|
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
|
77-0521800
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification Number)
|
|
Large accelerated filer
|
|
¨
|
|
Accelerated filer
|
|
ý
|
|
|
|
|
|
|
|
Non-accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
¨
|
|
|
|
|
|
|
|
Emerging growth company
|
|
¨
|
|
|
|
|
|
|
Page No.
|
|
|
|
Item 1.
|
||
|
|
|
|
||
|
|
|
|
Condensed Consolidated Statements of
Operations
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 6.
|
Item 1.
|
Financial Statements.
|
|
|
September 30,
2017 |
|
June 30,
2017* |
||||
|
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
17,463
|
|
|
$
|
20,757
|
|
Short-term investments
|
|
74,224
|
|
|
77,598
|
|
||
Accounts receivable, net of allowances of $111 and $75 at September 30, 2017 and June 30, 2017, respectively
|
|
59,930
|
|
|
57,834
|
|
||
Restricted cash
|
|
3,403
|
|
|
3,401
|
|
||
Income taxes receivable
|
|
34
|
|
|
34
|
|
||
Deferred costs
|
|
16,868
|
|
|
11,703
|
|
||
Prepaid expenses and other current assets
|
|
4,025
|
|
|
3,988
|
|
||
Total current assets
|
|
175,947
|
|
|
175,315
|
|
||
Property and equipment, net
|
|
6,501
|
|
|
4,658
|
|
||
Deferred income taxes, non-current
|
|
819
|
|
|
900
|
|
||
Goodwill and intangible assets, net
|
|
34,561
|
|
|
34,844
|
|
||
Deferred costs, non-current
|
|
57,272
|
|
|
42,389
|
|
||
Other assets
|
|
1,577
|
|
|
1,454
|
|
||
Total assets
|
|
$
|
276,677
|
|
|
$
|
259,560
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Trade accounts payable
|
|
$
|
15,638
|
|
|
$
|
6,151
|
|
Accrued expenses
|
|
45,269
|
|
|
51,528
|
|
||
Deferred revenue
|
|
28,783
|
|
|
20,345
|
|
||
Income taxes payable
|
|
75
|
|
|
197
|
|
||
Total current liabilities
|
|
89,765
|
|
|
78,221
|
|
||
Deferred rent, non-current
|
|
273
|
|
|
996
|
|
||
Deferred revenue, non-current
|
|
87,749
|
|
|
67,056
|
|
||
Other long-term liabilities
|
|
1,174
|
|
|
1,139
|
|
||
Commitments and contingencies
|
|
|
|
|
||||
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; 44,312 and 43,946 shares issued and outstanding at September 30, 2017 and June 30, 2017, respectively
|
|
44
|
|
|
44
|
|
||
Additional paid-in capital
|
|
161,241
|
|
|
159,666
|
|
||
Accumulated other comprehensive loss
|
|
(1,547
|
)
|
|
(1,934
|
)
|
||
Accumulated deficit
|
|
(62,022
|
)
|
|
(45,628
|
)
|
||
Total stockholders’ equity
|
|
97,716
|
|
|
112,148
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
276,677
|
|
|
$
|
259,560
|
|
|
|
Three Months Ended
|
||||||
|
|
September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Revenue:
|
|
|
|
|
||||
Product
|
|
$
|
23,964
|
|
|
$
|
29,423
|
|
Services
|
|
12,694
|
|
|
12,804
|
|
||
Total revenue
|
|
36,658
|
|
|
42,227
|
|
||
Cost of revenue:
|
|
|
|
|
||||
Product
|
|
14,674
|
|
|
17,761
|
|
||
Services
|
|
6,173
|
|
|
5,715
|
|
||
Total cost of revenue
|
|
20,847
|
|
|
23,476
|
|
||
Gross profit
|
|
15,811
|
|
|
18,751
|
|
||
Operating expenses:
|
|
|
|
|
||||
Research and development
|
|
21,082
|
|
|
18,018
|
|
||
Sales and marketing
|
|
5,064
|
|
|
5,268
|
|
||
General and administrative
|
|
5,211
|
|
|
5,491
|
|
||
Legal settlement and contingencies
|
|
250
|
|
|
—
|
|
||
Total operating expenses
|
|
31,607
|
|
|
28,777
|
|
||
Loss from operations
|
|
(15,796
|
)
|
|
(10,026
|
)
|
||
Other income (expense), net
|
|
(47
|
)
|
|
296
|
|
||
Loss before provision (benefit) for income taxes
|
|
(15,843
|
)
|
|
(9,730
|
)
|
||
Provision (benefit) for income taxes
|
|
255
|
|
|
(395
|
)
|
||
Net loss
|
|
$
|
(16,098
|
)
|
|
$
|
(9,335
|
)
|
|
|
|
|
|
||||
Net loss per share:
|
|
|
|
|
||||
Basic and diluted
|
|
$
|
(0.37
|
)
|
|
$
|
(0.22
|
)
|
Weighted average shares used in computing net loss per share:
|
|
|
|
|
||||
Basic and diluted
|
|
44,079
|
|
|
42,838
|
|
||
|
|
|
|
|
||||
Stock-based compensation expense included above:
|
|
|
|
|
||||
Cost of revenue
|
|
$
|
35
|
|
|
$
|
29
|
|
Research and development
|
|
1,395
|
|
|
1,490
|
|
||
Sales and marketing
|
|
438
|
|
|
494
|
|
||
General and administrative
|
|
612
|
|
|
528
|
|
||
Total stock-based compensation expense
|
|
$
|
2,480
|
|
|
$
|
2,541
|
|
|
|
Three Months Ended
|
||||||
|
|
September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
Net loss
|
|
$
|
(16,098
|
)
|
|
$
|
(9,335
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
||||
Foreign currency translation adjustment, net of tax
|
|
359
|
|
|
66
|
|
||
Available-for-sale securities:
|
|
|
|
|
||||
Unrealized gain (loss) on available-for-sale securities, net of tax
|
|
28
|
|
|
(138
|
)
|
||
Reclassification adjustments for gain (loss) on available-for-sale securities recognized, net of tax
|
|
—
|
|
|
(6
|
)
|
||
Net increase (decrease) from available-for-sale securities, net of tax
|
|
28
|
|
|
(144
|
)
|
||
Other comprehensive income (loss), net of tax
|
|
387
|
|
|
(78
|
)
|
||
Comprehensive loss
|
|
$
|
(15,711
|
)
|
|
$
|
(9,413
|
)
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||
|
|
September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Operating activities
|
|
|
|
|
||||
Net loss
|
|
$
|
(16,098
|
)
|
|
$
|
(9,335
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
716
|
|
|
637
|
|
||
Deferred rent reversal due to lease termination
|
|
(538
|
)
|
|
—
|
|
||
Tenant improvement allowance recognition due to lease termination
|
|
(582
|
)
|
|
—
|
|
||
Accretion of net premium on short-term investments
|
|
59
|
|
|
125
|
|
||
Stock-based compensation expense
|
|
2,480
|
|
|
2,541
|
|
||
Loss on disposal of property and equipment
|
|
8
|
|
|
—
|
|
||
Bad debt expense
|
|
38
|
|
|
67
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(2,109
|
)
|
|
(563
|
)
|
||
Deferred income taxes
|
|
104
|
|
|
19
|
|
||
Restricted cash
|
|
(2
|
)
|
|
129
|
|
||
Income taxes receivable
|
|
—
|
|
|
1
|
|
||
Deferred costs
|
|
(20,048
|
)
|
|
(2,857
|
)
|
||
Prepaid expenses and other current assets
|
|
(115
|
)
|
|
(25
|
)
|
||
Other assets
|
|
(326
|
)
|
|
18
|
|
||
Trade accounts payable
|
|
9,463
|
|
|
4,533
|
|
||
Accrued expenses and other liabilities
|
|
(6,037
|
)
|
|
(6,188
|
)
|
||
Income taxes payable
|
|
(123
|
)
|
|
92
|
|
||
Deferred rent
|
|
191
|
|
|
75
|
|
||
Deferred revenue
|
|
29,131
|
|
|
5,042
|
|
||
Net cash used in operating activities
|
|
(3,788
|
)
|
|
(5,689
|
)
|
||
Investing activities
|
|
|
|
|
||||
Purchases of property and equipment
|
|
(2,286
|
)
|
|
(394
|
)
|
||
Purchases of short-term investments
|
|
(13,355
|
)
|
|
(16,841
|
)
|
||
Proceeds from sales and maturities of short-term investments
|
|
16,697
|
|
|
19,032
|
|
||
Proceeds from sales of long-term investments
|
|
—
|
|
|
246
|
|
||
Net cash provided by investing activities
|
|
1,056
|
|
|
2,043
|
|
||
Financing activities
|
|
|
|
|
||||
Proceeds from exercise of stock options
|
|
197
|
|
|
23
|
|
||
Tax withholdings related to net share settlements of restricted stock units
|
|
(1,102
|
)
|
|
(1,256
|
)
|
||
Net cash used in financing activities
|
|
(905
|
)
|
|
(1,233
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
343
|
|
|
65
|
|
||
Net decrease in cash and cash equivalents
|
|
(3,294
|
)
|
|
(4,814
|
)
|
||
Cash and cash equivalents, at beginning of period
|
|
20,757
|
|
|
21,349
|
|
||
Cash and cash equivalents, at end of period
|
|
$
|
17,463
|
|
|
$
|
16,535
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
||||
Income taxes paid, net
|
|
$
|
304
|
|
|
$
|
910
|
|
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, 2017
|
|
$
|
(1,701
|
)
|
|
$
|
(233
|
)
|
|
$
|
(1,934
|
)
|
Other comprehensive income (loss) before reclassifications, net of tax
|
|
359
|
|
|
28
|
|
|
387
|
|
|||
Amount reclassified from accumulated other comprehensive loss, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other comprehensive income, net of tax
|
|
359
|
|
|
28
|
|
|
387
|
|
|||
Balance, net of tax as of September 30, 2017
|
|
$
|
(1,342
|
)
|
|
$
|
(205
|
)
|
|
$
|
(1,547
|
)
|
2.
|
Net income (loss) per share
|
|
|
Three Months Ended
September 30, |
||||||
|
|
2017
|
|
2016
|
||||
Net loss
|
|
$
|
(16,098
|
)
|
|
$
|
(9,335
|
)
|
Weighted average common shares used in computing net loss per share, basic and diluted
|
|
44,079
|
|
|
42,838
|
|
||
Net loss per share, basic and diluted
|
|
$
|
(0.37
|
)
|
|
$
|
(0.22
|
)
|
|
|
Three Months Ended
September 30, |
||||
|
|
2017
|
|
2016
|
||
Stock options
|
|
5,599
|
|
|
6,316
|
|
Restricted stock units
|
|
3,035
|
|
|
3,218
|
|
Total
|
|
8,634
|
|
|
9,534
|
|
3.
|
Cash, cash equivalents and short-term investments
|
Description
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Cash
|
|
$
|
10,280
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,280
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
|
5,634
|
|
|
—
|
|
|
—
|
|
|
5,634
|
|
||||
Commercial paper
|
|
749
|
|
|
—
|
|
|
—
|
|
|
749
|
|
||||
Corporate bonds
|
|
800
|
|
|
—
|
|
|
—
|
|
|
800
|
|
||||
Total cash equivalents
|
|
7,183
|
|
|
—
|
|
|
—
|
|
|
7,183
|
|
||||
Total cash and cash equivalents
|
|
17,463
|
|
|
—
|
|
|
—
|
|
|
17,463
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities
|
|
1,925
|
|
|
—
|
|
|
(5
|
)
|
|
1,920
|
|
||||
U.S. agency securities
|
|
2,552
|
|
|
—
|
|
|
(14
|
)
|
|
2,538
|
|
||||
Asset-backed securities
|
|
9,747
|
|
|
6
|
|
|
(14
|
)
|
|
9,739
|
|
||||
Municipal securities
|
|
4,452
|
|
|
1
|
|
|
(2
|
)
|
|
4,451
|
|
||||
Commercial paper
|
|
5,576
|
|
|
—
|
|
|
—
|
|
|
5,576
|
|
||||
Corporate bonds
|
|
50,041
|
|
|
29
|
|
|
(70
|
)
|
|
50,000
|
|
||||
Total short-term investments
|
|
74,293
|
|
|
36
|
|
|
(105
|
)
|
|
74,224
|
|
||||
Cash, cash equivalents and short-term investments
|
|
$
|
91,756
|
|
|
$
|
36
|
|
|
$
|
(105
|
)
|
|
$
|
91,687
|
|
Description
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Cash
|
|
$
|
17,316
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,316
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
|
444
|
|
|
—
|
|
|
—
|
|
|
444
|
|
||||
Commercial paper
|
|
2,997
|
|
|
—
|
|
|
—
|
|
|
2,997
|
|
||||
Total cash equivalents
|
|
3,441
|
|
|
—
|
|
|
—
|
|
|
3,441
|
|
||||
Total cash and cash equivalents
|
|
20,757
|
|
|
—
|
|
|
—
|
|
|
20,757
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities
|
|
1,476
|
|
|
—
|
|
|
(3
|
)
|
|
1,473
|
|
||||
U.S. agency securities
|
|
2,553
|
|
|
—
|
|
|
(16
|
)
|
|
2,537
|
|
||||
Asset-backed securities
|
|
9,707
|
|
|
8
|
|
|
(10
|
)
|
|
9,705
|
|
||||
Municipal securities
|
|
7,980
|
|
|
3
|
|
|
(1
|
)
|
|
7,982
|
|
||||
Commercial paper
|
|
4,240
|
|
|
—
|
|
|
(1
|
)
|
|
4,239
|
|
||||
Foreign government securities
|
|
750
|
|
|
—
|
|
|
—
|
|
|
750
|
|
||||
Corporate bonds
|
|
50,987
|
|
|
24
|
|
|
(99
|
)
|
|
50,912
|
|
||||
Total short-term investments
|
|
77,693
|
|
|
35
|
|
|
(130
|
)
|
|
77,598
|
|
||||
Cash, cash equivalents and short-term investments
|
|
$
|
98,450
|
|
|
$
|
35
|
|
|
$
|
(130
|
)
|
|
$
|
98,355
|
|
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
Due within one year
|
|
$
|
36,192
|
|
|
$
|
36,191
|
|
Due between one and two years
|
|
23,710
|
|
|
23,658
|
|
||
Due between two and three years
|
|
14,391
|
|
|
14,375
|
|
||
Total
|
|
$
|
74,293
|
|
|
$
|
74,224
|
|
4.
|
Fair value of financial instruments
|
|
|
Fair Value Measurements at September 30, 2017 Using
|
||||||||||||||
|
|
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
||||||||
Description
|
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
|
$
|
5,634
|
|
|
$
|
5,634
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
|
749
|
|
|
—
|
|
|
749
|
|
|
—
|
|
||||
Corporate bonds
|
|
800
|
|
|
—
|
|
|
800
|
|
|
—
|
|
||||
Total cash equivalents
|
|
7,183
|
|
|
5,634
|
|
|
1,549
|
|
|
—
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities
|
|
1,920
|
|
|
1,920
|
|
|
—
|
|
|
—
|
|
||||
U.S. agency securities
|
|
2,538
|
|
|
—
|
|
|
2,538
|
|
|
—
|
|
||||
Asset-backed securities
|
|
9,739
|
|
|
—
|
|
|
9,739
|
|
|
—
|
|
||||
Municipal securities
|
|
4,451
|
|
|
—
|
|
|
4,451
|
|
|
—
|
|
||||
Commercial paper
|
|
5,576
|
|
|
—
|
|
|
5,576
|
|
|
—
|
|
||||
Corporate bonds
|
|
50,000
|
|
|
—
|
|
|
50,000
|
|
|
—
|
|
||||
Total short-term investments
|
|
74,224
|
|
|
1,920
|
|
|
72,304
|
|
|
—
|
|
||||
Cash equivalents and short-term investments
|
|
$
|
81,407
|
|
|
$
|
7,554
|
|
|
$
|
73,853
|
|
|
$
|
—
|
|
|
|
Fair Value Measurements at June 30, 2017 Using
|
||||||||||||||
|
|
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
||||||||
Description
|
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
|
$
|
444
|
|
|
$
|
444
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
|
2,997
|
|
|
—
|
|
|
2,997
|
|
|
—
|
|
||||
Total cash equivalents
|
|
3,441
|
|
|
444
|
|
|
2,997
|
|
|
—
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities
|
|
1,473
|
|
|
1,473
|
|
|
—
|
|
|
—
|
|
||||
U.S. agency securities
|
|
2,537
|
|
|
—
|
|
|
2,537
|
|
|
—
|
|
||||
Asset-backed securities
|
|
9,705
|
|
|
—
|
|
|
9,705
|
|
|
—
|
|
||||
Municipal securities
|
|
7,982
|
|
|
—
|
|
|
7,982
|
|
|
—
|
|
||||
Commercial paper
|
|
4,239
|
|
|
—
|
|
|
4,239
|
|
|
—
|
|
||||
Foreign government securities
|
|
750
|
|
|
—
|
|
|
750
|
|
|
—
|
|
||||
Corporate bonds
|
|
50,912
|
|
|
—
|
|
|
50,912
|
|
|
—
|
|
||||
Total short-term investments
|
|
77,598
|
|
|
1,473
|
|
|
76,125
|
|
|
—
|
|
||||
Cash equivalents and short-term investments
|
|
$
|
81,039
|
|
|
$
|
1,917
|
|
|
$
|
79,122
|
|
|
$
|
—
|
|
5.
|
Balance sheet information
|
|
|
September 30,
2017 |
|
June 30,
2017 |
||||
Acquired developed technology
|
|
$
|
13,875
|
|
|
$
|
13,875
|
|
Less accumulated amortization
|
|
(10,642
|
)
|
|
(10,359
|
)
|
||
Intangible assets, net
|
|
$
|
3,233
|
|
|
$
|
3,516
|
|
|
|
September 30,
2017 |
|
June 30,
2017 |
||||
Accrued compensation and benefits
|
|
$
|
6,807
|
|
|
$
|
10,554
|
|
Accrued royalties
|
|
24,728
|
|
|
28,179
|
|
||
Customer overpayments and related reserves
|
|
6,956
|
|
|
5,940
|
|
||
Other accrued expenses
|
|
6,778
|
|
|
6,855
|
|
||
Total accrued expenses
|
|
$
|
45,269
|
|
|
$
|
51,528
|
|
6.
|
Commitments and contingencies
|
|
|
Payments Due by Period
|
||||||||||||||||||||||||||
|
|
Total
|
|
Fiscal 2018
|
|
Fiscal 2019
|
|
Fiscal 2020
|
|
Fiscal 2021
|
|
Fiscal 2022
|
|
Thereafter
|
||||||||||||||
Operating lease obligations
|
|
$
|
18,740
|
|
|
$
|
2,520
|
|
|
$
|
4,070
|
|
|
$
|
3,918
|
|
|
$
|
2,849
|
|
|
$
|
2,650
|
|
|
$
|
2,733
|
|
Purchase obligations
|
|
6,561
|
|
|
2,372
|
|
|
1,315
|
|
|
798
|
|
|
415
|
|
|
415
|
|
|
1,246
|
|
|||||||
Total contractual obligations
|
|
$
|
25,301
|
|
|
$
|
4,892
|
|
|
$
|
5,385
|
|
|
$
|
4,716
|
|
|
$
|
3,264
|
|
|
$
|
3,065
|
|
|
$
|
3,979
|
|
7.
|
Guarantees and indemnifications
|
8.
|
Stock-based compensation
|
|
|
Number of
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Life
(years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Options outstanding as of June 30, 2017
|
|
5,708
|
|
|
$
|
6.47
|
|
|
|
|
|
||
Granted
(1)
|
|
—
|
|
|
$
|
6.35
|
|
|
|
|
|
||
Exercised
|
|
(37
|
)
|
|
$
|
5.32
|
|
|
|
|
|
||
Canceled or expired
|
|
(72
|
)
|
|
$
|
6.93
|
|
|
|
|
|
||
Options outstanding as of September 30, 2017
|
|
5,599
|
|
|
$
|
6.48
|
|
|
6.39
|
|
$
|
2,323
|
|
As of September 30, 2017:
|
|
|
|
|
|
|
|
|
|||||
Options vested and expected to vest
|
|
5,307
|
|
|
$
|
6.51
|
|
|
6.27
|
|
$
|
2,135
|
|
Options exercisable
|
|
3,477
|
|
|
$
|
6.76
|
|
|
5.09
|
|
$
|
1,077
|
|
|
|
Number of
Shares
|
|
Weighted
Average
Remaining
Contractual
Life
(years)
|
|
Aggregate
Intrinsic
Value
|
|||
RSUs outstanding as of June 30, 2017
|
|
3,005
|
|
|
|
|
|
||
Granted
|
|
715
|
|
|
|
|
|
||
Vested
|
|
(502
|
)
|
|
|
|
|
||
Canceled
|
|
(183
|
)
|
|
|
|
|
||
RSUs outstanding as of September 30, 2017
|
|
3,035
|
|
|
1.60
|
|
$
|
19,270
|
|
As of September 30, 2017:
|
|
|
|
|
|
|
|||
RSUs expected to vest
|
|
2,498
|
|
|
1.45
|
|
$
|
15,860
|
|
|
|
Number of
Shares
|
|
Shares available for grant as of June 30, 2017
|
|
1,899
|
|
Additional shares authorized
|
|
1,667
|
|
Granted
|
|
(715
|
)
|
RSUs withheld for taxes in net share settlements
|
|
172
|
|
Canceled
|
|
255
|
|
Shares available for grant as of September 30, 2017
|
|
3,278
|
|
|
|
Three Months Ended
|
||||||
|
|
September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Stock option awards
|
|
$
|
596
|
|
|
$
|
474
|
|
RSU awards
|
|
1,884
|
|
|
2,067
|
|
||
Total stock-based compensation expense
|
|
$
|
2,480
|
|
|
$
|
2,541
|
|
|
|
Three Months Ended
|
||||||
|
|
September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Expected volatility
|
|
49
|
%
|
|
39
|
%
|
||
Expected term (in years)
|
|
6.22
|
|
|
4.15
|
|
||
Risk-free interest rate
|
|
1.64
|
%
|
|
1.14
|
%
|
||
Dividend yield
|
|
—
|
%
|
|
—
|
%
|
||
Weighted average grant date fair value per share
|
|
$
|
3.07
|
|
|
$
|
1.65
|
|
9.
|
Income taxes
|
10.
|
Segments
|
|
|
Three Months Ended
September 30, |
||||||
|
|
2017
|
|
2016
|
||||
Automotive
|
|
|
|
|
||||
Revenue
|
|
$
|
25,304
|
|
|
$
|
30,267
|
|
Cost of revenue
|
|
15,885
|
|
|
18,545
|
|
||
Gross profit
|
|
$
|
9,419
|
|
|
$
|
11,722
|
|
Gross margin
|
|
37
|
%
|
|
39
|
%
|
||
Advertising
|
|
|
|
|
||||
Revenue
|
|
$
|
7,615
|
|
|
$
|
6,545
|
|
Cost of revenue
|
|
3,412
|
|
|
3,526
|
|
||
Gross profit
|
|
$
|
4,203
|
|
|
$
|
3,019
|
|
Gross margin
|
|
55
|
%
|
|
46
|
%
|
||
Mobile Navigation
|
|
|
|
|
||||
Revenue
|
|
$
|
3,739
|
|
|
$
|
5,415
|
|
Cost of revenue
|
|
1,550
|
|
|
1,405
|
|
||
Gross profit
|
|
$
|
2,189
|
|
|
$
|
4,010
|
|
Gross margin
|
|
59
|
%
|
|
74
|
%
|
||
Total
|
|
|
|
|
||||
Revenue
|
|
$
|
36,658
|
|
|
$
|
42,227
|
|
Cost of revenue
|
|
20,847
|
|
|
23,476
|
|
||
Gross profit
|
|
$
|
15,811
|
|
|
$
|
18,751
|
|
Gross margin
|
|
43
|
%
|
|
44
|
%
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
|
Three Months Ended
September 30, |
||||||
|
|
2017
|
|
2016
|
||||
Revenue
|
|
$
|
36,658
|
|
|
$
|
42,227
|
|
Revenue from Ford as a percentage of total revenue
|
|
65
|
%
|
|
68
|
%
|
||
Billings (Non-GAAP)
|
|
$
|
65,789
|
|
|
$
|
47,269
|
|
Billings to Ford as a percentage of total billings (Non-GAAP)
|
|
68
|
%
|
|
64
|
%
|
||
Increase in deferred revenue
|
|
$
|
29,131
|
|
|
$
|
5,042
|
|
Increase in deferred costs
|
|
$
|
20,048
|
|
|
$
|
2,857
|
|
Gross profit
|
|
$
|
15,811
|
|
|
$
|
18,751
|
|
Gross margin
|
|
43
|
%
|
|
44
|
%
|
||
Direct contribution (Non-GAAP)
|
|
$
|
24,894
|
|
|
$
|
20,936
|
|
Direct contribution margin (Non-GAAP)
|
|
38
|
%
|
|
44
|
%
|
||
Net loss
|
|
$
|
(16,098
|
)
|
|
$
|
(9,335
|
)
|
Diluted net loss per share
|
|
$
|
(0.37
|
)
|
|
$
|
(0.22
|
)
|
Adjusted EBITDA (Non-GAAP)
|
|
$
|
(13,470
|
)
|
|
$
|
(6,848
|
)
|
Free cash flow (Non-GAAP)
|
|
$
|
(6,074
|
)
|
|
$
|
(6,083
|
)
|
•
|
We expect to incur additional costs in the future due to requirements to provide ongoing provisioning of services such as hosting, monitoring and customer support; accordingly, direct contribution from billings and direct contribution margin from billings do not reflect all costs associated with billings;
|
•
|
assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditures;
|
•
|
adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation;
|
•
|
adjusted EBITDA does not reflect the use of cash for net share settlements of RSUs;
|
•
|
adjusted EBITDA does not reflect tax payments that historically have represented a reduction in cash available to us or tax benefits that may arise as a result of generating net losses; and
|
•
|
adjusted EBITDA, free cash flow or similarly titled measures may be calculated by other companies differently, which reduces their usefulness as comparative measures.
|
Reconciliation of Deferred Revenue to Increase (Decrease) in Deferred Revenue
|
||||||||||||||||
Reconciliation of Deferred Costs to Increase (Decrease) in Deferred Costs
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended September 30, 2017
|
||||||||||||||
|
|
Automotive
|
|
Advertising
|
|
Mobile Navigation
|
|
Total
|
||||||||
Deferred revenue, September 30
|
|
$
|
115,705
|
|
|
$
|
—
|
|
|
$
|
827
|
|
|
$
|
116,532
|
|
Deferred revenue, June 30
|
|
86,517
|
|
|
—
|
|
|
884
|
|
|
87,401
|
|
||||
Change in deferred revenue
|
|
$
|
29,188
|
|
|
$
|
—
|
|
|
$
|
(57
|
)
|
|
$
|
29,131
|
|
|
|
|
|
|
|
|
|
|
||||||||
Deferred costs, September 30
|
|
$
|
74,140
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
74,140
|
|
Deferred costs, June 30
|
|
54,092
|
|
|
—
|
|
|
—
|
|
|
54,092
|
|
||||
Change in deferred costs
|
|
$
|
20,048
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,048
|
|
|
|
Three Months Ended September 30, 2016
|
||||||||||||||
|
|
Automotive
|
|
Advertising
|
|
Mobile Navigation
|
|
Total
|
||||||||
Deferred revenue, September 30
|
|
$
|
27,266
|
|
|
$
|
—
|
|
|
$
|
1,145
|
|
|
$
|
28,411
|
|
Deferred revenue, June 30
|
|
22,153
|
|
|
—
|
|
|
1,216
|
|
|
23,369
|
|
||||
Change in deferred revenue
|
|
$
|
5,113
|
|
|
$
|
—
|
|
|
$
|
(71
|
)
|
|
$
|
5,042
|
|
|
|
|
|
|
|
|
|
|
||||||||
Deferred costs, September 30
|
|
$
|
14,933
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,933
|
|
Deferred costs, June 30
|
|
12,076
|
|
|
—
|
|
|
—
|
|
|
12,076
|
|
||||
Change in deferred costs
|
|
$
|
2,857
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Revenue to Billings - Ford
|
||||||||
|
|
|
|
|
||||
|
|
Three Months Ended
September 30, |
||||||
|
|
2017
|
|
2016
|
||||
Revenue from Ford
|
|
$
|
23,963
|
|
|
$
|
28,758
|
|
Adjustments:
|
|
|
|
|
||||
Change in deferred revenue attributed to Ford
|
|
21,031
|
|
|
1,381
|
|
||
Billings to Ford
|
|
$
|
44,994
|
|
|
$
|
30,139
|
|
Billings to Ford as a percentage of total billings
|
|
68
|
%
|
|
64
|
%
|
Reconciliation of Net Loss to Adjusted EBITDA
|
||||||||
|
|
|
|
|
||||
|
|
Three Months Ended
September 30, |
||||||
|
|
2017
|
|
2016
|
||||
Net loss
|
|
$
|
(16,098
|
)
|
|
$
|
(9,335
|
)
|
Adjustments:
|
|
|
|
|
||||
Legal settlement and contingencies
|
|
250
|
|
|
—
|
|
||
Deferred rent reversal due to lease termination
|
|
(538
|
)
|
|
—
|
|
||
Tenant improvement allowance recognition due to lease termination
|
|
(582
|
)
|
|
—
|
|
||
Stock-based compensation expense
|
|
2,480
|
|
|
2,541
|
|
||
Depreciation and amortization
|
|
716
|
|
|
637
|
|
||
Other income (expense), net
|
|
47
|
|
|
(296
|
)
|
||
Provision (benefit) for income taxes
|
|
255
|
|
|
(395
|
)
|
||
Adjusted EBITDA
|
|
$
|
(13,470
|
)
|
|
$
|
(6,848
|
)
|
|
|
Three Months Ended
September 30, |
||||||
Consolidated Statements of Operations Data
|
|
2017
|
|
2016
|
||||
|
|
(in thousands)
|
||||||
Revenue:
|
|
|
|
|
||||
Product
|
|
$
|
23,964
|
|
|
$
|
29,423
|
|
Services
|
|
12,694
|
|
|
12,804
|
|
||
Total revenue
|
|
36,658
|
|
|
42,227
|
|
||
Cost of revenue:
|
|
|
|
|
||||
Product
|
|
14,674
|
|
|
17,761
|
|
||
Services
|
|
6,173
|
|
|
5,715
|
|
||
Total cost of revenue
|
|
20,847
|
|
|
23,476
|
|
||
Gross profit
|
|
15,811
|
|
|
18,751
|
|
||
Operating expenses:
|
|
|
|
|
||||
Research and development
|
|
21,082
|
|
|
18,018
|
|
||
Sales and marketing
|
|
5,064
|
|
|
5,268
|
|
||
General and administrative
|
|
5,211
|
|
|
5,491
|
|
||
Legal settlement and contingencies
|
|
250
|
|
|
—
|
|
||
Total operating expenses
|
|
31,607
|
|
|
28,777
|
|
||
Loss from operations
|
|
(15,796
|
)
|
|
(10,026
|
)
|
||
Other income (expense), net
|
|
(47
|
)
|
|
296
|
|
||
Loss before provision (benefit) for income taxes
|
|
(15,843
|
)
|
|
(9,730
|
)
|
||
Provision (benefit) for income taxes
|
|
255
|
|
|
(395
|
)
|
||
Net loss
|
|
$
|
(16,098
|
)
|
|
$
|
(9,335
|
)
|
|
|
(as a percentage of revenue)
|
||||
Revenue:
|
|
|
|
|
||
Product
|
|
65
|
%
|
|
70
|
%
|
Services
|
|
35
|
%
|
|
30
|
%
|
Total revenue
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue:
|
|
|
|
|
||
Product
|
|
40
|
%
|
|
42
|
%
|
Services
|
|
17
|
%
|
|
14
|
%
|
Total cost of revenue
|
|
57
|
%
|
|
56
|
%
|
Gross profit
|
|
43
|
%
|
|
44
|
%
|
Operating expenses:
|
|
|
|
|
||
Research and development
|
|
57
|
%
|
|
43
|
%
|
Sales and marketing
|
|
14
|
%
|
|
12
|
%
|
General and administrative
|
|
14
|
%
|
|
13
|
%
|
Legal settlement and contingencies
|
|
1
|
%
|
|
—
|
%
|
Total operating expenses
|
|
86
|
%
|
|
68
|
%
|
Loss from operations
|
|
(43
|
)%
|
|
(24
|
)%
|
Other income (expense), net
|
|
—
|
%
|
|
1
|
%
|
Loss before provision (benefit) for income taxes
|
|
(43
|
)%
|
|
(23
|
)%
|
Provision (benefit) for income taxes
|
|
1
|
%
|
|
(1
|
)%
|
Net loss
|
|
(44
|
)%
|
|
(22
|
)%
|
|
|
|||||||
|
|
2017
|
|
2016
|
||||
Automotive
|
|
|
|
|
||||
Revenue
|
|
$
|
25,304
|
|
|
$
|
30,267
|
|
Cost of revenue
|
|
15,885
|
|
|
18,545
|
|
||
Gross profit
|
|
$
|
9,419
|
|
|
$
|
11,722
|
|
Gross margin
|
|
37
|
%
|
|
39
|
%
|
||
Advertising
|
|
|
|
|
||||
Revenue
|
|
$
|
7,615
|
|
|
$
|
6,545
|
|
Cost of revenue
|
|
3,412
|
|
|
3,526
|
|
||
Gross profit
|
|
$
|
4,203
|
|
|
$
|
3,019
|
|
Gross margin
|
|
55
|
%
|
|
46
|
%
|
||
Mobile Navigation
|
|
|
|
|
||||
Revenue
|
|
$
|
3,739
|
|
|
$
|
5,415
|
|
Cost of revenue
|
|
1,550
|
|
|
1,405
|
|
||
Gross profit
|
|
$
|
2,189
|
|
|
$
|
4,010
|
|
Gross margin
|
|
59
|
%
|
|
74
|
%
|
||
Total
|
|
|
|
|
||||
Revenue
|
|
$
|
36,658
|
|
|
$
|
42,227
|
|
Cost of revenue
|
|
20,847
|
|
|
23,476
|
|
||
Gross profit
|
|
$
|
15,811
|
|
|
$
|
18,751
|
|
Gross margin
|
|
43
|
%
|
|
44
|
%
|
|
|
Three Months Ended
September 30, |
||||||
|
|
2017
|
|
2016
|
||||
Net cash used in operating activities
|
|
$
|
(3,788
|
)
|
|
$
|
(5,689
|
)
|
Net cash provided by investing activities
|
|
1,056
|
|
|
2,043
|
|
||
Net cash used in financing activities
|
|
(905
|
)
|
|
(1,233
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
343
|
|
|
65
|
|
||
Net decrease in cash and cash equivalents
|
|
$
|
(3,294
|
)
|
|
$
|
(4,814
|
)
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
•
|
the ability of automobile manufacturers to sell automobiles equipped with our products;
|
•
|
the introduction of competitive in-car platforms and products, such as Apple's CarPlay and Google's auto initiatives;
|
•
|
competitive pressures on automotive navigation pricing from low cost suppliers and for vehicles where consumers are extremely price sensitive;
|
•
|
the recent demonstration by Google of in-car integration of Android Auto with Google Maps which did not require a mobile handset;
|
•
|
investments made by HERE and TomTom in high definition maps that may be leveraged to displace our products and services in new vehicle models;
|
•
|
changes made to existing contractual obligations with a customer that may affect the nature and timing of revenue recognition, such as the transition by Ford to its SYNC 3 platform, for which we have different revenue recognition criteria, or the adoption of our map update solution for Ford's European customers and its impact on the timing of our revenue recognition;
|
•
|
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 United States;
|
•
|
the seasonality of new vehicle production, including tooling and assembly changes and plant shutdowns;
|
•
|
the effectiveness of our entry into new business areas, such as advertising;
|
•
|
the loss of our relationship, a change in our revenue model, or a change in pricing with any particular customer;
|
•
|
poor reviews of automotive service offerings into which our navigation solutions are integrated resulting in limited uptake of navigation options by car buyers;
|
•
|
warranty claims based on the performance of our products and the potential impact on our reputation with navigation users and automotive OEMs;
|
•
|
the sale of vehicle brands by automotive OEMs, such as the sale of Opel and Vauxhall by GM in August 2017 to an automotive OEM with which we do not have an existing relationship;
|
•
|
the timing and quality of information we receive from our customers and the impact of customer audits of their reporting to us;
|
•
|
the inability of our automobile manufacturer customers to attract new vehicle buyers and new subscribers for connected 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;
|
•
|
the cost and potential outcomes of existing and future litigation;
|
•
|
the timing and success of new product or service introductions by us or our competitors;
|
•
|
the timing and success of marketing expenditures for our products and services;
|
•
|
the extent of any interruption in our services;
|
•
|
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 such as ASC 606, Revenue from Contracts with Customers.
|
•
|
significantly greater revenue and financial resources;
|
•
|
ownership of mapping and other content allowing them to offer a more vertically integrated solution;
|
•
|
stronger brand and consumer recognition in a particular market segment, geographic region or worldwide;
|
•
|
the capacity to leverage their marketing expenditures across a broader portfolio of products;
|
•
|
access to core technology and intellectual property, including more extensive patent portfolios;
|
•
|
access to custom or proprietary content;
|
•
|
quicker pace of innovation;
|
•
|
stronger automobile manufacturer, OEM, advertising agency and advertiser relationships;
|
•
|
more financial flexibility and experience to make acquisitions;
|
•
|
ability or demonstrated ability to partner with others to create stronger or new competitors;
|
•
|
stronger international presence, which could make our larger competitors more attractive partners to automobile manufacturers and OEMs;
|
•
|
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, that are 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;
|
•
|
our inability to retain key personnel of the companies we acquire;
|
•
|
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.
|
•
|
impact from our inability to benefit from the carryback of net losses expected in the current fiscal year and thereafter due to the limitations of the two year loss carryback for federal tax purposes;
|
•
|
changes in forecasted annual operating income or loss by jurisdiction and forecasted withholding taxes;
|
•
|
changes in relative proportions of revenue and income or loss before taxes in the various jurisdictions in which we operate;
|
•
|
changes to the valuation allowance on net deferred tax assets;
|
•
|
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;
|
•
|
impact from any future tax settlements with state, federal or foreign tax authorities;
|
•
|
impact from increases or decreases in tax reserves due to new assessments of risk, the expiration of the statute of limitations or the completion of government audits;
|
•
|
impact from changes in tax laws, regulations and interpretations in the jurisdictions in which we operate, as well as the expiration and retroactive reinstatement of tax holidays;
|
•
|
impact from withholding tax 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;
|
•
|
changes in customer arrangements where the customer's domicile may impose withholding tax on our revenue that we previously were not subject to;
|
•
|
impact from acquisitions and related integration activities; or
|
•
|
impact from new FASB requirements.
|
•
|
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;
|
•
|
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;
|
•
|
difficulties in collecting accounts receivable balances in a timely manner;
|
•
|
dependence on foreign wireless carriers with different pricing models;
|
•
|
roaming charges to end users;
|
•
|
availability of reliable mobile networks in those countries;
|
•
|
requirements that we comply with local telecommunication regulations and automobile hands free laws in those countries;
|
•
|
requirements that we comply with local privacy regulations;
|
•
|
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.
|
•
|
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.
|
Item 6.
|
Exhibits.
|
|
|
|
TELENAV, INC.
|
||
|
|
|
|
|
|
Dated:
|
November 8, 2017
|
|
By:
|
|
/s/ Dr. HP J
IN
|
|
|
|
|
|
Dr. HP Jin
|
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
Dated:
|
November 8, 2017
|
|
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
|
|
Territory License No. 12, dated June 30, 2017, by and among HERE North America, LLC, HERE Europe B.V. and Telenav, Inc.
|
|
Filed herewith
|
|
|
|
|
|
|
Third Amendment dated August 7, 2017 to Territory License No. 11, dated April 3, 2015 to the Data License Agreement, dated as of December 1, 2002, by and between Telenav, Inc., NAVTEQ North America, LLC and NAVTEQ Europe B.V.
|
|
Filed herewith
|
|
|
|
|
|
|
Access Agreement dated August 7, 2017 by and between Telenav, Inc., HERE North America LLC
|
|
Filed herewith
|
|
|
|
|
|
|
First Amendment dated October 2, 2017 to Territory License No. 10, dated March 15, 2016, by and between HERE North America, LLC, HERE Europe B.V., HERE Solutions Korea Co. Ltd, and Telenav, Inc.
|
|
Filed herewith
|
|
|
|
|
|
|
Amendment No. 21, effective October 1, 2017, to the SYNC Generation 2 on-Board Navigation Agreement dated October 12, 2009, by and between Telenav, Inc. and Ford Motor Company]
|
|
Filed herewith
|
|
|
|
|
|
|
Sublease Termination Agreement, dated as of August 10, 2017, among Avaya, Inc. and Telenav, Inc.
|
|
Filed herewith
|
|
|
|
|
|
|
Lease, dated as of August 9, 2017, among PR II Towers at Great America Owner LLC and Telenav, Inc.
|
|
Filed herewith
|
|
|
|
|
|
|
Letter Agreement, dated as of August 24, 2017, among Telenav, Inc., Nokomis Capital, L.L.C. and certain other parties.
|
|
8-K
|
|
10.41
|
|
8/24/2017
|
|
|
Consulting Agreement, dated as of August 31, 2017, by and between Telenav, Inc. and Joseph M. Zaelit
|
|
8-K
|
|
10.42
|
|
9/5/2017
|
|
|
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
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
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
|
|
Filed herewith
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
Filed herewith
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document
|
|
Filed herewith
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
Filed herewith
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document
|
|
Filed herewith
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith
|
|
|
|
|
+
|
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
|
HERE NORTH AMERICA, LLC
|
TELENAV, INC.
|
By: /s/ Simon B. Anolick
|
By: /s/ Michael Strambi
|
Name: Simon B. Anolick
|
Name: Michael Strambi
|
Title: HERE Legal
|
Title: Chief Financial Officer, Telenav, Inc.
|
Date: 29 June 2017
|
Date: 6/22/17
|
HERE NORTH AMERICA, LLC
|
HERE EUROPE B.V.
|
By: /s/ Neil McTeigue
|
By: /s/ F.M. van Haaren
|
Name: Neil McTeigue
|
Name: F.M. van Haaren
|
Title: Senior Legal Counsel
|
Title: Managing Director
|
Date: June 29, 2017
|
Date: 30 Jun 2017
|
|
HERE EUROPE B.V.
|
|
By: /s/ T. Gaastra
|
|
Name: T. Gaastra
|
|
Title: Director
|
|
Date: 30 Jun 2017
|
TERMS AND CONDITIONS
|
I.
|
Territories
.
|
II.
|
Data
|
A.
|
Base Map Data
. “
Base Map Data
” means, as it relates to any particular country, the standard geographic map data (i.e., not including Additional Content) as and when generally released for commercial use by HERE for such country or portion thereof and which is referred to (and further described) in the applicable standard product documentation provided by HERE as the “Base Map” for that country or portion thereof. For purposes of determining which features and attributes are deemed to be “Base Map Data” and covered by the per Copy License Fees in
Exhibit C
,
a description of such features and attributes is set forth in the then-current Attribute Overview and Usage Guide (or equivalent document) made available to Client as part of the Customer Technical Reference Guide. HERE may update the list of features and attributes included in “Base Map Data” but shall not reclassify any “Base” attributes as “Premium”. In the event that HERE violates the foregoing, Client shall have the right to continue using such attribute as part of the “Base Map Data” licensed hereunder and shall not be obligated to pay any incremental amount associated with such use for the duration of the TL Term.
|
B.
|
Additional Content
. “
Additional Content
” means Data licensed under this TL in addition to Base Map Data (as defined above) as such Data is further described at the URL
http://corporate.navteq.com/additional_content_descriptions.html
. Additional Content shall be subject to the terms and conditions in such URL and the applicable fees described in Section V(A) below. HERE reserves the right to discontinue Additional Content upon reasonable notice to Client and [******];
provided, however
, subject to HERE’s rights under its supplier agreements, that the last releases provided by HERE to Client of any discontinued Additional Content may be included in any Copies distributed thereafter. For sake of clarity, Client may continue to include discontinued Additional Content in Copies previously distributed prior to receipt of notice from HERE of such discontinuation. Additional Content is not available on a standalone basis and may be licensed and used in conjunction with Data only.
|
C.
|
Add-Ons
. “
Add-Ons
” means additional content generally released by HERE from time to time for which HERE does not charge, in its sole discretion, additional license fees.
HERE shall be under no obligation to release such Additional Content.
|
III.
|
Application
.
|
A.
|
A [******]
Application
” means a [******] that uses Data solely to provide information solely in connection with one or more of the functions of [******]. For sake of clarity, [******] may not be capable of [******].
|
A.
|
Compiling any portion of the Data (“Compiled Data”) into Client’s own proprietary data format (which shall not include third party or public domain formats, unless otherwise mutually agreed upon between the parties) and, using the most current version of Data delivered by HERE to Client (except as otherwise required by [******] and Client’s development schedule), making initial copies of the Compiled Data (“Initial Copies”) for any portion of a single Territory either stored on physical storage media or in the form of electronic files suitable for transmission to an End-User for storage on physical storage media possessed by the End-User (collectively, “Copies”); and
|
B.
|
Distributing such Copies of Compiled Data to [******] for further distribution to End-Users (in the case of electronic files by transmitting and storing the same directly onto the physical storage media possessed by the End-User), solely for the End-Users’ own personal use with the Application. Client shall use commercially reasonable efforts to enforce the terms and conditions of its [******] agreement with [******], which shall include the obligation for [******] to comply with the applicable terms and conditions set forth herein as well as terms providing that HERE shall be a third party beneficiary to such agreement with the right to audit such third parties in a manner consistent with the provisions of the Agreement. Client shall be fully responsible for compliance by such third parties with [******] agreements.
|
C.
|
For sake of clarity, notwithstanding anything to the contrary under this TL, Client’s rights herein are limited solely to production and distribution of Compiled Data for Initial Copies to [******] for the [******] Application. Client shall not, and shall not permit any third party to, distribute, provide or otherwise make available any physical [******]
to [******] and/or any End-User under this TL.
|
A.
|
License Fees
. License fees hereunder consist of the per Copy fees applicable to use of the Data for the applicable Territory for each Application specified herein (“License Fees”), combined with the amounts due for any Additional Content that is made accessible for use in such Application (“Additional Content Fees”). For the avoidance of doubt, the pricing for each Territory in the tables in
Exhibit C
reflects the total amount due to HERE for each Copy, after combining the License Fees and the applicable Additional Content Fees (collectively, the “License Fees”).
|
B.
|
License Fee Reports & Due Dates
. Due to the supplier positions of Client as [******] and HERE as map supplier and solely for License Fee reporting purposes under this TL, and notwithstanding anything to the contrary under Section 5.8 of the Agreement, preliminary License Fee reports from Client specifying (i) the estimated number of Copies distributed during the calendar month reporting period; and (ii) ; a non-binding forecast of Copies to be distributed during the six (6) months following such reporting period, are due by the [******] day after [******] for which the report is provided (e.g., for Copies distributed in January 2017, the preliminary License Fee report is due by [******] ). Client shall provide a final License Fee report specifying the actual number of Copies distributed within [******] from the [******] for which the report is provided (e.g. for Copies distributed in January 2017, the final License Fee report is due by [******]). Following receipt of such a final License Fee report, HERE shall invoice Client for the amounts due.
Client shall pay the License Fees as specified under
Exhibit C
by the [******] for which the License Fee report is provided (e.g., for Copies distributed in January 2017, payment is due by [******]). In the event that the [******] notifies Client that the number of Copies reported during a prior reporting period to Client and to HERE were incorrect, Client shall include, with Client’s subsequent final License Fee report following such notification, a proper adjustment to the number of Copies reported for such prior period, which shall be incorporated as a debit or credit, as appropriate, to the then-current period’s License Fee report.
|
C.
|
Currency
. License Fees hereunder shall be paid in U.S. Dollars.
|
A.
|
In all instances where the Application uses, accesses, reflects or relies upon any portion of the Data to deliver information to End-Users, Client shall comply with the requirements for End User Terms as specified in Exhibit B.
|
B.
|
Client shall comply with the third party supplier requirements and restrictions with respect to use of the Data as made available through the HERE B2B Download Center or at the URL at https://legal.here.com/en-gb/terms/general-content-supplier-terms-and-notices.
|
C.
|
Notwithstanding any termination or expiration of the Agreement or this TL, an End-User’s right to use the last version of the Copy of the Compiled Data received by the End-User in connection with the Application under the Agreement and this TL shall continue so long as such End-User’s use of the Application is in compliance with all terms and conditions of Client’s then current end user license agreement for the Application.
|
A.
|
Audit
. During the TL Term, HERE has the right to audit Client’s records regarding (i) its use of the Data; and (ii) the number of Copies distributed for the calculation of license fees in accordance with Section 5.9 of the Agreement. With respect to any License Fees reported by Client [******], Client shall use commercially best efforts to require [******].
|
B.
|
HERE Marks and Legends
. Client shall include HERE Marks and the applicable HERE copyright notice (as specified in the HERE branding guidance as provided by HERE to Client) and third party copyright and similar notices and legends as specified in the Agreement, the HERE branding guidance and/or otherwise provided by HERE in the Application and/or owner’s manual, or such other placement of the HERE Marks & Legends as may be mutually agreed by the parties.
|
EXHIBIT A
DEFINITIONS
|
EXHIBIT B
END-USER TERMS
|
i.
|
restrict use of the Data to the End-User's own use for use with the Application;
|
ii.
|
prohibit use of the Data with geographic data from competitors of HERE (unless otherwise expressly permitted in writing by HERE);
|
iii.
|
prohibit reverse-engineering and archiving of the Data;
|
iv.
|
prohibit any export of the Data (or derivative thereof) except in compliance with applicable export laws, rules and regulations;
|
v.
|
require the End-User to cease using the Data if End-User fails to comply with the terms and conditions of the End-User terms;
|
vi.
|
provide notice to the End-User of the applicable regulatory and third-party supplier restrictions and obligations (including copyright notices), which may be satisfied by including a link to a URL to be hosted by HERE, which is currently contained at https://legal.here.com/terms/general-content-supplier/terms-and-notices/ (or as notified to Customer by HERE);
|
vii.
|
provide notice to United States Government End-Users that the Data is a "commercial item", as that term is defined at 48 C.F.R. ("FAR") 2.101, and is licensed in accordance with the End-User terms under which the Data is provided;
|
viii.
|
affirmatively disclaim any warranties, express or implied of quality, performance, merchantability, fitness for a particular purpose and non-infringement;
|
ix.
|
affirmatively disclaim liability for any claim, demand or action, irrespective of the nature of the cause of the claim, demand or action arising out of the use or possession of the Data; or for any loss of profit, revenue, contracts or savings, or any other direct, indirect, incidental, special or consequential damages arising out of the use of, or inability to use the Data, any defect or inaccuracy in the Data, or the breach of these terms or conditions, whether in an action in contract or tort or based on a warranty, even if Client, HERE or their suppliers have been advised of the possibility of such damages; and
|
x.
|
do not make or imply any warranties on behalf of HERE or its data suppliers or provide any right of liability or indemnity against HERE or its data suppliers.
|
EXHIBIT C
PRICING
|
1.
|
License Fees Per Copy for
[******]
Applications
. Client shall pay HERE the License Fee per initial Copy as set forth in the table below distributed to an End-User with an Application (“Initial Copy”) containing all or any portion of the Data identified in Section 2 below based on (i) the Territory; and (ii) period during which the Application is distributed.
|
License Fees per Initial Copy
|
||||||
Territory
|
Distribution Period:
[******]
|
Distribution Period:
[******]
|
Distribution Period:
[******]
|
Distribution Period:
[******]
|
Distribution Period:
[******]
|
Distribution Period:
[******]
|
[******]*
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
2.
|
Data.
The Data included in the Copy for each Territory, where made available by HERE, is specified in the table below, subject to terms and conditions set forth herein and the Agreement. For sake of clarity, other than Base Map Data and Add-ons, each of the following attributes licensed hereunder shall be considered Additional Content subject to the provisions of Section II.B of this TL.
|
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
|
•
|
[******]
|
A.
|
The License Fee Per Copy for Content Bundle B in Section I(4)
License Fees for [******] Territory
of Exhibit A to TL 11 shall be $[******] for Copies distributed from April 1
st
, 2017 to December 31
st
2017 in connection with vehicles that are enabled to accept Multi-Year Annual Copy Subscriptions (“MapCare”). For clarity, this Third Amendment does not change any of the License Fees for vehicles that are not MapCare enabled.
|
B.
|
Exhibit A, Section IV Multi-Year Annual Copy Subscriptions for [******] Route Guidance Applications
|
Pricing until end 2017
|
License Fee
|
[******]
|
MapCare Fee
|
Total
|
Pricing for 4/1/2017 to 12/31/2017 ([******])
|
$[******]
|
[******]
|
$[******]
|
$[******]
|
Pricing for 4/1/2017 to 12/31/2017 ([******])
|
$[******]
|
[******]
|
$[******]
|
$[******]
|
C.
|
Retrofit.
Exhibit A, Section IV Multi-Year Annual Copy Subscriptions for [******] Route Guidance Applications
Table 1 of TL 11 shall be followed by Sections 1 and 2 below:
|
1.
|
For vehicles produced from April 1
st
2016 to December 31
st
, 2016, the License Fees for Multi-Year Annual Copy Subscriptions (“Lump Sum MapCare Fee”) shall be calculated as follows for the [******] Territory and [******] Territory:
|
Territory
|
MapCare Fee
|
Lump Sum MapCare Fee
|
|
[******]
|
$[******]
|
[******]
|
|
[******]
|
$[******]
|
[******]
|
|
2.
|
For vehicles produced from January 1
st
2017 to April 1
st
, 2017 (Q1 2017), the License Fees for Multi-Year Annual Copy Subscriptions (“Lump Sum MapCare Fee”) shall be calculated as follows for the [******] Territory and [******] Territory:
|
Territory
|
MapCare Fee
|
Lump Sum MapCare Fee
|
|
[******]
|
$[******]
|
[******]
|
|
[******]
|
$[******]
|
[******]
|
|
D.
|
For the first additional year of subscriptions beyond the Standard MapCare entitlement, Map Update Product only license fees of $[******] per year for [******], and $[******] per year for [******] shall [******] provided that [******]. Any extension beyond the Standard MapCare Program shall be mutually agreed by the parties. These statements do not constitute any agreement between HERE and Telenav regarding an extension of the Map Update program and only represent a fair value statement used by HERE internally for revenue recognition purposes. The purpose of this section is to allow HERE’s accounting department to recognize annual revenue from MapCare.
|
HERE NORTH AMERICA, LLC
|
TELENAV, INC.
|
By:
/s/ Jeannie Lee Newman
|
By:
/s/ Michael Strambi
|
Name:
Jeannie Lee Newman
|
Name:
Michael Strambi
|
Title:
Senior Legal Counsel
|
Title:
Chief Financial Officer
|
Date:
August 7, 2017
|
Date:
July 25, 2017
|
|
|
HERE NORTH AMERICA, LLC
|
|
By:
/s/ Neil McTeigue
|
|
Name:
Neil McTeigue
|
|
Title:
Senior Legal Counsel
|
|
Date:
August 7, 2017
|
|
1.
|
Term
. This [******] Access Agreement is effective as of the date of last signature below and shall continue until April 1, 2019.
|
2.
|
License Grant and Permitted Use
. Subject to Telenav’s compliance with the terms and conditions herein and the applicable terms and conditions of the Agreement and TL11, during the term of this [******] Access Agreement, HERE hereby grants to Telenav the limited, restricted, non-exclusive, non-transferable, non-sublicensable right and license to compile, copy, distribute, host and store solely the [******] and [******], which shall include the [******] of the HERE Data made available by HERE to Telenav under TL 11 for those Territories as authorized in TL11
as amended, including any future amendments to the Territories and/or scope of licensed data (“HERE [******] Data”) on servers owned or controlled by Telenav (“Telenav Server”) solely for the purpose of providing access to compiled HERE [******] Data via the Telenav Server solely by the “[******]” [******] application as further defined in the [******] Agreement (“[******] Application”) to [******] Application end users for personal use. For clarity and except as otherwise permitted under other agreements between HERE and Telenav, in the event that additional HERE Data is made available on the Telenav Server for any reason, Telenav may not grant access to any HERE Data other than HERE [******] Data solely for use in the [******] Application.
|
3.
|
License Fee Reports & Due Dates. In connection with the reporting requirements otherwise set forth in Section V.B. of TL11, in each calendar month during the Term, Telenav shall provide a report to HERE that indicates the number of times during such month that any [******] Application has accessed the HERE [******] Data via the Telenav Server. Telenav shall report such instances of [******] Application access as a separate line item in its License Fee Reports to HERE that are otherwise provided to HERE in accordance with TL 11, but shall not provide any vehicle specific reporting with regard to the [******] Applications. Subject to Client’s compliance with the conditions set forth herein, License Fees solely for the use and access of HERE [******] Data by the [******] Application shall be [******].
|
4.
|
Obligations Upon Termination
. Upon termination or expiration of this [******] Access Agreement, Telenav shall promptly remove the HERE [******]Data from Telenav Servers and immediately terminate access to such HERE [******] Data by the [******] Applications.
|
5.
|
This [******] Access Agreement is acknowledged and agreed to by the parties as of the date of the last signature below (the “Effective Date”).
|
HERE North America, LLC
|
Telenav, Inc.
|
By: /s/ Jeannie Lee Newman
|
By: /s/ Michael Strambi
|
Name: Jeannie Lee Newman
|
Name: Michael Strambi
|
Title: Senior Legal Counsel
|
Title: Chief Financial Officer
|
Date: August 7, 2017
|
Date: July 25, 2017
|
HERE North America, LLC
By: /s/ Neil McTeigue
|
Name: Neil McTeigue
|
Title: Senior Legal Counsel
|
Date: August 7, 2017
|
1.
|
Section V. of TL 10 is hereby amended to add the following language at the end of Section B:
|
2.
|
Exhibit D, PRICING
. Exhibit D (Pricing) of TL 10 is hereby amended to add the following subsection 1.A:
|
Renewal Subscription Fees
|
|
Territory
|
One Year Renewal Subscription Fee/Vehicle
|
North America
|
[******]
|
Europe
|
[******]
|
Australia / New Zealand :
|
[******]
|
Middle East
|
[******]
|
Israel
|
[******]
|
Africa
|
[******]
|
South Korea
|
[******]
|
Taiwan
|
[******]
|
Latin America
|
[******]
|
Southeast Asia
|
[******]
|
India
|
[******]
|
Turkey
|
[******]
|
3.
|
Exhibit D, PRICING
. Exhibit D (Pricing) of TL 10 is hereby amended to add the following subsection 2.A:
|
4.
|
Except as modified hereunder, all other terms and conditions of the Agreement shall stay in full force and effect.
|
HERE NORTH AMERICA, LLC
|
TELENAV, INC.
|
By:
/s/ Neil McTeigue
|
By:
/s/ Michael Strambi
|
Name:
Neil McTeigue
|
Name:
Michael Strambi
|
Title:
Senior Legal Counsel
|
Title:
Chief Financial Officer
|
Date:
October 2, 2017
|
Date:
September 25, 2017
|
|
|
HERE NORTH AMERICA, LLC
|
|
By:
/s/ Jeannie Lee Newman
|
|
Name:
Jeannie Lee Newman
|
|
Title:
Senior Legal Counsel
|
|
Date:
October 2, 2017
|
|
1.
|
Attachment II – Software Development and Licensed Software Supplemental Terms and Conditions, delete Section 10.1 and replace with the following:
|
2.
|
In Attachment V, at the end of Section 3, add the following:
|
Region
|
Feature
|
CY
|
||
[******]
|
[******]
|
[******]
|
||
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
|
[******]
|
[******]
|
[******]
|
[******]
|
3.
|
After
Attachment XII
, add as
Attachment XIII
, attached hereto and incorporated by reference herein.
|
1.
|
Telenav shall provide Ford with [******] in the form of [******] (“[******]”) for Sync 3 and all [******] and as further detailed in
Exhibit A
to this
Attachment XIII
, attached hereto and incorporated by reference herein. [******] will be used in conjunction with the Sync 3 Licensed Software provided under the Agreement. For purposes of clarification, [******] does not include [******].
|
2.
|
License Grant
|
a.
|
Telenav hereby grants Ford a worldwide, non-transferable, non-sublicensable (unless otherwise permitted herein), revocable, limited license to access and use [******] during the Term in [******] as incorporated into the Ford vehicles and related services produced by Ford or its affiliated companies. For purposes of clarification, revocation is subject to a breach of the Agreement that is uncured within the provisions set forth in the Agreement. For purposes of clarification, an assignment of the license rights hereunder by Ford to an Affiliate shall not be deemed a transfer under this Section 2(a). “Affiliate” means any entity which controls, is controlled by or under common control with a party, where “control” means ownership or control, direct or indirect, of more than fifty percent (50%) of such entity’s voting capital, and any such entity shall be an affiliate of such party only as long as such ownership or control exists.
|
b.
|
In reference to Section 1 above, Telenav shall not invoice Ford for [******] beyond what is set forth in Section 3 of Attachment V.
|
3.
|
Territories. Telenav will make [******] available to [******] which are [******] in [******].
|
4.
|
Conditions. The following conditions apply to [******]:
|
a.
|
Telenav will provide [******] which will [******].
|
b.
|
Access to [******] requires [******] and [******].
|
5.
|
Ownership. Telenav shall retain ownership of all IP rights pertaining to [******], including [******].
|
6.
|
Duration of [******]
|
a.
|
Telenav will [******] for [******] for [******]. After [******], the [******].
|
b.
|
[******] will [******], subject to the Term set forth above [******].
|
c.
|
Telenav will not be obligated to [******] to Ford or any Ford End Customer after December 31, 2023 unless Ford and Telenav mutually agree to an extension
|
7.
|
|
a.
|
Ford shall provide each End Customer with any legally required and otherwise appropriate instructions, warnings, notices and safety information as required by applicable laws
|
8.
|
End User and Supplier Terms
|
a.
|
Ford is required to (a) make the End User Terms and Privacy Policy available to End Customers in connection with and prior to End Customer’s first use of [******]; and (b) cause each End Customer to accept the End User Terms and Privacy Policy in such a manner that the End User Terms and Privacy Policy are enforceable against the End Customer by Telenav in the applicable End User jurisdiction. “Privacy Policy” means the [******] privacy policy. With respect to End User Terms and Privacy Policy available to End Customers on [******], Telenav shall inform Ford of any changes that are required and will work with Ford to adopt such changes for such vehicles.
|
b.
|
[******] may [******]. Ford shall comply with [******]. Upon reasonable notice, Telenav reserves the right to amend or replace [******] from time to time at as mutually agreed upon with Ford.
|
9.
|
Ford is responsible for [******] after completion of initial term.
|
10.
|
Systems & Accounting Reporting
|
a.
|
Telenav and Ford will work together to define the reports that are to be generated during the Term.
|
b.
|
These reports will be of the following types:
|
i.
|
Telenav shall provide [******].
|
c.
|
Telenav will need Ford to [******].
|
11.
|
Press Release. All joint press releases shall be subject to Ford’s communications governance process.
|
12.
|
Service Level Agreement –Telenav agrees to meet the service level requirements as set forth in Exhibit B to this Attachment XIII, attached hereto and incorporated by reference herein.
|
1
|
Scope and Background
|
Word or Phrase
|
Interpretation
|
Engineering Spec
|
Ford’s Engineering Spec, reference #1
|
SYNC
|
The automobile resident interactive platform that will host the Navigation Client.
|
Human Machine Interface (HMI)
|
Human Machine Interface implementation owned by [******]
|
Voice User Interface (VUI)
|
Voice-based User Interface owned by Nuance
|
Voice Control Application (VCA) data
|
The data transformed by Telenav per agreed VCA specifications and provided to Nuance to generate Voice grammars
|
Navigation Plug-in
|
Software module that is installed in the SYNC platform in the automobile that supports features in the Engineering Spec.
|
Navigation APIs
|
The Application Program Interfaces provided by the Navigation Plug-in to access Navigation features supported in the Navigation Plug-In
|
Navigation Display
|
Telenav implementation of navigation screen, residing underneath HMI layer
|
Text to Speech (TTS) engine
|
Embedded text-to-speech engine owned by Nuance
|
GPSM
|
The GPS Module providing location related information for real-time navigation
|
Sirius Radio
|
The source of dynamic data via satellite radio
|
2
|
Features and Requirements
|
3
|
Project Timelines and Feature Deliverables
|
4
|
Software Deliverables
|
5
|
Change Request / Change Management
|
6
|
Quality Validation Process
|
7
|
Release and Acceptance
|
8
|
Dependencies
|
•
|
[******]
|
1.
|
Definitions
|
Term
|
Definition
|
Availability
|
[******]
|
Down Time
|
The number of minutes
[******]
is not Operational during a calendar month. Time used for Scheduled Maintenance shall not be considered Down Time. Scheduled Down Time will not count against Availability until
[******]
.
|
Emergency Maintenance
|
Maintenance required outside the agreed-upon Scheduled Maintenance or necessary within Scheduled Maintenance but not scheduled in advance pursuant to Section 4. Any downtime due to Emergency Maintenance will be considered Down Time.
|
Hours of Operation (for technical support) and language
|
[******]
|
Impact
|
The severity level assigned to an Incident based on the Impact classifications defined in section 3.3 below. Impact severity level reflects the degree of Licensee impact resulting from an incident, with
[******].
|
Incident
|
Any problem with the Services for which Ford requests support in conformance with this SLA.
|
Operational
|
The Service is (i) functional and available to its intended end user in full accordance with its documentation and all applicable specifications, and (ii) not experiencing any Ford-impacting errors, defects or service-limiting issues.
|
Resolution
|
The permanent correction of the error, defect or condition giving rise to the Incident/outage.
|
Root Cause Analysis (“RCA”)
|
The process of identifying and reporting the core events that resulted in failure to meet performance requirements
|
Scheduled Down Time
|
The number of minutes of Down Time incurred during Scheduled Maintenance. Any Down Time not scheduled in advance (per Section 4.1) or in excess of allowed minutes as outlined in Section 4.1 will be counted against the Availability calculations.
|
Scheduled Maintenance
|
The number of minutes of maintenance that is scheduled in advance. Scheduled Down Time shall occur within the Scheduled Maintenance window. Any downtime outside of the scheduled maintenance window will be considered Down Time and shall be counted against the Availability calculations.
|
Total Time
|
The total number of minutes in a given calendar month.
|
Trouble Ticket
|
A unique numbered record that documents a significant event or Incident. The tracking document for an Incident or Scheduled Maintenance.
|
2.
|
Monthly Service Availability Performance Requirement
. Telenav will ensure that
[******]
maintain a monthly Availability of
[******]
. The Availability calculation shall include
[******].
For purposes of clarity,
[******]
.
|
3.
|
Incident Management
. Collaboration and communication between Ford and Telenav are key to mutual success. All entities responsible for Services availability will follow this matrix for Incident communication and Incident Management.
|
4.
|
Maintenance/Downtime
|
5.
|
Change Management, Upgrades and New Releases
|
6.
|
Disaster Recovery
|
7.
|
Synthetic Transaction
|
8.
|
Contacts and Hours of Operation
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
[******]
|
FORD MOTOR COMPANY
By:
/s/ Melissa Sheahan
(Signature)
Name:
Melissa Sheahan
(Printed Name)
Title:
Sync Software Buyer
Date:
07/27/2017
|
TELENAV, inc.
By:
/s/ Michael Strambi
(Signature)
Name:
Michael Strambi
(Printed Name)
Title:
Chief Financial Officer
Date:
07/26/2017
|
SUBLANDLORD
:
|
TELENAV, INC.
|
AVAYA INC.,
a Delaware corporation
|
By:
/s/ Michael Strambi
|
By:
/s/ James M Chirico, Jr.
|
Its:
Chief Financial Officer
|
Its:
James M. Chirico, Jr.
|
|
Chief Operating Officer
|
|
|
|
ARTICLE 1. PREMISES; COMMON AREAS
|
3
|
|
|
ARTICLE 2. TERM AND CONDITION OF PREMISES
|
4
|
|
|
ARTICLE 3. USE, NUISANCE, OR HAZARD
|
5
|
|
|
ARTICLE 4. RENT
|
6
|
|
|
ARTICLE 5. RENT ADJUSTMENT
|
8
|
|
|
ARTICLE 6. SERVICES TO BE PROVIDED BY LANDLORD
|
16
|
|
|
ARTICLE 7. REPAIRS AND MAINTENANCE BY LANDLORD
|
17
|
|
|
ARTICLE 8. REPAIRS AND CARE OF PROJECT BY TENANT
|
18
|
|
|
ARTICLE 9. TENANT'S EQUIPMENT AND INSTALLATIONS
|
19
|
|
|
ARTICLE 10. FORCE MAJEURE
|
19
|
|
|
ARTICLE 11. CONSTRUCTION, MECHANICS' AND MATERIALMAN'S LIENS
|
20
|
|
|
ARTICLE 12. ARBITRATION.
|
20
|
|
|
ARTICLE 13. INSURANCE
|
21
|
|
|
ARTICLE 14. QUIET ENJOYMENT
|
23
|
|
|
ARTICLE 15. ALTERATIONS
|
23
|
|
|
ARTICLE 16. FURNITURE, FIXTURES, AND PERSONAL PROPERTY;
|
|
SURRENDER OF PREMISES
|
25
|
|
|
ARTICLE 17. PERSONAL PROPERTY AND OTHER TAXES
|
26
|
|
|
ARTICLE 18. ASSIGNMENT AND SUBLETTING
|
26
|
|
|
ARTICLE 19. DAMAGE OR DESTRUCTION
|
30
|
|
|
ARTICLE 20. CONDEMNATION
|
33
|
|
|
ARTICLE 21. HOLD HARMLESS
|
34
|
|
|
ARTICLE 22. DEFAULT BY TENANT
|
35
|
|
|
ARTICLE 23. LIEN FOR RENT
|
39
|
|
|
ARTICLE 24. RIGHT TO RELOCATE
|
39
|
|
|
ARTICLE 25. ATTORNEYS' FEES
|
41
|
|
|
ARTICLE 26. NON-WAIVER
|
42
|
|
|
ARTICLE 27. RULES AND REGULATIONS
|
42
|
|
|
ARTICLE 28. ASSIGNMENT BY LANDLORD
|
43
|
|
|
ARTICLE 29. LIABILITY OF LANDLORD
|
43
|
|
|
ARTICLE 30. SUBORDINATION AND ATTORNMENT
|
43
|
|
|
ARTICLE 31. HOLDING OVER.
|
44
|
|
|
ARTICLE 32. SIGNS
|
45
|
|
|
ARTICLE 33. HAZARDOUS SUBSTANCES
|
46
|
|
|
ARTICLE 34. COMPLIANCE WITH LAWS AND OTHER REGULATIONS
|
48
|
|
|
ARTICLE 35. SEVERABILITY .
|
49
|
|
|
ARTICLE 36. NOTICES
|
49
|
|
|
ARTICLE 37. OBLIGATIONS OF, SUCCESSORS, PLURALITY, GENDER
|
49
|
|
|
ARTICLE 38. ENTIRE AGREEMENT
|
49
|
|
|
ARTICLE 39. CAPTIONS .
|
50
|
|
|
ARTICLE 40. CHANGES.
|
50
|
|
|
ARTICLE 41. AUTHORITY
|
50
|
|
|
ARTICLE 42. BROKERAGE
|
50
|
|
|
ARTICLE 43. EXHIBITS
|
51
|
|
|
ARTICLE 44. APPURTENANCES
|
51
|
|
|
ARTICLE 45. PREJUDGMENT REMEDY, REDEMPTION, COUNTERCLAIM, AND JURY
|
51
|
|
|
ARTICLE 46. RECORDING
|
52
|
|
|
ARTICLE 47. MORTGAGEE PROTECTION
|
52
|
|
|
ARTICLE 48. OTHER LANDLORD CONSTRUCTION
|
52
|
|
|
ARTICLE 49. PARKING
|
53
|
|
|
ARTICLE 50. ELECTRICAL CAPACITY
|
53
|
|
|
ARTICLE 51. OPTION TO EXTEND LEASE
|
53
|
|
|
ARTICLE 52. TELECOMMUNICATIONS LINES AND EQUIPMENT
|
56
|
|
|
ARTICLE 53. ERISA
|
57
|
|
|
ARTICLE 54. CONTINGENCY
|
58
|
Period
(In Full Calendar Months)
|
Annual Base Rent
|
Monthly Base Rent
|
Commencement Date - Month 12
|
$1,311,240.00
|
$109.270.00*
|
Month 13 - Month 24
|
$1,868.517.00
|
$155.709.75
|
Month 25 - Month 36
|
$1,924,572.48
|
$160,381.04
|
Month 37 - Month 48
|
$1,982.309.64
|
$165,192.47
|
Month 49 - Month 60
|
$2,041.779.00
|
$170,148.25
|
Month 61 - Month 72
|
$2,103,032.40
|
$175,252.70
|
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:
|
November 8, 2017
|
|
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:
|
November 8, 2017
|
|
By:
|
|
/s/ MICHAEL STRAMBI
|
|
|
|
|
|
Michael Strambi
|
|
|
|
|
|
Chief Financial Officer
|
Date:
|
November 8, 2017
|
|
By:
|
|
/s/ Dr. HP JIN
|
|
|
|
|
|
Dr. HP Jin
|
|
|
|
|
|
President and Chief Executive Officer
|
Date:
|
November 8, 2017
|
|
By:
|
|
/s/ MICHAEL STRAMBI
|
|
|
|
|
|
Michael Strambi
|
|
|
|
|
|
Chief Financial Officer
|