Delaware
(State or other jurisdiction of
incorporation or organization)
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26-1989091
(I.R.S. Employer
Identification Number)
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Title of each class
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Name of each exchange on which registered
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Class B Common Stock, par value $0.0001 per share
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New York Stock Exchange
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Large accelerated filer [ ]
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Accelerated filer [x]
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Non-accelerated filer [ ]
(Do not check if a smaller
reporting company)
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Smaller reporting company [ ]
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Page
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•
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Castlight Health Benefits Platform
. The functionality of the core Castlight technology is available to all of our customers. Our core technology includes both an employee and a benefits professional experience. The employee-facing web and mobile experiences simplify health care decision making for employees and their families by providing highly relevant, personalized information for medical services that enable informed choices before, during and after receiving health care. The intuitive, natural language search experience includes personalized out-of-pocket cost estimates, clinical quality, patient satisfaction and provider demographic information. Employer programs are integrated into the platform and promoted to employees in relevant situations to drive increased utilization of valuable benefits and services like tele-health, second opinion programs and wellness offerings. Additional features include the ability to manage a tailored care team, personalized tips, evidence-based clinical guidelines, educational content, benefit guides and real-time spend and deductible information. The benefits professional experience empowers human resource leaders with real-time insights into employee engagement with the platform, benefits and programs to identify opportunities to drive better employee engagement and improved outcomes.
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Castlight Pharmacy.
Castlight Pharmacy delivers information to guide employees and their families on how to manage their prescription drug spending. Our pharmacy product enables them to easily search for cost estimates for specific medications at convenient retail locations as well as mail order alternatives and presents multiple ways to save including using generic equivalents and therapeutic area alternatives. Additionally, Castlight Pharmacy is capable of driving improved drug compliance through prescription refill reminders and interfaces with other third-party applications to change and fulfill prescriptions.
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Castlight Rewards.
Castlight Rewards is an incentive system to motivate employees to make better health care decisions. Employers can use Castlight Rewards to encourage employees to learn about their health care, engage with us and a variety of other desired behaviors.
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Castlight Action.
Castlight Action is a fully automated solution for benefits professionals to leverage data and predictive analytics to connect employees to the right benefits and programs throughout the year, in a HIPAA-compliant manner. It surfaces insights to the benefits leader, segments and targets the relevant population using personalized, multi-channel campaigns with specific behavior change goals, and delivers real-time aggregate reporting on the impact of those campaigns to the benefits leader. Castlight Action helps enable benefits leaders to unlock the full value of their benefits strategy by bringing the power of data to enable better employee decision-making.
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Castlight Elevate.
Castlight Elevate helps employees working through behavioral health conditions or triggers such as depression, anxiety, substance use disorder, insomnia, and stress. Castlight Elevate breaks down the barriers to behavioral health treatment by enabling employees to research behavioral health services, make educated treatment choices, and begin care, all through a personalized experience.
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Castlight Dental.
Castlight Dental provides a comprehensive solution for employees to understand and manage their oral health and dental spend. Our dental product enables employees to search for specific dental procedures, understand the coverage and overall cost of the care, and make optimal choices. Further, Castlight Dental educates employees about common oral health conditions, driving health, productivity, and increased benefit satisfaction for employees.
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Communication and Engagement Services.
We offer communications services to drive employee engagement with our offering that span educational presentations, email campaigns, print collateral and employer-specific media. Communications initiatives are typically run during open enrollment, time of product launch and periodically post launch, and are designed to drive employee engagement and change management. The fees for these services are included as part of our contracts.
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Implementation Services.
We provide implementation services to our customers to help ensure successful deployment of our offering, including executing required data feeds, loading customer data, configuring products, integrating with third-party and other applications and comprehensive testing. The fees for these services are included as part of our contracts.
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Customer Support.
We offer end user support to help ensure effective employee use of our platform. We provide telephonic, live chat and email support for employees and their families in the areas of account maintenance, technical issue resolution, and navigation of online services. In addition, we assist employees with finding care, understanding their benefits, and interpreting past claims, bills, and total spend. We also enable employees who may have limited computer access to obtain their personalized health care information using our customer support personnel. The fees for these services are included as part of subscriptions to our products.
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Scalability.
We have developed a robust and scalable data architecture infrastructure, which allows for automated loading and normalization of numerous data sources, including billions of claim transactions in our data warehouse.
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Standardization.
Our technology assimilates structured and unstructured data from disparate sources, and employs unique algorithms to convert these data into user-friendly information for our users. Additionally, we operate using Services Oriented Architecture principles, with a platform of services that serve to deliver the application in a scalable and standardized way.
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Security.
We maintain a formal and comprehensive security program designed to ensure the security and integrity of customer data, protect against security threats or data breaches and prevent unauthorized access to our data or the data of our customers. We strictly regulate and limits all access to on-demand servers and networks at our production and remote backup facilities. All users are authenticated, authorized and validated before they can access our system. Users must have a valid user ID and associated password to log on to our services. We require Transport Layer Security between the user’s browser and our servers to protect data in transit. Encrypted backup files are transmitted over secure connections to redundant storage in a secondary data center.
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ability to curate complex data from multiple sources and present it through an easy to navigate user interface;
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capability for customization through configuration, integration, security, scalability and reliability of products;
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ease of use and rates of user engagement;
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complimentary technology platform and high touch services;
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breadth and depth of application functionality;
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competitive and understandable pricing;
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size of customer base and level of user engagement;
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depth of access to third-party data sources;
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ability to integrate with legacy enterprise infrastructures and third-party applications;
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ability to innovate and respond rapidly to customer needs and regulatory changes;
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domain expertise in benefits and health care consumerism;
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accessibility on any browser or mobile device;
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clearly defined implementation timeline; and
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customer branding and styling.
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limit how we will use and disclose the protected health information;
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implement reasonable administrative, physical and technical safeguards to protect such information from misuse;
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enter into similar agreements with our agents and subcontractors that have access to the information;
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report security incidents, breaches and other inappropriate uses or disclosures of the information; and
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assist the customer in question with certain duties under the privacy standards.
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the addition or loss of large customers, including through acquisitions or consolidations of such customers;
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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. As we continue to leverage our channel relationships and expand our business, there is no assurance this seasonality will continue;
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the timing of recognition of revenue, including possible delays in the recognition of revenue due to lengthy and sometimes unpredictable implementation timelines;
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failure to meet our contractual commitments under service-level agreements with our customers;
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the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure;
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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;
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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;
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our ability to attract new customers;
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customer renewal rates and the timing and terms of customer renewals;
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network outages or security breaches;
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the mix of products and services sold or renewed during a period;
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general economic, industry and market conditions;
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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
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impact of new accounting pronouncements.
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the price, performance and functionality of our offering;
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our customers’ user counts and benefit design features;
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the availability, price, performance and functionality of competing or alternative solutions;
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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;
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our ability to develop complementary products and services;
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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;
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the stability, performance and security of our hosting infrastructure and hosting services;
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changes in health care laws, regulations or trends; and
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the business environment of our customers, in particular, headcount reductions by our customers.
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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;
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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;
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private litigation by individuals adversely affected by any violation of HIPAA, HITECH or comparable state laws for which we are responsible; and
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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.
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cease offering or using technologies that incorporate the challenged intellectual property;
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make substantial payments for legal fees, settlement payments or other costs or damages;
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obtain a license, which may not be available on reasonable terms, to sell or use the relevant technology; or
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incur substantial costs and reallocate resources to redesign our technology to avoid infringement.
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inability to integrate or benefit from acquired technologies or services in a profitable manner;
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unanticipated costs or liabilities associated with the acquisition;
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difficulty integrating the accounting systems, operations and personnel of the acquired business;
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difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;
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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;
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diversion of management’s attention from other business concerns;
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adverse effects to our existing business relationships with business partners and customers as a result of the acquisition;
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the potential loss of key employees;
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use of resources that are needed in other parts of our business; and
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use of substantial portions of our available cash to consummate the acquisition.
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overall performance of the equity markets;
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our operating performance and the performance of other similar companies;
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changes in the estimates of our operating results that we provide to the public or our failure to meet these projections;
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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;
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sales of shares of our Class B common stock by us or our stockholders;
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announcements of technological innovations, new products or enhancements to services, acquisitions, strategic alliances or significant agreements by us or by our competitors;
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disruptions in our services due to computer hardware, software or network problems;
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announcements of customer additions and customer cancellations or delays in customer purchases;
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recruitment or departure of key personnel;
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the economy as a whole, market conditions in our industry and the industries of our customers;
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litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors;
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developments or disputes concerning our intellectual property or other proprietary rights;
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new laws or regulations or new interpretations of existing laws or regulations applicable to our business; and
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the size of our market float.
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adoption of a merger or consolidation agreement involving our company;
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a sale, lease or exchange of all or substantially all of our property and assets;
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a dissolution or liquidation of our company; or
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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 ownership of 30% or more of the number of outstanding shares of Class A common stock and Class B common stock, combined.
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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;
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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
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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 Class A and Class B common 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;
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certain litigation against us can only be brought in Delaware;
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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;
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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;
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our restated certificate of incorporation prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
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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 Class A and Class B common stock, combined; and
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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 our Class A 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. As of December 31, 2016, holders of our Class A common stock owned 52.1% and holders of our Class B common stock owned 47.9% of the outstanding shares of our Class A and Class B common stock, combined. However, because of our dual class common stock structure these holders of our Class A common stock have 91.6% and holders of our Class B common stock have 8.4% of the total votes with respect to the matters specified above. In all other circumstances, holders of our Class A 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 52.1% and holders of our Class B common stock have 47.9% of the total votes.
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High
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Low
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||||
Year ended December 31, 2015
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First Quarter
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$
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11.99
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$
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6.52
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Second Quarter
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10.36
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6.96
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Third Quarter
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8.42
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4.02
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Fourth Quarter
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5.39
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3.59
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Year ended December 31, 2016
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First Quarter
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$
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4.18
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$
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2.54
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Second Quarter
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4.97
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3.15
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Third Quarter
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4.71
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3.36
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Fourth Quarter
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5.50
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3.60
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3/2015
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6/2015
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9/2015
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12/2015
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3/2015
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6/2015
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9/2015
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12/2015
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3/2016
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6/2016
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9/2016
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12/2016
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||||||||||||
Castlight Health, Inc.
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$
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19.7
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$
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25.8
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$
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13.4
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$
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10.0
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$
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19.7
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|
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$
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25.8
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|
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$
|
13.4
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|
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$
|
10.0
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|
|
$
|
7.7
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|
|
$
|
11.1
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|
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$
|
10.4
|
|
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$
|
11.7
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NYSE Composite
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$
|
104.5
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|
|
$
|
106.5
|
|
|
$
|
98.3
|
|
|
$
|
98.3
|
|
|
$
|
104.5
|
|
|
$
|
106.5
|
|
|
$
|
98.3
|
|
|
$
|
98.3
|
|
|
$
|
97.4
|
|
|
$
|
100.1
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|
|
$
|
103.1
|
|
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$
|
108.2
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S&P SuperComposite Application Software Index
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$
|
116.0
|
|
|
$
|
122.9
|
|
|
$
|
119.8
|
|
|
$
|
131.1
|
|
|
$
|
116.0
|
|
|
$
|
122.9
|
|
|
$
|
119.8
|
|
|
$
|
131.1
|
|
|
$
|
124.4
|
|
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$
|
138.4
|
|
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$
|
140.2
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|
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$
|
144.4
|
|
|
Year Ended December 31,
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||||||||||||||||||
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2016
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2015
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2014
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2013
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2012
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||||||||||
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(in thousands, except per share data)
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||||||||||||||||||
Consolidated Statements of Operations Data:
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||||||||||
Revenue:
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|
|
|
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|
|
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||||||||||
Subscription
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$
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95,016
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|
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$
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70,350
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|
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$
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41,602
|
|
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$
|
11,655
|
|
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$
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3,395
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|
Professional services
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6,684
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|
|
4,965
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|
|
4,003
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|
|
1,318
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|
|
759
|
|
|||||
Total revenue
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101,700
|
|
|
75,315
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|
|
45,605
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|
|
12,973
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|
|
4,154
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|
|||||
Cost of revenue(1):
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|
|
|
|
|
|
|
|
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||||||||||
Cost of subscription
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16,463
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|
|
12,417
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|
|
10,472
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|
|
6,246
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|
|
3,242
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|
|||||
Cost of professional services
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18,098
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|
|
21,351
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|
|
17,300
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|
|
11,058
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|
|
5,286
|
|
|||||
Total cost of revenue
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34,561
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|
|
33,768
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|
|
27,772
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|
|
17,304
|
|
|
8,528
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|
|||||
Gross profit (loss)
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67,139
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|
|
41,547
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|
|
17,833
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(4,331
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)
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|
(4,374
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)
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and marketing(1)
|
58,800
|
|
|
67,414
|
|
|
62,065
|
|
|
33,742
|
|
|
15,829
|
|
|||||
Research and development(1)
|
40,460
|
|
|
30,077
|
|
|
22,917
|
|
|
15,219
|
|
|
9,718
|
|
|||||
General and administrative(1)
|
26,859
|
|
|
24,274
|
|
|
19,009
|
|
|
9,047
|
|
|
5,212
|
|
|||||
Total operating expenses
|
126,119
|
|
|
121,765
|
|
|
103,991
|
|
|
58,008
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|
|
30,759
|
|
|||||
Operating loss
|
(58,980
|
)
|
|
(80,218
|
)
|
|
(86,158
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)
|
|
(62,339
|
)
|
|
(35,133
|
)
|
|||||
Other income, net
|
432
|
|
|
298
|
|
|
218
|
|
|
157
|
|
|
129
|
|
|||||
Net loss
|
$
|
(58,548
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)
|
|
$
|
(79,920
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)
|
|
$
|
(85,940
|
)
|
|
$
|
(62,182
|
)
|
|
$
|
(35,004
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)
|
Net loss per share, basic and diluted(2)
|
$
|
(0.58
|
)
|
|
$
|
(0.85
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)
|
|
$
|
(1.16
|
)
|
|
$
|
(6.28
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)
|
|
$
|
(4.44
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)
|
Weighted-average shares used to compute basic and diluted net loss per share(2)
|
100,798
|
|
|
93,753
|
|
|
74,381
|
|
|
9,895
|
|
|
7,885
|
|
(1)
|
Includes stock-based compensation expense as follows:
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Cost of revenue
|
$
|
2,467
|
|
|
$
|
2,458
|
|
|
$
|
1,400
|
|
|
$
|
125
|
|
|
$
|
107
|
|
Sales and marketing
|
8,843
|
|
|
7,705
|
|
|
5,933
|
|
|
919
|
|
|
551
|
|
|||||
Research and development
|
5,959
|
|
|
3,498
|
|
|
2,556
|
|
|
603
|
|
|
242
|
|
|||||
General and administrative
|
4,743
|
|
|
4,169
|
|
|
4,312
|
|
|
780
|
|
|
411
|
|
(2)
|
Net loss per share is computed by dividing net loss by the weighted-average number of shares of our common stock outstanding during the period, less the weighted-average unvested shares of common stock subject to repurchase.
|
|
As of December 31,
|
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|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||
|
(in thousands)
|
||||||||||||||
Consolidated Balance Sheets Data:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
48,722
|
|
|
$
|
19,150
|
|
|
$
|
17,425
|
|
|
$
|
25,154
|
|
Marketable securities
|
65,882
|
|
|
101,274
|
|
|
175,057
|
|
|
42,017
|
|
||||
Working capital
|
92,287
|
|
|
96,384
|
|
|
170,559
|
|
|
54,944
|
|
||||
Property and equipment, net
|
5,285
|
|
|
6,896
|
|
|
3,630
|
|
|
2,631
|
|
||||
Total assets
|
157,166
|
|
|
173,274
|
|
|
223,274
|
|
|
83,517
|
|
||||
Total deferred revenue
|
35,868
|
|
|
34,112
|
|
|
27,360
|
|
|
11,473
|
|
||||
Total liabilities
|
55,204
|
|
|
54,920
|
|
|
47,084
|
|
|
27,444
|
|
||||
Convertible preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
180,423
|
|
||||
Total stockholders’ equity (deficit)
|
101,962
|
|
|
118,354
|
|
|
176,190
|
|
|
(124,350
|
)
|
|
As of
|
||||||
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
(in millions)
|
||||||
Signed Annual Recurring Revenue (ARR)
|
$
|
121.6
|
|
|
$
|
110.0
|
|
|
Year Ended December 31,
|
||||
|
2016
|
|
2015
|
||
Annual Net Dollar Retention Rate (NDR)
|
94
|
%
|
|
116
|
%
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
|
|
|
|
|||||
Revenue:
|
|
|
|
|
|
|||
Subscription
|
93
|
%
|
|
93
|
%
|
|
91
|
%
|
Professional services
|
7
|
%
|
|
7
|
%
|
|
9
|
%
|
Total revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue:
|
|
|
|
|
|
|||
Cost of subscription
|
16
|
%
|
|
17
|
%
|
|
23
|
%
|
Cost of professional services
|
18
|
%
|
|
28
|
%
|
|
38
|
%
|
Total cost of revenue
|
34
|
%
|
|
45
|
%
|
|
61
|
%
|
Gross margin (loss) percentage
|
66
|
%
|
|
55
|
%
|
|
39
|
%
|
Operating expenses:
|
|
|
|
|
|
|||
Sales and marketing
|
58
|
%
|
|
90
|
%
|
|
136
|
%
|
Research and development
|
40
|
%
|
|
40
|
%
|
|
50
|
%
|
General and administrative
|
26
|
%
|
|
32
|
%
|
|
42
|
%
|
Total operating expenses
|
124
|
%
|
|
162
|
%
|
|
228
|
%
|
Operating loss
|
(58
|
)%
|
|
(107
|
)%
|
|
(189
|
)%
|
Other income, net
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Net loss
|
(58
|
)%
|
|
(107
|
)%
|
|
(189
|
)%
|
|
Year Ended December 31,
|
||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2015 to 2016 % change
|
|
2014 to 2015 % change
|
||||||||
|
(in thousands, except percentages)
|
||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||
Subscription
|
$
|
95,016
|
|
|
$
|
70,350
|
|
|
$
|
41,602
|
|
|
35
|
%
|
|
69
|
%
|
Professional services
|
6,684
|
|
|
4,965
|
|
|
4,003
|
|
|
35
|
%
|
|
24
|
%
|
|||
Total revenue
|
$
|
101,700
|
|
|
$
|
75,315
|
|
|
$
|
45,605
|
|
|
35
|
%
|
|
65
|
%
|
|
Year Ended December 31,
|
||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2015 to 2016 % change
|
|
2014 to 2015 % change
|
||||||||
|
(in thousands, except percentages)
|
||||||||||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
||||||||
Subscription
|
$
|
16,463
|
|
|
$
|
12,417
|
|
|
$
|
10,472
|
|
|
33
|
%
|
|
19
|
%
|
Professional services
|
18,098
|
|
|
21,351
|
|
|
17,300
|
|
|
(15
|
)%
|
|
23
|
%
|
|||
Total cost of revenue
|
$
|
34,561
|
|
|
$
|
33,768
|
|
|
$
|
27,772
|
|
|
2
|
%
|
|
22
|
%
|
Gross margin (loss) percentage
|
|
|
|
|
|
|
|
|
|
||||||||
Subscription
|
83
|
%
|
|
82
|
%
|
|
75
|
%
|
|
|
|
|
|||||
Professional services
|
(171
|
)%
|
|
(330
|
)%
|
|
(332
|
)%
|
|
|
|
|
|||||
Total gross margin (loss) percentage
|
66
|
%
|
|
55
|
%
|
|
39
|
%
|
|
|
|
|
|||||
Gross profit (loss)
|
$
|
67,139
|
|
|
$
|
41,547
|
|
|
$
|
17,833
|
|
|
62
|
%
|
|
133
|
%
|
|
Year Ended December 31,
|
||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2015 to 2014 % change
|
|
2014 to 2015 % change
|
||||||||
|
(in thousands, except percentages)
|
||||||||||||||||
Sales and marketing
|
$
|
58,800
|
|
|
$
|
67,414
|
|
|
$
|
62,065
|
|
|
(13
|
)%
|
|
9
|
%
|
|
Year Ended December 31,
|
||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2015 to 2016 % change
|
|
2014 to 2015 % change
|
||||||||
|
(in thousands, except percentages)
|
||||||||||||||||
Research and development
|
$
|
40,460
|
|
|
$
|
30,077
|
|
|
$
|
22,917
|
|
|
35
|
%
|
|
31
|
%
|
|
Year Ended December 31,
|
||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2015 to 2016 % change
|
|
2014 to 2015 % change
|
||||||||
|
(in thousands, except percentages)
|
||||||||||||||||
General and administrative
|
$
|
26,859
|
|
|
$
|
24,274
|
|
|
$
|
19,009
|
|
|
11
|
%
|
|
28
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Net cash used in operating activities
|
$
|
(36,971
|
)
|
|
$
|
(56,868
|
)
|
|
$
|
(54,637
|
)
|
Net cash provided by (used in) investing activities
|
46,478
|
|
|
54,743
|
|
|
(142,548
|
)
|
|||
Net cash provided by financing activities
|
20,065
|
|
|
3,850
|
|
|
189,456
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
29,572
|
|
|
$
|
1,725
|
|
|
$
|
(7,729
|
)
|
|
Total
|
|
Less Than
1 Year
|
|
1-3
Years
|
|
3-5
Years
|
|
More Than
5 Years
|
||||||||||
Operating leases for facilities(1)
|
$
|
12,014
|
|
|
$
|
2,651
|
|
|
$
|
4,290
|
|
|
$
|
4,102
|
|
|
$
|
971
|
|
Data center costs(2)
|
1,963
|
|
|
714
|
|
|
1,249
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
13,977
|
|
|
3,365
|
|
|
5,539
|
|
|
4,102
|
|
|
971
|
|
(1)
|
Operating leases for facilities space represents our principal commitments, which consists of obligations under leases for office
space.
Minimum payments have not been reduced by sublease rentals of $1.3 million due in the future under a noncancelable sublease.
|
(2)
|
Data center costs represent costs associated with service agreements for our data centers in Colorado and Arizona.
|
•
|
there is persuasive evidence of an arrangement;
|
•
|
the service has been provided to the customer;
|
•
|
collection of the fees is reasonably assured; and
|
•
|
the amount of fees to be paid by the customer is fixed or determinable.
|
CASTLIGHT HEALTH, INC.
|
|
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
Page
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
48,722
|
|
|
$
|
19,150
|
|
Marketable securities
|
65,882
|
|
|
101,274
|
|
||
Accounts receivable, net
|
14,806
|
|
|
12,751
|
|
||
Deferred commissions
|
8,218
|
|
|
5,438
|
|
||
Prepaid expenses and other current assets
|
3,382
|
|
|
3,772
|
|
||
Total current assets
|
141,010
|
|
|
142,385
|
|
||
Property and equipment, net
|
5,285
|
|
|
6,896
|
|
||
Marketable securities, noncurrent
|
—
|
|
|
13,335
|
|
||
Restricted cash, noncurrent
|
1,144
|
|
|
1,000
|
|
||
Deferred commissions, noncurrent
|
5,050
|
|
|
4,923
|
|
||
Other assets
|
4,677
|
|
|
4,735
|
|
||
Total assets
|
$
|
157,166
|
|
|
$
|
173,274
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
2,288
|
|
|
$
|
3,384
|
|
Accrued expenses and other current liabilities
|
6,369
|
|
|
4,550
|
|
||
Accrued compensation
|
9,443
|
|
|
11,477
|
|
||
Deferred revenue
|
30,623
|
|
|
26,590
|
|
||
Total current liabilities
|
48,723
|
|
|
46,001
|
|
||
Deferred revenue, noncurrent
|
5,245
|
|
|
7,522
|
|
||
Other liabilities, noncurrent
|
1,236
|
|
|
1,397
|
|
||
Total liabilities
|
55,204
|
|
|
54,920
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of December 31, 2016 and 2015; no shares issued and outstanding as of December 31, 2016 and 2015
|
—
|
|
|
—
|
|
||
Class A common stock, $0.0001 par value; 200,000,000 shares authorized as of December 31, 2016 and 2015; 54,295,405 and 54,517,785 shares issued and outstanding as of December 31, 2016 and 2015
|
5
|
|
|
6
|
|
||
Class B common stock, $0.0001 par value; 800,000,000 shares authorized as of December 31, 2016 and 2015; 50,015,518 and 41,100,307 shares issued and outstanding as of December 31, 2016 and 2015
|
5
|
|
|
4
|
|
||
Additional paid-in capital
|
457,596
|
|
|
415,519
|
|
||
Accumulated other comprehensive loss
|
—
|
|
|
(79
|
)
|
||
Accumulated deficit
|
(355,644
|
)
|
|
(297,096
|
)
|
||
Total stockholders’ equity
|
101,962
|
|
|
118,354
|
|
||
Total liabilities and stockholders’ equity
|
$
|
157,166
|
|
|
$
|
173,274
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Subscription
|
$
|
95,016
|
|
|
$
|
70,350
|
|
|
$
|
41,602
|
|
Professional services
|
6,684
|
|
|
4,965
|
|
|
4,003
|
|
|||
Total revenue
|
101,700
|
|
|
75,315
|
|
|
45,605
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Cost of subscription (1)
|
16,463
|
|
|
12,417
|
|
|
10,472
|
|
|||
Cost of professional services (1)
|
18,098
|
|
|
21,351
|
|
|
17,300
|
|
|||
Total cost of revenue
|
34,561
|
|
|
33,768
|
|
|
27,772
|
|
|||
Gross profit
|
67,139
|
|
|
41,547
|
|
|
17,833
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Sales and marketing (1)
|
58,800
|
|
|
67,414
|
|
|
62,065
|
|
|||
Research and development (1)
|
40,460
|
|
|
30,077
|
|
|
22,917
|
|
|||
General and administrative (1)
|
26,859
|
|
|
24,274
|
|
|
19,009
|
|
|||
Total operating expenses
|
126,119
|
|
|
121,765
|
|
|
103,991
|
|
|||
Operating loss
|
(58,980
|
)
|
|
(80,218
|
)
|
|
(86,158
|
)
|
|||
Other income, net
|
432
|
|
|
298
|
|
|
218
|
|
|||
Net loss
|
$
|
(58,548
|
)
|
|
$
|
(79,920
|
)
|
|
$
|
(85,940
|
)
|
Net loss per share, basic and diluted
|
$
|
(0.58
|
)
|
|
$
|
(0.85
|
)
|
|
$
|
(1.16
|
)
|
Weighted-average shares used to compute basic and diluted net loss per share
|
100,798
|
|
|
93,753
|
|
|
74,381
|
|
(1)
|
Includes stock-based compensation expense as follows:
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cost of revenue:
|
|
|
|
|
|
||||||
Cost of subscription
|
$
|
506
|
|
|
$
|
283
|
|
|
$
|
180
|
|
Cost of professional services
|
1,961
|
|
|
2,175
|
|
|
1,220
|
|
|||
Sales and marketing
|
8,843
|
|
|
7,705
|
|
|
5,933
|
|
|||
Research and development
|
5,959
|
|
|
3,498
|
|
|
2,556
|
|
|||
General and administrative
|
4,743
|
|
|
4,169
|
|
|
4,312
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Net loss
|
$
|
(58,548
|
)
|
|
$
|
(79,920
|
)
|
|
$
|
(85,940
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
||||||
Net change in unrealized loss on available-for-sale marketable securities
|
79
|
|
|
(39
|
)
|
|
(40
|
)
|
|||
Other comprehensive gain (loss)
|
79
|
|
|
(39
|
)
|
|
(40
|
)
|
|||
Comprehensive loss
|
$
|
(58,469
|
)
|
|
$
|
(79,959
|
)
|
|
$
|
(85,980
|
)
|
|
|
Convertible
Preferred Stock
|
|
|
Class A and B
Common Stock |
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Accumulated
Deficit
|
|
Total
Stockholders’
(Deficit)/Equity
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balances as of December 31, 2013
|
|
64,475,633
|
|
|
$
|
180,423
|
|
|
|
10,994,074
|
|
|
$
|
1
|
|
|
$
|
6,885
|
|
|
$
|
—
|
|
|
$
|
(131,236
|
)
|
|
$
|
(124,350
|
)
|
Vesting of restricted common stock
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
||||||
Exercise of stock options, net
|
|
—
|
|
|
—
|
|
|
|
2,956,676
|
|
|
|
|
|
3,294
|
|
|
—
|
|
|
—
|
|
|
3,294
|
|
||||||
Vesting of early exercised warrant issued
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
300
|
|
|
—
|
|
|
—
|
|
|
300
|
|
||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
14,215
|
|
|
—
|
|
|
—
|
|
|
14,215
|
|
||||||
Expense related to warrant
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
2,639
|
|
|
—
|
|
|
—
|
|
|
2,639
|
|
||||||
Conversion of preferred stock to common stock
|
|
(64,475,633
|
)
|
|
(180,423
|
)
|
|
|
64,475,633
|
|
|
7
|
|
|
180,416
|
|
|
—
|
|
|
—
|
|
|
180,423
|
|
||||||
Issuance of common stock upon initial public offering, net
|
|
—
|
|
|
—
|
|
|
|
12,765,000
|
|
|
1
|
|
|
185,627
|
|
|
—
|
|
|
—
|
|
|
185,628
|
|
||||||
Comprehensive loss
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
(85,940
|
)
|
|
(85,980
|
)
|
||||||
Balances as of December 31, 2014
|
|
—
|
|
|
$
|
—
|
|
|
|
91,191,383
|
|
|
$
|
9
|
|
|
$
|
393,397
|
|
|
$
|
(40
|
)
|
|
$
|
(217,176
|
)
|
|
$
|
176,190
|
|
Vesting of restricted stock units
|
|
—
|
|
|
—
|
|
|
|
295,468
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Exercise of stock options, net
|
|
—
|
|
|
—
|
|
|
|
4,131,241
|
|
|
1
|
|
|
3,943
|
|
|
—
|
|
|
—
|
|
|
3,944
|
|
||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
18,179
|
|
|
—
|
|
|
—
|
|
|
18,179
|
|
||||||
Comprehensive loss
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
|
(79,920
|
)
|
|
(79,959
|
)
|
||||||
Balances as of December 31, 2015
|
|
—
|
|
|
$
|
—
|
|
|
|
95,618,092
|
|
|
$
|
10
|
|
|
$
|
415,519
|
|
|
$
|
(79
|
)
|
|
$
|
(297,096
|
)
|
|
$
|
118,354
|
|
Vesting of restricted stock units, net
|
|
—
|
|
|
—
|
|
|
|
1,984,407
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Exercise of stock options, net
|
|
—
|
|
|
—
|
|
|
|
1,945,766
|
|
|
—
|
|
|
2,829
|
|
|
—
|
|
|
—
|
|
|
2,829
|
|
||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
22,012
|
|
|
—
|
|
|
—
|
|
|
22,012
|
|
|||||||
Issuance of common stock and warrants to SAP, net
|
|
—
|
|
|
—
|
|
|
|
4,762,658
|
|
|
|
|
17,236
|
|
|
—
|
|
|
—
|
|
|
17,236
|
|
|||||||
Comprehensive loss
|
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
79
|
|
|
(58,548
|
)
|
|
(58,469
|
)
|
|||||||
Balances as of December 31, 2016
|
|
—
|
|
|
$
|
—
|
|
|
|
104,310,923
|
|
|
$
|
10
|
|
|
$
|
457,596
|
|
|
$
|
—
|
|
|
$
|
(355,644
|
)
|
|
$
|
101,962
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(58,548
|
)
|
|
$
|
(79,920
|
)
|
|
$
|
(85,940
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
3,168
|
|
|
2,024
|
|
|
1,354
|
|
|||
Stock-based compensation
|
22,012
|
|
|
17,830
|
|
|
14,201
|
|
|||
Amortization of deferred commissions
|
5,070
|
|
|
3,510
|
|
|
4,092
|
|
|||
Accretion and amortization of marketable securities
|
481
|
|
|
1,385
|
|
|
1,489
|
|
|||
Expense related to warrant
|
—
|
|
|
—
|
|
|
2,639
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(2,055
|
)
|
|
(1,654
|
)
|
|
(6,032
|
)
|
|||
Deferred commissions
|
(7,977
|
)
|
|
(7,633
|
)
|
|
(4,861
|
)
|
|||
Prepaid expenses and other assets
|
448
|
|
|
328
|
|
|
(1,895
|
)
|
|||
Accounts payable
|
(1,035
|
)
|
|
646
|
|
|
147
|
|
|||
Accrued expenses and other liabilities
|
1,743
|
|
|
(1,158
|
)
|
|
1,870
|
|
|||
Deferred revenue
|
1,756
|
|
|
6,752
|
|
|
15,887
|
|
|||
Accrued compensation
|
(2,034
|
)
|
|
1,022
|
|
|
2,412
|
|
|||
Net cash used in operating activities
|
(36,971
|
)
|
|
(56,868
|
)
|
|
(54,637
|
)
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Restricted cash
|
(144
|
)
|
|
(1,000
|
)
|
|
101
|
|
|||
Investment in related party
|
—
|
|
|
(4,125
|
)
|
|
—
|
|
|||
Purchase of property and equipment, net
|
(1,702
|
)
|
|
(5,376
|
)
|
|
(1,860
|
)
|
|||
Purchase of marketable securities
|
(98,184
|
)
|
|
(119,867
|
)
|
|
(230,316
|
)
|
|||
Sales of marketable securities
|
—
|
|
|
5,000
|
|
|
13,000
|
|
|||
Maturities of marketable securities
|
146,508
|
|
|
180,111
|
|
|
76,527
|
|
|||
Net cash provided by (used in) investing activities
|
46,478
|
|
|
54,743
|
|
|
(142,548
|
)
|
|||
Financing activities:
|
|
|
|
|
|
||||||
Proceeds from the exercise of stock options and warrants
|
2,829
|
|
|
3,944
|
|
|
3,294
|
|
|||
Proceeds from the issuance of common stock and warrants to SAP
|
17,358
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from initial public offering
|
—
|
|
|
—
|
|
|
189,943
|
|
|||
Payments of deferred financing costs
|
(122
|
)
|
|
(94
|
)
|
|
(3,781
|
)
|
|||
Net cash provided by financing activities
|
20,065
|
|
|
3,850
|
|
|
189,456
|
|
|||
|
|
|
|
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
29,572
|
|
|
1,725
|
|
|
(7,729
|
)
|
|||
Cash and cash equivalents at beginning of period
|
19,150
|
|
|
17,425
|
|
|
25,154
|
|
|||
Cash and cash equivalents at end of period
|
$
|
48,722
|
|
|
$
|
19,150
|
|
|
$
|
17,425
|
|
Noncash investing and financing activity:
|
|
|
|
|
|
||||||
Vesting of early exercised stock options, restricted common stock, and warrants
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(321
|
)
|
Purchase of property and equipment, accrued but not paid
|
(20
|
)
|
|
(165
|
)
|
|
(600
|
)
|
|||
Deferred offering costs, accrued but not paid
|
—
|
|
|
—
|
|
|
(94
|
)
|
•
|
there is persuasive evidence of an arrangement;
|
•
|
the service has been provided to the customer;
|
•
|
collection of the fees is reasonably assured; and
|
•
|
the amount of fees to be paid by the customer is fixed or determinable.
|
Software
|
|
3–5 years
|
Computer equipment
|
|
3 years
|
Furniture and equipment
|
|
5–7 years
|
Leasehold improvements
|
|
Shorter of the lease term or the estimated useful lives of the improvements
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Value
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities
|
$
|
37,864
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
37,862
|
|
U.S. agency obligations
|
33,019
|
|
|
5
|
|
|
(3
|
)
|
|
33,021
|
|
||||
Money market mutual funds
|
7,965
|
|
|
—
|
|
|
|
|
|
7,965
|
|
||||
|
78,848
|
|
|
5
|
|
|
(5
|
)
|
|
78,848
|
|
||||
Included in cash and cash equivalents
|
12,966
|
|
|
|
|
|
—
|
|
|
12,966
|
|
||||
Included in marketable securities
|
$
|
65,882
|
|
|
$
|
5
|
|
|
$
|
(5
|
)
|
|
$
|
65,882
|
|
|
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
|
||||||
December 31, 2016
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
Money market mutual funds
|
$
|
7,965
|
|
|
$
|
—
|
|
|
$
|
7,965
|
|
U.S. treasury securities
|
—
|
|
|
5,000
|
|
|
5,000
|
|
|||
Marketable securities:
|
|
|
|
|
|
||||||
U.S. agency obligations
|
—
|
|
|
33,021
|
|
|
33,021
|
|
|||
U.S. treasury securities
|
—
|
|
|
32,862
|
|
|
32,862
|
|
|||
|
$
|
7,965
|
|
|
$
|
70,883
|
|
|
$
|
78,848
|
|
|
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 December 31,
|
||||||
|
2016
|
|
2015
|
||||
Leasehold improvements
|
$
|
2,061
|
|
|
$
|
2,046
|
|
Computer equipment
|
5,487
|
|
|
4,345
|
|
||
Software
|
1,099
|
|
|
885
|
|
||
Internal-use software
|
2,925
|
|
|
2,925
|
|
||
Furniture and equipment
|
931
|
|
|
853
|
|
||
Total
|
12,503
|
|
|
11,054
|
|
||
Accumulated depreciation
|
(7,218
|
)
|
|
(4,158
|
)
|
||
Property and equipment, net
|
$
|
5,285
|
|
|
$
|
6,896
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
Accrued commissions
|
$
|
3,637
|
|
|
$
|
5,212
|
|
Accrued bonuses
|
3,388
|
|
|
4,034
|
|
||
Other employee and benefits payable
|
2,418
|
|
|
2,231
|
|
||
Total
|
$
|
9,443
|
|
|
$
|
11,477
|
|
|
Operating
Leases
(1)
|
|
Contractual
Obligations
|
||||
2017
|
$
|
2,651
|
|
|
$
|
714
|
|
2018
|
2,113
|
|
|
714
|
|
||
2019
|
2,177
|
|
|
535
|
|
||
2020
|
2,190
|
|
|
—
|
|
||
2021 and later
|
2,883
|
|
|
—
|
|
||
|
$
|
12,014
|
|
|
$
|
1,963
|
|
|
Options Outstanding
|
|||||||||||
|
Number of
Shares
Outstanding
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Life in
Years
|
|
Aggregate
Intrinsic
Value
|
|||||
Balance at December 31, 2015
|
9,561,713
|
|
|
$
|
5.62
|
|
|
6.9
|
|
$
|
16,694
|
|
Stock options granted
|
3,854,646
|
|
|
$
|
3.16
|
|
|
|
|
|
||
Stock options exercised
|
(1,945,766
|
)
|
|
$
|
1.45
|
|
|
|
|
|
||
Stock options canceled and forfeited
|
(3,827,640
|
)
|
|
$
|
9.08
|
|
|
|
|
|
||
Balance at December 31, 2016
|
7,642,953
|
|
|
$
|
3.71
|
|
|
7.19
|
|
$
|
18,537
|
|
Vested or expected to vest December 31, 2016
|
7,218,516
|
|
|
$
|
3.70
|
|
|
7.09
|
|
$
|
17,810
|
|
Exercisable as of December 31, 2016
|
4,378,055
|
|
|
$
|
3.52
|
|
|
5.94
|
|
$
|
12,940
|
|
|
Restricted Stock Units Outstanding
|
|||||
|
Number of shares
|
|
Weighted Average Grant-Date Fair Value
|
|||
Balance at December 31, 2015
|
6,685,118
|
|
|
$
|
7.63
|
|
Restricted Stock Units granted (1)
|
7,759,565
|
|
|
$
|
3.66
|
|
Restricted Stock Units vested
|
(1,984,407
|
)
|
|
$
|
7.80
|
|
Restricted Stock Units forfeited/canceled (2)
|
(1,918,610
|
)
|
|
$
|
6.82
|
|
Balance at December 31, 2016
|
10,541,666
|
|
|
$
|
4.82
|
|
|
Year Ended December 31,
|
||||
|
2016
|
|
2015
|
|
2014
|
Volatility
|
45% - 47%
|
|
53%
|
|
60%
|
Expected life (in years)
|
5.31 - 6.12
|
|
6.2
|
|
5.0-6.3
|
Risk-free interest rate
|
0.95 - 1.37%
|
|
1.38%-1.91%
|
|
1.53%-2.05%
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
Weighted-average fair value of underlying common stock
|
$3.16
|
|
$8.95
|
|
$14.74
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
United States
|
$
|
(58,548
|
)
|
|
$
|
(79,920
|
)
|
|
$
|
(85,940
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Tax at federal statutory rate
|
$
|
(19,812
|
)
|
|
$
|
(27,173
|
)
|
|
$
|
(29,220
|
)
|
State statutory rate (net of federal benefit)
|
(1,259
|
)
|
|
(1,560
|
)
|
|
(1,728
|
)
|
|||
Non-deductible stock compensation
|
1,594
|
|
|
2,334
|
|
|
(19
|
)
|
|||
Change in valuation allowance
|
14,365
|
|
|
24,332
|
|
|
30,571
|
|
|||
Other
|
5,112
|
|
|
2,067
|
|
|
396
|
|
|||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
As of December 31,
|
||||||
Deferred tax assets:
|
2016
|
|
2015
|
||||
Net operating loss carryforwards
|
$
|
105,100
|
|
|
$
|
93,165
|
|
Deferred rent
|
580
|
|
|
235
|
|
||
Accrued compensation
|
1,291
|
|
|
326
|
|
||
Stock-based compensation
|
6,369
|
|
|
6,224
|
|
||
Other reserves and accruals
|
3
|
|
|
4
|
|
||
Property and equipment
|
649
|
|
|
322
|
|
||
Deferred revenue
|
3,879
|
|
|
3,017
|
|
||
|
117,871
|
|
|
103,293
|
|
||
Valuation allowance
|
(117,871
|
)
|
|
(103,293
|
)
|
||
Net deferred tax assets
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Gross unrecognized tax benefits at the beginning of the year
|
$
|
9,540
|
|
|
$
|
7,214
|
|
|
$
|
4,513
|
|
Increases for tax positions of prior years
|
—
|
|
|
133
|
|
|
871
|
|
|||
Decreases for tax positions of prior years
|
(125
|
)
|
|
(346
|
)
|
|
(831
|
)
|
|||
Increases for tax positions related to the current year
|
4,153
|
|
|
2,539
|
|
|
2,661
|
|
|||
Gross unrecognized tax benefits at the end of the year
|
$
|
13,568
|
|
|
$
|
9,540
|
|
|
$
|
7,214
|
|
|
Year Ended December 31,
|
|
|
||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||||||||||
Net loss
|
$
|
(31,610
|
)
|
|
$
|
(26,938
|
)
|
|
$
|
(48,116
|
)
|
|
$
|
(31,804
|
)
|
|
$
|
(67,655
|
)
|
|
$
|
(18,285
|
)
|
Weighted-average shares used to compute basic and diluted net loss per share
|
54,421
|
|
|
46,377
|
|
|
56,444
|
|
|
37,309
|
|
|
58,555
|
|
|
15,826
|
|
||||||
Basic and diluted net loss per share
|
$
|
(0.58
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.85
|
)
|
|
$
|
(0.85
|
)
|
|
$
|
(1.16
|
)
|
|
$
|
(1.16
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Stock options and restricted common stock
|
18,185
|
|
|
16,247
|
|
|
17,791
|
|
|||
Warrants
|
2,020
|
|
|
115
|
|
|
115
|
|
|||
|
$
|
20,205
|
|
|
$
|
16,362
|
|
|
$
|
17,906
|
|
|
|
Quarter Ended
|
||||||||||||||||||||||||||||||
|
|
Mar 31,
2015 |
|
Jun 30,
2015 |
|
Sept 30,
2015 |
|
Dec 31,
2015 |
|
Mar 31,
2016 |
|
Jun 30,
2016 |
|
Sept 30,
2016 |
|
Dec 31,
2016 |
||||||||||||||||
Total revenue
|
|
15,951
|
|
|
18,510
|
|
|
19,539
|
|
|
21,315
|
|
|
22,717
|
|
|
23,585
|
|
|
25,501
|
|
|
29,897
|
|
||||||||
Gross profit
|
|
8,779
|
|
|
10,256
|
|
|
10,852
|
|
|
11,660
|
|
|
13,468
|
|
|
14,641
|
|
|
17,535
|
|
|
21,496
|
|
||||||||
Net loss
|
|
$
|
(19,643
|
)
|
|
$
|
(21,212
|
)
|
|
$
|
(20,007
|
)
|
|
$
|
(19,058
|
)
|
|
$
|
(21,355
|
)
|
|
$
|
(16,692
|
)
|
|
$
|
(11,403
|
)
|
|
$
|
(9,098
|
)
|
Net loss per share, basic and diluted
|
|
$
|
(0.21
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.09
|
)
|
|
CASTLIGHT HEALTH, INC.
|
||
|
By:
|
|
/s/ Giovanni M. Colella
|
|
|
|
Giovanni M. Colella
|
|
|
|
Chief Executive Officer, Co-Founder and Director
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ Giovanni M. Colella
|
|
Chief Executive Officer, Co-Founder and Director
|
|
March 1, 2017
|
Giovanni M. Colella
|
|
(Principal Executive Officer)
|
|
|
|
|
|
||
/s/ Siobhan Nolan Mangini
|
|
Chief Financial Officer
|
|
March 1, 2017
|
Siobhan Nolan Mangini
|
|
(Principal Financial Officer)
|
|
|
|
|
|
||
/s/ Priya Jain
|
|
Corporate Controller and Chief Accounting Officer
|
|
March 1, 2017
|
Priya Jain
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Bryan Roberts
|
|
Chairman of the Board of Directors and Co-Founder
|
|
March 1, 2017
|
Bryan Roberts
|
|
|
|
|
|
|
|
||
/s/ David Ebersman
|
|
Director
|
|
March 1, 2017
|
David Ebersman
|
|
|
|
|
/s/ Ann Lamont
|
|
Director
|
|
March 1, 2017
|
Ann Lamont
|
|
|
|
|
|
|
|
||
/s/ Ed Park
|
|
Director
|
|
March 1, 2017
|
Ed Park
|
|
|
|
|
|
|
|
||
/s/ David B. Singer
|
|
Director
|
|
March 1, 2017
|
David B. Singer
|
|
|
|
|
|
|
|
|
|
/s/ Michael Eberhard
|
|
Director
|
|
March 1, 2017
|
Mike Eberhard
|
|
|
|
|
|
|
|
|
|
/s/ Kenny Van Zant
|
|
Director
|
|
March 1, 2017
|
Kenny Van Zant
|
|
|
|
|
|
|
|
|
|
Incorporate by Reference
|
|
|
|||||
Exhibit
Number
|
|
Description of Document
|
|
Form
|
|
File
No.
|
|
Filing Date
|
|
Exhibit
|
|
Filed
Herewith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.1
|
|
Agreement and Plan of Merger and Reorganization, dated as of January 4, 2017, by and among Castlight Health, Inc., Neptune Acquisition Subsidiary, Inc. and Jiff, Inc.
|
|
8-K
|
|
0001-36330
|
|
January 4, 2017
|
|
2.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
Restated Certificate of Incorporation.
|
|
10-Q
|
|
001-36330
|
|
May 12, 2014
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
Amended and Restated Bylaws.
|
|
10-Q
|
|
001-36330
|
|
May 12, 2014
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
Form of Class A Common Stock Certificate.
|
|
S-8
|
|
333-194566
|
|
March 14, 2014
|
|
4.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.2
|
|
Form of Class B Common Stock Certificate.
|
|
S-1
|
|
333-193840
|
|
March 3, 2014
|
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.3
|
|
Amended and Restated Investors’ Rights Agreement, dated as of April 26, 2012, by and among the Registrant and certain of its stockholders.
|
|
S-1
|
|
333-193840
|
|
February 10, 2014
|
|
4.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.4
|
|
Warrant issued to SAP Technologies, Inc.
|
|
8-K
|
|
001-36330
|
|
May 18, 2016
|
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.5
|
|
Securities Purchase Agreement dated May 16, 2016, between Castlight Health, Inc. and SAP Technologies, Inc.
|
|
8-K
|
|
001-36330
|
|
May 18, 2016
|
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1*
|
|
Form of Indemnification Agreement.
|
|
S-1
|
|
333-193840
|
|
March 3, 2014
|
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2*
|
|
2008 Stock Incentive Plan and forms of stock option agreement thereunder and restricted stock agreement.
|
|
S-1
|
|
333-193840
|
|
March 3, 2014
|
|
10.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3*
|
|
2014 Equity Incentive Plan and forms of stock option award agreement, restricted stock agreement, stock appreciation right award agreement, restricted stock unit award agreement, performance shares award agreement and stock bonus agreement.
|
|
S-1
|
|
333-193840
|
|
March 3, 2014
|
|
10.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.4*
|
|
2014 Employee Stock Purchase Plan and form of subscription agreement.
|
|
S-1
|
|
333-193840
|
|
March 3, 2014
|
|
10.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.5*
|
|
Form of restricted stock unit agreement; performance based
|
|
10-Q
|
|
001-36330
|
|
August 5, 2015
|
|
10.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.6*
|
|
Job Offer Letter, dated as of September 6, 2012, by and between the Registrant and John C. Doyle.
|
|
S-1
|
|
333-193840
|
|
February 10, 2014
|
|
10.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.7*
|
|
Double Trigger Acceleration Policy.
|
|
S-1
|
|
333-193840
|
|
February 10, 2014
|
|
10.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.8
|
|
2012 Sublease Agreement by and between National Union Fire Insurance Company of Pittsburgh, Pa. and the Registrant, with Consent to Sublease Agreement, dated as of August 9, 2012.
|
|
S-1
|
|
333-193840
|
|
February 10, 2014
|
|
10.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.9
|
|
Master Services Agreement, dated as of November 28, 2012; First Service Addendum, dated as of November 28, 2012; and Business Associate Agreement, dated as of September 11, 2012, in each case by and between the Registrant and the Administrative Committee of the Wal-Mart Stores, Inc., Associates’ Health and Welfare Plan.
|
|
S-1
|
|
333-193840
|
|
March 3, 2014
|
|
10.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.10
|
|
Lease Agreement by and between 150 Spear Street, LLC and the Registrant, dated May 21, 2015.
|
|
10-Q
|
|
001-36330
|
|
August 5, 2015
|
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.11
|
|
Amendment to the Lease Agreement by and between 150 Spear Street, LLC and the Company.
|
|
10-Q
|
|
001-36330
|
|
November 2, 2016
|
|
10.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.12*
|
|
Job Offer Letter, dated as of October 7, 2014, by and between the Registrant and John McCracken
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.13*
|
|
Form of Executive Severance Agreement
|
|
8-K
|
|
001-36330
|
|
July 11, 2016
|
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21.1
|
|
Subsidiaries of the Registrant.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24.1
|
|
Power of Attorney (see signature page of this annual report on Form 10-K).
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99.1
|
|
Certain Excerpts from the Prospectus dated February 22, 2017 filed on February 22, 2017 pursuant to Rule424(b)(3) relating to the Registration Statement on Form S-4, as amended (No. 333- 215861) of the Registrant.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Schema Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document
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X
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101.DEF
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XBRL Taxonomy Definition Linkbase Document
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X
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101.LAB
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XBRL Taxonomy Labels Linkbase Document
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X
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101.PRE
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XBRL Taxonomy Presentation Linkbase Document
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X
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*
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Indicates a management contract, compensatory plan or arrangement
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Enclosures:
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At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement, Security Policies Agreement, Benefits Overview, Mobile Device Agreement
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Name of Subsidiary
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Jurisdiction
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Castlight, Inc.
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Delaware
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Neptune Acquisition Subsidiary, Inc.
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Delaware
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▪
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Registration Statement (Form S-4 No. 333-215861) of Castlight Health, Inc., and
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▪
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Registration Statements (Form S-8 Nos. 333-194566 and 333-202701) pertaining to employee benefit plans of Castlight Health, Inc.;
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1.
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I have reviewed this Annual Report on Form 10-K of Castlight Health, Inc.;
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2.
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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;
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3.
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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;
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4.
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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
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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
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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(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):
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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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C
ASTLIGHT
H
EALTH
, I
NC
.
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||
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By:
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/s/Giovanni M. Colella
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Dated:
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Giovanni M. Colella
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March 1, 2017
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Chief Executive Officer, Co-founder and Director
(Principal Executive Officer)
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1.
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I have reviewed this Annual Report on Form 10-K of Castlight Health, Inc.;
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2.
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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.
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Designed such internal control over financial reporting, or caused such internal control over financial
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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
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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(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
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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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C
ASTLIGHT
H
EALTH
, I
NC
.
|
||
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By:
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/s/ Siobhan Nolan Mangini
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Dated:
|
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Siobhan Nolan Mangini
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March 1, 2017
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Chief Financial Officer
(Principal Financial Officer)
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C
ASTLIGHT
H
EALTH
, I
NC
.
|
||
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By:
|
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/s/Giovanni M. Colella
|
|
|
|
Giovanni M. Colella
|
|
|
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Chief Executive Officer, Co-founder and Director
(Principal Executive Officer)
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Dated:
|
|
|
|
March 1, 2017
|
|
|
|
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C
ASTLIGHT
H
EALTH
, I
NC
.
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||
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By:
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/s/ Siobhan Nolan Mangini
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Siobhan Nolan Mangini
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Chief Financial Officer
(Principal Financial Officer)
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Dated:
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March 1, 2017
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•
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Castlight’s and/or Jiff’s employees may experience uncertainty regarding their future roles in the combined
company, which might adversely affect Castlight’s and/or Jiff’s ability to retain, recruit and motivate key employees and executives; |
•
|
the attention of Castlight’s and/or Jiff’s management may be directed towards the completion of the merger and other transaction-related considerations and may be diverted from the day-to-day business operations of Castlight and/or Jiff, as applicable, and matters related to the merger may require commitments of time and resources that could otherwise have been devoted to other opportunities that might have been beneficial to Castlight and/or Jiff, as applicable; and
|
•
|
customers, partners and other third parties with business relationships with Castlight and/or Jiff may decide not to renew or may decide to seek to terminate, change and/or renegotiate their relationships with Castlight and/or Jiff as a result of the merger, whether pursuant to the terms of their existing agreements with Castlight and/or Jiff or otherwise.
|
•
|
diversion of management focus and resources from operational matters and other strategic opportunities while working to implement the merger;
|
•
|
reputational harm due to the adverse perception of any failure to successfully complete the merger; and
|
•
|
having to pay certain costs relating to the merger, such as legal, accounting, financial advisory, filing and printing fees.
|
•
|
investors react negatively to the prospects of the combined company’s business and prospects from the merger;
|
•
|
the effect of the merger on the combined company’s business and prospects is not consistent with the expectations of financial or industry analysts; or
|
•
|
the combined company does not achieve the perceived benefits of the merger as rapidly or to the extent anticipated by financial or industry analysts.
|
•
|
the inability to successfully combine the businesses of Castlight and Jiff in a manner that permits the combined company to achieve the synergies anticipated to result from the merger, which would result in the anticipated benefits of the merger not being realized partly or wholly in the time frame currently anticipated or at all;
|
•
|
lost sales and customers as a result of certain customers of either of the two companies deciding not to do
business with the combined company; |
•
|
complexities associated with managing the combined businesses;
|
•
|
integrating personnel from the two companies;
|
•
|
creation of uniform standards, controls, procedures, policies and information systems;
|
•
|
potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions
associated with the merger; and |
•
|
performance shortfalls at one or both of the two companies as a result of the diversion of management’s attention
caused by completing the merger and integrating the companies’ operations. |