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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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91-2145721
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(State or Other Jurisdiction of
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(I.R.S. Employer
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Incorporation or Organization)
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Identification No.)
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Large accelerated filer
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¨
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Accelerated filer
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ý
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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(Do not check if a smaller reporting company)
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Emerging growth company
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¨
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PART I. FINANCIAL INFORMATION
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Three Months Ended
March 31, |
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2018
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2017
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Revenues:
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INAP US
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$
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57,076
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$
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55,461
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INAP INTL
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17,125
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16,672
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Total revenues
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74,201
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72,133
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Operating costs and expenses:
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Costs of sales and services, exclusive of depreciation and amortization, shown below:
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INAP US
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18,435
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23,547
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INAP INTL
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6,602
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5,498
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Costs of customer support
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7,387
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7,264
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Sales, general and administrative
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19,854
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16,564
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Depreciation and amortization
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21,077
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17,745
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Exit activities, restructuring and impairments
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(33
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)
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1,023
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Total operating costs and expenses
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73,322
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71,641
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Income from operations
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879
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492
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Non-operating expenses:
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Interest expense
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15,027
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8,137
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(Gain) loss on foreign currency, net
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(215
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)
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97
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Total non-operating expenses
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14,812
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8,234
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Loss before income taxes, non-controlling interest and equity in earnings of equity-method investment
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(13,933
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)
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(7,742
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)
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Provision for income taxes
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100
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518
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Equity in earnings of equity-method investment, net of taxes
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—
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(30
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)
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Net loss
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(14,033
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)
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(8,230
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)
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Less net income attributable to non-controlling interest
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27
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—
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Net loss attributable to INAP stockholders
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(14,060
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)
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(8,230
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)
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Other comprehensive income:
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Foreign currency translation adjustment
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61
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73
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Unrealized gain on foreign currency contracts
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—
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85
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Total other comprehensive income
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61
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158
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Comprehensive loss
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$
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(13,999
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)
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$
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(8,072
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)
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Basic and diluted net loss per share
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$
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(0.70
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)
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$
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(0.50
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)
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Weighted average shares outstanding used in computing basic and diluted net loss per share
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20,052
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16,087
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March 31,
2018 |
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December 31, 2017
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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16,159
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$
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14,603
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Accounts receivable, net of allowance for doubtful accounts of $1,700 and $1,487, respectively
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17,524
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17,794
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Contract assets
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7,131
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—
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Prepaid expenses and other assets
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8,690
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8,673
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Total current assets
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49,504
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41,070
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Property and equipment, net
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461,314
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458,565
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Intangible assets, net
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79,185
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25,666
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Goodwill
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118,077
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50,209
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Non-current contract assets
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12,056
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—
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Deposits and other assets
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11,784
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11,015
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Total assets
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$
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731,920
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$
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586,525
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LIABILITIES AND STOCKHOLDERS’ DEFICIT
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Current liabilities:
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Accounts payable
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$
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21,699
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$
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20,388
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Accrued liabilities
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14,279
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15,908
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Deferred revenues
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5,871
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4,861
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Capital lease obligations
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10,095
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11,711
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Revolving credit facility
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16,000
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5,000
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Term loan, less discount and prepaid costs of $3,539 and $2,133, respectively
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818
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867
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Exit activities and restructuring liability
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3,391
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4,152
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Other current liabilities
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4,197
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1,707
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Total current liabilities
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76,350
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64,594
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Capital lease obligations
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223,549
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223,749
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Term loan, less discount and prepaid costs of $11,286 and $7,655, respectively
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416,766
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287,845
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Exit activities and restructuring liability
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408
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664
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Deferred rent
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1,138
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1,310
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Deferred tax liability
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1,841
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1,651
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Other long-term liabilities
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3,046
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7,744
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Total liabilities
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723,098
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587,557
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Commitments and contingencies (note 10)
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Stockholders’ deficit:
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Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding
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—
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—
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Common stock, $0.001 par value; 30,000 shares authorized; 21,131 and 20,804 shares outstanding, respectively
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21
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21
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Additional paid-in capital
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1,327,985
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1,327,084
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Treasury stock, at cost, 313 and 293 shares, respectively
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(7,429
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)
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(7,159
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)
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Accumulated deficit
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(1,313,598
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)
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(1,323,723
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)
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Accumulated items of other comprehensive loss
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(1,263
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)
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(1,324
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)
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Total INAP stockholders’ deficit
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5,716
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(5,101
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)
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Non-controlling interests
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3,106
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4,069
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Total stockholders’ deficit
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8,822
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(1,032
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)
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Total liabilities and stockholders’ deficit
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$
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731,920
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$
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586,525
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Three Months Ended March 31,
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2018
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2017
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Cash Flows from Operating Activities:
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Net loss
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$
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(14,033
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)
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$
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(8,230
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)
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Adjustments to reconcile net loss to net cash provided by operating activities:
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Depreciation and amortization
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21,077
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17,745
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Loss on disposal of fixed asset
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46
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—
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Amortization of debt discount and issuance costs
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638
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715
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Stock-based compensation expense, net of capitalized amount
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858
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598
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Equity in earnings of equity-method investment
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2
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(30
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)
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Provision for doubtful accounts
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332
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301
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Non-cash change in capital lease obligations
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(213
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)
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71
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Non-cash change in exit activities and restructuring liability
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372
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|
|
980
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Non-cash change in deferred rent
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(252
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)
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|
(423
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)
|
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Deferred taxes
|
|
(30
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)
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254
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||
Payment of debt lender fees
|
|
(300
|
)
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|
(2,583
|
)
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Other, net
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—
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(96
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)
|
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Changes in operating assets and liabilities:
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|
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Accounts receivable
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864
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2,096
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Prepaid expenses, deposits and other assets
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(467
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)
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123
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Accounts payable
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(636
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)
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|
(2,247
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)
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Accrued and other liabilities
|
|
(2,904
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)
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(180
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)
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Deferred revenues
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|
(138
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)
|
|
(510
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)
|
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Exit activities and restructuring liability
|
|
(1,389
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)
|
|
(1,386
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)
|
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Asset retirement obligation
|
|
(248
|
)
|
|
52
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|
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Other liabilities
|
|
(52
|
)
|
|
14
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|
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Net cash flows provided by operating activities
|
|
3,527
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|
|
7,264
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Cash Flows from Investing Activities:
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|
|
|
|
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Purchases of property and equipment
|
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(6,082
|
)
|
|
(5,789
|
)
|
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Proceeds from disposal of property and equipment
|
|
437
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|
|
—
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|
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Business acquisition, net of cash acquired
|
|
(132,143
|
)
|
|
—
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|
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Acquisition of minority shares
|
|
(1,130
|
)
|
|
—
|
|
||
Additions to acquired and developed technology
|
|
(277
|
)
|
|
(200
|
)
|
||
Net cash flows used in investing activities
|
|
(139,195
|
)
|
|
(5,989
|
)
|
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|
|
|
|
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Cash Flows from Financing Activities:
|
|
|
|
|
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Proceeds from credit agreements
|
|
146,000
|
|
|
—
|
|
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Proceeds from stock issuance
|
|
—
|
|
|
40,282
|
|
||
Principal payments on credit agreements
|
|
(1,089
|
)
|
|
(39,997
|
)
|
||
Debt issuance costs
|
|
(5,676
|
)
|
|
—
|
|
||
Payments on capital lease obligations
|
|
(2,027
|
)
|
|
(2,491
|
)
|
||
Proceeds from exercise of stock options
|
|
31
|
|
|
7
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|
||
Acquisition of common stock for income tax withholdings
|
|
(270
|
)
|
|
(149
|
)
|
||
Other, net
|
|
235
|
|
|
(157
|
)
|
||
Net cash flows provided by (used in) in financing activities
|
|
137,204
|
|
|
(2,505
|
)
|
||
Effect of exchange rates on cash and cash equivalents
|
|
20
|
|
|
15
|
|
||
Net increase (decrease) in cash and cash equivalents
|
|
1,556
|
|
|
(1,215
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
14,603
|
|
|
10,389
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
16,159
|
|
|
$
|
9,174
|
|
|
|
|
|
|
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Supplemental disclosure of cash flow information:
|
|
|
|
|
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Cash paid for interest
|
|
$
|
13,000
|
|
|
$
|
7,336
|
|
Non-cash acquisition of property and equipment under capital leases
|
|
—
|
|
|
290
|
|
||
Additions to property and equipment included in accounts payable
|
|
2,287
|
|
|
1,247
|
|
1.
|
NATURE OF OPERATIONS AND BASIS OF PRESENTATION
|
|
December 31, 2017, as reported
|
|
Adjustments
|
|
January 1, 2018, as adjusted
|
||||||
ASSETS
|
|
|
|
|
|
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|
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Current assets:
|
|
|
|
|
|
|
|
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Cash and cash equivalents
|
$
|
14,603
|
|
|
$
|
—
|
|
|
$
|
14,603
|
|
Accounts receivable, net of allowance for doubtful accounts of $1,487
|
17,794
|
|
|
—
|
|
|
17,794
|
|
|||
Prepaid expenses and other assets
|
8,673
|
|
|
6,814
|
|
|
15,487
|
|
|||
Total current assets
|
41,070
|
|
|
6,814
|
|
|
47,884
|
|
|||
|
|
|
|
|
|
||||||
Property and equipment, net
|
458,565
|
|
|
—
|
|
|
458,565
|
|
|||
Intangible assets, net
|
25,666
|
|
|
—
|
|
|
25,666
|
|
|||
Goodwill
|
50,209
|
|
|
—
|
|
|
50,209
|
|
|||
Deposits and other assets
|
11,015
|
|
|
12,214
|
|
|
23,229
|
|
|||
Total assets
|
$
|
586,525
|
|
|
$
|
19,028
|
|
|
$
|
605,553
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|
|
|
||||
Accounts payable
|
$
|
20,388
|
|
|
$
|
—
|
|
|
$
|
20,388
|
|
Accrued liabilities
|
15,908
|
|
|
—
|
|
|
15,908
|
|
|||
Deferred revenues
|
4,861
|
|
|
(749
|
)
|
|
4,112
|
|
|||
Capital lease obligations
|
11,711
|
|
|
—
|
|
|
11,711
|
|
|||
Revolving credit facility
|
5,000
|
|
|
—
|
|
|
5,000
|
|
|||
Term loan, less discount and prepaid costs of $2,133
|
867
|
|
|
—
|
|
|
867
|
|
|||
Exit activities and restructuring liability
|
4,152
|
|
|
—
|
|
|
4,152
|
|
|||
Other current liabilities
|
1,707
|
|
|
—
|
|
|
1,707
|
|
|||
Total current liabilities
|
64,594
|
|
|
(749
|
)
|
|
63,845
|
|
|||
|
|
|
|
|
|
||||||
Capital lease obligations
|
223,749
|
|
|
—
|
|
|
223,749
|
|
|||
Term loan, less discount and prepaid costs of $7,655
|
287,845
|
|
|
—
|
|
|
287,845
|
|
|||
Exit activities and restructuring liability
|
664
|
|
|
—
|
|
|
664
|
|
|||
Deferred rent
|
1,310
|
|
|
—
|
|
|
1,310
|
|
|||
Deferred tax liability
|
1,651
|
|
|
209
|
|
|
1,860
|
|
|||
Other long-term liabilities
|
7,744
|
|
|
(4,616
|
)
|
|
3,128
|
|
|||
Total liabilities
|
587,557
|
|
|
(5,156
|
)
|
|
582,401
|
|
|||
Commitments and contingencies
|
|
|
|
|
|
|
|
||||
Stockholders’ deficit:
|
|
|
|
|
|
|
|
||||
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common stock, $0.001 par value; 30,000 shares authorized; 20,804 shares outstanding
|
21
|
|
|
—
|
|
|
21
|
|
|||
Additional paid-in capital
|
1,327,084
|
|
|
—
|
|
|
1,327,084
|
|
|||
Treasury stock, at cost, 293 shares
|
(7,159
|
)
|
|
—
|
|
|
(7,159
|
)
|
|||
Accumulated deficit
|
(1,323,723
|
)
|
|
24,184
|
|
|
(1,299,539
|
)
|
|||
Accumulated items of other comprehensive loss
|
(1,324
|
)
|
|
—
|
|
|
(1,324
|
)
|
|||
Total INAP stockholders’ deficit
|
(5,101
|
)
|
|
24,184
|
|
|
19,083
|
|
|||
Non-controlling interests
|
4,069
|
|
|
—
|
|
|
4,069
|
|
|||
Total stockholders’ deficit
|
(1,032
|
)
|
|
24,184
|
|
|
23,152
|
|
|||
Total liabilities and stockholders’ deficit
|
$
|
586,525
|
|
|
$
|
19,028
|
|
|
$
|
605,553
|
|
|
For the Three Months Ended March 31, 2018
|
||||||||||
|
As Reported
|
|
Balances without Adoption of ASC 606
|
|
Effect of Change Higher/ (Lower)
|
||||||
Revenues:
|
|
|
|
|
|
|
|
||||
INAP US
|
$
|
57,076
|
|
|
$
|
56,835
|
|
|
$
|
241
|
|
INAP INTL
|
17,125
|
|
|
17,125
|
|
|
—
|
|
|||
Total revenues
|
74,201
|
|
|
73,960
|
|
|
241
|
|
|||
|
|
|
|
|
|
||||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||
Costs of sales and services, exclusive of depreciation and amortization, shown below:
|
|
|
|
|
|
||||||
INAP US
|
18,435
|
|
|
18,435
|
|
|
—
|
|
|||
INAP INTL
|
6,602
|
|
|
6,602
|
|
|
—
|
|
|||
Costs of customer support
|
7,387
|
|
|
7,387
|
|
|
—
|
|
|||
Sales, general and administrative
|
19,854
|
|
|
19,948
|
|
|
(94
|
)
|
|||
Depreciation and amortization
|
21,077
|
|
|
21,077
|
|
|
—
|
|
|||
Exit activities, restructuring and impairments
|
(33
|
)
|
|
(33
|
)
|
|
—
|
|
|||
Total operating costs and expenses
|
73,322
|
|
|
73,416
|
|
|
(94
|
)
|
|||
Income from operations
|
879
|
|
|
544
|
|
|
335
|
|
|||
|
|
|
|
|
|
|
|
||||
Non-operating expenses:
|
|
|
|
|
|
||||||
Interest expense
|
15,027
|
|
|
15,027
|
|
|
—
|
|
|||
Gain on foreign currency, net
|
(215
|
)
|
|
(215
|
)
|
|
—
|
|
|||
Total non-operating expenses
|
14,812
|
|
|
14,812
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|||||
Loss before income taxes and non-controlling interest
|
(13,933
|
)
|
|
(14,268
|
)
|
|
335
|
|
|||
Provision for income taxes
|
100
|
|
|
100
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Net loss
|
(14,033
|
)
|
|
(14,368
|
)
|
|
335
|
|
|||
Less net income attributable to non-controlling interest
|
27
|
|
|
27
|
|
|
—
|
|
|||
Net loss attributable to INAP stockholders
|
(14,060
|
)
|
|
(14,395
|
)
|
|
335
|
|
|||
|
|
|
|
|
|
|
|||||
Other comprehensive income:
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustment
|
61
|
|
|
61
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Comprehensive loss
|
$
|
(13,999
|
)
|
|
$
|
(14,334
|
)
|
|
$
|
335
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted net loss per share
|
$
|
(0.70
|
)
|
|
$
|
(0.72
|
)
|
|
$
|
0.02
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding used in computing basic and diluted net loss per share
|
20,052
|
|
|
20,052
|
|
|
|
|
|
March 31, 2018
|
||||||||||
|
As Reported
|
|
Balances without Adoption of ASC 606
|
|
Effect of Change Higher/ (Lower)
|
||||||
ASSETS
|
|
|
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
16,159
|
|
|
$
|
16,159
|
|
|
$
|
—
|
|
Accounts receivable, net of allowance for doubtful accounts of $1,700
|
17,524
|
|
|
17,524
|
|
|
—
|
|
|||
Contract assets
|
7,131
|
|
|
6,872
|
|
|
259
|
|
|||
Prepaid expenses and other assets
|
8,690
|
|
|
8,690
|
|
|
—
|
|
|||
Total current assets
|
49,504
|
|
|
49,245
|
|
|
259
|
|
|||
|
|
|
|
|
|
||||||
Property and equipment, net
|
461,314
|
|
|
461,314
|
|
|
—
|
|
|||
Intangible assets, net
|
79,185
|
|
|
79,185
|
|
|
—
|
|
|||
Goodwill
|
118,077
|
|
|
118,077
|
|
|
—
|
|
|||
Non-current contract assets
|
12,056
|
|
|
12,027
|
|
|
29
|
|
|||
Deposits and other assets
|
11,784
|
|
|
11,784
|
|
|
—
|
|
|||
Total assets
|
$
|
731,920
|
|
|
$
|
731,632
|
|
|
$
|
288
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|
|
|
||||
Accounts payable
|
$
|
21,699
|
|
|
$
|
21,699
|
|
|
$
|
—
|
|
Accrued liabilities
|
14,279
|
|
|
14,279
|
|
|
—
|
|
|||
Deferred revenues
|
5,871
|
|
|
6,062
|
|
|
(191
|
)
|
|||
Capital lease obligations
|
10,095
|
|
|
10,095
|
|
|
—
|
|
|||
Revolving credit facility
|
16,000
|
|
|
16,000
|
|
|
—
|
|
|||
Term loan, less discount and prepaid costs of $3,539
|
818
|
|
|
818
|
|
|
—
|
|
|||
Exit activities and restructuring liability
|
3,391
|
|
|
3,391
|
|
|
—
|
|
|||
Other current liabilities
|
4,197
|
|
|
4,197
|
|
|
—
|
|
|||
Total current liabilities
|
76,350
|
|
|
76,541
|
|
|
(191
|
)
|
|||
|
|
|
|
|
|
||||||
Capital lease obligations
|
223,549
|
|
|
223,549
|
|
|
—
|
|
|||
Term loan, less discount and prepaid costs of $11,286
|
416,766
|
|
|
416,766
|
|
|
—
|
|
|||
Exit activities and restructuring liability
|
408
|
|
|
408
|
|
|
—
|
|
|||
Deferred rent
|
1,138
|
|
|
1,138
|
|
|
—
|
|
|||
Deferred tax liability
|
1,841
|
|
|
1,841
|
|
|
—
|
|
|||
Other long-term liabilities
|
3,046
|
|
|
2,902
|
|
|
144
|
|
|||
Total liabilities
|
723,098
|
|
|
723,145
|
|
|
(47
|
)
|
|||
Commitments and contingencies
|
|
|
|
|
|
|
|
||||
Stockholders’ deficit:
|
|
|
|
|
|
|
|
||||
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common stock, $0.001 par value; 30,000 shares authorized; 21,131 shares outstanding
|
21
|
|
|
21
|
|
|
—
|
|
|||
Additional paid-in capital
|
1,327,985
|
|
|
1,327,985
|
|
|
—
|
|
|||
Treasury stock, at cost, 313 shares
|
(7,429
|
)
|
|
(7,429
|
)
|
|
—
|
|
|||
Accumulated deficit
|
(1,313,598
|
)
|
|
(1,313,933
|
)
|
|
335
|
|
|||
Accumulated items of other comprehensive loss
|
(1,263
|
)
|
|
(1,263
|
)
|
|
—
|
|
|||
Total INAP stockholders’ deficit
|
5,716
|
|
|
5,381
|
|
|
335
|
|
|||
Non-controlling interests
|
3,106
|
|
|
3,106
|
|
|
—
|
|
|||
Total stockholders’ deficit
|
8,822
|
|
|
8,487
|
|
|
335
|
|
|||
Total liabilities and stockholders’ deficit
|
$
|
731,920
|
|
|
$
|
731,632
|
|
|
$
|
288
|
|
|
|
Three Months Ended March 31, 2017
|
||||||||||
|
|
As Previously
Reported
|
|
Reclassification
|
|
As Reported
|
||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|||
INAP COLO
|
|
$
|
53,339
|
|
|
$
|
(53,339
|
)
|
|
$
|
—
|
|
INAP CLOUD
|
|
18,794
|
|
|
(18,794
|
)
|
|
—
|
|
|||
INAP US
|
|
—
|
|
|
55,461
|
|
|
55,461
|
|
|||
INAP INTL
|
|
—
|
|
|
16,672
|
|
|
16,672
|
|
|||
Costs of sales and services, exclusive of depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|||
INAP COLO
|
|
24,806
|
|
|
(24,806
|
)
|
|
—
|
|
|||
INAP CLOUD
|
|
4,239
|
|
|
(4,239
|
)
|
|
—
|
|
|||
INAP US
|
|
—
|
|
|
23,547
|
|
|
23,547
|
|
|||
INAP INTL
|
|
—
|
|
|
5,498
|
|
|
5,498
|
|
|
Purchase price allocation
|
|
||
Cash
|
$
|
2,857
|
|
|
Prepaid expenses and other assets
|
1,683
|
|
|
|
Property, plant and equipment
|
14,885
|
|
|
|
Other long term assets
|
39
|
|
|
|
Intangible assets:
|
|
Weighted Average
|
||
Noncompete Agreements
|
4,000
|
|
4 years
|
|
Trade name
|
1,700
|
|
8 years
|
|
Technology
|
15,100
|
|
7 years
|
|
Customer relationship
|
34,100
|
|
10 years
|
|
Goodwill
|
67,868
|
|
|
|
Total assets acquired
|
142,232
|
|
|
|
Accounts payable and accrued liabilities
|
5,098
|
|
|
|
Deferred revenue
|
1,600
|
|
|
|
Long term liabilities
|
534
|
|
|
|
Net assets acquired
|
$
|
135,000
|
|
|
|
Three months ended March 31, 2018 (
in
thousands except per share amounts)
|
Three months ended March 31, 2017 (
in
thousands except per share amounts)
|
||||
|
||||||
Revenues
|
$
|
82,172
|
|
$
|
81,728
|
|
Net loss
|
$
|
(15,667
|
)
|
$
|
(17,739
|
)
|
Basic and diluted net loss per share
|
$
|
(0.78
|
)
|
$
|
(0.89
|
)
|
Weighted average shares outstanding used in computing basic and diluted net loss per share
|
20,052
|
|
19,877
|
|
•
|
Level 1: Quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
|
•
|
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
16,159
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,159
|
|
Asset retirement obligations
(1)
|
|
—
|
|
|
—
|
|
|
1,729
|
|
|
1,729
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
14,603
|
|
|
—
|
|
|
—
|
|
|
14,603
|
|
||||
Asset retirement obligations
(1)
|
|
—
|
|
|
—
|
|
|
1,936
|
|
|
1,936
|
|
||||
|
|
|
|
|
|
|
|
|
(1)
|
We calculate the fair value of asset retirement obligations by discounting the estimated amount using the current Treasury bill rate adjusted for our credit risk. At March 31, 2018, the balance is included in “Other long-term liabilities,” in the accompanying unaudited consolidated balance sheets. At December 31, 2017,
$0.2 million
and
$1.7 million
were included in "Other current liabilities" and "Other long-term liabilities," respectively, in the accompanying unaudited consolidated balance sheets.
|
Balance, January 1, 2018
|
$
|
1,936
|
|
Accretion
|
41
|
|
|
Payments
|
(248
|
)
|
|
Balance, March 31, 2018
|
$
|
1,729
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Term loan
|
|
$
|
432,409
|
|
|
$
|
435,934
|
|
|
$
|
298,500
|
|
|
$
|
301,485
|
|
Revolving credit facility
|
|
16,000
|
|
|
16,130
|
|
|
5,000
|
|
|
5,050
|
|
|
|
December 31, 2017
|
|
Re-allocations
|
|
SingleHop Acquisition (note 5)
|
|
March 31, 2018
|
||||||||
Operating segments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
INAP COLO
|
|
$
|
6,003
|
|
|
$
|
(6,003
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
INAP CLOUD
|
|
44,206
|
|
|
(44,206
|
)
|
|
—
|
|
|
—
|
|
||||
INAP US
|
|
—
|
|
|
28,304
|
|
|
67,868
|
|
|
96,172
|
|
||||
INAP INTL
|
|
—
|
|
|
21,905
|
|
|
—
|
|
|
21,905
|
|
||||
Total
|
|
$
|
50,209
|
|
|
$
|
—
|
|
|
$
|
67,868
|
|
|
$
|
118,077
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
|
Gross Carrying Amount
|
|
AccumulatedAmortization
|
|
Gross Carrying Amount
|
|
AccumulatedAmortization
|
||||||||
Acquired and developed technology
|
|
$
|
68,269
|
|
|
$
|
(48,766
|
)
|
|
$
|
52,825
|
|
|
$
|
(48,063
|
)
|
Customer relationships, trade names and noncompete
|
|
110,850
|
|
|
(51,168
|
)
|
|
71,116
|
|
|
(50,212
|
)
|
||||
|
|
$
|
179,119
|
|
|
$
|
(99,934
|
)
|
|
$
|
123,941
|
|
|
$
|
(98,275
|
)
|
Nine months remaining in 2018
|
$
|
8,636
|
|
2019
|
10,941
|
|
|
2020
|
10,031
|
|
|
2021
|
9,548
|
|
|
2022
|
7,839
|
|
|
Thereafter
|
32,190
|
|
|
|
$
|
79,185
|
|
|
|
Balance December 31, 2017
|
|
Initial
Charges
|
|
Plan
Adjustments
|
|
Cash
Payments
|
|
Balance March 31, 2018
|
||||||||||
Activity for 2018 restructuring charge:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate obligations
|
|
$
|
—
|
|
|
$
|
171
|
|
|
$
|
9
|
|
|
$
|
(23
|
)
|
|
$
|
157
|
|
Activity for 2017 restructuring charge:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate obligations
|
|
3,380
|
|
|
—
|
|
|
72
|
|
|
(1,020
|
)
|
|
2,432
|
|
|||||
Activity for 2016 restructuring charge:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Severance
|
|
46
|
|
|
—
|
|
|
34
|
|
|
(34
|
)
|
|
46
|
|
|||||
Real estate obligations
|
|
247
|
|
|
—
|
|
|
7
|
|
|
(38
|
)
|
|
216
|
|
|||||
Activity for 2015 restructuring charge:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate obligation
|
|
64
|
|
|
—
|
|
|
12
|
|
|
(22
|
)
|
|
54
|
|
|||||
Service contracts
|
|
388
|
|
|
—
|
|
|
8
|
|
|
(50
|
)
|
|
346
|
|
|||||
Activity for 2014 restructuring charge:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate obligation
|
|
691
|
|
|
—
|
|
|
59
|
|
|
(202
|
)
|
|
548
|
|
|||||
|
|
$
|
4,816
|
|
|
$
|
171
|
|
|
$
|
201
|
|
|
$
|
(1,389
|
)
|
|
$
|
3,799
|
|
|
|
Balance December 31, 2016
|
|
Initial
Charges
|
|
Plan
Adjustments
|
|
Cash
Payments
|
|
Balance March 31, 2017
|
||||||||||
Activity for 2016 restructuring charge:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate obligations
|
|
$
|
1,911
|
|
|
$
|
—
|
|
|
$
|
566
|
|
|
$
|
(993
|
)
|
|
$
|
1,484
|
|
Service contracts
|
|
933
|
|
|
—
|
|
|
378
|
|
|
(187
|
)
|
|
1,124
|
|
|||||
Activity for 2015 restructuring charge:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate obligation
|
|
111
|
|
|
—
|
|
|
(4
|
)
|
|
(7
|
)
|
|
100
|
|
|||||
Service contracts
|
|
565
|
|
|
—
|
|
|
5
|
|
|
(49
|
)
|
|
521
|
|
|||||
Activity for 2014 restructuring charge:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Real estate obligations
|
|
1,183
|
|
|
—
|
|
|
34
|
|
|
(150
|
)
|
|
1,067
|
|
|||||
|
|
$
|
4,703
|
|
|
$
|
—
|
|
|
$
|
979
|
|
|
$
|
(1,386
|
)
|
|
$
|
4,296
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Revenues:
|
|
|
|
|
|
|
||
INAP US
|
|
$
|
57,076
|
|
|
$
|
55,461
|
|
INAP INTL
|
|
17,125
|
|
|
16,672
|
|
||
Total revenues
|
|
74,201
|
|
|
72,133
|
|
||
|
|
|
|
|
||||
Cost of sales and services, customer support and sales and marketing:
|
|
|
|
|
|
|
||
INAP US
|
|
30,537
|
|
|
35,457
|
|
||
INAP INTL
|
|
11,133
|
|
|
9,002
|
|
||
Total costs of sales and services, customer support and sales and marketing
|
|
41,670
|
|
|
44,459
|
|
||
|
|
|
|
|
||||
Segment profit:
|
|
|
|
|
|
|
||
INAP US
|
|
26,539
|
|
|
20,004
|
|
||
INAP INTL
|
|
5,992
|
|
|
7,670
|
|
||
Total segment profit
|
|
32,531
|
|
|
27,674
|
|
||
|
|
|
|
|
||||
Exit activities, restructuring and impairments
|
|
(33
|
)
|
|
1,023
|
|
||
Other operating expenses, including general and administrative and depreciation and amortization expenses
|
|
31,685
|
|
|
26,159
|
|
||
Income from operations
|
|
879
|
|
|
492
|
|
||
Non-operating expenses
|
|
14,812
|
|
|
8,234
|
|
||
Loss before income taxes and non-controlling interest
|
|
$
|
(13,933
|
)
|
|
$
|
(7,742
|
)
|
|
|
Three Months Ended
March 31, |
|
||||||
|
|
2018
|
|
2017
|
|
||||
Net loss
|
|
$
|
(14,033
|
)
|
|
$
|
(8,230
|
)
|
|
Less net income attributable to non-controlling stockholders
|
|
27
|
|
|
—
|
|
|
||
Net loss attributable to common stock
|
|
$
|
(14,060
|
)
|
|
$
|
(8,230
|
)
|
|
Weighted average shares outstanding, basic and diluted
|
|
20,052
|
|
|
16,087
|
|
|
||
|
|
|
|
|
|
|
|
||
Net loss per share, basic and diluted
|
|
$
|
(0.70
|
)
|
|
$
|
(0.50
|
)
|
|
Anti-dilutive securities excluded from diluted net loss per share calculation for stock-based compensation plans
|
|
1,336
|
|
|
1,385
|
|
|
|
|
Three Months Ended
March 31,
|
|
Increase (Decrease) from
2017 to 2018
|
|||||||||||
|
|
2018
|
|
2017
|
|
Amount
|
|
Percent
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
INAP US
|
|
$
|
57,076
|
|
|
$
|
55,461
|
|
|
$
|
1,615
|
|
|
3
|
%
|
INAP INTL
|
|
17,125
|
|
|
16,672
|
|
|
453
|
|
|
3
|
%
|
|||
Total revenues
|
|
74,201
|
|
|
72,133
|
|
|
2,068
|
|
|
3
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Costs of sales and services, exclusive of depreciation and amortization, shown below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
INAP US
|
|
18,435
|
|
|
23,547
|
|
|
(5,112
|
)
|
|
(22
|
)%
|
|||
INAP INTL
|
|
6,602
|
|
|
5,498
|
|
|
1,104
|
|
|
20
|
%
|
|||
Costs of customer support
|
|
7,387
|
|
|
7,264
|
|
|
123
|
|
|
2
|
%
|
|||
Sales, general and administrative
|
|
19,854
|
|
|
16,564
|
|
|
3,290
|
|
|
20
|
%
|
|||
Depreciation and amortization
|
|
21,077
|
|
|
17,745
|
|
|
3,332
|
|
|
19
|
%
|
|||
Exit activities, restructuring and impairments
|
|
(33
|
)
|
|
1,023
|
|
|
(1,056
|
)
|
|
(103
|
)%
|
|||
Total operating costs and expenses
|
|
73,322
|
|
|
71,641
|
|
|
1,681
|
|
|
2
|
%
|
|||
Income from operations
|
|
$
|
879
|
|
|
$
|
492
|
|
|
$
|
387
|
|
|
79
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
$
|
15,027
|
|
|
$
|
8,137
|
|
|
$
|
6,890
|
|
|
85
|
%
|
|
|
Three Months Ended
March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Costs of customer support
|
|
$
|
46
|
|
|
$
|
62
|
|
Sales, general and administrative
|
|
812
|
|
|
536
|
|
||
|
|
$
|
858
|
|
|
$
|
598
|
|
|
|
Three Months Ended
March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Revenues
|
|
$
|
74,201
|
|
|
$
|
72,133
|
|
|
|
|
|
|
||||
Net loss attributable to INAP stockholders
|
|
$
|
(14,060
|
)
|
|
$
|
(8,230
|
)
|
Non-GAAP revenue
|
|
40
|
|
|
—
|
|
||
Depreciation and amortization
|
|
21,077
|
|
|
17,745
|
|
||
Interest expense
|
|
15,027
|
|
|
8,137
|
|
||
Provision for income taxes
|
|
100
|
|
|
518
|
|
||
Other (income) expense
|
|
(215
|
)
|
|
67
|
|
||
Loss (gain) on disposal of property and equipment, net
|
|
46
|
|
|
(97
|
)
|
||
Exit activities, restructuring and impairments
|
|
(33
|
)
|
|
1,023
|
|
||
Stock-based compensation
|
|
858
|
|
|
598
|
|
||
Acquisition costs
|
|
2,558
|
|
|
—
|
|
||
Strategic alternatives and related costs
(1)
|
|
27
|
|
|
6
|
|
||
Organizational realignment costs
(2)
|
|
240
|
|
|
287
|
|
||
Non-income tax contingency
|
|
—
|
|
|
1,500
|
|
||
Adjusted EBITDA
|
|
$
|
25,665
|
|
|
$
|
21,554
|
|
|
|
|
|
|
(1)
|
Primarily legal and other professional fees incurred in connection with the evaluation by our board of directors of strategic alternatives and related shareholder communications. We include these costs in sales, general and administrative ("SG&A") in the accompanying consolidated statements of operations and comprehensive loss for the three months ended March 31, 2018 and 2017.
|
(2)
|
Primarily professional fees, employee retention bonus and severance and executive search costs incurred related to our organization realignment. We include these costs in SG&A in the accompanying consolidated statements of operations and comprehensive loss for the three months ended March 31, 2018 and 2017.
|
Period
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs
|
|||||
January 1 to 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
February 1 to 28, 2018
|
|
11,681
|
|
|
13.01
|
|
|
—
|
|
|
—
|
|
|
March 1 to 31, 2018
|
|
8,011
|
|
|
13.22
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
19,692
|
|
|
$
|
13.10
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
(1)
|
These shares were surrendered to us to satisfy tax withholding obligations in connection with the vesting of shares of restricted stock and restricted stock units previously issued to employees and directors.
|
Exhibit
Number
|
|
Description
|
|
|
|
|
|
|
|
2.1
|
|
|||
10.1
|
|
|||
10.2
|
|
|||
10.3
|
|
|||
10.4
|
|
|||
10.5
|
|
|||
10.6
|
|
|||
31.1
|
|
|||
|
|
|
||
31.2
|
|
|||
|
|
|
||
32.1*
|
|
|||
|
|
|
||
32.2*
|
|
|||
|
|
|
||
101.INS
|
|
XBRL Instance Document.
|
||
|
|
|
||
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
||
|
|
|
||
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
||
|
|
|
||
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
||
|
|
|
||
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
||
|
|
|
||
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
||
|
|
|
|
|
|
|
|
|
|
|
INTERNAP CORPORATION
|
|
|
|
|
|
By:
|
/s/ Robert Dennerlein
|
|
|
Robert Dennerlein
|
|
|
(Chief Financial Officer)
|
|
|
|
|
|
Date: May 3, 2018
|
•
|
Reporting to the President & CEO
|
•
|
Base Salary of $225K
|
•
|
Target Annual Cash Bonus of 50% subject to performance
|
•
|
Potential for additional cash bonus up to 75% subject to Compensation Committee discretion
|
•
|
Annual Equity Grant at a value of your base salary, or $225K, at the discretion of the Compensation Committee. The contemplated structure under development with the Comp. Com is an RSU grant, whereby the value will be determined by your then Base Salary, divided by a stock price (TBD), deriving the number of shares granted. The Restricted Stock will be subject to a 3 year
vest; 50% of the grant will be subject to time, and 50% will be subject to performance as part of the Compensation Committee's approve metrics - TBD
|
•
|
12 months severance (lX Base Salary) for involuntary termination, assuming no legal or performance issues. This protection will begin after you completed your first 90 days successfully. The Company will pay COBRA for the period under severance, and your severance payment will be paid over 12 months in the normal payroll cycle
|
•
|
Participation in Company benefit plans, including medical, dental, 401K, etc.
|
•
|
4 weeks vacation
|
AND:
|
Andy Day,
domiciled and residing at 196 Gloucester Avenu
e
,
in Oakville, Ontario, L6J 3W6,
|
1.1
|
This agreement is taken jointly to facilitate good will and spec
i
fy th
e
functions and working cond
i
tions of the Employee. This offer is contingent upon successful completion of a background check
.
|
1.2
|
The Employer hereby retains the Employee
’
s services as GM & SVP of the Cloud Business Unit beginning on April 1, 2017
.
In thi
s
capacity, he or she is responsible for the functional leadership of Cloud Servic
es
, Ubersmith and Funio and for any related task. Regarding all Short-Term Incentive Plan and Stock Award programs in 2017, your starting po
i
nt is consider
e
d January 1
,
2017, so that you will be eligible fo
r
cash and stock bonus awards based on being employed for
t
he
e
ntir
e
year
.
|
2.1
|
The Employee reports directly to Peter Aquino, President & CEO
.
|
2.2
|
The Employee
s
hall faithfully and loyally perform his or h
er
duties toward th
e
Employer
.
The Employee shall respect all guidelines
,
polic
i
es and/or rules established verbally or in writing by the Employer.
|
2.3
|
The Employee acknowledges hav
i
ng been informed of all of the Employer’s policies and/or rules currently in effect
.
|
2.4
|
For the entire duration of employment, the Employee shall devote all his or her time, energy, drive, and competence to the performance of his or her functions. The Employee may not hold another position without having previously obtained his or her immediate supervisor’s written authorization, which can be revoked
.
|
2.5
|
It is understood and agreed that Employee may continue his current advisory or Board of Director positions provided that such positions do not become competitive, create any business conflict and/or interfere with the duties and responsibilities as the GM & SVP of the Cloud Business Unit, as discussed with the CEO prior to April 1, 2017. Any future advisory positions or Board of Director positions must be discussed and pre-approved by the CEO before Employee accepts such positions with third parties
.
|
3.1
|
The Employer has the right
,
at any time and without notice
,
to terminate the Employee’s employment under this agreement for Cause. For the purposes of this agreement, “Cause
”
shall m
e
an any act or omission on the Employee’s part which would at law permit an employer to, without notice or payment in lieu of not
i
ce, terminate the employment of an employee including but not limited to, a material breach of this agreement
.
|
3.2
|
In the event that the Employee wishes to end his or her employment, a written notice must be provided to the Employer at least four (4) weeks prior to the end of employment. However, the Employer may waive the right to this notice without having to pay any compensation whatsoever to the Employee.
|
3.3
|
The Employer can also terminate the Employee’s employment for reasons other than those stated in section 3.1, in which case the Employer’s obligation shall be limited solely to providing the Employee with the following:
|
(i)
|
Should your employment be terminated due to reasons other than cause and provided you satisfy the conditions of the Release Agreement, you will be eligible for twelve months of Severance Pay
|
(ii)
|
Continuation of the Employee’s benefits for such minimum period as is required pursuant to the ESA.
|
4.1
|
For the duration of this Employment Agreement, the Employer pays the Employee $335,000 CAD in gross annual remuneration, payable every two (2) weeks, by bank transfers. This salary will be revised as per the Employer’s policies.
|
4.2
|
The Employee will be eligible to participate in the INAP 2017 Short Term Incentive Plan (“Incentive Plan”) Any payments that may be made to you will be based on INAP’s achievement of goal
s
approved by the Board of Directors. Your target bonus opportunity under the Incentive Plan will be 50% of your 2017 base salary, subject to the terms of the Incent
i
ve Plan. Your eligibility for the 2017 Short Term Incentive Plan will be for the entire year (there will be no proration based on months of service in 2017).
|
4.3
|
The Employee will be eligible for an annual Stock Award at
the
discretion of the Compensation Committee. Please note that this award will be a USD denominated award, and not subject to FX translation, i.e., you will be pegged to the USD amount of
$250,000,
and award values based on USD only. The Restricted Stock will be subject to a three-year vest; 50% of the grant will be
subject
to time, and 50% will be subject to performance as part of the Compensation Committee’s approval metrics.
|
4.4
|
The Employee
consents
to having three dollars ($3) deducted from every pay by the Employer as contribution to the social club.
|
5.1
|
The Employee is
entitled
to four (4) weeks of annual paid vacation, effective April
1, 2017,
as per the ESA. Vacation can be taken during
periods agreed upon with the Employer. It is agreed that vacation time is to be taken during the vacation entitlement year immediately following the one during which this time was accumulated. The vacat
i
on entitlement year is the recurring 12-month period beginning on the date of h
i
re
.
|
5.2
|
The Employee is also entitled to five (5) floating holidays that may be taken as per the Employer’s policies.
|
6.1
|
The Employee is entitled to all benefits offered by the Employer as per e
x
isting or future policies.
|
7.1
|
Your principle office location will be in our Montreal
,
Quebec facility
,
however it is understood your residence location is Oakville, Ontario
.
As per the Employer’s policies, upon presentation of a detailed description of expenses along with receipts or other supporting documents
,
the Employer will reimburse any representation e
x
penses, travel expenses and mileage reasonably incurred by the Employee in performing his or her functions, as previously approved by the Employer, within thirty (30) days following the request for reimbursement
.
|
8.1
|
The Employee acknowledges having received, or that he or she will receive
,
during the period of employment or while performing his or her functions, confidential information concerning the Employer and its previous, current or future activities, as well as confidential information concerning third parties to which the Employer is bound by secrecy
.
|
8.2
|
Therefore, the Employee agrees to respect the confidential nature of this information and not to disclose such information or discuss it with any other person
,
and shall not use such information, except to perform his or her functions for the Employer, without having previously obtained express written consent from the Employer.
|
8.3
|
For the purpose of this Agreement, the term
“confidential
information
”
includes all information, knowledge or data belonging to the Employer or to any third party to which the Employer is bound by secrecy, including without limiting the generality of the foregoing any informat
i
on relating to costs, prices, profits, markets, sales, client lists, procedures followed
,
business partners, marketing and
sales,
memoranda, ideas, notes, documents and specifications
,
technical reports, program source codes, industry secrets, research and development, as well as any information concerning finished products or products under consideration.
|
9.1
|
Any discovery,
invention
or improvement made or implemented by the Employee, as well as any privileged information discovered or obtained by the Employee while performing his or her functions and that relates to research or to official or unofficial works undertaken for the Employer, or to issues of past
,
present or future interest to the Employer, is the exclusive property of the Employer.
|
9.2
|
The Employee hereby agrees to periodically disclose and provide to his or her immediate supervisor or designate any discovery, invention, improvement or privileged information that may have been
created,
put in place
or
obtained by the Employee while performing his
or
her functions, ind
i
vidually or in collaboration with other
employees,
and that relates to any of the Employer’s products
,
tasks
or
activities, be they current or projected.
|
9.3
|
The Employee agrees to sign, at the Employer’s requ
e
st, any document, request, or transfer necessary or useful
for
requesting and obtaining patents,
trademarks,
industrial designs and/or copyright in Canada and in any other country for such invent ions
,
discoveries,
improvements
and privileged information.
|
9.4
|
Furthermore, the Employee agrees to sign any document
,
request and/or transfer necessary or useful for the transfer or transmission,
to
the Employer alone,
of every
right, title and interest pertaining to
such
patents, trademarks
,
industrial designs,
copyright,
inventions, discoveries, improvements and privileged information
.
|
10
.
1
|
At all times while this Employment Agreement is in effect, and for a period of
six (6) months
following the date of termination of employment with the Employer, the Employee shall not directly or indirectly, in any capacity, including but not limited to as principal, proxy, shareholder (e
x
cept if all shares held are publicly traded and the total amount does not exceed three percent (3%) of the share total of the company), investor, employer, employee, agent,
i
ndependent
contractor,
franchisor, franchisee, distributor, advisor or consultant, perform funct
i
ons or activities identical or
substantially
similar to the ones he or she will have performed,
i
n business areas identical or substantially similar to those of the Employer and that are in competition with the Employer
,
i.e. dedicated
colocation servers,
web hosting, domain names reservation, Cloud and Ubersmith
in
the province of Ontario.
|
11.1
|
For a period of
twelve (12) months
as of the date on which he or she ceases to be employed by the Employer
,
the Employee agrees, whether for his or her own benefit or that of another party, directly or indirectly, in any capacity whatsoever, not to:
|
(a)
|
Solicit or provide services to the Employer’s clients or potential clients who have been solicited or provided services by the Employer over the
course
of the year preceding the date on which the Employee ceased to be employed by the Employer; and/or
|
(b)
|
Offer employment, solicit with the intent to hire, hire or otherwise encourage to leave his or her job any person employed by the Employer at any
time
during the
twelve
(12) month period
immediately
preceding the
end
of
employment
of the Employee with the Employer
|
12.1
|
The Employee hereby confirms that he or she is not bound by any contractual provision or agreement limiting his or her liberty to work for the Employer
.
|
12.2
|
The conditions expressed in this Employment Agreement revoke and
cancel
any previous agreement, written or verbal, concerning the Employee’s employment with the Employer, each party releasing the other finally and completely from any and all actions
,
causes of actions, claims and demands of any nature, based on the provisions of any such agreement.
|
12.3
|
The parties acknowledge that this
E
mployment Agreement contains each and every condi
t
ion governing the Employee’s employment.
|
12.4
|
Should your employment be term
i
nated due to reasons other than cause and provided you satisfy the conditions of the Releas
e
Agreement, you will be eligible for twelve months of Severance Pay
.
|
1
3
.
1
|
To be valid, any mod
i
ficat
i
on to this Emp
l
oyment Agreement mu
s
t be approved by the
E
mployer and con
fi
rmed
i
n writing by bo
t
h part
i
es.
|
14.1
|
Th
i
s
E
mployment Agreement Is governed by the laws o
f
the province of Ontar
i
o and
i
ts In
t
erpretation
i
s
subject to these sam
e
laws.
|
•
|
You will receive a starting base salary of $9,615.38 ($250,000 on an annualized basis) per pay-period less payroll deductions and all required withholdings. You will also be subject to review through our performance evaluation process.
|
•
|
You will be eligible to participate in the INAP 2017 Short Term Incentive Plan (“Incentive Plan”). Any payments that may be made to you will be based on INAP’s achievement of goals approved by the Board of Directors. Your target bonus opportunity under the Incentive Plan will be 50% of your 2017 actual earned base salary, subject to the terms of the Incentive Plan.
|
•
|
You will be eligible for an annual Stock Award at the discretion of the Compensation Committee. The Restricted Stock will be subject to a three-year vest; 50% of the grant will be subject to time, and 50% will be subject to performance as part of the Compensation Committee’s approve metrics.
|
•
|
You will initially be based in our Atlanta, GA office, and will be required to travel from time-to-time as part of your duties. INAP will reimburse you for all reasonable travel, lodging and meals, according to the terms of INAP’s travel and expense policy.
|
•
|
Should your employment with INAP be terminated due to reasons other than cause and provided that you satisfy the
conditions
of the Release Agreement, you will be eligible for twelve months
of
Severance Pay after you work for the Company at least 6 months.
|
•
|
You will be eligible to participate in the benefits we offer generally to our employees
.
A benefit summary is included in your new hire packet.
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Internap Corporation (the “registrant”);
|
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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e)) 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: May 3, 2018
|
/s/ Peter D. Aquino
|
|
Peter D. Aquino
|
|
President and Chief Executive Officer
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Internap Corporation (the “registrant”);
|
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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e)) 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: May 3, 2018
|
/s/ Robert Dennerlein
|
|
Robert Dennerlein
|
|
Chief Financial Officer
|
|
•
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
•
|
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: May 3, 2018
|
|
|
|
|
/s/ Peter D. Aquino
|
|
Peter D. Aquino
|
|
President and Chief Executive Officer
|
|
•
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
•
|
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: May 3, 2018
|
|
|
|
|
/s/ Robert Dennerlein
|
|
Robert Dennerlein
|
|
Chief Financial Officer
|