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 [ ]
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Smaller reporting company [ ]
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Emerging growth company [X]
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•
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According to The Centers for Medicare and Medicaid Services (“CMS”), U.S. private health insurance spending is estimated to be $1.24 trillion in 2018 and is expected to grow at a compound annual growth rate of 4.4% through 2022.
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•
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Employers seek to deploy more digital health offerings to improve employee satisfaction and outcomes but are faced with evaluating and managing an ever-increasing number of digital health point solutions for their employees. Rock Health estimates that more than $29 billion was invested in U.S. digital health companies from 2013 to 2018, across more than 1,800 funding rounds. While this explosion in digital health options has been overwhelming for human resource executives responsible for health benefits evaluation, selection and spend, these solutions are seen as key drivers of employee engagement.
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•
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The proliferation of so many healthcare and wellbeing offerings has also led to another problem for employees: underutilization of the benefits actually provided to employees. A March 2017 study by NBGH and Fidelity has shown utilization rates that are less than 20% for key benefits offerings like financial wellness, weight management, condition management, and resilience.
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•
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access to claims data and other data through all major health plans and many of the largest pharmacy benefits managers and dental carriers;
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demographic information from employer eligibility files;
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real-time employee search and benefit utilization information through integrations with point solution partners;
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•
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connection to an employer’s plan design, including understanding each employee’s selected health plan, their network configuration, and their real-time deductible status;
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data from numerous validated and nationally recognized provider quality sources;
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Health Savings Accounts;
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•
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biometric data.
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•
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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, communication and comprehensive testing.
We also 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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•
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User and 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. We offer interactive sessions to our customers that help them understand impact of our product through various standard and customized reporting and provide deeper insights about their employee population with a focus on employee engagement. The fees for these services are included as part of our subscription contracts.
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•
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Marketplace: Store and Rewards Center.
To help employers drive employee engagement with their benefits, we offer an online store where employers can offer third-party health products and services (e.g. fitness trackers) to their employees for use with Wellbeing Navigator’s activity tracking functionality. Additionally, we power a Rewards Center where employees can redeem incentive points for items such as contributions to the HSA accounts, gift cards, and donations to charity.
Revenues from p
roducts sold through our online market place is recognized on a net basis principally because we are not the primary obligor to the end-customers.
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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 limit all access to on-demand servers and networks at our production and remote backup facilities. All users are validated, authenticated and authorized 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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Care guidance competitors, which include: independent vendors
such as ClearCost Health, Compass, Healthcare Bluebook, Accolade, HealthAdvocate, and Quantum Health;
and U.S. health plans
such as Aetna Inc., Cigna Corporation, and United Healthcare Group, Inc., and Health Services Corporation
that bundle basic care guidance functionality into their offering;
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•
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Wellbeing competitors, which
include: Limeade, VirginPulse and Vitality; and
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Platform competitors, which include: United Healthcare Group’s Optum/Rally offering, and emerging competitors such as Evive, Welltok, and Sharecare.
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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 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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the inability to successfully market and sell the combined product offerings;
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lost sales and customers as a result of certain customers deciding not to migrate their pre-combination product selection to our combined product:
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complexities associated with managing the combined businesses;
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creating uniform standards, controls, procedures, policies and information systems;
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performance shortfalls as a result of the diversion of management’s attention caused by integrating the companies’ operations and functionality, or developing new functionality; and
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potential loss of brand awareness or confusion as a result of our re-branding activities.
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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 either enter into new subscription agreements or renew previous agreements with us in the second half of the year.
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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 or changes brought about by new accounting pronouncements;
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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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other impacts of new accounting pronouncements.
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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 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;
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private litigation by individuals adversely affected by any violation of HIPAA, HITECH or comparable 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 or strategic collaborations or alliances in an efficient, effective or profitable manner;
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unanticipated costs or liabilities associated with the acquisition or strategic transaction;
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challenges in achieving strategic objectives, cost savings and other benefits expected from such transactions;
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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;
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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;
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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 or strategic transaction;
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the potential loss of key employees;
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the risk that we do not realize a satisfactory return on our investments;
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diversion 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 or strategic transaction.
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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, including same day sales to cover tax withholdings as a result of settlement of restricted stock units;
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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 resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors.
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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, 2018
, holders of our Class A common stock owned approximately
26%
and holders of our Class B common stock owned approximately
74%
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
78%
and holders of our Class B common stock have approximately
22%
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
26%
and holders of our Class B common stock have approximately
74%
of the total votes.
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3/2014
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12/2014
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12/2015
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12/2016
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12/2017
|
12/2018
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||||||||||||
Castlight Health, Inc.
|
$
|
100.00
|
|
|
$
|
37.14
|
|
|
$
|
13.56
|
|
|
$
|
15.71
|
|
|
$
|
11.90
|
|
$
|
6.89
|
|
NYSE Composite Index
|
$
|
100.00
|
|
|
$
|
104.63
|
|
|
$
|
97.91
|
|
|
$
|
106.73
|
|
|
$
|
123.64
|
|
$
|
109.80
|
|
S&P Software & Services Select Industry Index
|
$
|
100.00
|
|
|
$
|
102.75
|
|
|
$
|
110.58
|
|
|
$
|
121.17
|
|
|
$
|
155.14
|
|
$
|
169.24
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
|
|
As Adjusted
(1,2)
|
|
As Adjusted
(1)
|
|
|
|
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Subscription
|
$
|
143,901
|
|
|
$
|
121,368
|
|
|
$
|
91,943
|
|
|
$
|
70,350
|
|
|
$
|
41,602
|
|
Professional services and other
|
12,503
|
|
|
10,652
|
|
|
6,765
|
|
|
4,965
|
|
|
4,003
|
|
|||||
Total revenue, net
|
156,404
|
|
|
132,020
|
|
|
98,708
|
|
|
75,315
|
|
|
45,605
|
|
|||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of subscription
|
34,691
|
|
|
28,410
|
|
|
16,463
|
|
|
12,417
|
|
|
10,472
|
|
|||||
Cost of professional services and other
|
25,498
|
|
|
18,242
|
|
|
15,403
|
|
|
21,351
|
|
|
17,300
|
|
|||||
Total cost of revenue
|
60,189
|
|
|
46,652
|
|
|
31,866
|
|
|
33,768
|
|
|
27,772
|
|
|||||
Gross profit
|
96,215
|
|
|
85,368
|
|
|
66,842
|
|
|
41,547
|
|
|
17,833
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and marketing
|
49,134
|
|
|
59,767
|
|
|
58,641
|
|
|
67,414
|
|
|
62,065
|
|
|||||
Research and development
|
61,355
|
|
|
54,502
|
|
|
40,460
|
|
|
30,077
|
|
|
22,917
|
|
|||||
General and administrative
|
25,620
|
|
|
28,825
|
|
|
26,859
|
|
|
24,274
|
|
|
19,009
|
|
|||||
Total operating expenses
|
136,109
|
|
|
143,094
|
|
|
125,960
|
|
|
121,765
|
|
|
103,991
|
|
|||||
Operating loss
|
(39,894
|
)
|
|
(57,726
|
)
|
|
(59,118
|
)
|
|
(80,218
|
)
|
|
(86,158
|
)
|
|||||
Other income, net
|
188
|
|
|
618
|
|
|
432
|
|
|
298
|
|
|
218
|
|
|||||
Loss before income tax benefit
|
(39,706
|
)
|
|
(57,108
|
)
|
|
(58,686
|
)
|
|
(79,920
|
)
|
|
(85,940
|
)
|
|||||
Income tax benefit
|
—
|
|
|
(5,206
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net loss
|
$
|
(39,706
|
)
|
|
$
|
(51,902
|
)
|
|
$
|
(58,686
|
)
|
|
$
|
(79,920
|
)
|
|
$
|
(85,940
|
)
|
Net loss per share, basic and diluted
(3)
|
$
|
(0.29
|
)
|
|
$
|
(0.41
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.85
|
)
|
|
$
|
(1.16
|
)
|
Weighted-average shares used to compute basic and diluted net loss per share
(3)
|
137,686
|
|
|
125,534
|
|
|
100,798
|
|
|
93,753
|
|
|
74,381
|
|
|
As of December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
|
|
As Adjusted
(1,2)
|
|
As Adjusted
(1)
|
|
|
|
|
||||||||||
|
(in thousands)
|
|
|
||||||||||||||||
Consolidated Balance Sheets Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
66,005
|
|
|
$
|
61,319
|
|
|
$
|
48,722
|
|
|
$
|
19,150
|
|
|
$
|
17,425
|
|
Marketable securities
|
11,327
|
|
|
32,025
|
|
|
65,882
|
|
|
101,274
|
|
|
175,057
|
|
|||||
Working capital
|
56,650
|
|
|
62,257
|
|
|
90,303
|
|
|
96,384
|
|
|
170,559
|
|
|||||
Property and equipment, net
|
3,963
|
|
|
5,263
|
|
|
5,285
|
|
|
6,896
|
|
|
3,630
|
|
|||||
Total assets
|
253,514
|
|
|
279,883
|
|
|
183,498
|
|
|
173,274
|
|
|
223,274
|
|
|||||
Total deferred revenue
|
21,223
|
|
|
30,442
|
|
|
29,634
|
|
|
34,112
|
|
|
27,360
|
|
|||||
Total liabilities
|
58,843
|
|
|
68,326
|
|
|
48,970
|
|
|
54,920
|
|
|
47,084
|
|
|||||
Total stockholders’ equity
|
194,671
|
|
|
211,557
|
|
|
134,528
|
|
|
118,354
|
|
|
176,190
|
|
(1)
|
The summary consolidated financial data for the years ended
December 31, 2018
,
2017
, and
2016
and as of
December 31, 2018
and
2017
reflects the adoption of ASC 606. See
Note 2
of the notes to consolidated financial statements for a summary of adjustments. The summary of consolidated financial data as of
December 31, 2016
has been derived from our audited consolidated financial statements adjusted for the adoption of ASC 606. The summary consolidated financial data for the years ended December 31, 2015 and 2014 and as of
December 31, 2015
and
2014
does not reflect the adoption of ASC 606.
|
(2)
|
In 2017, we completed the acquisition of Jiff. Please refer to
Note 5
–
Business Combinations
to the consolidated financial statements for a discussion of the allocation of the purchase consideration to the assets and liabilities acquired.
|
(3)
|
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, 2018
|
|
December 31, 2017
|
||||
|
(in millions)
|
||||||
Signed Annual Recurring Revenue
|
$
|
150.5
|
|
|
$
|
163.2
|
|
|
Year Ended December 31,
|
||||
|
2018
|
|
2017
|
||
Annual Net Dollar Retention Rate
|
82
|
%
|
|
104
|
%
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
|
|
|
(as adjusted)
(1)
|
|
(as adjusted)
(1)
|
|||
Revenue:
|
|
|
|
|
|
|||
Subscription
|
92
|
%
|
|
92
|
%
|
|
93
|
%
|
Professional services and other
|
8
|
%
|
|
8
|
%
|
|
7
|
%
|
Total revenue, net
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue:
|
|
|
|
|
|
|||
Cost of subscription
|
22
|
%
|
|
21
|
%
|
|
17
|
%
|
Cost of professional services and other
|
16
|
%
|
|
14
|
%
|
|
15
|
%
|
Total cost of revenue
|
38
|
%
|
|
35
|
%
|
|
32
|
%
|
Gross margin
|
62
|
%
|
|
65
|
%
|
|
68
|
%
|
Operating expenses:
|
|
|
|
|
|
|||
Sales and marketing
|
32
|
%
|
|
45
|
%
|
|
59
|
%
|
Research and development
|
39
|
%
|
|
41
|
%
|
|
41
|
%
|
General and administrative
|
16
|
%
|
|
22
|
%
|
|
27
|
%
|
Total operating expenses
|
87
|
%
|
|
108
|
%
|
|
127
|
%
|
Operating loss
|
(25
|
)%
|
|
(43
|
)%
|
|
(59
|
)%
|
Other income, net
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Loss before income tax benefit
|
(25
|
)%
|
|
(43
|
)%
|
|
(59
|
)%
|
Income tax benefit
|
—
|
%
|
|
(4
|
)%
|
|
—
|
%
|
Net loss
|
(25
|
)%
|
|
(39
|
)%
|
|
(59
|
)%
|
(1)
|
Prior-period information has been adjusted for the adoption of ASC 606. See
Note 2
–
Summary of Significant Accounting Policies
for a summary of adjustments.
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2017 to 2018 % change
|
|
2016 to 2017 % change
|
||||||||
|
|
|
(as adjusted)
(1)
|
|
(as adjusted)
(1)
|
|
|
|
|
||||||||
|
(in thousands, except percentages)
|
||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||
Subscription
|
$
|
143,901
|
|
|
$
|
121,368
|
|
|
$
|
91,943
|
|
|
19
|
%
|
|
32
|
%
|
Professional services and other
|
12,503
|
|
|
10,652
|
|
|
6,765
|
|
|
17
|
%
|
|
57
|
%
|
|||
Total revenue, net
|
$
|
156,404
|
|
|
$
|
132,020
|
|
|
$
|
98,708
|
|
|
18
|
%
|
|
34
|
%
|
(1)
|
Prior-period information has been adjusted for the adoption of ASC 606. See
Note 2
–
Summary of Significant Accounting Policies
for a summary of adjustments.
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2017 to 2018 % change
|
|
2016 to 2017 % change
|
||||||||
|
(in thousands, except percentages)
|
||||||||||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
||||||||
Subscription
|
$
|
34,691
|
|
|
$
|
28,410
|
|
|
$
|
16,463
|
|
|
22
|
%
|
|
73
|
%
|
Professional services and other
(1)
|
25,498
|
|
|
18,242
|
|
|
15,403
|
|
|
40
|
%
|
|
18
|
%
|
|||
Total cost of revenue
|
$
|
60,189
|
|
|
$
|
46,652
|
|
|
$
|
31,866
|
|
|
29
|
%
|
|
46
|
%
|
Gross margin (loss) percentage:
|
|
|
|
|
|
|
|
|
|
||||||||
Subscription
|
76
|
%
|
|
77
|
%
|
|
82
|
%
|
|
|
|
|
|||||
Professional services and other
(1)
|
(104
|
)%
|
|
(71
|
)%
|
|
(128
|
)%
|
|
|
|
|
|||||
Total gross margin
|
62
|
%
|
|
65
|
%
|
|
68
|
%
|
|
|
|
|
|||||
Gross profit
|
$
|
96,215
|
|
|
$
|
85,368
|
|
|
$
|
66,842
|
|
|
13
|
%
|
|
28
|
%
|
(1)
|
2017 and 2016 has been adjusted for the adoption of ASC 606. See
Note 2
–
Summary of Significant Accounting Policies
for a summary of adjustments.
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2017 to 2018 % change
|
|
2016 to 2017 % change
|
||||||||
|
|
|
(as adjusted)
(1)
|
|
(as adjusted)
(1)
|
|
|
|
|
||||||||
|
(in thousands, except percentages)
|
||||||||||||||||
Sales and marketing
|
$
|
49,134
|
|
|
$
|
59,767
|
|
|
$
|
58,641
|
|
|
(18
|
)%
|
|
2
|
%
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2017 to 2018 % change
|
|
2016 to 2017 % change
|
||||||||
|
(in thousands, except percentages)
|
||||||||||||||||
Research and development
|
$
|
61,355
|
|
|
$
|
54,502
|
|
|
$
|
40,460
|
|
|
13
|
%
|
|
35
|
%
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2017 to 2018 % change
|
|
2016 to 2017 % change
|
||||||||
|
(in thousands, except percentages)
|
||||||||||||||||
General and administrative
|
$
|
25,620
|
|
|
$
|
28,825
|
|
|
$
|
26,859
|
|
|
(11
|
)%
|
|
7
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Net cash used in operating activities
|
$
|
(18,551
|
)
|
|
$
|
(23,457
|
)
|
|
$
|
(36,971
|
)
|
Net cash provided by investing activities
|
19,222
|
|
|
34,610
|
|
|
46,622
|
|
|||
Net cash provided by financing activities
|
4,015
|
|
|
1,625
|
|
|
20,065
|
|
|||
Net increase in cash, cash equivalents and restricted cash
|
$
|
4,686
|
|
|
$
|
12,778
|
|
|
$
|
29,716
|
|
|
Total
|
|
Less Than
1 Year
|
|
1-3
Years
|
|
3-5
Years
|
|
More than 5 Years
|
||||||||||
Long-term debt maturities
(1)
|
$
|
5,113
|
|
|
$
|
1,859
|
|
|
$
|
3,254
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest payments on long-term debt
(1)
|
314
|
|
|
185
|
|
|
129
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases for facilities
(2)
|
22,470
|
|
|
6,324
|
|
|
11,308
|
|
|
3,727
|
|
|
1,111
|
|
|||||
Data center costs
(3)
|
1,331
|
|
|
761
|
|
|
570
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
29,228
|
|
|
$
|
9,129
|
|
|
$
|
15,261
|
|
|
$
|
3,727
|
|
|
$
|
1,111
|
|
(1)
|
The above table assumes that our long-term debt is held to maturity, and the interest rate on our debt remains unchanged for the remaining life of the debt from the rate in effect at
December 31, 2018
. In addition to principal and interest payments, the Company is also required to pay $0.5 million as final payment on the earlier of maturity, termination or prepayment of the Term Loan. See
Note 10
–
Debt
to our consolidated financial statements for additional information.
|
(2)
|
Operating leases for facilities space represent our principal commitments, which consists of obligations under leases for office
space.
Minimum payments have not been reduced by sublease rentals of
$7.1 million
due in the future under a non-cancellable sublease. Excludes certain common area maintenance, insurance and tax payments for which the Company is also obligated. In
2018
, these charges totaled approximately
$0.7 million
.
|
(3)
|
Data center costs represent costs associated with service agreements for our data centers in the U.S.
|
•
|
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.
|
CASTLIGHT HEALTH, INC.
|
|
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
Page
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
|
|
(as adjusted)
(1)
|
||||
|
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
66,005
|
|
|
$
|
61,319
|
|
Marketable securities
|
11,327
|
|
|
32,025
|
|
||
Accounts receivable and other, net
|
26,816
|
|
|
21,933
|
|
||
Prepaid expenses and other current assets
|
3,680
|
|
|
3,991
|
|
||
Total current assets
|
107,828
|
|
|
119,268
|
|
||
Property and equipment, net
|
3,963
|
|
|
5,263
|
|
||
Restricted cash, non-current
|
1,325
|
|
|
1,325
|
|
||
Deferred commissions
|
20,142
|
|
|
27,512
|
|
||
Deferred professional service costs
|
10,133
|
|
|
12,480
|
|
||
Intangible assets, net
|
16,209
|
|
|
20,253
|
|
||
Goodwill
|
91,785
|
|
|
91,785
|
|
||
Other assets
|
2,129
|
|
|
1,997
|
|
||
Total assets
|
$
|
253,514
|
|
|
$
|
279,883
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
9,556
|
|
|
$
|
3,907
|
|
Accrued expenses and other current liabilities
|
15,454
|
|
|
13,178
|
|
||
Accrued compensation
|
5,975
|
|
|
13,941
|
|
||
Deferred revenue
|
20,193
|
|
|
25,985
|
|
||
Total current liabilities
|
51,178
|
|
|
57,011
|
|
||
Deferred revenue, non-current
|
1,030
|
|
|
4,457
|
|
||
Debt, non-current
|
3,254
|
|
|
4,958
|
|
||
Other liabilities, non-current
|
3,381
|
|
|
1,900
|
|
||
Total liabilities
|
58,843
|
|
|
68,326
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of December 31, 2018 and 2017; no shares issued and outstanding as of December 31, 2018 and 2017
|
—
|
|
|
—
|
|
||
Class A common stock, $0.0001 par value; 200,000,000 shares authorized as of December 31, 2018 and 2017; 37,576,324 and 52,853,400 shares issued and outstanding as of December 31, 2018 and 2017, respectively
|
4
|
|
|
5
|
|
||
Class B common stock, $0.0001 par value; 800,000,000 shares authorized as of December 31, 2018 and 2017; 104,350,881 and 81,685,875 shares issued and outstanding as of December 31, 2018 and 2017, respectively
|
10
|
|
|
8
|
|
||
Additional paid-in capital
|
609,697
|
|
|
586,900
|
|
||
Accumulated other comprehensive loss
|
—
|
|
|
(22
|
)
|
||
Accumulated deficit
|
(415,040
|
)
|
|
(375,334
|
)
|
||
Total stockholders’ equity
|
194,671
|
|
|
211,557
|
|
||
Total liabilities and stockholders’ equity
|
$
|
253,514
|
|
|
$
|
279,883
|
|
(1)
|
Prior-period information has been adjusted for the adoption of ASU No. 2014-09,
Revenue from Contracts with Customers
(“ASC 606”). See
Note 2
–
Summary of Significant Accounting Policies
for a summary of adjustments.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
(as adjusted)
(1)
|
|
(as adjusted)
(1)
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Subscription
|
$
|
143,901
|
|
|
$
|
121,368
|
|
|
$
|
91,943
|
|
Professional services and other
|
12,503
|
|
|
10,652
|
|
|
6,765
|
|
|||
Total revenue, net
|
156,404
|
|
|
132,020
|
|
|
98,708
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Cost of subscription
(2)
|
34,691
|
|
|
28,410
|
|
|
16,463
|
|
|||
Cost of professional services and other
(2)
|
25,498
|
|
|
18,242
|
|
|
15,403
|
|
|||
Total cost of revenue
|
60,189
|
|
|
46,652
|
|
|
31,866
|
|
|||
Gross profit
|
96,215
|
|
|
85,368
|
|
|
66,842
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Sales and marketing
(2)
|
49,134
|
|
|
59,767
|
|
|
58,641
|
|
|||
Research and development
(2)
|
61,355
|
|
|
54,502
|
|
|
40,460
|
|
|||
General and administrative
(2)
|
25,620
|
|
|
28,825
|
|
|
26,859
|
|
|||
Total operating expenses
|
136,109
|
|
|
143,094
|
|
|
125,960
|
|
|||
Operating loss
|
(39,894
|
)
|
|
(57,726
|
)
|
|
(59,118
|
)
|
|||
Other income, net
|
188
|
|
|
618
|
|
|
432
|
|
|||
Loss before income tax benefit
|
(39,706
|
)
|
|
(57,108
|
)
|
|
(58,686
|
)
|
|||
Income tax benefit
|
—
|
|
|
(5,206
|
)
|
|
—
|
|
|||
Net loss
|
$
|
(39,706
|
)
|
|
$
|
(51,902
|
)
|
|
$
|
(58,686
|
)
|
Net loss per share, basic and diluted
|
$
|
(0.29
|
)
|
|
$
|
(0.41
|
)
|
|
$
|
(0.58
|
)
|
Weighted-average shares used to compute basic and diluted net loss per share
|
137,686
|
|
|
125,534
|
|
|
100,798
|
|
(1)
|
Prior-period information has been adjusted for the adoption of ASC 606. See
Note 2
–
Summary of Significant Accounting Policies
for a summary of adjustments.
|
(2)
|
Includes stock-based compensation expense as follows:
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
(as adjusted)
(1)
|
|
(as adjusted)
(1)
|
||||||
Cost of revenue:
|
|
|
|
|
|
||||||
Cost of subscription
|
$
|
1,017
|
|
|
$
|
888
|
|
|
$
|
506
|
|
Cost of professional services and other
|
1,177
|
|
|
1,081
|
|
|
1,205
|
|
|||
Sales and marketing
|
3,770
|
|
|
9,665
|
|
|
8,843
|
|
|||
Research and development
|
7,214
|
|
|
7,415
|
|
|
5,959
|
|
|||
General and administrative
|
4,954
|
|
|
4,954
|
|
|
4,743
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
(as adjusted)
(1)
|
|
(as adjusted)
(1)
|
||||||
|
|
|
|
|
|
||||||
Net loss
|
$
|
(39,706
|
)
|
|
$
|
(51,902
|
)
|
|
$
|
(58,686
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
||||||
Net change in unrealized (loss) gain on available-for-sale marketable securities
|
22
|
|
|
(22
|
)
|
|
79
|
|
|||
Other comprehensive (loss) income
|
22
|
|
|
(22
|
)
|
|
79
|
|
|||
Comprehensive loss
|
$
|
(39,684
|
)
|
|
$
|
(51,924
|
)
|
|
$
|
(58,607
|
)
|
(1)
|
Prior-period information has been adjusted for the adoption of ASC 606. See
Note 2
–
Summary of Significant Accounting Policies
for a summary of adjustments.
|
|
Class A and B
Common Stock |
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Accumulated
Deficit
|
|
Total
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balances as of December 31, 2015
|
95,618,092
|
|
|
$
|
10
|
|
|
$
|
415,519
|
|
|
$
|
(79
|
)
|
|
$
|
(297,096
|
)
|
|
$
|
118,354
|
|
Cumulative adjustment upon adoption of ASC 606
1
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,704
|
|
|
32,704
|
|
|||||
Balances after adopting ASC 606
1
|
95,618,092
|
|
|
10
|
|
|
415,519
|
|
|
(79
|
)
|
|
(264,392
|
)
|
|
151,058
|
|
|||||
Vesting of restricted stock units
|
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 income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
79
|
|
|
(58,686
|
)
|
|
(58,607
|
)
|
|||||
Balances as of December 31, 2016
|
104,310,923
|
|
|
$
|
10
|
|
|
$
|
457,596
|
|
|
$
|
—
|
|
|
$
|
(323,078
|
)
|
|
$
|
134,528
|
|
Cumulative adjustment upon adoption of ASU 2016-09
2
|
—
|
|
|
—
|
|
|
354
|
|
|
—
|
|
|
(354
|
)
|
|
—
|
|
|||||
Balances after adopting ASU 2016-09
2
|
104,310,923
|
|
|
10
|
|
|
457,950
|
|
|
$
|
—
|
|
|
(323,432
|
)
|
|
134,528
|
|
||||
Issuance of common stock related to acquisition, net
|
25,054,049
|
|
|
2
|
|
|
100,288
|
|
|
—
|
|
|
—
|
|
|
100,290
|
|
|||||
Vesting of restricted stock units
|
3,956,495
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Exercise of stock options, net
|
1,217,808
|
|
|
1
|
|
|
2,355
|
|
|
—
|
|
|
—
|
|
|
2,356
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
24,578
|
|
|
—
|
|
|
—
|
|
|
24,578
|
|
|||||
SAP warrant modification
|
—
|
|
|
—
|
|
|
1,729
|
|
|
—
|
|
|
—
|
|
|
1,729
|
|
|||||
Comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
(51,902
|
)
|
|
(51,924
|
)
|
|||||
Balances as of December 31, 2017
|
134,539,275
|
|
|
$
|
13
|
|
|
$
|
586,900
|
|
|
$
|
(22
|
)
|
|
$
|
(375,334
|
)
|
|
$
|
211,557
|
|
Vesting of restricted stock units
|
4,131,967
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Exercise of stock options, net
|
3,255,963
|
|
|
1
|
|
|
4,479
|
|
|
—
|
|
|
—
|
|
|
4,480
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
18,318
|
|
|
—
|
|
|
—
|
|
|
18,318
|
|
|||||
Comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
(39,706
|
)
|
|
(39,684
|
)
|
|||||
Balances as of December 31, 2018
|
141,927,205
|
|
|
$
|
14
|
|
|
$
|
609,697
|
|
|
$
|
—
|
|
|
$
|
(415,040
|
)
|
|
$
|
194,671
|
|
(1)
|
Prior-period information has been adjusted for the adoption of ASC 606. See
Note 2
–
Summary of Significant Accounting Policies
for a summary of adjustments.
|
(2)
|
Prior-period information has been adjusted for the adoption of ASU 2016-09. See
Note 2
–
Summary of Significant Accounting Policies
for a summary of adjustments.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
(as adjusted)
(1)
|
|
(as adjusted)
(1)
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(39,706
|
)
|
|
$
|
(51,902
|
)
|
|
$
|
(58,686
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
6,858
|
|
|
6,613
|
|
|
3,168
|
|
|||
Stock-based compensation
|
18,132
|
|
|
24,003
|
|
|
21,256
|
|
|||
Amortization and impairment of deferred commissions
|
13,105
|
|
|
10,026
|
|
|
5,882
|
|
|||
Amortization and impairment of professional service costs
|
5,268
|
|
|
4,225
|
|
|
2,795
|
|
|||
Release of deferred tax valuation allowance due to business combination
|
—
|
|
|
(5,206
|
)
|
|
—
|
|
|||
Lease exit and related charges
|
2,634
|
|
|
—
|
|
|
—
|
|
|||
Change in fair value of contingent consideration liability
|
—
|
|
|
(671
|
)
|
|
—
|
|
|||
Accretion and amortization of marketable securities
|
(516
|
)
|
|
(83
|
)
|
|
481
|
|
|||
Expense related to expiration of SAP warrant
|
—
|
|
|
1,132
|
|
|
—
|
|
|||
Gain on sale of investment in related party
|
—
|
|
|
(1,375
|
)
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable and other, net
|
(4,883
|
)
|
|
(2,799
|
)
|
|
(2,278
|
)
|
|||
Deferred commissions
|
(5,735
|
)
|
|
(9,888
|
)
|
|
(8,947
|
)
|
|||
Deferred professional service costs
|
(2,735
|
)
|
|
(4,181
|
)
|
|
(4,734
|
)
|
|||
Prepaid expenses and other assets
|
178
|
|
|
1,645
|
|
|
448
|
|
|||
Accounts payable
|
5,744
|
|
|
764
|
|
|
(1,035
|
)
|
|||
Accrued expenses and other liabilities
|
290
|
|
|
3,493
|
|
|
1,743
|
|
|||
Deferred revenue
|
(9,219
|
)
|
|
(1,943
|
)
|
|
4,970
|
|
|||
Accrued compensation
|
(7,966
|
)
|
|
2,690
|
|
|
(2,034
|
)
|
|||
Net cash used in operating activities
|
(18,551
|
)
|
|
(23,457
|
)
|
|
(36,971
|
)
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Proceeds from sale of investment in related party
|
—
|
|
|
5,500
|
|
|
—
|
|
|||
Purchase of property and equipment, net
|
(2,014
|
)
|
|
(2,544
|
)
|
|
(1,702
|
)
|
|||
Purchase of marketable securities
|
(31,974
|
)
|
|
(62,658
|
)
|
|
(98,184
|
)
|
|||
Maturities of marketable securities
|
53,210
|
|
|
96,576
|
|
|
146,508
|
|
|||
Business combination, net of cash acquired
|
—
|
|
|
(2,264
|
)
|
|
—
|
|
|||
Net cash provided by investing activities
|
19,222
|
|
|
34,610
|
|
|
46,622
|
|
|||
Financing activities:
|
|
|
|
|
|
||||||
Proceeds from the exercise of stock options
|
4,480
|
|
|
2,356
|
|
|
2,829
|
|
|||
Proceeds from the issuance of common stock and warrants to SAP
|
—
|
|
|
—
|
|
|
17,358
|
|
|||
Principal payments on long-term debt
|
(465
|
)
|
|
—
|
|
|
—
|
|
|||
Payments of issuance costs related to equity
|
—
|
|
|
(731
|
)
|
|
(122
|
)
|
|||
Net cash provided by financing activities
|
4,015
|
|
|
1,625
|
|
|
20,065
|
|
|||
|
|
|
|
|
|
||||||
Net increase in cash, cash equivalents and restricted cash
|
4,686
|
|
|
12,778
|
|
|
29,716
|
|
|||
Cash, cash equivalents and restricted cash at beginning of period
|
62,644
|
|
|
49,866
|
|
|
20,150
|
|
|||
Cash, cash equivalents and restricted cash at end of period
|
$
|
67,330
|
|
|
$
|
62,644
|
|
|
$
|
49,866
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Reconciliation of cash, cash equivalents and restricted cash:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
66,005
|
|
|
$
|
61,319
|
|
|
$
|
48,722
|
|
Restricted cash
|
1,325
|
|
|
1,325
|
|
|
1,144
|
|
|||
Total cash, cash equivalents and restricted cash
|
$
|
67,330
|
|
|
$
|
62,644
|
|
|
$
|
49,866
|
|
|
|
|
|
|
|
||||||
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Cash paid during the year for interest
|
$
|
215
|
|
|
$
|
117
|
|
|
$
|
—
|
|
Non-cash purchase consideration related to acquisition of Jiff
|
—
|
|
|
101,692
|
|
|
—
|
|
|||
Purchase of property and equipment, accrued but not paid
|
93
|
|
|
188
|
|
|
20
|
|
•
|
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.
|
Software
|
|
3
|
-
|
5
|
Computer equipment
|
|
3
|
||
Furniture and equipment
|
|
5
|
-
|
7
|
Leasehold improvements
|
|
Shorter of the lease term or the estimated useful lives of the improvements
|
•
|
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 costs that were both incremental and direct 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
(1)
|
|
As Adjusted
|
||||||
Assets
|
|
|
|
|
|
|||||||
|
Accounts receivable and other, net
|
$
|
20,761
|
|
|
$
|
1,172
|
|
|
$
|
21,933
|
|
|
Deferred commissions
(2)
|
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)
|
Reflects the cumulative impact of adopting ASC 606.
|
(2)
|
Prior to the adoption of ASC 606, Deferred commissions, current and non-current, were presented separately. Upon the adoption of ASC 606, the consolidated balance sheet as of December 31, 2017 was reclassified to conform to the current period presentation.
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||||||||||||||||
|
|
Previously Reported
|
|
Adjustments
|
|
As Adjusted
|
|
Previously Reported
|
|
Adjustments
|
|
As Adjusted
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Subscription
|
$
|
120,496
|
|
|
$
|
872
|
|
|
$
|
121,368
|
|
|
$
|
95,016
|
|
|
$
|
(3,073
|
)
|
|
$
|
91,943
|
|
|
Professional services and other
|
10,933
|
|
|
(281
|
)
|
|
10,652
|
|
|
6,684
|
|
|
81
|
|
|
6,765
|
|
||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Cost of professional services and other
|
18,774
|
|
|
(532
|
)
|
|
18,242
|
|
|
18,098
|
|
|
(2,695
|
)
|
|
15,403
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Sales and marketing
|
62,313
|
|
|
(2,546
|
)
|
|
59,767
|
|
|
58,800
|
|
|
(159
|
)
|
|
58,641
|
|
||||||
Operating loss
|
(61,395
|
)
|
|
3,669
|
|
|
(57,726
|
)
|
|
(58,980
|
)
|
|
(138
|
)
|
|
(59,118
|
)
|
|||||||
Net loss
|
(55,571
|
)
|
|
3,669
|
|
|
(51,902
|
)
|
|
(58,548
|
)
|
|
(138
|
)
|
|
(58,686
|
)
|
|||||||
Net loss per share, basic and diluted
|
(0.44
|
)
|
|
0.03
|
|
|
(0.41
|
)
|
|
(0.58
|
)
|
|
—
|
|
|
(0.58
|
)
|
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||||||||||||||||
|
|
|
Previously Reported
|
|
Adjustments
|
|
As Adjusted
|
|
Previously Reported
|
|
Adjustments
|
|
As Adjusted
|
||||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss
|
$
|
(55,571
|
)
|
|
$
|
3,669
|
|
|
$
|
(51,902
|
)
|
|
$
|
(58,548
|
)
|
|
$
|
(138
|
)
|
|
$
|
(58,686
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Stock-based compensation
|
24,578
|
|
|
(575
|
)
|
|
24,003
|
|
|
22,012
|
|
|
(756
|
)
|
|
21,256
|
|
|||||||
|
Amortization of deferred commissions
|
12,453
|
|
|
(2,427
|
)
|
|
10,026
|
|
|
5,070
|
|
|
812
|
|
|
5,882
|
|
|||||||
|
Amortization of deferred professional costs
|
—
|
|
|
4,225
|
|
|
4,225
|
|
|
—
|
|
|
2,795
|
|
|
2,795
|
|
|||||||
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Accounts receivable
|
(2,522
|
)
|
|
(277
|
)
|
|
(2,799
|
)
|
|
(2,055
|
)
|
|
(223
|
)
|
|
(2,278
|
)
|
||||||
|
|
Deferred commissions
|
(9,768
|
)
|
|
(120
|
)
|
|
(9,888
|
)
|
|
(7,977
|
)
|
|
(970
|
)
|
|
(8,947
|
)
|
||||||
|
|
Deferred professional service costs
|
—
|
|
|
(4,181
|
)
|
|
(4,181
|
)
|
|
—
|
|
|
(4,734
|
)
|
|
(4,734
|
)
|
||||||
|
Deferred revenue
|
(1,629
|
)
|
|
(314
|
)
|
|
(1,943
|
)
|
|
1,756
|
|
|
3,214
|
|
|
4,970
|
|
|
December 31, 2017
|
|
|
|
Expense recognized
|
|
December 31, 2018
|
||||||||
|
|
Additions
|
|
||||||||||||
|
As adjusted
(1)
|
|
|
|
|
|
|
||||||||
Deferred commissions
|
$
|
27,512
|
|
|
$
|
5,735
|
|
|
$
|
(13,105
|
)
|
|
$
|
20,142
|
|
Deferred professional service costs
|
12,480
|
|
|
2,921
|
|
|
(5,268
|
)
|
|
10,133
|
|
||||
Total deferred commissions and professional service costs
|
$
|
39,992
|
|
|
$
|
8,656
|
|
|
$
|
(18,373
|
)
|
|
$
|
30,275
|
|
(1)
|
Prior-period information has been adjusted for the adoption of ASC 606. See
Note 2
–
Summary of Significant Accounting Policies
for a summary of adjustments.
|
|
|
Fair value
|
||
Fair value of Company Class B common stock (25,054,049 shares at $3.65 per share)
|
|
$
|
91,447
|
|
Fair value of contingent consideration
|
|
671
|
|
|
Fair value of assumed Jiff options attributable to pre-combination services
|
|
9,574
|
|
|
Transaction costs paid on behalf of Jiff
|
|
4,498
|
|
|
Total purchase price consideration
|
|
$
|
106,190
|
|
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
|
|
|
|
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
Balance, beginning of year
(1)
|
$
|
91,785
|
|
|
$
|
—
|
|
Acquisition of Jiff
|
—
|
|
|
91,398
|
|
||
Measurement period adjustments for Jiff acquisition
|
—
|
|
|
387
|
|
||
Balance, end of year
(2)
|
$
|
91,785
|
|
|
$
|
91,785
|
|
(1)
|
The Company had no goodwill prior to the acquisition of Jiff.
|
(2)
|
The Company had
no
accumulated goodwill impairment charges as of December 31, 2018 or 2017.
|
|
As of December 31, 2018
|
||||||||||||||
|
Useful Life
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||
Customer relationships
|
10
|
|
$
|
10,900
|
|
|
$
|
(1,908
|
)
|
|
$
|
8,992
|
|
||
Developed technology
|
5
|
|
10,600
|
|
|
(3,710
|
)
|
|
6,890
|
|
|||||
Backlog
|
3
|
|
1,500
|
|
|
(1,256
|
)
|
|
244
|
|
|||||
Other acquired intangible assets
|
1
|
-
|
3
|
|
900
|
|
|
(817
|
)
|
|
83
|
|
|||
Total identifiable intangible assets
|
|
|
|
|
$
|
23,900
|
|
|
$
|
(7,691
|
)
|
|
$
|
16,209
|
|
|
As of 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
|
|
(1)
|
The Company had no intangible assets prior to the acquisition of Jiff.
|
2019
|
$
|
3,505
|
|
2020
|
3,242
|
|
|
2021
|
3,210
|
|
|
2022
|
1,620
|
|
|
2023
|
1,090
|
|
|
Thereafter
|
3,542
|
|
|
Total estimated amortization expense
|
$
|
16,209
|
|
|
December 31, 2018
|
||||||||||||||
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Value
|
||||||||
U.S. treasury securities
|
$
|
7,980
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,980
|
|
U.S. agency obligations
|
18,158
|
|
|
—
|
|
|
—
|
|
|
18,158
|
|
||||
Money market mutual funds
|
7,115
|
|
|
—
|
|
|
—
|
|
|
7,115
|
|
||||
|
33,253
|
|
|
—
|
|
|
—
|
|
|
33,253
|
|
||||
Included in cash and cash equivalents
|
21,926
|
|
|
—
|
|
|
—
|
|
|
21,926
|
|
||||
Included in marketable securities
|
$
|
11,327
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,327
|
|
|
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
|
|
|
December 31, 2018
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
Money market mutual funds
|
$
|
7,115
|
|
|
$
|
—
|
|
|
$
|
7,115
|
|
U.S. agency obligations
|
—
|
|
|
14,811
|
|
|
14,811
|
|
|||
Marketable securities:
|
|
|
|
|
|
||||||
U.S. agency obligations
|
—
|
|
|
3,347
|
|
|
3,347
|
|
|||
U.S. treasury securities
|
—
|
|
|
7,980
|
|
|
7,980
|
|
|||
|
$
|
7,115
|
|
|
$
|
26,138
|
|
|
$
|
33,253
|
|
|
December 31, 2017
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
Money market mutual funds
|
$
|
6,115
|
|
|
$
|
—
|
|
|
$
|
6,115
|
|
U.S. agency obligations
|
—
|
|
|
18,366
|
|
|
18,366
|
|
|||
Marketable securities:
|
|
|
|
|
|
||||||
U.S. agency obligations
|
—
|
|
|
1,000
|
|
|
1,000
|
|
|||
U.S. treasury securities
|
—
|
|
|
31,025
|
|
|
31,025
|
|
|||
|
$
|
6,115
|
|
|
$
|
50,391
|
|
|
$
|
56,506
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
Leasehold improvements
|
$
|
3,102
|
|
|
$
|
2,915
|
|
Computer equipment
|
6,860
|
|
|
6,165
|
|
||
Software
|
1,097
|
|
|
1,149
|
|
||
Internal-use software
|
2,925
|
|
|
2,925
|
|
||
Furniture and equipment
|
1,018
|
|
|
1,293
|
|
||
Total
|
15,002
|
|
|
14,447
|
|
||
Accumulated depreciation
|
(11,039
|
)
|
|
(9,184
|
)
|
||
Property and equipment, net
|
$
|
3,963
|
|
|
$
|
5,263
|
|
2019
|
$
|
1,859
|
|
2020
|
1,859
|
|
|
2021
(1)
|
1,395
|
|
|
Total future maturities of debt
|
$
|
5,113
|
|
Less current maturities
(2)
|
(1,859
|
)
|
|
Debt, non-current
|
$
|
3,254
|
|
(1)
|
Excludes the
$0.5 million
required to be paid as final payment on the earlier of maturity, termination or prepayment of the Term Loan.
|
(2)
|
Classified within accrued expenses and other current liabilities on the consolidated balance sheet as of
December 31, 2018
.
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
Customer deposits related to online store
|
$
|
5,926
|
|
|
$
|
5,638
|
|
Other
|
9,528
|
|
|
7,540
|
|
||
Total
|
$
|
15,454
|
|
|
$
|
13,178
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
Accrued commissions
|
$
|
379
|
|
|
$
|
2,481
|
|
Accrued bonuses
|
4,293
|
|
|
9,001
|
|
||
Other employee and benefits payable
|
1,303
|
|
|
2,459
|
|
||
Total
|
$
|
5,975
|
|
|
$
|
13,941
|
|
|
Operating
Leases
(1)
|
|
Contractual
Obligations
|
||||
2019
|
$
|
6,324
|
|
|
$
|
761
|
|
2020
|
5,953
|
|
|
570
|
|
||
2021
|
5,355
|
|
|
—
|
|
||
2022
|
3,050
|
|
|
—
|
|
||
2023 and later
|
1,788
|
|
|
—
|
|
||
|
$
|
22,470
|
|
|
$
|
1,331
|
|
(1)
|
Minimum payments have not been reduced by sublease rentals of
$7.1 million
due in the future under non-cancellable subleases.
|
|
Year Ended December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||
Volatility
|
57%
|
|
61%
|
|
45
|
%
|
–
|
47%
|
|||||
Expected life (in years)
|
6.06
|
|
6.02
|
|
5.31
|
|
–
|
6.12
|
|||||
Risk-free interest rate
|
2.72
|
%
|
–
|
2.74%
|
|
2.03%
|
|
0.95
|
%
|
–
|
1.37%
|
||
Dividend yield
|
—%
|
|
—%
|
|
—%
|
||||||||
Weighted-average fair value of underlying common stock
|
$3.69
|
|
$3.60
|
|
$3.16
|
|
Year Ended December 31,
|
||||
|
2018
|
|
2017
|
|
2016
|
Volatility
|
*
|
|
75%
|
|
*
|
Risk-free interest rate
|
*
|
|
2.35%
|
|
*
|
Dividend yield
|
*
|
|
—%
|
|
*
|
|
Options Outstanding
|
|||||||||||
|
Number of
Shares
Outstanding
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Life (in
years)
|
|
Aggregate
Intrinsic
Value (in thousands)
|
|||||
Balance at December 31, 2017
|
10,335,178
|
|
|
$
|
2.83
|
|
|
6.16
|
|
$
|
19,253
|
|
Stock options granted
|
134,000
|
|
|
$
|
3.69
|
|
|
|
|
|
||
Stock options exercised
|
(3,255,963
|
)
|
|
$
|
1.38
|
|
|
|
|
|
||
Stock options forfeited and canceled
|
(947,992
|
)
|
|
$
|
9.16
|
|
|
|
|
|
||
Balance at December 31, 2018
|
6,265,223
|
|
|
$
|
2.65
|
|
|
4.71
|
|
$
|
3,499
|
|
Vested or expected to vest at December 31, 2018
|
6,265,223
|
|
|
$
|
2.65
|
|
|
4.71
|
|
$
|
3,499
|
|
Exercisable as of December 31, 2018
|
5,330,943
|
|
|
$
|
2.61
|
|
|
4.21
|
|
$
|
3,366
|
|
|
Restricted Stock Units Outstanding
|
|||||
|
Number of shares
|
|
Weighted Average Grant-Date Fair Value
|
|||
Balance at December 31, 2017
|
9,333,896
|
|
|
$
|
4.03
|
|
Restricted Stock Units granted
(1)
|
8,146,627
|
|
|
$
|
3.36
|
|
Restricted Stock Units vested
|
(4,131,967
|
)
|
|
$
|
4.19
|
|
Restricted Stock Units forfeited and canceled
(2)
|
(3,819,954
|
)
|
|
$
|
3.67
|
|
Balance at December 31, 2018
|
9,528,602
|
|
|
$
|
3.54
|
|
(1)
|
Includes performance stock units (“PSUs”) that were granted in
2018
.
|
(2)
|
Includes PSUs that were granted in the prior year, which were canceled because performance targets were not achieved.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
(as adjusted)
(1)
|
|
(as adjusted)
(1)
|
||||||
United States
|
$
|
(39,706
|
)
|
|
$
|
(57,108
|
)
|
|
$
|
(58,686
|
)
|
(1)
|
Prior-period information has been adjusted for the adoption of ASC 606. See
Note 2
–
Summary of Significant Accounting Policies
for a summary of adjustments.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Tax at federal statutory rate
(1)
|
$
|
(8,338
|
)
|
|
$
|
(19,417
|
)
|
|
$
|
(19,953
|
)
|
State statutory rate (net of federal benefit)
|
(2,279
|
)
|
|
(2,479
|
)
|
|
(1,259
|
)
|
|||
Non-deductible stock compensation
|
(194
|
)
|
|
106
|
|
|
1,594
|
|
|||
Effect of U.S. tax law change
(1)
|
—
|
|
|
51,203
|
|
|
—
|
|
|||
Change in valuation allowance
(1)
|
10,638
|
|
|
(30,974
|
)
|
|
14,506
|
|
|||
Benefit associated with Jiff Acquisition
|
—
|
|
|
(5,206
|
)
|
|
—
|
|
|||
Other
|
173
|
|
|
1,561
|
|
|
5,112
|
|
|||
Income tax benefit
|
$
|
—
|
|
|
$
|
(5,206
|
)
|
|
$
|
—
|
|
(1)
|
Amounts for December 31, 2017 and 2016 are adjusted to reflect the adoption of ASC 606 described in
Note 2
-
Summary of Significant Accounting Policies
.
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
118,477
|
|
|
$
|
105,247
|
|
Deferred rent
|
914
|
|
|
474
|
|
||
Accrued compensation
|
1,230
|
|
|
2,792
|
|
||
Stock-based compensation
|
6,014
|
|
|
7,530
|
|
||
Other reserves and accruals
|
316
|
|
|
78
|
|
||
Property and equipment
|
509
|
|
|
283
|
|
||
|
127,460
|
|
|
116,404
|
|
||
Valuation allowance
(1)
|
(115,298
|
)
|
|
(106,154
|
)
|
||
Deferred tax assets, net of valuation allowance
(1)
|
12,162
|
|
|
10,250
|
|
||
Deferred tax liability:
|
|
|
|
||||
Intangibles
|
(4,191
|
)
|
|
(5,165
|
)
|
||
Deferred costs
(1)
|
(7,971
|
)
|
|
(5,085
|
)
|
||
Deferred tax liability
(1)
|
(12,162
|
)
|
|
(10,250
|
)
|
||
Net deferred tax asset/(liability)
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Amounts for December 31, 2017 are adjusted to reflect the adoption of ASC 606 described in
Note 2
-
Summary of Significant Accounting Policies
.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Gross unrecognized tax benefits at the beginning of the year
|
$
|
18,888
|
|
|
$
|
13,568
|
|
|
$
|
9,540
|
|
Decreases for tax positions of prior years
|
—
|
|
|
(626
|
)
|
|
(125
|
)
|
|||
Increases for tax positions related to the current year
|
3,300
|
|
|
5,946
|
|
|
4,153
|
|
|||
Gross unrecognized tax benefits at the end of the year
|
$
|
22,188
|
|
|
$
|
18,888
|
|
|
$
|
13,568
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
|
|
|
(as adjusted)
(1)
|
|
(as adjusted)
(1)
|
||||||||||||||||||
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||||||||||
Net loss
|
$
|
(13,375
|
)
|
|
$
|
(26,331
|
)
|
|
$
|
(22,153
|
)
|
|
$
|
(29,749
|
)
|
|
$
|
(31,685
|
)
|
|
$
|
(27,001
|
)
|
Weighted-average shares used to compute basic and diluted net loss per share
|
46,379
|
|
|
91,307
|
|
|
53,582
|
|
|
71,952
|
|
|
54,421
|
|
|
46,377
|
|
||||||
Basic and diluted net loss per share
|
$
|
(0.29
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.41
|
)
|
|
$
|
(0.41
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.58
|
)
|
(1)
|
Prior-period information has been adjusted for the adoption of ASC 606. See
Note 2
–
Summary of Significant Accounting Policies
for a summary of adjustments.
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Stock options and restricted common stock
|
15,794
|
|
|
19,669
|
|
|
18,185
|
|
Warrants
|
115
|
|
|
115
|
|
|
2,020
|
|
|
15,909
|
|
|
19,784
|
|
|
20,205
|
|
|
|
Quarter Ended
|
||||||||||||||
|
|
March 31, 2018
|
|
June 30, 2018
|
|
September 30, 2018
|
|
December 31, 2018
|
||||||||
Total revenue
|
|
$
|
36,479
|
|
|
$
|
37,784
|
|
|
$
|
40,041
|
|
|
$
|
42,100
|
|
Gross profit
|
|
21,536
|
|
|
22,054
|
|
|
25,246
|
|
|
27,379
|
|
||||
Net loss
|
|
(14,444
|
)
|
|
(13,958
|
)
|
|
(7,265
|
)
|
|
(4,039
|
)
|
||||
Net loss per share, basic and diluted
|
|
(0.11
|
)
|
|
(0.10
|
)
|
|
(0.05
|
)
|
|
(0.03
|
)
|
|
|
Quarter Ended, as adjusted
(1,2)
|
||||||||||||||
|
|
March 31, 2017
|
|
June 30, 2017
|
|
September 30, 2017
|
|
December 31, 2017
|
||||||||
Total revenue
|
|
$
|
27,703
|
|
|
$
|
32,632
|
|
|
$
|
34,492
|
|
|
$
|
37,193
|
|
Gross profit
|
|
19,648
|
|
|
20,298
|
|
|
21,578
|
|
|
23,844
|
|
||||
Net loss
|
|
(14,374
|
)
|
|
(12,379
|
)
|
|
(17,992
|
)
|
|
(7,157
|
)
|
||||
Net loss per share, basic and diluted
|
|
(0.14
|
)
|
|
(0.09
|
)
|
|
(0.14
|
)
|
|
(0.05
|
)
|
(1)
|
Adjusted for the adoption of ASC 606. See
Note 2
–
Summary of Significant Accounting Policies
for additional information.
|
(2)
|
On April 3, 2017, the Company acquired Jiff. Jiff has been included in our consolidated results of operations starting on the acquisition date.
Please refer to
Note 5
–
Business Combinations
for additional information on this acquisition.
|
|
|
|
|
|
Incorporate by Reference
|
|
|
||||
Exhibit
Number
|
Description of Document
|
|
Form
|
|
File
No.
|
|
Filing Date
|
|
Exhibit
|
|
Filed
Herewith
|
2.1
|
|
8-K
|
|
0001-36330
|
|
January 4, 2017
|
|
2.1
|
|
|
|
3.1
|
|
10-Q
|
|
001-36330
|
|
May 12, 2014
|
|
3.1
|
|
|
|
3.2
|
|
10-Q
|
|
001-36330
|
|
May 12, 2014
|
|
3.2
|
|
|
|
4.1
|
|
S-8
|
|
333-194566
|
|
March 14, 2014
|
|
4.8
|
|
|
|
4.2
|
|
S-1
|
|
333-193840
|
|
March 3, 2014
|
|
4.1
|
|
|
|
4.3
|
|
S-1
|
|
333-193840
|
|
February 10, 2014
|
|
4.2
|
|
|
|
4.4
|
|
8-K
|
|
001-36330
|
|
May 18, 2016
|
|
10.1
|
|
|
|
10.1**
|
|
S-1
|
|
333-193840
|
|
March 3, 2014
|
|
10.1
|
|
|
|
10.2**
|
|
S-1
|
|
333-193840
|
|
March 3, 2014
|
|
10.2
|
|
|
|
10.3**
|
|
S-1
|
|
333-193840
|
|
March 3, 2014
|
|
10.3
|
|
|
|
10.4**
|
|
S-1
|
|
333-193840
|
|
March 3, 2014
|
|
10.4
|
|
|
|
10.5**
|
|
10-Q
|
|
001-36330
|
|
August 5, 2015
|
|
10.2
|
|
|
|
10.6**
|
|
S-1
|
|
333-193840
|
|
February 10, 2014
|
|
10.6
|
|
|
|
10.7**
|
|
S-1
|
|
333-193840
|
|
February 10, 2014
|
|
10.9
|
|
|
|
10.8
|
|
10-Q
|
|
001-36330
|
|
August 5, 2015
|
|
10.1
|
|
|
|
10.9
|
|
10-Q
|
|
001-36330
|
|
November 2, 2016
|
|
10.15
|
|
|
|
10.10**
|
|
8-K
|
|
001-36330
|
|
July 11, 2016
|
|
10.1
|
|
|
|
10.11**
|
|
10-Q
|
|
001-36330
|
|
April 28, 2017
|
|
10.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporate by Reference
|
|
|
||||
Exhibit
Number
|
Description of Document
|
|
Form
|
|
File
No.
|
|
Filing Date
|
|
Exhibit
|
|
Filed
Herewith
|
10.12
|
|
8-K
|
|
001-36330
|
|
April 3, 2017
|
|
10.1
|
|
|
|
10.13**
|
|
S-8
|
|
333-221191
|
|
October 27, 2017
|
|
99.1
|
|
|
|
10.14**
|
|
10-Q
|
|
001-36330
|
|
August 1, 2018
|
|
10.17
|
|
|
|
10.15**
|
|
10-Q
|
|
001-36330
|
|
August 8, 2016
|
|
10.12
|
|
|
|
10.16**
|
|
|
|
|
|
|
|
|
|
X
|
|
10.17**
|
|
|
|
|
|
|
|
|
|
X
|
|
10.18**
|
|
|
|
|
|
|
|
|
|
X
|
|
21.1
|
|
|
|
|
|
|
|
|
|
X
|
|
23.1
|
|
|
|
|
|
|
|
|
|
X
|
|
24.1
|
|
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
|
|
|
|
|
X
|
|
32.1 *
|
|
|
|
|
|
|
|
|
|
X
|
|
32.2 *
|
|
|
|
|
|
|
|
|
|
X
|
|
99.1
|
|
10-K
|
|
001-36330
|
|
March 1, 2017
|
|
99.1
|
|
|
|
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:
|
March 1, 2019
|
By:
|
|
/s/ John C. Doyle
|
|
|
|
|
John C. Doyle
|
|
|
|
|
Chief Executive Officer, and Director
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ John C. Doyle
|
|
Chief Executive Officer, and Director
|
|
March 1, 2019
|
John C. Doyle
|
|
(Principal Executive Officer)
|
|
|
|
|
|
||
/s/ Siobhan Nolan Mangini
|
|
Chief Financial Officer
|
|
March 1, 2019
|
Siobhan Nolan Mangini
|
|
(Principal Financial Officer)
|
|
|
|
|
|
||
/s/ Eric Chan
|
|
Chief Accounting Officer
|
|
March 1, 2019
|
Eric Chan
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Bryan Roberts
|
|
Chairman of the Board of Directors
|
|
March 1, 2019
|
Bryan Roberts
|
|
|
|
|
|
|
|
|
|
/s/ Seth Cohen
|
|
Director
|
|
March 1, 2019
|
Seth Cohen
|
|
|
|
|
|
|
|
|
|
/s/ Michael L. Eberhard
|
|
Director
|
|
March 1, 2019
|
Michael L. Eberhard
|
|
|
|
|
|
|
|
|
|
/s/ David Ebersman
|
|
Director
|
|
March 1, 2019
|
David Ebersman
|
|
|
|
|
|
|
|
||
/s/ Ed Park
|
|
Director
|
|
March 1, 2019
|
Ed Park
|
|
|
|
|
|
|
|
||
/s/ David B. Singer
|
|
Director
|
|
March 1, 2019
|
David B. Singer
|
|
|
|
|
|
|
|
|
|
/s/ Kenny Van Zant
|
|
Director
|
|
March 1, 2019
|
Kenny Van Zant
|
|
|
|
|
|
|
|
|
|
/s/ Judy Verhave
|
|
Director
|
|
March 1, 2019
|
Judy Verhave
|
|
|
|
|
/s/ Eric Chan
|
7/28/2017
|
Eric Chan
|
Date
|
/s/ Maeve O'Meara
|
2/21/2019
|
Maeve O'Meara
|
Date
|
/s/ Neeraj Gupta
|
|
2/22/2019
|
|
|
Neeraj Gupta
|
|
Date
|
|
|
|
|
|
Name of Subsidiary
|
|
Jurisdiction
|
|
|
|
Engage Technologies, Inc.
|
|
Delaware
|
Jiff, Inc.
|
|
Delaware
|
▪
|
Registration Statement (Form S-4 No. 333-215861) of Castlight Health, Inc., and
|
▪
|
Registration Statements (Form S-8 Nos. 333-194566, 333-202701, 333-216374, 333-221191, and 333-223373) pertaining to employee benefit plans of Castlight Health, Inc.;
|
1.
|
I have reviewed this Annual Report on Form 10-K 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
|
March 1, 2019
|
|
|
Chief Executive Officer, and Director
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K 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
|
March 1, 2019
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
C
ASTLIGHT
H
EALTH
, I
NC
.
|
||
|
By:
|
|
/s/ John C. Doyle
|
|
|
|
John C. Doyle
|
|
|
|
Chief Executive Officer, and Director
(Principal Executive Officer)
|
Dated:
|
|
|
|
March 1, 2019
|
|
|
|
|
C
ASTLIGHT
H
EALTH
, I
NC
.
|
||
|
By:
|
|
/s/ Siobhan Nolan Mangini
|
|
|
|
Siobhan Nolan Mangini
|
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
Dated:
|
|
|
|
March 1, 2019
|
|
|
|