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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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05-0605598
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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Large Accelerated Filer
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o
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Accelerated Filer
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o
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Non-accelerated filer
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x
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(Do not check if a smaller reporting Company)
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Smaller Reporting Company
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o
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Page
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September 30,
2015 |
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December 31,
2014 |
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Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
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$
|
159,098
|
|
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$
|
3,290
|
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Marketable investments
|
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—
|
|
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48,253
|
|
||
Accounts receivable, net of doubtful accounts of $494 and $602
|
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26,055
|
|
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18,912
|
|
||
Inventories
|
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50,324
|
|
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33,451
|
|
||
Deferred taxes
|
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7,333
|
|
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6,280
|
|
||
Prepaid expenses and other current assets
|
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6,267
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|
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5,115
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|
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Total current assets
|
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249,077
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|
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115,301
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Property and equipment, net
|
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8,646
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|
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5,181
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|
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Deferred taxes
|
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1,309
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|
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571
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Other non-current assets
|
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293
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|
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328
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Total assets
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$
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259,325
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|
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$
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121,381
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Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit)
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Current Liabilities:
|
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Accounts payable
|
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$
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4,024
|
|
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$
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2,348
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Accrued liabilities
|
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24,253
|
|
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18,475
|
|
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Total current liabilities
|
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28,277
|
|
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20,823
|
|
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Other non-current liabilities
|
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2,458
|
|
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1,461
|
|
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Total liabilities
|
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30,735
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|
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22,284
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|
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Commitments and contingencies (Note 8)
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|
|
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Convertible preferred stock, $0.001 par value per share—none authorized, issued and outstanding at September 30, 2015; 25,000,000 shares authorized, 19,510,410 shares issued and outstanding at December 31, 2014; aggregate liquidation value $149,361 at December 31, 2014
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—
|
|
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111,467
|
|
||
Stockholders’ Equity (Deficit):
|
|
|
|
|
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Preferred stock, $0.001 par value per share—5,000,000 shares authorized, none issued and outstanding at September 30, 2015; None authorized, issued and outstanding at December 31, 2014
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—
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—
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Common stock, $0.001 par value per share—300,000,000 shares authorized, 29,882,621 issued and outstanding at September 30, 2015; 40,000,000 shares authorized, 4,736,689 issued and outstanding at December 31, 2014
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30
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|
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5
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|
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Additional paid-in capital
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249,230
|
|
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8,446
|
|
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Notes receivable from stockholders
|
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(26
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)
|
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(117
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)
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Accumulated other comprehensive loss
|
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(1,536
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)
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(864
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)
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Accumulated deficit
|
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(19,108
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)
|
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(19,840
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)
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Total stockholders’ equity (deficit)
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228,590
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(12,370
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)
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Total liabilities, convertible preferred stock and stockholders’ equity (deficit)
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$
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259,325
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$
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121,381
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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||||
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2015
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2014
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2015
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|
2014
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||||||||
Revenue
|
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$
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50,416
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|
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$
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32,464
|
|
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$
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131,679
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|
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$
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90,107
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Cost of revenue
|
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16,919
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11,667
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|
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44,079
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|
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31,156
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Gross profit
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33,497
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20,797
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|
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87,600
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|
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58,951
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Operating expenses:
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|
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|
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||||||||
Research and development
|
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4,560
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3,897
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|
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12,543
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|
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11,435
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|
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Sales, general and administrative
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26,755
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16,589
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72,698
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44,829
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Total operating expenses
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31,315
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20,486
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85,241
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56,264
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Income from operations
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2,182
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|
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311
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|
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2,359
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|
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2,687
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Interest income (expense), net
|
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17
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144
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|
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402
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|
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183
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|
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Other income (expense), net
|
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(115
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)
|
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(56
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)
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(613
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)
|
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(148
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)
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Income before provision for income taxes
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2,084
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|
|
399
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|
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2,148
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|
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2,722
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|
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Provision for income taxes
|
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1,183
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|
|
227
|
|
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1,416
|
|
|
893
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|
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Net income
|
|
901
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|
|
172
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|
|
732
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|
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1,829
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|
||||
Foreign currency translation adjustments, net of tax
|
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(303
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)
|
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(413
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)
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(892
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)
|
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(507
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)
|
||||
Unrealized gains (losses) on available-for-sale securities, net of tax
|
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—
|
|
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(266
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)
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220
|
|
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(92
|
)
|
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Comprehensive income (loss)
|
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$
|
598
|
|
|
$
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(507
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)
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$
|
60
|
|
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$
|
1,230
|
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Net income (loss) attributable to common stockholders (Note 16)
|
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$
|
276
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|
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$
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(1,192
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)
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$
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175
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|
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$
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(933
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)
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Net income (loss) per share attributable to common stockholders
—Basic |
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$
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0.04
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|
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$
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(0.25
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)
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$
|
0.03
|
|
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$
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(0.20
|
)
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—Diluted
|
|
$
|
0.03
|
|
|
$
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(0.25
|
)
|
|
$
|
0.02
|
|
|
$
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(0.20
|
)
|
Weighted average shares used to compute net income (loss) per share attributable to common stockholders
—Basic |
|
7,853,730
|
|
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4,688,045
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|
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5,962,031
|
|
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4,577,725
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|
||||
—Diluted
|
|
10,189,248
|
|
|
4,688,045
|
|
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8,494,651
|
|
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4,577,725
|
|
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Convertible Preferred Stock
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
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Notes
Receivable
from
Stockholders
|
|
Accumulated
Other
Comprehensive
Loss
|
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Accumulated
Deficit
|
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Total
Stockholders’
Equity (Deficit)
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||||||||||||||||||||
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Shares
|
|
Amount
|
|
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Shares
|
|
Amount
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2014
|
|
19,510,410
|
|
|
$
|
111,467
|
|
|
|
4,736,689
|
|
|
$
|
5
|
|
|
$
|
8,446
|
|
|
$
|
(117
|
)
|
|
$
|
(864
|
)
|
|
$
|
(19,840
|
)
|
|
$
|
(12,370
|
)
|
Conversion of convertible preferred stock into common stock upon closing of IPO
|
|
(19,510,410
|
)
|
|
(111,467
|
)
|
|
|
19,510,410
|
|
|
19
|
|
|
111,448
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111,467
|
|
|||||||
Shares issued upon closing of IPO
|
|
—
|
|
|
—
|
|
|
|
4,600,000
|
|
|
5
|
|
|
124,762
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
124,767
|
|
|||||||
Issuance of common stock
|
|
—
|
|
|
—
|
|
|
|
1,059,172
|
|
|
1
|
|
|
1,058
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,059
|
|
|||||||
Shares held for tax withholdings
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(2,525
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,525
|
)
|
|||||||
Repurchase of common stock
|
|
—
|
|
|
—
|
|
|
|
(23,650
|
)
|
|
—
|
|
|
(342
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(342
|
)
|
|||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
5,126
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,126
|
|
|||||||
Excess tax benefit from stock-based compensation
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
1,257
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,257
|
|
|||||||
Forgiven notes receivable from stockholders
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
91
|
|
|
—
|
|
|
—
|
|
|
91
|
|
|||||||
Foreign currency translation adjustment, net of tax of $116
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(892
|
)
|
|
—
|
|
|
(892
|
)
|
|||||||
Unrealized gain on investments, net of tax of $159
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
220
|
|
|
—
|
|
|
220
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
732
|
|
|
732
|
|
|||||||
Balance at September 30, 2015
|
|
—
|
|
|
$
|
—
|
|
|
|
29,882,621
|
|
|
$
|
30
|
|
|
$
|
249,230
|
|
|
$
|
(26
|
)
|
|
$
|
(1,536
|
)
|
|
$
|
(19,108
|
)
|
|
$
|
228,590
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2015
|
|
2014
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
||||
Net income
|
|
$
|
732
|
|
|
$
|
1,829
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
1,227
|
|
|
520
|
|
||
Stock-based compensation
|
|
5,126
|
|
|
1,074
|
|
||
Excess tax benefit from stock-based compensation
|
|
(1,257
|
)
|
|
—
|
|
||
Provision for doubtful accounts
|
|
(108
|
)
|
|
172
|
|
||
Inventory write downs
|
|
704
|
|
|
1,398
|
|
||
Write off of note receivable
|
|
91
|
|
|
—
|
|
||
Provision for sales returns
|
|
675
|
|
|
122
|
|
||
Loss on minority investment
|
|
—
|
|
|
150
|
|
||
Loss on disposal of property and equipment
|
|
12
|
|
|
30
|
|
||
Realized loss on marketable investments
|
|
541
|
|
|
—
|
|
||
Provision for product warranty
|
|
299
|
|
|
26
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(7,383
|
)
|
|
(4,971
|
)
|
||
Inventories
|
|
(18,012
|
)
|
|
(5,157
|
)
|
||
Prepaid expenses and other current and non-current assets
|
|
(1,706
|
)
|
|
(207
|
)
|
||
Accounts payable
|
|
1,501
|
|
|
888
|
|
||
Accrued expenses and other non-current liabilities
|
|
4,927
|
|
|
3,133
|
|
||
Net cash used in operating activities
|
|
(12,631
|
)
|
|
(993
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
||||
Purchase of marketable investments
|
|
(4,069
|
)
|
|
(48,771
|
)
|
||
Proceeds from sales of marketable investments
|
|
52,160
|
|
|
12,737
|
|
||
Purchases of property and equipment
|
|
(4,507
|
)
|
|
(1,798
|
)
|
||
Net cash provided by (used in) investing activities
|
|
43,584
|
|
|
(37,832
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
||||
Proceeds from issuance of preferred stock, net of issuance costs
|
|
—
|
|
|
57,212
|
|
||
Proceeds from issuance of common stock issued in initial public offering, net of issuance costs
|
|
125,916
|
|
|
—
|
|
||
Proceeds from exercises of stock options
|
|
546
|
|
|
923
|
|
||
Excess tax benefit from stock-based compensation
|
|
1,257
|
|
|
—
|
|
||
Repurchase of preferred stock
|
|
—
|
|
|
(8,311
|
)
|
||
Repayment of credit facility
|
|
—
|
|
|
(6,000
|
)
|
||
Repurchase of common stock and stock options
|
|
—
|
|
|
(1,022
|
)
|
||
Payment of employee taxes related to vested common and restricted stock
|
|
(2,525
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
|
125,194
|
|
|
42,802
|
|
||
Effect of foreign exchange rate changes on cash and cash equivalents
|
|
(339
|
)
|
|
80
|
|
||
Net Increase In Cash And Cash Equivalents
|
|
155,808
|
|
|
4,057
|
|
||
CASH AND CASH EQUIVALENTS—Beginning of period
|
|
3,290
|
|
|
4,131
|
|
||
CASH AND CASH EQUIVALENTS—End of period
|
|
$
|
159,098
|
|
|
$
|
8,188
|
|
NONCASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
||||
Conversion of convertible preferred stock into common stock
|
|
$
|
111,467
|
|
|
$
|
—
|
|
Purchase of property and equipment funded through accounts payable
|
|
$
|
200
|
|
|
$
|
85
|
|
Deferred issuance costs not yet paid
|
|
$
|
1,149
|
|
|
$
|
—
|
|
|
|
As of December 31, 2014
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair Value
|
||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
|
$
|
155
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
155
|
|
Marketable investments:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Agency securities
|
|
—
|
|
|
6,006
|
|
|
—
|
|
|
6,006
|
|
||||
U.S. Treasury
|
|
4,009
|
|
|
—
|
|
|
—
|
|
|
4,009
|
|
||||
Corporate bonds
|
|
—
|
|
|
29,619
|
|
|
—
|
|
|
29,619
|
|
||||
Mutual funds
|
|
8,619
|
|
|
—
|
|
|
—
|
|
|
8,619
|
|
||||
Total
|
|
$
|
12,783
|
|
|
$
|
35,625
|
|
|
$
|
—
|
|
|
$
|
48,408
|
|
|
|
Balance At
Beginning
Of Period
|
|
Charged To
Costs And
Expenses
|
|
Deductions
|
|
Balance At
End Of
Period
|
||||||||
Allowance for Doubtful Accounts
|
|
|
|
|
|
|
|
|
||||||||
For the year ended December 31, 2014
|
|
$
|
471
|
|
|
$
|
150
|
|
|
$
|
(19
|
)
|
|
$
|
602
|
|
For the nine months ended September 30, 2015
|
|
602
|
|
|
(108
|
)
|
|
—
|
|
|
494
|
|
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
Prepaid expenses
|
|
$
|
5,772
|
|
|
$
|
3,130
|
|
Income tax receivable
|
|
318
|
|
|
1,654
|
|
||
Other current assets
|
|
177
|
|
|
331
|
|
||
Prepaid expenses and other current assets
|
|
$
|
6,267
|
|
|
$
|
5,115
|
|
Marketable Investments
|
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
U.S. Agency securities
|
|
$
|
6,012
|
|
|
$
|
3
|
|
|
$
|
(9
|
)
|
|
$
|
6,006
|
|
U.S. Treasury
|
|
4,011
|
|
|
—
|
|
|
(2
|
)
|
|
$
|
4,009
|
|
|||
Corporate bonds
|
|
29,834
|
|
|
4
|
|
|
(219
|
)
|
|
$
|
29,619
|
|
|||
Mutual funds
|
|
8,768
|
|
|
—
|
|
|
(149
|
)
|
|
$
|
8,619
|
|
|||
Total
|
|
$
|
48,625
|
|
|
$
|
7
|
|
|
$
|
(379
|
)
|
|
$
|
48,253
|
|
|
December 31, 2014
|
||
|
Fair Value
|
||
Due in one year
|
$
|
16,442
|
|
Due in one to five years
|
31,811
|
|
|
Total
|
$
|
48,253
|
|
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
Raw materials
|
|
$
|
9,477
|
|
|
$
|
5,105
|
|
Work in process
|
|
1,244
|
|
|
543
|
|
||
Finished goods
|
|
39,603
|
|
|
27,803
|
|
||
Inventories
|
|
$
|
50,324
|
|
|
$
|
33,451
|
|
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
Machinery and equipment
|
|
$
|
8,166
|
|
|
$
|
5,089
|
|
Furniture and fixtures
|
|
2,004
|
|
|
519
|
|
||
Leasehold improvements
|
|
1,434
|
|
|
379
|
|
||
Software
|
|
744
|
|
|
599
|
|
||
Computers
|
|
565
|
|
|
153
|
|
||
Construction in progress
|
|
341
|
|
|
1,931
|
|
||
Total property and equipment
|
|
13,254
|
|
|
8,670
|
|
||
Less: Accumulated depreciation and amortization
|
|
(4,608
|
)
|
|
(3,489
|
)
|
||
Property and equipment, net
|
|
$
|
8,646
|
|
|
$
|
5,181
|
|
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
Payroll and employee-related expenses
|
|
$
|
12,850
|
|
|
$
|
8,221
|
|
Sales return reserve
|
|
2,839
|
|
|
2,164
|
|
||
Preclinical and clinical trial cost
|
|
1,405
|
|
|
2,319
|
|
||
Deferred revenue
|
|
784
|
|
|
1,591
|
|
||
Product warranty
|
|
618
|
|
|
314
|
|
||
Sales tax payable
|
|
412
|
|
|
306
|
|
||
Income tax payable
|
|
54
|
|
|
332
|
|
||
Other accrued liabilities
|
|
5,291
|
|
|
3,228
|
|
||
Total accrued liabilities
|
|
$
|
24,253
|
|
|
$
|
18,475
|
|
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
Balance at the beginning of the period
|
|
$
|
314
|
|
|
$
|
323
|
|
Accruals of warranties issued
|
|
545
|
|
|
149
|
|
||
Settlements of warranty claims
|
|
(241
|
)
|
|
(158
|
)
|
||
Balance at the end of the period
|
|
$
|
618
|
|
|
$
|
314
|
|
|
Lease Payments
|
||
Three Months Ending December 31, 2015
|
$
|
766
|
|
Year Ending December 31:
|
|
||
2016
|
3,149
|
|
|
2017
|
3,145
|
|
|
2018
|
3,141
|
|
|
2019
|
3,223
|
|
|
2020
|
3,299
|
|
|
Thereafter
|
32,486
|
|
|
Total future minimum lease payments
|
$
|
49,209
|
|
Series
|
|
Shares
Authorized
|
|
Shares Issued
and
Outstanding
|
|
Proceeds,
Net of Issuance
Costs
|
|
Aggregate
Liquidation
Amount
|
||||||
Series A Preferred Stock
|
|
1,000,000
|
|
|
1,000,000
|
|
|
$
|
299
|
|
|
$
|
554
|
|
Series B Preferred Stock
|
|
4,287,486
|
|
|
4,005,338
|
|
|
6,536
|
|
|
11,725
|
|
||
Series C Preferred Stock
|
|
4,388,715
|
|
|
4,168,218
|
|
|
13,266
|
|
|
22,238
|
|
||
Series D Preferred Stock
|
|
3,944,733
|
|
|
3,881,459
|
|
|
19,647
|
|
|
30,976
|
|
||
Series E Preferred Stock
|
|
1,973,684
|
|
|
1,909,940
|
|
|
14,507
|
|
|
21,609
|
|
||
Series F Preferred Stock
|
|
5,303,031
|
|
|
4,545,455
|
|
|
57,212
|
|
|
62,259
|
|
||
Undesignated
|
|
4,102,351
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total preferred stock
|
|
25,000,000
|
|
|
19,510,410
|
|
|
$
|
111,467
|
|
|
$
|
149,361
|
|
|
|
Number
of Shares
|
|
Weighted-
Average
Exercise
Price
|
|||
Balance, December 31, 2014
|
|
2,900,676
|
|
|
$
|
2.66
|
|
Options granted
|
|
1,809,400
|
|
|
21.47
|
|
|
Options exercised
|
|
(938,456
|
)
|
|
0.95
|
|
|
Options cancelled
|
|
(5,526
|
)
|
|
11.14
|
|
|
Balance, September 30, 2015
|
|
3,766,094
|
|
|
12.11
|
|
|
|
Number
of Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Unvested at December 31, 2014
|
|
367,126
|
|
|
$
|
7.26
|
|
Granted
|
|
673,361
|
|
|
14.60
|
|
|
Vested
|
|
(278,216
|
)
|
|
11.77
|
|
|
Cancelled/Forfeited
|
|
(3,000
|
)
|
|
7.75
|
|
|
Unvested and expected to vest at September 30, 2015
|
|
759,271
|
|
|
12.12
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Cost of sales
|
|
$
|
141
|
|
|
$
|
65
|
|
|
$
|
271
|
|
|
$
|
189
|
|
Research and development
|
|
100
|
|
|
23
|
|
|
282
|
|
|
70
|
|
||||
Sales, general and administrative
|
|
1,269
|
|
|
284
|
|
|
4,573
|
|
|
815
|
|
||||
|
|
$
|
1,510
|
|
|
$
|
372
|
|
|
$
|
5,126
|
|
|
$
|
1,074
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Numerator
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
901
|
|
|
$
|
172
|
|
|
$
|
732
|
|
|
$
|
1,829
|
|
Less: Deemed dividend paid to preferred stockholders upon repurchase
|
|
—
|
|
|
(6,344
|
)
|
|
—
|
|
|
(6,344
|
)
|
||||
Less: Undistributed income attributable to preferred stockholders
|
|
(625
|
)
|
|
—
|
|
|
(557
|
)
|
|
—
|
|
||||
Add: Undistributed loss attributable to preferred stockholders
|
|
—
|
|
|
4,980
|
|
|
—
|
|
|
3,582
|
|
||||
Net income (loss) attributable to common stockholders—basic and diluted
|
|
$
|
276
|
|
|
$
|
(1,192
|
)
|
|
$
|
175
|
|
|
$
|
(933
|
)
|
Denominator
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares used to compute net income (loss) attributable to common stockholders
—Basic
|
|
7,853,730
|
|
|
4,688,045
|
|
|
5,962,031
|
|
|
4,577,725
|
|
||||
Potential dilutive options, as calculated using treasury stock method
|
|
1,979,194
|
|
|
—
|
|
|
2,362,685
|
|
|
—
|
|
||||
Potential dilutive restricted stock, as calculated using treasury stock method
|
|
356,324
|
|
|
—
|
|
|
169,935
|
|
|
—
|
|
||||
Weighted average shares used to compute net income (loss) attributable to common stockholders
—Diluted
|
|
10,189,248
|
|
|
4,688,045
|
|
|
8,494,651
|
|
|
4,577,725
|
|
||||
Net income (loss) per share attributable to common stockholders
—Basic
|
|
$
|
0.04
|
|
|
$
|
(0.25
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.20
|
)
|
—Diluted
|
|
$
|
0.03
|
|
|
$
|
(0.25
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.20
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Options to purchase common stock
|
|
1,321,250
|
|
|
2,976,992
|
|
|
1,321,250
|
|
|
2,976,992
|
|
Restricted stock
|
|
6,500
|
|
|
368,793
|
|
|
6,500
|
|
|
368,793
|
|
Common stock warrants
|
|
—
|
|
|
75,972
|
|
|
—
|
|
|
75,972
|
|
Total
|
|
1,327,750
|
|
|
3,421,757
|
|
|
1,327,750
|
|
|
3,421,757
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
United States
|
|
$
|
35,394
|
|
|
$
|
22,305
|
|
|
$
|
89,364
|
|
|
$
|
59,281
|
|
Japan
|
|
5,420
|
|
|
3,467
|
|
|
14,030
|
|
|
10,796
|
|
||||
Other International
|
|
9,602
|
|
|
6,692
|
|
|
28,285
|
|
|
20,030
|
|
||||
Total
|
|
$
|
50,416
|
|
|
$
|
32,464
|
|
|
$
|
131,679
|
|
|
$
|
90,107
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Neuro
|
|
$
|
36,309
|
|
|
$
|
26,988
|
|
|
$
|
102,363
|
|
|
$
|
77,056
|
|
Peripheral Vascular
|
|
14,107
|
|
|
5,476
|
|
|
29,316
|
|
|
13,051
|
|
||||
Total
|
|
$
|
50,416
|
|
|
$
|
32,464
|
|
|
$
|
131,679
|
|
|
$
|
90,107
|
|
•
|
The rate at which we grow our salesforce and the speed at which newly hired salespeople become fully effective can impact our revenue growth or our costs incurred in anticipation of such growth.
|
•
|
Our industry is intensely competitive and, in particular, we compete with a number of large, well-capitalized companies. We must continue to successfully compete in light of our competitors’ existing and future products and their resources to successfully market to the specialist physicians who use our products.
|
•
|
We must continue to successfully introduce new products that gain acceptance with specialist physicians and successfully transition from existing products to new products, ensuring adequate supply while avoiding excess inventory of older products and resulting inventory write-downs or write-offs. In addition, as we introduce new products, we generally build our inventory of components and finished goods in advance of sales, which may cause quarterly fluctuations in our financial condition.
|
•
|
Publications of clinical results by us, our competitors and other third parties can have a significant influence on whether, and the degree to which, our products are used by specialist physicians and the procedures and treatments those physicians choose to administer for a given condition.
|
•
|
The specialist physicians who use our products may not perform procedures during certain times of the year, such as those periods when they are at major medical conferences or are away from their practices for other reasons, the timing of which occurs irregularly during the year and from year to year.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||||||
|
(in thousands, except for percentages)
|
||||||||||||||||||||||||||
Revenue
|
$
|
50,416
|
|
|
100.0
|
%
|
|
$
|
32,464
|
|
|
100.0
|
%
|
|
$
|
131,679
|
|
|
100.0
|
%
|
|
$
|
90,107
|
|
|
100.0
|
%
|
Cost of revenue
|
16,919
|
|
|
33.6
|
%
|
|
11,667
|
|
|
35.9
|
%
|
|
44,079
|
|
|
33.5
|
%
|
|
31,156
|
|
|
34.6
|
%
|
||||
Gross profit
|
33,497
|
|
|
66.4
|
%
|
|
20,797
|
|
|
64.1
|
%
|
|
87,600
|
|
|
66.5
|
%
|
|
58,951
|
|
|
65.4
|
%
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Research and development
|
4,560
|
|
|
9.0
|
%
|
|
3,897
|
|
|
12.0
|
%
|
|
12,543
|
|
|
9.5
|
%
|
|
11,435
|
|
|
12.7
|
%
|
||||
Sales, general and administrative
|
26,755
|
|
|
53.1
|
%
|
|
16,589
|
|
|
51.1
|
%
|
|
72,698
|
|
|
55.2
|
%
|
|
44,829
|
|
|
49.8
|
%
|
||||
Total operating expenses
|
31,315
|
|
|
62.1
|
%
|
|
20,486
|
|
|
63.1
|
%
|
|
85,241
|
|
|
64.7
|
%
|
|
56,264
|
|
|
62.4
|
%
|
||||
Income from operations
|
2,182
|
|
|
4.3
|
%
|
|
311
|
|
|
1.0
|
%
|
|
2,359
|
|
|
1.8
|
%
|
|
2,687
|
|
|
3.0
|
%
|
||||
Interest income (expense), net
|
17
|
|
|
0.0
|
%
|
|
144
|
|
|
0.4
|
%
|
|
402
|
|
|
0.3
|
%
|
|
183
|
|
|
0.2
|
%
|
||||
Other income (expense), net
|
(115
|
)
|
|
(0.2
|
)%
|
|
(56
|
)
|
|
(0.2
|
)%
|
|
(613
|
)
|
|
(0.5
|
)%
|
|
(148
|
)
|
|
(0.2
|
)%
|
||||
Income before provision for income taxes
|
2,084
|
|
|
4.1
|
%
|
|
399
|
|
|
1.2
|
%
|
|
2,148
|
|
|
1.6
|
%
|
|
2,722
|
|
|
3.0
|
%
|
||||
Provision for income taxes
|
1,183
|
|
|
2.3
|
%
|
|
227
|
|
|
0.7
|
%
|
|
1,416
|
|
|
1.1
|
%
|
|
893
|
|
|
1.0
|
%
|
||||
Net income
|
$
|
901
|
|
|
1.8
|
%
|
|
$
|
172
|
|
|
0.5
|
%
|
|
$
|
732
|
|
|
0.6
|
%
|
|
$
|
1,829
|
|
|
2.0
|
%
|
|
Three Months Ended September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(in thousands, except for percentages)
|
|||||||||||||
Neuro
|
$
|
36,309
|
|
|
$
|
26,988
|
|
|
$
|
9,321
|
|
|
34.5
|
%
|
Peripheral Vascular
|
14,107
|
|
|
5,476
|
|
|
8,631
|
|
|
157.6
|
%
|
|||
Total
|
$
|
50,416
|
|
|
$
|
32,464
|
|
|
$
|
17,952
|
|
|
55.3
|
%
|
|
Three Months Ended September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(in thousands, except for percentages)
|
|||||||||||||
Cost of revenue
|
$
|
16,919
|
|
|
$
|
11,667
|
|
|
$
|
5,252
|
|
|
45.0
|
%
|
Gross profit
|
$
|
33,497
|
|
|
$
|
20,797
|
|
|
$
|
12,700
|
|
|
61.1
|
%
|
Gross margin %
|
66.4
|
%
|
|
64.1
|
%
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(in thousands, except for percentages)
|
|||||||||||||
R&D
|
$
|
4,560
|
|
|
$
|
3,897
|
|
|
$
|
663
|
|
|
17.0
|
%
|
R&D as a percentage of revenue
|
9.0
|
%
|
|
12.0
|
%
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(in thousands, except for percentages)
|
|||||||||||||
SG&A
|
$
|
26,755
|
|
|
$
|
16,589
|
|
|
$
|
10,166
|
|
|
61.3
|
%
|
SG&A
as a percentage of revenue
|
53.1
|
%
|
|
51.1
|
%
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Change
|
||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
||||
|
(in thousands, except for percentages)
|
||||||||||
Provision for income taxes
|
1,183
|
|
|
227
|
|
|
$
|
956
|
|
|
nm
|
Effective tax rate
|
56.8
|
%
|
|
56.9
|
%
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(in thousands, except for percentages)
|
|||||||||||||
Neuro
|
$
|
102,363
|
|
|
$
|
77,056
|
|
|
$
|
25,307
|
|
|
32.8
|
%
|
Peripheral Vascular
|
29,316
|
|
|
13,051
|
|
|
16,265
|
|
|
124.6
|
%
|
|||
Total
|
$
|
131,679
|
|
|
$
|
90,107
|
|
|
$
|
41,572
|
|
|
46.1
|
%
|
|
Nine Months Ended September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(in thousands, except for percentages)
|
|||||||||||||
Cost of revenue
|
$
|
44,079
|
|
|
$
|
31,156
|
|
|
$
|
12,923
|
|
|
41.5
|
%
|
Gross profit
|
$
|
87,600
|
|
|
$
|
58,951
|
|
|
$
|
28,649
|
|
|
48.6
|
%
|
Gross margin %
|
66.5
|
%
|
|
65.4
|
%
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(in thousands, except for percentages)
|
|||||||||||||
R&D
|
$
|
12,543
|
|
|
$
|
11,435
|
|
|
$
|
1,108
|
|
|
9.7
|
%
|
R&D as a percentage of revenue
|
9.5
|
%
|
|
12.7
|
%
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(in thousands, except for percentages)
|
|||||||||||||
SG&A
|
$
|
72,698
|
|
|
$
|
44,829
|
|
|
$
|
27,869
|
|
|
62.2
|
%
|
SG&A as a percentage of revenue
|
55.2
|
%
|
|
49.8
|
%
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
||||||
|
(in thousands, except for percentages)
|
||||||||||||
Provision for income taxes
|
$
|
1,416
|
|
|
$
|
893
|
|
|
$
|
523
|
|
|
nm
|
Effective tax rate
|
65.9
|
%
|
|
32.8
|
%
|
|
|
|
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
|
(in thousands)
|
||||||
Cash and cash equivalents
|
$
|
159,098
|
|
|
$
|
3,290
|
|
Marketable investments
|
—
|
|
|
48,253
|
|
||
Accounts receivable, net
|
26,055
|
|
|
18,912
|
|
||
Accounts payable
|
4,024
|
|
|
2,348
|
|
||
Accrued liabilities
|
24,253
|
|
|
18,475
|
|
||
Working capital
(1)
|
220,800
|
|
|
94,478
|
|
(1)
|
Working capital consists of total current assets less total current liabilities.
|
|
Nine Months Ended September 30,
|
||||||
|
2015
|
|
2014
|
||||
|
(in thousands)
|
||||||
Cash and cash equivalents at beginning of period
|
$
|
3,290
|
|
|
$
|
4,131
|
|
Net cash used in operating activities
|
(12,631
|
)
|
|
(993
|
)
|
||
Net cash provided by (used in) investing activities
|
43,584
|
|
|
(37,832
|
)
|
||
Net cash provided by financing activities
|
125,194
|
|
|
42,802
|
|
||
Cash and cash equivalents at end of period
|
159,098
|
|
|
8,188
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less Than
One Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
Five Years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Rent obligations
(1)
|
$
|
35,711
|
|
|
$
|
2,010
|
|
|
$
|
4,140
|
|
|
$
|
4,405
|
|
|
$
|
25,156
|
|
Equipment lease obligations
(2)
|
333
|
|
|
138
|
|
|
192
|
|
|
3
|
|
|
—
|
|
|||||
Purchase commitments
(3)
|
9,862
|
|
|
6,169
|
|
|
3,693
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
45,906
|
|
|
$
|
8,317
|
|
|
$
|
8,025
|
|
|
$
|
4,408
|
|
|
$
|
25,156
|
|
(1)
|
We lease our corporate headquarters and a manufacturing facility at our campus in Alameda, California, pursuant to lease agreements that expire in November 2029. Additionally, we lease offices in Germany, Australia and Brazil. In June 2015, a lease for additional space at our campus in Alameda, California commenced upon our landlord’s substantial completion of tenant improvements. This lease expires in November 2029 and, as of
September 30, 2015
, represented a contractual obligation of $13.7 million.
|
(2)
|
We lease equipment and automobiles under operating leases. These leases expire at various dates through 2018.
|
(3)
|
Purchase commitments consist of contracts with suppliers to purchase raw materials to be used to manufacture products.
|
•
|
We granted to our directors, officers, employees and consultants options to purchase an aggregate of 1,321,250 shares of common stock under our equity compensation plans, at exercise prices ranging from $22.04 to $30.00 per share.
|
•
|
We issued and sold to our directors, officers, employees and consultants an aggregate of 6,500 shares of common stock upon the exercise of options under our equity compensation plans at exercise prices ranging from $1.26 to $3.98 per share, for an aggregate amount of $16,613.
|
•
|
We granted to our directors, officers and employees an aggregate of 5,000 shares of restricted stock under our equity compensation plans at a fair market value of $22.04 per share, for an aggregate amount of $110,200.
|
Exhibit Number
|
|
Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
3.1
|
|
Restated Certificate of Incorporation of Penumbra, Inc.
|
|
8-K
|
|
001-37557
|
|
3.3
|
|
September 29, 2015
|
3.2
|
|
Amended and Restated Bylaws of Penumbra, Inc.
|
|
8-K
|
|
001-37557
|
|
3.3
|
|
September 29, 2015
|
4.1
|
|
Specimen Common Stock Certificate
|
|
S-1/A
|
|
333-206412
|
|
4.1
|
|
September 8, 2015
|
10.1*+
|
|
Amended and restated 2014 Equity Incentive Plan - Stock Option Agreement of Penumbra, Inc.
|
|
|
|
|
|
|
|
|
10.2*+
|
|
Amended and restated 2014 Equity Incentive Plan - Restricted Stock Agreement of Penumbra, Inc.
|
|
|
|
|
|
|
|
|
31.1*
|
|
Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
|
|
|
31.2*
|
|
Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
|
|
|
32.1**
|
|
Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.
|
|
|
|
|
|
|
|
|
101*
|
|
The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 formatted in Extensible Business Reporting Language (XBRL) includes: (i) Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014, (ii) Condensed Consolidated Statements of Operations for the three and nine months ended September, 2015 and 2014, (iii) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2014, and (v) Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
PENUMBRA, INC.
|
Date: November 12, 2015
|
|
|
|
By:
|
/s/ Sri Kosaraju
|
|
|
Sri Kosaraju
|
|
|
Chief Financial Officer and Head of Strategy
|
|
|
(Principal Financial and Accounting Officer and Duly Authorized Officer)
|
Date of Grant:
|
|
|
|
Vesting Commencement Date:
|
|
|
|
Total Number of Shares of:
|
|
Restricted Stock:
|
|
1.
|
The name, address, taxpayer identification number and taxable year of the undersigned are as follows:
|
NAME:
|
SPOUSE:
|
|
|
ADDRESS:
|
|
|
|
|
|
TAXPAYER IDENTIFICATION NO.:
|
TAXABLE YEAR:
|
2.
|
The property with respect to which the election is made is described as follows: __________ shares (the “Shares”) of the Common Stock of Penumbra, Inc. (the “Company”).
|
3.
|
The date on which the property was transferred is:___________________ ,______.
|
4.
|
The property is subject to the following restrictions:
|
5.
|
The Fair Market Value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms shall never lapse, of such property is: $_________________.
|
6.
|
The amount (if any) paid for such property is: $_________________.
|
Dated: ______________________, _____
|
|
|
Taxpayer
|
|
|
The undersigned spouse of taxpayer joins in this election.
|
|
|
|
Dated: ______________________, _____
|
|
|
Spouse of Taxpayer
|
Submitted by:
|
|
Accepted by:
|
PARTICIPANT
|
|
PENUMBRA, INC.
|
|
|
|
Signature
|
|
By
|
|
|
|
Print Name
|
|
Print Name
|
|
|
|
Address:
|
|
Title
|
|
|
|
|
|
Date Received
|
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Penumbra, 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)) 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)
|
(Omitted pursuant to Exchange Act Rule 13a-14);
|
(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.
|
/s/ Adam Elsesser
|
Adam Elsesser
|
Chairman, Chief Executive Officer and President
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Penumbra, 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)) 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)
|
(Omitted pursuant to Exchange Act Rule 13a-14);
|
(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.
|
/s/ Sri Kosaraju
|
Sri Kosaraju
|
Chief Financial Officer and Head of Strategy
|
•
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
•
|
The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Adam Elsesser
|
Adam Elsesser
|
Chairman, Chief Executive Officer and President
|
|
/s/ Sri Kosaraju
|
Sri Kosaraju
|
Chief Financial Officer and Head of Strategy
|