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Delaware
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27-2992077
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.0001 per share
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The NASDAQ Global Market
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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x
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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PART I
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PART II
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PART III
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PART IV
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our financial performance and our ability to achieve or sustain profitability or predict future results;
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our ability to attract and retain customers;
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our ability to deliver high-quality customer service;
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the growth of demand for enterprise work management applications;
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our plans regarding, and our ability to effectively manage, our growth;
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our plans regarding future acquisitions and our ability to consummate and integrate acquisitions;
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maintaining our senior management team and key personnel;
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our ability to maintain and expand our direct sales organization;
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the performance of our resellers;
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our ability to obtain financing in the future on acceptable terms or at all;
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our ability to adapt to changing market conditions and competition;
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our ability to successfully enter new markets and manage our international expansion;
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the operation and reliability of our third-party data centers;
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our ability to adapt to technological change and continue to innovate;
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economic and financial conditions;
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our ability to integrate our applications with other software applications;
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maintaining and expanding our relationships with third parties;
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costs associated with defending intellectual property infringement and other claims;
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our ability to maintain, protect and enhance our brand and intellectual property;
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our ability to comply with privacy laws and regulations;
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our expectations with respect to revenue, cost of revenue and operating expenses in future periods;
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our expectations with regard to trends, such as seasonality, which affect our business;
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our expectations as to the payment of dividends;
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our plans with respect to foreign currency exchange risk and inflation;
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our beliefs regarding how our applications benefit customers and what our competitive strengths are; and
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other risk factors included under “Risk Factors” in this Annual Report on Form 10-K.
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Project and Information Technology (IT) Financial Management
. Enables customers to manage their organization’s projects, professional workforce and IT costs.
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Workflow Automation
. Enables customers to automate document-intensive workflows among internal functional areas as well as with their partners and supply chain.
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Digital Engagement
. Enables customers to effectively engage with their customers, prospects and community via the web and mobile technologies.
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Information Technology
. Information technology departments use our applications to manage a variety of information technology activities and resources, such as projects and application portfolios. Our applications help information technology departments ensure they are delivering against the objectives of the business by helping to select and prioritize the right investments, gain greater control of resource demand and allocation, and track and report benefit realization. Our applications enable executives to gain better insight into information technology spending to help prevent cost overruns and understand the nature of consumption. By enabling information technology teams to make more informed decisions with real-time visibility across the complete information technology portfolio, our
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Process Excellence and Operations
. Process excellence, Lean Six Sigma and similar functional groups within organizations use our applications to facilitate critical process improvement efforts. Our applications help provide high-level visibility and tracking of process excellence programs, automate processes and streamline workflows while improving process governance. Process improvement and similar business transformation initiatives continue to be a key driver of corporate performance, especially among large global corporations.
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Finance
. Finance departments use our applications as a cost allocation tool to assess and validate proposed investments and initiatives of a particular line of business, as well as increase the visibility and governance of capital expenditures and cost-cutting projects and deepen the understanding of actual resource utilization and costs. Our applications help improve collaboration between finance departments and particular lines of business, in addition to streamlining compliance and accounting workflows.
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Professional Services
. Professional services organizations, such as consulting or software development firms, employ our applications to streamline service delivery and optimize utilization of billable resources. In addition, service- oriented departments within organizations, such as customer service and support teams, utilize our applications to more effectively budget, plan and track provision of services and improve capacity planning and forecasting.
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Marketing
. Marketing teams employ our applications to enhance their overall marketing effectiveness. We offer applications that help customers build their online and mobile brand presence, engage their target audiences, collaborate on the creation and publication of content, and gain increased control over marketing workflows, activities and budgets. Our applications empower marketing and communications organizations to more effectively manage the influx of projects, information, processes and systems necessary to meet today’s modern marketing requirements.
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Our applications enable our customers to more effectively align programs, initiatives, investments and projects with overall business objectives, helping ensure the right work is done at the right time. This alignment drives increased productivity and optimizes the allocation and utilization of people, time and money within organizations.
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Our applications help customers to more effectively manage projects and tasks by enabling real-time visibility, collaboration, structured workflows and access to the right content and information. This provides teams of distributed workers with clarity into priorities and expectations as well as the tools to execute effectively, resulting in increased productivity, transparency, accountability, and the ability to respond rapidly to change.
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Our applications collect and make available real-time data regarding the planning, management and execution of projects and work processes across teams and business units This enables a more complete view of teams, projects and resources at anytime from anywhere.
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Our applications provide analytics and reporting capabilities that transform disparate data in real-time into actionable intelligence, enabling users to make better informed business decisions. Our applications enable organizations to conduct dynamic and sophisticated “what-if” and scenario analyses that can improve their ability to respond effectively to changing business conditions.
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Customers can easily access our cloud-based applications with an Internet browser. Our applications do not require large up-front software expenditures or significant ongoing infrastructure or information technology support. In addition, our applications have modern look and feel that helps provide a consistent user experience across our applications.
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Our applications are highly configurable, which provides us with flexibility to meet the unique business requirements of individual customers. Our applications are also scalable and are able to support large
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Large, attractive customer base
. Our customer base is highly diverse and spans a broad array of industries, including financial services, retail, technology, manufacturing, education, consumer goods, media, telecommunications, government, food and beverage, healthcare and life sciences. We service customers of varying size, ranging from large global corporations and government agencies to small- and medium-sized businesses. We have a highly referenceable customer base that we leverage to help us acquire new customers. We have over
2,000
customers, with no customer accounting for more than
3%
of our revenue.
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Diversified family of software applications
. We offer a family of software applications that addresses a broad range of enterprise work management needs, from strategic planning to task execution. We believe this benefits our customers as compared to many of our cloud-based competitors who offer only a single point solution for a more limited and discrete work management need. Our applications address the information technology, process excellence, finance, professional services and marketing functions within organizations.
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Recurring revenue model with high visibility
. We believe we have a highly attractive operating model due to the recurring nature of our subscription revenue, which results in greater visibility and predictability of future revenue and enhances our ability to effectively manage our business. In addition, the cloud-based nature of our model accommodates significant additional business volume with limited incremental costs, providing us with opportunities to improve our operating margins.
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Proven M&A capability
. We have a proven ability to successfully identify, acquire and integrate complementary businesses to grow our company, as evidenced by the eleven acquisitions we have completed since the beginning of 2012. We have a dedicated and experienced corporate development team that continually monitors hundreds of companies in order to maintain a robust pipeline of potential acquisition candidates. We believe that our acquisition experience and strategy gives us a competitive advantage in identifying additional opportunities to expand our family of software applications to better serve our customers.
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Experienced, proven management team
. Our management team has significant operating experience and previously occupied key leadership roles at both private and public companies. In addition, our management’s extensive knowledge of the industry and experience in building businesses organically and through strategic acquisitions has enabled us to quickly establish a leading position within the enterprise work management software market.
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Cloud-based platform
. We deliver our software applications and functionality primarily through the cloud, with no hardware or software installation required by our customers. This delivery model allows us to provide reliable, cost-effective applications to our customers, add subscribers with minimal incremental expense and deploy new functionality and upgrades quickly and efficiently. We believe our cloud-based delivery model provides us with a competitive advantage over legacy processes and on-premise systems.
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Commitment to customer success
. We have a dedicated customer success organization whose mission is to drive adoption, value realization, retention and loyalty across our customer base. Our focus on enabling our customers’ success is a key reason our annual net dollar retention rate was
90%
in fiscal
2015
. Our commitment to customer success has enabled us to expand our footprint within organizations and facilitate the ongoing adoption of our enterprise work management software applications.
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Increase sales to existing customers
. We believe there is a significant opportunity to expand the adoption of our applications within existing customers, particularly within divisions or departments that have not previously used our applications. We also intend to cross-sell additional applications to our existing customers, as very few of our customers currently use more than one of our applications. In addition, we intend to add new applications to our family of applications that will address additional functions within the enterprise work management spectrum. We believe these initiatives will significantly increase the value of our platform to our customers, further strengthen our competitive position and drive increased adoption of multiple applications by our customers.
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Add new customers
. We maintain direct sales and marketing capabilities in order to further grow our customer base. We also maintain indirect sales channels through alliances with strategic partners that can leverage our applications with complementary services and technologies they provide. In addition, we continue to expand the range of integrations between our software and third-party applications and platforms, which we believe make our applications more attractive to a broader audience of potential customers.
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Acquire complementary software businesses
. We intend to pursue acquisitions of complementary technologies, products and businesses to enhance the features and functionality of our applications, expand our customer base and provide access to new markets and increased benefits of scale. Our dedicated and experienced corporate development team continually monitors hundreds of companies in order to maintain a robust pipeline of potential acquisition candidates, many of which are smaller scale or address only limited enterprise work management challenges, which often operate outside the scope of some of our larger competitors. We believe that our acquisition experience and strategy gives us a competitive advantage in identifying additional opportunities to expand our family of cloud-based applications to better serve our customers. We will prioritize acquisitions within the enterprise functions we currently serve, including Project & IT Management, Workflow Automation and Digital Engagement.
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Expand globally
. We believe there is a significant opportunity to grow sales of our applications globally. In fiscal 2015, 2014, and 2013, approximately
19%
,
22%
and
24%
, respectively, of our revenue was derived from sales outside the United States. Over the next several years, we will continue to evaluate growth opportunities outside the United States through selective acquisitions, the hiring of additional sales personnel and entering into strategic partnerships.
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Improve and enhance applications
. We will continue to invest in research and development and work closely with our customers to identify and improve new applications, features and functionalities that address customer requirements across the enterprise work management spectrum. We also intend to continue to expand the breadth of our applications with additional analytics, third-party integrations and social and mobile capabilities to meet the evolving needs of today’s knowledge workers.
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gather, develop and assess ideas and proposed investments;
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prioritize and select projects and investments according to business value and strategic fit;
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more effectively allocate resources in alignment with business objectives;
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respond quickly to change with real-time visibility into status and the ability to evaluate the impact of potential changes; and
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gauge performance against strategic objectives, execution-level indicators and financial metrics.
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plan and schedule projects and work in order to improve resource utilization;
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gain real-time visibility into work status, issues and risks;
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track costs associated with projects and work; and
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increase the quality and speed of execution with customizable templates and workflows.
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empower collaboration by providing a way for employees, suppliers and partners to access, share and update content from anywhere;
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streamline workflows by creating custom rules to process and route content for approval;
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automatically capture, index, classify and organize enterprise content in a secure, central repository with document retention policies to meet business and compliance requirements; and
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apply and enforce document retention policies to meet business and compliance requirements.
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streamline the process for creating and managing website content;
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deliver more relevant, personalized content to website visitors based on the tracking of individual visitor behavior.
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integrate user-generated content, such as polls, surveys, blogs, ratings and comments, into their websites;
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engage entire target audiences with one-on-one text message conversations to achieve optimal results;
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reach the correct person at exactly the right moment through list segmentation and scheduling;
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provide timely alerts and reminders on important events based on user preferences;
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respond to users instantly, answering questions via text message;
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manage all mobile communications from a single place, keeping track of all users and actions;
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analyze campaign performance at all levels and every action;
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run surveys, polls and quizzes to gather information and engage users; and
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ensure security and privacy of information through comprehensive policies, procedures and technical controls.
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create resource capacity plans;
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align available skills, expertise and capacity with project requirements;
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more efficiently plan and schedule projects;
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track resource and expense allocation for specific projects, activity types or budget categories;
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analyze workforce performance;
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streamline timesheet review, approval and reporting processes;
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manage time, travel and entertainment expenses; and
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streamline project cost reporting, billing and revenue recognition processes.
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quantify and understand the total cost of ownership of information technology applications and services;
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establish product and unit-costing metrics for benchmarking and/or chargeback;
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provide information technology and finance departments with the ability to chargeback business units for applications and services, including cloud services, based on metered consumption;
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provide business managers with insights into their consumption of information technology services to better utilize information technology services with business goals and objectives;
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leverage utilization and capacity metrics for “what-if” analysis and modeling;
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analyze fixed versus variable information technology-related costs to identify opportunities for savings; and
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support demand-based budgeting and forecasting processes.
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use of our website to provide information about us and our software applications, as well as educational opportunities for potential customers;
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field marketing events for customers and prospective customers;
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participation in, and sponsorship of, executive events, trade shows and industry events;
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our user conferences;
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integrated digital marketing campaigns, including email, online advertising, blogs and webinars;
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public relations, analyst relations and social media initiatives; and
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sales representatives who respond to incoming leads to convert them into new sales opportunities.
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Customer Care
. Our customer care team assists customers throughout their lifecycle with the Upland family of applications by making service offerings available to all customers as part of their standard customer agreements, including webinars, user group meetings and conferences. In particular, we hold a user conference featuring a variety of keynote and customer speakers, panelists and presentations. Conference attendees also gain insight into our recent application enhancements and participate in interactive sessions that give them the opportunity to express opinions on new features and functionality.
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Professional Services
. Our professional services team is responsible for coordinating all activities relating to the implementation, transition and on-boarding of new customers and assisting new customers with the addition of new applications to their accounts. Typical professional services engagements vary in length from a few weeks to several months depending on the size and scope of the engagement and are in addition to services provided under our standard customer agreement and are fee-based. In addition, our project managers and consultants work closely with our customers to provide services that help customers maximize the utility of our applications. Our continuing education services, known as Upland University, provide our clients with access to product tutorials and information on new applications and platform features, as well as offer tailored training programs to meet specific client needs.
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Account Management
. We assign each customer a regionally aligned account team with a relationship manager who functions as the customer’s single point of contact and advocate within Upland. Our account management teams are trained on all of our applications and work closely with the relationship manager to ensure that our customers receive high-quality consultative service.
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Customer Support
. We offer support from all of our office locations, as well as our offshore Center of Excellence in Egypt and India, to help our customers maximize the return on their investment in our applications. We provide 24/7 customer support around the world through our online customer support portal. In addition, our customer support team manages and administers the Upland customer community forum and knowledge base repository.
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Health Checks and Program Reviews
: Engages core users and business buyer sponsors to deliver a detailed scorecard and recommendation report.
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Advisory and Retained Services
: Provides access to a specific customer success contact with priority scheduling and periodic checkpoints.
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System Deployment and Adoption Analysis
: Analyzes system configuration and usage patterns, resulting in best practice recommendations on improving user adoption and compliance.
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Consumption Review and Recommendations
: Delivers best practice recommendations for implementation strategy and a roadmap proposal for aligning the system with customers’ evolving process maturity to increase application usage.
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Success Services Program
: Provides three service-level options tailored to maximize customers’ value relative to their specific needs.
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breadth and depth of application functionality;
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ease of deployment and use of applications;
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total cost of ownership;
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levels of customer support satisfaction;
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brand awareness and reputation;
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capability for configurability, integration, scalability and reliability of applications;
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ability to innovate and respond to customer needs rapidly; and
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level of integration among applications and with other enterprise systems.
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Item 1A.
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Risk Factors
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we may not be able to identify suitable acquisition candidates or to consummate acquisitions on acceptable terms;
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we may pursue international acquisitions, which inherently pose more risks than domestic acquisitions;
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we compete with others to acquire complementary products, technologies and businesses, which may result in decreased availability of, or increased price for, suitable acquisition candidates;
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we may not be able to obtain the necessary financing, on favorable terms or at all, to finance any or all of our potential acquisitions;
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we may ultimately fail to consummate an acquisition even if we announce that we plan to acquire a technology, product or business; and
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acquired technologies, products or businesses may not perform as we expect and we may fail to realize anticipated revenue and profits.
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issues in integrating the target company’s technologies, products or businesses with ours;
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incompatibility of marketing and administration methods;
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maintaining employee morale and retaining key employees;
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integrating the cultures of both companies;
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preserving important strategic customer relationships;
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consolidating corporate and administrative infrastructures and eliminating duplicative operations; and
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coordinating and integrating geographically separate organizations.
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issue common stock that would dilute our current stockholders’ ownership percentage;
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use a substantial portion of our cash resources;
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increase our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition;
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assume liabilities for which we do not have indemnification from the former owners; further, indemnification obligations may be subject to dispute or concerns regarding the creditworthiness of the former owners;
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record goodwill and non-amortizable intangible assets that are subject to impairment testing and potential impairment charges;
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experience volatility in earnings due to changes in contingent consideration related to acquisition earn-out liability estimates;
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incur amortization expenses related to certain intangible assets;
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lose existing or potential contracts as a result of conflict of interest issues;
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become subject to adverse tax consequences or deferred compensation charges;
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incur large and immediate write-offs; or
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become subject to litigation.
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the extent to which our existing customers purchase additional seats or volume for our applications and the timing and terms of those purchases;
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the extent to which our existing customers renew their customer agreements for our applications and the timing and terms of those renewals;
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the extent to which we cross-sell additional applications to our existing customers and the timing and terms of such cross-selling;
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the addition or loss of customers, including through acquisitions or consolidations;
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the extent to which new customers are attracted to our applications to satisfy their enterprise work management needs;
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the rate of adoption and market acceptance of enterprise work management applications;
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the mix of our revenue, particularly between product and professional services revenue, for which the timing of revenue recognition is substantially different;
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changes in the gross profit we realize on our applications and professional services due to our differing revenue recognition policies applicable to subscription and product and professional services revenue and other variables;
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the extent to which we enter into multi-year contracts, in which the support fees are typically paid in advance;
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the number and size of new customers and the number and size of renewals in a particular period;
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changes in our pricing policies or those of our competitors;
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the mix of applications sold during a period;
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the timing and expenses related to the acquisition of technologies, products or businesses and potential future charges for impairment of goodwill from such acquisitions;
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the amount and timing of operating expenses, including those related to the maintenance and expansion of our business, operations and infrastructure;
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the amount and timing of expenses related to the development of new products and technologies, including enhancements to our applications;
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the amount and timing of commissions earned by our sales personnel;
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the timing and success of new applications introduced by us or new offerings offered by our competitors;
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the length of our sales cycles;
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changes in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic collaborators;
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our ability to manage our existing business and future growth, including increases in the number of customers using our applications;
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the seasonality of our business or cyclical fluctuations in our industry;
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the timing and expenses related to any international expansion efforts we may undertake and the success of such efforts;
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various factors related to disruptions in access and delivery of our cloud-based applications, errors or defects in our applications, privacy and data security and exchange rate fluctuations, each of which is described elsewhere in these risk factors; and
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g
eneral economic, industry and market conditions.
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uncertain political and economic climates;
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lack of familiarity and burdens of complying with foreign laws, accounting and legal standards, regulatory requirements, tariffs and other barriers;
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unexpected changes in regulatory requirements, taxes, trade laws, tariffs, export quotas, custom duties or other trade restrictions;
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lack of experience in connection with the localization of our applications, including translation into foreign languages and adaptation for local practices, and associated expenses and regulatory requirements;
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difficulties in adapting to differing technology standards;
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longer sales cycles and accounts receivable payment cycles and difficulties in collecting accounts receivable;
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difficulties in managing and staffing international operations, including differing legal and cultural expectations for employee relationships and increased travel, infrastructure and legal compliance costs associated with international operations;
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fluctuations in exchange rates that may increase the volatility of our foreign-based revenue and expenses;
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potentially adverse tax consequences, including the complexities of foreign value-added tax, goods and services tax and other transactional taxes;
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reduced or varied protection for intellectual property rights in some countries;
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difficulties in managing and adapting to differing cultures and customs;
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data privacy laws which require that customer data be stored and processed in a designated territory subject to laws different than the United States;
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new and different sources of competition as well as laws and business practices favoring local competitors and local employees;
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compliance with anti-bribery laws, including compliance with the Foreign Corrupt Practices Act;
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increased financial accounting and reporting burdens and complexities; and
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restrictions on the repatriation of earnings.
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the need to educate potential customers about the uses and benefits of our applications;
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the duration of the commitment customers make in their agreements with us, which are typically one to three years;
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the discretionary nature of potential customers’ purchasing and budget cycles and decisions;
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the competitive nature of potential customers’ evaluation and purchasing processes;
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the functionality demands of potential customers;
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fluctuations in the enterprise work management needs of potential customers;
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the announcement or planned introduction of new products by us or our competitors; and
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the purchasing approval processes of potential customers.
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loss or delayed market acceptance and sales;
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breach of warranty or product liability claims;
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sales credits or refunds for prepaid amounts related to unused subscription services;
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canceled contracts and loss of customers;
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diversion of development and customer service resources; and
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injury to our reputation.
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cease selling or using applications that incorporate the intellectual property that we allegedly infringe;
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make substantial payments for legal fees, settlement payments or other costs or damages;
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obtain a license, which may not be available on reasonable terms or at all, to sell or use the relevant technology; or
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redesign the allegedly infringing applications to avoid infringement, which could be costly, time-consuming or impossible.
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actual or anticipated changes in the estimates of our operating results that we provide to the public, our failure to meet these projections or changes in recommendations by securities analysts that elect to follow our common stock;
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price and volume fluctuations in the overall equity markets from time to time;
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significant volatility in the market price and trading volume of comparable companies;
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changes in the market perception of enterprise work management software generally or in the effectiveness of our applications in particular;
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disruptions in our services due to computer hardware, software or network problems;
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announcements of technological innovations, new products, strategic alliances or significant agreements by us or by our competitors;
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announcements of new customer agreements or upgrades and customer downgrades or cancellations or delays in customer purchases;
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litigation involving us;
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our ability to successfully consummate and integrate acquisitions;
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investors’ general perception of us;
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recruitment or departure of key personnel;
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sales of our common stock by us or our stockholders;
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fluctuations in the trading volume of our shares or the size of our public float; and
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general economic, legal, industry and market conditions and trends unrelated to our performance.
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our certificate of incorporation provides for a classified board of directors with staggered three-year terms so that not all members of our board of directors are elected at one time;
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directors may be removed by stockholders only for cause;
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our board of directors has the right to elect directors to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
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•
|
special meetings of our stockholders may be called only by our Chief Executive Officer, our board of directors or holders of not less than the majority of our issued and outstanding capital stock limiting the ability of minority stockholders to take certain actions without an annual meeting of stockholders;
|
•
|
our stockholders may not act by written consent unless the action to be effected and the taking of such action by written consent are approved in advance by our board of directors and, as a result, a holder, or holders, controlling a majority of our capital stock would generally not be able to take certain actions without holding a stockholders’ meeting;
|
•
|
our certificate of incorporation prohibits cumulative voting in the election of directors. This limits the ability of minority stockholders to elect director candidates;
|
•
|
stockholders must provide timely notice to nominate individuals for election to the board of directors or to propose matters that can be acted upon at an annual meeting of stockholders and, as a result, these provisions may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us; and
|
•
|
our board of directors may issue, without stockholder approval, shares of undesignated preferred stock, making it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to acquire us.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Item 4.
|
Mine Safety Disclosures
|
|
Sales Price Per Share
|
||
Year Ended December 31, 2015
|
Low
|
|
High
|
Fourth quarter
|
$6.77
|
|
$8.12
|
Third Quarter
|
$7.59
|
|
$9.18
|
Second Quarter
|
$5.91
|
|
$9.22
|
First Quarter
|
$6.81
|
|
$10.05
|
Fourth quarter (from November 6, 2014)
|
$8.60
|
|
$12.20
|
Item 6.
|
Selected Financial Data
|
Loss from continuing operations per common share, basic and diluted
|
$
|
(0.91
|
)
|
|
$
|
(4.43
|
)
|
|
$
|
(7.23
|
)
|
|
$
|
(5.78
|
)
|
Income (loss) from discontinued operations per common share, basic and diluted
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.54
|
)
|
|
$
|
2.39
|
|
Net loss per common share, basic and diluted
|
$
|
(0.91
|
)
|
|
$
|
(4.43
|
)
|
|
$
|
(7.77
|
)
|
|
$
|
(3.39
|
)
|
Weighted-average common shares outstanding, basic and diluted
|
14,939,601
|
|
|
4,889,901
|
|
|
1,196,668
|
|
|
751,416
|
|
|
December 31,
|
|||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|||||||
Cash and cash equivalents
|
$
|
18,473
|
|
|
$
|
30,988
|
|
|
$
|
4,703
|
|
|
3,892
|
|
Property and equipment, net
|
6,001
|
|
|
3,930
|
|
|
3,942
|
|
|
1,407
|
|
|||
Intangible assets, net
|
31,526
|
|
|
34,751
|
|
|
34,747
|
|
|
26,388
|
|
|||
Goodwill
|
47,422
|
|
|
45,146
|
|
|
33,630
|
|
|
21,093
|
|
|||
Total assets
|
122,414
|
|
|
135,686
|
|
|
94,847
|
|
|
67,808
|
|
|||
Deferred revenue
|
19,939
|
|
|
21,376
|
|
|
17,036
|
|
|
16,502
|
|
|||
Total liabilities
|
62,144
|
|
|
64,289
|
|
|
60,191
|
|
|
44,495
|
|
|||
Redeemable convertible preferred stock
|
—
|
|
|
—
|
|
|
50,538
|
|
|
27,492
|
|
|||
Total stockholders’ equity (deficit)
|
60,270
|
|
|
71,397
|
|
|
(15,882
|
)
|
|
(4,179
|
)
|
|
Year Ended December 31,
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||
|
(in thousands, except %)
|
||||||||||||||
Other Financial Data:
|
|
|
|
|
|
|
|
||||||||
Annualized recurring revenue value at year-end
(1)
|
$
|
58,918
|
|
|
$
|
56,800
|
|
|
$
|
49,061
|
|
|
$
|
27,093
|
|
Annual net dollar retention rate
(2)
|
90
|
%
|
|
96
|
%
|
|
90
|
%
|
|
n/a
|
|
||||
Adjusted EBITDA
(3)
|
$
|
4,143
|
|
|
$
|
4,213
|
|
|
$
|
3,576
|
|
|
$
|
3,998
|
|
(1)
|
Annualized recurring revenue value as of December 31 equals the monthly value of our recurring revenue contracts measured as of December 31 multiplied by 12. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Key Metrics” for additional discussion of this key metric.
|
(2)
|
We define annual net dollar retention rate as of December 31 as the aggregate annualized recurring revenue value at December 31 from those customers that were also customers as of December 31 of the prior fiscal year, divided by the aggregate annualized recurring revenue value from all customers as of December 31 of the prior fiscal year. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Key Metrics” for additional discussion of this key metric.
|
(3)
|
We monitor our Adjusted EBITDA to help us evaluate the effectiveness and efficiency of our operations. Adjusted EBITDA is a non-GAAP financial measure.
We define Adjusted EBITDA as net income (loss), calculated in accordance with GAAP, plus net income (loss) from discontinued operations, depreciation and amortization expense, interest expense, net, other expense (income), net, provision for income taxes, stock-based compensation expense, acquisition-related expenses, non-recurring litigation costs, and one-time purchase accounting adjustments to fair value deferred revenue acquired in business combinations. Prior to the filing of this Annual Report on Form 10-K, we did not include purchase accounting adjustments for deferred revenue as a component of Adjusted EBITDA, and as such, the prior year Adjusted EBITDA amounts presented herein have been recast to reflect the inclusion of purchase accounting adjustments for deferred revenue.
|
|
Year Ended December 31,
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Net Loss
|
$
|
(13,664
|
)
|
|
$
|
(20,117
|
)
|
|
$
|
(9,197
|
)
|
|
$
|
(2,507
|
)
|
Net income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
642
|
|
|
(1,791
|
)
|
||||
Depreciation and amortization expense
|
8,451
|
|
|
7,457
|
|
|
5,310
|
|
|
2,472
|
|
||||
Interest expense, net
|
1,858
|
|
|
1,951
|
|
|
2,797
|
|
|
528
|
|
||||
Other expense (income), net
|
544
|
|
|
(101
|
)
|
|
431
|
|
|
65
|
|
||||
Provision for income taxes
|
1,039
|
|
|
(78
|
)
|
|
708
|
|
|
(72
|
)
|
||||
Stock-based compensation expense
|
2,741
|
|
|
1,077
|
|
|
498
|
|
|
92
|
|
||||
Acquisition-related expense
|
2,455
|
|
|
2,186
|
|
|
1,461
|
|
|
1,933
|
|
||||
Stock-based compensation expense - related party vendor
|
—
|
|
|
11,220
|
|
|
—
|
|
|
—
|
|
||||
Nonrecurring litigation expense
|
406
|
|
|
256
|
|
|
—
|
|
|
—
|
|
||||
Purchase accounting deferred revenue discount
|
313
|
|
|
362
|
|
|
926
|
|
|
3,278
|
|
||||
Adjusted EBITDA
|
$
|
4,143
|
|
|
$
|
4,213
|
|
|
$
|
3,576
|
|
|
$
|
3,998
|
|
•
|
Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to items 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, in the preparation of our annual operating budget, as a measure of our operating performance, to assess the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance because Adjusted EBITDA eliminates the impact of items that we do not consider indicative of our core operating performance; and
|
•
|
Adjusted EBITDA provides more consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our operations and also facilitates comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.
|
•
|
depreciation and amortization are non-cash charges, and the assets being depreciated or amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect cash requirements for such replacements; however, much of the depreciation and amortization currently reflected relates to amortization of acquired intangible assets as a result of business combination purchase accounting adjustments, which will not need to be replaced in the future;
|
•
|
Adjusted EBITDA may not reflect changes in, or cash requirements for, our working capital needs or contractual commitments;
|
•
|
Adjusted EBITDA does not reflect the potentially dilutive impact of stock-based compensation;
|
•
|
Adjusted EBITDA does not reflect interest or tax payments that could reduce cash available for use; and
|
•
|
other companies, including companies in our industry, might calculate Adjusted EBITDA or similarly titled measures differently, which reduces their usefulness as comparative measures.
|
|
Year Ended December 31,
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Stock-based compensation:
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
$
|
42
|
|
|
$
|
49
|
|
|
$
|
16
|
|
|
$
|
—
|
|
Research and development
|
203
|
|
|
61
|
|
|
12
|
|
|
—
|
|
||||
Sales and marketing
|
65
|
|
|
39
|
|
|
15
|
|
|
—
|
|
||||
General and administrative
|
2,431
|
|
|
928
|
|
|
455
|
|
|
92
|
|
||||
Total
|
$
|
2,741
|
|
|
$
|
1,077
|
|
|
$
|
498
|
|
|
$
|
92
|
|
|
Year Ended December 31,
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Depreciation:
|
|
|
|
|
|
|
|
||||||||
Cost of Revenue
|
$
|
1,800
|
|
|
$
|
1,303
|
|
|
$
|
455
|
|
|
$
|
—
|
|
General and administrative
|
452
|
|
|
987
|
|
|
348
|
|
|
325
|
|
||||
Total
|
$
|
2,252
|
|
|
$
|
2,290
|
|
|
$
|
803
|
|
|
$
|
325
|
|
|
Year Ended December 31,
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Cost of Revenue
|
$
|
2,116
|
|
|
$
|
1,844
|
|
|
$
|
1,185
|
|
|
$
|
662
|
|
General and administrative
|
4,083
|
|
|
3,323
|
|
|
3,322
|
|
|
1,487
|
|
||||
Total
|
$
|
6,199
|
|
|
$
|
5,167
|
|
|
$
|
4,507
|
|
|
$
|
2,149
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Project and Information Technology (IT) Financial Management
. Enables customers to manage their organization’s projects, professional workforce and IT costs.
|
•
|
Workflow Automation
. Enables customers to automate document-intensive workflows among internal functional areas as well as with their partners and supply chain.
|
•
|
Digital Engagement
. Enables customers to effectively engage with their customers, prospects and community via the web and mobile technologies.
|
|
Year Ended December 31,
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||
|
(in thousands, except %)
|
||||||||||||||
Other Financial Data:
|
|
|
|
|
|
|
|
||||||||
Annualized recurring revenue value at year-end
(1)
|
$
|
58,918
|
|
|
$
|
56,800
|
|
|
$
|
49,061
|
|
|
$
|
27,093
|
|
Annual net dollar retention rate
(2)
|
90
|
%
|
|
96
|
%
|
|
90
|
%
|
|
n/a
|
|
||||
Adjusted EBITDA
(3)
|
$
|
4,143
|
|
|
$
|
4,213
|
|
|
$
|
3,576
|
|
|
$
|
3,998
|
|
(1)
|
Annualized recurring revenue
. The value as of December 31 equals the monthly value of our recurring revenue contracts measured as of December 31 multiplied by 12. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Key Metrics” for additional discussion of this key metric.
|
(2)
|
Annual net dollar retention rate
. We define annual net dollar retention rate as of December 31 as the aggregate annualized recurring revenue value at December 31 from those customers that were also customers as of December 31 of the prior fiscal year, divided by the aggregate annualized recurring revenue value from all customers as of December 31 of the prior fiscal year. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Key Metrics” for additional discussion of this key metric.
|
(3)
|
Adjusted EBITDA
. We monitor our Adjusted EBITDA to help us evaluate the effectiveness and efficiency of our operations. Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as net income (loss), calculated in accordance with GAAP, plus net income (loss) from discontinued operations, depreciation and amortization expense, interest expense, net, other expense (income), net, provision for income taxes, stock-based compensation expense, acquisition-related expenses, non-recurring litigation costs, and
purchase accounting adjustments for deferred revenue
. Prior to the filing of this Annual Report on Form 10-K, we did not include purchase accounting adjustments for deferred revenue as a component of Adjusted EBITDA, and as such, the prior year Adjusted EBITDA amounts presented herein have been recast to reflect the inclusion of purchase accounting adjustments for deferred revenue.
|
|
Year Ended December 31,
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Net loss
|
$
|
(13,664
|
)
|
|
$
|
(20,117
|
)
|
|
$
|
(9,197
|
)
|
|
$
|
(2,507
|
)
|
Income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
642
|
|
|
(1,791
|
)
|
||||
Depreciation and amortization expense
|
8,451
|
|
|
7,457
|
|
|
5,310
|
|
|
2,472
|
|
||||
Interest expense, net
|
1,858
|
|
|
1,951
|
|
|
2,797
|
|
|
528
|
|
||||
Other expense (income), net
|
544
|
|
|
(101
|
)
|
|
431
|
|
|
65
|
|
||||
Provision for income taxes
|
1,039
|
|
|
(78
|
)
|
|
708
|
|
|
(72
|
)
|
||||
Stock-based compensation expense
|
2,741
|
|
|
1,077
|
|
|
498
|
|
|
92
|
|
||||
Acquisition-related expenses
|
2,455
|
|
|
2,186
|
|
|
1,461
|
|
|
1,933
|
|
||||
Stock-based compensation expense --- related party vendor
|
—
|
|
|
11,220
|
|
|
—
|
|
|
—
|
|
||||
Non-recurring litigation costs
|
406
|
|
|
256
|
|
|
—
|
|
|
—
|
|
||||
Purchase accounting deferred revenue discount
|
313
|
|
|
362
|
|
|
926
|
|
|
3,278
|
|
||||
Adjusted EBITDA
|
$
|
4,143
|
|
|
$
|
4,213
|
|
|
$
|
3,576
|
|
|
$
|
3,998
|
|
•
|
Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to items 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, in the preparation of our annual operating budget, as a measure of our operating performance, to assess the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance because Adjusted EBITDA eliminates the impact of items that we do not consider indicative of our core operating performance;
|
•
|
Adjusted EBITDA provides more consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our operations and also facilitates comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and
|
•
|
Adjusted EBITDA should not be considered as an alternative to net loss or any other measure of financial performance calculated and presented in accordance with GAAP. The use of Adjusted EBITDA as an analytical tool has limitations such as:
|
•
|
depreciation and amortization are non-cash charges, and the assets being depreciated or amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect cash requirements for such replacements; however, much of the depreciation and amortization currently reflected relates to amortization of acquired intangible assets as a result of business combination purchase accounting adjustments, which will not need to be replaced in the future;
|
•
|
Adjusted EBITDA may not reflect changes in, or cash requirements for, our working capital needs or contractual commitments;
|
•
|
Adjusted EBITDA does not reflect the potentially dilutive impact of stock-based compensation;
|
•
|
Adjusted EBITDA does not reflect interest or tax payments that could reduce cash available for use; and,
|
•
|
other companies, including companies in our industry, might calculate Adjusted EBITDA or similarly titled measures differently, which reduces their usefulness as comparative measures.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
Amount
|
Percent of Revenue
|
|
Amount
|
Percent of Revenue
|
|
Amount
|
Percent of Revenue
|
||||||||||||
|
(dollars in thousands, except share and per share data)
|
|||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Subscription and support
|
$
|
57,193
|
|
|
82
|
%
|
|
$
|
48,625
|
|
|
75
|
%
|
|
$
|
30,887
|
|
|
75
|
%
|
Perpetual license
|
2,805
|
|
|
4
|
%
|
|
2,787
|
|
|
4
|
%
|
|
2,003
|
|
|
5
|
%
|
|||
Total product revenue
|
59,998
|
|
|
86
|
%
|
|
51,412
|
|
|
79
|
%
|
|
32,890
|
|
|
80
|
%
|
|||
Professional services
|
9,913
|
|
|
14
|
%
|
|
13,162
|
|
|
21
|
%
|
|
8,303
|
|
|
20
|
%
|
|||
Total revenue
|
69,911
|
|
|
100
|
%
|
|
64,574
|
|
|
100
|
%
|
|
41,193
|
|
|
100
|
%
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Subscription and support
(1)(2)
|
19,586
|
|
|
28
|
%
|
|
14,042
|
|
|
22
|
%
|
|
7,787
|
|
|
19
|
%
|
|||
Professional services
|
7,085
|
|
|
10
|
%
|
|
9,079
|
|
|
14
|
%
|
|
5,680
|
|
|
14
|
%
|
|||
Total cost of revenue
|
26,671
|
|
|
38
|
%
|
|
23,121
|
|
|
36
|
%
|
|
13,467
|
|
|
33
|
%
|
|||
Gross profit
|
43,240
|
|
|
62
|
%
|
|
41,453
|
|
|
64
|
%
|
|
27,726
|
|
|
67
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
(1)
|
12,965
|
|
|
19
|
%
|
|
14,670
|
|
|
23
|
%
|
|
10,625
|
|
|
26
|
%
|
|||
Research and development
(1)
|
15,778
|
|
|
23
|
%
|
|
26,165
|
|
|
41
|
%
|
|
10,340
|
|
|
25
|
%
|
|||
Refundable Canadian tax credits
|
(470
|
)
|
|
(1
|
)%
|
|
(1,094
|
)
|
|
(2
|
)%
|
|
(583
|
)
|
|
(1
|
)%
|
|||
General and administrative
(1)
|
18,201
|
|
|
26
|
%
|
|
13,561
|
|
|
21
|
%
|
|
6,832
|
|
|
17
|
%
|
|||
Depreciation and amortization
|
4,534
|
|
|
6
|
%
|
|
4,310
|
|
|
7
|
%
|
|
3,670
|
|
|
9
|
%
|
|||
Acquisition-related expenses
|
2,455
|
|
|
3
|
%
|
|
2,186
|
|
|
3
|
%
|
|
1,461
|
|
|
3
|
%
|
|||
Total operating expenses
|
53,463
|
|
|
76
|
%
|
|
59,798
|
|
|
93
|
%
|
|
32,345
|
|
|
79
|
%
|
|||
Loss from operations
|
(10,223
|
)
|
|
(14
|
)%
|
|
(18,345
|
)
|
|
(29
|
)%
|
|
(4,619
|
)
|
|
(12
|
)%
|
|||
Other Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense, net
|
(1,858
|
)
|
|
(3
|
)%
|
|
(1,951
|
)
|
|
(3
|
)%
|
|
(2,797
|
)
|
|
(7
|
)%
|
|||
Other expense, net
|
(544
|
)
|
|
—
|
%
|
|
101
|
|
|
—
|
%
|
|
(431
|
)
|
|
(1
|
)%
|
|||
Total other expense
|
(2,402
|
)
|
|
(3
|
)%
|
|
(1,850
|
)
|
|
(3
|
)%
|
|
(3,228
|
)
|
|
(8
|
)%
|
|||
Loss before provision for income taxes
|
(12,625
|
)
|
|
(17
|
)%
|
|
(20,195
|
)
|
|
(32
|
)%
|
|
(7,847
|
)
|
|
(20
|
)%
|
|||
Provision for income taxes
|
(1,039
|
)
|
|
(3
|
)%
|
|
78
|
|
|
1
|
%
|
|
(708
|
)
|
|
(1
|
)%
|
|||
Loss from continuing operations
|
(13,664
|
)
|
|
(20
|
)%
|
|
(20,117
|
)
|
|
(31
|
)%
|
|
(8,555
|
)
|
|
(21
|
)%
|
|||
Income (loss) from discontinued operations
|
—
|
|
|
|
|
—
|
|
|
|
|
(642
|
)
|
|
|
||||||
Net loss
|
$
|
(13,664
|
)
|
|
(20
|
)%
|
|
$
|
(20,117
|
)
|
|
(31
|
)%
|
|
$
|
(9,197
|
)
|
|
(21
|
)%
|
Preferred stock dividends and accretion
|
—
|
|
|
—
|
%
|
|
(1,524
|
)
|
|
(3
|
)%
|
|
(98
|
)
|
|
(2
|
)%
|
|||
Net loss attributable to common shareholders
(3)
|
$
|
(13,664
|
)
|
|
(20
|
)%
|
|
$
|
(21,641
|
)
|
|
(34
|
)%
|
|
$
|
(9,295
|
)
|
|
(23
|
)%
|
Net loss per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loss from continuing operations per common share, basic and diluted
|
$
|
(0.91
|
)
|
|
|
|
$
|
(4.43
|
)
|
|
|
|
$
|
(7.23
|
)
|
|
|
|||
Loss from discontinued operations per common share, basic and diluted
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
(0.54
|
)
|
|
|
|||
Loss per common share, basic and diluted
|
$
|
(0.91
|
)
|
|
|
|
$
|
(4.43
|
)
|
|
|
|
$
|
(7.77
|
)
|
|
|
|||
Weighted-average common shares outstanding, basic and diluted
(3)
|
14,939,601
|
|
|
|
|
4,889,901
|
|
|
|
|
1,196,668
|
|
|
|
(1)
|
Includes stock-based compensation.
|
(2)
|
Includes depreciation and amortization of $3,916,000, $3,147,000, and $1,640,000 in 2015, 2014, and 2013, respectively.
|
(3)
|
See Note
8
to our consolidated financial statements included elsewhere in this 10-K for a discussion and reconciliation of historical net loss attributable to common stockholders and weighted average shares outstanding for historical basic and diluted net loss per share calculations.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
% Change
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Subscription and support
|
$
|
57,193
|
|
|
82
|
%
|
|
$
|
48,625
|
|
|
75
|
%
|
|
$
|
8,568
|
|
|
18
|
%
|
Perpetual license
|
2,805
|
|
|
4
|
%
|
|
2,787
|
|
|
4
|
%
|
|
18
|
|
|
1
|
%
|
|||
Total product revenue
|
59,998
|
|
|
86
|
%
|
|
51,412
|
|
|
79
|
%
|
|
8,586
|
|
|
17
|
%
|
|||
Professional services
|
9,913
|
|
|
14
|
%
|
|
13,162
|
|
|
21
|
%
|
|
(3,249
|
)
|
|
(25
|
)%
|
|||
Total revenue
|
$
|
69,911
|
|
|
100
|
%
|
|
$
|
64,574
|
|
|
100
|
%
|
|
$
|
5,337
|
|
|
8
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
% Change
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Research and development:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
$
|
15,778
|
|
|
23
|
%
|
|
$
|
26,165
|
|
|
41
|
%
|
|
$
|
(10,387
|
)
|
|
(40
|
)%
|
Refundable Canadian tax credits
|
(470
|
)
|
|
(1
|
)%
|
|
(1,094
|
)
|
|
(2
|
)%
|
|
624
|
|
|
(57
|
)%
|
|||
Total research and development
|
$
|
15,308
|
|
|
22
|
%
|
|
$
|
25,071
|
|
|
39
|
%
|
|
$
|
(9,763
|
)
|
|
(39
|
)%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
% Change
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
General and administrative
|
$
|
18,201
|
|
|
26
|
%
|
|
$
|
13,561
|
|
|
21
|
%
|
|
$
|
4,640
|
|
|
34
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
% Change
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Depreciation
|
$
|
452
|
|
|
1
|
%
|
|
$
|
987
|
|
|
2
|
%
|
|
$
|
(535
|
)
|
|
(54
|
)%
|
Amortization
|
4,083
|
|
|
5
|
%
|
|
3,323
|
|
|
5
|
%
|
|
760
|
|
|
23
|
%
|
|||
Total depreciation and amortization
|
$
|
4,534
|
|
|
6
|
%
|
|
$
|
4,310
|
|
|
7
|
%
|
|
$
|
224
|
|
|
5
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
% Change
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Acquisition-related expense
|
$
|
2,455
|
|
|
4
|
%
|
|
$
|
2,186
|
|
|
3
|
%
|
|
$
|
269
|
|
|
12
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
% Change
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Other Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense, net
|
$
|
(1,858
|
)
|
|
(3
|
)%
|
|
$
|
(1,951
|
)
|
|
(3
|
)%
|
|
$
|
93
|
|
|
(5
|
)%
|
Other income (expense), net
|
(544
|
)
|
|
—
|
%
|
|
101
|
|
|
—
|
%
|
|
(645
|
)
|
|
(639
|
)%
|
|||
Total other expense
|
$
|
(2,402
|
)
|
|
(3
|
)%
|
|
$
|
(1,850
|
)
|
|
(3
|
)%
|
|
$
|
(552
|
)
|
|
30
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
% Change
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
(Provision for) Benefit from Income Taxes
|
$
|
(1,039
|
)
|
|
(1
|
)%
|
|
$
|
78
|
|
|
—
|
%
|
|
$
|
(1,117
|
)
|
|
(1,432
|
)%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
% Change
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Subscription and support
|
$
|
48,625
|
|
|
75
|
%
|
|
$
|
30,887
|
|
|
75
|
%
|
|
$
|
17,738
|
|
|
57
|
%
|
Perpetual license
|
2,787
|
|
|
4
|
%
|
|
2,003
|
|
|
5
|
%
|
|
784
|
|
|
39
|
%
|
|||
Total product revenue
|
51,412
|
|
|
79
|
%
|
|
32,890
|
|
|
80
|
%
|
|
18,522
|
|
|
56
|
%
|
|||
Professional services
|
13,162
|
|
|
21
|
%
|
|
8,303
|
|
|
20
|
%
|
|
4,859
|
|
|
59
|
%
|
|||
Total revenue
|
$
|
64,574
|
|
|
100
|
%
|
|
$
|
41,193
|
|
|
100
|
%
|
|
$
|
23,381
|
|
|
57
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
% Change
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Subscription and support
(1)
|
$
|
14,042
|
|
|
22
|
%
|
|
$
|
7,787
|
|
|
19
|
%
|
|
$
|
6,255
|
|
|
80
|
%
|
Professional services
|
9,079
|
|
|
14
|
%
|
|
5,680
|
|
|
14
|
%
|
|
3,399
|
|
|
60
|
%
|
|||
Total cost of revenue
|
23,121
|
|
|
36
|
%
|
|
13,467
|
|
|
33
|
%
|
|
9,654
|
|
|
72
|
%
|
|||
Gross profit
|
$
|
41,453
|
|
|
64
|
%
|
|
$
|
27,726
|
|
|
67
|
%
|
|
$
|
13,727
|
|
|
50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(1)
Includes depreciation and amortization expense as follows:
|
|
|
|
|
|
|
|
|||||||||||||
Depreciation
|
$
|
1,303
|
|
|
2
|
%
|
|
$
|
455
|
|
|
1
|
%
|
|
$
|
848
|
|
|
186
|
%
|
Amortization
|
$
|
1,844
|
|
|
3
|
%
|
|
$
|
1,185
|
|
|
3
|
%
|
|
$
|
659
|
|
|
56
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
% Change
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Sales and marketing
|
$
|
14,670
|
|
|
23
|
%
|
|
$
|
10,625
|
|
|
26
|
%
|
|
$
|
4,045
|
|
|
38
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
% Change
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Research and development:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
$
|
26,165
|
|
|
41
|
%
|
|
$
|
10,340
|
|
|
25
|
%
|
|
$
|
15,825
|
|
|
153
|
%
|
Refundable Canadian tax credits
|
(1,094
|
)
|
|
(2
|
)%
|
|
(583
|
)
|
|
(1
|
)%
|
|
(511
|
)
|
|
88
|
%
|
|||
Total research and development
|
$
|
25,071
|
|
|
39
|
%
|
|
$
|
9,757
|
|
|
24
|
%
|
|
$
|
15,314
|
|
|
157
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
% Change
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
General and administrative
|
$
|
13,561
|
|
|
21
|
%
|
|
$
|
6,832
|
|
|
17
|
%
|
|
$
|
6,729
|
|
|
98
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
% Change
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Depreciation
|
$
|
987
|
|
|
2
|
%
|
|
$
|
348
|
|
|
1
|
%
|
|
$
|
639
|
|
|
184
|
%
|
Amortization
|
3,323
|
|
|
5
|
%
|
|
3,322
|
|
|
8
|
%
|
|
1
|
|
|
—
|
%
|
|||
Total depreciation and amortization
|
$
|
4,310
|
|
|
7
|
%
|
|
$
|
3,670
|
|
|
9
|
%
|
|
$
|
640
|
|
|
17
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
% Change
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Acquisition-related expense
|
$
|
2,186
|
|
|
3
|
%
|
|
$
|
1,461
|
|
|
3
|
%
|
|
$
|
725
|
|
|
50
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
% Change
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Other Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense, net
|
$
|
(1,951
|
)
|
|
(3
|
)%
|
|
$
|
(2,797
|
)
|
|
(7
|
)%
|
|
$
|
846
|
|
|
(30
|
)%
|
Other income (expense), net
|
101
|
|
|
—
|
%
|
|
(431
|
)
|
|
(1
|
)%
|
|
532
|
|
|
(123
|
)%
|
|||
Total other expense
|
$
|
(1,850
|
)
|
|
(3
|
)%
|
|
$
|
(3,228
|
)
|
|
(8
|
)%
|
|
$
|
1,378
|
|
|
(43
|
)%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2014
|
|
2013
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
Percent of Revenue
|
|
Amount
|
|
% Change
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Benefit from (provision for) Income Taxes
|
$
|
78
|
|
|
1
|
%
|
|
$
|
(708
|
)
|
|
(1
|
)%
|
|
$
|
786
|
|
|
(111
|
)%
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(dollars in thousands)
|
||||||||||
Consolidated Statements of Cash Flow Data:
|
|
|
|
|
|
||||||
Net cash provided by (used in) operating activities
|
$
|
(1,503
|
)
|
|
$
|
1,177
|
|
|
$
|
(239
|
)
|
Net cash used in investing activities
|
(9,411
|
)
|
|
(7,078
|
)
|
|
(28,565
|
)
|
|||
Net cash provided by (used in) financing activities
|
(1,221
|
)
|
|
32,384
|
|
|
29,564
|
|
|||
Effect of exchange rate fluctuations on cash
|
(380
|
)
|
|
(198
|
)
|
|
51
|
|
|||
Change in cash and cash equivalents
|
(12,515
|
)
|
|
26,285
|
|
|
811
|
|
|||
Cash and cash equivalents, beginning of period
|
30,988
|
|
|
4,703
|
|
|
3,892
|
|
|||
Cash and cash equivalents, end of period
|
$
|
18,473
|
|
|
$
|
30,988
|
|
|
$
|
4,703
|
|
•
|
Incur additional indebtedness or guarantee indebtedness of others;
|
•
|
Create liens on their assets;
|
•
|
Make investments, including certain acquisitions;
|
•
|
Enter into mergers or consolidations;
|
•
|
Dispose of assets;
|
•
|
Pay dividends and make other distributions on the Company’s capital stock, and redeem and repurchase the Company’s capital stock;
|
•
|
Enter into transactions with affiliates; and
|
•
|
Prepay indebtedness or make changes to certain agreements.
|
Contractual Obligations
|
Payment Due by Period
|
|||||||||||||
|
Total
|
|
Less than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than 5 Years
|
|||||
Debt Obligations
|
24,874
|
|
|
1,750
|
|
|
2,500
|
|
|
20,624
|
|
|
—
|
|
Capital Lease Obligations
|
4,782
|
|
|
1,845
|
|
|
2,447
|
|
|
490
|
|
|
—
|
|
Operating Lease Obligations
|
5,229
|
|
|
1,874
|
|
|
2,410
|
|
|
944
|
|
|
—
|
|
Purchase Commitments
|
2,308
|
|
|
2,308
|
|
|
|
|
|
|
|
|||
Total
|
37,193
|
|
|
7,778
|
|
|
7,357
|
|
|
22,058
|
|
|
—
|
|
|
Year Ended December 31,
|
||||
|
2015
|
|
2014
|
|
2013
|
Weighted average grant-date fair value of options
|
$3.01
|
|
$3.76
|
|
$0.91
|
Expected volatility
|
42.5% - 44.0%
|
|
54.1% - 55.2%
|
|
53.3%
|
Risk-free interest rate
|
1.7% - 1.9%
|
|
1.6% - 1.9%
|
|
1.6%
|
Expected life in years
|
5.93
|
|
6.29
|
|
6.29
|
Dividend yield
|
—
|
|
—
|
|
—
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
|
(in thousands, except share and per share amounts)
|
December 31,
2015 |
|
December 31,
2014 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
18,473
|
|
|
$
|
30,988
|
|
Accounts receivable, net of allowance of $581 and $890 at December 31, 2015 and 2014, respectively
|
13,972
|
|
|
14,559
|
|
||
Prepaid and other
|
2,603
|
|
|
2,069
|
|
||
Total current assets
|
35,048
|
|
|
47,616
|
|
||
Canadian tax credits receivable
|
2,018
|
|
|
3,959
|
|
||
Property and equipment, net
|
6,001
|
|
|
3,930
|
|
||
Intangible assets, net
|
31,526
|
|
|
34,751
|
|
||
Goodwill
|
47,422
|
|
|
45,146
|
|
||
Other assets
|
399
|
|
|
284
|
|
||
Total assets
|
$
|
122,414
|
|
|
$
|
135,686
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
2,548
|
|
|
$
|
2,258
|
|
Accrued compensation
|
2,441
|
|
|
2,372
|
|
||
Accrued expenses and other
|
5,173
|
|
|
4,304
|
|
||
Deferred revenue
|
19,931
|
|
|
21,182
|
|
||
Due to seller
|
2,409
|
|
|
4,365
|
|
||
Current maturities of notes payable (includes unamortized discount of $250 and $38 at December 31, 2015 and 2014, respectively, based on imputed interest rate of 6.6%)
|
1,500
|
|
|
10,964
|
|
||
Total current liabilities
|
34,002
|
|
|
45,445
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
||||
Canadian tax credit liability to sellers
|
368
|
|
|
1,616
|
|
||
Notes payable, less current maturities (includes unamortized discount of $758 and $117 at December 31, 2015 and 2014, respectively, based on imputed interest rate of 6.6%)
|
22,366
|
|
|
12,327
|
|
||
Deferred revenue
|
8
|
|
|
194
|
|
||
Noncurrent deferred tax liability, net
|
2,818
|
|
|
3,006
|
|
||
Other long-term liabilities
|
2,582
|
|
|
1,701
|
|
||
Total liabilities
|
62,144
|
|
|
64,289
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.0001 par value; 50,000,000 shares authorized: 15,746,288 and 15,249,118 shares issued and outstanding as of December 31, 2015 and 2014 respectively
|
2
|
|
|
2
|
|
||
Additional paid-in capital
|
112,447
|
|
|
108,337
|
|
||
Accumulated other comprehensive loss
|
(3,289
|
)
|
|
(1,716
|
)
|
||
Accumulated deficit
|
(48,890
|
)
|
|
(35,226
|
)
|
||
Total stockholders’ equity
|
60,270
|
|
|
71,397
|
|
||
Total liabilities and stockholders’ equity
|
$
|
122,414
|
|
|
$
|
135,686
|
|
(in thousands, except share and per share amounts)
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Subscription and support
|
$
|
57,193
|
|
|
$
|
48,625
|
|
|
$
|
30,887
|
|
Perpetual license
|
2,805
|
|
|
2,787
|
|
|
2,003
|
|
|||
Total product revenue
|
59,998
|
|
|
51,412
|
|
|
32,890
|
|
|||
Professional services
|
9,913
|
|
|
13,162
|
|
|
8,303
|
|
|||
Total revenue
|
69,911
|
|
|
64,574
|
|
|
41,193
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Subscription and support
|
19,586
|
|
|
14,042
|
|
|
7,787
|
|
|||
Professional services
|
7,085
|
|
|
9,079
|
|
|
5,680
|
|
|||
Total cost of revenue
|
26,671
|
|
|
23,121
|
|
|
13,467
|
|
|||
Gross profit
|
43,240
|
|
|
41,453
|
|
|
27,726
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Sales and marketing
|
12,965
|
|
|
14,670
|
|
|
10,625
|
|
|||
Research and development
|
15,778
|
|
|
26,165
|
|
|
10,340
|
|
|||
Refundable Canadian tax credits
|
(470
|
)
|
|
(1,094
|
)
|
|
(583
|
)
|
|||
General and administrative
|
18,201
|
|
|
13,561
|
|
|
6,832
|
|
|||
Depreciation and amortization
|
4,534
|
|
|
4,310
|
|
|
3,670
|
|
|||
Acquisition-related expenses
|
2,455
|
|
|
2,186
|
|
|
1,461
|
|
|||
Total operating expenses
|
53,463
|
|
|
59,798
|
|
|
32,345
|
|
|||
Loss from operations
|
(10,223
|
)
|
|
(18,345
|
)
|
|
(4,619
|
)
|
|||
Other expense:
|
|
|
|
|
|
||||||
Interest expense, net
|
(1,858
|
)
|
|
(1,951
|
)
|
|
(2,797
|
)
|
|||
Other income (expense), net
|
(544
|
)
|
|
101
|
|
|
(431
|
)
|
|||
Total other expense
|
(2,402
|
)
|
|
(1,850
|
)
|
|
(3,228
|
)
|
|||
Loss before provision for income taxes
|
(12,625
|
)
|
|
(20,195
|
)
|
|
(7,847
|
)
|
|||
Provision for income taxes
|
(1,039
|
)
|
|
78
|
|
|
(708
|
)
|
|||
Loss from continuing operations
|
(13,664
|
)
|
|
(20,117
|
)
|
|
(8,555
|
)
|
|||
Income (loss) from discontinued operations, net of tax of $0, $0, and $642 for 2015, 2014, and 2013, respectively
|
—
|
|
|
—
|
|
|
(642
|
)
|
|||
Net loss
|
$
|
(13,664
|
)
|
|
$
|
(20,117
|
)
|
|
$
|
(9,197
|
)
|
Preferred stock dividends and accretion
|
—
|
|
|
(1,524
|
)
|
|
(98
|
)
|
|||
Net loss attributable to common shareholders
|
$
|
(13,664
|
)
|
|
$
|
(21,641
|
)
|
|
$
|
(9,295
|
)
|
Net loss per common share:
|
|
|
|
|
|
||||||
Loss from continuing operations per common share, basic and diluted
|
$
|
(0.91
|
)
|
|
$
|
(4.43
|
)
|
|
$
|
(7.23
|
)
|
Income (loss) from discontinued operations per common share, basic and diluted
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.54
|
)
|
Net loss per common share, basic and diluted
|
$
|
(0.91
|
)
|
|
$
|
(4.43
|
)
|
|
$
|
(7.77
|
)
|
Weighted-average common shares outstanding, basic and diluted
|
14,939,601
|
|
|
4,889,901
|
|
|
1,196,668
|
|
(in thousands)
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net loss
|
$
|
(13,664
|
)
|
|
$
|
(20,117
|
)
|
|
$
|
(9,197
|
)
|
Foreign currency translation adjustment
|
(1,573
|
)
|
|
(943
|
)
|
|
(669
|
)
|
|||
Comprehensive loss
|
$
|
(15,237
|
)
|
|
$
|
(21,060
|
)
|
|
$
|
(9,866
|
)
|
(in thousands, except share amounts)
|
Common Stock
|
|
|
|
Additional
Paid-In Capital |
|
Accumulated
Other Comprehensive Loss |
|
Accumulated
Deficit |
|
Total
Stockholders’ Equity (Deficit) |
|||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at December 31, 2012
|
1,695,720
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(104
|
)
|
|
$
|
(4,075
|
)
|
|
$
|
(4,179
|
)
|
Issuance of common stock in business combination
|
155,599
|
|
|
—
|
|
|
275
|
|
|
—
|
|
|
—
|
|
|
275
|
|
|||||
Accretion of preferred stock
|
—
|
|
|
—
|
|
|
(47
|
)
|
|
—
|
|
|
—
|
|
|
(47
|
)
|
|||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
(51
|
)
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
98
|
|
|
—
|
|
|
—
|
|
|
98
|
|
|||||
Distribution associated with spin-off
|
—
|
|
|
—
|
|
|
(275
|
)
|
|
—
|
|
|
(1,837
|
)
|
|
(2,112
|
)
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(669
|
)
|
|
—
|
|
|
(669
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,197
|
)
|
|
(9,197
|
)
|
|||||
Balance at December 31, 2013
|
1,851,319
|
|
|
—
|
|
|
—
|
|
|
(773
|
)
|
|
(15,109
|
)
|
|
(15,882
|
)
|
|||||
Issuance of common stock upon conversion of preferred stock
|
6,834,476
|
|
|
1
|
|
|
52,312
|
|
|
—
|
|
|
—
|
|
|
52,313
|
|
|||||
Issuance of common stock in initial public offering
|
3,846,154
|
|
|
1
|
|
|
38,845
|
|
|
—
|
|
|
—
|
|
|
38,846
|
|
|||||
Issuance of common stock to related party (Note 17)
|
1,803,574
|
|
|
—
|
|
|
11,219
|
|
|
—
|
|
|
—
|
|
|
11,219
|
|
|||||
Issuance of common stock in business combination
|
577,486
|
|
|
—
|
|
|
6,146
|
|
|
—
|
|
|
—
|
|
|
6,146
|
|
|||||
Issuance of restricted stock
|
335,673
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Exercise of stock options
|
436
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Accretion of preferred stock
|
—
|
|
|
—
|
|
|
(70
|
)
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
(1,454
|
)
|
|
—
|
|
|
—
|
|
|
(1,454
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
729
|
|
|
—
|
|
|
—
|
|
|
729
|
|
|||||
Conversion of warrants from preferred to common
|
—
|
|
|
—
|
|
|
609
|
|
|
—
|
|
|
—
|
|
|
609
|
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(943
|
)
|
|
—
|
|
|
(943
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,117
|
)
|
|
(20,117
|
)
|
|||||
Balance at December 31, 2014
|
15,249,118
|
|
|
2
|
|
|
108,337
|
|
|
(1,716
|
)
|
|
(35,226
|
)
|
|
71,397
|
|
|||||
Issuance of common stock in business combination
|
233,679
|
|
|
—
|
|
|
1,386
|
|
|
—
|
|
|
—
|
|
|
1,386
|
|
|||||
Issuance of stock under Company plans, net of shares withheld for tax
|
263,491
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|||||
Issuance of stock, net of issuance costs
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
—
|
|
|
—
|
|
|
(44
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,741
|
|
|
—
|
|
|
—
|
|
|
2,741
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,573
|
)
|
|
—
|
|
|
(1,573
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,664
|
)
|
|
(13,664
|
)
|
|||||
Balance at December 31, 2015
|
15,746,288
|
|
|
$
|
2
|
|
|
$
|
112,447
|
|
|
$
|
(3,289
|
)
|
|
$
|
(48,890
|
)
|
|
$
|
60,270
|
|
(in thousands)
|
|
Year Ended December 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Operating activities
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(13,664
|
)
|
|
$
|
(20,117
|
)
|
|
$
|
(9,197
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
8,451
|
|
|
7,457
|
|
|
5,595
|
|
|||
Deferred income taxes
|
|
207
|
|
|
(295
|
)
|
|
(104
|
)
|
|||
Foreign currency re-measurement loss
|
|
981
|
|
|
—
|
|
|
—
|
|
|||
Non-cash interest and other expense
|
|
376
|
|
|
589
|
|
|
1,585
|
|
|||
Non-cash stock compensation expense
|
|
2,741
|
|
|
1,077
|
|
|
498
|
|
|||
Stock-based compensation—related party vendor
|
|
—
|
|
|
11,220
|
|
|
—
|
|
|||
Changes in operating assets and liabilities, net of purchase business combinations:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
741
|
|
|
(1,579
|
)
|
|
2,941
|
|
|||
Prepaids and other
|
|
1,873
|
|
|
484
|
|
|
(1,617
|
)
|
|||
Accounts payable
|
|
157
|
|
|
639
|
|
|
(1,113
|
)
|
|||
Accrued expenses and other liabilities
|
|
(2,796
|
)
|
|
(924
|
)
|
|
2,176
|
|
|||
Deferred revenue
|
|
(570
|
)
|
|
2,626
|
|
|
(1,003
|
)
|
|||
Net cash provided by (used in) operating activities
|
|
(1,503
|
)
|
|
1,177
|
|
|
(239
|
)
|
|||
Investing activities
|
|
|
|
|
|
|
||||||
Purchase of property and equipment
|
|
(956
|
)
|
|
(861
|
)
|
|
(263
|
)
|
|||
Purchase of customer relationships
|
|
(791
|
)
|
|
—
|
|
|
—
|
|
|||
Purchase business combinations, net of cash acquired
|
|
(7,664
|
)
|
|
(6,217
|
)
|
|
(28,175
|
)
|
|||
Cash included in distribution of spin-off
|
|
—
|
|
|
—
|
|
|
(127
|
)
|
|||
Net cash provided by (used in) investing activities
|
|
(9,411
|
)
|
|
(7,078
|
)
|
|
(28,565
|
)
|
|||
Financing activities
|
|
|
|
|
|
|
||||||
Payments on capital leases
|
|
(1,020
|
)
|
|
(541
|
)
|
|
(351
|
)
|
|||
Proceeds from notes payable, net of issuance costs
|
|
24,083
|
|
|
5,685
|
|
|
28,036
|
|
|||
Payments on notes payable
|
|
(23,907
|
)
|
|
(10,910
|
)
|
|
(17,516
|
)
|
|||
Issuance of preferred stock, net of issuance costs
|
|
—
|
|
|
(97
|
)
|
|
19,716
|
|
|||
Issuance of common stock, net of issuance costs
|
|
(18
|
)
|
|
38,846
|
|
|
—
|
|
|||
Additional consideration paid to sellers of businesses
|
|
(359
|
)
|
|
(599
|
)
|
|
(321
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
(1,221
|
)
|
|
32,384
|
|
|
29,564
|
|
|||
Effect of exchange rate fluctuations on cash
|
|
(380
|
)
|
|
(198
|
)
|
|
51
|
|
|||
Change in cash and cash equivalents
|
|
(12,515
|
)
|
|
26,285
|
|
|
811
|
|
|||
Cash and cash equivalents, beginning of period
|
|
30,988
|
|
|
4,703
|
|
|
3,892
|
|
|||
Cash and cash equivalents, end of period
|
|
$
|
18,473
|
|
|
$
|
30,988
|
|
|
$
|
4,703
|
|
Supplemental disclosures of cash flow information
|
|
|
|
|
|
|
||||||
Cash paid for interest
|
|
$
|
1,523
|
|
|
$
|
1,382
|
|
|
$
|
1,221
|
|
Cash paid for taxes
|
|
$
|
314
|
|
|
$
|
252
|
|
|
$
|
287
|
|
Noncash investing and financing activities
|
|
|
|
|
|
|
||||||
Notes payable issued to sellers in business combination
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,500
|
|
Equipment acquired pursuant to capital lease obligations
|
|
$
|
3,428
|
|
|
$
|
1,572
|
|
|
$
|
649
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Balance at beginning of year
|
$
|
890
|
|
|
$
|
454
|
|
|
$
|
321
|
|
Provision
|
412
|
|
|
829
|
|
|
725
|
|
|||
Acquisitions
|
—
|
|
|
400
|
|
|
295
|
|
|||
Writeoffs, net of recoveries
|
(721
|
)
|
|
(793
|
)
|
|
(887
|
)
|
|||
Balance at end of year
|
$
|
581
|
|
|
$
|
890
|
|
|
$
|
454
|
|
Computer hardware and equipment
|
3 - 5 years
|
Purchased software and licenses
|
3 - 5 years
|
Furniture and fixtures
|
7 years
|
Leasehold improvements
|
Lesser of estimated useful life or lease term
|
|
Year Ended December 31,
|
||||
|
2015
|
|
2014
|
|
2013
|
Weighted average grant-date fair value of options
|
$3.01
|
|
$3.76
|
|
$0.91
|
Expected volatility
|
42.5% - 44.0%
|
|
54.1% - 55.2%
|
|
53.3%
|
Risk-free interest rate
|
1.7% - 1.9%
|
|
1.6% - 1.9%
|
|
1.6%
|
Expected life in years
|
5.93
|
|
6.29
|
|
6.29
|
Dividend yield
|
—
|
|
—
|
|
—
|
|
Ultriva
|
|
Solution Q
|
|
Mobile Commons
|
|
FileBound
|
|
ComSci
|
|
Clickability
|
||||||||||||
Year Acquired
|
2015
|
|
2014
|
|
2014
|
|
2013
|
|
2013
|
|
2013
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash
|
$
|
383
|
|
|
$
|
352
|
|
|
$
|
286
|
|
|
$
|
182
|
|
|
$
|
104
|
|
|
$
|
—
|
|
Accounts receivable
|
737
|
|
|
893
|
|
|
1,242
|
|
|
1,940
|
|
|
951
|
|
|
1,773
|
|
||||||
Other current assets
|
41
|
|
|
24
|
|
|
147
|
|
|
153
|
|
|
47
|
|
|
297
|
|
||||||
Canadian tax credit receivable
|
—
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Property and equipment
|
16
|
|
|
28
|
|
|
54
|
|
|
927
|
|
|
61
|
|
|
1,519
|
|
||||||
Customer relationships
|
1,820
|
|
|
2,230
|
|
|
1,620
|
|
|
3,600
|
|
|
2,000
|
|
|
4,400
|
|
||||||
Trade name
|
140
|
|
|
100
|
|
|
130
|
|
|
320
|
|
|
180
|
|
|
250
|
|
||||||
Technology
|
960
|
|
|
540
|
|
|
1,150
|
|
|
2,040
|
|
|
810
|
|
|
2,500
|
|
||||||
Goodwill
|
4,700
|
|
|
5,206
|
|
|
7,244
|
|
|
7,188
|
|
|
3,851
|
|
|
3,401
|
|
||||||
Other assets
|
32
|
|
|
14
|
|
|
47
|
|
|
21
|
|
|
8
|
|
|
—
|
|
||||||
Total assets acquired
|
8,829
|
|
|
9,458
|
|
|
11,920
|
|
|
16,371
|
|
|
8,012
|
|
|
14,140
|
|
||||||
Accounts payable
|
(197
|
)
|
|
(52
|
)
|
|
(313
|
)
|
|
(113
|
)
|
|
(260
|
)
|
|
(154
|
)
|
||||||
Accrued expense and other
|
(284
|
)
|
|
(223
|
)
|
|
(463
|
)
|
|
(266
|
)
|
|
(106
|
)
|
|
(100
|
)
|
||||||
Deferred tax liabilities
|
—
|
|
|
(428
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Deferred revenue
|
(760
|
)
|
|
(2,242
|
)
|
|
(144
|
)
|
|
(1,342
|
)
|
|
(78
|
)
|
|
(1,605
|
)
|
||||||
Canadian tax credit liability to seller
|
—
|
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total liabilities assumed
|
(1,241
|
)
|
|
(2,984
|
)
|
|
(920
|
)
|
|
(1,721
|
)
|
|
(444
|
)
|
|
(1,859
|
)
|
||||||
Total consideration
|
$
|
7,588
|
|
|
$
|
6,474
|
|
|
$
|
11,000
|
|
|
$
|
14,650
|
|
|
$
|
7,568
|
|
|
$
|
12,281
|
|
|
Fair Value Measurements at December 31, 2014
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Earnout consideration liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
500
|
|
|
$
|
500
|
|
|
Fair Value Measurements at December 31, 2015
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Earnout consideration liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
500
|
|
|
$
|
500
|
|
Ending balance at December 31, 2013
|
$
|
525
|
|
Change in fair value of preferred stock warrants
|
83
|
|
|
Conversion of preferred stock warrants to common warrants and to common stock
|
(608
|
)
|
|
Earnout consideration liability
|
500
|
|
|
Ending balance at December 31, 2014
|
500
|
|
|
Ending balance at December 31, 2015
|
$
|
500
|
|
Balance at December 31, 2013
|
$
|
33,630
|
|
Acquired in business combinations
|
12,313
|
|
|
Foreign currency translation adjustment
|
(797
|
)
|
|
Balance at December 31, 2014
|
$
|
45,146
|
|
Acquired in business combinations
|
4,700
|
|
|
Adjustment due to finalization of 2014 business combination
|
(120
|
)
|
|
Foreign currency translation adjustment
|
(2,304
|
)
|
|
Balance at December 31, 2015
|
$
|
47,422
|
|
|
Estimated Useful
Life (Years) |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net Carrying
Amount |
||||||
December 31, 2015
|
|
|
|
|
|
|
|
||||||
Customer relationships
|
1-10
|
|
$
|
31,848
|
|
|
$
|
9,054
|
|
|
$
|
22,794
|
|
Trade name
|
1-3
|
|
2,909
|
|
|
2,476
|
|
|
433
|
|
|||
Developed technology
|
4-7
|
|
13,808
|
|
|
5,509
|
|
|
8,299
|
|
|||
Total intangible assets
|
|
|
$
|
48,565
|
|
|
$
|
17,039
|
|
|
$
|
31,526
|
|
|
Estimated Useful
Life (Years)
|
|
Gross
Carrying Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
||||||
December 31, 2014
|
|
|
|
|
|
|
|
||||||
Customer relationships
|
10
|
|
$
|
30,053
|
|
|
$
|
5,813
|
|
|
$
|
24,240
|
|
Trade name
|
1-3
|
|
2,812
|
|
|
2,027
|
|
|
785
|
|
|||
Developed technology
|
4-7
|
|
13,305
|
|
|
3,579
|
|
|
9,726
|
|
|||
Total intangible assets
|
|
|
$
|
46,170
|
|
|
$
|
11,419
|
|
|
$
|
34,751
|
|
|
2015
|
|
2014
|
Customer relationships
|
9.3
|
|
9.7
|
Trade name
|
2.9
|
|
2.8
|
Developed technology
|
6.4
|
|
6.4
|
Total weighted-average amortization period
|
8.1
|
|
8.4
|
|
2015
|
|
2014
|
|
2013
|
||||||
Income (loss) before provision for income taxes:
|
|
|
|
|
|
||||||
United States
|
$
|
(13,254
|
)
|
|
$
|
(18,455
|
)
|
|
$
|
(9,267
|
)
|
Foreign
|
629
|
|
|
(1,740
|
)
|
|
1,420
|
|
|||
|
$
|
(12,625
|
)
|
|
$
|
(20,195
|
)
|
|
$
|
(7,847
|
)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
(100
|
)
|
|
54
|
|
|
18
|
|
|||
Foreign
|
932
|
|
|
163
|
|
|
1,136
|
|
|||
Total Current
|
$
|
832
|
|
|
$
|
217
|
|
|
$
|
1,154
|
|
|
|
|
|
|
|
||||||
Deferred
|
|
|
|
|
|
||||||
Federal
|
$
|
293
|
|
|
$
|
300
|
|
|
$
|
(417
|
)
|
State
|
31
|
|
|
10
|
|
|
(67
|
)
|
|||
Foreign
|
(117
|
)
|
|
(605
|
)
|
|
38
|
|
|||
Total Deferred
|
207
|
|
|
(295
|
)
|
|
(446
|
)
|
|||
|
$
|
1,039
|
|
|
$
|
(78
|
)
|
|
$
|
708
|
|
|
2015
|
|
2014
|
||||
Deferred tax assets:
|
|
|
|
||||
Current deferred tax assets:
|
|
|
|
||||
Accrued expenses and allowances
|
$
|
793
|
|
|
$
|
733
|
|
Deferred revenue
|
671
|
|
|
549
|
|
||
Other
|
22
|
|
|
62
|
|
||
Valuation allowance for current deferred tax assets
|
(1,183
|
)
|
|
(964
|
)
|
||
Net current deferred tax assets
|
303
|
|
|
380
|
|
||
Noncurrent deferred tax assets:
|
|
|
|
||||
Intangible assets
|
|
|
—
|
|
|||
Stock compensation
|
582
|
|
|
350
|
|
||
Net operating loss and tax credit carryforwards
|
20,871
|
|
|
16,755
|
|
||
Other
|
174
|
|
|
61
|
|
||
Valuation allowance for noncurrent deferred tax assets
|
(17,324
|
)
|
|
(12,143
|
)
|
||
Net noncurrent deferred tax assets
|
$
|
4,303
|
|
|
$
|
5,023
|
|
Deferred tax liabilities:
|
|
|
|
||||
Current deferred tax liabilities:
|
|
|
|
||||
Prepaid expenses
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
Total current deferred tax liabilities
|
(1
|
)
|
|
(1
|
)
|
||
Noncurrent deferred tax liabilities:
|
|
|
|
||||
Stock compensation
|
—
|
|
|
—
|
|
||
Capital expenses
|
(2
|
)
|
|
(202
|
)
|
||
Intangible assets
|
(6,481
|
)
|
|
(7,217
|
)
|
||
Goodwill
|
(561
|
)
|
|
(252
|
)
|
||
Tax credit carryforwards
|
(379
|
)
|
|
(737
|
)
|
||
Total noncurrent deferred tax liabilities
|
(7,423
|
)
|
|
(8,408
|
)
|
||
Net current deferred tax asset
|
$
|
302
|
|
|
$
|
379
|
|
Net noncurrent deferred tax liability
|
$
|
(3,120
|
)
|
|
$
|
(3,385
|
)
|
Net deferred taxes
|
$
|
(2,818
|
)
|
|
$
|
(3,006
|
)
|
Balance at January 1, 2013
|
$
|
70
|
|
Additional based on tax positions related to the current year
|
—
|
|
|
Additions for tax positions of prior years
|
—
|
|
|
Reductions for tax positions of prior years
|
(7
|
)
|
|
Settlements
|
—
|
|
|
Balance at December 31, 2013
|
$
|
63
|
|
Additional based on tax positions related to the current year
|
—
|
|
|
Additions for tax positions of prior years
|
—
|
|
|
Reductions for tax positions of prior years
|
(10
|
)
|
|
Settlements
|
—
|
|
|
Balance at December 31, 2014
|
$
|
53
|
|
Additional based on tax positions related to the current year
|
—
|
|
|
Additions for tax positions of prior years
|
568
|
|
|
Reductions for tax positions of prior years
|
—
|
|
|
Settlements
|
—
|
|
|
Balance at December 31, 2015
|
$
|
621
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Senior secured loans (includes unamortized discount of $1,008 and $155 at December 31, 2015 and December 31, 2014, respectively, based on imputed interest rate of 6.6%)
|
$
|
23,366
|
|
|
$
|
16,791
|
|
Revolving credit facility
|
—
|
|
|
3,000
|
|
||
Seller notes due 2015
|
—
|
|
|
3,000
|
|
||
Seller notes due 2016
|
500
|
|
|
500
|
|
||
|
23,866
|
|
|
23,291
|
|
||
Less current maturities
|
(1,500
|
)
|
|
(10,964
|
)
|
||
Total long-term debt
|
$
|
22,366
|
|
|
$
|
12,327
|
|
•
|
Incur additional indebtedness or guarantee indebtedness of others;
|
•
|
Create liens on their assets;
|
•
|
Make investments, including certain acquisitions;
|
•
|
Enter into mergers or consolidations;
|
•
|
Dispose of assets;
|
•
|
Pay dividends and make other distributions on the Company’s capital stock, and redeem and repurchase the Company’s capital stock;
|
•
|
Enter into transactions with affiliates; and
|
•
|
Prepay indebtedness or make changes to certain agreements.
|
Year ending December 31:
|
|
||
2016
|
$
|
1,750
|
|
2017
|
1,250
|
|
|
2018
|
1,250
|
|
|
2019
|
1,250
|
|
|
2020
|
19,374
|
|
|
Thereafter
|
—
|
|
|
|
$
|
24,874
|
|
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Numerators:
|
|
|
|
|
|
||||||
Loss from continuing operations attributable to common stockholders
|
$
|
(13,664
|
)
|
|
$
|
(20,117
|
)
|
|
$
|
(8,555
|
)
|
Income (loss) from discontinued operations attributable to common stockholders
|
—
|
|
|
—
|
|
|
(642
|
)
|
|||
Preferred stock dividends and accretion
|
—
|
|
|
(1,524
|
)
|
|
(98
|
)
|
|||
Net loss attributable to common stockholders
|
$
|
(13,664
|
)
|
|
$
|
(21,641
|
)
|
|
$
|
(9,295
|
)
|
Denominator:
|
|
|
|
|
|
||||||
Weighted–average common shares outstanding, basic and diluted
|
14,939,601
|
|
|
4,889,901
|
|
|
1,196,668
|
|
|||
Loss from continuing operations per share, basic and diluted
|
$
|
(0.91
|
)
|
|
$
|
(4.43
|
)
|
|
$
|
(7.23
|
)
|
Loss from discontinued operations per share, basic and diluted
|
—
|
|
|
—
|
|
|
(0.54
|
)
|
|||
Net loss per common share, basic and diluted
|
$
|
(0.91
|
)
|
|
$
|
(4.43
|
)
|
|
$
|
(7.77
|
)
|
|
Capital
Leases |
|
Operating
Leases |
|
Purchase Commitments
|
||||||
2016
|
$
|
1,845
|
|
|
$
|
1,874
|
|
|
$
|
2,308
|
|
2017
|
1,378
|
|
|
1,439
|
|
|
—
|
|
|||
2018
|
1,069
|
|
|
972
|
|
|
—
|
|
|||
2019
|
477
|
|
|
733
|
|
|
—
|
|
|||
2020
|
13
|
|
|
211
|
|
|
—
|
|
|||
Thereafter
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total minimum lease payments
|
4,782
|
|
|
$
|
5,229
|
|
|
$
|
2,308
|
|
|
Less amount representing interest
|
(549
|
)
|
|
|
|
|
|||||
Present value of capital lease obligations
|
4,233
|
|
|
|
|
|
|||||
Less current portion of capital lease obligations
|
(1,654
|
)
|
|
|
|
|
|||||
Long-term capital lease obligations
|
$
|
2,579
|
|
|
|
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
Equipment (including equipment under capital lease of $6,199 and $3,028, respectively)
|
$
|
11,599
|
|
|
$
|
7,712
|
|
Furniture and fixtures (including furniture under capital lease of $143 and $0 at December 31, 2015 and 2014, respectively)
|
484
|
|
|
502
|
|
||
Leasehold improvements
|
819
|
|
|
574
|
|
||
Accumulated depreciation (including for equipment and furniture under capital lease of $2,218 and $1,194 at December 31, 2015 and 2014, respectively)
|
(6,901
|
)
|
|
(4,858
|
)
|
||
Property and equipment, net
|
$
|
6,001
|
|
|
$
|
3,930
|
|
•
|
In July and October 2010, the Company issued
1,582,635
shares of restricted stock to three stockholders of the Company at
$0.0001
per share for aggregate proceeds of
$965
. In October 2012, the Company issued
113,085
shares of restricted stock to an employee of the Company at
$1.22
per share for aggregate proceeds of
$138,000
. These shares are subject to a repurchase option. If the holder’s status as an employee or service provider to the Company terminates, then the Company shall have the option to repurchase any shares that have not yet been released from the repurchase option at a price per share equal to the original purchase price.
|
•
|
In November 2013, the Company issued
155,599
shares of common stock valued at
$275,000
in connection with the acquisition of ComSci.
|
•
|
In January 2014, the Company issued
1,803,574
shares of common stock to this company in connection with the amendment of such technology services agreement and took a noncash charge of
$11.2 million
recorded in research and development expenses.
|
•
|
In September 2014, the Company granted
294,010
shares of restricted stock with a grant-date fair value of
$8.73
. The restricted stock has restrictions which vest over
three years
from date of grant for
40,990
shares and over
four years
from the date of grant for
253,020
shares. The grant-date fair value of the shares is recognized over the requisite vesting pe
riod. If vesting periods are not achieved, the shares will be forfeited by the employee.
|
•
|
In November 2014, the Company granted
41,664
shares of restricted stock with a grant-date fair value of
$12.00
to members of the Board of Directors. The restricted stock has restrictions which vest fully after twelve months from date of grant. The grant-date fair value of the shares is recognized over the requisite vesting pe
riod. If vesting periods are not achieved, the shares will be forfeited by the respective Director.
|
•
|
In November, 2014, the Company issued
3,846,154
shares of common stock, at a price of
$12.00
per share, before underwriting discounts and commissions. The IPO generated net proceeds of approximately
$42.9 million
, after deducting underwriting discounts and commissions. Expenses incurred by us for the IPO were approximately
$4.1 million
and will be recorded against the proceeds received from the IPO.
|
•
|
In November 2014, the Company issued
6,834,476
share of common stock for conversion of all outstanding shares of preferred stock
on a one-to-one basis in connection with the Company's IPO.
|
•
|
In November 2014, the Company issued
150,977
shares of common stock valued at
$1.6 million
in connection with the acquisition of Solution Q. In addition, the company issued
65,570
shares of common stock to two employees valued at
$0.7 million
. The restricted stock has restrictions which vest fully
two years
from date of grant. The grant-date fair value of the shares is recognized over the requisite vesting pe
riod. If vesting periods are not achieved, the shares will be forfeited by the respective employee.
|
•
|
In December 2014, the Company agreed to issue
386,253
shares of common stock valued at
$4.5
million in connection with the acquisition of Mobile Commons. As of December 31, 2014,
316,747
shares of common stock were issued to certain former shareholders of Mobile Commons,
44,192
shares were being held in escrow for eighteen (
18
) months and subject to indemnification claims by the Company and an additional
25,314
shares were reserved for issuance upon the completion of certain documentation by certain former shareholders of Mobile Commons.
|
•
|
In November 2015, the Company agreed to issue
179,298
shares of common stock valued at approximately
$1,388,000
in connection with the acquisition of Ultriva.
In addition, the company issued
45,767
shares of common stock to an employee valued at approximately
$0.4 million
. The restricted stock has restrictions which vest at three different events during the year following the acquisition. The grant-date fair value of the shares is recognized over the requisite vesting pe
riod. If vesting periods are not achieved, the shares will be forfeited by the respective employee.
|
|
|
Number of
Options Outstanding |
|
Weighted–
Average Exercise Price |
|
Weighted–
Average Remaining Contractual Life (In Years) |
|
Weighted-
Average Fair Value per Share |
|||||
Outstanding at December 31, 2012
|
|
187,622
|
|
|
$
|
1.04
|
|
|
9.65
|
|
$
|
0.67
|
|
Options granted
|
|
191,045
|
|
|
1.77
|
|
|
|
|
0.91
|
|
||
Options forfeited
|
|
(20,676
|
)
|
|
1.28
|
|
|
|
|
0.79
|
|
||
Outstanding at December 31, 2013
|
|
357,991
|
|
|
$
|
1.40
|
|
|
9.16
|
|
$
|
0.79
|
|
Options granted
|
|
386,797
|
|
|
7.03
|
|
|
|
|
3.76
|
|
||
Options exercised
|
|
(435
|
)
|
|
1.77
|
|
|
|
|
0.93
|
|
||
Options forfeited
|
|
(79,143
|
)
|
|
3.87
|
|
|
|
|
2.09
|
|
||
Outstanding at December 31, 2014
|
|
665,210
|
|
|
$
|
4.39
|
|
|
8.78
|
|
$
|
2.37
|
|
Options granted
|
|
420,616
|
|
|
6.93
|
|
|
|
|
6.93
|
|
||
Options exercised
|
|
(106,338
|
)
|
|
2.17
|
|
|
|
|
2.24
|
|
||
Options forfeited
|
|
(201,100
|
)
|
|
5.62
|
|
|
|
|
4.99
|
|
||
Outstanding at December 31, 2015
|
|
778,388
|
|
|
$
|
5.75
|
|
|
8.39
|
|
$
|
5.75
|
|
Options vested and expected to vest at December 31, 2013
|
|
59,106
|
|
|
$
|
0.79
|
|
|
8.04
|
|
|
||
Options vested and exercisable at December 31, 2013
|
|
56,675
|
|
|
$
|
0.79
|
|
|
8.04
|
|
|
||
Options vested and expected to vest at December 31, 2014
|
|
149,907
|
|
|
$
|
1.58
|
|
|
7.81
|
|
|
||
Options vested and exercisable at December 31, 2014
|
|
149,907
|
|
|
$
|
1.58
|
|
|
7.81
|
|
|
||
Options vested and expected to vest at December 31, 2015
|
|
769,142
|
|
|
$
|
5.72
|
|
|
8.37
|
|
|
||
Options vested and exercisable at December 31, 2015
|
|
244,631
|
|
|
$
|
3.78
|
|
|
6.91
|
|
|
|
Number of
Restricted Shares Outstanding |
Unvested balances at December 31, 2012
|
739,544
|
Awards granted
|
—
|
Awards vested
|
(499,265)
|
Unvested balances at December 31, 2013
|
240,279
|
Awards granted
|
401,244
|
Awards vested
|
(202,584)
|
Unvested balances at December 31, 2014
|
438,939
|
Awards granted
|
242,500
|
Awards vested
|
(144,268)
|
Awards forfeited
|
(23,228)
|
Unvested balances at December 31, 2015
|
513,943
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cost of subscription and support revenue
|
$
|
47
|
|
|
$
|
30
|
|
|
$
|
9
|
|
Cost of professional services revenue
|
(5
|
)
|
|
19
|
|
|
8
|
|
|||
Sales and marketing
|
65
|
|
|
39
|
|
|
15
|
|
|||
Research and development
|
203
|
|
|
61
|
|
|
12
|
|
|||
General and administrative
|
2,431
|
|
|
929
|
|
|
454
|
|
|||
Total
|
$
|
2,741
|
|
|
$
|
1,078
|
|
|
$
|
498
|
|
▪
|
In 2011, the Company issued
2,652,110
shares of Series A redeemable convertible preferred stock for aggregate proceeds of
$16.0 million
, net of issuance costs of
$199,000
.
|
▪
|
In January 2012, the Company issued
169,054
shares of Series A redeemable convertible preferred stock for aggregate proceeds of
$1.0 million
, net of issuance costs of
$24,000
.
|
▪
|
In January 2012, the Company issued
1,701,909
shares of Series B redeemable convertible preferred stock for aggregate proceeds of
$10.4 million
, net of issuance costs of
$22,000
.
|
▪
|
In November 2012, the Company issued
131,168
shares of Series B-1 redeemable convertible preferred stock valued at
$800,000
in connection with the acquisition of EPM Live. Such shares are subject to forfeiture obligations based upon continued employment over a
24
-month period. The Company is accounting for such shares as compensation as the shares vest. At December 31, 2014, all shares are now fully amortized.
|
▪
|
In May 2013, the Company issued
106,572
shares of B-1 redeemable convertible preferred stock valued at
$624,000
in connection with the acquisition of FileBound.
|
▪
|
In November 2013, the Company issued
155,598
shares of Series B-2 redeemable convertible preferred stock valued at
$949,000
in connection with the acquisition of ComSci.
|
▪
|
In December 2013, the Company issued
1,918,048
shares of Series C redeemable convertible preferred stock for aggregate proceeds of
$19.7 million
, net of issuance costs of
$82,000
. The proceeds from the issuance of Series C preferred stock included the conversion of
$4.9 million
of convertible promissory bridge notes and accrued interest payable.
|
▪
|
In November 2014, all of the shares of preferred stock were converted into
6,834,476
shares of common stock on a
one
-to-one basis in connec
tion with the Company's IPO.
|
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues:
|
|
|
|
|
|
||||||
U.S.
|
$
|
56,778
|
|
|
$
|
50,661
|
|
|
$
|
31,166
|
|
Canada
|
4,280
|
|
|
3,713
|
|
|
3,509
|
|
|||
Other International
|
8,853
|
|
|
10,200
|
|
|
6,518
|
|
|||
Total Revenues
|
$
|
69,911
|
|
|
$
|
64,574
|
|
|
$
|
41,193
|
|
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Identifiable long-lived assets:
|
|
|
|
|
|
||||||
U.S.
|
$
|
5,501
|
|
|
$
|
3,330
|
|
|
$
|
3,310
|
|
Canada
|
469
|
|
|
600
|
|
|
632
|
|
|||
Other International
|
31
|
|
|
—
|
|
|
—
|
|
|||
Total identifiable long-lived assets
|
$
|
6,001
|
|
|
$
|
3,930
|
|
|
$
|
3,942
|
|
|
3/31/14
|
|
6/30/14
|
|
9/30/14
|
|
12/31/14
|
|
3/31/15
|
|
6/30/15
|
|
9/30/15
|
|
12/31/15
|
||||||||||||||||
Consolidated Statements of Operations Data:
|
|
||||||||||||||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Subscription and support
|
$
|
11,737
|
|
|
$
|
11,805
|
|
|
$
|
12,368
|
|
|
$
|
12,715
|
|
|
$
|
14,322
|
|
|
$
|
14,023
|
|
|
$
|
14,129
|
|
|
$
|
14,719
|
|
Perpetual license
|
440
|
|
|
657
|
|
|
850
|
|
|
840
|
|
|
811
|
|
|
846
|
|
|
540
|
|
|
608
|
|
||||||||
Total product revenue
|
12,177
|
|
|
12,462
|
|
|
13,218
|
|
|
13,555
|
|
|
15,133
|
|
|
14,869
|
|
|
14,669
|
|
|
15,327
|
|
||||||||
Professional services
|
3,436
|
|
|
3,749
|
|
|
3,057
|
|
|
2,920
|
|
|
2,395
|
|
|
2,809
|
|
|
2,436
|
|
|
2,273
|
|
||||||||
Total revenue
|
15,613
|
|
|
16,211
|
|
|
16,275
|
|
|
16,475
|
|
|
17,528
|
|
|
17,678
|
|
|
17,105
|
|
|
17,600
|
|
||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Subscription and support
(1)(2)
|
3,258
|
|
|
3,346
|
|
|
3,488
|
|
|
3,950
|
|
|
4,732
|
|
|
4,841
|
|
|
4,771
|
|
|
5,242
|
|
||||||||
Professional services
(1)
|
2,397
|
|
|
2,340
|
|
|
2,305
|
|
|
2,037
|
|
|
1,908
|
|
|
1,732
|
|
|
1,677
|
|
|
1,768
|
|
||||||||
Total cost of revenue
|
5,655
|
|
|
5,686
|
|
|
5,793
|
|
|
5,987
|
|
|
6,640
|
|
|
6,573
|
|
|
6,448
|
|
|
7,010
|
|
||||||||
Gross profit
|
9,958
|
|
|
10,525
|
|
|
10,482
|
|
|
10,488
|
|
|
10,888
|
|
|
11,105
|
|
|
10,657
|
|
|
10,590
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Sales and marketing
(1)
|
3,136
|
|
|
4,015
|
|
|
3,767
|
|
|
3,752
|
|
|
3,532
|
|
|
3,446
|
|
|
2,929
|
|
|
3,058
|
|
||||||||
Research and development
(1)
|
14,899
|
|
|
3,494
|
|
|
3,793
|
|
|
3,979
|
|
|
3,926
|
|
|
4,152
|
|
|
3,852
|
|
|
3,848
|
|
||||||||
Refundable Canadian tax credits
|
(136
|
)
|
|
(138
|
)
|
|
(138
|
)
|
|
(682
|
)
|
|
(121
|
)
|
|
(122
|
)
|
|
(115
|
)
|
|
(112
|
)
|
||||||||
General and administrative
(1)
|
2,623
|
|
|
3,053
|
|
|
3,555
|
|
|
4,330
|
|
|
5,119
|
|
|
4,714
|
|
|
4,494
|
|
|
3,874
|
|
||||||||
Depreciation and amortization
|
1,055
|
|
|
1,066
|
|
|
1,067
|
|
|
1,122
|
|
|
1,014
|
|
|
1,063
|
|
|
1,130
|
|
|
1,327
|
|
||||||||
Acquisition-related expenses
|
290
|
|
|
231
|
|
|
108
|
|
|
1,557
|
|
|
545
|
|
|
360
|
|
|
176
|
|
|
1,374
|
|
||||||||
Total operating expenses
|
21,867
|
|
|
11,721
|
|
|
12,152
|
|
|
14,058
|
|
|
14,015
|
|
|
13,613
|
|
|
12,466
|
|
|
13,369
|
|
||||||||
Income (loss) from operations
|
(11,909
|
)
|
|
(1,196
|
)
|
|
(1,670
|
)
|
|
(3,570
|
)
|
|
(3,127
|
)
|
|
(2,508
|
)
|
|
(1,809
|
)
|
|
(2,779
|
)
|
||||||||
Other expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest expense, net
|
(415
|
)
|
|
(419
|
)
|
|
(397
|
)
|
|
(720
|
)
|
|
(347
|
)
|
|
(576
|
)
|
|
(462
|
)
|
|
(473
|
)
|
||||||||
Other expense, net
|
114
|
|
|
(482
|
)
|
|
60
|
|
|
409
|
|
|
(512
|
)
|
|
(12
|
)
|
|
137
|
|
|
(157
|
)
|
||||||||
Total other expense
|
(301
|
)
|
|
(901
|
)
|
|
(337
|
)
|
|
(311
|
)
|
|
(859
|
)
|
|
(588
|
)
|
|
(325
|
)
|
|
(630
|
)
|
||||||||
Loss before provision for income taxes
|
(12,210
|
)
|
|
(2,097
|
)
|
|
(2,007
|
)
|
|
(3,881
|
)
|
|
(3,986
|
)
|
|
(3,096
|
)
|
|
(2,134
|
)
|
|
(3,409
|
)
|
||||||||
Provision for income taxes
|
(410
|
)
|
|
(280
|
)
|
|
(438
|
)
|
|
1,206
|
|
|
243
|
|
|
(238
|
)
|
|
(190
|
)
|
|
(854
|
)
|
||||||||
Loss from continuing operations
|
(12,620
|
)
|
|
(2,377
|
)
|
|
(2,445
|
)
|
|
(2,675
|
)
|
|
(3,743
|
)
|
|
(3,334
|
)
|
|
(2,324
|
)
|
|
(4,263
|
)
|
||||||||
Income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net income (loss)
|
(12,620
|
)
|
|
(2,377
|
)
|
|
(2,445
|
)
|
|
(2,675
|
)
|
|
(3,743
|
)
|
|
(3,334
|
)
|
|
(2,324
|
)
|
|
(4,263
|
)
|
||||||||
Preferred stock dividends and accretion
|
(435
|
)
|
|
(440
|
)
|
|
(445
|
)
|
|
(204
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net loss attributable to common shareholders
|
$
|
(13,055
|
)
|
|
$
|
(2,817
|
)
|
|
$
|
(2,890
|
)
|
|
$
|
(2,879
|
)
|
|
$
|
(3,743
|
)
|
|
$
|
(3,334
|
)
|
|
$
|
(2,324
|
)
|
|
$
|
(4,263
|
)
|
Net loss per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loss from continuing operations per common share, basic and diluted
|
$
|
(4.48
|
)
|
|
$
|
(0.80
|
)
|
|
$
|
(0.80
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.28
|
)
|
(1) includes stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
(2) Includes depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships, and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
|
Upland Software, Inc.
|
|
|
|
|
|
By:
|
/s/ John T. McDonald
|
|
|
John T. McDonald
|
|
|
Chief Executive Officer and Chairman
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ John T. McDonald
|
|
Chief Executive Officer and Chairman
|
|
March 30, 2016
|
John T. McDonald
|
|
(
Principal Executive Officer
)
|
|
|
|
|
|
|
|
/s/ Michael D. Hill
|
|
Chief Financial Officer, Secretary and Treasurer
|
|
March 30, 2016
|
Michael D. Hill
|
|
(
Principal Financial Officer and Principal Accounting Officer
)
|
|
|
|
|
|
|
|
/s/ John D. Thornton
|
|
Director
|
|
March 30, 2016
|
John D. Thornton
|
|
|
|
|
|
|
|
|
|
/s/ Steven Sarracino
|
|
Director
|
|
March 30, 2016
|
Steven Sarracino
|
|
|
|
|
|
|
|
|
|
/s/ Stephen E. Courter
|
|
Director
|
|
March 30, 2016
|
Stephen E. Courter
|
|
|
|
|
|
|
|
|
|
/s/ Rodney C. Favaron
|
|
Director
|
|
March 30, 2016
|
Rodney C. Favaron
|
|
|
|
|
|
|
Incorporated by Reference
|
|||
Exhibit
No. |
Description of Exhibit
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
2.1
|
Agreement and Plan of Merger by and among the Registrant, Steering Wheel Acquisition Corp., PowerSteering Software, Inc. and Michael Pehl, as Stockholder representative, dated February 3, 2012
|
S-1
|
333-198574
|
2.1
|
September 4, 2014
|
2.2
|
Stock Purchase Agreement by and among the Registrant, Tenrox Inc., the stockholders named therein and Novacap II, L.P. and Aramazd Israilian, as representatives, dated February 10, 2012
|
S-1
|
333-198574
|
2.2
|
September 4, 2014
|
2.3
|
Membership Interest Purchase Agreement by and among the Registrant, LMR Solutions, LLC, Joseph Larscheid and Cheryl Larscheid, dated November 13, 2012
|
S-1
|
333-198574
|
2.3
|
September 4, 2014
|
2.4
|
Stock Purchase Agreement by and among the Registrant, Marex Group Inc., FileBound Solutions, Inc., the Selling Stockholders (as defined therein) and Rex Lamb, as representative of the Selling Stockholders, dated May 16, 2013
|
S-1
|
333-198574
|
2.4
|
September 4, 2014
|
2.5
|
Membership Interest Purchase Agreement by and among the Registrant, Upland Software, Inc., ComSci, LLC and Robert Svec, dated November 7, 2013
|
S-1
|
333-198574
|
2.5
|
September 4, 2014
|
2.6
|
Stock Purchase Agreement by and among the Registrant, Clickability, Inc. and Limelight Networks, Inc. dated December 23, 2013
|
S-1
|
333-198574
|
2.6
|
September 4, 2014
|
3.1*
|
Amended and Restated Certificate of Incorporation, as currently in effect
|
|
|
|
|
3.2*
|
Amended and Restated Bylaws, as currently in effect
|
|
|
|
|
4.1
|
Amended and Restated Investors’ Rights Agreement among the Registrant and certain stockholders, dated December 20, 2013
|
S-1
|
333-198574
|
4.1
|
September 4, 2014
|
4.2
|
Restricted Stock Agreement between the Registrant, Joseph Larscheid and Cheryl Larscheid, dated November 14, 2012
|
S-1
|
333-198574
|
4.4
|
September 4, 2014
|
4.3
|
Market Standoff Agreement between the Registrant and Robert Svec, dated November 6, 2013
|
S-1
|
333-198574
|
4.5
|
September 4, 2014
|
4.4
|
Warrant to Purchase Series A Preferred Stock issued to Comerica Bank dated February 10, 2012
|
S-1
|
333-198574
|
4.8
|
September 4, 2014
|
4.5
|
Warrant to Purchase Series B Preferred Stock issued to Comerica Bank dated March 5, 2012
|
S-1
|
333-198574
|
4.9
|
September 4, 2014
|
4.6
|
Warrant to Purchase Series B Preferred Stock issued to Comerica Bank dated April 11, 2013
|
S-1
|
333-198574
|
4.10
|
September 4, 2014
|
4.7
|
Warrant to Purchase Common Stock issued to Entrepreneurs Foundation of Central Texas dated November 6, 2013
|
S-1
|
333-198574
|
4.11
|
September 4, 2014
|
|
|
Incorporated by Reference
|
|||
4.8
|
Restricted Stock Agreement between the Registrant, Craig MacInnis, Karen Smiley-MacInnis, and John David MacInnis, dated November 20, 2014
|
10-K
|
001-36720
|
4.8
|
March 31, 2015
|
4.9
|
Restricted Stock Agreement between the Registrant, Bradley Robbins, Carla Robbins, and Debbie-Anne Michelle Dias, dated November 20, 2014
|
10-K
|
001-36720
|
4.9
|
March 31, 2015
|
4.10
|
Specimen Common Stock Certificate
|
10-Q
|
001-36720
|
4.1
|
May 15, 2015
|
10.1+
|
Form of Indemnification Agreement for directors and officers
|
S-1
|
333-198574
|
10.2
|
October 27, 2014
|
10.2+
|
Amended and Restated 2010 Stock Plan, as amended September 2, 2014
|
S-1
|
333-198574
|
10.3.1
|
September 4, 2014
|
10.3+
|
Form of Stock Option Agreement under Amended and Restated 2010 Stock Plan (Standard)
|
S-1
|
333-198574
|
10.4
|
September 4, 2014
|
10.3.1+
|
Form of Stock Option Agreement under Amended and Restated 2010 Stock Plan (Former ComSci, LLC Employees)
|
S-1
|
333-198574
|
10.4.1
|
September 4, 2014
|
10.3.2+
|
Form of Stock Option Agreement under Amended and Restated 2010 Stock Plan (Executive)
|
S-1
|
333-198574
|
10.4.2
|
September 4, 2014
|
10.3.3+
|
Form of Amendment to Stock Option Agreement under Amended and Restated 2010 Stock Plan with Certain Executives
|
S-1
|
333-198574
|
10.4.3
|
September 4, 2014
|
10.4+
|
Form of Restricted Stock Purchase Agreement under Amended and Restated 2010 Stock Plan
|
S-1
|
333-198574
|
10.5
|
September 4, 2014
|
10.4.1+
|
Form of Amendment to Restricted Stock Purchase Agreement under Amended and Restated 2010 Stock Plan
|
S-1
|
333-198574
|
10.5.1
|
September 4, 2014
|
10.5+
|
2014 Equity Incentive Plan
|
S-1
|
333-198574
|
10.6
|
October 27, 2014
|
10.6+
|
Form of Stock Option Award Agreement under 2014 Equity Incentive Plan
|
S-1
|
333-198574
|
10.7
|
October 27, 2014
|
10.6.1+
|
Form of Stock Option Award Agreement under 2014 Equity Incentive Plan (Executive)
|
S-1
|
333-198574
|
10.7.1
|
October 27, 2014
|
10.7+
|
Form of Restricted Stock Purchase Agreement under 2014 Equity Incentive Plan
|
S-1
|
333-198574
|
10.8
|
October 27, 2014
|
10.7.1+
|
Form of Restricted Stock Purchase Agreement under 2014 Equity Incentive Plan (Executive)
|
S-1
|
333-198574
|
10.8.1
|
October 27, 2014
|
10.8+
|
Form of Restricted Stock Unit Award Agreement under 2014 Equity Incentive Plan
|
S-1
|
333-198574
|
10.9
|
October 27, 2014
|
10.8.1+
|
Form of Restricted Stock Unit Award Agreement under 2014 Equity Incentive Plan (Executive)
|
S-1
|
333-198574
|
10.9.1
|
October 27, 2014
|
10.9+
|
Offer of Employment between the Registrant and John T. McDonald, dated July 23, 2010
|
S-1
|
333-198574
|
10.10
|
September 4, 2014
|
10.10+
|
Employment Agreement between the Registrant and John T. McDonald, dated May 9, 2014
|
S-1
|
333-198574
|
10.12
|
September 4, 2014
|
10.11+
|
Offer of Employment between the Registrant and R. Brian Henley, dated January 10, 2013
|
S-1
|
333-198574
|
10.11
|
September 4, 2014
|
10.12+
|
Employment Agreement between the Registrant and R. Brian Henley, dated July 25, 2014
|
S-1
|
333-198574
|
10.11.1
|
September 4, 2014
|
10.13+
|
Offer of Employment between the Registrant and Timothy Mattox, dated July 7, 2014
|
10-K
|
001-36720
|
10.13
|
March 31, 2015
|
10.14+
|
Restricted Stock Purchase Agreement between the Registrant and John T. McDonald, dated July 23, 2010
|
S-1
|
333-198574
|
10.14
|
September 4, 2014
|
10.15+
|
Restricted Stock Purchase Agreement between the Registrant and John T. McDonald, dated October 18, 2010
|
S-1
|
333-198574
|
10.15
|
September 4, 2014
|
|
|
Incorporated by Reference
|
|||
10.16+
|
Restricted Stock Purchase Agreement between the Registrant and John T. McDonald, dated September 2, 2014
|
S-1
|
333-198574
|
10.16
|
September 4, 2014
|
10.17+
|
Restricted Stock Purchase Agreement between the Registrant and R. Brian Henley, dated September 2, 2014
|
S-1
|
333-198574
|
10.16.1
|
September 4, 2014
|
10.18+
|
Restricted Stock Purchase Agreement between the Registrant and Timothy Mattox, dated September 2, 2014
|
10-K
|
001-36720
|
10.18
|
March 31, 2015
|
10.19
|
Office Lease between the Registrant and TPG-401 Congress LLC, dated February 27, 2014
|
S-1
|
333-198574
|
10.17
|
September 4, 2014
|
10.20
|
First Amendment to Office Lease between Registrant and TPG-401 Congress LLC
|
S-1
|
333-198574
|
10.17.1
|
September 4, 2014
|
10.21
|
Lease Agreement between Tenrox Inc. and A.R.E. Quebec, dated November 5, 2012, as amended
|
S-1
|
333-198574
|
10.18
|
September 4, 2014
|
10.22
|
Sublease Agreement between Marex Properties, LLC and Marex Group Inc., dated May 10, 2013
|
S-1
|
333-198574
|
10.19
|
September 4, 2014
|
10.23
|
Loan and Security Agreement and Joinder between the Registrant, Visionael Corporation, PowerSteering Software, Inc., LMR Solutions LLC, Marex Group, Inc., FileBound Solutions, Inc., ComSci, LLC, ComSci, Inc. and Comerica Bank, dated March 5, 2012, as amended through December 6, 2013
|
S-1
|
333-198574
|
10.20
|
September 4, 2014
|
10.23.1
|
Ninth Amendment to Loan and Security Agreement, Joinder and Consent between Registrant, Upland Software I, Inc., Upland Software III, Inc., Upland Software IV, Inc., Upland Software V, Inc., Upland Software VI, LLC, Upland Software VII, Inc., Upland IX, LLC and Comerica Bank, dated March 23, 2015
|
10-K
|
001-36720
|
10.23.1
|
March 31, 2015
|
10.24
|
Security Agreement between Tenrox Inc. and Comerica Bank, dated March 5, 2012, as amended
|
S-1
|
333-198574
|
10.21
|
September 4, 2014
|
10.25
|
Unconditional Guaranty by Tenrox Inc., dated March 5, 2012
|
S-1
|
333-198574
|
10.22
|
September 4, 2014
|
10.26
|
Affirmation of Guaranty Documents by Tenrox Inc. for the benefit of Comerica Bank, dated December 3, 2012, as amended through May 16, 2013
|
S-1
|
333-198574
|
10.23
|
September 4, 2014
|
10.26.1
|
Amendment to and Affirmation of Guaranty Documents between Upland Software II, Inc. and Comerica Bank, dated March 23, 2015
|
10-K
|
001-36720
|
10.26.1
|
March 31, 2015
|
10.27
|
Loan and Security Agreement between Tenrox, Inc., successor to Silverback Two Canada Merger Corporation, and Comerica Bank, dated February 10, 2012, as amended through December 6, 2013
|
S-1
|
333-198574
|
10.24
|
September 4, 2014
|
10.27.1
|
Eighth Amendment to Loan and Security Agreement, Joinder and Consent between Upland Software Inc., Solution Q Inc. and Comerica Bank, dated March 23, 2015
|
10-K
|
001-36720
|
10.27.1
|
March 31, 2015
|
10.28
|
Pledge and Security Agreement between the Registrant and Comerica Bank, dated February 10, 2012, as amended through May 16, 2013
|
S-1
|
333-198574
|
10.25
|
September 4, 2014
|
10.28.1
|
Amendment No. 6 to Pledge and Security Agreement between Registrant and Comerica Bank, dated March 23, 2015
|
10-K
|
001-36720
|
10.28.1
|
March 31, 2015
|
10.29
|
Security Agreement between Marex Group, Inc. and Comerica Bank, dated May 16, 2013, as amended through December 6, 2013
|
S-1
|
333-198574
|
10.26
|
September 4, 2014
|
10.29.1
|
Amendment No. 3 to Security Agreement between Upland Software IV, Inc. and Comerica Bank, dated March 23, 2015
|
10-K
|
001-36720
|
10.29.1
|
March 31, 2015
|
|
|
Incorporated by Reference
|
|||
10.30
|
Security Agreement between LMR Solutions LLC and Comerica Bank, dated December 3, 2012, as amended through December 6, 2013
|
S-1
|
333-198574
|
10.27
|
September 4, 2014
|
10.30.1
|
Amendment No. 5 to Security Agreement between Upland Software III, LLC and Comerica Bank, dated March 23, 2015
|
10-K
|
001-36720
|
10.30.1
|
March 31, 2015
|
10.31
|
Security Agreement between PowerSteering Software Inc. and Comerica Bank, dated February 10, 2012, as amended through March 19, 2014
|
S-1
|
333-198574
|
10.28
|
October 27, 2014
|
10.31.1
|
Amendment No. 6 to Security Agreement between Upland Software I, Inc. and Comerica Bank, dated March 23, 2015
|
10-K
|
001-36720
|
10.31.1
|
March 31, 2015
|
10.32
|
Security Agreement between Tenrox Inc. and Comerica Bank, dated February 10, 2012, as amended through December 6, 2013
|
S-1
|
333-198574
|
10.29
|
October 27, 2014
|
10.32.1
|
Amendment No. 6 to Security Agreement between Upland Software II, Inc. and Comerica Bank, dated March 23, 2015
|
10-K
|
001-36720
|
10.32.1
|
March 31, 2015
|
10.33
|
Unconditional Guaranty by Marex Group, Inc., dated May 16, 2013
|
S-1
|
333-198574
|
10.30
|
September 4, 2014
|
10.34
|
Unconditional Guaranty by LMR Solutions LLC, dated December 3, 2012
|
S-1
|
333-198574
|
10.31
|
September 4, 2014
|
10.35
|
Unconditional Guaranty by PowerSteering Software Inc., dated February 10, 2012
|
S-1
|
333-198574
|
10.32
|
September 4, 2014
|
10.36
|
Unconditional Guaranty by Tenrox Inc., dated February 10, 2012
|
S-1
|
333-198574
|
10.33
|
September 4, 2014
|
10.37
|
Unconditional Guaranty by the Registrant, dated February 10, 2012
|
S-1
|
333-198574
|
10.34
|
September 4, 2014
|
10.38
|
Amendment to and Affirmation of Guaranty Documents and Waiver by Tenrox Inc. for the benefit of Comerica Bank, dated April 11, 2013
|
S-1
|
333-198574
|
10.35
|
September 4, 2014
|
10.39
|
Note Purchase Agreement between the Registrant and the Investors listed on Schedule I thereto, dated October 9, 2013, as amended
|
S-1
|
333-198574
|
10.40
|
September 4, 2014
|
10.40
|
Series C Preferred Stock Purchase Agreement among the Registrant and the Investors listed on the Schedule of Investors thereto, dated December 20, 2013
|
S-1
|
333-198574
|
10.36
|
September 4, 2014
|
10.41
|
Amended and Restated Technology Services Agreement between the Registrant and DevFactory FZ-LLC, dated January 1, 2014
|
S-1
|
333-198574
|
10.37
|
October 27, 2014
|
10.42
|
Letter Agreement between the Registrant and DevFactory FZ-LLC, dated January 1, 2014
|
S-1
|
333-198574
|
10.38
|
September 4, 2014
|
10.43
|
Stock Purchase Agreement between the Registrant and DevFactory FZ-LLC, dated January 27, 2014
|
S-1
|
333-198574
|
10.39
|
September 4, 2014
|
10.44
|
Unconditional Guaranty by Upland IX, LLC, dated March 23, 2015
|
10-K
|
001-36720
|
10.44
|
March 31, 2015
|
10.45
|
Security Agreement between Upland IX, LLC and Comerica Bank, dated March 23, 2015
|
10-K
|
001-36720
|
10.45
|
March 31, 2015
|
10.46
|
Lease by and between Lincoln One, LLC and the Registrant dated June 19, 2015
|
8-K
|
001-36720
|
10.1
|
June 22, 2015
|
10.47
|
Credit Agreement by and between the Registrant and Wells Fargo Finance, dated May 14, 2015
|
10-Q
|
001-36720
|
10.1
|
August 14, 2015
|
10.48
|
Guaranty and Security Agreement by and between the Registrant and Wells Fargo Capital Finance, dated May 14, 2015
|
10-Q
|
001-36720
|
10.2
|
August 14, 2015
|
By:
|
/s/ John T. McDonald
|
|
John T. McDonald,
|
|
Chief Executive Officer
|
ARTICLE I - CORPORATE OFFICES
|
||
1.1
|
REGISTERED OFFICE
|
|
1.2
|
OTHER OFFICES
|
|
ARTICLE II - MEETINGS OF STOCKHOLDERS
|
||
2.1
|
PLACE OF MEETING
|
|
2.2
|
ANNUAL MEETING
|
|
2.3
|
SPECIAL MEETING
|
|
2.4
|
ADVANCE NOTICE PROCEDURES
|
|
2.5
|
NOTICE OF STOCKHOLDERS' MEETINGS
|
|
2.6
|
QUORUM
|
|
2.7
|
ADJOURNED MEETING; NOTICE
|
|
2.8
|
CONDUCT OF BUSINESS
|
|
2.9
|
VOTING
|
|
2.10
|
STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
|
|
2.11
|
RECORD DATES
|
|
2.12
|
PROXIES
|
|
2.13
|
LIST OF STOCKHOLDERS ENTITLED TO VOTE
|
|
2.14
|
INSPECTORS OF ELECTION
|
|
ARTICLE III - DIRECTORS
|
||
3.1
|
POWERS
|
|
3.2
|
NUMBER OF DIRECTORS
|
|
3.3
|
ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS
|
|
3.4
|
RESIGNATION AND VACANCIES
|
|
3.5
|
PLACE OF MEETINGS; MEETINGS BY TELEPHONE
|
|
3.6
|
REGULAR MEETINGS
|
|
3.7
|
SPECIAL MEETINGS; NOTICE
|
|
3.8
|
QUORUM; VOTING
|
|
3.9
|
BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
|
|
3.10
|
FEES AND COMPENSATION OF DIRECTORS
|
|
3.11
|
REMOVAL OF DIRECTORS
|
ARTICLE IV - COMMITTEES
|
||
4.1
|
COMMITTEES OF DIRECTORS
|
|
4.2
|
COMMITEE MINUTES
|
|
4.3
|
MEETINGS AND ACTION OF COMMITTEES
|
|
4.4
|
SUBCOMMITTEES
|
|
ARTICLE V - OFFICERS
|
||
5.1
|
OFFICERS
|
|
5.2
|
APPOINTMENT OF OFFICERS
|
|
5.3
|
SUBORDINATE OFFICERS
|
|
5.4
|
REMOVAL AND RESIGNATION OF OFFICERS
|
|
5.5
|
VACANCIES IN OFFICES
|
|
5.6
|
REPRESENTATION OF SHARES OF OTHER CORPORATIONS
|
|
5.7
|
AUTHORITY AND DUTIES OF OFFICERS
|
|
ARTICLE VI - STOCK
|
||
6.1
|
STOCK CERTIFICATES; PARTLY PAID SHARES
|
|
6.2
|
SPECIAL DESIGNATION ON CERTIFICATES
|
|
6.3
|
LOST CERTIFICATES
|
|
6.4
|
DIVIDENDS
|
|
6.5
|
TRANSFER OF STOCK
|
|
6.6
|
STOCK TRANSFER AGREEMENTS
|
|
6.7
|
REGISTERED STOCKHOLDERS
|
|
ARTICLE VII - MANNER OF GIVING NOTICE AND WAIVER
|
||
7.1
|
NOTICE OF STOCKHOLDERS' MEETINGS
|
|
7.2
|
NOTICE BY ELECTRONIC TRANSMISSION
|
|
7.3
|
NOTICE TO STOCKHOLDERS SHARING AN ADDRESS
|
|
7.4
|
NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL
|
|
7.5
|
WAIVER OF NOTICE
|
|
ARTICLE VIII - INDEMNIFICIATION
|
||
8.1
|
INDEMNIFICATION OF DIRECTORS AND OFFICERS IN THIRD PARTY PROCEEDINGS
|
|
8.2
|
INDEMNIFICATION OF DIRECTORS AND OFFICERS IN ACTION BY OR IN THE RIGHT OF THE CORPORATION
|
|
8.3
|
SUCCESSFUL DEFENSE
|
8.4
|
INDEMNIFICATION OF OTHERS
|
|
8.5
|
ADVANCED PAYMENT OF EXPENSES
|
|
8.6
|
LIMITATION ON INDEMNIFICATION
|
|
8.7
|
DETERMINATION; CLAIM
|
|
8.8
|
NON-EXCLUSIVITY OF RIGHTS
|
|
8.9
|
INSURANCE
|
|
8.10
|
SURVIVAL
|
|
8.11
|
EFFECT OF REPEAL OR MODIFICATION
|
|
8.12
|
CERTAIN DEFINITIONS
|
|
ARTICLE IX - GENERAL MATTERS
|
||
9.1
|
EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS
|
|
9.2
|
FISCAL YEAR
|
|
9.3
|
SEAL
|
|
9.4
|
CONSTRUCTION; DEFINITIONS
|
|
ARTICLE X - AMENDMENTS
|
|
/s/ Robert V. Housley
|
|
Robert V. Housley, Secretary
|
1.
|
I have reviewed this Annual Report on Form 10-K of Upland Software, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
March 30, 2016
|
/s/ John T. McDonald
|
John T. McDonald
|
Chief Executive Officer
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of Upland Software, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Michael D. Hill
|
Michael D. Hill
|
Chief Financial Officer
|
(Principal Financial Officer)
|
/s/ John T. McDonald
|
John T. McDonald
|
Chief Executive Officer
(Principal Executive Officer)
|
/s/ Michael D. Hill
|
Michael D. Hill
|
Chief Financial Officer
(Principal Financial Officer)
|