Delaware
(State or other jurisdiction of
incorporation or organization)
|
|
26-1989091
(I.R.S. Employer
Identification Number)
|
Large accelerated filer [ ]
|
Accelerated filer [X]
|
Non-accelerated filer [ ]
(Do not check if a smaller
reporting company)
|
Smaller reporting company [ ]
|
|
Page
|
|
As of
|
||||||
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
55,108
|
|
|
$
|
19,150
|
|
Marketable securities
|
61,326
|
|
|
101,274
|
|
||
Accounts receivable, net
|
15,888
|
|
|
12,751
|
|
||
Deferred commissions
|
7,746
|
|
|
5,438
|
|
||
Prepaid expenses and other current assets
|
3,884
|
|
|
3,772
|
|
||
Total current assets
|
143,952
|
|
|
142,385
|
|
||
Property and equipment, net
|
5,912
|
|
|
6,896
|
|
||
Marketable securities, noncurrent
|
—
|
|
|
13,335
|
|
||
Restricted cash, noncurrent
|
1,000
|
|
|
1,000
|
|
||
Deferred commissions, noncurrent
|
3,861
|
|
|
4,923
|
|
||
Other assets
|
4,691
|
|
|
4,735
|
|
||
Total assets
|
$
|
159,416
|
|
|
$
|
173,274
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
3,603
|
|
|
$
|
3,384
|
|
Accrued expenses and other current liabilities
|
4,894
|
|
|
4,550
|
|
||
Accrued compensation
|
7,146
|
|
|
11,477
|
|
||
Deferred revenue
|
30,730
|
|
|
26,590
|
|
||
Total current liabilities
|
46,373
|
|
|
46,001
|
|
||
Deferred revenue, noncurrent
|
6,700
|
|
|
7,522
|
|
||
Other liabilities, noncurrent
|
1,255
|
|
|
1,397
|
|
||
Total liabilities
|
54,328
|
|
|
54,920
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Class A and Class B common stock
|
10
|
|
|
10
|
|
||
Additional paid-in capital
|
451,586
|
|
|
415,519
|
|
||
Accumulated other comprehensive income (loss)
|
38
|
|
|
(79
|
)
|
||
Accumulated deficit
|
(346,546
|
)
|
|
(297,096
|
)
|
||
Total stockholders’ equity
|
105,088
|
|
|
118,354
|
|
||
Total liabilities and stockholders’ equity
|
$
|
159,416
|
|
|
$
|
173,274
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Subscription
|
$
|
23,867
|
|
|
$
|
18,233
|
|
|
$
|
66,859
|
|
|
$
|
50,417
|
|
Professional services
|
1,634
|
|
|
1,306
|
|
|
4,944
|
|
|
3,583
|
|
||||
Total revenue
|
25,501
|
|
|
19,539
|
|
|
71,803
|
|
|
54,000
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||||
Cost of subscription (1)
|
3,988
|
|
|
3,081
|
|
|
12,218
|
|
|
8,532
|
|
||||
Cost of professional services (1)
|
3,978
|
|
|
5,606
|
|
|
13,941
|
|
|
15,581
|
|
||||
Total cost of revenue
|
7,966
|
|
|
8,687
|
|
|
26,159
|
|
|
24,113
|
|
||||
Gross profit
|
17,535
|
|
|
10,852
|
|
|
45,644
|
|
|
29,887
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Sales and marketing (1)
|
13,143
|
|
|
16,731
|
|
|
44,877
|
|
|
50,835
|
|
||||
Research and development (1)
|
10,573
|
|
|
7,868
|
|
|
30,619
|
|
|
21,853
|
|
||||
General and administrative (1)
|
5,338
|
|
|
6,311
|
|
|
19,902
|
|
|
18,291
|
|
||||
Total operating expenses
|
29,054
|
|
|
30,910
|
|
|
95,398
|
|
|
90,979
|
|
||||
Operating loss
|
(11,519
|
)
|
|
(20,058
|
)
|
|
(49,754
|
)
|
|
(61,092
|
)
|
||||
Other income, net
|
116
|
|
|
51
|
|
|
304
|
|
|
230
|
|
||||
Net loss
|
$
|
(11,403
|
)
|
|
$
|
(20,007
|
)
|
|
$
|
(49,450
|
)
|
|
$
|
(60,862
|
)
|
Net loss per Class A and B share, basic and diluted
|
$
|
(0.11
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
(0.65
|
)
|
Weighted-average shares used to compute basic and diluted net loss per Class A and B share
|
103,147
|
|
|
94,409
|
|
|
99,734
|
|
|
93,343
|
|
(1)
|
Includes stock-based compensation expense as follows:
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||||
Cost of subscription
|
$
|
139
|
|
|
$
|
96
|
|
|
$
|
367
|
|
|
$
|
196
|
|
Cost of professional services
|
456
|
|
|
647
|
|
|
1,468
|
|
|
1,522
|
|
||||
Sales and marketing
|
2,190
|
|
|
2,058
|
|
|
6,644
|
|
|
5,883
|
|
||||
Research and development
|
1,631
|
|
|
981
|
|
|
4,300
|
|
|
2,344
|
|
||||
General and administrative
|
1,236
|
|
|
1,177
|
|
|
3,476
|
|
|
3,100
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net loss
|
$
|
(11,403
|
)
|
|
$
|
(20,007
|
)
|
|
$
|
(49,450
|
)
|
|
$
|
(60,862
|
)
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Net change in unrealized gain (loss) on available-for-sale marketable securities
|
(16
|
)
|
|
19
|
|
|
117
|
|
|
69
|
|
||||
Reclassification adjustments for net realized gains on available-for-sale marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other comprehensive income (loss)
|
(16
|
)
|
|
19
|
|
|
117
|
|
|
69
|
|
||||
Comprehensive loss
|
$
|
(11,419
|
)
|
|
$
|
(19,988
|
)
|
|
$
|
(49,333
|
)
|
|
$
|
(60,793
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Operating activities:
|
|
|
|
||||
Net loss
|
$
|
(49,450
|
)
|
|
$
|
(60,862
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
2,407
|
|
|
1,378
|
|
||
Stock-based compensation
|
16,255
|
|
|
13,045
|
|
||
Amortization of deferred commissions
|
3,157
|
|
|
2,576
|
|
||
Accretion and amortization of marketable securities
|
406
|
|
|
1,126
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(3,137
|
)
|
|
(2,548
|
)
|
||
Deferred commissions
|
(4,403
|
)
|
|
(3,346
|
)
|
||
Prepaid expenses and other assets
|
(68
|
)
|
|
(1,026
|
)
|
||
Accounts payable
|
300
|
|
|
716
|
|
||
Accrued expenses and other liabilities
|
(4,046
|
)
|
|
(1,740
|
)
|
||
Deferred revenue
|
3,318
|
|
|
5,770
|
|
||
Net cash used in operating activities
|
(35,261
|
)
|
|
(44,911
|
)
|
||
Investing activities:
|
|
|
|
||||
Restricted cash
|
—
|
|
|
(1,000
|
)
|
||
Investment in related party
|
—
|
|
|
(4,125
|
)
|
||
Purchase of property and equipment
|
(1,587
|
)
|
|
(3,499
|
)
|
||
Purchase of marketable securities
|
(73,163
|
)
|
|
(86,324
|
)
|
||
Sales of marketable securities
|
—
|
|
|
5,000
|
|
||
Maturities of marketable securities
|
126,157
|
|
|
140,019
|
|
||
Net cash provided by investing activities
|
51,407
|
|
|
50,071
|
|
||
Financing activities:
|
|
|
|
||||
Proceeds from the exercise of stock options
|
2,576
|
|
|
3,180
|
|
||
Proceeds from issuance of common stock and warrants
|
17,358
|
|
|
—
|
|
||
Payments of issuance costs
|
(122
|
)
|
|
(94
|
)
|
||
Net cash provided by financing activities
|
19,812
|
|
|
3,086
|
|
||
|
|
|
|
||||
Net increase in cash and cash equivalents
|
35,958
|
|
|
8,246
|
|
||
Cash and cash equivalents at beginning of period
|
19,150
|
|
|
17,425
|
|
||
Cash and cash equivalents at end of period
|
$
|
55,108
|
|
|
$
|
25,671
|
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Value
|
||||||||
September 30, 2016
|
|
|
|
|
|
|
|
||||||||
U.S. agency obligations
|
$
|
34,481
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
34,505
|
|
U.S. treasury securities
|
26,807
|
|
|
15
|
|
|
(1
|
)
|
|
26,821
|
|
||||
Money market mutual funds
|
32,468
|
|
|
—
|
|
|
—
|
|
|
32,468
|
|
||||
|
93,756
|
|
|
39
|
|
|
(1
|
)
|
|
93,794
|
|
||||
Included in cash and cash equivalents
|
32,468
|
|
|
—
|
|
|
—
|
|
|
32,468
|
|
||||
Included in marketable securities
|
$
|
61,288
|
|
|
$
|
39
|
|
|
$
|
(1
|
)
|
|
$
|
61,326
|
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Value
|
||||||||
December 31, 2015
|
|
|
|
|
|
|
|
||||||||
U.S. agency obligations
|
$
|
83,763
|
|
|
$
|
—
|
|
|
$
|
(48
|
)
|
|
$
|
83,715
|
|
U.S. treasury securities
|
33,924
|
|
|
—
|
|
|
(31
|
)
|
|
33,893
|
|
||||
Money market mutual funds
|
1,038
|
|
|
—
|
|
|
—
|
|
|
1,038
|
|
||||
|
118,725
|
|
|
—
|
|
|
(79
|
)
|
|
118,646
|
|
||||
Included in cash and cash equivalents
|
4,038
|
|
|
—
|
|
|
(1
|
)
|
|
4,037
|
|
||||
Included in marketable securities
|
$
|
101,334
|
|
|
$
|
—
|
|
|
$
|
(60
|
)
|
|
$
|
101,274
|
|
Included in marketable securities, noncurrent
|
$
|
13,353
|
|
|
$
|
—
|
|
|
$
|
(18
|
)
|
|
$
|
13,335
|
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
September 30, 2016
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
Money market mutual funds
|
$
|
32,468
|
|
|
$
|
—
|
|
|
$
|
32,468
|
|
Marketable securities:
|
|
|
|
|
|
||||||
U.S. agency obligations
|
—
|
|
|
34,505
|
|
|
34,505
|
|
|||
U.S. treasury securities
|
—
|
|
|
26,821
|
|
|
26,821
|
|
|||
|
$
|
32,468
|
|
|
$
|
61,326
|
|
|
$
|
93,794
|
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
December 31, 2015
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
Money market mutual funds
|
$
|
1,038
|
|
|
$
|
—
|
|
|
$
|
1,038
|
|
U.S. agency obligations
|
—
|
|
|
3,000
|
|
|
3,000
|
|
|||
Marketable securities:
|
|
|
|
|
|
||||||
U.S. agency obligations
|
—
|
|
|
80,715
|
|
|
80,715
|
|
|||
U.S. treasury securities
|
—
|
|
|
33,893
|
|
|
33,893
|
|
|||
|
$
|
1,038
|
|
|
$
|
117,608
|
|
|
$
|
118,646
|
|
|
As of
|
||||||
|
September 30, 2016
|
|
December 31, 2015
|
||||
Leasehold improvements
|
$
|
2,061
|
|
|
$
|
2,046
|
|
Computer equipment
|
5,369
|
|
|
4,345
|
|
||
Software
|
1,136
|
|
|
885
|
|
||
Capitalization of internal-use software
|
2,925
|
|
|
2,925
|
|
||
Furniture and equipment
|
931
|
|
|
853
|
|
||
Total
|
12,422
|
|
|
11,054
|
|
||
Accumulated depreciation
|
(6,510
|
)
|
|
(4,158
|
)
|
||
Property and equipment, net
|
$
|
5,912
|
|
|
$
|
6,896
|
|
|
As of
|
||||||
|
September 30, 2016
|
|
December 31, 2015
|
||||
Subscription
|
$
|
22,152
|
|
|
$
|
18,029
|
|
Professional services—implementation
|
5,540
|
|
|
5,254
|
|
||
Professional services—communications
|
3,038
|
|
|
3,307
|
|
||
Total current
|
30,730
|
|
|
26,590
|
|
||
Subscription
|
370
|
|
|
1,163
|
|
||
Professional services—implementation
|
4,946
|
|
|
5,367
|
|
||
Professional services—communications
|
1,384
|
|
|
992
|
|
||
Total noncurrent
|
6,700
|
|
|
7,522
|
|
||
Total
|
$
|
37,430
|
|
|
$
|
34,112
|
|
|
Options
Outstanding
|
|
Weighted-
Average
Exercise
Price
|
|
Aggregate
Intrinsic
Value
|
|||||
Balance at December 31, 2015
|
9,561,713
|
|
|
$
|
5.62
|
|
|
$
|
16,694
|
|
Stock option grants
|
3,854,646
|
|
|
$
|
3.16
|
|
|
|
||
Stock options exercised
|
(1,804,676
|
)
|
|
$
|
1.43
|
|
|
|
||
Stock options canceled
|
(3,551,388
|
)
|
|
$
|
9.56
|
|
|
|
||
Balance at September 30, 2016
|
8,060,295
|
|
|
$
|
3.52
|
|
|
$
|
14,012
|
|
|
Nine Months Ended September 30,
|
||
|
2016
|
|
2015
|
Volatility
|
47%
|
|
53%
|
Expected life (in years)
|
6.12
|
|
6.17
|
Risk-free interest rate
|
1.37%
|
|
1.38%-1.91%
|
Dividend yield
|
—%
|
|
—%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||||||||||
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||||||||||||||
Net loss
|
$
|
(6,011
|
)
|
|
$
|
(5,392
|
)
|
|
$
|
(11,584
|
)
|
|
$
|
(8,423
|
)
|
|
$
|
(27,002
|
)
|
|
$
|
(22,448
|
)
|
|
$
|
(37,207
|
)
|
|
$
|
(23,655
|
)
|
Weighted-average shares used to compute basic and diluted net loss per share
|
54,376
|
|
|
48,771
|
|
|
54,664
|
|
|
39,745
|
|
|
54,460
|
|
|
45,274
|
|
|
57,063
|
|
|
36,280
|
|
||||||||
Basic and diluted net loss per share
|
$
|
(0.11
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
(0.65
|
)
|
|
$
|
(0.65
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Stock options and restricted stock units
|
21,538
|
|
|
17,776
|
|
|
21,538
|
|
|
17,776
|
|
Warrants*
|
2,020
|
|
|
115
|
|
|
2,020
|
|
|
115
|
|
Total
|
23,558
|
|
|
17,891
|
|
|
23,558
|
|
|
17,891
|
|
|
As of September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in millions)
|
||||||
Signed Annual Recurring Revenue (ARR)
|
$
|
118.1
|
|
|
$
|
103.0
|
|
|
Twelve Months Ended December 31,
|
||||
|
2015
|
|
2014
|
||
Annual Net Dollar Retention Rate (NDR)
|
116
|
%
|
|
103
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
|
(percentages of revenue)
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||
Subscription
|
94
|
%
|
|
93
|
%
|
|
93
|
%
|
|
93
|
%
|
Professional services
|
6
|
%
|
|
7
|
%
|
|
7
|
%
|
|
7
|
%
|
Total revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue:
|
|
|
|
|
|
|
|
||||
Cost of subscription
|
16
|
%
|
|
16
|
%
|
|
17
|
%
|
|
16
|
%
|
Cost of professional services
|
15
|
%
|
|
29
|
%
|
|
19
|
%
|
|
29
|
%
|
Total cost of revenue
|
31
|
%
|
|
45
|
%
|
|
36
|
%
|
|
45
|
%
|
Gross margin percentage
|
69
|
%
|
|
55
|
%
|
|
64
|
%
|
|
55
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
||||
Sales and marketing
|
52
|
%
|
|
86
|
%
|
|
62
|
%
|
|
94
|
%
|
Research and development
|
41
|
%
|
|
40
|
%
|
|
43
|
%
|
|
40
|
%
|
General and administrative
|
21
|
%
|
|
32
|
%
|
|
28
|
%
|
|
34
|
%
|
Total operating expenses
|
114
|
%
|
|
158
|
%
|
|
133
|
%
|
|
168
|
%
|
Operating loss
|
(45
|
)%
|
|
(103
|
)%
|
|
(69
|
)%
|
|
(113
|
)%
|
Other income, net
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Net loss
|
(45
|
)%
|
|
(103
|
)%
|
|
(69
|
)%
|
|
(113
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
2016
|
|
2015
|
|
% Change
|
|
$ Change
|
|
2016
|
|
2015
|
|
% Change
|
|
$ Change
|
||||||||||||
|
(dollars in thousands)
|
|
(dollars in thousands)
|
||||||||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Subscription
|
$
|
23,867
|
|
|
$
|
18,233
|
|
|
31%
|
|
$
|
5,634
|
|
|
$
|
66,859
|
|
|
$
|
50,417
|
|
|
33%
|
|
$
|
16,442
|
|
Professional services
|
1,634
|
|
|
1,306
|
|
|
25%
|
|
328
|
|
|
4,944
|
|
|
3,583
|
|
|
38%
|
|
1,361
|
|
||||||
Total revenue
|
$
|
25,501
|
|
|
$
|
19,539
|
|
|
31%
|
|
$
|
5,962
|
|
|
$
|
71,803
|
|
|
$
|
54,000
|
|
|
33%
|
|
$
|
17,803
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
% Change
|
|
$ Change
|
|
2016
|
|
2015
|
|
% Change
|
|
$ Change
|
||||||||||||||
|
(dollars in thousands)
|
|
(dollars in thousands)
|
||||||||||||||||||||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Subscription
|
3,988
|
|
|
3,081
|
|
|
29
|
%
|
|
$
|
907
|
|
|
12,218
|
|
|
8,532
|
|
|
43
|
%
|
|
$
|
3,686
|
|
||||
Professional services
|
3,978
|
|
|
5,606
|
|
|
(29
|
)%
|
|
$
|
(1,628
|
)
|
|
13,941
|
|
|
15,581
|
|
|
(11
|
)%
|
|
(1,640
|
)
|
|||||
Total cost of revenue
|
$
|
7,966
|
|
|
$
|
8,687
|
|
|
(8
|
)%
|
|
$
|
(721
|
)
|
|
$
|
26,159
|
|
|
$
|
24,113
|
|
|
8
|
%
|
|
$
|
2,046
|
|
Gross margin (loss) percentage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Subscription
|
83.3
|
%
|
|
83.1
|
%
|
|
|
|
|
|
81.7
|
%
|
|
83.1
|
%
|
|
|
|
|
||||||||||
Professional services
|
(143
|
)%
|
|
(329
|
)%
|
|
|
|
|
|
(182
|
)%
|
|
(335
|
)%
|
|
|
|
|
||||||||||
Total gross margin percentage
|
68.8
|
%
|
|
55.5
|
%
|
|
|
|
|
|
63.6
|
%
|
|
55.3
|
%
|
|
|
|
|
||||||||||
Gross profit
|
$
|
17,535
|
|
|
$
|
10,852
|
|
|
62
|
%
|
|
$
|
6,683
|
|
|
$
|
45,644
|
|
|
$
|
29,887
|
|
|
53
|
%
|
|
$
|
15,757
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
% Change
|
|
$ Change
|
|
2016
|
|
2015
|
|
% Change
|
|
$ Change
|
||||||||||||||
|
(dollars in thousands)
|
|
(dollars in thousands)
|
||||||||||||||||||||||||||
Sales and marketing
|
$
|
13,143
|
|
|
$
|
16,731
|
|
|
(21
|
)%
|
|
$
|
(3,588
|
)
|
|
$
|
44,877
|
|
|
$
|
50,835
|
|
|
(12
|
)%
|
|
$
|
(5,958
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
% Change
|
|
$ Change
|
|
2016
|
|
2015
|
|
% Change
|
|
$ Change
|
||||||||||||||
|
(dollars in thousands)
|
|
(dollars in thousands)
|
||||||||||||||||||||||||||
Research and development
|
$
|
10,573
|
|
|
$
|
7,868
|
|
|
34
|
%
|
|
$
|
2,705
|
|
|
$
|
30,619
|
|
|
$
|
21,853
|
|
|
40
|
%
|
|
$
|
8,766
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
% Change
|
|
$ Change
|
|
2016
|
|
2015
|
|
% Change
|
|
$ Change
|
||||||||||||||
|
(dollars in thousands)
|
|
(dollars in thousands)
|
||||||||||||||||||||||||||
General and administrative
|
$
|
5,338
|
|
|
$
|
6,311
|
|
|
(15
|
)%
|
|
$
|
(973
|
)
|
|
$
|
19,902
|
|
|
$
|
18,291
|
|
|
9
|
%
|
|
$
|
1,611
|
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Net cash used in operating activities
|
$
|
(35,261
|
)
|
|
$
|
(44,911
|
)
|
Net cash provided by investing activities
|
51,407
|
|
|
50,071
|
|
||
Net cash provided by financing activities
|
19,812
|
|
|
3,086
|
|
||
Net increase in cash and cash equivalents
|
$
|
35,958
|
|
|
$
|
8,246
|
|
•
|
the addition or loss of large customers, including through acquisitions or consolidations of such customers;
|
•
|
seasonal and other variations in the timing of the sales of our offering, as a significantly higher proportion of our customers enter into new subscription agreements with us or renew previous agreements in the third and fourth quarters of the year compared to the first and second quarters;
|
•
|
the timing of recognition of revenue, including possible delays in the recognition of revenue due to lengthy and sometimes unpredictable implementation timelines;
|
•
|
failure to meet our contractual commitments under service-level agreements with our customers;
|
•
|
the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure;
|
•
|
our access to pricing and claims data managed by health plans and other third parties, or changes to the fees we pay for that data;
|
•
|
the timing and success of introductions of new products, services and pricing by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic partners;
|
•
|
our ability to attract new customers;
|
•
|
customer renewal rates and the timing and terms of customer renewals;
|
•
|
network outages or security breaches;
|
•
|
the mix of products and services sold or renewed during a period;
|
•
|
general economic, industry and market conditions;
|
•
|
the timing of expenses related to the development or acquisition of technologies or businesses and potential future
charges for impairment of goodwill from acquired companies; and
|
•
|
impact of new accounting pronouncements.
|
•
|
the price, performance and functionality of our offering;
|
•
|
our customers’ user counts and benefit design features;
|
•
|
the availability, price, performance and functionality of competing or alternative solutions;
|
•
|
the potential for customers that are able to access lower-functionality versions of our offering that we provide through health plans or other channel partners to opt to use the lower-functionality versions of our offering;
|
•
|
our ability to develop complementary products and services;
|
•
|
our continued ability to access the pricing and claims data necessary to enable us to deliver reliable data in our cost estimation and price transparency offering to customers;
|
•
|
the stability, performance and security of our hosting infrastructure and hosting services;
|
•
|
changes in health care laws, regulations or trends; and
|
•
|
the business environment of our customers, in particular, headcount reductions by our customers.
|
•
|
breach of our contractual obligations to customers, which may cause our customers to terminate their relationship with us and may result in potentially significant financial obligations to our customers;
|
•
|
investigation by the federal and state regulatory authorities empowered to enforce HIPAA, which include the U.S. Department of Health and Human Services and state attorneys general, and the possible imposition of civil penalties;
|
•
|
private litigation by individuals adversely affected by any violation of HIPAA, HITECH or comparable state laws for which we are responsible; and
|
•
|
negative publicity, which may decrease the willingness of current and potential future customers to work with us and negatively affect our sales and operating results.
|
•
|
cease offering or using technologies that incorporate the challenged intellectual property;
|
•
|
make substantial payments for legal fees, settlement payments or other costs or damages;
|
•
|
obtain a license, which may not be available on reasonable terms, to sell or use the relevant technology; or
|
•
|
incur substantial costs and reallocate resources to redesign our technology to avoid infringement.
|
•
|
inability to integrate or benefit from acquired technologies or services in a profitable manner;
|
•
|
unanticipated costs or liabilities associated with the acquisition;
|
•
|
difficulty integrating the accounting systems, operations and personnel of the acquired business;
|
•
|
difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;
|
•
|
difficulty converting the customers of the acquired business onto our platform and contract terms, including disparities in the revenue, licensing, support or professional services model of the acquired company;
|
•
|
diversion of management’s attention from other business concerns;
|
•
|
adverse effects to our existing business relationships with business partners and customers as a result of the acquisition;
|
•
|
the potential loss of key employees;
|
•
|
use of resources that are needed in other parts of our business; and
|
•
|
use of substantial portions of our available cash to consummate the acquisition.
|
•
|
overall performance of the equity markets;
|
•
|
our operating performance and the performance of other similar companies;
|
•
|
changes in the estimates of our operating results that we provide to the public or our failure to meet these projections;
|
•
|
failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company or our failure to meet these estimates or the expectations of investors or changes in recommendations by securities analysts that elect to follow our Class B common stock;
|
•
|
sales of shares of our Class B common stock by us or our stockholders;
|
•
|
announcements of technological innovations, new products or enhancements to services, acquisitions, strategic alliances or significant agreements by us or by our competitors;
|
•
|
disruptions in our services due to computer hardware, software or network problems;
|
•
|
announcements of customer additions and customer cancellations or delays in customer purchases;
|
•
|
recruitment or departure of key personnel;
|
•
|
the economy as a whole, market conditions in our industry and the industries of our customers;
|
•
|
litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors;
|
•
|
developments or disputes concerning our intellectual property or other proprietary rights;
|
•
|
new laws or regulations or new interpretations of existing laws or regulations applicable to our business; and
|
•
|
the size of our market float.
|
•
|
adoption of a merger or consolidation agreement involving our company;
|
•
|
a sale, lease or exchange of all or substantially all of our property and assets;
|
•
|
a dissolution or liquidation of our company; or
|
•
|
every matter, if and when any individual, entity or “group” (as such term is used in Regulation 13D of the Exchange Act) has, or has publicly disclosed (through a press release or a filing with the SEC) an intent to have, beneficial
|
•
|
our board of directors is classified into three classes of directors with staggered three-year terms and directors are only able to be removed from office for cause, which may delay the replacement of a majority of our board of directors or impede an acquirer from rapidly replacing our existing directors with its own slate of directors;
|
•
|
subject to the rights of the holders of any series of preferred stock to elect directors under specified circumstances, only our board of directors has the right to fill a vacancy created by the expansion of our board of directors or the
|
•
|
our stockholders may not act by written consent or call special stockholders’ meetings; as a result, a holder, or holders, controlling a majority of our capital stock are not be able to take certain actions other than at annual stockholders’ meetings or special stockholders’ meetings, which special meetings may only be called by the chairman of our board, our chief executive officer, our president, or a majority of our board of directors;
|
•
|
certain litigation against us can only be brought in Delaware;
|
•
|
our restated certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued, by our board of directors without the approval of the holders of Class B common stock, which makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to acquire us;
|
•
|
advance notice procedures and additional disclosure requirements apply for stockholders to nominate candidates for election as directors or to bring matters before a meeting of stockholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company;
|
•
|
our restated certificate of incorporation prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
|
•
|
amendment of the anti-takeover provisions of our restated certificate of incorporation require super majority approval by holders of at least two-thirds of our outstanding common stock; and
|
•
|
in certain circumstances pertaining to change in control, the sale of all or substantially all of our assets and liquidation matters, and on all matters if and when any individual, entity or group has, or has publicly disclosed an intent to have, beneficial ownership of 30% or more of the number of outstanding shares of Class A common stock and Class B common stock, combined, holders of our Class A common stock are entitled to ten votes per share and holders of our Class B common stock are entitled to one vote per share. The holders of our Class A common stock own 52.4% and the holders of our Class B common stock own 47.6% of the outstanding shares of Class A common stock and Class B common stock, combined. However, because of our dual class common stock structure these holders of our Class A common stock have 91.7% and holders of our Class B common stock have 8.3% of the total votes with respect to the matters specified above. In all other circumstances, holders of our Class A common stock and Class B common stock are each entitled to one vote per share, and in these other circumstances the holders of our Class A common stock have 52.4% and holders of our Class B common stock have 47.6% of the total votes.
|
(a)
|
Unregistered Sales of Equity Securities
|
(b)
|
Use of Proceeds from Public Offering of Common Stock
|
(c)
|
Is
suer Purchases of Equity Securities
|
|
|
|
|
Incorporate by Reference
|
|
|
||||||
Exhibit
Number
|
|
Description of Document
|
|
Form
|
|
File
No.
|
|
Filing Date
|
|
Exhibit
|
|
Filed
Herewith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.15
|
|
Amendment to the Lease Agreement by and between 150 Spear Street, LLC and the Company.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1*
|
|
Certification of Chief Executive Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
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32.2*
|
|
Certification of Chief Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
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101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
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|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Schema Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Labels Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
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|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
*
|
The certifications on Exhibit 32 hereto are deemed not “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liability of that Section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.
|
|
C
ASTLIGHT
H
EALTH
, I
NC
.
|
||
Date: November 2, 2016
|
By:
|
|
/s/ Siobhan Nolan Mangini
|
|
|
|
Siobhan Nolan Mangini
|
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
|
Incorporate by Reference
|
|
|
||||||
Exhibit
Number
|
|
Description of Document
|
|
Form
|
|
File
No.
|
|
Filing Date
|
|
Exhibit
|
|
Filed
Herewith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.15
|
|
Amendment to the Lease Agreement by and between 150 Spear Street, LLC and the Company.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1*
|
|
Certification of Chief Executive Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.2*
|
|
Certification of Chief Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Schema Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Labels Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
*
|
The certifications on Exhibit 32 hereto are deemed not “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liability of that Section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.
|
Period
|
Annual Base Rent per
Rentable Square Foot |
Monthly Installment of
Base Rent for Additional Premises |
||||
7/16/17 – 7/15/18
|
|
$70.00
|
|
$90,766.67*
|
|
|
7/16/18 – 7/15/19
|
|
$72.10
|
|
|
$93,489.67
|
|
7/16/19 – 7/15/20
|
|
$74.26
|
|
|
$96,290.47
|
|
7/16/20 – 7/15/21
|
|
$76.49
|
|
|
$99,182.03
|
|
7/16/21 – 6/30/22
|
|
$78.78
|
|
|
$102,151.40
|
|
•
|
Copy of contract with Tenant's General Contractor
|
•
|
Copy of General Contractor's certificate of insurance, including Additional Insured endorsement naming Landlord as an Additional Insured
|
•
|
General Contractor's Schedule of Values, showing total contract value
|
PROPERTY:
|
150 SPEAR STREET
SAN FRANCISCO, CA |
BLDG STANDARD SPECIFICATIONS
|
|
WALLCOVERINGS AND PARTITIONS
|
Pah IL
|
ho 12 Wpm. Tier bane 1,I
,
Aire
|
1de r
|
|
|
EAssnell sheer in corridors and suites
|
-err Moors 02/9 eggshell 100E1
|
|
|
7e, -g o<s In Parr 0/0:1
|
|
|
PAL IMF <
|
Coiling Imp riela
Metal basting required for hanging of ItsIrs A,F.•
|
lbs
|
|
Ersmmir g
|
7110 to sb npsn g ter plenum simrans1 A
|
|
LAMI NATE:Ml
|
Itemat.
|
WI For eit. Amine Gurnee-Len
|
|
DOORS AND NA RDWARE,
|
|
cl,oh To 54
|
|
HVAC
|
1a7ab1e 771urne box . or 111'
I Pus 2L3g etrrtft
Tunic md 'Title PAINalbni)
|
2,1111.7, E141,1-0 11
Free,' Irene, artl et tenor 710e, at, se0ar3ted 1145rior zml,, M5 I /
1
1,4
p
or 1.700 :f 7cenor zollIs a', 1
0,
.V per 500 sr 21111,.1c mitt, nape 00411010d,nes
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Castlight Health 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(s) 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
|
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
|
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(s) 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.
|
|
C
ASTLIGHT
H
EALTH
, I
NC
.
|
||
|
By:
|
|
/s/ Giovanni M. Colella
|
Dated:
|
|
|
Giovanni M. Colella
|
November 2, 2016
|
|
|
Chief Executive Officer, Co-founder and Director
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Castlight Health 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(s) 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
|
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
|
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(s) 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.
|
|
C
ASTLIGHT
H
EALTH
, I
NC
.
|
||
|
By:
|
|
/s/ Siobhan Nolan Mangini
|
Dated:
|
|
|
Siobhan Nolan Mangini
|
November 2, 2016
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
C
ASTLIGHT
H
EALTH
, I
NC
.
|
||
|
By:
|
|
/s/ Giovanni M. Colella
|
|
|
|
Giovanni M. Colella
|
|
|
|
Chief Executive Officer, Co-founder and Director
(Principal Executive Officer)
|
Dated:
|
|
|
|
November 2, 2016
|
|
|
|
|
C
ASTLIGHT
H
EALTH
, I
NC
.
|
||
|
By:
|
|
/s/ Siobhan Nolan Mangini
|
|
|
|
Siobhan Nolan Mangini
|
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
Dated:
|
|
|
|
November 2, 2016
|
|
|
|