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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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77-0521800
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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Large accelerated filer
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¨
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Accelerated filer
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ý
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page No.
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Item 1.
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Condensed Consolidated Statements of
Operations
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|
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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Item 1.
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Financial Statements.
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|
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December 31,
2013 |
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June 30, 2013*
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||||
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(unaudited)
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|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
37,202
|
|
|
$
|
25,787
|
|
Short-term investments
|
|
138,425
|
|
|
165,898
|
|
||
Accounts receivable, net of allowances of $220 and $241 at December 31, 2013 and June 30, 2013
|
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25,947
|
|
|
28,193
|
|
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Deferred income taxes
|
|
1,362
|
|
|
867
|
|
||
Restricted cash
|
|
13,632
|
|
|
2,668
|
|
||
Prepaid expenses and other current assets
|
|
12,313
|
|
|
11,113
|
|
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Total current assets
|
|
228,881
|
|
|
234,526
|
|
||
Property and equipment, net
|
|
10,181
|
|
|
11,753
|
|
||
Deferred income taxes, non-current
|
|
5,341
|
|
|
3,771
|
|
||
Goodwill and intangible assets, net
|
|
17,796
|
|
|
18,805
|
|
||
Other assets
|
|
4,313
|
|
|
4,814
|
|
||
Total assets
|
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$
|
266,512
|
|
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$
|
273,669
|
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Liabilities and stockholders’ equity
|
|
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||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
1,091
|
|
|
$
|
1,604
|
|
Accrued compensation
|
|
8,568
|
|
|
8,855
|
|
||
Accrued royalties
|
|
5,164
|
|
|
9,833
|
|
||
Other accrued expenses
|
|
24,640
|
|
|
16,729
|
|
||
Deferred revenue
|
|
2,465
|
|
|
7,025
|
|
||
Income taxes payable
|
|
49
|
|
|
95
|
|
||
Total current liabilities
|
|
41,977
|
|
|
44,141
|
|
||
Deferred rent, non-current
|
|
8,215
|
|
|
8,884
|
|
||
Other long-term liabilities
|
|
6,906
|
|
|
6,180
|
|
||
Commitments and contingencies (Note 5)
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Preferred stock, $0.001 par value: 50,000 shares authorized; no shares issued or outstanding
|
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value: 600,000 shares authorized; 38,656 shares and 39,342 shares issued and outstanding at December 31, 2013 and June 30, 2013, respectively
|
|
39
|
|
|
40
|
|
||
Additional paid-in capital
|
|
119,968
|
|
|
118,193
|
|
||
Accumulated other comprehensive income
|
|
572
|
|
|
373
|
|
||
Retained earnings
|
|
88,835
|
|
|
95,858
|
|
||
Total stockholders’ equity
|
|
209,414
|
|
|
214,464
|
|
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Total liabilities and stockholders’ equity
|
|
$
|
266,512
|
|
|
$
|
273,669
|
|
|
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Three Months Ended
|
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Six Months Ended
|
||||||||||||
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December 31,
|
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December 31,
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||||||||||||
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2013
|
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2012
|
|
2013
|
|
2012
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
||||||
Product
|
|
$
|
18,367
|
|
|
$
|
14,542
|
|
|
$
|
37,658
|
|
|
$
|
23,390
|
|
Services
|
|
18,794
|
|
|
32,687
|
|
|
43,799
|
|
|
66,361
|
|
||||
Total revenue
|
|
37,161
|
|
|
47,229
|
|
|
81,457
|
|
|
89,751
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
||||||||
Product
|
|
9,367
|
|
|
9,103
|
|
|
18,676
|
|
|
13,371
|
|
||||
Services
|
|
5,823
|
|
|
8,178
|
|
|
12,594
|
|
|
15,603
|
|
||||
Total cost of revenue
|
|
15,190
|
|
|
17,281
|
|
|
31,270
|
|
|
28,974
|
|
||||
Gross profit
|
|
21,971
|
|
|
29,948
|
|
|
50,187
|
|
|
60,777
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Research and development
|
|
14,315
|
|
|
14,298
|
|
|
29,133
|
|
|
29,305
|
|
||||
Sales and marketing
|
|
7,910
|
|
|
7,577
|
|
|
15,668
|
|
|
14,811
|
|
||||
General and administrative
|
|
6,755
|
|
|
7,379
|
|
|
12,728
|
|
|
13,376
|
|
||||
Total operating expenses
|
|
28,980
|
|
|
29,254
|
|
|
57,529
|
|
|
57,492
|
|
||||
Operating income (loss)
|
|
(7,009
|
)
|
|
694
|
|
|
(7,342
|
)
|
|
3,285
|
|
||||
Other income, net
|
|
1,121
|
|
|
614
|
|
|
1,403
|
|
|
1,036
|
|
||||
Income (loss) from continuing operations before provision (benefit) for income taxes
|
|
(5,888
|
)
|
|
1,308
|
|
|
(5,939
|
)
|
|
4,321
|
|
||||
Provision (benefit) for income taxes
|
|
(1,891
|
)
|
|
890
|
|
|
(1,951
|
)
|
|
1,682
|
|
||||
Income (loss) from continuing operations, net of tax
|
|
(3,997
|
)
|
|
418
|
|
|
(3,988
|
)
|
|
2,639
|
|
||||
Income from discontinued operations, net of tax
|
|
—
|
|
|
486
|
|
|
—
|
|
|
966
|
|
||||
Net income (loss)
|
|
$
|
(3,997
|
)
|
|
$
|
904
|
|
|
$
|
(3,988
|
)
|
|
$
|
3,605
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic income (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations, net of tax
|
|
$
|
(0.10
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.06
|
|
Income from discontinued operations, net of tax
|
|
$
|
—
|
|
|
$
|
0.01
|
|
|
$
|
—
|
|
|
$
|
0.02
|
|
Net income (loss)
|
|
$
|
(0.10
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.09
|
|
Diluted income (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations, net of tax
|
|
$
|
(0.10
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.06
|
|
Income from discontinued operations, net of tax
|
|
$
|
—
|
|
|
$
|
0.01
|
|
|
$
|
—
|
|
|
$
|
0.02
|
|
Net income (loss)
|
|
$
|
(0.10
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.08
|
|
Weighted average shares used in computing net income (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
38,508
|
|
|
40,895
|
|
|
38,660
|
|
|
41,103
|
|
||||
Diluted
|
|
38,508
|
|
|
42,768
|
|
|
38,660
|
|
|
42,833
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Stock compensation expense included above:
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
|
$
|
30
|
|
|
$
|
39
|
|
|
$
|
66
|
|
|
$
|
76
|
|
Research and development
|
|
1,063
|
|
|
889
|
|
|
2,072
|
|
|
1,528
|
|
||||
Sales and marketing
|
|
769
|
|
|
633
|
|
|
1,466
|
|
|
992
|
|
||||
General and administrative
|
|
801
|
|
|
616
|
|
|
1,542
|
|
|
1,001
|
|
||||
Total stock compensation expense
|
|
$
|
2,663
|
|
|
$
|
2,177
|
|
|
$
|
5,146
|
|
|
$
|
3,597
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
December 31,
|
|
December 31,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
(3,997
|
)
|
|
$
|
904
|
|
|
$
|
(3,988
|
)
|
|
$
|
3,605
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment, net of tax
|
|
(6
|
)
|
|
(38
|
)
|
|
45
|
|
|
(45
|
)
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on available-for-sale securities, net of tax
|
|
101
|
|
|
(18
|
)
|
|
240
|
|
|
146
|
|
||||
Reclassification adjustments for gain (loss) on available-for-sale securities recognized, net of tax
|
|
(67
|
)
|
|
(44
|
)
|
|
(86
|
)
|
|
(53
|
)
|
||||
Net increase (decrease) from available-for-sale securities, net of tax
|
|
34
|
|
|
(62
|
)
|
|
154
|
|
|
93
|
|
||||
Other comprehensive income (loss), net of tax:
|
|
28
|
|
|
(100
|
)
|
|
199
|
|
|
48
|
|
||||
Comprehensive income (loss)
|
|
$
|
(3,969
|
)
|
|
$
|
804
|
|
|
$
|
(3,789
|
)
|
|
$
|
3,653
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
||||||
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Operating activities
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
(3,988
|
)
|
|
$
|
3,605
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
3,424
|
|
|
4,255
|
|
||
Amortization of net premium on short-term investments
|
|
1,904
|
|
|
2,217
|
|
||
Stock-based compensation expense
|
|
5,146
|
|
|
3,597
|
|
||
Loss due to impairment
|
|
—
|
|
|
409
|
|
||
Loss on disposal of property and equipment
|
|
14
|
|
|
—
|
|
||
Bad debt expense
|
|
59
|
|
|
—
|
|
||
Excess tax benefits from employee stock option plans
|
|
259
|
|
|
(1
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
2,187
|
|
|
518
|
|
||
Deferred income taxes
|
|
(2,065
|
)
|
|
1,109
|
|
||
Prepaid expenses and other current assets
|
|
(1,200
|
)
|
|
2,055
|
|
||
Restricted cash
|
|
(10,964
|
)
|
|
(2,668
|
)
|
||
Other assets
|
|
405
|
|
|
(2,548
|
)
|
||
Accounts payable
|
|
(562
|
)
|
|
(1,183
|
)
|
||
Accrued compensation
|
|
(287
|
)
|
|
1,396
|
|
||
Accrued royalties
|
|
(4,669
|
)
|
|
4,341
|
|
||
Accrued expenses and other liabilities
|
|
9,059
|
|
|
8,629
|
|
||
Income taxes payable
|
|
(301
|
)
|
|
4
|
|
||
Deferred rent
|
|
(650
|
)
|
|
1,159
|
|
||
Deferred revenue
|
|
(4,573
|
)
|
|
14,914
|
|
||
Net cash provided by (used in) operating activities
|
|
(6,802
|
)
|
|
41,808
|
|
||
Investing activities
|
|
|
|
|
||||
Purchases of property and equipment
|
|
(540
|
)
|
|
(1,157
|
)
|
||
Additions to capitalized software
|
|
—
|
|
|
(607
|
)
|
||
Purchases of short-term investments
|
|
(41,820
|
)
|
|
(73,589
|
)
|
||
Purchase of long-term investments
|
|
(600
|
)
|
|
(650
|
)
|
||
Proceeds from sales and maturities of short-term investments
|
|
67,543
|
|
|
78,953
|
|
||
Acquisition, net of cash acquired
|
|
—
|
|
|
(18,254
|
)
|
||
Net cash provided by (used in) investing activities
|
|
24,583
|
|
|
(15,304
|
)
|
||
Financing activities
|
|
|
|
|
||||
Proceeds from exercise of stock options
|
|
638
|
|
|
1,374
|
|
||
Repurchase of common stock
|
|
(6,277
|
)
|
|
(12,004
|
)
|
||
Tax withholdings related to net share settlements of restricted stock units
|
|
(513
|
)
|
|
—
|
|
||
Excess tax benefits from employee stock option plans
|
|
(259
|
)
|
|
1
|
|
||
Net cash used in financing activities
|
|
(6,411
|
)
|
|
(10,629
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
45
|
|
|
(45
|
)
|
||
Net increase in cash and cash equivalents
|
|
11,415
|
|
|
15,830
|
|
||
Cash and cash equivalents, at beginning of period
|
|
25,787
|
|
|
6,920
|
|
||
Cash and cash equivalents, at end of period
|
|
$
|
37,202
|
|
|
$
|
22,750
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
||||
Income taxes paid (refunded), net
|
|
$
|
220
|
|
|
$
|
(1,722
|
)
|
1.
|
Summary of business and significant accounting policies
|
|
|
Foreign Currency
Translation Adjustments |
|
Unrealized
Gains (Losses) on Available-for-Sale Securities |
|
Total
|
||||||
Balance, net of tax as of June 30, 2013
|
|
$
|
270
|
|
|
$
|
103
|
|
|
$
|
373
|
|
Other comprehensive income before reclassifications, net of tax
|
|
45
|
|
|
240
|
|
|
285
|
|
|||
Amount reclassified from accumulated other comprehensive income (loss), net of tax
|
|
—
|
|
|
(86
|
)
|
|
(86
|
)
|
|||
Other comprehensive income, net of tax
|
|
45
|
|
|
154
|
|
|
199
|
|
|||
Balance, net of tax as of December 31, 2013
|
|
$
|
315
|
|
|
$
|
257
|
|
|
$
|
572
|
|
2.
|
Net income (loss) per share
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
December 31,
|
|
December 31,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Income (loss) from continuing operations, net of tax
|
|
$
|
(3,997
|
)
|
|
$
|
418
|
|
|
$
|
(3,988
|
)
|
|
$
|
2,639
|
|
Income from discontinued operations, net of tax
|
|
—
|
|
|
486
|
|
|
—
|
|
|
966
|
|
||||
Net income (loss)
|
|
$
|
(3,997
|
)
|
|
$
|
904
|
|
|
$
|
(3,988
|
)
|
|
$
|
3,605
|
|
Shares used in computing net income (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares used in computing basic net income (loss) per share
|
|
38,508
|
|
|
40,895
|
|
|
38,660
|
|
|
41,103
|
|
||||
Diluted:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares used in computing basic net income (loss) per share
|
|
38,508
|
|
|
40,895
|
|
|
38,660
|
|
|
41,103
|
|
||||
Add weighted average effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
Stock options
|
|
—
|
|
|
1,736
|
|
|
—
|
|
|
1,698
|
|
||||
Restricted common stock and restricted stock units
|
|
—
|
|
|
137
|
|
|
—
|
|
|
32
|
|
||||
Weighted average common shares used in computing diluted net income (loss) per share
|
|
38,508
|
|
|
42,768
|
|
|
38,660
|
|
|
42,833
|
|
||||
Basic income (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations, net of tax
|
|
$
|
(0.10
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.06
|
|
Income from discontinued operations, net of tax
|
|
$
|
—
|
|
|
$
|
0.01
|
|
|
$
|
—
|
|
|
$
|
0.02
|
|
Net income (loss)
|
|
$
|
(0.10
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.09
|
|
Diluted income (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations, net of tax
|
|
$
|
(0.10
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.06
|
|
Income from discontinued operations, net of tax
|
|
$
|
—
|
|
|
$
|
0.01
|
|
|
$
|
—
|
|
|
$
|
0.02
|
|
Net income (loss)
|
|
$
|
(0.10
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.08
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
|
December 31,
|
|
December 31,
|
||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Stock options
|
|
5,935
|
|
|
1,982
|
|
|
5,935
|
|
|
2,501
|
|
Restricted stock units
|
|
3,048
|
|
|
—
|
|
|
3,048
|
|
|
794
|
|
Restricted common stock
|
|
228
|
|
|
758
|
|
|
228
|
|
|
—
|
|
Total
|
|
9,211
|
|
|
2,740
|
|
|
9,211
|
|
|
3,295
|
|
3.
|
Cash, cash equivalents and short-term investments
|
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Cash
|
|
$
|
35,311
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35,311
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
|
1,891
|
|
|
—
|
|
|
—
|
|
|
1,891
|
|
||||
Total cash equivalents
|
|
1,891
|
|
|
—
|
|
|
—
|
|
|
1,891
|
|
||||
Total cash and cash equivalents
|
|
37,202
|
|
|
—
|
|
|
—
|
|
|
37,202
|
|
||||
Short-term securities:
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
|
1,000
|
|
|
1
|
|
|
—
|
|
|
1,001
|
|
||||
Municipal securities
|
|
112,097
|
|
|
335
|
|
|
(3
|
)
|
|
112,429
|
|
||||
Commercial paper
|
|
3,398
|
|
|
1
|
|
|
—
|
|
|
3,399
|
|
||||
Corporate bonds
|
|
21,535
|
|
|
65
|
|
|
(4
|
)
|
|
21,596
|
|
||||
Total short-term investments
|
|
138,030
|
|
|
402
|
|
|
(7
|
)
|
|
138,425
|
|
||||
Cash, cash equivalents and short-term investments
|
|
$
|
175,232
|
|
|
$
|
402
|
|
|
$
|
(7
|
)
|
|
$
|
175,627
|
|
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Cash
|
|
$
|
23,546
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23,546
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
|
2,241
|
|
|
—
|
|
|
—
|
|
|
2,241
|
|
||||
Total cash equivalents
|
|
2,241
|
|
|
—
|
|
|
—
|
|
|
2,241
|
|
||||
Total cash and cash equivalents
|
|
25,787
|
|
|
—
|
|
|
—
|
|
|
25,787
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
|
1,000
|
|
|
3
|
|
|
—
|
|
|
1,003
|
|
||||
Municipal securities
|
|
148,888
|
|
|
242
|
|
|
(137
|
)
|
|
148,993
|
|
||||
Commercial paper
|
|
3,389
|
|
|
2
|
|
|
—
|
|
|
3,391
|
|
||||
Corporate bonds
|
|
12,462
|
|
|
58
|
|
|
(9
|
)
|
|
12,511
|
|
||||
Total short-term investments
|
|
165,739
|
|
|
305
|
|
|
(146
|
)
|
|
165,898
|
|
||||
Cash, cash equivalents and short-term investments
|
|
$
|
191,526
|
|
|
$
|
305
|
|
|
$
|
(146
|
)
|
|
$
|
191,685
|
|
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
Due within one year
|
|
$
|
59,482
|
|
|
$
|
59,620
|
|
Due within two years
|
|
58,334
|
|
|
58,536
|
|
||
Due after two years
|
|
20,214
|
|
|
20,269
|
|
||
Total
|
|
$
|
138,030
|
|
|
$
|
138,425
|
|
4.
|
Fair value of financial instruments
|
|
|
Fair Value Measurements at December 31, 2013 Using
|
||||||||||||||
|
|
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
||||||||
|
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Description
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
|
$
|
1,891
|
|
|
$
|
1,891
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total cash equivalents
|
|
1,891
|
|
|
1,891
|
|
|
—
|
|
|
—
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
|
1,001
|
|
|
—
|
|
|
1,001
|
|
|
—
|
|
||||
Municipal securities
|
|
112,429
|
|
|
—
|
|
|
112,429
|
|
|
—
|
|
||||
Commercial paper
|
|
3,399
|
|
|
—
|
|
|
3,399
|
|
|
—
|
|
||||
Corporate bonds
|
|
21,596
|
|
|
—
|
|
|
21,596
|
|
|
—
|
|
||||
Total short-term investments
|
|
138,425
|
|
|
—
|
|
|
138,425
|
|
|
—
|
|
||||
Cash equivalents and short-term investments
|
|
$
|
140,316
|
|
|
$
|
1,891
|
|
|
$
|
138,425
|
|
|
$
|
—
|
|
|
|
Fair Value Measurements at June 30, 2013 Using
|
||||||||||||||
|
|
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
||||||||
|
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Description
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
|
$
|
2,241
|
|
|
$
|
2,241
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total cash equivalents
|
|
2,241
|
|
|
2,241
|
|
|
—
|
|
|
—
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
|
1,003
|
|
|
—
|
|
|
1,003
|
|
|
—
|
|
||||
Municipal securities
|
|
148,993
|
|
|
—
|
|
|
148,993
|
|
|
—
|
|
||||
Commercial paper
|
|
3,391
|
|
|
—
|
|
|
3,391
|
|
|
—
|
|
||||
Corporate bonds
|
|
12,511
|
|
|
—
|
|
|
12,511
|
|
|
—
|
|
||||
Total short-term investments
|
|
165,898
|
|
|
—
|
|
|
165,898
|
|
|
—
|
|
||||
Cash equivalents and short-term investments
|
|
$
|
168,139
|
|
|
$
|
2,241
|
|
|
$
|
165,898
|
|
|
$
|
—
|
|
5.
|
Commitments and contingencies
|
|
|
Payments due by period
|
||||||||||||||||||||||||||
|
|
Total
|
|
Fiscal 2014
|
|
Fiscal 2015
|
|
Fiscal 2016
|
|
Fiscal 2017
|
|
Fiscal 2018
|
|
Thereafter
|
||||||||||||||
Operating lease obligations, net of sublease income
|
|
$
|
31,040
|
|
|
$
|
6,348
|
|
|
$
|
4,738
|
|
|
$
|
4,763
|
|
|
$
|
4,647
|
|
|
$
|
4,294
|
|
|
$
|
6,250
|
|
Purchase obligations
|
|
4,341
|
|
|
2,058
|
|
|
2,070
|
|
|
213
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total contractual obligations
|
|
$
|
35,381
|
|
|
$
|
8,406
|
|
|
$
|
6,808
|
|
|
$
|
4,976
|
|
|
$
|
4,647
|
|
|
$
|
4,294
|
|
|
$
|
6,250
|
|
7.
|
Stock-based compensation
|
|
|
Number of
Shares
|
|
Options outstanding as of June 30, 2013
|
|
6,577
|
|
Granted
|
|
9
|
|
Exercised
|
|
(153
|
)
|
Canceled
|
|
(498
|
)
|
Options outstanding as of December 31, 2013
|
|
5,935
|
|
|
|
Number of
Shares
(thousands)
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Life
(years)
|
|
Aggregate
Intrinsic
Value
(thousands)
|
|||||
Options outstanding
|
|
5,935
|
|
|
$
|
5.64
|
|
|
5.91
|
|
$
|
9,730
|
|
Options vested and expected to vest
|
|
5,790
|
|
|
$
|
5.60
|
|
|
5.86
|
|
$
|
9,689
|
|
Options exercisable
|
|
4,235
|
|
|
$
|
5.04
|
|
|
5.17
|
|
$
|
9,215
|
|
|
|
Number of
Shares
|
|
Weighted
average
remaining
contractual life
(years)
|
|
Aggregate
intrinsic value
|
|||
RSUs outstanding as of June 30, 2013
|
|
2,032
|
|
|
|
|
|
||
Granted
|
|
1,468
|
|
|
|
|
|
||
Vested
|
|
(254
|
)
|
|
|
|
|
||
Canceled
|
|
(198
|
)
|
|
|
|
|
||
RSUs outstanding as of December 31, 2013
|
|
3,048
|
|
|
2.02
|
|
$
|
20,088
|
|
RSUs expected to vest as of December 31, 2013
|
|
2,570
|
|
|
1.92
|
|
$
|
16,934
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
December 31,
|
|
December 31,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Stock option awards
|
|
$
|
1,025
|
|
|
$
|
1,469
|
|
|
$
|
2,284
|
|
|
$
|
2,790
|
|
RSU awards
|
|
1,182
|
|
|
300
|
|
|
1,950
|
|
|
399
|
|
||||
Restricted common stock
|
|
456
|
|
|
408
|
|
|
912
|
|
|
408
|
|
||||
Total stock-based compensation expense
|
|
$
|
2,663
|
|
|
$
|
2,177
|
|
|
$
|
5,146
|
|
|
$
|
3,597
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
|
December 31,
|
|
December 31,
|
||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Expected volatility
|
|
—
|
%
|
|
73
|
%
|
|
62
|
%
|
|
73
|
%
|
Expected term (in years)
|
|
—
|
|
|
4.76
|
|
|
4.45
|
|
|
4.80
|
|
Risk-free interest rate
|
|
—
|
%
|
|
0.71
|
%
|
|
1.44
|
%
|
|
0.69
|
%
|
Dividend yield
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
8.
|
Stock repurchase program
|
9.
|
Income taxes
|
Cash
|
|
$
|
181
|
|
Accounts receivable
|
|
410
|
|
|
Other assets
|
|
259
|
|
|
Developed technology
|
|
5,100
|
|
|
Goodwill
|
|
14,343
|
|
|
Liabilities assumed
|
|
(1,858
|
)
|
|
Total value of assets acquired and liabilities assumed
|
|
$
|
18,435
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
December 31,
|
|
December 31,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenue
|
|
$
|
37,161
|
|
|
$
|
47,229
|
|
|
$
|
81,457
|
|
|
$
|
89,751
|
|
Gross margin
|
|
59
|
%
|
|
63
|
%
|
|
62
|
%
|
|
68
|
%
|
||||
Non-GAAP gross margin
|
|
61
|
%
|
|
66
|
%
|
|
64
|
%
|
|
70
|
%
|
||||
Income (loss) from continuing operations, net of tax
|
|
$
|
(3,997
|
)
|
|
$
|
418
|
|
|
$
|
(3,988
|
)
|
|
$
|
2,639
|
|
Non-GAAP income (loss) from continuing operations, net of tax
|
|
$
|
(1,171
|
)
|
|
$
|
4,184
|
|
|
$
|
1,661
|
|
|
$
|
8,167
|
|
Adjusted EBITDA from continuing operations
|
|
$
|
(2,716
|
)
|
|
$
|
6,534
|
|
|
$
|
1,228
|
|
|
$
|
12,437
|
|
Diluted income (loss) from continuing operations, net of tax, per share
|
|
$
|
(0.10
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.06
|
|
Diluted non-GAAP income (loss) from continuing operations, net of tax, per share
|
|
$
|
(0.03
|
)
|
|
$
|
0.10
|
|
|
$
|
0.04
|
|
|
$
|
0.19
|
|
|
|
Three Months Ended
December 31,
|
|
Six Months Ended
December 31,
|
||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Gross margin
|
|
59
|
%
|
|
63
|
%
|
|
62
|
%
|
|
68
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
||||
Capitalized software and developed technology amortization
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
Stock-based compensation expense
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Non-GAAP gross margin
|
|
61
|
%
|
|
66
|
%
|
|
64
|
%
|
|
70
|
%
|
|
|
Three Months Ended
December 31,
|
|
Six Months Ended
December 31,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net income (loss)
|
|
$
|
(3,997
|
)
|
|
$
|
904
|
|
|
$
|
(3,988
|
)
|
|
$
|
3,605
|
|
Income from discontinued operations, net of tax
|
|
—
|
|
|
486
|
|
|
—
|
|
|
966
|
|
||||
Income (loss) from continuing operations, net of tax
|
|
(3,997
|
)
|
|
418
|
|
|
(3,988
|
)
|
|
2,639
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Legal settlement
|
|
—
|
|
|
1,300
|
|
|
—
|
|
|
1,300
|
|
||||
Capitalized software and developed technology amortization
|
|
818
|
|
|
1,091
|
|
|
1,718
|
|
|
1,676
|
|
||||
Stock-based compensation expense:
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
|
$
|
30
|
|
|
$
|
39
|
|
|
$
|
66
|
|
|
$
|
76
|
|
Research and development
|
|
1,063
|
|
|
889
|
|
|
2,072
|
|
|
1,528
|
|
||||
Sales and marketing
|
|
769
|
|
|
633
|
|
|
1,466
|
|
|
992
|
|
||||
General and administrative
|
|
801
|
|
|
616
|
|
|
1,542
|
|
|
1,001
|
|
||||
Total stock-based compensation
|
|
2,663
|
|
|
2,177
|
|
|
5,146
|
|
|
3,597
|
|
||||
Tax effect of adding back adjustments
|
|
(655
|
)
|
|
(802
|
)
|
|
(1,215
|
)
|
|
(1,045
|
)
|
||||
Non-GAAP income (loss) from continuing operations, net of tax
|
|
$
|
(1,171
|
)
|
|
$
|
4,184
|
|
|
$
|
1,661
|
|
|
$
|
8,167
|
|
|
|
Three Months Ended
December 31,
|
|
Six Months Ended
December 31,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net income (loss)
|
|
$
|
(3,997
|
)
|
|
$
|
904
|
|
|
$
|
(3,988
|
)
|
|
$
|
3,605
|
|
Income from discontinued operations, net of tax
|
|
—
|
|
|
486
|
|
|
—
|
|
|
966
|
|
||||
Income (loss) from continuing operations, net of tax
|
|
(3,997
|
)
|
|
418
|
|
|
(3,988
|
)
|
|
2,639
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Legal settlement
|
|
—
|
|
|
1,300
|
|
|
—
|
|
|
1,300
|
|
||||
Stock-based compensation expense
|
|
2,663
|
|
|
2,177
|
|
|
5,146
|
|
|
3,597
|
|
||||
Depreciation and amortization
|
|
1,630
|
|
|
2,363
|
|
|
3,424
|
|
|
4,255
|
|
||||
Interest and other income, net
|
|
(1,121
|
)
|
|
(614
|
)
|
|
(1,403
|
)
|
|
(1,036
|
)
|
||||
Provision (benefit) for income taxes
|
|
(1,891
|
)
|
|
890
|
|
|
(1,951
|
)
|
|
1,682
|
|
||||
Adjusted EBITDA from continuing operations
|
|
$
|
(2,716
|
)
|
|
$
|
6,534
|
|
|
$
|
1,228
|
|
|
$
|
12,437
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
December 31,
|
|
December 31,
|
||||||||||||
Consolidated Statements of Income Data
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Product
|
|
$
|
18,367
|
|
|
$
|
14,542
|
|
|
$
|
37,658
|
|
|
$
|
23,390
|
|
Services
|
|
18,794
|
|
|
32,687
|
|
|
43,799
|
|
|
66,361
|
|
||||
Total revenue
|
|
37,161
|
|
|
47,229
|
|
|
81,457
|
|
|
89,751
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
||||||||
Product
|
|
9,367
|
|
|
9,103
|
|
|
18,676
|
|
|
13,371
|
|
||||
Services
|
|
5,823
|
|
|
8,178
|
|
|
12,594
|
|
|
15,603
|
|
||||
Total cost of revenue
|
|
15,190
|
|
|
17,281
|
|
|
31,270
|
|
|
28,974
|
|
||||
Gross profit
|
|
21,971
|
|
|
29,948
|
|
|
50,187
|
|
|
60,777
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Research and development
|
|
14,315
|
|
|
14,298
|
|
|
29,133
|
|
|
29,305
|
|
||||
Sales and marketing
|
|
7,910
|
|
|
7,577
|
|
|
15,668
|
|
|
14,811
|
|
||||
General and administrative
|
|
6,755
|
|
|
7,379
|
|
|
12,728
|
|
|
13,376
|
|
||||
Total operating expenses
|
|
28,980
|
|
|
29,254
|
|
|
57,529
|
|
|
57,492
|
|
||||
Operating income (loss)
|
|
(7,009
|
)
|
|
694
|
|
|
(7,342
|
)
|
|
3,285
|
|
||||
Other income, net
|
|
1,121
|
|
|
614
|
|
|
1,403
|
|
|
1,036
|
|
||||
Income (loss) before provision (benefit) for income taxes
|
|
(5,888
|
)
|
|
1,308
|
|
|
(5,939
|
)
|
|
4,321
|
|
||||
Provision (benefit) for income taxes
|
|
(1,891
|
)
|
|
890
|
|
|
(1,951
|
)
|
|
1,682
|
|
||||
Income (loss) from continuing operations, net of tax
|
|
(3,997
|
)
|
|
418
|
|
|
(3,988
|
)
|
|
2,639
|
|
||||
Income from discontinued operations, net of tax
|
|
—
|
|
|
486
|
|
|
—
|
|
|
966
|
|
||||
Net income (loss)
|
|
$
|
(3,997
|
)
|
|
$
|
904
|
|
|
$
|
(3,988
|
)
|
|
$
|
3,605
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
|
December 31,
|
|
December 31,
|
||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
|
|
(as a percentage of revenue)
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
||
Product
|
|
49
|
%
|
|
31
|
%
|
|
46
|
%
|
|
26
|
%
|
Services
|
|
51
|
%
|
|
69
|
%
|
|
54
|
%
|
|
74
|
%
|
Total revenue
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
||||
Product
|
|
25
|
%
|
|
19
|
%
|
|
23
|
%
|
|
15
|
%
|
Services
|
|
16
|
%
|
|
17
|
%
|
|
15
|
%
|
|
17
|
%
|
Total cost of revenue
|
|
41
|
%
|
|
37
|
%
|
|
38
|
%
|
|
32
|
%
|
Gross profit
|
|
59
|
%
|
|
63
|
%
|
|
62
|
%
|
|
68
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
||||
Research and development
|
|
39
|
%
|
|
30
|
%
|
|
36
|
%
|
|
33
|
%
|
Sales and marketing
|
|
21
|
%
|
|
16
|
%
|
|
19
|
%
|
|
16
|
%
|
General and administrative
|
|
18
|
%
|
|
16
|
%
|
|
16
|
%
|
|
15
|
%
|
Total operating expenses
|
|
78
|
%
|
|
62
|
%
|
|
71
|
%
|
|
64
|
%
|
Operating income (loss)
|
|
(19
|
)%
|
|
1
|
%
|
|
(9
|
)%
|
|
4
|
%
|
Other income, net
|
|
3
|
%
|
|
2
|
%
|
|
2
|
%
|
|
1
|
%
|
Income (loss) before provision (benefit) for income taxes
|
|
(16
|
)%
|
|
3
|
%
|
|
(7
|
)%
|
|
5
|
%
|
Provision (benefit) for income taxes
|
|
(5
|
)%
|
|
2
|
%
|
|
(2
|
)%
|
|
2
|
%
|
Income (loss) from continuing operations, net of tax
|
|
(11
|
)%
|
|
1
|
%
|
|
(5
|
)%
|
|
3
|
%
|
Income from discontinued operations, net of tax
|
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
Net income (loss)
|
|
(11
|
)%
|
|
2
|
%
|
|
(5
|
)%
|
|
4
|
%
|
|
|
Six Months Ended
|
||||||
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
|
|
(in thousands)
|
||||||
Net cash provided by (used in) operating activities
|
|
$
|
(6,802
|
)
|
|
$
|
41,808
|
|
Net cash provided by (used in) investing activities
|
|
24,583
|
|
|
(15,304
|
)
|
||
Net cash used in financing activities
|
|
(6,411
|
)
|
|
(10,629
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
45
|
|
|
(45
|
)
|
||
Net increase in cash and cash equivalents
|
|
$
|
11,415
|
|
|
$
|
15,830
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
•
|
the transition away from paid carrier navigation to freemium offerings for mobile phone based navigation services;
|
•
|
impact of results of the offering of a premium upgrade on a basic version of our service that is offered for free;
|
•
|
the ability of automobile manufacturer customers to sell automobiles equipped with our products;
|
•
|
the seasonality of new vehicle model introductions and consumer buying patterns, as well as the effects of economic uncertainty on vehicle purchases
,
particularly outside of the U.S.;
|
•
|
the effectiveness of our entry into new business areas, such as advertising;
|
•
|
changes made to existing contractual obligations with a customer that may affect the nature and timing of revenue recognition;
|
•
|
poor reviews of automotive service offerings into which our navigation solutions are integrated resulting in limited uptake of navigation options by car buyers;
|
•
|
loss of subscribers by our wireless carrier customers or a reduction in the number of subscribers to plans that include our services;
|
•
|
the timing and quality of information we receive from our customers;
|
•
|
our inability to attract new end users;
|
•
|
the timing and success of new service introductions by us or our competitors;
|
•
|
the loss of our relationship or a change in our revenue model with any particular wireless carrier customer;
|
•
|
the timing and success of marketing expenditures for our products;
|
•
|
the extent of any interruption in our services;
|
•
|
the amount and timing of operating costs and capital expenditures related to the expansion of our operations and infrastructure through acquisitions or organic growth;
|
•
|
the timing of expenses related to the development or acquisition of technologies, products or businesses;
|
•
|
potential foreign currency exchange gains and losses associated with expenses and sales denominated in currencies other than the U.S. dollar;
|
•
|
general economic, industry and market conditions that impact expenditures for new vehicles, smartphones and mobile location services in the United States and other countries where we sell our services and products;
|
•
|
changes in interest rates and our mix of investments, which would impact our return on our investments in cash and marketable securities;
|
•
|
changes in our effective tax rates; and
|
•
|
the impact of new accounting pronouncements.
|
•
|
the provision of their services at no or low cost to consumers;
|
•
|
significantly greater revenue and financial resources;
|
•
|
stronger brand and consumer recognition regionally or worldwide;
|
•
|
the capacity to leverage their marketing expenditures across a broader portfolio of mobile and nonmobile products;
|
•
|
access to core technology and intellectual property, including more extensive patent portfolios;
|
•
|
access to custom or proprietary content;
|
•
|
quicker pace of innovation;
|
•
|
stronger wireless carrier, automotive and handset manufacturer relationships;
|
•
|
stronger international presence may make our larger competitors more attractive partners to automotive manufacturers and OEMs;
|
•
|
greater resources to make and integrate acquisitions;
|
•
|
lower labor and development costs; and
|
•
|
broader global distribution and presence.
|
•
|
difficulties in integrating and managing the operations, technologies and products of the companies we acquire including skobbler, which is geographically remote from our existing operations;
|
•
|
diversion of our management’s attention from normal daily operation of our business;
|
•
|
our inability to maintain the key business relationships and the reputations of the businesses we acquire, such as the European automobile manufacturer and OEM relationship of skobbler;
|
•
|
our inability to retain key personnel of the acquired company;
|
•
|
uncertainty of entry into markets in which we have limited or no prior experience and in which competitors have stronger market positions;
|
•
|
our dependence on unfamiliar affiliates and customers of the companies we acquire;
|
•
|
insufficient revenue to offset our increased expenses associated with acquisitions;
|
•
|
our responsibility for the liabilities of the businesses we acquire, including those which we may not anticipate; and
|
•
|
our inability to maintain internal standards, controls, procedures and policies.
|
•
|
damage to or failure of our computer software or hardware or our connections and outsourced service arrangements with third parties;
|
•
|
errors in the processing of data by our servers;
|
•
|
computer viruses or software defects;
|
•
|
physical or electronic break-ins, sabotage, intentional acts of vandalism and similar events; or
|
•
|
errors by our employees or third party service providers.
|
•
|
fluctuations in currency exchange rates;
|
•
|
unexpected changes in foreign regulatory requirements;
|
•
|
difficulties in managing the staffing of remote operations;
|
•
|
potentially adverse tax consequences, including the complexities of foreign value added tax systems, foreign tax withholding, restrictions on the repatriation of earnings and changes in tax rates;
|
•
|
dependence on foreign wireless carriers with different pricing models;
|
•
|
roaming charges to end users;
|
•
|
availability of reliable 2G, 3G and 4G mobile networks in those countries;
|
•
|
requirements that we comply with local telecommunication regulations and automobile hands free laws in those countries;
|
•
|
the burdens of complying with a wide variety of foreign laws and different legal standards;
|
•
|
increased financial accounting and reporting burdens and complexities;
|
•
|
political, social and economic instability in some jurisdictions;
|
•
|
terrorist attacks and security concerns in general; and
|
•
|
reduced or varied protection for intellectual property rights in some countries.
|
•
|
the implementation of our equipment at new data centers and expansion of our operations at data centers;
|
•
|
the replacement of outdated or failing equipment; and
|
•
|
the acquisition of key technologies to support or expand our navigation services.
|
•
|
changes in relative proportions of revenue and income or loss before taxes in the various jurisdictions in which we operate;
|
•
|
changes to actual or forecasted permanent differences between book and tax reporting, including the tax effects of purchase accounting for acquisitions and non-recurring charges which may cause fluctuations between reporting periods;
|
•
|
impacts from changes in tax laws, regulations and interpretations in the jurisdictions in which we operate, as well as the requirements of certain tax rulings;
|
•
|
impacts from withholding requirements in various non-U.S. jurisdictions and our ability to recoup those withholdings, which may depend on how much revenue we have in a particular jurisdiction to offset the related expenses;
|
•
|
adversely affect our relationships with our current or future customers and other business partners;
|
•
|
cause delays or stoppages in the shipment of Telenav enabled or preloaded mobile phones or vehicles, or cause us to modify or suspend the provision of our navigation services;
|
•
|
cause us to incur significant expenses in defending claims brought against our customers, other business partners or us;
|
•
|
divert management's attention and resources;
|
•
|
subject us to significant damages or settlements;
|
•
|
require us to enter into settlements, royalty or licensing agreements on unfavorable terms; or
|
•
|
require us or our business partners to cease certain activities and/or modify our products or services.
|
•
|
actual or anticipated fluctuations in our operating results;
|
•
|
changes in the financial projections we may provide to the public or our failure to meet these projections;
|
•
|
announcements by us or our competitors of significant technical innovations, relationship changes with key customers, acquisitions, strategic partnerships, joint ventures, capital raising activities or capital commitments;
|
•
|
the public’s response to our press releases or other public announcements, including our filings with the SEC;
|
•
|
lawsuits threatened or filed against us; and
|
•
|
large distributions of our common stock by significant stockholders to limited partners or others who immediately resell the shares.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
|
|
Total Number of
Shares Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs (1)
|
||||||
October 1 – October 31, 2013
|
|
172,969
|
|
|
$
|
6.56
|
|
|
172,969
|
|
|
$
|
3,631,769
|
|
November 1 – November 30, 2013
|
|
136,600
|
|
|
$
|
7.18
|
|
|
136,600
|
|
|
$
|
2,651,339
|
|
December 1 – December 31, 2013
|
|
159,722
|
|
|
$
|
6.44
|
|
|
159,722
|
|
|
$
|
1,622,028
|
|
Total
|
|
469,291
|
|
|
$
|
6.70
|
|
|
469,291
|
|
|
$
|
1,622,028
|
|
(1)
|
The purchases of our shares of common stock by us were made pursuant to a stock repurchase plan announced by us on March 18, 2013 that expires on March 14, 2014, under which our board of directors authorized us to purchase shares of our common stock up to an aggregate of $10.0 million, inclusive of broker fees.
|
Item 6.
|
Exhibits.
|
Exhibit
Number
|
|
Description
|
|
Incorporated by Reference
From Form
|
|
Incorporated by Reference From Exhibit Number
|
|
Date
Filed
|
10.16.22+
|
|
Seventeenth Amendment dated June 27, 2013 to the Data License Agreement, dated as of December 1, 2002, by and between HERE North America, LLC (f/k/a NAVTEQ North America, LLC) (formerly Navigation Technologies Corporation) and Telenav, Inc.
|
|
Filed herewith
|
|
|
|
|
10.16.24
|
|
Eighteenth Amendment dated January 28, 2014 to the Data License Agreement, dated as of December 1, 2002, by and between HERE North America, LLC (f/k/a NAVTEQ North America, LLC) (formerly Navigation Technologies Corporation) and Telenav, Inc.
|
|
Filed herewith
|
|
|
|
|
10.23.1#
|
|
Amendment No. 1 dated December 20, 2013 to the Employment Agreement dated March 28, 2012 between TeleNav, Inc. and Michael W. Strambi.
|
|
Filed herewith
|
|
|
|
|
10.26.15+
|
|
Amendment No. 15 effective November 18, 2013 to the SYNC Generation 2 On-Board Navigation Agreement dated October 12, 2009, as amended, by and between Telenav, Inc. and Ford Motor Company.
|
|
Filed herewith
|
|
|
|
|
31.1
|
|
Certification Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a),
as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of President and Chief Executive Officer
|
|
Filed herewith
|
|
|
|
|
31.2
|
|
Certification Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Chief Financial Officer
|
|
Filed herewith
|
|
|
|
|
32.1~
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of President and Chief Executive Officer
|
|
Furnished herewith
|
|
|
|
|
32.2~
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Chief Financial Officer
|
|
Furnished herewith
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
Furnished herewith
|
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
Furnished herewith
|
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Calculation Linkbase Document
|
|
Furnished herewith
|
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
Furnished herewith
|
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Label Linkbase Document
|
|
Furnished herewith
|
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Furnished herewith
|
|
|
|
|
#
|
Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.
|
+
|
Portions of the exhibit have been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission.
|
~
|
In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 33-8238 and 34-47986, Final Rule: Management’s Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
|
*
|
XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act, is deemed not filed for purposes of section 18 of the Exchange Act, and otherwise is not subject to liability under these sections.
|
|
|
|
TELENAV, INC.
|
||
|
|
|
|
|
|
Dated:
|
February 6, 2014
|
|
By:
|
|
/s/ Dr. HP J
IN
|
|
|
|
|
|
Dr. HP Jin
|
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
Dated:
|
February 6, 2014
|
|
By:
|
|
/s/ MICHAEL STRAMBI
|
|
|
|
|
|
Michael Strambi
|
|
|
|
|
|
Chief Financial Officer and Treasurer
|
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
Exhibit
Number
|
|
Description
|
|
Incorporated by Reference
From Form
|
|
Incorporated by Reference From Exhibit Number
|
|
Date
Filed
|
10.16.22+
|
|
Seventeenth Amendment dated June 27, 2013 to the Data License Agreement, dated as of December 1, 2002, by and between HERE North America, LLC (f/k/a NAVTEQ North America, LLC) (formerly Navigation Technologies Corporation) and Telenav, Inc.
|
|
Filed herewith
|
|
|
|
|
10.16.24
|
|
Eighteenth Amendment dated January 28, 2014 to the Data License Agreement, dated as of December 1, 2002, by and between HERE North America, LLC (f/k/a NAVTEQ North America, LLC) (formerly Navigation Technologies Corporation) and Telenav, Inc.
|
|
Filed herewith
|
|
|
|
|
10.23.1#
|
|
Amendment No. 1 dated December 20, 2013 to the Employment Agreement dated March 28, 2012 between TeleNav, Inc. and Michael W. Strambi.
|
|
Filed herewith
|
|
|
|
|
10.26.15+
|
|
Amendment No. 15 effective November 18, 2013 to the SYNC Generation 2 On-Board Navigation Agreement dated October 12, 2009, as amended, by and between Telenav, Inc. and Ford Motor Company.
|
|
Filed herewith
|
|
|
|
|
31.1
|
|
Certification Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of President and Chief Executive Officer
|
|
Filed herewith
|
|
|
|
|
31.2
|
|
Certification Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Chief Financial Officer
|
|
Filed herewith
|
|
|
|
|
32.1~
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of President and Chief Executive Officer
|
|
Furnished herewith
|
|
|
|
|
32.2~
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Chief Financial Officer
|
|
Furnished herewith
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
Furnished herewith
|
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
Furnished herewith
|
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Calculation Linkbase Document
|
|
Furnished herewith
|
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
Furnished herewith
|
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Label Linkbase Document
|
|
Furnished herewith
|
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Furnished herewith
|
|
|
|
|
#
|
Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.
|
+
|
Portions of the exhibit have been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission.
|
~
|
In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 33-8238 and 34-47986, Final Rule: Management’s Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
|
*
|
XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act, is deemed not filed for purposes of section 18 of the Exchange Act, and otherwise is not subject to liability under these sections.
|
1.
|
Amendment Term
. The term of this Seventeenth Amendment (“Seventeenth Amendment Term”) shall continue for a period of nine (9) months.
|
2.
|
[*****] and [*****] Rights
. Section VII of TL 8 is hereby amended to add the following Section VII(E):
|
•
|
[*****]
|
•
|
[*****]
|
3.
|
The terms and conditions of the Agreement remain in full force and effect except as modified hereunder.
|
HERE NORTH AMERICA, LLC
By: /s/ Stephen W. Kelley
Name: Stephen W. Kelley
Title: Director, Legal and Intellectual Property
Date: 6/27/2013
|
TELENAV, INC.
By: /s/ Loren Hillberg Name: Loren Hillberg Title: General Counsel Date: 6/26/2013 |
HERE NORTH AMERICA, LLC
By: /s/ Greg Dresher
Name: Greg Dresher
Title: Senior Legal Counsel
Date: 6/27/2013
|
1.
|
No Termination of Agreement.
Notwithstanding receipt by HERE of the notice letter from Client, dated July 30, 2013, stating its intent not to renew the Term of the Agreement, the Parties hereby agree that the Agreement will remain in full force and effect and continue in accordance with the Agreement Term as set forth under Section 6.2 of the DLA.
|
2.
|
Termination of TLs 1-7.
As of the Amendment Effective Date, and notwithstanding anything to the contrary under the Agreement, the Parties hereby agree that TL 1, TL 2, TL 3, TL 5, TL 6 and TL 7 are hereby terminated and shall no longer be in force and effect. For sake of clarity, any terms and conditions under an amendment to the Agreement that applies to the foregoing TLs shall no longer be in force and effect under the Agreement, including any MALF amounts owed under the foregoing TLs. For further sake of clarity, any amendment to the Agreement executed by the Parties amending the terms and conditions of the DLA shall remain in force and effect until terminated in accordance with the Agreement.
|
3.
|
End-User License
. In Section 4.3 of the Agreement, replace "LICENSEE shall provide each End-User, with a copy of the End-User Terms in a form and manner of presentation approved in advance in writing by NT, which approval shall not be unreasonably withheld" with "LICENSEE shall provide each End-User, with a copy of the End-User Terms in a form substantially similar as found in the applicable Territory License".
|
4.
|
Territory License Term
. In Section 6.1 of the Agreement, delete “, but in no event beyond the term of this Agreement or any extension thereof”.
|
5.
|
The terms and conditions of the Agreement remain in full force and effect except as modified hereunder.
|
1.
|
At the end of Section 8(a)(i), after “(as in effect immediately prior to Executive’s termination)”, add “, and (B) a lump-sum pro-rated amount of Executive’s bonus for the year in which the termination occurs (adjusted as appropriate based on the extent to which any applicable performance objectives have then been achieved and the relative weightings thereof, each as determined in the sole and absolute discretion of the Board or Committee acting in good faith)”.
|
MICHAEL W. STRAMBI
By:
/s/ Michael W. Strambi
(Signature)
Name:
Michael W. Strambi
(Printed Name)
Title:
Chief Financial Officer
Date:
12/20/13
|
TELENAV, INC.
By:
/s/ Loren E. Hillberg
(Signature)
Name:
Loren E. Hillberg
(Printed Name)
Title:
General Counsel
Date:
12/20/13
|
1.
|
Agreement, Attachment V: Pricing and Royalty, delete Section 12 and replace with the following:
|
2.
|
Agreement, Attachment V: Pricing and Royalty, renumber Section “15” to Section “13”.
|
3.
|
Agreement, Attachment V: Pricing and Royalty, after Section 13, add the following new section:
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
4.
|
Agreement, [*****] “Attachment [*****] - Statement of Work For SYNC™ Generation 2 Navigation Application [*****] Baseline” (from Amendment No. [*****]) to “Attachment [*****] - Statement of Work For SYNC™ Generation 2 Navigation Application [*****] Baseline”.
|
FORD MOTOR COMPANY
By:
/s/ Melissa Sheahan
(Signature)
Name:
Melissa Sheahan
(Printed Name)
Title:
SYNC Software Buyer
Date:
11/26/13
|
TELENAV, inc.
By:
/s/ Michael W. Strambi
(Signature)
Name:
Michael W. Strambi
(Printed Name)
Title:
Chief Financial Officer
Date:
11/26/13
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Telenav, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 6, 2014
|
|
By:
|
|
/s/ Dr. HP JIN
|
|
|
|
|
|
DR. HP Jin
|
|
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Telenav, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 6, 2014
|
|
By:
|
|
/s/ MICHAEL STRAMBI
|
|
|
|
|
|
Michael Strambi
|
|
|
|
|
|
Chief Financial Officer
|
Date:
|
February 6, 2014
|
|
By:
|
|
/s/ Dr. HP JIN
|
|
|
|
|
|
Dr. HP Jin
|
|
|
|
|
|
President and Chief Executive Officer
|
Date:
|
February 6, 2014
|
|
By:
|
|
/s/ MICHAEL STRAMBI
|
|
|
|
|
|
Michael Strambi
|
|
|
|
|
|
Chief Financial Officer
|