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Item 5. Market for Registrant’s Common Equity

2022-03-16 compared with 2021-03-15 · 12 added, 90 removed, 21 unchanged (83% of the section changed)

16 unchanged sentences

The stock price performance graph is not necessarily indicative of future price performance.

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2 S&P 500 Index Data:

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3 NASDAQ Index Data:

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Company / Index

1 unchanged sentence

Recent Sales of Unregistered Securities

Use of Proceeds

On July 28, 2020, the SEC declared effective our Registration Statement on Form S-1 (File No.

333-239644) for our offering of Class A common stock (the “Registration Statement”).

On July 31, 2020, we received $423.0 million in proceeds, net of $26.1 million of underwriting fees and commissions, from the sale of 23,812,216 shares of our Class A common stock.

Subsequently, we paid $6.2 million for offering costs and used a portion of the net proceeds of $416.8 million to pay off all amounts outstanding under our term loan facility, which aggregated $175.0 million.

There has been no material change in the planned use of proceeds from our offering as described in our final prospectus filed with the SEC pursuant to Rule 424(b).

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Selected Financial Data

The following table sets forth our selected historical consolidated financial information for the periods and dates indicated.

The consolidated balance sheet data as of December 31, 2020 and 2019 and the consolidated comprehensive income (loss) data for the years ended December 31, 2020, 2019 and 2018 have been derived from our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

The consolidated balance sheet data as of December 31, 2018 has been derived from our consolidated financial statements not included in this Annual Report on Form 10-K.

Our financial information has been impacted by certain events which occurred in 2020 and which are described below.

The financial information set forth in this section is not necessarily indicative of future results of operations.

We have historically been taxed as an S-Corporation for U.S.

federal income tax purposes and for income tax purposes in most states.

As a result, net income or loss has been allocated to our stockholders and included on their individual income tax returns prior to July 27, 2020.

Effective July 27, 2020 we converted to a C-Corporation, which has resulted in our net income or losses for all future periods to be taxed at the corporate level.

As such, our income tax provision will not be comparable for periods prior to the C-Corporation conversion.

On July 28, 2020, the Company filed its amended and restated certificate of incorporation with the Delaware Secretary of State to:

(i) effect a three-for-one forward stock split (the “Stock Split”);

(ii) establish a new capital structure for the Company (the “New Capital Structure”);

and (iii) effect a share exchange (the “Share Exchange”) (collectively, the “Recapitalization”).

The Stock Split resulted in each one share owned by a stockholder being exchanged for three shares of common stock, and the number of shares of the Company’s common stock issued and outstanding was increased proportionately based on the Stock Split.

After the Stock Split, the Share Exchange occurred, resulting in stockholders of record exchanging their existing Class A and Class B common stock (“former Class A” and “former Class B,” respectively) for newly created shares of Class A and Class B common stock (“Class A” and “Class B,” respectively) issued in connection with the New Capital Structure.

The effect of the Stock Split and the Share Exchange are recognized retrospectively in our consolidated financial statements.

Our Registration Statement was declared effective on July 28, 2020, resulting in our Class A common stock being registered and available for trading on the NASDAQ exchange (the “Offering”).

On July 31, 2020, the Company received $423.0 million in proceeds from the sale of 23,812,216 shares of Class A common stock at the Offering price of $19.00 per share on July 28, 2020, net of underwriting fees, and used a portion of the proceeds to pay off all amounts outstanding under our term loan facility, which aggregated $175.0 million.

Historical earnings per share information for all periods presented prior to the Offering was retrospectively restated similar to the treatment of a stock split to reflect the Share Exchange as management concluded that there was no economic value attributable to such exchange of shares in connection with the Recapitalization.

Class A common stock issued in connection with the Offering are reflected in the weighted average share calculation from their issuance date.

This data should be read in conjunction with and is qualified in its entirety by reference to Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto for the periods and dates indicated beginning on page F-1 of this Annual Report on Form 10-K.

Revenues are reflected in accordance with Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers , (“ASC 606”), which we adopted on January 1, 2018.

For the Year Ended

(In thousands, except per share data)

Consolidated Comprehensive Income (Loss) Data:

Software subscriptions

Total revenues

Cost of Revenues:

Software subscriptions (1)

Total cost of revenues

Operating expenses:

Research and development (1)

Selling and marketing (1)

General and administrative (1)

Depreciation and amortization

Impairment of asset (2)

Other operating expense (income), net

Total operating expenses

(Loss) income from operations

Interest expense, net

(Loss) income before income taxes

Income tax (benefit) expense

Net (loss) income

Other comprehensive loss (income) from foreign currency translation adjustments and revaluations, net of tax

Total comprehensive (loss) income

Net (loss) income attributable to Class A stockholders, basic

Net (loss) income per Class A share, basic

Weighted average Class A common stock, basic

Net (loss) income attributable to Class A stockholders, diluted

Net (loss) income per Class A share, diluted

Weighted average Class A common stock, diluted

Net (loss) income attributable to Class B stockholders, basic

Net (loss) income per Class B share, basic

Weighted average Class B common stock, basic

Net (loss) income attributable to Class B stockholders, diluted

Net (loss) income per Class B share, diluted

Weighted average Class B common stock, diluted

(1) Includes stock-based compensation expense as follows in the table below.

For more details, see Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Seasonality and Quarterly Trends” included elsewhere in this Annual Report on Form 10-K.

For the Year Ended

(In thousands)

Stock-based compensation expense:

Cost of revenues, software subscriptions

Cost of revenues, services

Research and development

Selling and marketing

General and administrative

Total stock-based compensation expense

(2) During the year ended December 31, 2018, we recorded an impairment of $32.7 million for capitalized internal-use software previously utilized to provide cloud-based services to customers, net of accumulated amortization of $11.9 million.

This impairment was related to a product strategy shift that resulted in this cloud offering no longer being made available for sale to customers after 2018.

The capitalized development costs were deemed to be fully impaired due to the net book value of the asset exceeding its future expected cash flows.

As of December 31,

(In thousands)

Consolidated Balance Sheet Data:

Cash and cash equivalents

Deferred revenue (current and non-current)

Debt (current and non-current)

Total liabilities

Options for redeemable shares

Total stockholders' equity (deficit)

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity