Delaware
|
|
20-8881738
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
12181 Bluff Creek Drive, 4th Floor
|
||
Los Angeles, CA 90094
|
||
(Address of principal executive offices, including zip code)
|
||
|
|
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Registrant’s telephone number, including area code:
|
||
|
(310) 207-0272
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Large accelerated filer
¨
|
|
Accelerated filer
¨
|
|
|
|
Non-accelerated filer
x
(Do not check if a smaller reporting company) |
|
Smaller reporting company
¨
|
Class
|
|
Outstanding as of July 28, 2015
|
Common Stock, $0.00001 par value
|
|
43,835,507
|
|
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Page No.
|
Part I.
|
||
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
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Item 4.
|
||
Part II.
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
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Item 5.
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||
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June 30, 2015
|
|
December 31, 2014
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
99,234
|
|
|
$
|
97,196
|
|
Accounts receivable, net
|
147,706
|
|
|
133,267
|
|
||
Prepaid expenses and other current assets
|
19,710
|
|
|
7,514
|
|
||
TOTAL CURRENT ASSETS
|
266,650
|
|
|
237,977
|
|
||
Property and equipment, net
|
15,706
|
|
|
15,196
|
|
||
Internal use software development costs, net
|
12,371
|
|
|
11,501
|
|
||
Goodwill
|
68,803
|
|
|
16,290
|
|
||
Intangible assets, net
|
60,221
|
|
|
14,090
|
|
||
Other assets, non-current
|
7,019
|
|
|
1,427
|
|
||
TOTAL ASSETS
|
$
|
430,770
|
|
|
$
|
296,481
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
177,339
|
|
|
$
|
151,021
|
|
Debt and capital lease obligations, current portion
|
—
|
|
|
105
|
|
||
Other current liabilities
|
1,951
|
|
|
3,276
|
|
||
TOTAL CURRENT LIABILITIES
|
179,290
|
|
|
154,402
|
|
||
Other liabilities, non-current
|
2,021
|
|
|
1,272
|
|
||
Deferred tax liability, net
|
12,355
|
|
|
607
|
|
||
Contingent consideration liabilities
|
27,622
|
|
|
11,448
|
|
||
TOTAL LIABILITIES
|
221,288
|
|
|
167,729
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
||||
STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Preferred stock, $0.00001 par value, 10,000 shares authorized at June 30, 2015 and December 31, 2014; 0 shares issued and outstanding at June 30, 2015 and December 31, 2014
|
—
|
|
|
—
|
|
||
Common stock, $0.00001 par value; 500,000 shares authorized at June 30, 2015 and December 31, 2014; 43,622 and 37,192 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
307,149
|
|
|
209,472
|
|
||
Accumulated other comprehensive income (loss)
|
19
|
|
|
(8)
|
|
||
Accumulated deficit
|
(97,686)
|
|
|
(80,712)
|
|
||
TOTAL STOCKHOLDERS’ EQUITY
|
209,482
|
|
|
128,752
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
430,770
|
|
|
$
|
296,481
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
Revenue
|
$
|
53,046
|
|
|
$
|
28,283
|
|
|
$
|
90,224
|
|
|
$
|
51,298
|
|
Expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
14,009
|
|
|
4,852
|
|
|
20,570
|
|
|
9,312
|
|
||||
Sales and marketing
|
22,161
|
|
|
10,296
|
|
|
37,210
|
|
|
19,323
|
|
||||
Technology and development
|
10,390
|
|
|
4,598
|
|
|
18,804
|
|
|
9,275
|
|
||||
General and administrative
|
17,984
|
|
|
15,653
|
|
|
32,263
|
|
|
26,973
|
|
||||
Total expenses
|
64,544
|
|
|
35,399
|
|
|
108,847
|
|
|
64,883
|
|
||||
Loss from operations
|
(11,498
|
)
|
|
(7,116
|
)
|
|
(18,623
|
)
|
|
(13,585
|
)
|
||||
Other (income) expense:
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
11
|
|
|
14
|
|
|
23
|
|
|
71
|
|
||||
Change in fair value of preferred stock warrant liabilities
|
—
|
|
|
1,742
|
|
|
—
|
|
|
732
|
|
||||
Foreign exchange (gain) loss, net
|
847
|
|
|
382
|
|
|
(1,343
|
)
|
|
930
|
|
||||
Total other (income) expense, net
|
858
|
|
|
2,138
|
|
|
(1,320
|
)
|
|
1,733
|
|
||||
Loss before income taxes
|
(12,356
|
)
|
|
(9,254
|
)
|
|
(17,303
|
)
|
|
(15,318
|
)
|
||||
Provision (benefit) for income taxes
|
(413
|
)
|
|
112
|
|
|
(329
|
)
|
|
162
|
|
||||
Net loss
|
(11,943
|
)
|
|
(9,366
|
)
|
|
(16,974
|
)
|
|
(15,480
|
)
|
||||
Cumulative preferred stock dividends
|
—
|
|
|
(70
|
)
|
|
—
|
|
|
(1,116
|
)
|
||||
Net loss attributable to common stockholders
|
$
|
(11,943
|
)
|
|
$
|
(9,436
|
)
|
|
$
|
(16,974
|
)
|
|
$
|
(16,596
|
)
|
Basic and diluted net loss per share attributable to common stockholders:
|
$
|
(0.30
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(0.74
|
)
|
Basic and diluted weighted-average shares used to compute net loss per share attributable to common stockholders:
|
39,414
|
|
|
32,266
|
|
|
37,596
|
|
|
22,296
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
Net loss
|
$
|
(11,943
|
)
|
|
$
|
(9,366
|
)
|
|
$
|
(16,974
|
)
|
|
$
|
(15,480
|
)
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Unrealized loss on investments, net of tax
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
||||
Foreign currency translation adjustments
|
93
|
|
|
22
|
|
|
30
|
|
|
37
|
|
||||
Comprehensive loss
|
$
|
(11,853
|
)
|
|
$
|
(9,344
|
)
|
|
$
|
(16,947
|
)
|
|
$
|
(15,443
|
)
|
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Accumulated Other
Comprehensive Income (Loss) |
|
Accumulated
Deficit |
|
Total
Stockholders’ Equity |
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at December 31, 2014
|
37,192
|
|
|
$
|
—
|
|
|
$
|
209,472
|
|
|
$
|
(8
|
)
|
|
$
|
(80,712
|
)
|
|
$
|
128,752
|
|
Exercise of common stock options
|
1,375
|
|
|
—
|
|
|
6,710
|
|
|
—
|
|
|
—
|
|
|
6,710
|
|
|||||
Restricted stock awards
|
487
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of common stock related to RSU vesting
|
74
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of common stock related to employee stock purchase plan
|
69
|
|
|
—
|
|
|
759
|
|
|
—
|
|
|
—
|
|
|
759
|
|
|||||
Issuance of common stock and exchange of stock options related to acquisition
|
4,425
|
|
|
—
|
|
|
76,611
|
|
|
—
|
|
|
—
|
|
|
76,611
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
13,597
|
|
|
—
|
|
|
—
|
|
|
13,597
|
|
|||||
Foreign exchange translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
|||||
Change in unrealized losses on investments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,974
|
)
|
|
(16,974
|
)
|
|||||
Balance at June 30, 2015
|
43,622
|
|
|
$
|
—
|
|
|
$
|
307,149
|
|
|
$
|
19
|
|
|
$
|
(97,686
|
)
|
|
$
|
209,482
|
|
|
Six Months Ended
|
||||||
|
June 30, 2015
|
|
June 30, 2014
|
||||
OPERATING ACTIVITIES:
|
|
|
|
||||
Net loss
|
$
|
(16,974
|
)
|
|
$
|
(15,480
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
13,849
|
|
|
5,053
|
|
||
Stock-based compensation
|
13,237
|
|
|
9,577
|
|
||
Loss on disposal of property and equipment, net
|
29
|
|
|
199
|
|
||
Change in fair value of preferred stock warrant liabilities
|
—
|
|
|
732
|
|
||
Change in fair value of contingent consideration
|
3
|
|
|
—
|
|
||
Unrealized foreign currency (gain) loss
|
508
|
|
|
121
|
|
||
Deferred income taxes
|
(11
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities, net of effect of business acquisition:
|
|
|
|
||||
Accounts receivable
|
(1,007
|
)
|
|
3,760
|
|
||
Prepaid expenses and other assets
|
97
|
|
|
(791
|
)
|
||
Accounts payable and accrued expenses
|
19,845
|
|
|
(1,637
|
)
|
||
Other liabilities
|
(950
|
)
|
|
(986
|
)
|
||
Net cash provided by operating activities
|
28,626
|
|
|
548
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
||||
Purchases of property and equipment
|
(4,246
|
)
|
|
(4,520
|
)
|
||
Capitalized internal use software development costs
|
(4,061
|
)
|
|
(4,449
|
)
|
||
Acquisition, net of cash acquired
|
(8,647
|
)
|
|
—
|
|
||
Investments in available-for-sale securities
|
(18,052
|
)
|
|
—
|
|
||
Change in restricted cash
|
1,100
|
|
|
100
|
|
||
Net cash used in investing activities
|
(33,906
|
)
|
|
(8,869
|
)
|
||
FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from the issuance of common stock in initial public offering, net of underwriting discounts and commissions
|
—
|
|
|
89,733
|
|
||
Payments of initial public offering costs
|
—
|
|
|
(2,898
|
)
|
||
Proceeds from exercise of stock options
|
6,710
|
|
|
1,070
|
|
||
Proceeds from issuance of common stock under employee stock purchase plan
|
759
|
|
|
—
|
|
||
Repayment of debt and capital lease obligations
|
(105
|
)
|
|
(3,973
|
)
|
||
Net cash provided by financing activities
|
7,364
|
|
|
83,932
|
|
||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
(46
|
)
|
|
121
|
|
||
CHANGE IN CASH AND CASH EQUIVALENTS
|
2,038
|
|
|
75,732
|
|
||
CASH AND CASH EQUIVALENTS--Beginning of period
|
97,196
|
|
|
29,956
|
|
||
CASH AND CASH EQUIVALENTS--End of period
|
$
|
99,234
|
|
|
$
|
105,688
|
|
SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:
|
|
|
|
||||
Capitalized assets financed by accounts payable and accrued expenses
|
$
|
1,910
|
|
|
$
|
1,043
|
|
Leasehold improvements paid by landlord
|
$
|
—
|
|
|
$
|
803
|
|
Capitalized stock-based compensation
|
$
|
360
|
|
|
$
|
330
|
|
Conversion of preferred stock to common stock
|
$
|
—
|
|
|
$
|
52,571
|
|
Reclassification of preferred stock warrant liabilities to additional-paid-in-capital
|
$
|
—
|
|
|
$
|
6,183
|
|
Reclassification of deferred offering costs to additional-paid-in-capital
|
$
|
—
|
|
|
$
|
3,533
|
|
Deferred offering costs included in accounts payable and accrued expenses
|
$
|
—
|
|
|
$
|
139
|
|
Common stock and options issued for business acquisition
|
$
|
76,795
|
|
|
$
|
—
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
|
(In thousands, except per share data)
|
||||||||||||||
Net loss attributable to common stockholders
|
$
|
(11,943
|
)
|
|
$
|
(9,436
|
)
|
|
$
|
(16,974
|
)
|
|
$
|
(16,596
|
)
|
Weighted-average common shares outstanding
|
41,873
|
|
|
34,463
|
|
|
39,747
|
|
|
23,619
|
|
||||
Weighted-average unvested restricted shares
|
(1,682
|
)
|
|
(2,197
|
)
|
|
(1,698
|
)
|
|
(1,323
|
)
|
||||
Weighted-average escrow shares
|
(777
|
)
|
|
—
|
|
|
(453
|
)
|
|
—
|
|
||||
Weighted-average common shares outstanding used to compute net loss per share attributable to common stockholders
|
39,414
|
|
|
32,266
|
|
|
37,596
|
|
|
22,296
|
|
||||
Basic and diluted net loss per share attributable to common stockholders
|
$
|
(0.30
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(0.74
|
)
|
|
June 30, 2015
|
|
June 30, 2014
|
||
|
(in thousands)
|
||||
Options to purchase common stock
|
7,442
|
|
|
8,252
|
|
Unvested restricted stock awards
|
1,741
|
|
|
2,194
|
|
Unvested restricted stock units
|
2,566
|
|
|
181
|
|
Shares held in escrow
|
997
|
|
|
—
|
|
Total shares excluded from net loss per share attributable to common stockholders
|
12,746
|
|
|
10,627
|
|
•
|
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
|
•
|
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|
•
|
Level 3 – Unobservable inputs.
|
|
June 30, 2015
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|||||||||
|
(in thousands)
|
||||||||||||||
Money market funds
|
$
|
37,933
|
|
|
$
|
37,933
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate debt securities
|
$
|
7,993
|
|
|
$
|
7,993
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. Treasury, government and agency debt securities
|
$
|
10,056
|
|
|
$
|
10,056
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Contingent consideration liabilities
|
$
|
27,622
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27,622
|
|
|
December 31, 2014
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|||||||||
|
(in thousands)
|
||||||||||||||
Cash equivalents
|
$
|
55,963
|
|
|
$
|
55,963
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Contingent consideration liabilities
|
$
|
11,448
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,448
|
|
|
|
Three Month Roll Forward
|
|
Six Month Roll Forward
|
||||||||||||
|
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Beginning balance
|
|
$
|
—
|
|
|
$
|
4,441
|
|
|
$
|
—
|
|
|
$
|
5,451
|
|
Change in value of preferred stock warrants recorded in other expense, net
|
|
—
|
|
|
1,742
|
|
|
—
|
|
|
732
|
|
||||
Net exercise of preferred stock warrant and conversion of preferred stock warrant to common stock warrant
|
|
—
|
|
|
(6,183
|
)
|
|
—
|
|
|
(6,183
|
)
|
||||
Ending balance
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Three Month Roll Forward
|
|
Six Month Roll Forward
|
||||||||||||
|
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Beginning balance
|
|
$
|
11,586
|
|
|
$
|
—
|
|
|
$
|
11,448
|
|
|
$
|
—
|
|
Increase to contingent consideration liability related to the Chango acquisition
|
|
16,171
|
|
|
—
|
|
|
16,171
|
|
|
—
|
|
||||
Change in fair value of contingent consideration liabilities recorded in general and administrative expense
|
|
(135
|
)
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Ending balance
|
|
$
|
27,622
|
|
|
$
|
—
|
|
|
$
|
27,622
|
|
|
$
|
—
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Available-for-sale - short-term:
|
(in thousands)
|
||||||||||||||
U.S. Treasury, agency debt securities
|
$
|
4,003
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
4,001
|
|
Corporate debt securities
|
7,993
|
|
|
—
|
|
|
—
|
|
|
7,993
|
|
||||
Total
|
$
|
11,996
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
11,994
|
|
Available-for-sale - long-term:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury, government and agency debt securities
|
$
|
6,056
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
6,055
|
|
|
Amortized Cost
|
|
Fair Value
|
||||
|
(in thousands)
|
||||||
Due in less than 1 year
|
$
|
11,996
|
|
|
$
|
11,994
|
|
Due within 1-2 years
|
6,056
|
|
|
6,055
|
|
||
Total
|
$
|
18,052
|
|
|
$
|
18,049
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
|
(in thousands)
|
||||||
Accounts payable—seller
|
$
|
157,009
|
|
|
$
|
138,366
|
|
Accounts payable—trade
|
9,294
|
|
|
5,350
|
|
||
Accrued employee-related payables
|
11,036
|
|
|
7,305
|
|
||
|
$
|
177,339
|
|
|
$
|
151,021
|
|
Shares of the Company's common stock
|
$
|
72,477
|
|
Estimated fair value of contingent consideration
|
16,171
|
|
|
Fair value of stock-based awards exchanged
|
4,318
|
|
|
Cash paid
|
9,097
|
|
|
Working capital adjustment
|
(184
|
)
|
|
Total purchase consideration
|
101,879
|
|
|
Cash
|
450
|
|
|
Accounts receivable
|
13,333
|
|
|
Prepaid and other assets
|
1,025
|
|
|
Fixed assets
|
265
|
|
|
Intangible assets, including in process research and development of $580
|
52,420
|
|
|
Goodwill
|
52,513
|
|
|
Total assets acquired
|
$
|
120,006
|
|
Accounts payable and accrued expenses
|
5,825
|
|
|
Other liabilities
|
443
|
|
|
Deferred tax liability, net
|
11,859
|
|
|
Total liabilities assumed
|
18,127
|
|
|
Total net assets acquired
|
$
|
101,879
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
|
(in thousands, except per share data)
|
||||||||||||||
Pro forma revenues
|
$
|
56,489
|
|
|
$
|
38,751
|
|
|
$
|
106,874
|
|
|
$
|
69,173
|
|
Pro forma net loss
|
$
|
(13,013
|
)
|
|
$
|
(17,316
|
)
|
|
$
|
(20,400
|
)
|
|
$
|
(39,053
|
)
|
Pro forma net loss per share
|
$
|
(0.31
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
(1.51
|
)
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
|
|
(in thousands)
|
||||||
Beginning balance
|
|
$
|
16,290
|
|
|
$
|
1,491
|
|
Additions from the acquisition of iSocket
|
|
—
|
|
|
11,778
|
|
||
Additions from the acquisition of Shiny
|
|
—
|
|
|
3,021
|
|
||
Additions from the acquisition of Chango
|
|
52,513
|
|
|
—
|
|
||
Ending balance
|
|
$
|
68,803
|
|
|
$
|
16,290
|
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
|
|
(in thousands)
|
||||||
Amortizable intangible assets:
|
|
|
|
|
||||
Developed technology
|
|
$
|
35,176
|
|
|
$
|
13,176
|
|
In-process research and development
|
|
580
|
|
|
—
|
|
||
Customer relationships
|
|
25,330
|
|
|
3,330
|
|
||
Backlog
|
|
3,090
|
|
|
—
|
|
||
Non-compete agreements
|
|
4,990
|
|
|
490
|
|
||
Trademarks
|
|
253
|
|
|
3
|
|
||
|
|
69,419
|
|
|
16,999
|
|
||
Total accumulated amortization—intangible assets
|
|
(9,198
|
)
|
|
(2,909
|
)
|
||
Total identifiable intangible assets, net
|
|
$
|
60,221
|
|
|
$
|
14,090
|
|
Fiscal Year
|
Amount
|
||
|
(in thousands)
|
||
2015
|
$
|
9,439
|
|
2016
|
16,227
|
|
|
2017
|
13,725
|
|
|
2018
|
9,941
|
|
|
2019 and thereafter
|
10,889
|
|
|
Total
|
$
|
60,221
|
|
|
Shares Under Option
|
|
Weighted- Average Exercise Price
|
|
Weighted- Average Contractual Life
|
|
Aggregate Intrinsic Value
|
|||||
|
(in thousands)
|
|
|
|
|
|
(in thousands)
|
|||||
Outstanding at December 31, 2014
|
8,113
|
|
|
$
|
8.05
|
|
|
|
|
|
||
Granted
|
1,125
|
|
|
$
|
12.21
|
|
|
|
|
|
||
Exercised
|
(1,385
|
)
|
|
$
|
4.97
|
|
|
|
|
|
||
Canceled
|
(411
|
)
|
|
$
|
10.98
|
|
|
|
|
|
||
Outstanding at June 30, 2015
|
7,442
|
|
|
$
|
9.10
|
|
|
7.49 years
|
|
$
|
45,583
|
|
Vested and expected to vest June 30, 2015
|
6,920
|
|
|
$
|
8.94
|
|
|
7.43 years
|
|
$
|
43,403
|
|
Exercisable at June 30, 2015
|
3,863
|
|
|
$
|
6.87
|
|
|
6.67 years
|
|
$
|
31,458
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||
Expected term (in years)
|
4.0
|
|
|
5.9
|
|
|
4.2
|
|
|
6.0
|
|
Risk-free interest rate
|
1.16
|
%
|
|
1.89
|
%
|
|
1.23
|
%
|
|
1.81
|
%
|
Expected volatility
|
48
|
%
|
|
53
|
%
|
|
48
|
%
|
|
54
|
%
|
Dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Number of Shares
|
|
|
(in thousands)
|
|
Nonvested shares of restricted stock outstanding at December 31, 2014
|
1,750
|
|
Granted
|
552
|
|
Canceled
|
(65
|
)
|
Vested
|
(496
|
)
|
Nonvested shares of restricted stock outstanding at June 30, 2015
|
1,741
|
|
|
Number of Shares
|
|
|
(in thousands)
|
|
Nonvested shares of restricted stock units outstanding at December 31, 2014
|
845
|
|
Granted
|
1,877
|
|
Canceled
|
(82
|
)
|
Vested
|
(74
|
)
|
Nonvested shares of restricted stock units outstanding at June 30, 2015
|
2,566
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Cost of revenue
|
$
|
70
|
|
|
$
|
57
|
|
|
$
|
112
|
|
|
$
|
88
|
|
Sales and marketing
|
1,858
|
|
|
700
|
|
|
2,983
|
|
|
1,277
|
|
||||
Technology and development
|
1,116
|
|
|
424
|
|
|
1,906
|
|
|
727
|
|
||||
General and administrative
|
4,695
|
|
|
5,918
|
|
|
8,236
|
|
|
7,485
|
|
||||
Total stock-based compensation
|
$
|
7,739
|
|
|
$
|
7,099
|
|
|
$
|
13,237
|
|
|
$
|
9,577
|
|
•
|
our ability to grow rapidly and to manage our growth effectively;
|
•
|
our ability to develop innovative new technologies and remain a market leader;
|
•
|
our ability to attract and retain buyers and sellers and increase our business with them;
|
•
|
the freedom of buyers and sellers to direct their spending and inventory to competing sources of inventory and demand;
|
•
|
our ability to use our solution to purchase and sell higher value advertising and to expand the use of our solution by buyers and sellers utilizing evolving digital media platforms;
|
•
|
our ability to introduce new solutions and bring them to market in a timely manner in response to client demands and industry trends, including shift in digital advertising growth from display to mobile channels;
|
•
|
uncertainty of our estimates and expectations associated with new offerings, including private marketplace, mobile, orders, automated guaranteed, and intent marketing solutions;
|
•
|
our ability to maintain a supply of advertising inventory from sellers;
|
•
|
our limited operating history and history of losses;
|
•
|
our ability to continue to expand into new geographic markets;
|
•
|
the effects of increased competition in our market and increasing concentration of advertising spending, including mobile spending, in a small number of very large competitors, and our ability to compete effectively and to maintain our pricing and take rate;
|
•
|
potential adverse effects of malicious activity such as fraudulent inventory and malware;
|
•
|
the effects of seasonal trends on our results of operations;
|
•
|
costs associated with defending intellectual property infringement and other claims;
|
•
|
our ability to attract and retain qualified employees and key personnel;
|
•
|
our ability to consummate future acquisitions of or investments in complementary companies or technologies;
|
•
|
our ability to comply with, and the effect on our business of, evolving legal standards and regulations, particularly concerning data protection and consumer privacy; and
|
•
|
our ability to develop and maintain our corporate infrastructure, including our finance and information technology systems and controls.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
Operational measures:
|
|
|
|
|
|
|
|
||||||||
Managed revenue (in thousands)
|
$
|
227,152
|
|
|
$
|
153,540
|
|
|
$
|
424,372
|
|
|
$
|
283,106
|
|
Take rate
|
21.4
|
%
|
|
18.4
|
%
|
|
20.2
|
%
|
|
18.1
|
%
|
||||
Financial measures:
|
|
|
|
|
|
|
|
||||||||
Revenue (in thousands)
|
$
|
53,046
|
|
|
$
|
28,283
|
|
|
$
|
90,224
|
|
|
$
|
51,298
|
|
Adjusted EBITDA (in thousands)
|
$
|
6,667
|
|
|
$
|
2,661
|
|
|
$
|
10,859
|
|
|
$
|
1,045
|
|
•
|
Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as stock-based compensation expense, depreciation and amortization, amortization of acquired intangible assets, interest income or expense, change in fair value of preferred stock warrant liabilities, foreign exchange gains and losses, certain other non-recurring income or expenses such as acquisition and related costs, and provision for income taxes that can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired;
|
•
|
our management uses Adjusted EBITDA in conjunction with GAAP financial measures for planning purposes, including the preparation of our annual operating budget, as a measure of operating performance and the effectiveness of our business strategies, and in communications with our board of directors concerning our financial performance;
|
•
|
Adjusted EBITDA may sometimes be considered by the compensation committee of our board of directors in connection with the determination of compensation for our executive officers; and
|
•
|
Adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.
|
•
|
stock-based compensation is a non-cash charge and is and will remain an element of our long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period;
|
•
|
depreciation and amortization are non-cash charges, and the assets being depreciated or amortized will often have to be replaced in the future; Adjusted EBITDA does not reflect any cash requirements for these replacements;
|
•
|
Adjusted EBITDA does not reflect non-cash charges related to acquisition and related items, such as amortization of acquired intangible assets and changes in the fair value of contingent consideration;
|
•
|
Adjusted EBITDA does not reflect changes in, or cash requirements for, acquisition and related items, such as transaction expenses and expenses associated with earn-out amounts;
|
•
|
Adjusted EBITDA does not reflect changes in our working capital needs, capital expenditures, or contractual commitments;
|
•
|
Adjusted EBITDA does not reflect cash requirements for income taxes and the cash impact of other income or expense; and
|
•
|
other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Net loss
|
$
|
(11,943
|
)
|
|
$
|
(9,366
|
)
|
|
$
|
(16,974
|
)
|
|
$
|
(15,480
|
)
|
Add back (deduct):
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization expense, excluding amortization of acquired intangible assets
|
4,191
|
|
|
2,560
|
|
|
7,565
|
|
|
4,792
|
|
||||
Amortization of acquired intangibles
|
5,268
|
|
|
118
|
|
|
6,284
|
|
|
261
|
|
||||
Stock-based compensation expense
|
7,739
|
|
|
7,099
|
|
|
13,237
|
|
|
9,577
|
|
||||
Acquisition and related items
|
967
|
|
|
—
|
|
|
2,396
|
|
|
—
|
|
||||
Interest expense, net
|
11
|
|
|
14
|
|
|
23
|
|
|
71
|
|
||||
Change in fair value of preferred stock warrant liabilities
|
—
|
|
|
1,742
|
|
|
—
|
|
|
732
|
|
||||
Foreign currency (gain) loss, net
|
847
|
|
|
382
|
|
|
(1,343
|
)
|
|
930
|
|
||||
Provision (benefit) for income taxes
|
(413
|
)
|
|
112
|
|
|
(329
|
)
|
|
162
|
|
||||
Adjusted EBITDA
|
$
|
6,667
|
|
|
$
|
2,661
|
|
|
$
|
10,859
|
|
|
$
|
1,045
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Revenue
|
$
|
53,046
|
|
|
$
|
28,283
|
|
|
$
|
90,224
|
|
|
$
|
51,298
|
|
Expenses:
|
|
|
|
|
|
|
|
||||||||
Costs of revenue
(1) (2)
|
14,009
|
|
|
4,852
|
|
|
20,570
|
|
|
9,312
|
|
||||
Sales and marketing
(1) (2)
|
22,161
|
|
|
10,296
|
|
|
37,210
|
|
|
19,323
|
|
||||
Technology and development
(1) (2)
|
10,390
|
|
|
4,598
|
|
|
18,804
|
|
|
9,275
|
|
||||
General and administrative
(1) (2)
|
17,984
|
|
|
15,653
|
|
|
32,263
|
|
|
26,973
|
|
||||
Total expenses
|
64,544
|
|
|
35,399
|
|
|
108,847
|
|
|
64,883
|
|
||||
Loss from operations
|
(11,498)
|
|
|
(7,116)
|
|
|
(18,623)
|
|
|
(13,585)
|
|
||||
Other (income) expense, net
|
858
|
|
|
2,138
|
|
|
(1,320
|
)
|
|
1,733
|
|
||||
Loss before income taxes
|
(12,356)
|
|
|
(9,254)
|
|
|
(17,303)
|
|
|
(15,318)
|
|
||||
Provision (benefit) for income taxes
|
(413
|
)
|
|
112
|
|
|
(329
|
)
|
|
162
|
|
||||
Net loss
|
$
|
(11,943
|
)
|
|
$
|
(9,366
|
)
|
|
$
|
(16,974
|
)
|
|
$
|
(15,480
|
)
|
(1)
|
Includes stock-based compensation expense as follows:
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Costs of revenue
|
$
|
70
|
|
|
$
|
57
|
|
|
$
|
112
|
|
|
$
|
88
|
|
Sales and marketing
|
1,858
|
|
|
700
|
|
|
2,983
|
|
|
1,277
|
|
||||
Technology and development
|
1,116
|
|
|
424
|
|
|
1,906
|
|
|
727
|
|
||||
General and administrative
|
4,695
|
|
|
5,918
|
|
|
8,236
|
|
|
7,485
|
|
||||
Total
|
$
|
7,739
|
|
|
$
|
7,099
|
|
|
$
|
13,237
|
|
|
$
|
9,577
|
|
(2)
|
Includes depreciation and amortization expense as follows:
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Cost of revenue
|
$
|
5,258
|
|
|
$
|
2,241
|
|
|
$
|
8,729
|
|
|
$
|
4,226
|
|
Sales and marketing
|
3,240
|
|
|
109
|
|
|
3,745
|
|
|
189
|
|
||||
Technology and development
|
479
|
|
|
192
|
|
|
733
|
|
|
390
|
|
||||
General and administrative
|
482
|
|
|
136
|
|
|
642
|
|
|
248
|
|
||||
Total depreciation and amortization
|
$
|
9,459
|
|
|
$
|
2,678
|
|
|
$
|
13,849
|
|
|
$
|
5,053
|
|
|
Three Months Ended*
|
|
Six Months Ended*
|
||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||
Revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue
|
26
|
%
|
|
17
|
%
|
|
23
|
%
|
|
18
|
%
|
Sales and marketing
|
42
|
%
|
|
36
|
%
|
|
41
|
%
|
|
38
|
%
|
Technology and development
|
20
|
%
|
|
16
|
%
|
|
21
|
%
|
|
18
|
%
|
General and administrative
|
34
|
%
|
|
55
|
%
|
|
36
|
%
|
|
53
|
%
|
Total expenses
|
122
|
%
|
|
125
|
%
|
|
121
|
%
|
|
126
|
%
|
Loss from operations
|
(22
|
)%
|
|
(25
|
)%
|
|
(21
|
)%
|
|
(26
|
)%
|
Other (income) expense, net
|
2
|
%
|
|
8
|
%
|
|
(1
|
)%
|
|
3
|
%
|
Loss before income taxes
|
(23
|
)%
|
|
(33
|
)%
|
|
(19
|
)%
|
|
(30
|
)%
|
Provision (benefit) for income taxes
|
(1
|
)%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Net loss
|
(23
|
)%
|
|
(33
|
)%
|
|
(19
|
)%
|
|
(30
|
)%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Revenue
|
$
|
53,046
|
|
|
$
|
28,283
|
|
|
$
|
90,224
|
|
|
$
|
51,298
|
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
|
(in thousands, except percentages)
|
||||||||||||||
Costs of revenue
|
$
|
14,009
|
|
|
$
|
4,852
|
|
|
$
|
20,570
|
|
|
$
|
9,312
|
|
Percent of revenue
|
26
|
%
|
|
17
|
%
|
|
23
|
%
|
|
18
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
|
(in thousands, except percentages)
|
||||||||||||||
Sales and marketing
|
$
|
22,161
|
|
|
$
|
10,296
|
|
|
$
|
37,210
|
|
|
$
|
19,323
|
|
Percent of revenue
|
42
|
%
|
|
36
|
%
|
|
41
|
%
|
|
38
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
|
(in thousands, except percentages)
|
||||||||||||||
Technology and development
|
$
|
10,390
|
|
|
$
|
4,598
|
|
|
$
|
18,804
|
|
|
$
|
9,275
|
|
Percent of revenue
|
20
|
%
|
|
16
|
%
|
|
21
|
%
|
|
18
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
|
(in thousands, except percentages)
|
||||||||||||||
General and administrative
|
$
|
17,984
|
|
|
$
|
15,653
|
|
|
$
|
32,263
|
|
|
$
|
26,973
|
|
Percent of revenue
|
34
|
%
|
|
55
|
%
|
|
36
|
%
|
|
53
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30, 2015
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||
|
(in thousands)
|
||||||||||||||
Interest expense, net
|
$
|
11
|
|
|
$
|
14
|
|
|
$
|
23
|
|
|
$
|
71
|
|
Change in fair value of convertible preferred stock warrant liabilities
|
—
|
|
|
1,742
|
|
|
—
|
|
|
732
|
|
||||
Foreign exchange (gain) loss, net
|
847
|
|
|
382
|
|
|
(1,343
|
)
|
|
930
|
|
||||
Total other (income) expense, net
|
$
|
858
|
|
|
$
|
2,138
|
|
|
$
|
(1,320
|
)
|
|
$
|
1,733
|
|
|
Six Months Ended
|
||||||
|
June 30, 2015
|
|
June 30, 2014
|
||||
|
(in thousands)
|
||||||
Cash flows provided by operating activities
|
$
|
28,626
|
|
|
$
|
548
|
|
Cash flows used in investing activities
|
(33,906
|
)
|
|
(8,869
|
)
|
||
Cash flows provided by financing activities
|
7,364
|
|
|
83,932
|
|
||
Effects of exchange rates on cash and cash equivalents
|
(46
|
)
|
|
121
|
|
||
Increase in cash and cash equivalents
|
$
|
2,038
|
|
|
$
|
75,732
|
|
•
|
build and maintain our reputation for innovation and solutions that meet the evolving needs of buyers and sellers;
|
•
|
distinguish ourselves from the wide variety of solutions available in our industry;
|
•
|
maintain and expand our relationships with buyers and sellers;
|
•
|
respond to evolving industry standards and government regulations that impact our business, particularly in the areas of data collection and consumer privacy;
|
•
|
prevent or otherwise mitigate failures or breaches of security or privacy;
|
•
|
attract, hire, integrate and retain qualified employees;
|
•
|
effectively execute upon our international expansion plans;
|
•
|
evaluate new acquisition targets, and successfully integrate acquired companies’ business and technologies;
|
•
|
maintain our cloud-based technology solution continuously without interruption 24 hours a day, seven days a week; and
|
•
|
anticipate and respond to varying product life cycles, regularly enhance our existing advertising solutions, and introduce new advertising solutions on a timely basis, including by developing our capabilities in evolving areas of the business, such as mobile and video.
|
•
|
seasonality in demand for digital advertising;
|
•
|
changes in pricing of advertising inventory or pricing for our solutions and our competitors’ offerings, including potential reductions in our pricing and overall “take rate” as a result of competitive pressure, changes in supply, improvements in technology and extension of automation to higher-value inventory, uncertainty regarding rate of adoption, changes in the allocation of demand spend by buyers, changes in revenue mix, auction dynamics, pricing discussions or negotiations with clients and potential clients, and other factors;
|
•
|
diversification of our revenue mix to include new services, some of which may have lower pricing than our historic lower-value inventory business or may cannibalize existing business;
|
•
|
the addition or loss of buyers or sellers;
|
•
|
changes in the advertising strategies or budgets or financial condition of advertisers;
|
•
|
the performance of our technology and the cost, timeliness and results of our technology innovation efforts;
|
•
|
advertising technology and digital media industry conditions and the overall demand for advertising, or changes and uncertainty in the regulatory environment for us or buyers or sellers, including with respect to privacy regulation;
|
•
|
the introduction of new technologies or service offerings by our competitors and market acceptance of such technologies or services;
|
•
|
our level of expenses, including investment required to support our technology development, scale our technology infrastructure and business expansion efforts, including acquisitions, hiring and capital expenditures, or expenses related to litigation;
|
•
|
the impact of changes in our stock price on valuation of stock-based compensation, warrants or other instruments that are marked to market;
|
•
|
the effect of our efforts to maintain the quality of transactions on our platform, including the blocking of non-human inventory and traffic, which could cause a reduction in our revenue if there are fewer transactions consummated through our platform even though the overall quality of the transactions may have improved;
|
•
|
the effectiveness of our financial and information technology infrastructure and controls;
|
•
|
foreign exchange rate fluctuations; and
|
•
|
changes in accounting policies and principles and the significant judgments and estimates made by management in the application of these policies and principles.
|
•
|
Buyers of advertising inventory are increasingly using technology, often provided by third parties, to assess viewability of impressions for use as a bidding or purchasing criterion, or to determine value for purposes of determining pricing.
|
•
|
Assessment of viewability is imperfect, but technology can be expected to improve as data providers, DSPs, and buyers themselves develop viewability assessment tools and build viewability factors into their algorithms for bidding, purchasing, and pricing decisions.
|
•
|
Inventory viewability and value correlate. More viewable inventory is more valuable, and viewability of inventory increases in importance with the price paid for that inventory.
|
•
|
Viewability can be used as an inventory differentiator, by domain or on an impression level, with higher viewability generally associated with higher value and pricing, and lower viewability generally associated with lower value and pricing.
|
•
|
The identification, acquisition and integration of acquired businesses require substantial attention from management. The diversion of management’s attention and any difficulties encountered in the transition process could hurt our business.
|
•
|
The identification, acquisition and integration of acquired businesses requires significant investment, including to harmonize service offerings, expand management capabilities and market presence, and improve or increase development efforts and technology features and functions.
|
•
|
The anticipated benefits from the acquisition may not be achieved, including as a result of loss of customers or personnel of the target, other difficulties in supporting and transitioning the target’s customers, the inability to realize expected synergies from an acquisition, or negative culture effects arising from the integration of new personnel.
|
•
|
We may face difficulties in integrating the personnel, technologies, solutions, operations, and existing contracts of the acquired business.
|
•
|
We may fail to identify all of the problems, liabilities or other shortcomings or challenges of an acquired company, technology, or solution, including issues related to intellectual property, solution quality or architecture, income tax and other regulatory compliance practices, revenue recognition or other accounting practices, or employee or customer issues.
|
•
|
To pay for future acquisitions, we could issue additional shares of our common stock or pay cash. Issuance of shares would dilute stockholders. Use of cash reserves could diminish our ability to respond to other opportunities or challenges. Borrowing to fund any cash purchase price would result in increased fixed obligations and could also include covenants or other restrictions that would impair our ability to manage our operations.
|
•
|
Acquisitions expose us to the risk of assumed known and unknown liabilities including contract, tax, and other obligations incurred by the acquired business, for which indemnity obligations, escrow arrangements or insurance may not be available or may not be sufficient to provide coverage.
|
•
|
New business acquisitions can generate significant intangible assets that result in substantial related amortization charges and possible impairments.
|
•
|
The operations of acquired businesses, or our adaptation of those operations, may require that we apply revenue recognition or other accounting methodologies, assumptions, and estimates that are different from those we use in our current business, which could complicate our financial statements, expose us to additional accounting and audit costs, and increase the risk of accounting errors.
|
•
|
Acquired businesses may have insufficient internal controls that we must remediate, and the integration of acquired businesses may require us to modify or enhance our own internal controls, in each case resulting in increased administrative expense and risk that we fail to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 or that our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, resulting in late filing of our periodic reports, loss of investor confidence, regulatory investigations, and litigation.
|
•
|
dispose of or sell our assets;
|
•
|
make material changes in our business or management;
|
•
|
consolidate or merge with other entities;
|
•
|
incur additional indebtedness;
|
•
|
create liens on our assets;
|
•
|
pay dividends;
|
•
|
make investments;
|
•
|
enter into transactions with affiliates; and
|
•
|
pay off or redeem subordinated indebtedness.
|
•
|
announcements of new offerings, products, services or technologies, commercial relationships, acquisitions, or other events by us or our competitors;
|
•
|
price and volume fluctuations in the overall stock market from time to time;
|
•
|
significant volatility in the market price and trading volume of technology companies in general and of companies in the digital advertising industry in particular;
|
•
|
fluctuations in the trading volume of our shares or the size of our public float;
|
•
|
actual or anticipated changes or fluctuations in our results of operations;
|
•
|
actual or anticipated changes in the expectations of investors or securities analysts, and whether our results of operations meet these expectations;
|
•
|
litigation involving us, our industry, or both;
|
•
|
regulatory developments in the United States, foreign countries, or both;
|
•
|
general economic conditions and trends;
|
•
|
major catastrophic events;
|
•
|
breaches or system outages;
|
•
|
sales of large amounts of our common stock or the perception that such sales could occur, as a result of open trading windows under our Insider Trading Policy, pre-arranged sales by insiders under Rule 10b5-1 promulgated under the Exchange Act, sales to cover taxes upon vesting of restricted stock awards or RSUs, or other factors;
|
•
|
departures of officers or other key employees; or
|
•
|
an adverse impact on the company resulting from other causes, including any of the other risks described in this Quarterly Report.
|
•
|
Our certificate of incorporation gives our board of directors the authority to issue shares of preferred stock in one or more series, and to establish from time to time the number of shares in each series and to fix the price, designations,
|
•
|
Our certificate of incorporation provides that our board of directors is classified, with only one of its three classes elected each year, and directors may be removed only for cause and only with the vote of 66
2
/
3
% of the voting power of stock outstanding and entitled to vote thereon. Further, the number of directors is determined solely by our board of directors, and because we do not allow for cumulative voting rights, holders of a majority of shares of common stock entitled to vote may elect all of the directors standing for election. These provisions could delay the ability of stockholders to change the membership of a majority of our board of directors.
|
•
|
Under our bylaws, only the board of directors or a majority of remaining directors, even if less than a quorum, may fill vacancies resulting from an increase in the authorized number of directors or the resignation, death or removal of a director.
|
•
|
Our certificate of incorporation prohibits stockholder action by written consent, so any action by stockholders may only be taken at an annual or special meeting.
|
•
|
Our certificate of incorporation provides that a special meeting of stockholders may be called only by the board of directors. This could delay any effort by stockholders to force consideration of a proposal or to take action, including the removal of directors.
|
•
|
Under our bylaws, advance notice must be given to nominate directors or submit proposals for consideration at stockholders’ meetings. This gives our board of directors time to defend against takeover attempts and could discourage or deter a potential acquirer from soliciting proxies or making proposals related to an unsolicited takeover attempt.
|
•
|
The provisions of our certificate of incorporation noted above may be amended only with the affirmative vote of holders of at least 66
2
/
3
% of the voting power of all of the then-outstanding shares of the company’s voting stock, voting together as a single class. The same two-thirds vote is required to amend the provision of our certificate of incorporation imposing these supermajority voting requirements. Further, our bylaws may be amended only by our board of directors or by the same percentage vote of stockholders noted above as required to amend our certificate of incorporation. These supermajority voting requirements may inhibit the ability of a potential acquirer to effect such amendments to facilitate an unsolicited takeover attempt.
|
•
|
Our board of directors may amend our bylaws by majority vote. This could allow the board to use bylaw amendments to delay or prevent an unsolicited takeover, and limits the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt.
|
|
THE RUBICON PROJECT, INC.
(Registrant) |
|
/s/ Todd Tappin |
|
Todd Tappin
|
|
Chief Operating Officer and Chief Financial Officer
(Principal Financial Officer) |
|
|
|
/s/ David Day |
|
David Day
|
|
Chief Accounting Officer
(Principal Accounting Officer) |
Number
|
|
Description
|
|
|
|
2.1
|
|
Amendment Agreement, dated as of April 20, 2015, by and among the Registrant, Chango Inc., and Fortis Advisors LLC, as the Securityholder Representative (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on April 27, 2015).
|
3.1
|
|
Sixth Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant's Quarterly Report on Form 10-Q filed with the Commission on May 15, 2014).
|
3.2
|
|
Amended and Restated Bylaws the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant's Quarterly Report on Form 10-Q filed with the Commission on May 15, 2014).
|
10.1*
|
|
Form of Amendment No. 1 to Executive Severance and Vesting Acceleration Agreement between the Registrant and certain of its executive officers.
|
10.2*
|
|
Seventh Amendment to Loan and Security Agreement, dated as of July 29, 2015, by and among Silicon Valley Bank, the Registrant, and the other Borrowers thereunder.
|
10.3*
|
|
First Amendment to Stock Pledge Agreement, dated as of July 29, 2015, by and between Silicon Valley Bank and the Registrant.
|
10.4*
|
|
Stock Pledge Agreement, dated as of July 29, 2015, by and between Silicon Valley Bank and Rubicon Project Unlatch, Inc.
|
10.5*
|
|
Additional Borrower Joinder Supplement, dated as of July 29, 2015, by and among Silicon Valley Bank, the Registrant, and the Additional Borrowers thereunder.
|
31.1*
|
|
Certification of Principal Executive Officer 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.
|
31.2*
|
|
Certification of Principal Financial Officer 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.
|
32.1*
(1)
|
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Certification of the Principal Executive Officer and Principal Financial Officer Pursuant To 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.ins*
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XBRL Instance Document
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101.sch*
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XBRL Taxonomy Schema Linkbase Document
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101.cal*
(2)
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XBRL Taxonomy Calculation Linkbase Document
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101.def*
(2)
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XBRL Taxonomy Definition Linkbase Document
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101.lab*
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XBRL Taxonomy Label Linkbase Document
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101.pre*
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XBRL Taxonomy Presentation Linkbase Document
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*
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Filed herewith
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THE COMPANY:
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The Rubicon Project, Inc.
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By:_______________________________________
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Name:
_________________________________
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Title:
__________________________________
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EXECUTIVE
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___________________________________________
[EXECUTIVE NAME]
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If to Borrower:
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c/o The Rubicon Project, Inc.
12181 Bluff Creek Drive, 4th Floor
Playa Vista, CA 90094
Attn: Chief Accounting Officer and General Counsel
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BANK
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BORROWER
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Silicon Valley Bank
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The Rubicon Project, Inc.
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By:
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/s/ Victor Le
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By:
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/s/ Jonathan Feldman
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Name:
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Victor Le
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Name:
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Jonathan Feldman
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Title:
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VP
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Title:
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Assistant Secretary
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TO: SILICON VALLEY BANK
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Date:
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FROM: THE RUBICON PROJECT, INC., RUBICON PROJECT HOPPER, INC., RUBICON PROJECT UNLATCH, INC., RUBICON PROJECT TURING, INC., RUBICON PROJECT EDISON, INC., ADVERTISEMENT AUTOMATION ACCELERATOR, LLC, RUBICON PROJECT CURIE, INC. and RUBICON PROJECT BELL, INC.
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Financial Covenants
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Required
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Actual
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Complies
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Maintain on a Monthly Basis:
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Minimum Fixed Charge Coverage Ratio*
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1.10:1.00
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_____:1.00
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Yes No
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Streamline Periods/Performance Pricing
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Applies
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Net Cash ≥ $1.00*
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Streamline Period is in effect; Prime + 0.00% or LIBOR + 2.00%
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Yes No
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Net Cash < $1.00
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Streamline Period is not in effect; Prime + 1.50% or LIBOR + 3.50%
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Yes No
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Have there been any amendments of or other changes to the Operating Documents of Borrower or any of its Subsidiaries? If yes, provide copies of any such amendments or changes with this Compliance Certificate.
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Yes
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No
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The Rubicon Project, Inc.
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BANK USE ONLY
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By: ______________________________________
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Received by: _____________________
AUTHORIZED SIGNER
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Name: ___________________________________
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Date: _________________________
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Title: ____________________________________
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Verified: ________________________
AUTHORIZED SIGNER
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Date: _________________________
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Compliance Status: Yes No
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A.
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Net Income of Borrower during the trailing 12-month period
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$
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B.
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To the extent included in the determination of Net Income
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1. The provision for income taxes
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$
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2. Depreciation expense
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$
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3. Amortization expense
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$
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4. Interest Expense
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$
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5. Non-cash stock compensation expense
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$
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6. Purchase accounting adjustments
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$
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$
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7. Non-cash adjustments under ASC 350, 805 and 815
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$
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$
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8. Other expenses or charges which do not represent a cash item
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$
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$
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9. Other non-recurring losses or expenses up to $500,000
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$
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$
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10. Cash paid for income taxes
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$
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11. Capital Expenditures (including software)
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$
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12. IPO capitalized costs
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$
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13. The sum of lines 1 through 9 minus lines 10 through 12
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$
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C.
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Adjusted EBITDA (line A plus line B.13)
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$
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D.
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Interest expenses accrued during trailing 12-month period
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$
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E.
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Principal payments required to be paid during trailing 12-month period
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$
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F.
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Fixed Charges (line D plus line E)
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$
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G.
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Fixed Charge Coverage Ratio (line C divided by line F)
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___:1.00
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No, not in compliance
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Yes, in compliance
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Date: ____________________
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TO:
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SILICON VALLEY BANK
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RE:
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Loan and Security Agreement dated as of September 27, 2011 (as amended, modified, supplemented or restated from time to time, the “
Loan Agreement
”), by and between
THE RUBICON PROJECT, INC., RUBICON PROJECT HOPPER, INC., RUBICON PROJECT UNLATCH, INC., RUBICON PROJECT TURING, INC., RUBICON PROJECT EDISON, INC., ADVERTISEMENT AUTOMATION ACCELERATOR, LLC, RUBICON PROJECT CURIE, INC. AND RUBICON PROJECT BELL, INC.
(individually and collectively, the “
Borrower
”), and Silicon Valley Bank (the “
Bank
”)
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BORROWER
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THE RUBICON PROJECT, INC.
, on behalf of itself and all Borrowers
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By:
__________________________________
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Name:
_______________________________
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Title:
________________________________
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LIBOR Pricing Date
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LIBOR
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LIBOR Variance
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Maturity Date
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____%
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Date: ____________________
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TO:
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SILICON VALLEY BANK
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RE:
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Loan and Security Agreement dated as of September 27, 2011 (as amended, modified, supplemented or restated from time to time, the “
Loan Agreement
”), by and between
THE RUBICON PROJECT, INC., RUBICON PROJECT HOPPER, INC., RUBICON PROJECT UNLATCH, INC., RUBICON PROJECT TURING, INC., RUBICON PROJECT EDISON, INC., ADVERTISEMENT AUTOMATION ACCELERATOR, LLC, RUBICON PROJECT CURIE, INC. AND RUBICON PROJECT BELL, INC.
(individually and collectively, the “
Borrower
”), and Silicon Valley Bank (the “
Bank
”)
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BORROWER
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THE RUBICON PROJECT, INC.
, on behalf of itself and all Borrowers
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By:
__________________________________
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Name:
_______________________________
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Title:
________________________________
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LIBOR Pricing Date
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LIBOR
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LIBOR Variance
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Maturity Date
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____%
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1.
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Definitions.
Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Pledge Agreement.
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2.
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Amendment to Pledge Agreement.
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BANK
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PLEDGOR
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Silicon Valley Bank
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The Rubicon Project, Inc.
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By:
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/s/ Victor Le
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By:
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/s/ Jonathan Feldman
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Name:
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Victor Le
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Name:
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Jonathan Feldman
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Title:
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VP
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Title:
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Assistant Secretary
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Issuer; Type and Place of Organization
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Number of Shares
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Type
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Certificate Number
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Percentage Ownership
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Rubicon Project Hopper, Inc.
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100%
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Rubicon Project Unlatch, Inc.
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100%
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Rubicon Project Turing, Inc.
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100%
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Rubicon Project Edison, Inc.
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100%
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Advertisement Automation Accelerator, LLC
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100%
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Rubicon Project Bell, Inc.
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100%
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Rubicon Project Curie, Inc.
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100%
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The Rubicon Project Ltd.
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65%
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The Rubicon Project GmbH
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65%
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The Rubicon Project Australia Pty. Ltd.
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65%
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Rubicon Project K.K.
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65%
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The Rubicon Project Singapore Pte. Ltd.
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65%
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The Rubicon Project SARL
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65%
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The Rubicon Project Serviços de Internet Ltda.
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65%
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The Rubicon Project Canada, Inc.
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65%
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1.
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CREATION OF SECURITY INTEREST.
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2.
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REPRESENTATIONS AND WARRANTIES. Pledgor represents and warrants that:
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3.
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NEGATIVE COVENANTS
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4.
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EVENTS OF DEFAULT
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5.
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BANK’S RIGHTS AND REMEDIES
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6.
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NOTICES
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If to Pledgor:
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Rubicon Project Unlatch, Inc.
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12181 Bluff Creek Drive
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Playa Vista, CA 90094
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Attn:
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Fax:
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If to Bank:
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Silicon Valley Bank
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38 Technology Drive West, Suite 150
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Irvine, CA 92618
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Attn: Victor Le
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Fax: (949) 790-9020
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7.
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CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER
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8.
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GENERAL PROVISIONS
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Pledgor
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RUBICON PROJECT UNLATCH, INC.
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By:
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/s/ Jonathan Feldman
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Title: Assistant Secretary
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Bank
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SILICON VALLEY BANK
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By:
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/s/ Victor Le
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Title: Assistant Secretary
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Issuer; Type and Place of Organization
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Number of Shares
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Type
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Certificate Number
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Percentage Ownership
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Rubicon Project Daylight, Inc.
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100%
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Dated: _____________20__
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PLEDGOR
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Rubicon Project Unlatch, Inc. By: Name: Title: |
WITNESS/ATTEST:
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THE RUBICON PROJECT, INC.
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By:
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/s/ Jonathan Feldman
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Name: Jonathan Feldman
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Title: Assistant Secretary
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WITNESS/ATTEST:
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RUBICON PROJECT HOPPER, INC.
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By:
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/s/ Jonathan Feldman
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Name: Jonathan Feldman
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Title: Assistant Secretary
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WITNESS/ATTEST:
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RUBICON PROJECT UNLATCH, INC.
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By:
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/s/ Jonathan Feldman
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Name: Jonathan Feldman
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Title: Assistant Secretary
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WITNESS/ATTEST:
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RUBICON PROJECT TURING, INC.
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By:
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/s/ Jonathan Feldman
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Name: Jonathan Feldman
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Title: Assistant Secretary
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WITNESS/ATTEST:
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RUBICON PROJECT EDISON, INC.
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By:
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/s/ Jonathan Feldman
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Name: Jonathan Feldman
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Title: Assistant Secretary
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WITNESS/ATTEST:
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ADVERTISEMENT AUTOMATION ACCELERATOR, LLC
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By:
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/s/ Jonathan Feldman
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Name: Jonathan Feldman
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Title: Authorized Person
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WITNESS/ATTEST:
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RUBICON PROJECT BELL, INC.
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By:
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/s/ Jonathan Feldman
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Name: Jonathan Feldman
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Title: Assistant Secretary
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WITNESS/ATTEST:
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RUBICON PROJECT BELL, INC.
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By:
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/s/ Jonathan Feldman
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Name: Jonathan Feldman
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Title: Assistant Secretary
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WITNESS/ATTEST:
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SILICON VALLEY BANK
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By:
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/s/ Victor Le
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Name: Victor Le
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Title: VP
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1.
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I have reviewed this Quarterly Report on Form 10-Q of The Rubicon Project, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
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c.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Signature:
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/s/ Frank Addante
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Frank Addante
Chief Executive Officer, Chief Product Architect and Chairman of the Board
(Principal Executive Officer)
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1.
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I have reviewed this Quarterly Report on Form 10-Q of The Rubicon Project, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
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c.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Signature:
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/s/ Todd Tappin
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Todd Tappin
Chief Operating Officer and Chief Financial Officer
(Principal Financial Officer)
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/s/ Frank Addante
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Frank Addante
Chief Executive Officer, Chief Product Architect and Chairman of the Board
(Principal Executive Officer)
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/s/ Todd Tappin
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Todd Tappin
Chief Operating Officer and Chief Financial Officer (Principal Financial Officer) |