Delaware
(State or other jurisdiction of
incorporation or organization)
|
|
26-1989091
(I.R.S. Employer
Identification Number)
|
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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Emerging growth company [X]
|
|
|
Page
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||
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As of
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||||||
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June 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
(as adjusted)
(1)
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
44,642
|
|
|
$
|
61,319
|
|
Marketable securities
|
29,833
|
|
|
32,025
|
|
||
Accounts receivable and other, net
|
28,184
|
|
|
21,933
|
|
||
Prepaid expenses and other current assets
|
5,742
|
|
|
3,991
|
|
||
Total current assets
|
108,401
|
|
|
119,268
|
|
||
Property and equipment, net
|
5,247
|
|
|
5,263
|
|
||
Restricted cash, non-current
|
1,325
|
|
|
1,325
|
|
||
Deferred commissions
|
24,691
|
|
|
27,512
|
|
||
Deferred professional service costs
|
11,855
|
|
|
12,480
|
|
||
Intangible assets, net
|
18,144
|
|
|
20,253
|
|
||
Goodwill
|
91,785
|
|
|
91,785
|
|
||
Other assets
|
2,141
|
|
|
1,997
|
|
||
Total assets
|
$
|
263,589
|
|
|
$
|
279,883
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
4,619
|
|
|
$
|
3,907
|
|
Accrued expenses and other current liabilities
|
17,829
|
|
|
13,178
|
|
||
Accrued compensation
|
9,530
|
|
|
13,941
|
|
||
Deferred revenue
|
26,509
|
|
|
25,985
|
|
||
Total current liabilities
|
58,487
|
|
|
57,011
|
|
||
Deferred revenue, non-current
|
2,723
|
|
|
4,457
|
|
||
Debt, non-current
|
4,183
|
|
|
4,958
|
|
||
Other liabilities, non-current
|
2,964
|
|
|
1,900
|
|
||
Total liabilities
|
68,357
|
|
|
68,326
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Class A and Class B common stock
|
14
|
|
|
13
|
|
||
Additional paid-in capital
|
598,963
|
|
|
586,900
|
|
||
Accumulated other comprehensive loss
|
(9
|
)
|
|
(22
|
)
|
||
Accumulated deficit
|
(403,736
|
)
|
|
(375,334
|
)
|
||
Total stockholders’ equity
|
195,232
|
|
|
211,557
|
|
||
Total liabilities and stockholders’ equity
|
$
|
263,589
|
|
|
$
|
279,883
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
(as adjusted)
(1)
|
|
|
|
(as adjusted)
(1)
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Subscription
|
$
|
34,802
|
|
|
$
|
30,382
|
|
|
$
|
67,791
|
|
|
$
|
56,279
|
|
Professional services and other
|
2,982
|
|
|
2,250
|
|
|
6,472
|
|
|
4,056
|
|
||||
Total revenue, net
|
37,784
|
|
|
32,632
|
|
|
74,263
|
|
|
60,335
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||||
Cost of subscription
(2)
|
9,140
|
|
|
7,706
|
|
|
18,314
|
|
|
11,952
|
|
||||
Cost of professional services and other
(2)
|
6,590
|
|
|
4,628
|
|
|
12,359
|
|
|
8,437
|
|
||||
Total cost of revenue
|
15,730
|
|
|
12,334
|
|
|
30,673
|
|
|
20,389
|
|
||||
Gross profit
|
22,054
|
|
|
20,298
|
|
|
43,590
|
|
|
39,946
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
(2)
|
13,306
|
|
|
15,935
|
|
|
27,218
|
|
|
30,081
|
|
||||
Research and development
(2)
|
16,425
|
|
|
15,194
|
|
|
31,796
|
|
|
26,265
|
|
||||
General and administrative
(2)
|
6,382
|
|
|
6,766
|
|
|
13,207
|
|
|
15,764
|
|
||||
Total operating expenses
|
36,113
|
|
|
37,895
|
|
|
72,221
|
|
|
72,110
|
|
||||
Operating loss
|
(14,059
|
)
|
|
(17,597
|
)
|
|
(28,631
|
)
|
|
(32,164
|
)
|
||||
Other income, net
|
101
|
|
|
12
|
|
|
229
|
|
|
205
|
|
||||
Loss before income tax benefit
|
$
|
(13,958
|
)
|
|
$
|
(17,585
|
)
|
|
$
|
(28,402
|
)
|
|
(31,959
|
)
|
|
Income tax benefit
|
—
|
|
|
(5,206
|
)
|
|
—
|
|
|
(5,206
|
)
|
||||
Net loss
|
$
|
(13,958
|
)
|
|
$
|
(12,379
|
)
|
|
$
|
(28,402
|
)
|
|
$
|
(26,753
|
)
|
Net loss per share, basic and diluted
|
$
|
(0.10
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.23
|
)
|
Weighted-average shares used to compute basic and diluted net loss per share
|
136,682
|
|
|
130,537
|
|
|
135,843
|
|
|
117,807
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
(as adjusted)
(1)
|
|
|
|
(as adjusted)
(1)
|
||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||||
Cost of subscription
|
$
|
231
|
|
|
$
|
253
|
|
|
$
|
473
|
|
|
$
|
380
|
|
Cost of professional services and other
|
315
|
|
|
363
|
|
|
616
|
|
|
609
|
|
||||
Sales and marketing
|
1,318
|
|
|
2,441
|
|
|
2,456
|
|
|
4,595
|
|
||||
Research and development
|
1,908
|
|
|
2,254
|
|
|
3,562
|
|
|
4,044
|
|
||||
General and administrative
|
1,375
|
|
|
1,169
|
|
|
2,632
|
|
|
2,464
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
(as adjusted)
(1)
|
|
|
|
(as adjusted)
(1)
|
|
|||||||
Net loss
|
$
|
(13,958
|
)
|
|
$
|
(12,379
|
)
|
|
$
|
(28,402
|
)
|
|
$
|
(26,753
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Net change in unrealized gain (loss) on available-for-sale marketable securities
|
11
|
|
|
4
|
|
|
13
|
|
|
(15
|
)
|
||||
Other comprehensive income (loss)
|
11
|
|
|
4
|
|
|
13
|
|
|
(15
|
)
|
||||
Comprehensive loss
|
$
|
(13,947
|
)
|
|
$
|
(12,375
|
)
|
|
$
|
(28,389
|
)
|
|
$
|
(26,768
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
|
|
(as adjusted)
(1)
|
||||
Operating activities:
|
|
|
|
||||
Net loss
|
$
|
(28,402
|
)
|
|
$
|
(26,753
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
3,573
|
|
|
2,758
|
|
||
Stock-based compensation
|
9,739
|
|
|
12,092
|
|
||
Amortization of deferred commissions
|
5,800
|
|
|
4,289
|
|
||
Amortization of deferred professional service costs
|
2,097
|
|
|
1,958
|
|
||
Lease exit and related charges
|
1,817
|
|
|
—
|
|
||
Release of deferred tax valuation allowance due to business combination
|
—
|
|
|
(5,206
|
)
|
||
Change in fair value of contingent consideration liability
|
—
|
|
|
(643
|
)
|
||
Accretion and amortization of marketable securities
|
(266
|
)
|
|
84
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable and other, net
|
(6,252
|
)
|
|
(3,117
|
)
|
||
Deferred commissions
|
(2,979
|
)
|
|
(3,452
|
)
|
||
Deferred professional service costs
|
(1,389
|
)
|
|
(1,853
|
)
|
||
Prepaid expenses and other assets
|
(1,896
|
)
|
|
(859
|
)
|
||
Accounts payable
|
511
|
|
|
(508
|
)
|
||
Accrued expenses and other liabilities
|
(1,229
|
)
|
|
(527
|
)
|
||
Deferred revenue
|
(1,210
|
)
|
|
6,711
|
|
||
Net cash used in operating activities
|
(20,086
|
)
|
|
(15,026
|
)
|
||
Investing activities:
|
|
|
|
||||
Purchase of property and equipment
|
(1,304
|
)
|
|
(930
|
)
|
||
Purchase of marketable securities
|
(23,979
|
)
|
|
(31,775
|
)
|
||
Maturities of marketable securities
|
26,450
|
|
|
63,737
|
|
||
Business combination, net of cash acquired
|
—
|
|
|
(2,264
|
)
|
||
Net cash provided by investing activities
|
1,167
|
|
|
28,768
|
|
||
Financing activities:
|
|
|
|
||||
Proceeds from exercise of stock options
|
2,242
|
|
|
831
|
|
||
Payments of issuance costs related to equity
|
—
|
|
|
(731
|
)
|
||
Net cash provided by financing activities
|
2,242
|
|
|
100
|
|
||
|
|
|
|
||||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(16,677
|
)
|
|
13,842
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
62,644
|
|
|
49,866
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
45,967
|
|
|
$
|
63,708
|
|
|
|
|
|
||||
Non-cash investing and financing activity:
|
|
|
|
||||
Non-cash purchase consideration related to acquisition of Jiff
|
$
|
—
|
|
|
$
|
101,692
|
|
|
|
|
|
||||
Reconciliation of cash, cash equivalents and restricted cash:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
44,642
|
|
|
$
|
62,201
|
|
Restricted cash
|
1,325
|
|
|
1,507
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
45,967
|
|
|
$
|
63,708
|
|
•
|
Prior to the adoption of the new standard, the Company recognized revenue of the combined professional services and subscription deliverable over the contractual term of the subscription contract. For certain contracts, this included periods that were cancelable due to termination provisions. Under the new standard, the Company recognizes revenue for the combined professional services and subscription performance obligation over the non-cancelable term of the arrangement. Additionally, prior to the adoption of the new standard, revenue related to variable fees was deferred until the fees became fixed or determinable.
Under the new standard, the Company
estimates variable consideration at the most likely amount to which the Company expects to be entitled. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.
|
•
|
Prior to the adoption of the new standard, the Company capitalized incremental and direct costs to obtain subscription contracts and amortized those costs over the non-cancelable portion of contracts. Under the new standard, the Company capitalizes all incremental costs to obtain subscription contracts and then amortizes those costs on a systematic basis that is consistent with the transfer to the customer of the goods or services to which those assets relate, which the Company has determined to be five years for initial subscription contracts or the contractual period for renewal subscription contracts.
|
•
|
Prior to the adoption of the new standard, the Company expensed costs to fulfill subscription contracts when they were incurred. Under the new standard, the Company recognizes as assets certain costs incurred to fulfill subscription contracts. Additionally, under the new standard, these costs are amortized on a systematic basis over a period that is consistent with the transfer to the customer of the goods or services to which those assets relate, which the Company has determined to be five years.
|
|
|
As of December 31, 2017
|
||||||||||
|
|
Previously Reported
|
|
Adjustments
|
|
As Adjusted
|
||||||
Assets
|
|
|
|
|
|
|||||||
|
Accounts receivable and other, net
|
$
|
20,761
|
|
|
$
|
1,172
|
|
|
$
|
21,933
|
|
|
Deferred commissions
(1)
|
10,583
|
|
|
16,929
|
|
|
27,512
|
|
|||
|
Deferred professional service costs
|
—
|
|
|
12,480
|
|
|
12,480
|
|
|||
Liabilities and stockholders' equity
|
|
|
|
|
|
|||||||
|
Deferred revenue
|
29,410
|
|
|
(3,425
|
)
|
|
25,985
|
|
|||
|
Deferred revenue, non-current
|
6,686
|
|
|
(2,229
|
)
|
|
4,457
|
|
|||
|
Accumulated deficit
|
(411,569
|
)
|
|
36,235
|
|
|
(375,334
|
)
|
(1)
|
As of December 31, 2017, Deferred commissions, current and non-current, were previously presented separately. The condensed consolidated balance sheet as of December 31, 2017 was reclassified to conform to the current period presentation.
|
|
|
Three Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2017
|
||||||||||||||||||||
|
|
Previously Reported
|
|
Adjustments
|
|
As Adjusted
|
|
Previously Reported
|
|
Adjustments
|
|
As Adjusted
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Subscription
|
$
|
29,834
|
|
|
$
|
548
|
|
|
$
|
30,382
|
|
|
$
|
55,600
|
|
|
$
|
679
|
|
|
$
|
56,279
|
|
|
Professional services and other
|
2,265
|
|
|
(15
|
)
|
|
2,250
|
|
|
4,243
|
|
|
(187
|
)
|
|
4,056
|
|
||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Cost of professional services and other
|
4,793
|
|
|
(165
|
)
|
|
4,628
|
|
|
8,781
|
|
|
(344
|
)
|
|
8,437
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Sales and marketing
|
16,575
|
|
|
(640
|
)
|
|
15,935
|
|
|
31,018
|
|
|
(937
|
)
|
|
30,081
|
|
||||||
Operating loss
|
(18,935
|
)
|
|
1,338
|
|
|
(17,597
|
)
|
|
(33,937
|
)
|
|
1,773
|
|
|
(32,164
|
)
|
|||||||
Net loss
|
(13,717
|
)
|
|
1,338
|
|
|
(12,379
|
)
|
|
(28,526
|
)
|
|
1,773
|
|
|
(26,753
|
)
|
|||||||
Net loss per share, basic and diluted
|
(0.11
|
)
|
|
0.02
|
|
|
(0.09
|
)
|
|
(0.24
|
)
|
|
0.01
|
|
|
(0.23
|
)
|
|
|
|
Six Months Ended June 30, 2017
|
||||||||||
|
|
|
Previously Reported
|
|
Adjustments
|
|
As Adjusted
|
||||||
Operating activities:
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(28,526
|
)
|
|
$
|
1,773
|
|
(1)
|
$
|
(26,753
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||||||||
|
Stock-based compensation
|
12,541
|
|
|
(449
|
)
|
(1)
|
12,092
|
|
||||
|
Amortization of deferred commissions
|
5,172
|
|
|
(883
|
)
|
(1)
|
4,289
|
|
||||
|
Amortization of deferred professional costs
|
—
|
|
|
1,958
|
|
(1)
|
1,958
|
|
||||
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|||||||
|
|
Deferred commissions
|
(3,398
|
)
|
|
(54
|
)
|
(1)
|
(3,452
|
)
|
|||
|
|
Deferred professional service costs
|
—
|
|
|
(1,853
|
)
|
(1)
|
(1,853
|
)
|
|||
|
Deferred revenue
|
7,202
|
|
|
(491
|
)
|
(1)
|
6,711
|
|
||||
Net cash provided by investing activities
|
28,405
|
|
|
363
|
|
(2)
|
28,768
|
|
|||||
Net increase in cash, cash equivalents and restricted cash
|
13,479
|
|
|
363
|
|
(2)
|
13,842
|
|
|||||
Cash, cash equivalents and restricted cash at the beginning of period
|
48,722
|
|
|
1,144
|
|
|
49,866
|
|
|||||
Cash, cash equivalents and restricted cash at the end of period
|
62,201
|
|
|
1,507
|
|
(2)
|
63,708
|
|
•
|
Identification of the contract, or contracts, with a customer;
|
•
|
Identification of the performance obligations in the contract;
|
•
|
Determination of the transaction price;
|
•
|
Allocation of the transaction price to the performance obligations in the contract; and
|
•
|
Recognition of revenue when, or as, the Company satisfies a performance obligation.
|
|
As of December 31, 2017
(1)
|
|
|
|
Expense recognized
|
|
As of June 30, 2018
|
||||||||
|
|
Additions
|
|
||||||||||||
Deferred commissions
|
$
|
27,512
|
|
|
$
|
2,979
|
|
|
$
|
(5,800
|
)
|
|
$
|
24,691
|
|
Deferred professional service costs
|
12,480
|
|
|
1,472
|
|
|
(2,097
|
)
|
|
11,855
|
|
||||
Total deferred commissions and professional service costs
|
$
|
39,992
|
|
|
$
|
4,451
|
|
|
$
|
(7,897
|
)
|
|
$
|
36,546
|
|
(1)
|
Prior-period information has been adjusted for the adoption of ASC 606. See
Note 2
–
Accounting Standards and Significant Accounting Policies
for a summary of adjustments.
|
Cash
|
$
|
2,234
|
|
Current assets
|
5,159
|
|
|
Other assets
|
1,971
|
|
|
Acquired intangible assets
|
23,900
|
|
|
Goodwill
|
91,785
|
|
|
Total assets acquired
|
125,049
|
|
|
Deferred revenue
|
(1,857
|
)
|
|
Other current liabilities
|
(6,192
|
)
|
|
Debt
|
(5,578
|
)
|
|
Non-current liabilities
|
(5,232
|
)
|
|
Total net assets acquired
|
$
|
106,190
|
|
|
|
Fair Value
|
|
Useful Life
|
||||
Customer relationships
|
|
$
|
10,900
|
|
|
10
|
||
Developed technology
|
|
10,600
|
|
|
5
|
|||
Backlog
|
|
1,500
|
|
|
3
|
|||
Other acquired intangible assets
|
|
900
|
|
|
1
|
-
|
3
|
|
Total identifiable intangible assets
|
|
$
|
23,900
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Total revenue
|
$
|
37,784
|
|
|
$
|
32,598
|
|
|
$
|
74,263
|
|
|
$
|
63,943
|
|
Net loss
|
(13,958
|
)
|
|
(15,490
|
)
|
|
(28,402
|
)
|
|
(33,957
|
)
|
|
June 30, 2018
|
||||||||||||||
|
Useful Life
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||
Customer relationships
|
10
|
|
$
|
10,900
|
|
|
$
|
(1,363
|
)
|
|
$
|
9,537
|
|
||
Developed technology
|
5
|
|
10,600
|
|
|
(2,650
|
)
|
|
7,950
|
|
|||||
Backlog
|
3
|
|
1,500
|
|
|
(960
|
)
|
|
540
|
|
|||||
Other acquired intangible assets
|
1
|
-
|
3
|
|
900
|
|
|
(783
|
)
|
|
117
|
|
|||
Total identifiable intangible assets
|
|
|
|
|
$
|
23,900
|
|
|
$
|
(5,756
|
)
|
|
$
|
18,144
|
|
|
December 31, 2017
|
||||||||||||||
|
Useful Life
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||
Customer relationships
|
10
|
|
$
|
10,900
|
|
|
$
|
(818
|
)
|
|
$
|
10,082
|
|
||
Developed technology
|
5
|
|
10,600
|
|
|
(1,590
|
)
|
|
9,010
|
|
|||||
Backlog
|
3
|
|
1,500
|
|
|
(664
|
)
|
|
836
|
|
|||||
Other acquired intangible assets
|
1
|
-
|
3
|
|
900
|
|
|
(575
|
)
|
|
325
|
|
|||
Total identifiable intangible assets
|
|
|
|
|
$
|
23,900
|
|
|
$
|
(3,647
|
)
|
|
$
|
20,253
|
|
Remainder of 2018
|
$
|
1,934
|
|
2019
|
3,505
|
|
|
2020
|
3,242
|
|
|
2021
|
3,210
|
|
|
2022
|
1,620
|
|
|
Thereafter
|
4,633
|
|
|
Total estimated amortization expense
|
$
|
18,144
|
|
|
As of June 30, 2018
|
||||||||||||||
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Value
|
||||||||
U.S. treasury securities
|
$
|
23,610
|
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
23,602
|
|
U.S. agency obligations
|
14,972
|
|
|
—
|
|
|
(1
|
)
|
|
14,971
|
|
||||
Money market mutual funds
|
6,287
|
|
|
—
|
|
|
—
|
|
|
6,287
|
|
||||
|
44,869
|
|
|
—
|
|
|
(9
|
)
|
|
44,860
|
|
||||
Included in cash and cash equivalents
|
15,027
|
|
|
—
|
|
|
—
|
|
|
15,027
|
|
||||
Included in marketable securities
|
$
|
29,842
|
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
29,833
|
|
|
December 31, 2017
|
||||||||||||||
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Value
|
||||||||
U.S. treasury securities
|
$
|
31,047
|
|
|
$
|
—
|
|
|
$
|
(22
|
)
|
|
$
|
31,025
|
|
U.S. agency obligations
|
19,366
|
|
|
—
|
|
|
—
|
|
|
19,366
|
|
||||
Money market mutual funds
|
6,115
|
|
|
—
|
|
|
—
|
|
|
6,115
|
|
||||
|
56,528
|
|
|
—
|
|
|
(22
|
)
|
|
56,506
|
|
||||
Included in cash and cash equivalents
|
24,481
|
|
|
—
|
|
|
—
|
|
|
24,481
|
|
||||
Included in marketable securities
|
$
|
32,047
|
|
|
$
|
—
|
|
|
$
|
(22
|
)
|
|
$
|
32,025
|
|
|
As of June 30, 2018
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
U.S. agency obligations
|
$
|
—
|
|
|
$
|
7,740
|
|
|
$
|
7,740
|
|
Money market mutual funds
|
6,287
|
|
|
—
|
|
|
6,287
|
|
|||
U.S. treasury securities
|
—
|
|
|
1,000
|
|
|
1,000
|
|
|||
Marketable securities:
|
|
|
|
|
|
||||||
U.S. treasury securities
|
—
|
|
|
22,602
|
|
|
22,602
|
|
|||
U.S. agency obligations
|
—
|
|
|
7,231
|
|
|
7,231
|
|
|||
|
$
|
6,287
|
|
|
$
|
38,573
|
|
|
$
|
44,860
|
|
|
As of December 31, 2017
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
U.S. agency obligations
|
$
|
—
|
|
|
$
|
18,366
|
|
|
$
|
18,366
|
|
Money market mutual funds
|
6,115
|
|
|
—
|
|
|
6,115
|
|
|||
Marketable securities:
|
|
|
|
|
|
||||||
U.S. treasury securities
|
—
|
|
|
31,025
|
|
|
31,025
|
|
|||
U.S. agency obligations
|
—
|
|
|
1,000
|
|
|
1,000
|
|
|||
|
$
|
6,115
|
|
|
$
|
50,391
|
|
|
$
|
56,506
|
|
|
As of
|
||||||
|
June 30, 2018
|
|
December 31, 2017
|
||||
Leasehold improvements
|
$
|
3,393
|
|
|
$
|
2,915
|
|
Computer equipment
|
6,799
|
|
|
6,165
|
|
||
Software
|
1,134
|
|
|
1,149
|
|
||
Internal-use software
|
2,925
|
|
|
2,925
|
|
||
Furniture and equipment
|
1,154
|
|
|
1,293
|
|
||
Total
|
15,405
|
|
|
14,447
|
|
||
Accumulated depreciation
|
(10,158
|
)
|
|
(9,184
|
)
|
||
Property and equipment, net
|
$
|
5,247
|
|
|
$
|
5,263
|
|
Remainder of 2018
|
$
|
620
|
|
2019
|
1,859
|
|
|
2020
|
1,859
|
|
|
2021
(1)
|
1,240
|
|
|
Total future maturities of debt
(2)
|
$
|
5,578
|
|
|
Number of
Shares Outstanding |
|
Weighted-
Average Grant Date Fair Value |
|||
Balance as of December 31, 2017
|
9,333,896
|
|
|
$
|
4.03
|
|
Restricted Stock Units granted
(1)
|
4,797,974
|
|
|
$
|
3.69
|
|
Restricted Stock Units vested
|
(1,662,426
|
)
|
|
$
|
4.32
|
|
Restricted Stock Units forfeited and canceled
(2)
|
(1,737,125
|
)
|
|
$
|
3.65
|
|
Balance as of June 30, 2018
|
10,732,319
|
|
|
$
|
3.66
|
|
|
Options
Outstanding
|
|
Weighted-
Average
Exercise
Price
|
|
Aggregate
Intrinsic
Value
|
|||||
Balance as of December 31, 2017
|
10,335,178
|
|
|
$
|
2.83
|
|
|
$
|
19,253
|
|
Stock option grants
|
134,000
|
|
|
$
|
3.69
|
|
|
|
||
Stock options exercised
|
(1,527,309
|
)
|
|
$
|
1.47
|
|
|
|
||
Stock options forfeited and canceled
|
(581,748
|
)
|
|
$
|
12.93
|
|
|
|
||
Balance as of June 30, 2018
|
8,360,121
|
|
|
$
|
2.39
|
|
|
$
|
19,499
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Volatility
|
57%
|
|
61%
|
||||
Expected life (in years)
|
6.06
|
|
6.02
|
||||
Risk-free interest rate
|
2.72
|
%
|
-
|
2.74
|
%
|
|
2.03%
|
Dividend yield
|
—%
|
|
—%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||
|
2018
|
|
2017
(1)
|
|
2018
|
|
2017
(1)
|
||||||||||||||||||||||||
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||||||||||||||
Net loss
|
$
|
(5,315
|
)
|
|
$
|
(8,643
|
)
|
|
$
|
(5,123
|
)
|
|
$
|
(7,256
|
)
|
|
$
|
(10,956
|
)
|
|
$
|
(17,446
|
)
|
|
$
|
(12,298
|
)
|
|
$
|
(14,455
|
)
|
Weighted-average shares used to compute basic and diluted net loss per share
|
52,043
|
|
|
84,639
|
|
|
54,018
|
|
|
76,519
|
|
|
52,401
|
|
|
83,442
|
|
|
54,153
|
|
|
63,654
|
|
||||||||
Basic and diluted net loss per share
|
$
|
(0.10
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.23
|
)
|
(1)
|
Prior-period information has been adjusted for the adoption of ASC 606. See
Note 2
–
Accounting Standards and Significant Accounting Policies
for a summary of adjustments.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Stock options and restricted stock units
|
19,092
|
|
|
22,239
|
|
|
19,092
|
|
|
22,239
|
|
Warrants
(1)
|
115
|
|
|
2,020
|
|
|
115
|
|
|
2,020
|
|
Contingent issuable shares related to Jiff
(2)
|
—
|
|
|
3,284
|
|
|
—
|
|
|
3,284
|
|
Total
|
19,207
|
|
|
27,543
|
|
|
19,207
|
|
|
27,543
|
|
(2)
|
As of December 31, 2017, the Company determined there would be no related payment because the milestones were not met. See
Note 5
–
Business Combinations
for additional information.
|
|
As of June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Signed Annual Recurring Revenue
|
$
|
166.4
|
|
|
$
|
150.8
|
|
|
Twelve Months Ended December 31,
|
||||
|
2017
|
|
2016
|
||
Annual Net Dollar Retention Rate
|
104
|
%
|
|
94
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
|
|
(as adjusted)
(1)
|
|
|
(as adjusted)
(1)
|
||||||
Revenue:
|
|
|
|
|
|
|
|
||||
Subscription
|
92
|
%
|
|
93
|
%
|
|
91
|
%
|
|
93
|
%
|
Professional services and other
|
8
|
%
|
|
7
|
%
|
|
9
|
%
|
|
7
|
%
|
Total revenue, net
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue:
|
|
|
|
|
|
|
|
||||
Cost of subscription
|
24
|
%
|
|
24
|
%
|
|
24
|
%
|
|
20
|
%
|
Cost of professional services and other
|
18
|
%
|
|
14
|
%
|
|
17
|
%
|
|
14
|
%
|
Total cost of revenue
|
42
|
%
|
|
38
|
%
|
|
41
|
%
|
|
34
|
%
|
Gross margin percentage
|
58
|
%
|
|
62
|
%
|
|
59
|
%
|
|
66
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
||||
Sales and marketing
|
35
|
%
|
|
49
|
%
|
|
37
|
%
|
|
50
|
%
|
Research and development
|
43
|
%
|
|
46
|
%
|
|
43
|
%
|
|
43
|
%
|
General and administrative
|
17
|
%
|
|
21
|
%
|
|
18
|
%
|
|
26
|
%
|
Total operating expenses
|
95
|
%
|
|
116
|
%
|
|
98
|
%
|
|
119
|
%
|
Operating loss
|
(37
|
)%
|
|
(54
|
)%
|
|
(39
|
)%
|
|
(53
|
)%
|
Other income, net
|
—
|
%
|
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
Loss before income taxes
|
(37
|
)%
|
|
(54
|
)%
|
|
(38
|
)%
|
|
(53
|
)%
|
Income tax benefit
|
—
|
%
|
|
(16
|
)%
|
|
—
|
%
|
|
(9
|
)%
|
Net loss
|
(37
|
)%
|
|
(38
|
)%
|
|
(38
|
)%
|
|
(44
|
)%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2018
|
|
|
|
%
|
|
$
|
|
2018
|
|
|
|
%
|
|
$
|
||||||||||||
|
|
2017
(1)
|
|
Change
|
|
Change
|
|
|
2017
(1)
|
|
Change
|
|
Change
|
||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Subscription
|
$
|
34,802
|
|
|
$
|
30,382
|
|
|
15%
|
|
$
|
4,420
|
|
|
$
|
67,791
|
|
|
$
|
56,279
|
|
|
20%
|
|
$
|
11,512
|
|
Professional services and other
|
2,982
|
|
|
2,250
|
|
|
33%
|
|
732
|
|
|
6,472
|
|
|
4,056
|
|
|
60%
|
|
2,416
|
|
||||||
Total revenue, net
|
$
|
37,784
|
|
|
$
|
32,632
|
|
|
16%
|
|
$
|
5,152
|
|
|
$
|
74,263
|
|
|
$
|
60,335
|
|
|
23%
|
|
$
|
13,928
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
|
|
%
|
|
$
|
|
2018
|
|
|
|
%
|
|
$
|
||||||||||||||
|
|
2017
(1)
|
|
Change
|
|
Change
|
|
|
2017
(1)
|
|
Change
|
|
Change
|
||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Subscription
|
$
|
9,140
|
|
|
$
|
7,706
|
|
|
19
|
%
|
|
$
|
1,434
|
|
|
18,314
|
|
|
$
|
11,952
|
|
|
53
|
%
|
|
$
|
6,362
|
|
|
Professional services and other
|
6,590
|
|
|
4,628
|
|
|
42
|
%
|
|
1,962
|
|
|
12,359
|
|
|
8,437
|
|
|
46
|
%
|
|
3,922
|
|
||||||
Total cost of revenue
|
$
|
15,730
|
|
|
$
|
12,334
|
|
|
28
|
%
|
|
$
|
3,396
|
|
|
$
|
30,673
|
|
|
$
|
20,389
|
|
|
50
|
%
|
|
$
|
10,284
|
|
Gross margin (loss) percentage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Subscription
|
74
|
%
|
|
75
|
%
|
|
|
|
|
|
73
|
%
|
|
79
|
%
|
|
|
|
|
||||||||||
Professional services and other
|
(121
|
)%
|
|
(106
|
)%
|
|
|
|
|
|
(91
|
)%
|
|
(108
|
)%
|
|
|
|
|
||||||||||
Total gross margin
|
58
|
%
|
|
62
|
%
|
|
|
|
|
|
59
|
%
|
|
66
|
%
|
|
|
|
|
||||||||||
Gross profit
|
$
|
22,054
|
|
|
$
|
20,298
|
|
|
9
|
%
|
|
$
|
1,756
|
|
|
$
|
43,590
|
|
|
$
|
39,946
|
|
|
9
|
%
|
|
$
|
3,644
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
|
|
%
|
|
$
|
|
2018
|
|
|
|
%
|
|
$
|
||||||||||||||
|
|
2017
(1)
|
|
Change
|
|
Change
|
|
|
2017
(1)
|
|
Change
|
|
Change
|
||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||||||
Sales and marketing
|
$
|
13,306
|
|
|
$
|
15,935
|
|
|
(16
|
)%
|
|
$
|
(2,629
|
)
|
|
$
|
27,218
|
|
|
$
|
30,081
|
|
|
(10
|
)%
|
|
$
|
(2,863
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
|
|
%
|
|
$
|
|
2018
|
|
|
|
%
|
|
$
|
||||||||||||||
|
|
2017
|
|
Change
|
|
Change
|
|
|
2017
|
|
Change
|
|
Change
|
||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||||||
Research and development
|
$
|
16,425
|
|
|
$
|
15,194
|
|
|
8
|
%
|
|
$
|
1,231
|
|
|
$
|
31,796
|
|
|
$
|
26,265
|
|
|
21
|
%
|
|
$
|
5,531
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
|
|
%
|
|
$
|
|
2018
|
|
|
|
%
|
|
$
|
||||||||||||||
|
|
2017
|
|
Change
|
|
Change
|
|
|
2017
|
|
Change
|
|
Change
|
||||||||||||||||
|
(In thousands, except percentages)
|
||||||||||||||||||||||||||||
General and administrative
|
$
|
6,382
|
|
|
$
|
6,766
|
|
|
(6
|
)%
|
|
$
|
(384
|
)
|
|
$
|
13,207
|
|
|
$
|
15,764
|
|
|
(16
|
)%
|
|
$
|
(2,557
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
(1)
|
||||
|
(In thousands)
|
||||||
Net cash used in operating activities
|
$
|
(20,086
|
)
|
|
$
|
(15,026
|
)
|
Net cash provided by investing activities
|
1,167
|
|
|
28,768
|
|
||
Net cash provided by financing activities
|
2,242
|
|
|
100
|
|
||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
$
|
(16,677
|
)
|
|
$
|
13,842
|
|
•
|
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.
|
•
|
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 acquisition, which would result in the anticipated benefits of the acquisition 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;
|
•
|
creating uniform standards, controls, procedures, policies and information systems;
|
•
|
performance shortfalls at one or both of the two companies as a result of the diversion of management’s attention caused by integrating the companies’ operations and functionality, or developing new functionality; and
|
•
|
potential loss of brand awareness or confusion as a result of our re-branding activities.
|
•
|
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 either enter into new subscription agreements or renew previous agreements with us in the second half of the year.
|
•
|
the timing of recognition of revenue, including possible delays in the recognition of revenue due to lengthy and sometimes unpredictable implementation timelines or changes brought about by new accounting pronouncements;
|
•
|
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
|
•
|
other impacts of new accounting pronouncements.
|
•
|
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 regulatory authorities empowered to enforce HIPAA and other applicable regulations, including but not limited to 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 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 or strategic collaborations or alliances in an efficient, effective or profitable manner;
|
•
|
unanticipated costs or liabilities associated with the acquisition or strategic transaction;
|
•
|
challenges in achieving strategic objectives, cost savings and other benefits expected from such transactions;
|
•
|
the lack of unilateral control over a strategic alliance and the risk that strategic partners have business goals and interests that are not aligned with ours;
|
•
|
delays, difficulties or unexpected costs in the integration, assimilation, implementation or modification of platforms, systems, functions, technologies and infrastructure to support the combined business or strategic alliance, as well as maintaining and integrating accounting systems and operations, uniform standards, controls (including internal accounting controls), procedures and policies
|
•
|
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 or strategic transaction;
|
•
|
the potential loss of key employees;
|
•
|
the risk that we do not realize a satisfactory return on our investments;
|
•
|
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 or strategic transaction.
|
•
|
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, including same day sales to cover tax withholdings as a result of settlement of restricted stock units;
|
•
|
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 ownership of 30% or more of the number of outstanding shares of Class A common stock and Class B common stock, combined.
|
•
|
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 resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors.
|
•
|
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.
|
•
|
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 Class A and Class B common stock, combined. 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 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
June 30, 2018
, holders of our Class A common stock owned approximately 38% and holders of our Class B common stock owned approximately 62% 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 approximately 86% and holders of our Class B common stock have approximately 14% 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 approximately 38% and holders of our Class B common stock have approximately 62% of the total votes.
|
|
|
|
|
Incorporate by Reference
|
|
|
||||||
Exhibit
Number
|
|
Description of Document
|
|
Form
|
|
File
No.
|
|
Filing Date
|
|
Exhibit
|
|
Filed
Herewith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.17**
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1*
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.2*
|
|
|
|
|
|
|
|
|
|
|
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.
|
**
|
Indicates a management contract, compensatory plan or arrangement.
|
|
|
CASTLIGHT HEALTH, INC.
|
||
Date:
|
August 1, 2018
|
By:
|
|
/s/ Siobhan Nolan Mangini
|
|
|
|
|
Siobhan Nolan Mangini
|
|
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
1.
|
Continued Employment.
From the Effective Date through the Separation Date (defined below) (the “
Employment Period
”), you will be employed by the Company as an Advisor to the Chief Executive Officer of the Company, reporting to the Chief Executive Officer. You will provide transition services as may be assigned to you in writing by the Chief Executive Officer.
|
2.
|
Salary and Benefits Continuation.
During the Employment Period, you will continue to be paid your base salary at the rate in effect on the date of this Amendment and be eligible for employee benefit plans as set forth in your Offer Letter. Your bonus for the first half of fiscal year 2017 will be paid consistent with standard Company practices, at a rate based on the greater of (i) the standard rate applied to the senior leadership team or (ii) the amount paid to the Company’s Chief Executive Officer. Notwithstanding the foregoing, Section 5 (Compensation Equivalency) in your Offer Letter shall cease to apply.
|
3.
|
Separation Date.
Provided that you continue to perform your obligations under (i) the Non- Competition Agreement, (ii) the Confidentiality Agreement, and (iii) as otherwise reasonably outlined and prescribed in writing by the Company’s Chief Executive Officer (collectively, the “
Continuing Obligations
”), your status as an officer and an employee of the Company and any of the Company’s subsidiaries will end effective as of September 30, 2018 (the “
Separation Date
”). On that date, you and the Company shall sign the Separation Agreement and General Release Agreement that is attached hereto as Exhibit A. In the event your employment is terminated as a result of your death prior to the Separation Date, you (or your designated beneficiary) will continue to be entitled to the Separation Benefits set forth in Section 3 of Exhibit A, subject to your (or your beneficiary’s) timely execution thereof. In the event your employment is terminated for a failure to adhere to the Continuing Obligations prior to the Separation Date, you will no longer be eligible for any of the Separation Benefits.
|
4.
|
Choice of Law.
This Amendment shall in all respects be governed and construed in accordance with the laws of the State of California, including all matters of construction, validity and performance, without regard to conflicts of law principles.
|
5.
|
Entire Agreement.
This Amendment, together with the Offer Letter, Confidentiality Agreement and Non-Compete Agreement contain the entire agreement with respect to the terms of your employment, including the transition and separation of your employment, and supersedes and replaces any prior agreements as to those matters, whether oral or written (including any amounts otherwise payable pursuant to the Executive Severance Agreement) except as expressly set forth herein. For the avoidance of doubt, this Agreement shall not supersede (i) that certain Equity Waiver or (ii) Benefits Waiver, each by and between you and the Company
|
DATE: June 9, 2018
|
|
By:
/s/ Derek Newell
|
|
|
|
|
Name: Robert Derek Newell
|
|
|
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|
|
DATE: June 9, 2018
|
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CASTLIGHT HEALTH, INC.
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|
By:
/s/ John Doyle
|
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Name: John Doyle
|
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Title: CEO
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•
|
Effective Date
. This Agreement shall become effective on the eighth (8
th
) day after Employee signs and returns this Agreement to the Company in accordance with Section 15 (“Effective Date”) provided that Employee does not revoke this Agreement prior to such date pursuant to Section 15(f) below and provided further that Employee returns this signed agreement to the Company by no later than [Date]
.
|
•
|
Separation of Employment
. Employee acknowledges and agrees that (a) Employee’s employment with the Company ceased effective as of the Separation Date; (b) Company has provided Employee a final paycheck that included payment of all remuneration that Employee earned through the Separation Date (subject to Section 3(a) below); (c) Company has provided Employee all forms required under California law; (d) Company has paid all salary, wages, bonuses and any and all other benefits and compensation that Employee earned during his employment with the Company; (e) Employee will submit his final documented expense reimbursement statement within ten (10) days following the Separation Date; and (f) except as otherwise provided in this Agreement, all benefits and perquisites of employment ceased as of the Separation Date and Employee will not receive any further salary, bonuses, vesting of any equity or benefits, or other forms of compensation after the Separation Date from the Company or any of its affiliates.
|
•
|
Separation Benefits
. In exchange for Employee’s releases and the promises and covenants contained herein, Employee will be entitled to receive the payments and benefits set forth below:
|
◦
|
Payment of 15 months Base Salary and 15 times the applicable COBRA Coverage, as such terms are defined in that certain Executive Severance Agreement by and between the Company and Employee, dated January
|
◦
|
Each of Employee’s unvested options to purchase shares of common stock in Jiff, Inc. which were converted into options to purchase shares of the Company’s common stock (all equity grants in Employee's Schwab account that begin with the letter “J”) shall become immediately vested and exercisable as of the Separation Date.
|
◦
|
Provided Employee continues to perform his obligations under (i) this Agreement,
|
•
|
General Release
. In consideration of and as a precondition to the Company’s payment of the benefits outlined in this Agreement, which includes consideration to which Employee otherwise would not be entitled, Employee and Company agree as follows:
|
◦
|
Employee, for and on behalf of himself, his agents, heirs, executors, administrators, and assigns, does hereby release and forever discharge the Company, and its successors and assigns, and each of its and their respective directors, officers, employees, shareholders, members, partners, subsidiaries, affiliates (including any sister and parent companies) and each of their respective agents, directors, officers, partners, employees and attorneys (collectively, “Releasees” and individually, “Releasee”), and each of them, from any and all claims, known or unknown, suspected or unsuspected, that Employee has or may have
|
◦
|
The Company does hereby release and forever discharge the Employee and his heirs from any and all claims, known or unknown, suspected or unsuspected, that Company has or may have as to the Employee, relating to, or arising out of, the employment of Employee with Company. However, this release is not intended to bar any claims related to the Continuing Obligations, or any claims that, by statute, may not be waived.
|
◦
|
Each of the parties is familiar with section 1542 of the California Civil Code, which reads as follows:
|
◦
|
Nothing herein is intended to release the Company’s statutory obligation under California Labor Code §2802 to indemnify Employee for any losses or expenditures incurred as a direct consequence of discharging his duties.
|
•
|
Covenant Not To Sue
. Employee covenants and agrees that he will never, individually or with any person, or through any agent, commence or prosecute against Company or any Releasee any action or other proceeding for any claim which is released or waived in this Agreement (provided, however, that nothing in this Agreement prevents Employee from challenging the waiver of his ADEA claims set forth below in Section 15). The Company covenants and agrees that it will never, individually or with any person, or through any agent, commence or prosecute against Employee any action or other proceeding otherwise covered by Section 4(b). Employee further agrees that he will not aid, assist, abet or in any way encourage any third party or third-party entity to, in any way, pursue any claims of any kind against Company or any Releasee, unless he is specifically required by law to engage in such activity. Company further agrees that it will
|
•
|
Assignment; Authority
. Employee represents and warrants that: no other person had or has or claims any interest through Employee in the claims released in this Agreement; he has the sole right and exclusive authority to execute this Agreement; he has the sole right to receive consideration paid therefore; there are no liens or claims of liens or assignments in law or equity or otherwise of or against any of the claims or causes of action or matters released herein; and he has not sold, assigned, transferred, conveyed or otherwise disposed of any claim or demand relating to any matter covered by this Agreement. The rights and obligations of the Parties to this Agreement will be binding on, and will be of benefit to, each of the parties successors, assigns, heirs and estates. For avoidance of doubt, (i) if Employee should die at anytime after this Agreement is signed, all the benefits in Section 3 above shall accrue to his heirs and estates as if Employee were still alive and had fulfilled all his obligations under this Agreement to accrue the benefits in Section 3; and (ii) if there is a Corporate Transaction (as defined in the Executive Severance Agreement), the acquirer will be responsible for all of the obligations under this Agreement.
|
•
|
Confidential Information
. Employee acknowledges and agrees that during the course of his employment with the Company, Employee had access to and became acquainted with the Company’s lists of clients, client information, computer programs, contracts, business plans and strategies, prices, reports, financial data and similar confidential or proprietary materials or information about
|
•
|
Non-Disparagement
. Employee agrees that he shall not disparage the Releasees to anyone, including but not limited to, employees and former employees, media or other third parties, or otherwise make statements or take actions (including on social media) which would place the Releasees, or any of them, in a negative light. Similarly, Employee will not disparage any Company product or service to anyone, including but not limited to, employees and former employees, media or other third parties, or otherwise make statements or take actions (including on social media) which would place such service in a negative light. Company agrees that none of its Executive Committee members or members of the Board of Directors shall disparage Employee to anyone, including but not limited to Company employees and former employees, media or other third parties, or otherwise make statements or take action (including on social media) which would place Employee in a negative light.
|
•
|
Company Property
. Employee acknowledges and agrees that, to the extent he has not already done so, he shall by the Separation Date deliver to the Company all property of the Company, including, but not limited to, equipment (e.g., laptop computer and cellular telephone), passwords, notebooks, electronic storage devices, credit cards, business cards, keys, parking or building access cards, documents, memoranda, reports, written and computer files and data, books, correspondence, lists, or other written or graphic records, and the like, relating to the Company’s business, that are in Employee’s possession or control, including but not limited to copies (including electronic copies) of any documents or files that contain the Company’s Confidential Information.
|
•
|
Future Cooperation
. The Parties agree not to act in any unlawful manner that might damage the business or reputation of the Company, Employee or the Releasees. The Parties agree not to counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges or complaints by any third party against the Company, Employee and/or any Releasees, unless under subpoena or other court or administrative order or legal process to do so. The Parties further agree both to immediately notify the other Party upon receipt of any court order, subpoena, or other legal discovery device that seeks or might require the disclosure or production of the existence or terms of this Agreement, and to furnish within six (6) business days of their
|
•
|
Waiver, Modification and Amendment
. No provision of this Agreement may be waived unless in writing signed by both parties hereto. Waiver of any one provision herein shall not be deemed to be a waiver of any other provision herein. This Agreement may be modified or amended only by a written agreement executed by the parties affected thereby.
|
•
|
Collaborative Effort
. The Company has advised Employee to consult with independent legal counsel prior to executing this Agreement. The parties shall bear their own costs and attorneys' fees incurred in negotiating and drafting this Agreement or incurred prior to the date of execution hereof. No party hereto or their respective attorneys shall be deemed to have drafted this Agreement, or any portion thereof, for purposes of
|
•
|
Execution and Governing Law
. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute a single document. This Agreement is entered into in, and shall be governed by and construed and interpreted in accordance with, the internal laws of the State of California without giving effect to its conflict of laws provisions. Employee acknowledges that he has read this Agreement, understands all of its terms and executes this Agreement voluntarily and with full knowledge of its significance.
|
•
|
Severability
. If any term, provision, covenant, or condition of this Agreement (the "Provision") is held by an arbitrator or a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions of this Agreement shall remain in full force and effect and in no way shall be affected, impaired, or invalidated. If possible, the Provision shall remain in effect but shall be modified by the court or arbitrator only to the extent necessary to make it reasonable.
|
•
|
Age Discrimination Disclosure, Review and Revocation
. Without detracting in any respect from any other provision of this Agreement:
|
◦
|
In consideration of the separation benefits provided in this Agreement, Employee agrees and acknowledges that this Agreement constitutes a knowing and voluntary waiver of all rights or claims he has or may have against the Company as set forth herein, including, but not limited to, all rights or claims arising under the Age Discrimination in Employment Act of 1967, as amended, including, but not limited to, all claims of age discrimination in employment and all claims of retaliation in violation of the ADEA.
|
◦
|
Employee understands that, by entering into this Agreement, he does not waive rights or claims that may arise after the date of his execution of this Agreement, including without limitation any rights or claims that he may have to secure enforcement of the terms and conditions of this Agreement.
|
◦
|
Employee agrees and acknowledges that the consideration provided to
|
◦
|
The Company hereby advises Employee to consult with an attorney prior to executing this Agreement.
|
◦
|
Employee acknowledges that he has at least twenty-one (21) days in which to review and consider this Agreement and, in the event Employee signs and returns this Agreement prior to such twenty-one (21)-day period, Employee acknowledges that he will have done so voluntarily and with full knowledge that he was waiving his right to have twenty-one (21) days to review and consider the Agreement.
|
◦
|
The Company agrees that Employee may revoke this Agreement within seven
|
◦
|
Employee agrees that any change to this Agreement, whether material or immaterial, will not restart the twenty-one (21)-day review period.
|
◦
|
Nothing in this Agreement prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs from doing so, unless specifically authorized by federal law.
|
•
|
Defend Trade Secrets Act
.
Pursuant to the Defend Trade Secrets Act of 2016 (18
|
•
|
Entire Agreement
. Other than expressly excepted herein, this Agreement (along with the Confidentiality Agreement and Non-Competition Agreement) constitutes the entire agreement between and among the parties pertaining to the subject matter hereof and the final, complete and exclusive expression of the terms and conditions of their Agreement. Any and all prior agreements, representations, negotiations and understandings made by the parties, oral and written, express or implied, are hereby superseded and merged herein. This Agreement may be modified, amended or waived, in whole or in part, only by a written agreement executed by the parties affected thereby. If any of the terms or provisions of this Agreement or the Confidentiality Agreement are found to be legally unenforceable, then the remaining terms and conditions shall nevertheless be fully enforceable without regard to the terms or provisions that are found to be legally unenforceable. For the avoidance of doubt, this Agreement shall not supersede (i) that certain
|
•
|
Not an Admission of Liability
. This Agreement, and its performance, does not constitute and will not be construed as an admission by Company or Employee of the truth of any contested matter, or of any liability, wrongful act, or omission.
|
•
|
Breach of Agreement
. If, in connection with a breach of this Agreement, either party is required to retain and utilize the services of counsel to enforce this Agreement, the parties agree that the substantially prevailing party in any such enforcement proceeding shall be entitled to its reasonable attorneys’ fees and costs, including costs of expert witnesses, unless otherwise prohibited by law.
|
•
|
Tax and Withholding
. All forms of compensation referred to in this Agreement or the Executive Severance Agreement are subject to reduction to reflect applicable withholding and payroll taxes and other deductions required by law. In the event that the payments provided for in this Agreement constitute “parachute payments” within the meaning of
|
Vicki Ryan
|
|
|
|
Chief People Officer
|
|
|
|
|
|
|
|
Signature
|
|
Date
|
|
|
|
|
|
Robert Derek Newell
|
|
|
|
|
|
|
|
Signature
|
|
Date
|
|
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/ John C. Doyle
|
Dated:
|
|
|
John C. Doyle
|
August 1, 2018
|
|
|
Chief Executive Officer
(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
|
August 1, 2018
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
C
ASTLIGHT
H
EALTH
, I
NC
.
|
||
|
By:
|
|
/s/ John C. Doyle
|
|
|
|
John C. Doyle
|
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
Dated:
|
|
|
|
August 1, 2018
|
|
|
|
|
C
ASTLIGHT
H
EALTH
, I
NC
.
|
||
|
By:
|
|
/s/ Siobhan Nolan Mangini
|
|
|
|
Siobhan Nolan Mangini
|
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
Dated:
|
|
|
|
August 1, 2018
|
|
|
|