)
|
2.3‡
|
Agreement and Plan of Merger dated as of October 1, 2015 by and among Autobytel Inc., a Delaware corporation, New Horizon Acquisition Corp., a Delaware corporation, AutoWeb, Inc., a Delaware corporation, and Jose Vargas, which is incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on October 6, 2015 (SEC File No. 001-34761) (“
October 2015 Form 8-K
”)
|
3.1
|
Fifth Amended and Restated Certificate of Incorporation of Autobytel Inc. (formerly Autobytel.com Inc.) certified by the Secretary of State of Delaware (filed December 14, 1998), as amended by Certificate of Amendment dated March 1, 1999, Second Certificate of Amendment of the Fifth Amended and Restated Certificate of Incorporation of Autobytel Inc. dated July 22, 1999, Third Certificate of Amendment of the Fifth Amended and Restated Certificate of Incorporation of Autobytel Inc. dated August 14, 2001, and Amended Certificate of Designation of Series A Junior Participating Preferred Stock dated April 24, 2009, which are incorporated herein by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2009 filed with the SEC on April 24, 2009 (SEC File No. 000-22239); Fourth Certificate of Amendment to Fifth Amended and Restated Certificate of Incorporation of Autobytel Inc. dated July 10, 2012, which is incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on July 12, 2012 (SEC File No. 001-34761); and Fifth Certificate of Amendment to Fifth Amended and Restated Certificate of Incorporation of Autobytel Inc. dated July 3, 2013, which is incorporated herein by reference to Exhibit 3.3 to the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013 filed with the SEC on August 1, 2013 (SEC File No. 001-34761); and Certificate of Designations of Series B Junior Participating Convertible Preferred Stock of Autobytel Inc. dated October 1, 2015, which is incorporated herein by reference to Exhibit 3.1 to the October 2015 Form 8-K
|
3.2
|
Fifth Amended and Restated Bylaws of Autobytel Inc. dated October 1, 2015, which is incorporated herein by reference to Exhibit 3.2 to the October 2015 Form 8-K
|
4.1
|
Form of Common Stock Certificate of Autobytel Inc., which is incorporated herein by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2001 filed with the SEC on November 14, 2001 (SEC File No. 000-22239)
|
4.2
|
Tax Benefit Preservation Plan dated as of May 26, 2010 between Autobytel Inc. and Computershare Trust Company, N.A., as rights agent, together with the following exhibits thereto: Exhibit A – Form of Right Certificate; and Exhibit B – Summary of Rights to Purchase Shares of Preferred Stock of Autobytel Inc., which is incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on June 2, 2010 (SEC File No. 000-22239), as amended by Amendment No. 1 to Tax Benefit Preservation Plan dated as of April 14, 2014, between Autobytel Inc. and Computershare Trust Company, N.A., as rights agent, which is incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on April 16, 2014 (SEC File No. 001-34761)
|
4.3
|
Certificate of Adjustment Under Section 11(m) of the Tax Benefit Preservation Plan dated July 12, 2012, which is incorporated by reference to Exhibit 4.3 to the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2012 filed with the SEC on November 8, 2012 (SEC File No. 001-34761)
|
10.1
|
Autobytel Inc. Amended and Restated 2014 Equity Incentive Plan, which is incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on June 23, 2016 (SEC File No. 001-34761)
|
10.2*
|
Form of Non-Employee Director Stock Option Award Agreement (Non-Qualified Stock Option) under the Autobytel Inc. Amended and Restated 2014 Equity Incentive Plan
|
10.3*
|
Form of Employee Stock Option Award Agreement (Non-Qualified Stock Option) (Executive) under the Autobytel Inc. Amended and Restated 2014 Equity Incentive Plan,
|
10.4*
|
Form of Employee Stock Option Award Agreement (Non-Qualified Stock Option) (Non-Executive) under the Autobytel Inc. Amended and Restated 2014 Equity Incentive Plan
|
10.5* |
Fourth Amendment to Loan Agreement dated as of June 1, 2016 (amending Loan Agreement dated as of February 26, 2013 by and between Autobytel Inc., a Delaware corporation, and Union Bank, N.A., a national banking association, as amended)
|
31.1*
|
Rule 13a-14(a)/15d-14(a) Certification by Principal Executive Officer
|
31.2*
|
Rule 13a-14(a)/15d-14(a) Certification by Principal Financial Officer
|
32.1*
|
Section 1350 Certification by Principal Executive Officer and Principal Financial Officer
|
101.INS††
|
XBRL Instance Document
|
101.SCH††
|
XBRL Taxonomy Extension Schema Document
|
101.CAL††
|
XBRL Taxonomy Calculation Linkbase Document
|
101.DEF††
|
XBRL Taxonomy Extension Definition Document
|
101.LAB††
|
XBRL Taxonomy Label Linkbase Document
|
101.PRE††
|
XBRL Taxonomy Presentation Linkbase Document
|
‡
|
Certain schedules in this Exhibit have been omitted in accordance with Item 601(b)(2) of Regulation S-K. Autobytel will furnish supplementally a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request; provided, however, that Autobytel may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedule or exhibit so furnished.
|
††
|
Furnished with this report. In accordance with Rule 406T of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
|
|
6.
|
Miscellaneous
.
|
Grant Date: | [XXXX] | |
Total Options Awarded: | [XXXX] | |
Exercise Price Per Share: | $[XXXX] |
“Company” | Autobytel Inc., a Delaware corporation | ||
By:
|
Glenn E. Fuller
Executive Vice President, Chief Legal and Administrative Officer and Secretary
|
||
|
|||
“Participant” |
[Printed Name of Participant]
|
|
(a)
|
A counterpart of this Fourth Amendment, duly executed by Borrower; and
|
|
(i)
|
Section 3.
2
.
|
For the purposes of Section 3.2 of the Agreement, Exhibit A attached hereto constitutes the current schedule of Borrower’s Affiliates delivered to Bank.
|
|
(ii)
|
Section 3.8
.
|
Section 3.8 of the Agreement is hereby amended in its entirety to read as follows:
|
Subsidiary Name
|
Jurisdiction of Incorporation
|
Auto-By-Tel Acceptance Corporation
|
Delaware
|
Auto-By-Tel Insurance Services, Inc.
|
Delaware
|
Autobytel Dealer Services, Inc.
|
Delaware
|
Autotegrity, Inc.
|
Delaware
|
AutoWeb, Inc.
|
Delaware
|
AW GUA USA, Inc.
|
Delaware
|
AW GUA, Sociedad de Responsabilidad Limitada
|
Guatemala
|
Car.com, Inc.
|
Delaware
|
Dealix Corporation
|
California
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Autobytel 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.
|
/s/ Jeffrey H. Coats
|
||
Jeffrey H. Coats
|
||
President and Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Autobytel 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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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/s/ Kimberly S. Boren
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Kimberly S. Boren,
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Senior Vice President and
Chief Financial Officer
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1.
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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/s/ Jeffrey H. Coats
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Jeffrey H. Coats
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President and Chief Executive Officer
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August 4, 2016
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/s/ Kimberly S. Boren
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Kimberly S. Boren
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Senior Vice President and
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Chief Financial Officer
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August 4, 2016
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