As filed with the Securities and Exchange Commission on
May 5, 2010.
Registration No. 333-165844
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Amendment No. 1
to
Form S-1
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
QLIK TECHNOLOGIES
INC.
(Exact Name of Registrant as
Specified in its Charter)
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Delaware
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7372
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20-1643718
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(State or Other Jurisdiction of
Incorporation or Organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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150 Radnor Chester
Road
Suite E220
Radnor, Pennsylvania
19087
(888) 828-9768
(Address, including zip code and
telephone number, including area code, of registrants
principal executive offices)
Lars Björk
President and Chief Executive
Officer
150 Radnor Chester
Road
Suite E220
Radnor, Pennsylvania
19087
(888) 828-9768
(Name, address, including zip
code and telephone number, including area code, of agent for
service)
Copies to:
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Jay K. Hachigian, Esq.
Richard R. Hesp, Esq.
Gunderson Dettmer Stough
Villeneuve Franklin & Hachigian, LLP
850 Winter Street
Waltham, Massachusetts 02451
Telephone:
(781) 890-8800
Telecopy:
(781) 622-1622
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Richard D. Truesdell, Jr., Esq.
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
Telephone: (212) 450-4000
Telecopy: (212) 701-5800
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Approximate date of commencement of proposed sale to the
public: As soon as practicable after the
effective date of this Registration Statement.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933 check the
following
box. o
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
If this form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in
Rule 12b-2
of the Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer þ
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Smaller reporting company o
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(Do not check if a smaller reporting company)
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The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment that
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933, as amended, or until the
Registration Statement shall become effective on such date as
the Securities and Exchange Commission, acting pursuant to such
Section 8(a), may determine.
The
information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these
securities and we are not soliciting offers to buy these
securities in any state where the offer or sale is not
permitted.
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PROSPECTUS
(Subject to Completion)
Issued ,
2010
Shares
COMMON STOCK
Qlik Technologies Inc. is
offering shares
of its common stock and the selling stockholders are
offering shares.
We will not receive any proceeds from the sale of shares by the
selling stockholders. This is our initial public offering and no
public market exists for our shares. We anticipate that the
initial public offering price will be between
$ and
$ per share.
We intend to apply to have our common stock listed on the
Nasdaq Global Market under the symbol QLIK.
Investing in our common stock involves risks. See
Risk Factors beginning on page 10.
PRICE
$
A SHARE
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Underwriting
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Proceeds to
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Price to
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Discounts and
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Proceeds to
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Selling
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Public
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Commissions
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QlikTech
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Stockholders
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Per share
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$
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$
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$
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$
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Total
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$
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$
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$
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$
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We and the selling stockholders have granted the underwriters
the right to purchase up to an
additional shares
of common stock to cover over-allotments, with up to an
additional shares sold by us
and up to an
additional shares sold by the
selling stockholders.
The Securities and Exchange Commission and state securities
regulators have not approved or disapproved these securities, or
determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The underwriters expect to deliver the shares of common stock to
purchasers
on ,
2010.
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MORGAN
STANLEY |
CITI |
J.P. MORGAN |
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JEFFERIES &
COMPANY |
THOMAS WEISEL PARTNERS LLC |
, 2010
TABLE OF
CONTENTS
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Page
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1
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10
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27
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28
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32
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58
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73
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98
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100
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103
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107
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109
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112
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116
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116
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116
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F-1
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EX-10.38 |
EX-23.1 |
You should rely only on the information contained in this
prospectus or in any free writing prospectus we may authorize to
be delivered or made available to you. We, the underwriters and
the selling stockholders have not authorized anyone to provide
you with additional or different information. We, the
underwriters and the selling stockholders are offering to sell,
and seeking offers to buy, shares of our common stock only in
jurisdictions where offers and sales are permitted. The
information in this prospectus is accurate only as of the date
of this prospectus, regardless of the time of delivery of this
prospectus or any sale of shares of our common stock.
Until ,
2010 (25 days after commencement of this offering), all
dealers that buy, sell or trade shares of our common stock,
whether or not participating in this offering, may be required
to deliver a prospectus. This delivery requirement is in
addition to the obligation of dealers to deliver a prospectus
when acting as underwriters and with respect to their unsold
allotments or subscriptions.
For investors outside of the United States: Neither we, the
selling stockholders nor any of the underwriters have done
anything that would permit this offering or possession or
distribution of this prospectus in any jurisdiction where action
for that purpose is required, other than in the United States.
Persons outside the United States who come into possession of
this prospectus must inform themselves about, and observe any
restrictions relating to, the offering of the shares of common
stock and the distribution of this prospectus outside of the
United States.
Unless the context indicates otherwise, as used in this
prospectus, the terms Qlik Technologies and
QlikTech refer to Qlik Technologies Inc. The terms
Powered by QlikView, Qlik,
QlikView, QlikView Local Client,
QlikView Server, QlikView Publisher,
QlikCommunity and QlikAcademy are our
trademarks. All other trademarks, trade names and service marks
appearing in this prospectus are the property of their
respective owners.
PROSPECTUS
SUMMARY
This summary highlights the most important features of this
offering and the information contained elsewhere in this
prospectus. This summary is not complete and does not contain
all of the information that you should consider before investing
in our common stock. You should read the entire prospectus
carefully, especially the risks of investing in our common stock
discussed under the heading Risk Factors and our
consolidated financial statements and related notes included in
this prospectus.
QLIK
TECHNOLOGIES INC.
Overview
We have pioneered a powerful, easy-to-use business intelligence
solution that enables our customers to make better and faster
business decisions. Our software platform, QlikView, combines
enterprise-class analytics and search functionality with the
simplicity and
ease-of-use
found in office productivity software tools for a broad set of
business users. We have grown our customer base from over 1,500
customers in 2005 to over 13,000 in 2009 and increased our
revenue at a 59% compound annual growth rate during the same
period. Our solution addresses the needs of a diverse range of
customers, from middle market customers to large enterprises
such as BP, Campbell Soup Company, Colonial Life, The Dannon
Company, Inc., Heidelberger Druckmaschinen AG, ING, Kraft Foods,
Lifetime Brands, National Health Service (NHS), Qualcomm,
Symantec and Volvo Car UK Limited. We have customers in over 100
countries and approximately 77% of our revenue in 2009 was
derived internationally.
According to a 2009 International Data Corporation
(IDC) report, the business intelligence market is projected
to grow to $8.6 billion in 2010. We believe QlikView
addresses a broader market opportunity than solely traditional
users of business intelligence tools. According to a 2009
Gartner, Inc. report, 28% of total potential users within
organizations use business intelligence software. Small
businesses and medium-sized enterprises have had limited
adoption of traditional business intelligence solutions due to
their high cost and complexity. QlikView addresses the needs of
all business users in companies of all sizes.
QlikView empowers business users to navigate data in a manner
consistent with the fluid, associative nature of human thought.
QlikView is powered by our in-memory associative search
technology which has utilized rapid advances in computing power
to yield significant improvement in flexibility and performance
at a lower cost than traditional business intelligence
solutions. Our technology platform enables users to consolidate
large, disparate data sets and discover relationships within
data in real time when requested by the user. QlikView also
visualizes this data in a simple, intuitive user interface that
enables users to interactively explore and analyze information.
We have a differentiated business model designed to accelerate
the adoption of our product by reducing the time and cost to
purchase and implement our software. Our low risk approach to
product sales provides a needed alternative to costly,
all-or-nothing,
traditional business intelligence sales models by offering free
product downloads to individuals and a
30-day money
back guarantee upon purchase. We initially focus on specific
business users or departments within a prospective
customers organization and seek to solve a targeted
business need. After demonstrating QlikViews benefits to
initial adopters within an organization, we work to expand sales
of our product to other business units, geographies and use
cases with a long-term goal of broad organizational deployment.
According to a 2009 IDC survey, 44% of our customers deploy
QlikView in less than one month and 77% of our customers deploy
QlikView in less than three months. In comparison, our customers
have indicated to us that their prior implementations of
traditional business intelligence tools often take up to
18 months. We have a diversified distribution model that
consists of a direct sales force and a partner network that
includes resellers, original equipment manufacturers (known as
OEMs) and systems integrators. Additionally, our online user
community, QlikCommunity, provides us with a loyal and growing
network of users who promote our software, provide support for
other users and contribute valuable insights and feedback for
our product development efforts.
For the years ended December 31, 2009, 2008 and 2007, our
revenue was $157.4 million, $118.3 million and
$80.6 million, representing
year-over-year
growth of 33% in 2009 and 47% in 2008. For the three months
ended December 31, 2009, our revenue was
$61.7 million, representing 74% growth over the same period
the prior year. In
1
addition, we generated operating income of $13.2 million,
$1.6 million and $0.1 million in 2009, 2008 and 2007.
For the year ended December 31, 2009, software license and
maintenance revenue comprised 90% and professional services and
training comprised 10% of our total revenue.
Our
Industry
We believe that to succeed in todays increasingly
competitive markets, businesses must accelerate the rate at
which they identify and respond to changing business conditions.
An organizations market agility and ultimate success are
dependent upon its ability to harness the power of increasing
volumes of information to make effective business decisions
which can be achieved by business intelligence and data
analytics software. The use and importance of this software
within organizations of all sizes has significantly increased
for several reasons, including:
Exponential Growth in Data Available for
Analysis. Over the last two decades,
organizations have made significant investments in software
applications that produce substantial amounts of data that is
often stored in different formats, making it challenging to
efficiently analyze the data and gain insight from it without
using powerful data analytics solutions.
Disparate Data Sources. In todays
highly competitive marketplace, companies are expanding
operations through geographic diversification, acquisitions and
partnerships, while more closely integrating their systems with
those of their customers, partners and suppliers. As a result,
organizations often deploy a number of tools, including data
integration software, data warehouses and business intelligence
tools, to gain insight from this disparate business data.
Decentralized Decision-Making. We
believe that many organizations are shifting towards
decentralized decision-making in order to more efficiently
respond to changing industry trends and competitive threats.
This shift has created the need for intuitive data analysis
tools that support employees at all levels of the organization
as they assume more responsibility for making critical business
decisions.
Although these trends have led to increased adoption of business
intelligence and data analytics tools, we believe that most
traditional tools are inadequate to meet the needs of users and
face the following limitations:
Analysis Tools Not Designed for Business
Users. Most traditional business intelligence
tools were developed specifically for data analysts and other
quantitative professionals and require sophisticated programming
in order to build pre-defined data sets and conduct analysis. A
typical business user does not possess the skills or authority
needed to modify the underlying data set and therefore receives
static reports. As a result, these users lack access to critical
data in a timely manner and may miss important insights needed
to make business decisions.
Highly Inflexible Solutions are Difficult to Implement and
Maintain. Traditional business intelligence
solutions require the integration and summarization of large
volumes of data stored across an organization, which can be a
time-consuming process that requires significant professional
services support. In addition, a substantial investment of time
and money can be required to refresh the data summarization as
the underlying data sources evolve and change.
Substantial
Total-Cost-of-Ownership. Organizations incur
significant hardware, software and professional services costs
to deploy and maintain traditional business intelligence
solutions. According to a 2009 report, Gartner estimates that
the cost of development for business intelligence and data
warehouse applications is about three to five times the cost of
the software.
Spreadsheets Not Suited for Data Analysis and Lack
Reliability. Spreadsheets have been widely
adopted by business users for data analysis because they are
readily available. However, spreadsheets are general purpose
business productivity tools designed for data input and
calculation that do not scale to support large data sets and
lack auditing capabilities, sophisticated data security features
and multi-user collaboration tools.
2
Our
Market Opportunity
QlikView addresses a broader market opportunity than just
traditional users of business intelligence tools. According to a
2009 IDC report, the business intelligence market is projected
to grow to $8.6 billion in 2010. We believe that published
market size estimates exclude the vast majority of business
users, as most of these individuals do not use traditional
business intelligence solutions due to their cost and complexity.
The market for our software platform extends beyond large
enterprises which have historically been the most frequent
adopters of traditional business intelligence tools. The
substantial cost and complexity of these traditional tools have
limited adoption by small businesses and medium-sized
enterprises. These potential users and customer segments
represent a large, underpenetrated market opportunity that we
believe will increasingly deploy powerful, enterprise-class
software platforms if they are lower cost and easy to use. In
addition to the business intelligence market, we also believe
QlikView can be used to satisfy business users needs in
adjacent markets, such as search and discovery software which
according to a 2009 IDC report is projected to grow to
$2.4 billion in 2010.
Our
Solution
QlikView is an innovative business intelligence solution that
combines
enterprise-class
analytics with the simplicity and
ease-of-use
found in office productivity software tools. We designed
QlikView to enable business users in organizations of all sizes
to make faster and better decisions. The key differentiators of
our solution include:
Intuitive Experience Drives Broad
Adoption. Unlike traditional business
intelligence tools, QlikView empowers business users with
sophisticated analytic capabilities delivered through an
easy-to-use, intuitive user interface. QlikView extends the
power of data analytics to the business users by allowing them
to search associatively and define visual charts through simple
point-and-click
technology without the help of information technology (or IT)
staff.
Faster Decision Cycles Increase Business
Agility. QlikView can be installed and
implemented throughout an organization in less than three
months, compared to traditional business intelligence tools
which we believe on average can take up to 18 months to
implement. In addition, a customers analysis can be
rapidly updated as underlying data evolves and analytic
requirements change which enables business users to intuitively
interrogate and analyze data in real time and reduce decision
cycles.
Lower Total Cost-of-Ownership Yields Higher
ROI. QlikView can be implemented in a
self-service manner and requires less expenditures on hardware,
software, services and ongoing IT support as compared to
traditional business intelligence solutions.
Highly Scalable In-Memory Architecture Leverages Hardware
Advances. QlikView benefits from two
important computer hardware trends: 64-bit computing, which
increases the amount of memory available on computers, and
multi-core central processing units, or CPUs, which allow for
parallel processing of complex calculations. The expected
improvements in memory capacity and CPU performance will drive
QlikViews future performance with minimal incremental
investment.
Open Platform Focus. QlikView is
designed to be the easiest and fastest business intelligence
platform on which business users can develop analytic
applications. We license our platform to partners, such as
independent software vendors and systems integrators, to create
a wide variety of purpose-specific analytic applications.
Our
Business Model
To complement QlikView, we have developed a differentiated
business model that has the following attributes:
Broad User Focus. We seek to market and
sell directly to the business user by providing an intuitive
software platform that can be installed and used with minimal
training. Unlike most existing business intelligence tools,
QlikView is designed for business users and does not require
substantial IT support to install, integrate and maintain.
Low Risk Rapid Product Adoption. To
facilitate rapid adoption of our platform, we allow our
customers to purchase licenses in the way that best meets their
needs, including on an individual, workgroup, departmental or
3
enterprise-wide basis. In addition, we offer free product
downloads to individual users and a
30-day money
back guarantee upon purchase.
Land and Expand Customer
Penetration. We seek to initially
land within the organization of a new customer by
solving a business need of specific business users or
departments. We then work to expand the use of our
solution across the organization by targeting other business
units, geographies and use cases. Our customer penetration
strategy is focused on creating a loyal user base that promotes
adoption through tangible results and powerful,
word-of-mouth
marketing, which facilitate incremental sales.
Globally Diversified Distribution
Model. We seek to maximize the reach of the
QlikView platform by employing a multi-pronged sales approach
that leverages a direct sales force and partner network which
includes resellers, OEM relationships and systems integrators.
We typically enter new markets through partnerships and reseller
agreements to minimize cost and risk while assessing demand in
the new market. We currently have distribution capabilities in
over 100 countries and a network of over 1,100 channel
partners worldwide to help generate demand for QlikView.
Community-Based Marketing and
Support. We have established QlikCommunity,
our user community, to augment our development, marketing and
support efforts. This community of over 21,000 registered users
as of December 31, 2009 promotes the use of our software
within their organizations as well as to other organizations.
Our
Growth Strategy
We intend to make QlikView the primary platform on which
business users, in companies of all sizes, make critical
business decisions. The key elements of our growth strategy
include:
Increase Our Global Market
Penetration. We intend to expand our presence
in targeted geographies by growing our direct sales force and
global partner network. We began our operations in Sweden, have
established a substantial foothold in Western Europe and will
continue to seek to expand globally, particularly in the United
States, Japan, Australia, China, Russia and Brazil.
Further Penetrate Our Existing Customer
Base. We intend to increase penetration of
existing customers by capitalizing on current users
satisfaction to promote QlikView to other users and departments
within their organizations. Historically, we have effectively
migrated new customers from single project and departmental
deployments to multi-department deployments over time.
Extend Our Software Platform to Provide New Business
Solutions. We plan to enhance our current
platform by adding new functionality that extends our analytics,
visualization and search capabilities to broader use cases. We
believe that QlikViews capabilities can be extended to
adjacent areas where data-driven decisions are critical
including website navigation, content search and information
management, external data communication, product configuration
and
e-commerce
applications.
Expand Our OEM Alliances and Strategic
Relationships. We have an ongoing effort to
increase our number of OEM alliances with other independent
software vendors that license our technology to embed within and
enhance their solutions. We believe we have a significant
opportunity to expand the use of QlikView through our OEM
relationships, which accounted for approximately 6% of our sales
in 2009, as well as through other distribution relationships. In
addition, we seek to expand our strategic reseller agreements
and relationships with systems integrators and consultants and
to use this channel to generate additional inbound customer
prospects.
Enhance Adoption of QlikView by Offering a Robust Mobile
Solution. We intend to offer a variety of
delivery options that enable our customers to use our software
from any location over any device. QlikView is available for
many popular mobile platforms, including Apple iPhone, Android,
BlackBerry and Symbian-based smart phones.
4
Risks
Associated with Our Business
Our business is subject to numerous risks described in the
section entitled Risk Factors and elsewhere in this
prospectus. You should carefully consider these risks before
making an investment. Some of these risks include:
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we have limited experience in targeting a global marketplace
which impedes our ability to forecast quarterly and annual
revenues accurately
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our quarterly operating results are subject to fluctuations
which could cause our stock price to decline
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we are dependent on a single product platform, QlikView
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the market for business intelligence software is still evolving
and if this market or our market share fail to grow, our
business would be harmed
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our success is dependent on maintaining successful relationships
with strategic channel partners and expanding our direct sales
capabilities
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management of our international operations is complex
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demand for our software platform may be adversely affected by
changing industry standards
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we are dependent on our customers renewal of their
maintenance contracts
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we face intense competition, and most of our competitors have
longer operating histories, greater name recognition, larger
customer bases and significantly greater financial, technical,
sales, marketing and other resources than we have
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Our
Corporate Information
We were founded in Sweden in 1993. From 1993 until 1999, our
activities were focused on software research and development
that resulted in QlikViews core technology, and from 1999
until 2004 we focused on the commercialization of our technology
primarily in the Nordic market and limited regions of Europe. In
2004, we reincorporated in Delaware and began to broaden our
marketing and sales activities in the United States and
continued our expansion globally. Our principal executive
offices are located at 150 Radnor Chester Road, Suite E220,
Radnor, Pennsylvania 19087 and our telephone number is
(888) 828-9768.
Our website address is www.qlikview.com. The information on, or
that can be accessed through, our website is not part of this
prospectus.
5
THE
OFFERING
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Common stock offered by QlikTech |
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shares |
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Common stock offered by the selling stockholders
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shares
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Total |
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shares |
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Over-allotment option to be offered by QlikTech
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shares |
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Over-allotment option to be offered by the selling stockholders
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shares |
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Common stock to be outstanding after this offering
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shares |
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Use of proceeds |
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We expect our net proceeds from this offering will be
$ ,
assuming the sale
of shares
of common stock in this offering at an assumed initial public
offering price of $ per share, the
mid-point of the range reflected on the cover page of the
prospectus. We intend to use approximately $6.9 million of
the net proceeds of this offering to repay in full the principal
and accrued interest and to pay any applicable prepayment fee on
our outstanding debt facility from Stiftelsen Industrifonden. We
expect to use the remaining net proceeds of this offering for
general corporate purposes, including working capital and
potential capital expenditures and acquisitions. We will not
receive any of the proceeds from the sale of the shares of
common stock by the selling stockholders. See Use of
Proceeds. |
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Proposed Nasdaq Global Market symbol
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QLIK |
The number of shares of our common stock to be outstanding after
the offering is based on 63,350,570 shares of common stock
outstanding as of December 31, 2009, which assumes:
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the renaming of our Series A common stock as common stock;
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the conversion of 19,846,279 shares of Series A
preferred stock into 19,846,279 shares of common
stock; and
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the conversion of 26,875,145 shares of Series AA
preferred stock into 26,875,145 shares of common stock.
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Except where stated otherwise herein, the number of shares of
our common stock to be outstanding after this offering does not
take into account:
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12,341,473 shares issuable upon exercise of options
outstanding as of December 31, 2009 at a weighted average
exercise price of approximately $1.51 per share;
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1,548,497 shares reserved as of December 31, 2009 for
future issuance under our stock-based compensation
plans; and
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568,263 shares issuable upon the exercise of warrants
outstanding as of December 31, 2009 at a weighted average
exercise price of approximately $1.43 per share.
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Unless otherwise indicated, the information we present in this
prospectus assumes and reflects the following:
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the renaming of our Series A common stock as common stock
prior to the closing of this offering;
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the conversion of all outstanding shares of our Series A
preferred stock and Series AA preferred stock into shares
of our common stock and all outstanding warrants to purchase
preferred stock into warrants to purchase common stock upon the
closing of this offering;
|
|
|
|
the filing of our restated certificate of incorporation and the
adoption of our amended and restated bylaws to be effective upon
the closing of this offering; and
|
|
|
|
no exercise by the underwriters of their option to purchase
additional shares.
|
6
SUMMARY
CONSOLIDATED FINANCIAL DATA
The tables below summarize our consolidated financial data. The
following summary financial data should be read together with
our consolidated financial statements and related notes,
Selected Consolidated Financial Data and
Managements Discussion and Analysis of Financial
Condition and Results of Operations included elsewhere in
this prospectus. The data for each of the three years ended
December 31, 2007, 2008 and 2009 have been derived from our
audited consolidated financial statements appearing elsewhere in
this prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
Consolidated Statement of
Operations Data:
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
|
(In thousands, except for share and
|
|
|
|
per share amounts)
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
License revenue
|
|
$
|
51,482
|
|
|
$
|
74,446
|
|
|
$
|
99,864
|
|
Maintenance revenue
|
|
|
17,747
|
|
|
|
29,401
|
|
|
|
41,390
|
|
Professional services revenue
|
|
|
11,357
|
|
|
|
14,417
|
|
|
|
16,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
80,586
|
|
|
|
118,264
|
|
|
|
157,359
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
License revenue
|
|
|
2,949
|
|
|
|
3,071
|
|
|
|
3,663
|
|
Maintenance revenue
|
|
|
580
|
|
|
|
1,365
|
|
|
|
1,635
|
|
Professional services revenue
|
|
|
8,177
|
|
|
|
9,562
|
|
|
|
11,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of
revenue(1)
|
|
|
11,706
|
|
|
|
13,998
|
|
|
|
17,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
68,880
|
|
|
|
104,266
|
|
|
|
140,259
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing(1)
|
|
|
48,249
|
|
|
|
74,267
|
|
|
|
93,349
|
|
Research and
development(1)
|
|
|
5,419
|
|
|
|
8,258
|
|
|
|
8,735
|
|
General and
administrative(1)
|
|
|
15,154
|
|
|
|
20,190
|
|
|
|
25,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
68,822
|
|
|
|
102,715
|
|
|
|
127,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
58
|
|
|
|
1,551
|
|
|
|
13,166
|
|
Other income (expense)
|
|
|
(463
|
)
|
|
|
3,304
|
|
|
|
(4,529
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before benefit for income taxes
|
|
|
(405
|
)
|
|
|
4,855
|
|
|
|
8,637
|
|
Benefit (provision) for income taxes
|
|
|
40
|
|
|
|
(1,860
|
)
|
|
|
(1,776
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(365
|
)
|
|
$
|
2,995
|
|
|
$
|
6,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common
share(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
$
|
0.07
|
|
Diluted
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
$
|
0.06
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
13,526,926
|
|
|
|
14,552,999
|
|
|
|
16,267,186
|
|
Diluted
|
|
|
13,526,926
|
|
|
|
16,523,443
|
|
|
|
20,778,448
|
|
Pro forma net income per common share
(unaudited)(3):
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
$
|
0.13
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
$
|
0.12
|
|
Weighted average number of shares used in pro forma computation
(unaudited)(3):
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
62,988,610
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
67,606,341
|
|
Pro forma as adjusted net income per common share
(unaudited)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in pro forma as adjusted
computation
(unaudited)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes stock-based compensation expense as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
$
|
12
|
|
|
$
|
39
|
|
|
$
|
82
|
|
Sales and marketing
|
|
|
103
|
|
|
|
285
|
|
|
|
733
|
|
Research and development
|
|
|
6
|
|
|
|
19
|
|
|
|
79
|
|
General and administrative
|
|
|
69
|
|
|
|
388
|
|
|
|
585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
190
|
|
|
$
|
731
|
|
|
$
|
1,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|
(2) |
|
We applied the two-class method to compute net income (loss) per
common share which requires that earnings attributable to common
stockholders for the period be allocated between common and
participating securities based upon their respective rights to
receive distributed and undistributed earnings. See Note 2
of the notes to consolidated financial statements. |
|
|
|
(3) |
|
The pro forma basic and diluted net income per share have been
calculated assuming (i) the renaming of our Series A
common stock as common stock prior to the closing of this
offering, (ii) the conversion of all outstanding shares of
Series A and Series AA preferred stock into an
aggregate of 46,721,424 shares of our common stock prior to
the close of this offering and (iii) the reclassification
of outstanding preferred stock warrants from long term
liabilities to additional paid-in capital as of the beginning of
the period. The numerator of the pro forma net income per share
calculation is derived by adding the approximately
$1.372 million charge related to the preferred stock
warrant liability to net income as reported of approximately
$6.861 million, to arrive at net income attributable to
common shares of approximately $8.233 million. |
|
|
|
(4) |
|
The pro forma as adjusted basic and diluted net income per share
have been calculated assuming (i) the renaming of our
Series A common stock as common stock prior to the closing
of this offering, (ii) the conversion of all outstanding
shares of Series A and Series AA preferred stock into
an aggregate of 46,721,424 shares of our common stock prior
to the close of this offering, (iii) the reclassification
of outstanding preferred stock warrants from long-term
liabilities to additional paid-in capital, (iv) the sale by
us of
the shares
of common stock offered by this prospectus, (v) the filing
of our restated certificate of incorporation, which will occur
immediately upon closing of this offering, and (vi) the use
of approximately $6.9 million of the net proceeds of this
offering to repay in full the principal and accrued interest and
to pay any applicable prepayment fee on our outstanding debt
facility from Stiftelsen Industrifonden as of the beginning of
the period. The numerator of the pro forma net income per share
calculation is derived by adding the approximately
$1.372 million charge related to the preferred stock
warrant liability and the interest recorded in 2009 related to
the Stiftelsen Industrifonden debt facility of approximately
$0.8 million to net income as reported of approximately
$6.861 million, to arrive at net income attributable to
common shares of approximately $9.033 million. |
The following table presents our summary consolidated balance
sheet data as of December 31, 2009:
|
|
|
|
|
on a pro forma basis to give effect to (i) the renaming of
our Series A common stock as common stock; (ii) the
conversion of all outstanding shares of our Series A
preferred stock and Series AA preferred stock into shares
of our common stock and all outstanding warrants to purchase
preferred stock into warrants to purchase common stock; and
(iii) the reclassification of our outstanding preferred
stock warrants from long-term liabilities to additional paid-in
capital; and
|
|
|
|
|
|
on a pro forma as adjusted basis to give effect to (i) the
renaming of our Series A common stock as common stock;
(ii) the conversion of all outstanding shares of our
Series A preferred stock and Series AA preferred stock
into shares of our common stock and all outstanding warrants to
purchase preferred stock into warrants to purchase common stock;
(iii) the reclassification of our outstanding preferred
stock warrants from long-term liabilities to additional paid-in
capital; (iv) the sale by us of the shares of common stock
offered by this prospectus at an initial public offering price
of $ per share, the mid-point of
the range reflected on the cover of this prospectus, and after
deducting the underwriting discounts and commissions and
estimated offering expenses payable by us; (v) the filing
of our restated certificate of incorporation, which will occur
immediately upon closing of this offering, and (vi) the use
of approximately $6.9 million of the net proceeds of this
offering to repay in full the principal and accrued interest and
to pay any applicable prepayment fee on our outstanding debt
facility from Stiftelsen Industrifonden.
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2009
|
|
|
|
|
|
|
|
|
|
Pro Forma As
|
|
Consolidated Balance Sheet
Data:
|
|
Actual
|
|
|
Pro Forma
|
|
|
Adjusted
|
|
|
|
(in thousands)
|
|
|
Cash and cash equivalents
|
|
$
|
24,852
|
|
|
$
|
24,852
|
|
|
|
|
|
Working capital
|
|
|
14,829
|
|
|
|
14,737
|
|
|
|
|
|
Deferred revenue
|
|
|
35,575
|
|
|
|
35,575
|
|
|
|
|
|
Total assets
|
|
|
102,967
|
|
|
|
102,875
|
|
|
|
|
|
Long-term obligations, including current portion
|
|
|
11,436
|
|
|
|
9,224
|
|
|
|
|
|
Convertible preferred stock
|
|
|
23,901
|
|
|
|
|
|
|
|
|
|
Total stockholders equity (deficit)
|
|
|
(9,103
|
)
|
|
|
16,918
|
|
|
|
|
|
9
RISK
FACTORS
Investing in our common stock involves a high degree of risk.
The risks described below are not the only ones facing us.
Additional risks that we do not yet know of or that we currently
think are immaterial may also impair our business operations. If
any of the following risks actually occur, our business,
operating results or financial condition could be materially
harmed. In such cases, the trading price of our common stock
could decline and you may lose all or part of your investment.
Before investing in our common stock, you should carefully
consider each of the following risk factors and all of the other
information set forth in this prospectus, including the
financial statements and the notes thereto.
Risks
Related to Our Business and Industry
We have limited experience in targeting a global
marketplace and compete in a rapidly evolving industry which
makes our future operating results difficult to predict.
We have limited experience in targeting the global business
intelligence marketplace. In addition, we have a limited
operating history in an industry characterized by rapid
technological innovation, changing customer needs, evolving
industry standards and frequent introductions of new products,
enhancements and services. Any of these factors can render our
existing software platform and services obsolete or
unmarketable. We believe that our future success will depend in
large part on our ability:
|
|
|
|
|
to support current and future releases of popular hardware,
operating systems, computer programming languages, databases and
software applications
|
|
|
|
to develop new products that achieve market acceptance in a
timely manner
|
|
|
|
to meet an expanding range of customer requirements
|
As we encounter increasing competitive pressures, we will likely
be required to modify, enhance, reposition or introduce new
products and service offerings. We may not be successful in
doing so in a timely, cost-effective and appropriately
responsive manner, or at all. All of these factors make it
difficult to predict our future operating results which may
impair our ability to manage our business and your ability to
assess our prospects.
We may experience quarterly fluctuations in our operating
results due to a number of factors which make our future results
difficult to predict and could cause our operating results to
fall below expectations or our guidance.
Our operating results may fluctuate due to a variety of factors,
many of which are outside of our control. As a result, comparing
our operating results on a
period-to-period
basis may not be meaningful. You should not rely on our past
results as an indication of our future performance. If our
revenue or operating results fall below the expectations of
investors or securities analysts or below any guidance we may
provide to the market, the price of our common stock could
decline substantially.
Our operating results have varied in the past. In addition to
other risk factors listed in this Risk Factors
section, factors that may affect our quarterly operating
results, business and financial condition include the following:
|
|
|
|
|
demand for our software platform and services and the size and
timing of orders
|
|
|
|
market acceptance of our current and future products
|
|
|
|
a slowdown in spending on information technology and software by
our current
and/or
prospective customers
|
|
|
|
sales cycles and performance of our indirect channel partners
and original equipment manufacturers (known as OEMs)
|
|
|
|
budgeting cycles of our customers
|
|
|
|
the management, performance and expansion of our international
operations
|
|
|
|
the rate of renewals of our maintenance agreements
|
10
|
|
|
|
|
changes in the competitive dynamics of our markets
|
|
|
|
our ability to control costs, including our operating expenses
|
|
|
|
customers delaying purchasing decisions in anticipation of new
products or product enhancements by us or our competitors
|
|
|
|
the outcome or publicity surrounding any pending or threatened
lawsuits
|
|
|
|
the timing of recognizing revenue in any given quarter as a
result of revenue recognition rules
|
|
|
|
an increase in the rate of product returns
|
|
|
|
foreign currency exchange rate fluctuations
|
|
|
|
failure to successfully manage any acquisitions
|
|
|
|
general economic and political conditions in our domestic and
international markets
|
In addition, we may in the future experience fluctuations in our
gross and operating margins due to changes in the mix of our
direct and indirect sales, domestic and international revenues,
and license and service revenues.
We may implement changes to our license pricing structure for
all of our products including increased prices and modified
licensing parameters. If these changes are not accepted by our
current or future customers, our business, operating results and
financial condition could be harmed.
Based upon all of the factors described above, we have a limited
ability to forecast the amount and mix of future revenues and
expenses, and it is likely that at some time our operating
results will fall below our estimates or the expectations of
public market analysts and investors.
We depend on revenue from a single product
platform.
We are dependent on a single product platform, QlikView. Our
business would be harmed by a decline in demand for, or in the
price of, our software platform as a result of, among other
factors:
|
|
|
|
|
any change in our pricing model
|
|
|
|
increased competition
|
|
|
|
support, research and development or other expenditures
undertaken in attempts, whether or not successful, to develop
new products
|
|
|
|
a maturation in the markets for our products
|
Our financial results would suffer if the market for
business intelligence software does not continue to grow or if
we are unable to further penetrate this market.
Nearly all of our revenues to date have come from sales of
business intelligence software and related maintenance services.
We expect these sales to account for substantially all of our
revenues for the foreseeable future. Although demand for
business intelligence software has grown in recent years, the
market for business intelligence software applications is still
evolving. We cannot be sure that this market will continue to
grow or, even if it does grow, that customers will purchase our
software platform or services. We have spent, and intend to keep
spending, considerable resources to educate potential customers
about business intelligence software in general and our software
platform in particular. However, we cannot be sure that these
expenditures will help our software platform achieve any
additional market acceptance or enable us to attract new
customers or new users at existing customers. A reduction in the
demand for our services and software platform could be caused
by, among other things, lack of customer acceptance, weakening
economic conditions, competing technologies and services or
decreases in software spending. If the market and our market
share fail to grow or grow more slowly than we currently expect,
our business, operating results and financial condition would be
harmed.
11
We use indirect channel partners and if we are unable to
maintain successful relationships with them, our business,
operating results and financial condition could be
harmed.
In addition to our direct sales force, we use strategic indirect
channel partners such as distribution partners, value-added
resellers, system integrators and OEMs to license and support
our software platform. For the year ended December 31,
2009, transactions by indirect channel partners accounted for
50% of our total product licenses revenues and first years
maintenance billings.
Our channel partners may offer customers the products of several
different companies, including products that compete with ours.
Our channel partners generally do not have an exclusive
relationship with us; thus, we cannot be certain that they will
prioritize or provide adequate resources for selling our
products. Divergence in strategy or contract defaults by any of
these channel partners may harm our ability to develop, market,
sell or support our software platform. In addition, establishing
and retaining qualified indirect sales channel partners and
training them in our software platform and services require
significant time and resources. In order to develop and expand
our distribution channel, we must continue to scale and improve
our processes and procedures that support our channel, including
investment in systems and training. These processes and
procedures may become increasingly complex and difficult to
manage as we grow our organization.
Our ability to achieve revenue growth in the future will depend
in part on our success in maintaining successful relationships
with our channel partners. There can be no assurance that our
channel partners will continue to cooperate with us when our
distribution agreements expire or are up for renewal. If we are
unable to maintain our relationships with these channel
partners, our business, operating results and financial
condition could be harmed. In addition, there can be no
assurance that actions taken or not taken by such parties will
not harm us. Also, in a number of regions we rely on a limited
number of resellers, and our business may be harmed if any of
these resellers were to fail to effectively address their
specified geographic territories.
In addition, we rely on our channel partners to operate in
accordance with the terms of their contractual agreements with
us. For example, our agreements with our channel partners limit
the terms and conditions pursuant to which they are authorized
to resell or distribute our software and offer technical support
and related services. We also typically require our channel
partners to provide us with the dates and details of product
license transactions sold to end user customers. If our channel
partners do not comply with their contractual obligations to us,
our business, results of operations and financial condition may
be harmed.
If we are unable to expand our direct sales capabilities,
we may not be able to generate increased revenues.
In order to succeed, we must expand our direct sales force to
generate increased revenue from new customers. As of
December 31, 2009, we had a team of 124 dedicated direct
sales professionals, and we intend to increase our number of
direct sales professionals. New hires will require training and
will take time to achieve full productivity. We cannot be
certain that new hires will become as productive as necessary or
that we will be able to hire enough qualified individuals in the
future. Failure to hire qualified direct sales personnel will
preclude us from expanding our business and growing our revenue.
As we pursue new enterprise customers, additional OEM
opportunities or more complicated deployments, our sales cycle
and deployment processes may become more unpredictable and
require greater time and expense.
We anticipate that our sales cycle may lengthen as we pursue new
enterprise customers. Enterprise customers may undertake a
significant evaluation process in regard to enterprise software
which can last from several months to a year or longer. If our
sales cycle were to lengthen in this manner, events may occur
during this period that affect the size or timing of a purchase
or even cause cancellations, and this may lead to more
unpredictability in our business and operating results.
Additionally, sales cycles for sales of our software platform to
OEMs tend to be longer, ranging from three to 12 months or
more, and may involve convincing a partners entire
organization that our software platform is the appropriate
software for its applications. We may spend substantial time,
effort and money on our sales efforts without any assurance that
our efforts will produce any sales.
In addition, we may face unexpected deployment challenges with
enterprise customers or more complicated installations of our
software platform. It may be difficult to deploy our software
platform if the customer has
12
unexpected database, hardware or software technology issues.
Additional deployment complexities may occur if a customer hires
a third party to deploy our software platform or if one of our
indirect channel partners leads the implementation of our
solution. Any difficulties or delays in the initial
implementation could cause customers to reject our software or
lead to the delay or non-receipt of future orders, in which case
our business, operating results and financial condition would be
harmed.
Managing our international operations is complex and our
failure to do so successfully could harm our business, operating
results and financial condition.
We receive a significant portion of our total revenues from
international sales from foreign direct and indirect operations.
International revenues accounted for approximately 77% of our
total revenues for each of the years ended December 31,
2007, 2008 and 2009. We have facilities located in Australia,
Austria, Belgium, Denmark, Finland, France, Germany, India,
Italy, Japan, the Netherlands, Portugal, Singapore, Spain,
Sweden, Switzerland and the United Kingdom. We expect to
continue to add personnel in additional countries. Our
international operations require significant management
attention and financial resources.
There are certain risks inherent in our international business
activities including, but not limited to:
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managing and staffing international offices and the increased
costs associated with multiple international locations
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maintaining relationships with indirect channel partners outside
the United States, whose sales and lead generation activities
are very important to our international operations
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multiple legal systems and unexpected changes in legal
requirements
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tariffs, export restrictions, trade barriers and other
regulatory or contractual limitations on our ability to sell or
develop our products in certain foreign markets
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trade laws and business practices favoring local competition
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costs of localizing products and potential lack of acceptance of
localized versions
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potential tax issues, including restrictions on repatriating
earnings and multiple and conflicting tax laws and regulations
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weaker intellectual property protection in some countries
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difficulties in enforcing contracts and collecting accounts
receivable, longer sales cycles and longer payment cycles,
especially in emerging markets
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the significant presence of some of our competitors in certain
international markets
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our ability to adapt to sales practices and customer
requirements in different cultures
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political and economic instability, including war and terrorism
or the threat of war and terrorism
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We believe that, over time, a significant portion of our
revenues and costs will continue to be denominated in foreign
currencies. To the extent such denomination in foreign
currencies does occur, gains and losses on the conversion to
United States dollars of accounts receivable, accounts payable
and other monetary assets and liabilities arising from
international operations may contribute to fluctuations in our
results of operations. Although we may in the future decide to
undertake foreign exchange hedging transactions to cover a
portion of our foreign currency transaction exposure, we
currently do not hedge any foreign currency exposure. If we are
not effective in any future foreign exchange hedging
transactions in which we engage, our business, operating results
and financial condition could be harmed.
In addition, compliance with foreign and United States laws and
regulations that are applicable to our international operations
is complex and may increase our cost of doing business in
international jurisdictions, and our international operations
could expose us to fines and penalties if we fail to comply with
these regulations. These laws and regulations include import and
export requirements, United States laws such as the Foreign
Corrupt Practices Act, and local laws prohibiting corrupt
payments to governmental officials. Although we have
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implemented policies and procedures designed to help ensure
compliance with these laws, there can be no assurance that our
employees, partners and other persons with whom we do business
will not take actions in violation of our policies or these
laws. Any violations of these laws could subject us to civil or
criminal penalties, including substantial fines or prohibitions
on our ability to offer our products and services to one or more
countries, and could also materially damage our reputation, our
brand and our international expansion efforts.
Our failure to manage any of these risks successfully could harm
our international operations and reduce our international sales.
If new industry standards emerge or if we are unable to
respond to rapid technological changes, demand for our software
platform may be adversely affected.
We believe that our future success will depend in large part on
our ability:
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to support current and future industry standards, including
databases and operating systems
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to maintain technological competiveness and meet an expanding
range of customer requirements
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to introduce new products and features for our customers
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The emergence of new industry standards in related fields may
adversely affect the demand for our existing software platform.
This could happen, for example, if new technologies emerged that
were incompatible with customer deployments of our software
platform. We currently support Open Database Connectivity, or
ODBC, and Object Linking and Embedding Database, or OLEDB,
standards in database access technology. If we are unable to
adapt our software platform on a timely basis to new standards
in database access technology, the ability of our software
platform to access customer databases could be impaired. In
addition, the emergence of new server operating systems
standards could adversely affect the demand for our existing
software platform. Our platform currently requires the Windows
Server operating system when deployed on a server, as used in
most multi-user deployments. If customers are unwilling to use
Windows Server, we may not be able to achieve compatibility on a
timely basis or without substantial research and development and
support expense. We currently support all generally available
client operating systems that run industry standard web
browsers, but we cannot assure you that we will be able to
support future client operating systems and web browsers in a
timely and cost-effective manner, if at all.
The markets for our software platform and services are also
characterized by rapid technological and customer requirement
changes. In particular, our technology is optimized for servers
utilizing the x86 and x64 families of microprocessors. If the
speed and performance of these microprocessor families do not
continue to increase at the rates we anticipate, our software
may not attain the performance speed and capabilities that we
expect. Also if a different microprocessor architecture were to
gain widespread acceptance in server applications, we may not be
able to achieve compatibility on a timely basis or without
substantial research and development and support expense.
Difficulty by us in achieving compatibility with a different
microprocessor architecture or other technological change or in
satisfying changing customer requirements could render our
existing and future products obsolete and unmarketable. As a
result, we may not be able to accurately predict the lifecycle
of our software platform and services, and they may become
obsolete before we receive the amount of revenues that we
anticipate from them.
Business intelligence software is inherently complex. The
development and testing of new products and product enhancements
can require significant research and development expenditures.
As a result, substantial delays in the general availability of
such new releases or significant problems in the installation or
implementation of such new releases could harm our business,
operating results and financial condition. We may not
successfully develop and market product enhancements or new
products that respond to technological change or new customer
requirements. Even if we introduce a new product, we may
experience a decline in revenues of our existing products that
is not fully matched by the new products revenue. For
example, customers may delay making purchases of a new product
to make a more thorough evaluation of the product, or until
industry and marketplace reviews become widely available. In
addition, we may lose existing customers who choose a
competitors product rather than migrate to our new
product. This could result in a temporary or permanent revenue
shortfall and harm our business.
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Our business depends on customers renewing their annual
maintenance contracts and our ability to collect renewal
fees.
Any decline in maintenance renewals could harm our future
operating results. We sell our software platform pursuant to a
perpetual license with a fixed upfront fee which ordinarily
includes one year of maintenance as part of the initial price.
Our customers have no obligation to renew their maintenance
agreements after the expiration of this initial period, and they
may not renew these agreements. We may be unable to predict
future customer renewal rates accurately. Our customers
renewal rates may decline or fluctuate as a result of a number
of factors, including their level of satisfaction with our
software platform, the prices of our software platform, the
prices of products and services offered by our competitors or
reductions in our customers spending levels. If our
customers do not renew their maintenance and support
arrangements or if they renew them on less favorable terms, our
revenue may decline and our business will suffer. A substantial
portion of our quarterly maintenance revenue is attributable to
maintenance and support agreements entered into during previous
quarters. As a result, if there is a decline in renewed
maintenance agreements in any one quarter, only a small portion
of the decline will be reflected in our maintenance revenue
recognized in that quarter and the rest will be reflected in our
maintenance revenue recognized in the following four quarters or
more. In addition, we may have difficulties collecting renewal
fees from our customers, especially in regards to customers
located in emerging international markets. If we are unable to
collect renewal fees from customers, our business will be harmed.
Our software platform could contain undetected errors, or
bugs, which could cause problems with product performance and
which could in turn reduce demand for our software platform,
reduce our revenue and lead to product liability claims against
us.
Software products like ours, which consist of hundreds of
thousands of lines of code and incorporate licensed software
from third parties, may contain errors
and/or
defects. Although we test our software extensively, we have in
the past discovered software errors in our products after their
introduction. Despite testing by us and by our current and
potential customers, errors may be found in new products or
releases after commercial shipment or deployment begins. This
could result in lost revenue, damage to our reputation or delays
in market acceptance which could harm our business, operating
results and financial condition. We may also have to expend
resources to correct these defects.
Our license agreements with customers typically contain
provisions designed to limit our exposure to product liability,
warranty and other claims. It is possible, however, that these
provisions may not be effective as a result of existing or
future laws of certain domestic or international jurisdictions
or unfavorable judicial decisions in such jurisdictions, and we
may be exposed to product liability, warranty and other claims.
If these claims are made, our potential exposure may be
substantial given the use of our products in business-critical
applications. A successful product liability claim against us
could harm our business, operating results and financial
condition.
We face intense competition which may lead to reduced
revenue and loss of market share.
The markets for business intelligence software, analytical
applications and information management are intensely
competitive and subject to rapidly changing technology and
evolving standards. In addition, many companies in these markets
are offering, or may soon offer, products and services that may
compete with our software platform.
We face competitors in several broad categories, including
business intelligence software, analytical processes, query,
search and reporting tools. We compete with large software
corporations, including suppliers of enterprise resource
planning software that provide one or more capabilities that are
competitive with our products, such as IBM (which acquired
Cognos in 2008), Microsoft, Oracle (which acquired Hyperion
Solutions in 2007) and SAP AG (which acquired Business
Objects in 2008), and with open source business intelligence
vendors, including Pentaho and JasperSoft. Open source software
is software that is made widely available by its authors and is
licensed as is for a nominal fee or, in some cases,
at no charge. As the use of open source software becomes more
widespread, certain open source technology could become
competitive with our proprietary technology, which could cause
sales of our products to decline or force us to reduce the fees
we charge for our products. We also compete, or may increasingly
in the future compete, with various independent competitors that
are primarily
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focused on business intelligence products, such as Actuate,
Information Builders, MicroStrategy, the SAS Institute and
TIBCO. We expect additional competition as other established and
emerging companies or open source vendors enter the business
intelligence software market and new products and technologies
are introduced.
Many of our competitors have longer operating histories,
significantly greater financial, technical, marketing or other
resources and greater name recognition than we do. In addition,
many of our competitors have strong relationships with current
and potential customers and extensive knowledge of the business
intelligence industry. As a result, they may be able to respond
more quickly to new or emerging technologies and changes in
customer requirements or devote greater resources to the
development, promotion and sale of their products than us.
Increased competition may lead to price cuts, fewer customer
orders, reduced gross margins, longer sales cycles and loss of
market share. We may not be able to compete successfully against
current and future competitors, and our business, operating
results and financial condition will be harmed if we fail to
meet these competitive pressures.
Current and future competitors may also make strategic
acquisitions or establish cooperative relationships among
themselves or with others. By doing so, these competitors may
increase their ability to meet the needs of our potential
customers. Our current or prospective indirect channel partners
may establish cooperative relationships with our current or
future competitors. These relationships may limit our ability to
sell our software platform through specific distribution
channels. Accordingly, new competitors or alliances among
current and future competitors may emerge and rapidly gain
significant market share. These developments could limit our
ability to obtain revenues from new customers and to maintain
technical support revenues from our installed customer base. If
we are unable to compete successfully against current and future
competitors, our business, operating results and financial
condition would be harmed.
If customers demand business intelligence software to be
provided via a software as a service business model,
our business could be harmed.
Software as a service, or SaaS, is a model of software
deployment where a software provider typically licenses an
application to customers for use as a service on demand through
web browser technologies. A SaaS business model can require a
vendor to undertake substantial capital investments and related
sales and support resources and personnel. If customers were to
require business intelligence software like QlikView to be
provided via a SaaS deployment, we would need to undertake these
investments in order to implement this alternative business
model. In addition, we would be obligated to apply new revenue
recognition policies. Even if we undertook these investments, we
may be unsuccessful in implementing a SaaS business model. These
factors could harm our business, operating results and financial
condition.
If we fail to develop our brand cost-effectively, our
business may be harmed.
We believe that developing and maintaining awareness and
integrity of our brand in a cost effective manner are important
to achieving widespread acceptance of our existing and future
products and are important elements in attracting new customers.
We believe that the importance of brand recognition will
increase as competition in our market further intensifies.
Successful promotion of our brand will depend on the
effectiveness of our marketing efforts and on our ability to
provide reliable and useful products at competitive prices.
Brand promotion activities may not yield increased revenue, and
even if they do, the increased revenue may not offset the
expenses we incur in building our brand. We also rely on our
customer base and community of end-users in a variety of ways,
including to give us feedback on our products and to provide
user-based support to our other customers. If we fail to promote
and maintain our brand successfully or to maintain loyalty among
our customers and QlikCommunity, our user community, or if we
incur substantial expenses in an unsuccessful attempt to promote
and maintain our brand, we may fail to attract new customers or
to retain our existing customers and our business may be harmed.
If we are unable to manage our growth effectively, our
revenues and profits could be adversely affected.
We have recently expanded our operations and employee headcount
significantly, and we anticipate that further significant
expansion will be required. Our future operating results depend
to a large extent on our ability to manage this expansion and
growth successfully. Sustaining our growth will place
significant demands on our management as well as on our
administrative, operational and financial resources. To manage
our growth, we must
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continue to improve our operational, financial and management
information systems and expand, motivate and manage our
workforce. If we are unable to manage our growth successfully
without compromising our quality of service and our profit
margins, or if new systems that we implement to assist in
managing our growth do not produce the expected benefits, our
revenues and profits could be harmed. Risks that we face in
undertaking future expansion include:
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training new personnel to become productive and generate revenue
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controlling expenses and investments in anticipation of expanded
operations
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implementing and enhancing our administrative infrastructure,
systems and processes
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addressing new markets
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expanding operations in the United States and new international
regions
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A failure to manage our growth effectively could harm our
ability to market and sell our software platform and maintenance
services.
If we are unable to recruit or retain skilled personnel,
or if we lose the services of any of our key personnel, our
business, operating results and financial condition could be
harmed.
Our future success depends on our continuing ability to attract,
train and retain highly skilled personnel, and we face intense
competition for these employees. We may not be able to retain
our current key employees or attract, train or retain other
highly skilled personnel in the future. If we lose the services
of one or all of these individuals, or if we are unable to
attract, train and retain the highly skilled personnel we need,
our business, operating results and financial condition could be
harmed.
Future product development is dependent on adequate
research and development resources.
In order to remain competitive, we must continue to develop new
products, applications and enhancements to our existing software
platform. This is particularly true as we further expand our
product capabilities. Maintaining adequate research and
development resources, such as the appropriate personnel, talent
and development technology, to meet the demands of the market is
essential. Our research and development organization is located
in Lund, Sweden, and we may have difficulty hiring suitably
skilled personnel in this region or expanding our research and
development organization to facilities located in other
geographic locations. In addition, many of our competitors
expend a considerably greater amount on their respective
research and development programs. Our failure to maintain
adequate research and development resources or to compete
effectively with the research and development programs of our
competitors would present an advantage to such competitors.
Further, if we are unable to develop products internally due to
certain constraints, such as high employee turnover, lack of
management ability or a lack of other development resources,
this may force us to expand into a certain market or strategy
via an acquisition for which we could potentially pay too much
or unsuccessfully integrate into our operations.
If we fail to offer high quality customer support, our
business would suffer.
Once our software platform and solutions are deployed to our
customers, our customers rely on our support services to resolve
any related issues. High quality customer support is important
for the successful marketing and sale of our software platform
and services and for the renewal of existing customers. The
importance of high quality customer support will increase as we
expand our business and pursue new enterprise customers. If we
do not help our customers quickly resolve post-deployment issues
and provide effective ongoing support, our ability to sell our
software platform and services to existing customers would
suffer and our reputation with existing or potential customers
would be harmed. Also, our maintenance agreements contain
service level agreements under which we guarantee specified
response times. If we fail to meet our service level obligations
under these agreements, we may be subject to penalties which
could result in higher than expected costs, decreased revenue
and decreased operating margins.
We currently utilize a combination of internal support personnel
and third party support organizations, and we cannot assure you
that actions taken or not taken by our third party support
organization will not harm our reputation
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or business. As we expand our sales, we will be required to
engage and train additional support personnel and resources.
Further, our support organization will face additional
challenges as we enter new international markets, including
challenges associated with delivering support, training and
documentation in languages required by new customers. If we fail
to maintain high quality customer support or to grow our
internal and external support organization to match any future
sales growth, our business will suffer.
If we overestimate revenue, we may be unable to reduce our
expenses to avoid or minimize harm to our results of
operations.
Our revenues are difficult to forecast and are likely to
fluctuate significantly from period to period. We base our
operating expense budgets on expected revenue trends, and many
of our expenses, such as office and equipment leases and
personnel costs, will be relatively fixed in the short term and
will increase over time as we make investments in our business.
Our estimates of sales trends may not correlate with actual
revenues in a particular quarter or over a longer period of
time. Variations in the rate and timing of conversion of our
sales prospects into actual licensing revenues could cause us to
plan or budget inaccurately and those variations could adversely
affect our financial results. In particular, delays, reductions
in amount or cancellation of customers purchases or an
increase in the number of customers exercising our
30-day money
back guarantee on our software platform would adversely affect
the overall level and timing of our revenues, and our business,
results of operations and financial condition could be harmed.
Due to the relatively fixed nature of many of our expenses, we
may be unable to adjust spending quickly enough to offset any
unexpected revenue shortfall.
In the course of our sales to customers, we may encounter
difficulty collecting accounts receivable and could be exposed
to risks associated with uncollectible accounts receivable. In
the event we are unable to collect on our accounts receivable,
it could negatively affect our cash flows, operating results and
business.
Our methodologies and software solutions may infringe the
intellectual property rights of third parties or be found to
contain unexpected open source software, and this may create
liability for us or otherwise harm our business.
Third parties may claim that our current or future products
infringe their intellectual property rights, and such claims may
result in legal claims against our customers and us. These
claims may damage our reputation, harm our customer
relationships and create liability for us. We expect the number
of such claims will increase as the number of products and the
level of competition in our industry segments grow, the
functionality of products overlap and the volume of issued
software patents and patent applications continues to increase.
We generally agree in our customer contracts to indemnify
customers for expenses or liabilities they incur as a result of
third party intellectual property infringement claims associated
with our products or services. To the extent that any claim
arises as a result of third party technology we have licensed
for use in our product, we may be unable to recover from the
appropriate third party any expenses or other liabilities that
we incur.
In addition, software products like ours that contain thousands
of lines of software code at times incorporate open source
software code. The use of open source software code is typically
subject to varying forms of software licenses, called copyleft
or open source licenses. These types of licenses may require
that any person who creates a software product that
redistributes or modifies open source software that was subject
to an open source license must also make their own software
product subject to the same open source license. This can lead
to a requirement that the newly created software product be
provided free of charge or be made available or distributed in
source code form. Although we do not believe our software
includes any open source software that would result in the
imposition of any such requirement on portions of our software
product, our software could be found to contain this type of
open source software.
Responding to any infringement claim, regardless of its
validity, or discovering open source software in our product
could harm our business, operating results and financial
condition, by, among other things:
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resulting in time-consuming and costly litigation
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diverting managements time and attention from developing
our business
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requiring us to pay monetary damages or enter into royalty and
licensing agreements that we would not normally find acceptable
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causing product shipment or deployment delays
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requiring us to stop selling certain of our products
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requiring us to redesign certain of our products using
alternative non-infringing or non-open source technology or
practices, which could require significant effort and expense
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requiring us to disclose our software source code, the detailed
program commands for our software program
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requiring us to satisfy indemnification obligations to our
customers
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Our intellectual property rights are valuable, and any
inability to protect them could reduce the value of our software
platform, services and brand.
We currently have three issued United States patents and one
pending United States patent expiring at various times ranging
from 2015 to 2029 and 17 issued and eight pending foreign
patents expiring at various times ranging from 2015 to 2029. We
rely on a combination of copyright, trademark, patent, trade
secrets, confidentiality procedures and contractual commitments
to protect our proprietary information. For example, we license
our software pursuant to click-wrap or signed license agreements
that impose certain restrictions on a licensees ability to
utilize the software. We also seek to avoid disclosure of our
intellectual property, including by requiring those persons with
access to our proprietary information to execute confidentiality
agreements with us and by restricting access to our source code.
Despite our efforts, these measures can only provide limited
protection. Unauthorized third parties may try to copy or
reverse engineer portions of our software platform or may
otherwise obtain and use our intellectual property. Any patents
owned by us may be invalidated, circumvented or challenged. Any
of our pending or future patent applications, whether or not
being currently challenged, may not be issued with the scope of
the claims we seek, if at all. Legal standards relating to the
validity, enforceability and scope of protection of intellectual
property rights in other countries are uncertain and may afford
little or no effective protection for our services, software,
methodology and other proprietary rights. Consequently, we may
be unable to prevent our intellectual property rights from being
exploited abroad, which could require costly efforts to protect
them. Policing the unauthorized use of our proprietary rights is
expensive, difficult and, in some cases, impossible. Litigation
may be necessary in the future to enforce or defend our
intellectual property rights, to protect our trade secrets or to
determine the validity and scope of the proprietary rights of
others. Such litigation could result in substantial costs and
diversion of management resources, either of which could harm
our business. Accordingly, despite our efforts, we may not be
able to prevent third parties from infringing upon or
misappropriating our intellectual property. If we cannot protect
our proprietary technology against unauthorized copying or use,
we may not remain competitive.
Furthermore, many of our current and potential competitors have
the ability to dedicate substantially greater resources to
developing and protecting their technology or intellectual
property rights than we do. In addition, our attempts to protect
our proprietary technology and intellectual property rights may
be further limited as our employees may be recruited by our
current or future competitors and may take with them significant
knowledge of our proprietary information. Consequently, others
may develop services and methodologies that are similar or
superior to our services and methodologies or may design around
our intellectual property.
Computer hackers may damage our systems,
services and products, and breaches of data protection could
impact our business.
Computer programmers and hackers may be able to penetrate our
network security and misappropriate our confidential information
or that of third parties, create system disruptions or cause
interruptions or shutdowns of our internal systems and services.
If successful, any of these events could damage our computer
systems or those of our customers and could disrupt or prevent
us from providing timely maintenance and support for our
software platform. Computer programmers and hackers also may be
able to develop and deploy viruses, worms and other malicious
software programs that attack our products or otherwise exploit
any security vulnerabilities of our
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products. The costs to us to eliminate or alleviate security
problems, bugs, viruses, worms, malicious software programs and
security vulnerabilities could be significant, and the efforts
to address these problems could result in interruptions, delays,
cessation of service and loss of existing or potential customers
and may impede our sales, manufacturing, distribution and other
critical functions.
In the course of our regular business operations and providing
maintenance and support services to our customers, we process
and transmit proprietary information and sensitive or
confidential data, including personal information of employees,
customers and others. Breaches in security could expose us, our
customers or the individuals affected to a risk of loss or
misuse of this information, which could result in potential
regulatory actions, litigation and potential liability for us,
as well as the loss of existing or potential customers and
damage to our brand and reputation.
Our business could be harmed as a result of the risks
associated with our acquisitions.
As part of our business strategy, we may from time to time seek
to acquire businesses that provide us with additional
intellectual property, customer relationships and geographic
coverage. We can provide no assurances that we will be able to
find and identify desirable acquisition targets or that we will
be successful in entering into a definitive agreement with any
one target. In addition, even if we reach a definitive agreement
with a target, there is no assurance that we will complete any
future acquisition.
Any acquisitions we undertake will likely be accompanied by
business risks which may include, among other things:
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the effect of the acquisition on our financial and strategic
position and reputation
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the failure of an acquisition to result in expected benefits,
which may include benefits relating to enhanced revenues,
technology, human resources, costs savings, operating
efficiencies, goodwill and other synergies
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the difficulty, cost and management effort required to integrate
the acquired businesses, including costs and delays in
implementing common systems and procedures and costs and delays
caused by communication difficulties
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the assumption of certain known or unknown liabilities of the
acquired business, including litigation-related liabilities
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the reduction of our cash available for operations and other
uses, the increase in amortization expense related to
identifiable assets acquired, potentially dilutive issuances of
equity securities or the incurrence of debt
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a lack of experience in new markets, new business culture,
products or technologies or an initial dependence on unfamiliar
distribution partners
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the possibility that we will pay more than the value we derive
from the acquisition
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the impairment of relationships with customers, partners or
suppliers of the acquired business or our customers
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the potential loss of key employees of the acquired company
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These factors could harm our business, results of operations or
financial condition.
In addition to the risks commonly encountered in the acquisition
of a business as described above, we may also experience risks
relating to the challenges and costs of closing a transaction.
The risks described above may be exacerbated as a result of
managing multiple acquisitions at once.
Business disruptions could affect our operating
results.
A significant portion of our research and development activities
and certain other critical business operations are concentrated
at a single facility in Sweden. We are also a highly automated
business and a disruption or failure of our systems could cause
delays in completing sales and providing services. A major
natural disaster, fire, act of terrorism or other catastrophic
event that results in the destruction or disruption of any of
our critical business
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operations or information technology systems could severely
affect our ability to conduct normal business operations and, as
a result, our future operating results could be harmed.
Future litigation could harm our results of operation and
financial condition.
In addition to intellectual property litigation, from time to
time, we may be subject to other litigation. We record a related
liability when we can make a reasonable estimate of the
liability relating to pending litigation and determine that it
is probable. As additional information becomes available, we
assess the potential liability and revise estimates as
appropriate. However, because of uncertainties relating to
litigation, the amount of our estimates could be wrong. In
addition to the related cost and use of cash, pending or future
litigation could cause the diversion of managements
attention and resources.
We will incur significant increased costs as a result of
operating as a public company.
We have never operated as a public company. As a public company,
we will incur significant legal, accounting and other expenses
that we did not incur as a private company. In addition, the
Sarbanes-Oxley Act of 2002, as well as rules subsequently
implemented by the Securities and Exchange Commission (SEC) and
the Nasdaq Global Market impose various requirements on public
companies, including requirements with respect to corporate
governance practices. Our management and other personnel will
need to devote a substantial amount of time to these compliance
initiatives. Moreover, these rules and regulations will increase
our legal and financial compliance costs and will make some
activities more time-consuming and costly. For example, we
expect these rules and regulations to make it more difficult and
more expensive for us to obtain director and officer liability
insurance, and we may be required to accept reduced policy
limits and coverage or incur substantial costs to maintain the
same or similar coverage. These rules and regulations could also
make it more difficult for us to attract and retain qualified
persons to serve on our board of directors, our board committees
or as executive officers.
We may need additional capital in the future and it may
not be available on acceptable terms, if at all.
We have historically relied on outside financing and cash flow
from operations to fund our operations, capital expenditures and
expansion. However, we may require additional capital in the
future to fund our operations and acquisitions, finance
investments in equipment or personnel or respond to competitive
pressures. We cannot assure you that additional financing will
be available on terms acceptable to us. In addition, the terms
of available financing may place limits on our financial and
operational flexibility. If we are unable to obtain sufficient
capital in the future, we may not be able to continue to meet
customer demand for service quality, availability and
competitive pricing. We also may be forced to reduce our
operations or may not be able to expand or acquire complementary
businesses, develop new services or otherwise respond to
changing business conditions or competitive pressures.
Prolonged economic uncertainties or downturns could
materially harm our business.
Current or future economic downturns could harm our business and
results of operations. Negative trends in the general economy
both in the United States and abroad, including trends resulting
from actual or threatened military action by the United States,
terrorist attacks on the United States, Europe or elsewhere, and
financial and credit market fluctuations, could cause a decrease
in corporate spending on business intelligence software in
general and negatively affect the rate of growth of our business.
General worldwide economic conditions have experienced a
significant downturn. These conditions make it extremely
difficult for our customers and us to accurately forecast and
plan future business activities, and they could cause our
customers to slow spending on our products and services, which
would delay and lengthen sales cycles. Furthermore, during
challenging economic times our customers may face issues in
gaining timely access to sufficient credit, which could result
in an impairment of their ability to make timely payments to us.
If that were to occur, we may be required to increase our
allowance for doubtful accounts and our results would be harmed.
We maintain operating bank accounts at financial institutions in
the United States, Sweden and other regions. In particular, a
significant amount of our cash balances in the United States and
Sweden are in excess of the insurance limits of the United
States governments Federal Deposit Insurance Corporation
(FDIC) and Swedish governments Swedish Deposit Insurance
Scheme (Insättningsgarantin). The FDIC insures deposits in
most banks and savings associations located in the United States
and protects depositors against the loss of their deposits if an
FDIC-insured bank or savings association fails, subject to
specified monetary ceilings. Similarly, the Swedish
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Deposit Insurance Scheme is a state-provided guarantee of
deposits in accounts at Swedish banks, subject to specified
monetary ceilings. We could incur substantial losses if the
underlying financial institutions in these or other regions fail
or are otherwise unable to return our deposits.
We have a significant number of customers in the consumer
products and services, manufacturing and financial services
industries. A substantial downturn in these industries may cause
firms to react to worsening conditions by reducing their capital
expenditures in general or by specifically reducing their
spending on information technology. Customers in these
industries may delay or cancel information technology projects
or seek to lower their costs by renegotiating vendor contracts.
Also, customers with excess information technology resources may
choose to develop in-house software solutions rather than obtain
those solutions from us. Moreover, competitors may respond to
market conditions by lowering prices and attempting to lure away
our customers. In addition, the increased pace of consolidation
in certain industries may result in reduced overall spending on
our products.
We cannot predict the timing, strength or duration of any
economic slowdown or recovery, generally or in the consumer
products and services, manufacturing and financial services
industries. If the economic condition of the general economy or
markets in which we operate worsen from present levels, our
business, financial condition and results of operations could be
harmed.
If we fail to establish and maintain proper and effective
internal control over financial reporting, our operating results
and our ability to operate our business could be harmed.
The Sarbanes-Oxley Act requires, among other things, that we
establish and maintain effective internal control over financial
reporting and disclosure controls and procedures. If this
offering were to become effective in 2010, under the SECs
current rules, beginning with the year ending December 31,
2011, we would be required to perform system and process
evaluation and testing of our internal control over financial
reporting to allow management to report on the effectiveness of
our internal control over financial reporting, as required by
Section 404 of the Sarbanes-Oxley Act. Our independent
registered public accounting firm will also be required to
report on our internal control over financial reporting. Our
testing and our auditors testing may reveal deficiencies
in our internal control over financial reporting that are deemed
to be material weaknesses and render our internal control over
financial reporting ineffective. Due to the extent of our
international operations, our financial reporting requires
substantial international activities, resources and reporting
consolidation. We expect to incur substantial accounting and
auditing expense and to expend significant management time in
complying with the requirements of Section 404. If we are
not able to comply with the requirements of Section 404 in
a timely manner, or if we or our independent registered public
accounting firm identify deficiencies in our internal control
over financial reporting that are deemed to be material
weaknesses, the market price of our stock could decline and we
could be subject to investigations or sanctions by the SEC,
FINRA or other regulatory authorities. In addition, we could be
required to expend significant management time and financial
resources to correct any material weaknesses that may be
identified or to respond to any regulatory investigations or
proceedings.
We
have previously identified material weaknesses in our internal
control over financial reporting, and if we are unable to
achieve and maintain effective internal control over financial
reporting, this could have a material adverse effect on our
business and common stock price.
We produce our consolidated financial statements in accordance
with the requirements of United States generally accepted
accounting principles, or GAAP, but our internal accounting
controls may not currently meet all standards applicable to
companies with publicly traded securities. Effective internal
controls are necessary for us to provide reliable financial
reports to help mitigate the risk of fraud and to operate
successfully as a publicly traded company.
In connection with the preparation of our consolidated financial
statements for the year ended December 31, 2009, we
identified a material weakness in the design and operation of
our internal controls over financial reporting relating to the
accounting for expenses in one of our European operating
subsidiaries. A material weakness is defined as a deficiency, or
a combination of deficiencies, in internal control over
financial reporting, such that there is a reasonable possibility
that a material misstatement of a companys annual or
interim financial statements will not be prevented or detected
on a timely basis by the companys internal controls.
Specifically, we determined that
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we had insufficient reconciliation and oversight of our
accounting for accrued and prepaid expenses in one of our
European operating subsidiaries during our financial statement
close process which would have resulted in the overstatement of
our assets and liabilities in the consolidated balance sheet and
an overstatement of operating expenses and understatement of net
income. During 2010 we have implemented procedures and controls
designed to improve communication and overview of financial
reporting by our geographic territories, including the affected
operating subsidiary noted above, during our reporting
consolidation processes. These procedures and controls include a
monthly review of each of our territorys financial results
by financial controllers outside of the respective territory;
increased communications, including monthly videoconferences
among all regional financial controllers to address any material
topics; and a quarterly requirement for all reporting
territories to provide detailed commentary and analysis of
material balance sheet positions and operating results for
internal review purposes. We believe we will have remediated
this material weakness by June 30, 2010. In addition, our
plans include the expansion of our finance staff in the affected
territory with the hiring of a local senior financial executive
which is currently in process.
In connection with the preparation of our consolidated financial
statements for the year ended December 31, 2008, we
identified a material weakness in our formal financial statement
closing process. We remediated this material weakness during
2009 by implementing additional controls, including increasing
our corporate accounting staff, implementing additional system
controls and establishing a formalized closing calendar.
Although we believe we have addressed the internal control
deficiencies that led to the material weaknesses, the measures
we have taken may not be effective given our global operations
and distribution capabilities in over 100 countries, and we may
not be able to implement and maintain effective internal control
over financial reporting in the future. If we have material
weaknesses in the future, it could affect the financial results
that we report or create a perception that those financial
results do not fairly state our financial condition or results
of operations. Either of those events could have an adverse
effect on the value of our common stock.
Our results of operations may be adversely affected by
changes in or interpretations of accounting standards.
We prepare our consolidated financial statements in conformity
with accounting principles generally accepted in the United
States. These principles are subject to interpretation by the
SEC and various bodies formed to interpret and create
appropriate accounting standards. Our accounting policies that
recently have been or may be affected by changes in the
accounting rules are as follows:
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software revenue recognition
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accounting for income taxes
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accounting for business combinations and related goodwill
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accounting for stock issued to employees
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assessing fair value of financial and non-financial assets
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application, if any, of international financial reporting
standards (IFRS)
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We continuously review our compliance with all new and existing
revenue recognition accounting pronouncements. Depending upon
the outcome of these ongoing reviews and the potential issuance
of further accounting pronouncements, implementation guidelines
and interpretations, we may be required to modify our reported
results, revenue recognition policies or business practices
which could harm our results of operations.
Our results of operations could be harmed by changes in
tax rates or negative tax rulings.
We are subject to taxes in the United States and a variety of
foreign jurisdictions. All of these jurisdictions have in the
past and may in the future make changes to their corporate
income tax rates and other income tax laws which could increase
our future income tax provision.
Our future income tax obligations could be affected by earnings
that are lower than anticipated in jurisdictions where we have
lower statutory rates and by earnings that are higher than
anticipated in jurisdictions where we have higher statutory
rates, by changes in the valuation of our deferred tax assets
and liabilities, changes in the amount of unrecognized tax
benefits under FASB ASC Topic No. 740, Income Taxes,
or by changes in tax laws, regulations, accounting principles or
interpretations thereof.
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Our determination of our tax liability is subject to review by
applicable United States and foreign tax authorities. Any
adverse outcome of such a review could harm our operating
results and financial condition. The determination of our
worldwide provision for income taxes and other tax liabilities
requires significant judgment and, in the ordinary course of
business, there are many transactions and calculations where the
ultimate tax determination is uncertain. Moreover, as a
multinational business, we have subsidiaries that engage in many
intercompany transactions in a variety of tax jurisdictions
where the ultimate tax determination is uncertain.
As a result of these and other factors, the ultimate amount of
tax obligations owed may differ from the amounts recorded in our
financial statements and any such difference may harm our
financial results in future periods in which we change our
estimates of our tax obligations or in which the ultimate tax
outcome is determined.
Risks
Related to this Offering
An active trading market for our common stock may not
develop.
Prior to this offering, there has been no public market for our
common stock. Although we anticipate that our common stock will
be approved for listing on the Nasdaq Global Market, an active
trading market for our shares may never develop or be sustained
following this offering. The initial public offering price for
our common stock will be determined by negotiation between the
representatives of the underwriters and us. This initial public
offering price may vary from the market price of our common
stock after the offering. Investors may not be able to sell
their common stock at or above the initial public offering
price. In addition, an inactive market may impair our ability to
raise capital by selling shares and may impair our ability to
acquire other companies or technologies by using our shares as
consideration, which, in turn, could harm our business.
If securities or industry analysts do not publish research
or reports or publish unfavorable research or reports about our
business, our stock price and trading volume could
decline.
The trading market for our common stock will depend in part on
the research and reports that securities or industry analysts
publish about us, our business, our market or our competitors.
We do not currently have and may never obtain research coverage
by securities and industry analysts. If no securities or
industry analysts commence coverage of our company, the trading
price for our stock could be negatively impacted. In the event
we obtain securities or industry analyst coverage, if one or
more of the analysts who covers us downgrades our stock, our
stock price would likely decline. If one or more of these
analysts ceases to cover us or fails to regularly publish
reports on us, interest in our stock could decrease which could
cause our stock price or trading volume to decline.
The price of our common stock may be volatile and
fluctuate substantially which could result in substantial losses
for investors purchasing shares in this offering.
The initial public offering price for the shares of our common
stock sold in this offering will be determined by negotiation
between the representatives of the underwriters and us. This
price may not reflect the market price of our common stock
following this offering. In addition, the market price of our
common stock is likely to be highly volatile and may fluctuate
substantially due to the following factors (in addition to the
other risk factors described in this section):
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quarterly variations in our results of operations or those of
our competitors
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announcements by us or our competitors of acquisitions, new
products, significant contracts or commercial relationships
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our ability to respond to changing industry standards,
technological developments or customer requirements on a timely
basis
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commencement of, or our involvement in, litigation
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any major change in our board of directors or management
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recommendations by securities analysts or changes in earnings
estimates
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announcements about our earnings that are not in line with
analyst expectations
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announcements by our competitors of their earnings that are not
in line with analyst expectations
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the volume of shares of our common stock available for public
sale
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sales of stock by us or by our stockholders
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short sales, hedging and other derivative transactions involving
shares of our common stock
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adoption of new accounting standards affecting the software
industry
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general economic conditions in the United States and abroad and
slow or negative growth of related markets
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general political conditions in the United States and abroad,
including terrorist attacks, war or threat of terrorist attacks
or war
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In addition, the stock market in general, and the Nasdaq Global
Market and the market for technology companies in particular,
have experienced extreme price and volume fluctuations that have
often been unrelated or disproportionate to the operating
performance of the particular companies affected. These broad
market and industry factors may materially harm the market price
irrespective of our operating performance. As a result of these
factors, you might be unable to resell your shares at or above
the initial public offering price after this offering. In
addition, in the past, following periods of volatility in the
overall market and the market price of a companys
securities, securities class action litigation has often been
instituted against the affected company. This type of
litigation, if instituted against us, could result in
substantial costs and a diversion of our managements
attention and resources.
We currently do not intend to pay dividends on our common
stock, and consequently, your only opportunity to achieve a
return on your investment is if the price of our common stock
appreciates and you sell your shares at a price above your
cost.
We currently do not intend to declare or pay dividends on shares
of our common stock in the foreseeable future. See
Dividend Policy for more information. Consequently,
your only opportunity to achieve a return on your investment in
our company will be if the market price of our common stock
appreciates and you sell your shares at a price above your cost.
There is no guarantee that the price of our common stock will
ever exceed the price that you pay.
A substantial number of shares of our common stock could
be sold into the public market shortly after this offering,
which could depress our stock price.
The market price of our common stock could decline as a result
of sales by our existing stockholders of shares of common stock
in the market after this offering or the perception that these
sales could occur. Once a trading market develops for our common
stock, many of our stockholders will have an opportunity to sell
their stock for the first time. These factors could also make it
difficult for us to raise additional capital by selling stock.
Please see the section entitled Shares Eligible for
Future Sale for more information regarding these factors.
As a
new investor, you will incur immediate and substantial dilution
as a result of this offering.
The initial public offering price of our common stock will be
substantially higher than the pro forma as adjusted net tangible
book value per share of our outstanding common stock.
Accordingly, if you purchase shares of our common stock at the
assumed initial public offering price (the midpoint of the range
set forth on the cover page of this prospectus), you will incur
immediate and substantial dilution of
$ per share. If the holders of
outstanding options or warrants exercise those options or
warrants, you will suffer further dilution. See
Dilution for more information.
Our management will have broad discretion over the use of
the proceeds we receive in this offering and might not apply the
proceeds in ways that increase the value of your
investment.
Our management will have broad discretion to use the net
proceeds from this offering and you will be relying on the
judgment of our management regarding the application of these
proceeds. They might not apply the net proceeds of this offering
in ways that increase the value of your investment. We expect to
use the net proceeds from this offering for repayment of
outstanding debt and general corporate purposes, including
working capital, capital expenditures, acquisitions and further
development of our services and solutions. We have not allocated
these net
25
proceeds for any specific purposes. Our management might not be
able to yield any return on the investment and use of these net
proceeds. You will not have the opportunity to influence our
decisions on how to use the proceeds.
Existing stockholders significantly influence us and could
delay or prevent an acquisition by a third party.
Upon completion of this offering, executive officers, key
employees and directors and their affiliates will beneficially
own, in the aggregate,
approximately % of our outstanding
common stock. As a result, these stockholders will be able to
exercise significant influence over all matters requiring
stockholder approval, including the election of directors and
approval of significant corporate transactions which could have
the effect of delaying or preventing a third party from
acquiring control over us. For information regarding the
ownership of our outstanding stock by our executive officers and
directors and their affiliates, please see Principal and
Selling Stockholders.
Anti-takeover provisions in our certificate of
incorporation and bylaws and in Delaware law could prevent or
delay a change in control of our company.
We are a Delaware corporation, and the anti-takeover provisions
of the Delaware General Corporation Law may discourage, delay or
prevent a change in control by prohibiting us from engaging in a
business combination with an interested stockholder for a period
of three years after the person becomes an interested
stockholder even if a change of control would be beneficial to
our existing stockholders. For more information, see
Description of Capital Stock Anti-Takeover
Effects of Our Certificate of Incorporation, Bylaws and Delaware
Law. In addition, our restated certificate of
incorporation and amended and restated bylaws may discourage,
delay or prevent a change in our management or control over us
that stockholders may consider favorable. Our restated
certificate of incorporation and amended and restated bylaws
which will be in effect as of the closing of this offering:
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authorize the issuance of blank check preferred
stock that could be issued by our board of directors to thwart a
takeover attempt
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do not provide for cumulative voting in the election of
directors which would allow holders of less than a majority of
the stock to elect some directors
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establish a classified board of directors, as a result of which
the successors to the directors whose terms have expired will be
elected to serve from the time of election and qualification
until the third annual meeting following their election
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require that directors only be removed from office for cause
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provide that vacancies on the board of directors, including
newly-created directorships, may be filled only by a majority
vote of directors then in office
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limit who may call special meetings of stockholders
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prohibit stockholder action by written consent, requiring all
actions to be taken at a meeting of the stockholders
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establish advance notice requirements for nominating candidates
for election to the board of directors or for proposing matters
that can be acted upon by stockholders at stockholder meetings
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For information regarding these and other provisions, please see
Description of Capital Stock.
Our
ability to utilize our net operating losses may be limited if
cumulative changes in ownership of our capital stock exceed 50%
during certain periods.
If over a rolling three-year period, the cumulative change in
our ownership exceeds 50%, our ability to utilize our net
operating losses to offset future taxable income may be limited.
We have exceeded this 50% cumulative change threshold during
2000 and 2004. We have not yet determined the amount of the
cumulative change in our ownership resulting from this offering.
The effect of this offering on our cumulative change in
ownership may limit or otherwise negatively affect the benefits
of engaging in financing and other transactions in the future.
Furthermore, it is possible that transactions in our stock that
may not be within our control may cause us to exceed the 50%
cumulative change threshold and may impose a limitation on the
utilization of our net operating losses in the future. In the
event the usage of these net operating losses is subject to
limitation and we are profitable, our future cash flows could be
adversely impacted due to our increased tax liability.
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SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY
DATA
This prospectus contains forward-looking statements. All
statements other than statements of historical fact contained in
this prospectus, including statements regarding our future
results of operations and financial position, business strategy
and plans and objectives of management for future operations,
are forward-looking statements. These statements involve known
and unknown risks, uncertainties and other important factors
that may cause our actual results, performance or achievements
to be materially different from any future results, performance
or achievements expressed or implied by the forward-looking
statements.
In some cases, we identify forward-looking statements by terms
such as may, will, should,
expects, plans, anticipates,
could, intends, target,
projects, contemplates,
believes, estimates,
predicts, potential or
continue or the negative of these terms or other
similar expressions. The forward-looking statements in this
prospectus are only predictions. We have based these
forward-looking statements largely on our current expectations
and projections about future events and financial trends that we
believe may affect our business, financial condition and results
of operations. These forward-looking statements speak only as of
the date of this prospectus and are subject to a number of
risks, uncertainties and assumptions described in the Risk
Factors section and elsewhere in this prospectus. Because
forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified,
you should not rely on these forward-looking statements as
predictions of future events. The events and circumstances
reflected in our forward-looking statements may not occur and
actual results could differ materially from those projected in
our forward-looking statements. We undertake no obligation, and
specifically decline any obligation, to publicly update or
revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
This prospectus also contains statistical data that we obtained
from industry publications and reports. These industry
publications generally indicate that they have obtained their
information from sources believed to be reliable, but do not
guarantee the accuracy and completeness of their information.
Although we have not independently verified the data contained
in these industry publications and reports, based on our
industry experience we believe that the publications are
reliable and the conclusions contained in the publications and
reports are reasonable.
The Gartner report described herein represents data, research
opinion or viewpoints published, as part of a syndicated
subscription service, by Gartner, Inc. (Gartner) and
are not representations of fact. The Gartner report speaks as of
its original publication date (and not as of the date of this
prospectus) and the opinions expressed in the Gartner report are
subject to change without notice.
The following notes set forth the source for the Gartner report
and a description of the term generic business
intelligence project as used in a 2009 IDC report
referenced in the section of this prospectus entitled
Business:
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(1)
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Gartner, Inc. Business Intelligence Purchase Drivers and
Adoption Rates, 2009 Survey Results, Bill Hostmann,
September 4, 2009.
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(2)
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A generic business intelligence project uses
IDCs standard proportions for the elements of software,
services and hardware. This calculation combines these
proportions with the savings QlikView customers made on each
element.
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USE OF
PROCEEDS
We estimate that we will receive net proceeds from the sale of
the common stock that we are offering of approximately
$ million, or approximately
$ million if the underwriters
exercise their right to purchase additional shares of common
stock to cover over-allotments in full, based upon an assumed
initial public offering price of $
per share, which is the midpoint of the range listed on the
cover page of this prospectus, and after deducting estimated
underwriting discounts and commissions and estimated offering
expenses that we must pay. A $1.00 increase (decrease) in the
assumed initial public offering price of
$ per share would increase
(decrease) the net proceeds to us from this offering by
approximately $ million
(assuming the number of shares offered by us as set forth on the
cover page of the prospectus remains the same). We may also
increase or decrease the number of shares we are offering. Each
increase (decrease) of 1,000,000 in the number of shares offered
by us would increase (decrease) the net proceeds to us from this
offering by approximately
$ million, assuming that the
assumed initial public offering price remains the same, and
after deducting the estimated underwriting discounts and
commissions and estimated offering expenses payable by us. We do
not expect that a change in the offering price or the number of
shares by these amounts would have a material effect on our uses
of the net proceeds from this offering, although it may impact
the amount of time prior to which we may need to seek additional
capital. We will not receive any proceeds from the sale of
shares of common stock by the selling stockholders.
We intend to use approximately $6.9 million of the net
proceeds of this offering to repay in full the principal and
accrued interest and to pay any applicable prepayment fee on our
outstanding loan from Stiftelsen Industrifonden, based on
amounts accrued as of December 31, 2009. The loan has an
interest rate of 10% per annum and has a maturity date of March
2012. The loan is subject to a prepayment fee of an amount equal
to interest on the amount prepaid from the date of prepayment
through March 31, 2012 at a rate equal to one-half the
Swedish Reference Rate (0.25% as of December 31, 2009)
applicable on the date of prepayment. We used the net proceeds
of this loan for working capital and general corporate purposes.
We intend to use the remaining net proceeds of this offering for
general corporate purposes, including working capital needs.
While we have not allocated the remaining net proceeds of this
offering to specified general corporate purposes, we may utilize
such proceeds by allocating them amongst the following
categories: expansion of our domestic and international sales
and marketing activities; technology infrastructure to help
increase transaction volume and further enhance our software
products and develop new software solutions; increase awareness
of our solutions and expand our customer base; and development
of marketing, sales and other promotional programs to sell
products to our existing and future customers. We believe
opportunities may exist to expand our current business through
strategic acquisitions and investments in technology, and we may
use a portion of the proceeds for these purposes. We are not
currently a party to any contracts or letters of intent, nor do
we have any arrangements or understandings, with respect to any
strategic acquisitions or investments. The amount of net
proceeds to be utilized for strategic acquisitions has not been
determined.
The expected use of net proceeds of this offering represents our
current intentions based upon our present plans and business
conditions. The amounts we actually expend in these areas may
vary significantly from our current intentions and will depend
upon a number of factors, including future sales growth, success
of our engineering efforts, cash generated from future
operations, if any, and actual expenses to operate our business.
As of the date of this prospectus, we cannot specify with
certainty all of the particular uses for the net proceeds to be
received upon the closing of this offering. Accordingly, our
management will have broad discretion in the application of the
net proceeds, and investors will be relying on the judgment of
our management regarding the application of the net proceeds of
this offering.
Pending the uses described above, we intend to invest the net
proceeds in a variety of capital preservation instruments,
including short-term, interest-bearing, investment grade
instruments, certificates of deposit or direct or guaranteed
obligations of the United States government.
28
DIVIDEND
POLICY
We have never declared or paid any cash dividends on our capital
stock, and we do not currently intend to pay any cash dividends
on our common stock for the foreseeable future. We expect to
retain future earnings, if any, to fund the development and
growth of our business. Any future determination to pay
dividends on our common stock will be at the discretion of our
board of directors and will depend upon, among other factors,
our financial condition; operating results; current and
anticipated cash needs; plans for expansion; applicable Delaware
law, which provides that dividends are only payable out of
surplus or current net profits; and other factors that our board
of directors may deem relevant.
29
CAPITALIZATION
The following table sets forth our cash, cash equivalents and
capitalization as of December 31, 2009:
|
|
|
|
|
on a pro forma basis to give effect to (i) the renaming of
our Series A common stock as common stock; (ii) the
conversion of all outstanding shares of our Series A
preferred stock and Series AA preferred stock into shares
of our common stock and all outstanding warrants to purchase
preferred stock into warrants to purchase common stock and
(iii) the reclassification of our outstanding preferred
stock warrants from long-term liabilities to additional paid-in
capital; and
|
|
|
|
|
|
on a pro forma as adjusted basis to reflect: (i) the
renaming of our Series A common stock as common stock;
(ii) the conversion of all outstanding shares of our
Series A preferred stock and Series AA preferred stock
into shares of our common stock and all outstanding warrants to
purchase preferred stock into warrants to purchase common stock;
(iii) the reclassification of our outstanding preferred
stock warrants from long-term liabilities to additional paid-in
capital; (iv) the sale by us of
the shares
of common stock offered by this prospectus at an initial public
offering price of $ per share, the
mid-point of the range reflected on the cover of this
prospectus, and after deducting the underwriting discounts and
commissions and estimated offering expenses payable by us;
(v) the filing of our restated certificate of
incorporation, which will occur immediately upon closing of this
offering and (vi) the use of approximately
$6.9 million of the net proceeds of this offering to repay
in full the principal and accrued interest and to pay any
applicable prepayment fee on our outstanding debt facility from
Stiftelsen Industrifonden.
|
You should read the information in this table together with our
financial statements and accompanying notes and
Managements Discussion and Analysis of Financial
Condition and Results of Operations appearing elsewhere in
this prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2009
|
|
|
|
|
|
|
|
|
|
Pro Forma As
|
|
|
|
Actual
|
|
|
Pro Forma
|
|
|
Adjusted(1)
|
|
|
|
(in thousands, except share and
|
|
|
|
per share data)
|
|
|
Cash and cash equivalents
|
|
$
|
24,852
|
|
|
$
|
24,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term obligations, including current portion
|
|
$
|
11,436
|
|
|
$
|
9,224
|
|
|
|
|
|
Convertible preferred stock, par value $0.0001 per share;
47,195,706 shares authorized, 46,721,424 shares issued
and outstanding, actual; 47,195,706 shares authorized, no
shares issued and outstanding, pro forma; none authorized,
issued or outstanding, pro forma as adjusted
|
|
|
23,901
|
|
|
|
|
|
|
|
|
|
Stockholders equity (deficit):
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, par value $0.0001 per share; none authorized,
issued or outstanding, actual and pro
forma; shares
authorized, none issued or outstanding, pro forma as adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, par value $0.0001 per share;
78,068,237 shares authorized, 16,629,146 shares issued
and outstanding, actual; 78,068,237 shares authorized,
63,350,570 shares issued and outstanding, pro
forma; shares
authorized, shares
issued and outstanding, pro forma as adjusted
|
|
|
2
|
|
|
|
6
|
|
|
|
|
|
Additional paid-in capital
|
|
|
5,743
|
|
|
|
31,760
|
|
|
|
|
|
Accumulated deficit
|
|
|
(13,383
|
)
|
|
|
(13,383
|
)
|
|
|
|
|
Accumulated other comprehensive loss
|
|
|
(1,465
|
)
|
|
|
(1,465
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity (deficit)
|
|
|
(9,103
|
)
|
|
|
16,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capitalization
|
|
$
|
26,234
|
|
|
$
|
26,142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30
|
|
|
(1)
|
|
Each $1.00 increase or decrease in
the assumed initial public offering price of
$ per share would increase or
decrease, respectively, the amount of pro forma as adjusted
additional paid-in capital, total stockholders equity
(deficit) and total capitalization by approximately
$ million, assuming the
number of shares offered by us, as set forth on the cover page
of this prospectus, remains the same and after deducting the
estimated underwriting discounts and commissions. If the
underwriters option to purchase additional shares of our
common stock in this offering is exercised in full, the amount
of pro forma as adjusted additional paid-in capital, total
stockholders equity (deficit) and total capitalization
would increase by approximately $
, and we would
have shares
of our common stock issued and outstanding.
|
In the table above, the number of shares outstanding as of
December 31, 2009 does not include:
|
|
|
|
|
12,341,473 shares of common stock issuable upon exercise of
stock options outstanding at a weighted average exercise price
of approximately $1.51 per share;
|
|
|
|
1,548,497 shares of common stock available for future
issuance under our stock-based compensation plans; and
|
|
|
|
568,263 shares of common stock issuable upon the exercise
of outstanding warrants at a weighted average exercise price of
approximately $1.43 per share.
|
See Management Employee Benefit Plans
and Note 13 of the notes to consolidated financial
statements for a description of our equity plans.
Sales by the selling stockholders in this offering will cause
the number of shares held by existing stockholders to be reduced
to shares
or % of the total number of shares
of our common stock outstanding after this offering. If the
underwriters overallotment option is exercised in full,
the number of shares held by the existing stockholders after
this offering would be reduced to %
of the total number of shares of our common stock outstanding
after this offering and the number of newly issued shares held
by new investors would increase
to shares
or % of the total number of shares
of our common stock outstanding after this offering.
31
DILUTION
Our pro forma net tangible book value as of December 31,
2009 was approximately $10.2 million, or approximately
$0.16 per share. Pro forma net tangible book value per share
represents the amount of total tangible assets minus our total
liabilities, divided by 63,350,570 shares of common stock
outstanding after giving effect to (i) the renaming of our
Series A common stock as common stock and (ii) the
conversion of all outstanding shares of our Series A
preferred stock and Series AA preferred stock into shares
of our common stock and all outstanding warrants to purchase
preferred stock into warrants to purchase common stock.
Net tangible book value dilution per share to new investors
represents the difference between the amount per share paid by
purchasers of shares of common stock in this offering and the
net tangible book value per share of common stock immediately
after completion of this offering. After giving effect to our
sale
of shares
of common stock in this offering at an assumed initial public
offering price of $ per share, and
after deducting the underwriting discounts and commissions and
estimated offering expenses, the pro forma net tangible book
value as of December 31, 2009 would have been approximately
$ million or approximately
$ per share. This represents an
immediate increase in net tangible book value of
$ per share to existing
stockholders and an immediate dilution in net tangible book
value of $ per share to purchasers
of common stock in the offering, as illustrated in the following
table:
|
|
|
|
|
|
|
|
|
Assumed initial public offering price per share
|
|
|
|
|
|
$
|
|
|
Pro forma net tangible book value per share before this offering
|
|
$
|
0.16
|
|
|
|
|
|
Increase in pro forma net tangible book value per share
attributable to new investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma net tangible book value per share after this offering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilution per share to new investors
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
Each $1.00 increase (decrease) in the assumed initial public
offering price of $ per share
would increase (decrease) our pro forma as adjusted net tangible
book value by $ million, or
$ per share, and the pro forma
dilution per share to investors in this offering by
$ per share, assuming that the
number of shares offered by us, as set forth on the cover page
of this prospectus, remains the same, and after deducting
estimated underwriting discounts and commissions and estimated
offering expenses payable by us. We may also increase or
decrease the number of shares we are offering. An increase of
1,000,000 in the number of shares offered by us would increase
our pro forma as adjusted net tangible book value by
approximately $ million, or
$ per share, and the pro forma
dilution per share to investors in this offering would be
$ per share, assuming that the
assumed initial public offering price remains the same, and
after deducting the estimated underwriting discounts and
commissions and estimated offering expenses payable by us.
Similarly, a decrease of 1,000,000 in the number of shares
offered by us would decrease our pro forma as adjusted net
tangible book value by approximately
$ million, or
$ per share, and the pro forma
dilution per share to investors in this offering would be
$ per share, assuming that
the assumed initial public offering price remains the same, and
after deducting the estimated underwriting discounts and
commissions and estimated offering expenses payable by us. The
pro forma information discussed above is illustrative only and
will adjust based on the actual initial public offering price
and other terms of this offering determined at pricing.
If the underwriters exercise their option to purchase additional
shares of our common stock in full in this offering, the pro
forma net tangible book value per share after the offering would
be approximately $ per share, the
increase in pro forma net tangible book value per share to
existing stockholders would be approximately
$ per share and the dilution
to new investors purchasing shares in this offering would be
approximately $ per share.
32
The table below presents on a pro forma basis as of
December 31, 2009, after giving effect to the renaming of
our Series A common stock as common stock and the
conversion of all outstanding shares of our Series A
preferred stock and Series AA preferred stock into shares
of our common stock and assuming there are no exercises of stock
options or warrants outstanding on December 31, 2009 (as
further described below), the differences between the existing
stockholders and the purchasers of shares in the offering with
respect to the number of shares purchased from us, the total
consideration paid and the average price paid per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
Average
|
|
|
|
Shares Purchased
|
|
|
Consideration
|
|
|
Price
|
|
|
|
Number
|
|
|
Percent
|
|
|
Amount
|
|
|
Percent
|
|
|
per Share
|
|
|
Existing stockholders
|
|
|
|
|
|
|
|
%
|
|
$
|
|
|
|
|
|
%
|
|
$
|
|
|
Investors in the offering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2009, there were options outstanding to
purchase a total of 12,341,473 shares of common stock at a
weighted average exercise price of approximately $1.51 per
share. In addition, as of December 31, 2009, there were
warrants outstanding to purchase 93,981 shares of common
stock at a weighted average exercise price of $1.65 per share
and 474,282 shares of Series A preferred stock at a
weighted average exercise price of approximately $1.39 per
share, which in the aggregate will be exercisable for
568,263 shares of common stock upon the completion of the
offering. Effective immediately upon the signing of the
underwriting agreement for this offering, an aggregate of
3,300,000 shares of our common stock will be reserved for
issuance under our 2010 Equity Incentive Plan (which
includes shares
of common stock reserved for future issuance under our 2007
Omnibus Stock Option and Award Plan that will be allocated to
our 2010 Equity Incentive Plan), and this share reserve will
also be subject to automatic annual increases in accordance with
the terms of the plan. Furthermore, we may choose to raise
additional capital through the sale of equity or convertible
debt securities due to market conditions or strategic
considerations even if we believe we have sufficient funds for
our current or future operating plans. To the extent that any of
these options or warrants are exercised, new options are issued
under our equity incentive plans or we issue additional shares
of common stock or other equity securities in the future, there
will be further dilution to investors participating in this
offering. For a description of our equity plans, please see
Management Equity Benefit Plans and
Note 13 of the notes to consolidated financial statements.
33
SELECTED
CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data should be
read together with our financial statements and accompanying
notes and Managements Discussion and Analysis of
Financial Condition and Results of Operations appearing
elsewhere in this prospectus. The selected financial data in
this section is not intended to replace our financial statements
and the related notes. Our historical results are not
necessarily indicative of our future results.
We derived the consolidated statements of operations data for
the years ended December 31, 2007, 2008 and 2009 and the
consolidated balance sheet data as of December 31, 2008 and
2009 from our audited financial statements appearing elsewhere
in this prospectus. The consolidated statements of operations
data for the years ended December 31, 2005 and 2006, and
the consolidated balance sheet data as of December 31,
2005, 2006 and 2007 are derived from our audited financial
statements which are not included in this prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
Consolidated Statement of
Operations Data:
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
|
(in thousands, except share and per share data)
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License revenue
|
|
$
|
15,654
|
|
|
$
|
28,915
|
|
|
$
|
51,482
|
|
|
$
|
74,446
|
|
|
$
|
99,864
|
|
Maintenance revenue
|
|
|
5,725
|
|
|
|
9,797
|
|
|
|
17,747
|
|
|
|
29,401
|
|
|
|
41,390
|
|
Professional services revenue
|
|
|
3,113
|
|
|
|
5,558
|
|
|
|
11,357
|
|
|
|
14,417
|
|
|
|
16,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
24,492
|
|
|
|
44,270
|
|
|
|
80,586
|
|
|
|
118,264
|
|
|
|
157,359
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License revenue
|
|
|
580
|
|
|
|
1,140
|
|
|
|
2,949
|
|
|
|
3,071
|
|
|
|
3,663
|
|
Maintenance revenue
|
|
|
289
|
|
|
|
352
|
|
|
|
580
|
|
|
|
1,365
|
|
|
|
1,635
|
|
Professional services revenue
|
|
|
1,520
|
|
|
|
4,582
|
|
|
|
8,177
|
|
|
|
9,562
|
|
|
|
11,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of
revenue(1)
|
|
|
2,389
|
|
|
|
6,074
|
|
|
|
11,706
|
|
|
|
13,998
|
|
|
|
17,100
|
|
Gross profit
|
|
|
22,103
|
|
|
|
38,196
|
|
|
|
68,880
|
|
|
|
104,266
|
|
|
|
140,259
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing(1)
|
|
|
18,602
|
|
|
|
26,999
|
|
|
|
48,249
|
|
|
|
74,267
|
|
|
|
93,349
|
|
Research and
development(1)
|
|
|
2,969
|
|
|
|
3,275
|
|
|
|
5,419
|
|
|
|
8,258
|
|
|
|
8,735
|
|
General and
administrative(1)
|
|
|
7,244
|
|
|
|
9,699
|
|
|
|
15,154
|
|
|
|
20,190
|
|
|
|
25,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
28,815
|
|
|
|
39,973
|
|
|
|
68,822
|
|
|
|
102,715
|
|
|
|
127,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
|
(6,712
|
)
|
|
|
(1,777
|
)
|
|
|
58
|
|
|
|
1,551
|
|
|
|
13,166
|
|
Other income (expense)
|
|
|
173
|
|
|
|
(748
|
)
|
|
|
(463
|
)
|
|
|
3,304
|
|
|
|
(4,529
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before benefit for income taxes
|
|
|
(6,539
|
)
|
|
|
(2,525
|
)
|
|
|
(405
|
)
|
|
|
4,855
|
|
|
|
8,637
|
|
Benefit (provision) for income taxes
|
|
|
|
|
|
|
|
|
|
|
40
|
|
|
|
(1,860
|
)
|
|
|
(1,776
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(6,539
|
)
|
|
$
|
(2,525
|
)
|
|
$
|
(365
|
)
|
|
$
|
2,995
|
|
|
$
|
6,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common
share(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.53
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.03
|
)
|
|
|
0.01
|
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
(0.53
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
Consolidated Statement of
Operations Data:
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
|
(in thousands, except share and per share data)
|
|
|
Weighted average number of common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
12,394,631
|
|
|
|
12,515,571
|
|
|
|
13,526,926
|
|
|
|
14,552,999
|
|
|
|
16,267,186
|
|
Diluted
|
|
|
12,394,631
|
|
|
|
12,515,571
|
|
|
|
13,526,926
|
|
|
|
16,523,443
|
|
|
|
20,778,448
|
|
Pro forma net income per common share
(unaudited)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.13
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.12
|
|
Weighted average number of shares used in pro forma computation
(unaudited)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62,988,610
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
67,606,341
|
|
Pro forma as adjusted net income per common share
(unaudited)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
Weighted average number of shares used in pro forma as adjusted
computation
(unaudited)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes stock-based compensation expense as follows:
|
Cost of revenue
|
|
$
|
|
|
|
$
|
2
|
|
|
$
|
12
|
|
|
$
|
39
|
|
|
$
|
82
|
|
Sales and marketing
|
|
|
|
|
|
|
12
|
|
|
|
103
|
|
|
|
285
|
|
|
|
733
|
|
Research and development
|
|
|
|
|
|
|
1
|
|
|
|
6
|
|
|
|
19
|
|
|
|
79
|
|
General and administrative
|
|
|
|
|
|
|
11
|
|
|
|
69
|
|
|
|
388
|
|
|
|
585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
26
|
|
|
$
|
190
|
|
|
$
|
731
|
|
|
$
|
1,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) |
|
We applied the two-class method to compute net income (loss) per
common share which requires that earnings attributable to common
stockholders for the period be allocated between common and
participating securities based upon their respective rights to
receive distributed and undistributed earnings. See Note 2
of the notes to consolidated financial statements. |
|
|
|
(3) |
|
The pro forma basic and diluted net income per share have been
calculated assuming (i) the renaming of our Series A
common stock as common stock prior to the closing of this
offering, (ii) the conversion of all outstanding shares of
Series A and Series AA preferred stock into an
aggregate of 46,721,424 shares of our common stock prior to
the close of this offering and (iii) the reclassification
of outstanding preferred stock warrants from long term
liabilities to additional paid-in capital as of the beginning of
the period. The numerator of the pro forma net income per share
calculation is derived by adding the approximately
$1.372 million charge related to the preferred stock
warrant liability to net income as reported of approximately
$6.861 million, to arrive at net income attributable to
common shares of approximately $8.233 million. |
35
|
|
|
(4) |
|
The pro forma as adjusted basic and diluted net income per share
have been calculated assuming (i) the renaming of our
Series A common stock as common stock prior to the closing
of this offering, (ii) the conversion of all outstanding
shares of Series A and Series AA preferred stock into
an aggregate of 46,721,424 shares of our common stock prior
to the close of this offering, (iii) the reclassification
of outstanding preferred stock warrants from long-term
liabilities to additional paid-in capital, (iv) the sale by
us of
the shares
of common stock offered by the prospectus; (v) the filing
of our restated certificate of incorporation, which will occur
immediately upon closing of this offering, and (vi) the
use of approximately $6.9 million of the net proceeds of
this offering to repay in full the principal and accrued
interest and to pay any applicable prepayment fee on our
outstanding debt facility from Stiftelsen Industrifonden as of
the beginning of the period. The numerator of the pro forma net
income per share calculation is derived by adding the
approximately $1.372 million charge related to the
preferred stock warrant liability and the interest recorded in
2009 related to the Stiftelsen Industrifonden debt facility of
approximately $0.8 million to net income as reported of
approximately $6.861 million, to arrive at net income
attributable to common shares of approximately
$9.033 million. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
|
(in thousands)
|
|
|
Consolidated balance sheet data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
3,407
|
|
|
$
|
4,401
|
|
|
$
|
9,214
|
|
|
$
|
14,800
|
|
|
$
|
24,852
|
|
Working capital
|
|
|
3,375
|
|
|
|
2,958
|
|
|
|
2,411
|
|
|
|
12,155
|
|
|
|
14,829
|
|
Deferred revenue
|
|
|
5,374
|
|
|
|
9,760
|
|
|
|
17,297
|
|
|
|
22,143
|
|
|
|
35,575
|
|
Total assets
|
|
|
15,463
|
|
|
|
25,827
|
|
|
|
50,684
|
|
|
|
67,018
|
|
|
|
102,967
|
|
Long-term obligations, including current portion
|
|
|
|
|
|
|
1,965
|
|
|
|
1,855
|
|
|
|
10,762
|
|
|
|
11,436
|
|
Convertible preferred stock
|
|
|
23,901
|
|
|
|
23,901
|
|
|
|
23,901
|
|
|
|
23,901
|
|
|
|
23,901
|
|
Total stockholders equity (deficit)
|
|
|
(19,770
|
)
|
|
|
(21,190
|
)
|
|
|
(20,877
|
)
|
|
|
(17,368
|
)
|
|
|
(9,103
|
)
|
36
MANAGEMENTS
DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial
condition and results of operations should be read in
conjunction with Selected Consolidated Financial
Data and our consolidated financial statements and related
notes appearing elsewhere in this prospectus. In addition to
historical information, this discussion and analysis contains
forward-looking statements that involve risks, uncertainties and
assumptions. Our actual results may differ materially from those
anticipated in these forward-looking statements as a result of
certain factors. We discuss factors that we believe could cause
or contribute to these differences below and elsewhere in this
prospectus, including those set forth under Risk
Factors and Special Note Regarding Forward-Looking
Statements and Industry Data.
Overview
We have pioneered a powerful, easy-to-use business intelligence
solution that enables our customers to make better and faster
business decisions. Our software platform, QlikView, combines
enterprise-class analytics and search functionality with the
simplicity and
ease-of-use
found in office productivity software tools for a broad set of
business users. QlikView is powered by our in-memory associative
search technology, which has utilized rapid advances in
computing power to yield significant improvement in flexibility
and performance at a lower cost than traditional business
intelligence solutions. We have grown our customer base from
over 1,500 customers in 2005 to over 13,000 in 2009 and
increased our revenue at a 59% compound annual growth rate
during the same period. We added an average of 404 new customers
per month during fiscal year 2009. Our solution addresses the
needs of a diverse range of customers from middle market
customers to large enterprises such as BP, Campbell Soup
Company, Colonial Life, The Dannon Company, Inc., Heidelberger
Druckmaschinen AG, Kraft Foods, ING, Lifetime Brands, National
Health Service (NHS), Qualcomm, Symantec and Volvo Car UK
Limited. We have customers in over 100 countries and
approximately 77% of our revenue in 2009 was derived
internationally.
We have a differentiated business model designed to accelerate
the adoption of our product by reducing the time and cost to
purchase and implement our software. Our low risk approach to
product sales, which offers free product downloads to
individuals and a
30-day money
back guarantee upon purchase, provides a needed alternative to
costly,
all-or-nothing,
traditional business intelligence models. We initially focus on
specific business users or departments within a prospective
customers organization and seek to solve a targeted
business need. After demonstrating QlikViews benefits to
initial adopters within an organization, we work to expand sales
of our product to other business units, geographies and use
cases with the long-term goal of broad organizational
deployment. According to a 2009 IDC survey, 44% of our customers
deploy QlikView in less than one month and 77% of our customers
deploy QlikView in less than three months.
We license QlikView under perpetual licenses which include one
year of maintenance as part of the initial purchase price of the
product. Our customers can renew, and generally have renewed,
their maintenance agreements for a fee that is based upon a
percentage of the initial license fee paid. For the fiscal year
ended December 31, 2009, our total revenue was comprised of
64% license revenue, 26% maintenance revenue and 10%
professional services revenue. We have a diversified
distribution model that consists of a direct sales force and a
partner network of resellers, OEM relationships and systems
integrators which accounted for 50% of our total license revenue
and first years maintenance billings during fiscal year
2009. Additionally, our online QlikCommunity provides us with a
loyal and growing network of users who promote our software,
provide support for other users and contribute valuable insights
and feedback for our product development efforts.
To complement QlikView, we have developed a differentiated
business model that has the following attributes:
|
|
|
|
|
Broad User Focus marketing and selling
QlikView directly to the business user by providing an
easy-to-use platform that can be used with minimal training
|
|
|
|
Low Risk Rapid Product Adoption providing a
low risk alternative to costly,
all-or-nothing,
enterprise-wide deployment requirements
|
|
|
|
Land and Expand Customer Penetration
initially targeting business users in an organization to
create a loyal user base that promotes broad adoption of our
software platform across an organization
|
37
|
|
|
|
|
Globally Diversified Distribution Model
employing a multi-pronged international sales approach that
leverages a direct sales force and partner network
|
|
|
|
Community-Based Marketing and Support
augmenting our development, marketing and support efforts
through our online QlikCommunity
|
In evaluating our operating results we focus on the productivity
of our sales force, the effectiveness of our local and corporate
level marketing, our ability to close opportunities generated by
our marketing leads and the competitiveness of our technology.
In each of these areas, we have taken steps designed to improve
our operating results, including undertaking additional sales
training for our sales representatives, hiring more experienced
regional sales management, investing further in our corporate
website to improve its use as an effective lead generative tool,
developing a partner enablement program to focus on the results
of our sales partners around the world and expanding our
research and development staff with a focus on testing and
quality assurance.
From a risk perspective we have had to deal with the impact of
the recessionary global environment during the past two years,
although we anticipate that the negative impact of these
conditions will continue to moderate. We have faced pricing
pressure from some of our larger competitors to which we have
attempted to respond by focusing on the value delivered by
QlikView in comparison to more traditional business intelligence
products, and we believe that this has helped to minimize the
loss of potential new business from this pressure. Also, the
rapid growth in our business has required the continued hiring
of experienced staff across all of our geographic territories.
To aid this effort we have focused on improving our local
recruiting initiatives, as well as developing further internal
training programs to prepare executives for greater
responsibilities.
We were founded in Sweden in 1993. From 1993 until 1999, our
activities were focused on software research and development
that resulted in QlikViews core technology, and from 1999
until 2004 we focused on the commercialization of our technology
primarily in the Nordic market and limited regions of Europe. In
late 2004, we reincorporated in Delaware and began to broaden
our marketing and sales activities in the United States and
continued our expansion globally.
Financial
Operations Overview
Revenues
Our revenue is comprised of license, maintenance and
professional services revenue. We license our software under
perpetual licenses which include one year of maintenance as part
of the initial purchase price of the product. License revenue
reflects the revenue recognized from sales of licenses to new
customers and additional licenses to existing customers.
Historically, the majority of our license revenues have come
from new customers. However, going forward we seek to increase
the contribution from existing customers based upon our
land and expand sales strategy. Customers can renew,
and generally have renewed, their maintenance agreements for a
fee that is based upon a percentage of the initial license fee
paid. Current customers with maintenance agreements are entitled
to receive unspecified upgrades and enhancements when and if
they become available. We have experienced growth in maintenance
revenue primarily due to increased license sales and growth in
our customer base and high retention of those customers. In
2009, our annual maintenance renewal rate was greater than 85%.
Professional services revenue is comprised of training,
installation and other consulting revenues. Given the ease of
implementation of our product, professional service revenues
have averaged 12% of total revenues during the last three fiscal
years. We do not expect that proportion to change significantly
during the near term. Of our total revenues, we have
historically generated the majority of sales through our direct
sales channel rather than through our partner network. However,
the contribution from our partner network continues to grow, and
we anticipate that over time revenues from partners will be more
than 50% of total revenues. Given the size of the United States
market and our limited penetration there, we expect that the
United States will represent our largest market during the near
term and will likely be an important contributor to future
revenue growth. Due to the global diversity of our customer
base, our results are impacted by movements in the currencies of
the major territories in which we operate. The primary
currencies impacting results are the United States dollar, our
functional currency; the Swedish kronor; the euro; and the
British pound. Inflation and changing prices had no material
effect on our sales, revenue or operating income from continuing
operations during 2007, 2008 and 2009.
38
Cost
of Revenue
Cost of revenue primarily consists of personnel costs, fees paid
to subcontractors providing technical support services, referral
fees paid to third parties in connection with software license
sales and other discrete professional services. Personnel costs
include salaries, employee benefit and social costs, bonuses,
stock-based compensation and direct overhead.
Operating
Expenses
We classify our operating expenses into three categories: sales
and marketing, research and development and general and
administrative. Our operating expenses primarily consist of
personnel costs, sales commissions, marketing program costs,
legal, accounting, consulting and other professional service
costs and depreciation and amortization. Personnel costs include
salaries, employee benefit and social costs, bonuses,
stock-based compensation and direct overhead. Historically, we
have focused on the continued growth of our license revenues,
and as a result, sales and marketing has represented the largest
amount of total expenses both in absolute dollar terms and as a
percentage of total revenues. Going forward, we expect to drive
greater efficiencies from this cost base and consequently expect
that sales and marketing as a percentage of revenues will
decline in the long term. Conversely, we project that research
and development expenses will remain constant or grow as a
percentage of total revenues as we continue to invest in future
product enhancements and new products.
Sales and Marketing. Sales and marketing
expenses primarily consist of personnel costs for our sales,
marketing and business development employees and executives;
commissions earned by our sales personnel; facilities costs
attributable to our sales and marketing personnel; the cost of
marketing programs; and the cost of business development
programs. We expect to continue to hire additional sales
personnel in the United States and in our international
locations in 2010.
Research and Development. Research and
development expenses primarily consist of personnel and facility
costs for our research and development and product marketing
employees. We have devoted our development efforts primarily to
enhancing the functionality and expanding the capabilities of
our software platform, including, for example, the development
of our QlikView mobile client (released in 2009). We expect that
our research and development expenses will continue to increase
in absolute dollars and as a percentage of revenue in the long
term as we increase our research and development and product
marketing headcount to further strengthen and enhance our
software platform. The vast majority of our research and
development staff is based in Lund, Sweden.
General and Administrative. General and
administrative expenses primarily consist of personnel costs for
our executive, finance, legal, human resources and
administrative personnel, as well as the cost of facilities
attributable to general and administrative operations,
depreciation and amortization, legal, accounting and other
professional service fees and other corporate expenses. We
incurred additional costs in 2009, and expect to continue to
incur higher costs, associated with being a public company,
including higher legal, corporate insurance and accounting
expenses and the additional costs of achieving and maintaining
compliance with Section 404 of the Sarbanes-Oxley Act and
related regulations. We also expect that general and
administrative expenses will continue to increase in absolute
dollars because of our efforts to expand our international
operations, but we believe over time general and administrative
costs will decline as a percentage of revenues as we expect to
derive greater efficiencies from our corporate infrastructure.
Other
Income (Expense)
Other income (expense) primarily consists of net interest,
change in the fair value of warrants, foreign exchange gains
(losses) and other income. Net interest represents interest
income received on our cash and cash equivalents and interest
expense associated with our outstanding debt. We expect interest
expense to decrease in periods subsequent to the completion of
this offering as we anticipate paying down all of our
outstanding long-term debt balance with proceeds from this
offering. Change in the fair value of warrants consists of
charges recorded to mark our companys outstanding
preferred and common stock warrants to fair value at each
reporting date. Upon completion of this offering our preferred
stock warrants will be reclassified to additional paid-in
capital, and they will no longer be required to be adjusted
based on their fair market carrying value each period. Foreign
exchange gains (losses) relate to the remeasurement of certain
transactions, primarily our outstanding note payable with a
39
Swedish financial institution, denominated in currencies other
than our functional currency, the United States dollar. As a
result of our business activities in foreign countries, we
expect that foreign exchange gains (losses) will continue to
occur due to fluctuations in exchange rates in the countries
where we do business.
Income
Tax Expense
Income tax expense primarily consists of corporate income taxes
related to profits resulting from the sale of our software
platform by our United States and international subsidiaries.
Impact
of Foreign Currency Translation
Approximately 73% of our operating revenues are earned in
foreign denominated currencies, including the Swedish kronor,
euro and British pound. We expect that our exposure to foreign
currency exchange risk will increase to the extent we are able
to continue to expand our business internationally. For purposes
of our consolidated financial statements, local currency assets
and liabilities are translated at the rate of exchange to the
United States dollar on the balance sheet date and local
currency revenues and expenses are translated at average rates
of exchange to the United States dollar during the reporting
period. Foreign currency transaction gains (losses) have been
reflected as a component of our results from operations and
foreign currency translation gains (losses) have been included
as a component of accumulated other comprehensive income (loss).
Our 2009 operating results were favorably impacted by the
general weakening of the United States dollar relative to the
Swedish kronor offset in part by the general strengthening of
the United States dollar relative to the euro and British pound,
and our 2008 results were negatively impacted by the general
strengthening of the United States dollar relative to the
Swedish kronor.
Critical
Accounting Policies and Estimates
We prepare our consolidated financial statements in accordance
with generally accepted accounting principles in the United
States, or GAAP. The preparation of consolidated financial
statements also requires us to make estimates and assumptions
that affect the reported amounts of assets, liabilities,
revenue, costs and expenses and related disclosures. We base our
estimates on historical experience and on various other
assumptions that we believe to be reasonable under the
circumstances. Actual results could differ significantly from
the estimates made by our management. To the extent that there
are differences between our estimates and actual results, our
future financial statement presentation, financial condition,
results of operations and cash flows will be affected. We
believe that the accounting policies discussed below are
critical to understanding our historical and future performance,
as these policies relate to the more significant areas involving
managements judgments and estimates.
Revenue
Recognition
We derive substantially all of our revenue from the licensing of
our software products, from the sale of maintenance agreements
and from the sale of training and other consulting services. We
require one year of maintenance as part of the initial purchase
price of each software offering and then sell annual renewals of
this maintenance agreement. We recognize revenue for software,
maintenance and other services when persuasive evidence of an
arrangement exists, delivery has occurred, the sales price is
fixed or determinable and collectability is reasonably assured.
As substantially all of our software licenses are sold in
multiple-element arrangements that include either maintenance or
both maintenance and professional services, we use the residual
method to determine the amount of license revenue to be
recognized. Under the residual method, consideration is
allocated to undelivered elements based upon vendor-specific
objective evidence (or VSOE) of the fair value of those
elements, with the residual of the arrangement fee allocated to
and recognized as license revenue. We have established VSOE of
the fair value of maintenance through independent maintenance
renewals which demonstrate a consistent relationship of
maintenance pricing as a percentage of the contractual license
fee. Maintenance revenues are deferred and recognized ratably
over the contractual period of the maintenance arrangement which
is generally 12 months. Arrangements that include other
professional services are evaluated to determine whether those
services are essential to the functionality of other elements of
the arrangement. We have determined that these services are not
40
considered essential and the amounts allocated to the services
are recognized as revenue when the services are performed. The
VSOE of fair value of our professional services is based on the
price for these same services when they are sold separately.
Revenue for services that are sold either on a stand-alone basis
or included in multiple-element arrangements is recognized as
the services are performed.
For sales through resellers, we recognize revenue upon the
shipment of the product only if those resellers provide us, at
the time of placing their order, with the identity of the
end-user customer to whom the product has been sold. Our
resellers do not carry inventory of our software. Sales through
resellers are evidenced by a reseller agreement, together with
purchase orders on a
transaction-by-transaction
basis. We do not currently offer any rights to return products
sold to resellers.
We also sell software licenses to OEMs who integrate our product
for distribution with their applications. The OEMs
end-user customer is licensed to use our products solely in
conjunction with the OEMs application. In OEM
arrangements, key delivery is required as the basis for revenue
recognition. However, depending upon the OEM partners
business model we recognize revenue either up-front or over time
in subscription or royalty based models.
We do not offer specified upgrades or incrementally significant
discounts. We record advance payments as deferred revenues until
the product is shipped, services are delivered or obligations
are met and the revenue can be recognized. Deferred revenues
represent the excess of amounts invoiced or paid over amounts
recognized as revenues. Any contingencies, such as rights of
return, conditions of acceptance, and warranties are accounted
for as a separate element. The effect of accounting for these
contingencies included in revenue arrangements has not been
material.
Stock-Based
Compensation
Our stock-based compensation is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
|
(in thousands)
|
|
|
Cost of revenue
|
|
$
|
12
|
|
|
$
|
39
|
|
|
$
|
82
|
|
Sales and marketing
|
|
|
103
|
|
|
|
285
|
|
|
|
733
|
|
Research and development
|
|
|
6
|
|
|
|
19
|
|
|
|
79
|
|
General and administrative
|
|
|
69
|
|
|
|
388
|
|
|
|
585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stock-based compensation
|
|
$
|
190
|
|
|
$
|
731
|
|
|
$
|
1,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior to January 1, 2006, we applied the intrinsic-value
method of accounting prescribed in previous FASB accounting
guidance, which was later superseded, for our stock options
issued to employees and directors. Under this method,
compensation expense was recognized on the date of grant only if
the current fair value of the underlying stock exceeded the
exercise price. On January 1, 2006, we adopted the revised
accounting guidance for stock-based compensation which was
adopted prospectively to new awards and to awards modified,
repurchased or cancelled after December 31, 2005. This
current guidance requires companies to measure and recognize
compensation expense for all employee stock-based payments at
fair value, net of estimated forfeitures, over the vesting
period of the underlying stock-based awards. In addition, we
account for stock-based compensation to non-employees in
accordance with the FASB accounting guidance for equity
instruments that are issued to other than employees. Stock-based
compensation issued to non-employees has not been material for
any period presented.
41
For the years ended December 31, 2007, 2008 and 2009, we
calculated the fair value of options granted using the
Black-Scholes pricing model with the following assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
Volatility
|
|
|
18.5%-21.8
|
%
|
|
|
48.0%-88.8
|
%
|
|
|
44.7%-62.4
|
%
|
Expected term, in years (Swedish grants)
|
|
|
4.00
|
|
|
|
4.00
|
|
|
|
4.00
|
|
Expected term, in years (all other grants)
|
|
|
6.25
|
|
|
|
6.25
|
|
|
|
6.25
|
|
Dividend yield
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
Risk-free interest rate
|
|
|
3.7%-4.8
|
%
|
|
|
1.2%-3.1
|
%
|
|
|
1.5%-2.4
|
%
|
We use the Black-Scholes option-pricing model to value our stock
option awards. The Black-Scholes option-pricing model requires
the input of subjective assumptions, including the expected life
of the stock-based payment awards and stock price volatility. In
addition, as a private company, one of the most subjective
inputs into the Black-Scholes option pricing model is the
estimated fair value of common stock which is discussed below.
Since we have been operating as a private company, we do not
have sufficient historical volatility for the expected term of
the options. Prior to 2008, we established the expected
volatility assumption by determining an appropriate industry
sector that was representative of the nature of our operations
as well as our market capitalization size (mid-cap software
industry). As of January 1, 2008 and forward, we use
comparable public companies as a basis for our expected
volatility to calculate the fair value of option grants. We
intend to continue to consistently apply this process using
comparable companies until a sufficient amount of historical
information regarding the volatility of our own share price
becomes available. The expected term for option grants to
employees based in Sweden is four years based on the contractual
expiration date required under local rules. The expected term
for all other grants is based on the simplified method provided
by SEC guidance. The risk-free interest rate is based on United
States Treasury yield curve with a remaining term equal to the
expected life assumed at grant. The assumptions used in
calculating the fair value of stock-based payment awards
represent managements best estimate and involve inherent
uncertainties and the application of managements judgment.
As a result, if factors change and management uses different
assumptions, share-based compensation expense could be
materially different in the future.
For all employee stock options, we recognize expense over the
requisite service period using the straight-line method. In
addition to the assumptions used to calculate the fair value of
the options, we are required to estimate the expected forfeiture
rate of all stock-based awards and only recognize expense for
those awards expected to vest. The estimation of the number of
stock awards that will ultimately vest requires judgment, and to
the extent actual results or updated estimates differ from our
current estimates, such amounts will be recorded as a cumulative
adjustment in the period in which estimates are revised. We
consider many factors when estimating expected forfeitures,
including types of awards, employee class and an analysis of our
historical and known forfeitures on existing awards. During the
period in which the options vest, we will record additional
expense if the actual forfeiture rate is lower than estimated
and a recovery of expense if the actual forfeiture rate is
higher than estimated.
As of December 31, 2009, there was approximately
$4.3 million of unrecognized stock-based compensation
expense related to non-vested stock option awards, net of
estimated forfeitures that we expect to recognize over a
weighted-average period of 1.54 years.
Based upon an assumed initial public offering price of
$ per share, which is the
mid-point of the range listed on the cover page of this
prospectus, the aggregate intrinsic value of options outstanding
as of March 31, 2010 was $ ,
of which $ related to vested
options and $ related to unvested
options.
Common
Stock Valuations
For all option grants during 2007, 2008 and 2009, the fair value
of the common stock underlying the option grants was determined
by our board of directors, with the assistance of management,
which intended all options granted to be exercisable at a price
per share not less than the per share fair value of our common
stock underlying those options on the date of grant. We utilized
the guidance set forth by the American Institute of Certified
Public Accountants, or the AICPA, in the AICPA Technical
Practice Aid, Valuation of Privately-Held-Company
Equity
42
Securities Issued as Compensation, referred to
herein as the AICPA Practice Aid, when establishing the fair
value of common stock at each grant date.
2007
and 2008 Valuations
In 2007 and 2008, our board of directors, with the assistance of
management, used the market approach and the income approach in
order to estimate the fair value of common stock underlying our
option grants during those periods. We believe both of these
approaches are appropriate methodologies given our stage of
development during 2007 and 2008. For the market approach, we
utilized the guideline company method by analyzing a population
of comparable companies and selected those technology companies
that we considered to be the most comparable to us in terms of
product offerings, revenues, margins and growth. Under the
market approach, we then used these guideline companies to
develop relevant market multiples and ratios, which are then
applied to our corresponding financial metrics to estimate our
equity value. For the income approach, we performed discounted
cash flow analyses which utilize projected cash flows as well as
a residual value which are then discounted to the present in
order to arrive at our current equity value. In determining our
equity value, we applied a greater weighting to the income
approach than to the market approach during 2007 and 2008, as we
concluded that the discounted cash flow method utilized under
the income approach was a more reliable indicator of our equity
value during that time. In allocating the total equity value
between preferred and common stock, we considered the
liquidation preferences of the preferred stockholders.
Additionally, each valuation during this period utilizes the
option-pricing method for allocating the total equity value
between preferred and common stock.
The significant input assumptions used in our valuation models
during 2007 and 2008 are based on subjective future expectations
combined with managements judgment, including:
Income approach assumptions are:
|
|
|
|
|
our expected revenue, operating performance and cash flows for
the current and future years, determined as of the valuation
date based on our estimates;
|
|
|
|
a discount rate, which is applied to discretely forecasted
future cash flows in order to calculate the present value of
those cash flows; and
|
|
|
|
a terminal value multiple, which is applied to our last year of
discretely forecasted cash flows to calculate the residual value
of our future cash flows.
|
Assumptions utilized in the market approach are:
|
|
|
|
|
our expected revenue, operating performance and cash flows for
the current and future years, determined as of the valuation
date based on our estimates;
|
|
|
|
multiples of market value to trailing revenues, determined as of
the valuation date, based on a group of comparable public
companies we identified; and
|
|
|
|
multiples of market value to expected future revenues,
determined as of the valuation date, based on the same group of
comparable public companies.
|
2009
Valuations
In 2009, we granted options to purchase shares of common stock
with exercise prices as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
|
Exercise Price
|
|
Fair Value
|
|
Intrinsic
|
Grant Date
|
|
Granted
|
|
per Share
|
|
per Share
|
|
Value
|
|
1st
Quarter
|
|
|
939,000
|
|
|
$
|
1.65
|
|
|
$
|
1.65
|
|
|
$
|
|
|
2nd
Quarter
|
|
|
666,202
|
|
|
|
1.65
|
|
|
|
1.65
|
|
|
|
|
|
3rd
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4th
Quarter
|
|
|
1,104,552
|
|
|
|
3.81
|
|
|
|
3.81
|
|
|
|
|
|
43
In order to determine the fair value of our common stock
underlying all option grants issued in the first and second
quarters of 2009, the board of directors, with the assistance of
management, used the market approach and the income approach
consistent with the 2008 methodology described above. During
this time period, our board of directors considered our
operational metrics relative to the challenging global economic
conditions and recession and determined that our estimated
equity value remained consistent with 2008. During the first
half of 2009, revenue growth slowed due in part to the global
economic crisis and was well below our expectations for that
period resulting in operating losses for the period. We also
considered the decline in valuations of publicly held technology
companies which we considered to be comparable to us in terms of
lines of business, revenues, margins, or growth, during this
period. In the third quarter of 2009, we began to see a
strengthening in our sales pipeline for both the second half of
2009 and 2010, and we also began to forecast positive operating
income for the second half of 2009. In addition, in the third
quarter of 2009, we began initial discussions with investment
banks regarding a possible public offering of our common stock.
In October of 2009, our board of directors approved the
composition of an investment banking syndicate to lead a
potential initial public offering of our common stock.
As a result of having greater visibility into a potential
liquidity event as well as due to improving operating results in
the second half of 2009, the board of directors with the
assistance of management performed a contemporaneous valuation
as of September 30, 2009, and adopted the
probability-weighted expected return method (known as PWERM) in
connection with this valuation, as prescribed by the AICPA
Practice Aid. The PWERM requires the consideration of various
liquidity scenarios, including an initial public offering, a
sale of our company at a range of valuations, or continuing to
operate as a standalone private company without a liquidity
event, and takes into account potential timing and the relative
probability of each possible outcome. This change in valuation
model was precipitated by changes in our business that allowed
us to forecast the timing and nature of a liquidity event with a
greater degree of certainty. This valuation model took into
consideration the following scenarios and associated
probabilities:
|
|
|
|
|
two different scenarios for the completion of an initial public
offering, one occurring in June 2010 and another occurring in
December 2010, with a combined probability of 35% of occurrence
|
|
|
|
three different scenarios for the sale of our company to a
strategic acquirer: a high, low and distressed sale scenario
with a combined probability of 50%
|
|
|
|
remaining a standalone private company without a liquidity
event, assigned a probability of 15%
|
For the initial public offering scenarios, we determined our
equity value by using a multiple of expected 2010 revenue based
upon an analysis of the revenue multiples of companies that we
considered to be comparable to us in terms of industry and
business model. For the scenarios which considered a sale of our
company, we considered a range of revenue multiples that were
based on merger and acquisition events for companies we consider
to be comparable to us in terms of industry and business model,
applied to expected 2011 revenues. For the scenario which
considered remaining a standalone private company without a
liquidity event, we determined the enterprise value by weighing
both a market based approach which utilizes a multiple of
expected 2010 revenue based on an analysis of the revenue
multiples of companies that we considered to be comparative to
us in terms of industry and business model, and an income based
approach based on estimated future discounted cash flows. For
all scenarios, we applied discounts ranging from 19% to 25% for
lack of marketability, and we utilized an estimated cost of
capital of 25% based on our stage of development.
As a result of the above analysis, we estimated the fair value
of our common stock to be $3.81 as of September 30, 2009.
Accordingly, the common stock options granted in the fourth
quarter of 2009 were granted with an exercise price of $3.81. We
believe that the increase from the previous valuation of $1.65
to $3.81 is primarily attributed to the following factors:
|
|
|
|
|
significant progress in discussions with investment banks during
the third quarter of 2009 regarding a potential initial public
offering of our common stock
|
|
|
|
greater clarity regarding the timing of a potential liquidity
event
|
|
|
|
improvement in global economic conditions in the third quarter
of 2009, specifically in the technology sector
|
|
|
|
improved expectations for our financial performance in the
fourth quarter of 2009 and in 2010
|
44
The board of directors with the assistance of management
performed a contemporaneous valuation as of December 31,
2009 using PWERM. We estimated the fair value of our common
stock as of December 31, 2009 at $5.18 per share. The
increase of 36% over the previous valuation of $3.81 was
primarily due to an increase in the probability of our initial
public offering. This valuation reflected marketability
discounts of 11% to 25% for the various scenarios. The
probability of an initial public offering was weighted at 50%,
the probability of a sale to a strategic acquirer was 35% and
the probability of remaining a private company was 15%.
The assumptions around fair value that we have made represent
our managements best estimate, but they are highly
subjective and inherently uncertain. If management had made
different assumptions, our calculation of the options fair
value and the resulting stock-based compensation expense could
differ, perhaps materially, from the amounts recognized in our
financial statements.
Research
and Development Expense for Software Products
Software development costs are expensed as incurred until
technological feasibility has been established, at which time
such costs are capitalized to the extent that the capitalizable
costs do not exceed the realizable value of such costs, until
the product is available for general release to customers. Based
on our product development process, technological feasibility is
established upon the completion of a working model of the
software product that has been tested to be consistent with the
product design specifications and that is free of any
uncertainties related to high-risk development issues. Costs
incurred by us between completion of the working model and the
point at which the product is ready for general release have
been insignificant. Accordingly, we have charged all such costs
to research and development expense.
Income
Taxes
We use the liability method of accounting for income taxes as
set forth in the authoritative guidance for income taxes. Under
this method, we recognize deferred tax liabilities and assets
for the expected future tax consequences of temporary
differences between the respective carrying amounts and tax
bases of our assets and liabilities. For the year ended
December 31, 2009, our tax provision consists principally
of foreign tax expense partially offset by United
States federal and state benefit. For year ended
December 31, 2008, our tax provision consists principally
of foreign and United States federal income tax expense.
We continue to assess the realizability of our deferred tax
assets, which primarily consist of net operating loss, or NOL,
carry-forwards. In assessing the realizability of these deferred
tax assets, management considers whether it is more likely than
not that some portion or all of the deferred tax assets will be
realized. We establish valuation allowances when necessary to
reduce deferred tax assets to the amounts expected to be
realized. The factors used to assess the likelihood of
realization include our latest forecast of future taxable income
and available tax planning strategies that could be implemented
to realize the net deferred tax assets. As of December 31,
2009 and 2008, our deferred tax assets had a valuation allowance
of $1.7 million and $3.0 million. The decrease in 2009
was due to reversal of valuation allowances in certain
jurisdictions in 2009 due to improved current and projected
taxable income.
If our recent trend of profitability continues, we may determine
that there is sufficient positive evidence to support a reversal
of, or decrease in, the valuation allowance. If we were to
reverse all or some part of our valuation allowance our
financial statements in the period of reversal would likely
reflect an increase in assets on our balance sheet and a
corresponding tax benefit to our statement of operations in the
amount of the reversal.
Because of certain prior period ownership changes, the
utilization of a portion of our United States federal and
state NOL carry forward may be limited. We have not finalized
our analysis to determine the annual 382 limitation, but we
estimate that approximately $2.0 million of our United
States federal and state net operating losses may be
limited which has been reflected in our valuation allowance at
December 31, 2009. If we were to determine that certain
amounts of the $2.0 million were not limited, a portion of
our valuation allowance could be reversed.
Effective January 1, 2007, we adopted the guidance on
accounting for uncertainty in income taxes as set forth under
Financial Interpretation No. 48, Accounting for
Uncertainty in Income Taxes (codified in ASC 740 Income
Taxes). This guidance clarified the accounting for
uncertainty in income taxes recognized in an entitys
financial statements and prescribes a recognition threshold and
measurement attribute for financial statement disclosure of
45
tax positions taken or expected to be taken on a tax return.
There was no impact upon adoption as our liability recognized
under previous accounting guidance was consistent with that
required under the new guidance. At December 31, 2009, our
reserve for uncertain tax positions was $3.3 million.
The adoption of this guidance required us to identify, evaluate
and measure all uncertain tax positions taken or to be taken on
tax returns and to record liabilities for the amount of these
positions that may not be sustained, or may only partially be
sustained, upon examination by the relevant taxing authorities.
Although we believe that our estimates and judgments were
reasonable, actual results may differ from these estimates. Some
or all of these judgments are subject to review by the taxing
authorities.
Our annual provision for income taxes and the determination of
the resulting deferred tax assets and liabilities involve a
significant amount of management judgment. Managements
judgments, assumptions and estimates relative to the current
provision for income tax take into account current tax laws, our
interpretation of current tax laws and possible outcomes of
current and future audits conducted by foreign and domestic tax
authorities. We operate within federal, state and international
taxing jurisdictions and are subject to audit in these
jurisdictions. These audits can involve complex issues which may
require an extended period of time to resolve.
We accrue interest and penalties related to unrecognized tax
benefits as a component of income tax expense. As of the
adoption date of this guidance and as of December 31, 2008
and December 31, 2009, there was no accrued interest or
penalties.
We intend either to invest our
non-United
States earnings permanently in foreign operations or to remit
these earnings to our United States entities in a tax-free
manner. For this reason, we do not record federal income taxes
on the undistributed earnings of our foreign subsidiaries.
46
Results
of Operations
The following table sets forth a summary of our consolidated
statement of operations and the related changes for the periods
indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
Consolidated Statement of
Operations Data:
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
|
(in thousands)
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
License revenue
|
|
$
|
51,482
|
|
|
$
|
74,446
|
|
|
$
|
99,864
|
|
Maintenance revenue
|
|
|
17,747
|
|
|
|
29,401
|
|
|
|
41,390
|
|
Professional services revenue
|
|
|
11,357
|
|
|
|
14,417
|
|
|
|
16,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
80,586
|
|
|
|
118,264
|
|
|
|
157,359
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
License revenue
|
|
|
2,949
|
|
|
|
3,071
|
|
|
|
3,663
|
|
Maintenance revenue
|
|
|
580
|
|
|
|
1,365
|
|
|
|
1,635
|
|
Professional services revenue
|
|
|
8,177
|
|
|
|
9,562
|
|
|
|
11,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of
revenue(1)
|
|
|
11,706
|
|
|
|
13,998
|
|
|
|
17,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
68,880
|
|
|
|
104,266
|
|
|
|
140,259
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing(1)
|
|
|
48,249
|
|
|
|
74,267
|
|
|
|
93,349
|
|
Research and
development(1)
|
|
|
5,419
|
|
|
|
8,258
|
|
|
|
8,735
|
|
General and
administrative(1)
|
|
|
15,154
|
|
|
|
20,190
|
|
|
|
25,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
68,822
|
|
|
|
102,715
|
|
|
|
127,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
58
|
|
|
|
1,551
|
|
|
|
13,166
|
|
Other income (expense)
|
|
|
(463
|
)
|
|
|
3,304
|
|
|
|
(4,529
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before benefit for income taxes
|
|
|
(405
|
)
|
|
|
4,855
|
|
|
|
8,637
|
|
Benefit (provision) for income taxes
|
|
|
40
|
|
|
|
(1,860
|
)
|
|
|
(1,776
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(365
|
)
|
|
$
|
2,995
|
|
|
$
|
6,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Included stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
$
|
12
|
|
|
$
|
39
|
|
|
$
|
82
|
|
Sales and marketing
|
|
|
103
|
|
|
|
285
|
|
|
|
733
|
|
Research and development
|
|
|
6
|
|
|
|
19
|
|
|
|
79
|
|
General and administrative
|
|
|
69
|
|
|
|
388
|
|
|
|
585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
190
|
|
|
$
|
731
|
|
|
$
|
1,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47
Comparison
of the Years Ended December 31, 2008 and 2009
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
|
|
Percentage of
|
|
|
Period to Period
|
|
|
|
Amount
|
|
|
Revenue
|
|
|
Amount
|
|
|
Revenue
|
|
|
Change
|
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License revenue
|
|
$
|
74,446
|
|
|
|
62.9
|
%
|
|
$
|
99,864
|
|
|
|
63.5
|
%
|
|
$
|
25,418
|
|
|
|
34.1
|
%
|
Maintenance revenue
|
|
|
29,401
|
|
|
|
24.9
|
%
|
|
|
41,390
|
|
|
|
26.3
|
%
|
|
|
11,989
|
|
|
|
40.8
|
%
|
Professional services revenue
|
|
|
14,417
|
|
|
|
12.2
|
%
|
|
|
16,105
|
|
|
|
10.2
|
%
|
|
|
1,688
|
|
|
|
11.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
118,264
|
|
|
|
100.0
|
%
|
|
$
|
157,359
|
|
|
|
100.0
|
%
|
|
$
|
39,095
|
|
|
|
33.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue was $157.4 million in 2009 compared to
$118.3 million in 2008, an increase of $39.1 million,
or 33.1%. License revenue grew by approximately
$25.4 million, or 34%. All territories showed strong
revenue growth, particularly Spain and France, which in their
second full year of operations as a direct sales office grew 72%
and 96%, contributing an incremental $7.3 million in total
revenue. We also grew revenue by $9.0 million, or 27%, in
our largest market, North America, and saw growing contributions
from relatively new markets in Eastern Europe and a brand new
market, Japan, which provided $1.7 million in incremental
license revenue. Although we introduced a new version of
QlikView in 2009, there was no material increase in the pricing
for our product. Revenue growth was achieved primarily due to
volume growth as more customers acquired our product for the
first time, along with additional license purchases by our
existing customers. From a performance perspective, we
experienced an increasing contribution from existing customers,
approximately 58% of license revenues, which resulted from our
land and expand sales strategy and greater
productivity from our sales representatives with revenue per
representative growing 38%. We believe that a better global
economic outlook also contributed to higher revenues as customer
demand and their willingness to invest in information technology
grew over the course of the year, with the majority of our
growth for 2009 coming in the third and fourth quarters of the
fiscal year. Maintenance revenues grew by approximately 41%
driven by annual maintenance renewal rates of greater than 85%.
As a percentage of total revenues, maintenance grew to 26% in
2009 from 25% in 2008, reflecting the impact of the growing
installed customer base and renewal rates. Professional service
revenue grew by 12% and was approximately 10% of our total
revenues.
48
Cost
of Revenue and Gross Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
|
|
Percentage of
|
|
|
|
|
|
|
|
|
|
Related
|
|
|
|
|
|
Related
|
|
|
Period to Period
|
|
|
|
Amount
|
|
|
Revenue
|
|
|
Amount
|
|
|
Revenue
|
|
|
Change
|
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
Cost of Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of license revenue
|
|
$
|
3,071
|
|
|
|
4.1
|
%
|
|
$
|
3,663
|
|
|
|
3.7
|
%
|
|
$
|
592
|
|
|
|
19.3
|
%
|
Cost of maintenance revenue
|
|
|
1,365
|
|
|
|
4.6
|
%
|
|
|
1,635
|
|
|
|
4.0
|
%
|
|
|
270
|
|
|
|
19.8
|
%
|
Cost of professional services revenue
|
|
|
9,562
|
|
|
|
66.3
|
%
|
|
|
11,802
|
|
|
|
73.3
|
%
|
|
|
2,240
|
|
|
|
23.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of revenue
|
|
$
|
13,998
|
|
|
|
11.8
|
%
|
|
$
|
17,100
|
|
|
|
10.9
|
%
|
|
$
|
3,102
|
|
|
|
22.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License revenue
|
|
$
|
71,375
|
|
|
|
95.9
|
%
|
|
$
|
96,201
|
|
|
|
96.3
|
%
|
|
$
|
24,826
|
|
|
|
34.8
|
%
|
Maintenance revenue
|
|
|
28,036
|
|
|
|
95.4
|
%
|
|
|
39,755
|
|
|
|
96.0
|
%
|
|
|
11,719
|
|
|
|
41.8
|
%
|
Professional services revenue
|
|
|
4,855
|
|
|
|
33.7
|
%
|
|
|
4,303
|
|
|
|
26.7
|
%
|
|
|
(552
|
)
|
|
|
(11.4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
$
|
104,266
|
|
|
|
88.2
|
%
|
|
$
|
140,259
|
|
|
|
89.1
|
%
|
|
$
|
35,993
|
|
|
|
34.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue was $17.1 million in 2009 compared to
$14.0 million in 2008, an increase of $3.1 million, or
22.2%. Overall cost of revenue declined as a percent of revenue
from 11.8% in 2008 to 10.9% in 2009, despite a decrease in our
margin related to professional services. In anticipation of
continued growth in our installed customer base, we increased
headcount in our professional services organization which
increased costs by $1.5 million in 2009, but we did not
achieve a corresponding increase in related revenues, reducing
our gross margin in the category to 26.7% from 33.7%. In
addition, fees paid to subcontractors increased by
$0.9 million. Fees paid to referral partners for license
revenues increased by $0.6 million in 2009 due to a
significant transaction.
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2009
|
|
|
Period to
|
|
|
|
|
|
|
Percentage
|
|
|
|
|
|
Percentage
|
|
|
Period
|
|
|
|
Amount
|
|
|
of Revenue
|
|
|
Amount
|
|
|
of Revenue
|
|
|
Change
|
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
$
|
74,267
|
|
|
|
62.8
|
%
|
|
$
|
93,349
|
|
|
|
59.3
|
%
|
|
$
|
19,082
|
|
|
|
25.7
|
%
|
Research and development
|
|
|
8,258
|
|
|
|
7.0
|
%
|
|
|
8,735
|
|
|
|
5.6
|
%
|
|
|
477
|
|
|
|
5.8
|
%
|
General and administrative
|
|
|
20,190
|
|
|
|
17.1
|
%
|
|
|
25,009
|
|
|
|
15.9
|
%
|
|
|
4,819
|
|
|
|
23.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
$
|
102,715
|
|
|
|
86.9
|
%
|
|
$
|
127,093
|
|
|
|
80.8
|
%
|
|
$
|
24,378
|
|
|
|
23.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and Marketing. Sales and marketing
expenses increased $19.1 million, or 25.7%, but declined as
a percentage of revenues, reflecting an increase in revenue
achieved per sales representative and an increased percentage of
sales from existing customers and through partners. The increase
was primarily attributable to an increase in personnel and
commission costs of $12.9 million (including a
$0.5 million increase in stock-based compensation), an
increase in costs related to marketing programs of
$2.4 million, an increase in facility and other
infrastructure costs of $2.6 million and an increase in
travel expenses of $0.9 million. Also in 2009, we
implemented an online customer relationship management tool to
facilitate sales force growth. We expect sales
49
and marketing expenses to continue to increase in absolute
dollars but to decrease as a percentage of revenues over time as
we continue to expand our sales force and marketing activities.
Research and Development. Although total
research and development headcount increased during this period,
total research and development expenses grew by only
$0.5 million or 5.8%. With the vast majority of our related
staff based in Lund, Sweden, changes in the value of the Swedish
kronor reduced the impact of the staff increase by approximately
$0.8 million. To accommodate the increase in our research
and development staff, we made further investment in our
facility in Sweden of approximately $0.2 million. We expect
our research and development expenses will continue to increase
in absolute dollars and as a percentage of revenue in the long
term as we increase our research and development headcount to
further strengthen and enhance our software platform.
General and Administrative. General and
administrative expenses were $25.0 million in 2009 compared
to $20.2 million in 2008, an increase of $4.8 million,
or 23.9%. This increase was due primarily to a $2.3 million
increase in personnel costs to build out our corporate level
functions to support anticipated global growth and prepare for
being a publicly traded company. This increase was also due to a
$1.2 million increase in travel expenses, a
$0.2 million increase in stock-based compensation expense,
a $0.5 million increase in facility and infrastructure
costs to support international expansion, and an increase in
depreciation and amortization of $0.3 million related in
part to additional investment in property and equipment due to
our increased headcount. We expect that general and
administrative expenses will continue to increase in absolute
dollars because of our efforts to expand our international
operations and due to costs to be incurred in connection with
this offering and ongoing public company related costs. However,
we believe over time general and administrative costs will
decline as a percentage of revenues as we will derive greater
efficiencies from our corporate infrastructure.
Other
Income (Expense)
Other income (expense) was an expense of $4.5 million in
2009 compared to income of $3.3 million in 2008. The change
consisted of increased interest expense, charges for our common
and preferred stock warrants and foreign exchange. Interest
expense increased due to a full year of interest expense on our
term loan. The change in the fair value of the stock warrants
increased by $1.5 million in 2009 in a manner consistent
with the increased value in our common stock. We had a
$1.6 million foreign exchange loss in 2009 compared to a
gain of $4.2 million in 2008. The change is principally due
to the foreign currency impact of our outstanding debt as a
result of the United States dollar generally weakening relative
to the Swedish kronor in 2009 compared to generally
strengthening in 2008.
Income
Tax Expense
Our income tax expense in 2009 was consistent with income tax
expense in 2008. The increase in our income before income taxes
of $3.8 million from 2008 to 2009 was offset by a decrease
in our effective tax rate from 38% in 2008 to 21% in 2009 as a
result of current year reversal of valuation allowance in
certain jurisdictions and a more significant impact of earnings
from foreign operations.
50
Comparison
of the Years Ended December 31, 2007 and 2008
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2008
|
|
|
Period to
|
|
|
|
|
|
|
Percentage of
|
|
|
|
|
|
Percentage of
|
|
|
Period
|
|
|
|
Amount
|
|
|
Revenue
|
|
|
Amount
|
|
|
Revenue
|
|
|
Change
|
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License revenue
|
|
$
|
51,482
|
|
|
|
63.9
|
%
|
|
$
|
74,446
|
|
|
|
62.9
|
%
|
|
$
|
22,964
|
|
|
|
44.6
|
%
|
Maintenance revenue
|
|
|
17,747
|
|
|
|
22.0
|
%
|
|
|
29,401
|
|
|
|
24.9
|
%
|
|
|
11,654
|
|
|
|
65.7
|
%
|
Professional services revenue
|
|
|
11,357
|
|
|
|
14.1
|
%
|
|
|
14,417
|
|
|
|
12.2
|
%
|
|
|
3,060
|
|
|
|
26.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
80,586
|
|
|
|
100.0
|
%
|
|
$
|
118,264
|
|
|
|
100.0
|
%
|
|
$
|
37,678
|
|
|
|
46.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue was $118.3 million in 2008 compared to
$80.6 million in 2007, an increase of $37.7 million,
or 46.8%, driven by an increase of $14.2 million, or 73%,
in our North American operations, which includes Latin America,
and an increase of $7.6 million, or 37%, in the Nordic
countries, primarily in Sweden, and $8.6 million in
contributions from new markets including our direct sales
operations in France and Spain. License revenue grew 45% and
maintenance revenue grew 66%. Maintenance revenue grew in both
absolute dollars and as a percentage of total revenues due to
the continued growth in our installed customer base and strong
renewal rates. Professional service revenue also increased
reflecting growth in both consulting and training services.
Cost
of Revenue and Gross Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
|
|
Percentage
|
|
|
Period to
|
|
|
|
|
|
|
of Related
|
|
|
|
|
|
of Related
|
|
|
Period
|
|
|
|
Amount
|
|
|
Revenue
|
|
|
Amount
|
|
|
Revenue
|
|
|
Change
|
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
Cost of Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of license revenue
|
|
$
|
2,949
|
|
|
|
5.7
|
%
|
|
$
|
3,071
|
|
|
|
4.1
|
%
|
|
$
|
122
|
|
|
|
4.1
|
%
|
Cost of maintenance revenue
|
|
|
580
|
|
|
|
3.3
|
%
|
|
|
1,365
|
|
|
|
4.6
|
%
|
|
|
785
|
|
|
|
135.3
|
%
|
Cost of professional services revenue
|
|
|
8,177
|
|
|
|
72.0
|
%
|
|
|
9,562
|
|
|
|
66.3
|
%
|
|
|
1,385
|
|
|
|
16.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of revenue
|
|
$
|
11,706
|
|
|
|
14.5
|
%
|
|
$
|
13,998
|
|
|
|
11.8
|
%
|
|
$
|
2,292
|
|
|
|
19.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License revenue
|
|
$
|
48,533
|
|
|
|
94.3
|
%
|
|
$
|
71,375
|
|
|
|
95.9
|
%
|
|
$
|
22,842
|
|
|
|
47.1
|
%
|
Maintenance revenue
|
|
|
17,167
|
|
|
|
96.7
|
%
|
|
|
28,036
|
|
|
|
95.4
|
%
|
|
|
10,869
|
|
|
|
63.3
|
%
|
Professional services revenue
|
|
|
3,180
|
|
|
|
28.0
|
%
|
|
|
4,855
|
|
|
|
33.7
|
%
|
|
|
1,675
|
|
|
|
52.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
$
|
68,880
|
|
|
|
85.5
|
%
|
|
$
|
104,266
|
|
|
|
88.2
|
%
|
|
$
|
35,386
|
|
|
|
51.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue was $14.0 million in 2008 compared to
$11.7 million in 2007, an increase of $2.3 million, or
19.6%. This increase was primarily due to the increase in
revenues and an increase in personnel and facility costs of
$0.8 million related to expanded headcount in our support
organization in order to support the increasing number of new
customers we added during 2007 and 2008. In addition, fees paid
to subcontractors in connection with the sale of professional
services to our customers increased $1.3 million. Our gross
profit as a percentage of revenue
51
increased slightly in 2008 as compared to 2007 due to a higher
percentage of our revenue being derived from license and
maintenance sales.
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2008
|
|
|
Period to
|
|
|
|
|
|
|
Percentage
|
|
|
|
|
|
Percentage
|
|
|
Period
|
|
|
|
Amount
|
|
|
of Revenue
|
|
|
Amount
|
|
|
of Revenue
|
|
|
Change
|
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
$
|
48,249
|
|
|
|
59.9
|
%
|
|
$
|
74,267
|
|
|
|
62.8
|
%
|
|
$
|
26,018
|
|
|
|
53.9
|
%
|
Research and development
|
|
|
5,419
|
|
|
|
6.7
|
%
|
|
|
8,258
|
|
|
|
7.0
|
%
|
|
|
2,839
|
|
|
|
52.4
|
%
|
General and administrative
|
|
|
15,154
|
|
|
|
18.8
|
%
|
|
|
20,190
|
|
|
|
17.1
|
%
|
|
|
5,036
|
|
|
|
33.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
$
|
68,822
|
|
|
|
85.4
|
%
|
|
$
|
102,715
|
|
|
|
86.9
|
%
|
|
$
|
33,893
|
|
|
|
49.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and Marketing. Sales and marketing
expenses were $74.3 million in 2008 compared to
$48.2 million in 2007, an increase of $26.0 million,
or 53.9%. The increase was primarily attributable to an increase
in personnel and commission costs of $17.9 million, an
increase in costs related to marketing programs of
$3.4 million, an increase in facility and other
infrastructure costs of $2.7 million and an increase in
travel expenses of $2.1 million. Our establishment of
direct sales offices in France and Spain along with the further
growth of our sales force in the United Stated contributed to
the increase in sales and marketing expenses in 2008 as compared
to 2007.
Research and Development. Research and
development expenses were $8.3 million in 2008 compared to
$5.4 million in 2007, an increase of $2.8 million, or
52.4%. The increase was due to an increase in personnel costs of
$2.3 million due to an expansion of our product marketing
organization and increased travel expenses of $0.5 million
in 2008. With the vast majority of our research and development
staff based in Lund, Sweden, changes in the value of the Swedish
kronor adversely impacted these costs.
General and Administrative. General and
administrative expenses were $20.2 million in 2008 compared
to $15.2 million in 2007, an increase of $5.0 million,
or 33.2%. This increase was due primarily to a $1.8 million
increase in personnel costs, a $0.3 million increase in
stock-based compensation expense, a $0.9 million increase
in facility and infrastructure costs to support our growth and
international expansion and an increase in travel expenses of
$0.7 million. In addition, professional fees, principally
from accounting, audit and tax fees, increased by
$0.5 million and depreciation and amortization expense
increased by $0.3 million as compared to 2007. These costs
were incurred in order to provide the needed corporate
infrastructure necessary to support further revenue growth.
Other
Income (Expense)
Other income (expense) was income of $3.3 million in 2008
compared to expense of $0.5 million in 2007. The change was
principally due to a $4.2 million foreign exchange gain in
2008. This change was primarily due to the foreign currency
impact of our outstanding debt, which is denominated in Swedish
kronor, as a result of the United States dollar generally
strengthening relative to the Swedish kronor in 2008 compared to
a general weakening in 2007. This change was offset by increased
interest expense and charges for our common and preferred stock
warrants. Interest expense increased due to higher average
outstanding debt balances in 2008 as compared to 2007. The
change in fair value of stock warrants in 2008 was consistent
with the change in fair value of stock warrants in 2007.
Income
Tax Expense
Our income tax expense in 2008 increased by $1.9 million
from 2007. This increase resulted from an increase in our income
before income taxes of $5.3 million from 2007 to 2008 and
an increase in our effective tax rate from
52
9.9% in 2007 to 38.3% in 2008 as a result of more significant
earnings in foreign operations in 2008 as compared to 2007 and
the impact of nondeductible expenses in 2008.
Seasonality
Our quarterly results reflect seasonality in the sale of our
products and services. Historically, a pattern of increased
license sales in the fourth quarter has positively impacted
sales activity in that period which can make it difficult to
achieve sequential revenue growth in the first quarter.
Similarly, our gross margins and operating income have been
affected by these historical trends because the majority of our
expenses are relatively fixed in the near-term. The timing of
revenues in relation to our expenses, much of which does not
vary directly with revenue, has an impact on the cost of
revenue, sales and marketing expense, research and development
expense and general and administrative expense as a percentage
of revenue in each calendar quarter during the year. The
majority of our expenses are personnel-related and include
salaries, stock-based compensation, benefits and incentive-based
compensation plan expenses. As a result, we have not experienced
significant seasonal fluctuations in the timing of our expenses
from period to period, other than an increase in general and
administrative expenses during the first quarter of each year as
a result of our annual employee summit. On a quarterly basis, we
have usually generated the majority of our revenues in the final
month of each quarter and a significant amount in the last two
weeks of a quarter. We believe this is due to customer buying
patterns typical in this industry. Although these seasonal
factors are common in the technology sector, historical patterns
should not be considered a reliable indicator of our future
sales activity or performance.
Acquisitions
In January 2008, in order to achieve a direct sales presence in
Spain, we acquired the operations and tangible assets of P.C.
Compatible Business Intelligence, S.L., or PCB, a Spanish
reseller of our product, for $1.9 million, including cash
of $0.4 million and a warrant to purchase an aggregate of
93,981 shares of our common stock at an exercise price of
$1.65 per share. PCB has the right to exercise such warrant
until December 31, 2010 and to require us to purchase the
acquired shares for an aggregate of 1.8 million
(approximately $2.4 million based on an assumed exchange
rate of approximately $1.43 as of December 31, 2009). In
the event the holder does not exercise this right to cause us to
repurchase these shares, the warrant would remain outstanding
and be exercisable until its expiration on December 31,
2014.
In January 2010, in order to achieve a direct sales presence in
Japan, we acquired all of the issued and outstanding shares of
Syllogic Corporation, or Syllogic, a Japanese reseller of our
product, for 120,000 shares of our common stock plus
contingent cash consideration not to exceed $0.8 million.
We account for acquisitions using the purchase method of
accounting. In each case, we allocated the purchase price to the
assets acquired, including intangible assets and liabilities
assumed, based on estimated fair values at the date of the
acquisition.
Liquidity
and Capital Resources
Since our inception, we have financed our operations through the
sale of preferred stock and common stock, cash flows generated
by operations and borrowings under debt instruments. As of
December 31, 2009, we had cash and cash equivalents
totaling $24.9 million, net accounts receivable of
$63.7 million and $14.8 million of working capital. As
of December 31, 2009, we owed a balance of
49.7 million Swedish kronor (approximately
$6.9 million based on an assumed exchange rate of
approximately 0.14 as of December 31, 2009) under a
promissory note held by a financial institution which is one of
our stockholders. We currently intend to prepay the outstanding
principal of this promissory note and any applicable prepayment
fees with the proceeds of this offering. In addition, we have an
asset based line of credit facility with a Swedish bank under
which we may borrow up to 60 million Swedish kronor
(approximately $8.4 million as of December 31, 2009
based on an assumed exchange rate of approximately 0.14) which
had an outstanding balance of $0.2 million as of
December 31, 2009. The line of credit matures on
June 30, 2010, and we have begun discussions with the
lender regarding a possible extension of the facility beyond
that date.
We estimate our capital expenditures for 2010 to be
approximately $2.0 million, comprised primarily of
additional leasehold improvements, furniture and fixtures and
computer equipment. We believe that our existing
53
cash and cash equivalents and our cash flow from operations will
be sufficient to fund our operations and our capital
expenditures and to pay our debt service for at least the next
12 months. Our future capital requirements will depend on
many factors, including our rate of revenue growth, the
expansion of our sales and marketing activities, the timing and
extent of spending to support product development efforts and
expansion into new territories, the timing of introductions of
new software products and enhancements to existing software
products and the continuing market acceptance of our software
offerings. Although we are not currently a party to any
agreement or letter of intent regarding potential investments
in, or acquisitions of, complementary businesses, applications
or technologies, we may enter into these types of arrangements,
which could require us to seek additional equity or debt
financing. Additional funds may not be available on terms
favorable to us or at all.
We will also incur costs as a public company that we have not
previously incurred, including, but not limited to, costs and
expenses for directors fees, increased directors and officers
insurance, investor relations fees, expenses for compliance with
the Sarbanes-Oxley Act of 2002 and rules implemented by the SEC
and Nasdaq, on which our common stock will be listed, and
various other costs. The Sarbanes-Oxley Act of 2002 requires
that we maintain effective disclosure controls and procedures
and internal controls.
The following table shows selected balance sheet data as well as
our cash flows from operating activities, investing activities
and financing activities for the stated periods:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the Year Ended
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
2007
|
|
2008
|
|
2009
|
|
|
(in thousands)
|
|
Cash and cash equivalents
|
|
$
|
9,214
|
|
|
$
|
14,800
|
|
|
$
|
24,852
|
|
Accounts receivable, net
|
|
|
33,859
|
|
|
|
41,110
|
|
|
|
63,729
|
|
Cash provided by operating activities
|
|
|
2,856
|
|
|
|
2,631
|
|
|
|
13,036
|
|
Cash used in investing activities
|
|
|
(1,022
|
)
|
|
|
(2,158
|
)
|
|
|
(2,128
|
)
|
Cash provided by (used in) financing activities
|
|
|
2,480
|
|
|
|
6,926
|
|
|
|
(1,791
|
)
|
Cash
and Cash Equivalents
Our cash and cash equivalents at December 31, 2009 were
held for working capital purposes and were invested primarily in
cash and money market accounts. We do not enter into investments
for trading or speculative purposes.
Accounts
Receivable, Net
Our accounts receivable balance fluctuates from period to period
which affects our cash flow from operating activities. The
fluctuations vary depending on the timing of our service
delivery and billing activity, cash collections and changes to
our allowance for doubtful accounts. Our allowance for doubtful
accounts represents our best estimate of the amount of probable
credit losses. To date, we have not incurred any write-offs of
accounts receivable significantly different than accounts
reserved.
Cash
Flows
Cash
Provided by Operating Activities
Net cash provided by operating activities was $2.9 million,
$2.6 million and $13.0 million and net income (loss)
was ($0.4 million), $3.0 million and $6.9 million
for the years ended December 31, 2007, 2008 and 2009. The
primary reason for the increase in net cash provided by
operating activities in 2009 relates to the increase in net
income during 2009. We (generated) incurred non-cash (income)
expenses totaling $1.0 million, $1.9 million and
$3.2 million for the years ended December 31, 2007,
2008 and 2009. Non-cash expenses primarily consisted of
stock-based compensation expense, bad debt expense, change in
deferred tax assets and liabilities, unrealized foreign currency
gains and losses, and depreciation and amortization expense.
54
The change in certain assets and liabilities resulted in a net
source (use) of cash of $2.2 million, ($2.2 million)
and $3.0 million for the years ended December 31,
2007, 2008 and 2009. Cash provided by operating activities is
driven by sales of our software offerings. Collection of
accounts receivable from the sales of our software offerings is
a significant component of our cash flows from operating
activities, as is the change in deferred revenue related to
these sales.
Cash Used
in Investing Activities
Net cash used in investing activities was $1.0 million,
$2.2 million and $2.1 million for the years ended
December 31, 2007, 2008 and 2009. Cash used in investing
activities for the year ended December 31, 2007 was
primarily for the purchase of property. During the year ended
December 31, 2008, we acquired PCB for an aggregate of
$0.4 million in cash. In addition, we made capital
expenditures for property and equipment. Cash used in investing
activities for the year ended December 31, 2009 was
primarily for capital expenditures related to property and
equipment as we continued to expand our infrastructure and
workforce.
Cash
Provided by (Used in) Financing Activities
Net cash provided by financing activities was $2.5 million
and $6.9 million for the years ended December 31, 2007
and 2008. Net cash used in financing activities was
$1.8 million for the year ended December 31, 2009. Net
cash provided by financing activities for the year ended
December 31, 2007 was primarily related to borrowings under
our line of credit facility as well as proceeds from the
exercise of stock options partially offset by payments made
under our long-term debt arrangement. Net cash provided by
financing activities for the year ended December 31, 2008
resulted from borrowings under a new long-term note payable
arrangement and proceeds from the exercise of stock options
partially offset by payments made under our line of credit
facility and the previous long-term note payable. Net cash used
in financing activities for the year ended December 31,
2009 was due to payments under our long-term note payable
arrangement partially offset by payments received for the
exercise and purchase of stock options.
Contractual
Obligations and Commitments
We generally do not enter into long-term minimum purchase
commitments. Our principal commitments, in addition to those
related to our long-term debt discussed below, consist of
obligations under facility leases for office space.
The following table summarizes our outstanding contractual
obligations as of December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due by Period
|
|
|
|
|
|
|
Less Than
|
|
|
|
|
|
|
|
|
More Than
|
|
|
|
Total
|
|
|
1 Year
|
|
|
1-3 Years
|
|
|
3 to 5 Years
|
|
|
5 Years
|
|
|
|
(in thousands)
|
|
|
Operating lease obligations
|
|
$
|
16,662
|
|
|
$
|
5,522
|
|
|
$
|
7,167
|
|
|
$
|
3,364
|
|
|
$
|
609
|
|
Note payable
|
|
$
|
6,921
|
|
|
|
3,076
|
|
|
|
3,845
|
|
|
|
|
|
|
|
|
|
Interest on note payable
|
|
$
|
865
|
|
|
|
577
|
|
|
|
288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
24,448
|
|
|
$
|
9,175
|
|
|
$
|
11,300
|
|
|
$
|
3,364
|
|
|
$
|
609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We have obligations related to unrecognized tax benefit
liabilities totaling $3.3 million, which have been excluded
from the table above as we do not think it is practicable to
make reliable estimates of the periods in which payments for
these obligations will be made. See Note 9 of the notes to
consolidated financial statements.
Off-Balance
Sheet Arrangements
During the years ended December 31, 2007, 2008 and 2009, we
did not have any relationships with unconsolidated organizations
or financial partnerships, such as structured finance or special
purpose entities,
55
that would have been established for the purpose of facilitating
off-balance sheet arrangements or other contractually narrow or
limited purposes.
Recently
Adopted Accounting Principles
In June 2009, the Financial Accounting Standards Board, or FASB,
issued The FASB Accounting Standards Codification, or the
Codification, authorizing the Codification as the sole source
for authoritative guidance in accordance with GAAP. The
Codification is effective for financial statements issued for
reporting periods that end after September 15, 2009. The
Codification supersedes all accounting standards in GAAP, aside
from those issued by the SEC.
In May 2009, the FASB issued a standard that sets forth the
period after the balance sheet date during which management of a
reporting entity should evaluate events or transactions that may
occur for potential recognition or disclosure in the financial
statements; the circumstances under which an entity should
recognize events or transactions occurring after the balance
sheet date in its financial statements; and the disclosures that
an entity should make about events or transactions that occurred
after the balance sheet date. This standard is effective for
interim and annual periods ending after June 15, 2009. We
adopted this standard in the year ended December 31, 2009,
and it did not impact our consolidated financial results.
We adopted new accounting guidance on business combinations
effective January 1, 2009. While retaining the fundamental
requirements of previous GAAP, this new statement makes various
modifications to the accounting for contingent consideration,
preacquisition contingencies, purchased in-process research and
development, acquisition-related transaction costs,
acquisition-related restructuring costs, and changes in tax
valuation allowances and tax uncertainty accruals. The impact of
adopting the guidance will depend on the nature and terms of
business combinations, if any, that we consummate on or after
January 1, 2009.
We adopted new accounting guidance on fair value measurements
effective January 1, 2008, for financial assets and
liabilities. In addition, effective January 1, 2009, we
adopted this guidance as it relates to nonfinancial assets and
liabilities that are not recognized or disclosed at fair value
in the financial statements on at least an annual basis. This
guidance defines fair value as the price that would be received
to sell an asset or paid to transfer a liability, referred to as
the exit price, in an orderly transaction between market
participants at the measurement date. The standard outlines a
valuation framework and creates a fair value hierarchy in order
to increase the consistency and comparability of fair value
measurements and the related disclosures. See additional
disclosures in Note 5 of the notes to consolidated
financial statements related to the adoption of this fair value
guidance.
In June 2008, the FASB issued new guidance related to assessing
whether an equity-linked financial instrument (or embedded
feature) is indexed to an entitys own stock for the
purposes of determining whether such equity-linked financial
instrument (or embedded feature) is subject to derivative
accounting. We adopted the new guidance effective
January 1, 2009. The adoption of this guidance did not have
a material impact on our consolidated financial statements.
Recent
Accounting Pronouncements
In October 2009, the FASB clarified the accounting guidance for
sales of tangible products containing both software and hardware
elements and issued new guidance that amends the criteria for
evaluating the individual items in a multiple deliverable
revenue arrangement and how to allocate the consideration
received to the individual items. The guidance is effective for
revenue arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010, with
early adoption permitted. We have evaluated the potential impact
of the revised guidance on our financial position and results of
operations and have concluded that they will not have a material
impact on our consolidated financial statements.
In August 2009, the FASB issued guidance on measuring
liabilities at fair value, which provides clarification that in
circumstances where a quoted market price in an active market
for an identical liability is not available, a reporting entity
must measure fair value of the liability using one of the
following techniques: the quoted price of the identical
liability when traded as an asset; quoted prices for similar
liabilities or similar liabilities when traded as assets; or
another valuation technique, such as a present value technique
or the amount that the reporting entity
56
would pay to transfer the identical liability or would receive
to enter into the identical liability that is consistent with
the provisions of authoritative guidance. This statement becomes
effective for the first reporting period, including interim
periods, beginning after issuance. We adopted this statement
effective as of January 1, 2010. We have evaluated the
potential impact of these consensuses on our financial position
and results of operations, and we have concluded that they will
not have a material impact on our consolidated financial
statements.
Quantitative
and Qualitative Disclosures about Market Risk
Interest
Rate Sensitivity
We had cash and cash equivalents of $9.2 million at
December 31, 2007, $14.8 million at December 31,
2008 and $24.9 million at December 31, 2009. We held
these amounts primarily in cash or money market funds.
We hold cash and cash equivalents for working capital purposes.
We do not have material exposure to market risk with respect to
investments, as our investments consist primarily of highly
liquid investments purchased with original maturities of three
months or less. We do not use derivative financial instruments
for speculative or trading purposes; however, we may adopt
specific hedging strategies in the future. Any declines in
interest rates, however, will reduce future interest income.
We had total outstanding debt of $5.1 million at
December 31, 2007, $8.1 million at December 31,
2008 and $7.0 million at December 31, 2009. The
interest rate on our outstanding debt at December 31, 2009
is fixed at 10%.
Foreign
Currency Risk
We market our products in North America, Europe, the
Asia-Pacific Regions, South America and Africa and develop our
products in Europe. As a result of our business activities in
foreign countries, our financial results could be affected by
factors such as changes in foreign currency exchange rates or
economic conditions in foreign markets, and there is no
assurance that exchange rate fluctuations will not harm our
business in the future. We sell our products in certain
countries in the local currency for the respective country. In
addition, our product development activities are principally
based at our facility in Lund, Sweden. This provides some
natural hedging because most of our subsidiaries operating
expenses are denominated in their local currencies. Regardless
of this natural hedging, our results of operations may be
adversely impacted by the exchange rate fluctuation. Although we
will continue to monitor our exposure to currency fluctuations
and, where appropriate, may use financial hedging techniques in
the future to minimize the effect of these fluctuations, we are
not currently engaged in any financial hedging transactions.
Foreign currency risk exposures arise from transactions
denominated in a currency other than our functional currency and
from foreign denominated revenue and profit translated into
United States dollars. Approximately 73% of our operating
revenues were denominated in currencies other than the United
States dollar for the year ended December 31, 2009. The
principal foreign currencies in which we conduct business are
the Swedish kronor, the British pound and the euro. The
translation of currencies in which we operate into the United
States dollar may affect consolidated revenues and gross profit
margins as expressed in United States dollars. A weakening of
the United States dollar versus other currencies in which we
operate may increase our consolidated revenues and gross profit
margins while the strengthening of the United States dollars
versus these currencies may have an opposite effect on our
consolidated results expressed in United States dollars.
At December 31, 2008 and 2009, we have a note payable that
is denominated in Swedish kronor that is remeasured at each
reporting date with foreign currency gains (losses) recognized
in other income (expense). We recognized a gain in 2008 as a
result of the general strengthening of the United States dollar
relative to the Swedish kronor and a loss in 2009 due to the
general weakening of the United States dollar relative to the
Swedish kronor. A hypothetical 10% change in the foreign
exchange rate at December 31, 2009 would have resulted in a
$0.7 million impact on net income.
57
BUSINESS
Overview
We have pioneered a powerful, easy-to-use business intelligence
solution that enables our customers to make better and faster
business decisions. Our software platform, QlikView, combines
enterprise-class analytics and search functionality with the
simplicity and
ease-of-use
found in office productivity software tools for a broad set of
business users. QlikView is powered by our in-memory associative
search technology, which has utilized rapid advances in
computing power to yield significant improvement in flexibility
and performance at a lower cost than traditional business
intelligence solutions. We have grown our customer base from
over 1,500 customers in 2005 to over 13,000 in 2009 and
increased our revenue at a 59% compound annual growth rate
during the same period. We added an average of 404 new customers
per month during fiscal year 2009. Our solution addresses a
diverse range of customer needs from middle market customers to
large enterprises such as BP, Campbell Soup Company, Colonial
Life, The Dannon Company, Inc., Heidelberger Druckmaschiner AG,
ING, Kraft Foods, Lifetime Brands, National Health Services
(NHS), Qualcomm, Symantec and Volvo Car UK Limited. We have
customers in over 100 countries and approximately 77% of
our revenue in 2009 was derived internationally.
QlikView empowers business users to navigate data in a manner
consistent with the fluid, associative nature of human thought.
Our technology platform enables users to consolidate large,
disparate data sets and discover relationships within data in
real time when requested by the user. QlikView visualizes data
in a simple, intuitive user interface that enables users to
interactively explore and analyze information. The
ease-of-use
and flexibility of QlikView enables a broad set of business
users, such as sales, marketing, human resources and finance
professionals; executive management and other managers;
operations, support and IT staff; data analysts and
statisticians. Examples of QlikView users include:
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Operations Planner uses QlikView to prepare
inventory forecasts for a global food manufacturer resulting in
significant improvement in forecast accuracy and reduced
transportation and workforce costs
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Pharmaceutical Sales Representative uses
QlikView to access current industry sales trends and doctor
prescription history while on a sales call with a busy physician
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Chief Information Officer uses QlikView to
analyze IT spending and budget information to identify
opportunities for cost savings and service level improvement
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Police Sergeant uses QlikView to maintain a
consolidated view of crime levels and optimize staffing
allocations to dispatch police into high crime areas
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We have a differentiated business model designed to accelerate
the adoption of our product by reducing the time and cost to
purchase and implement our software. Our low risk approach to
product sales, which offers free product downloads to
individuals and a
30-day money
back guarantee upon purchase, provides a needed alternative to
costly,
all-or-nothing,
traditional business intelligence sales model. We initially
focus on specific business users or departments within a
prospective customers organization and seek to solve a
targeted business need. After demonstrating QlikViews
benefits to initial adopters within an organization, we work to
expand sales of our product to other business units, geographies
and use cases with the long-term goal of broad organizational
deployment. According to a 2009 IDC survey, 44% of our customers
deploy QlikView in less than one month and 77% of our customers
deploy QlikView in less than three months. In comparison, our
customers have indicated to us that their prior implementations
of traditional business intelligence tools often take up to
18 months. We have a diversified distribution model that
consists of a direct sales force and a partner network that
includes resellers, OEMs and systems integrators. Additionally,
our online QlikCommunity provides us with a loyal and growing
network of users who promote our software, provide support for
other users and contribute valuable insights and feedback for
our product development efforts.
For the years ended December 31, 2009, 2008 and 2007, our
revenue was $157.4 million, $118.3 million and
$80.6 million, representing
year-over-year
growth of 33% in 2009 and 47% in 2008. For the three months
ended December 31, 2009, our revenue was
$61.7 million, representing 74% growth over the same period
the prior year. In addition, we generated operating income of
$13.2 million, $1.6 million and $0.1 million for
the years ended
58
December 31, 2009, 2008 and 2007. For the year ended
December 31, 2009, software license and maintenance revenue
comprised 90% and professional services and training comprised
10% of our total revenue.
Our
Industry
Use
of Business Intelligence and Data Analytics Tools
We believe that to succeed in todays increasingly
competitive markets, businesses must accelerate the rate at
which they identify and respond to changing business conditions.
An organizations market agility and ultimate success in
the global marketplace are dependent upon its ability to harness
the power of increasing volumes of information to make effective
business decisions. In seeking to gain an information advantage,
many organizations have implemented a range of solutions,
including business intelligence and data analytics tools.
According to a 2009 IDC report, the business intelligence market
is projected to grow to $8.6 billion in 2010; however, we
believe most traditional business intelligence tools were
developed for data analysts and other quantitative
professionals, not business users. We believe that these
traditional business intelligence tools often fail to provide
timely and critical insights to business professionals due to
inflexible data architecture, lack of broad usability and
substantial implementation time. As a result of the limitations
of traditional business intelligence tools, many business users
have turned to spreadsheets to help them perform data analysis.
Business users have adopted spreadsheets for many applications
due to their wide availability; however, these general
productivity tools were not specifically designed to facilitate
interactivity, aggregation or analysis of data for decision
making.
Trends
Driving Adoption of Business Intelligence and Data Analytics
Solutions
The use and importance of business intelligence and data
analytics software within organizations of all sizes has
increased significantly for several reasons, including:
Exponential Growth in Data Available for
Analysis. Over the last two decades,
organizations have made significant investments in automating
business processes with software applications that generate
substantial amounts of data which must be manipulated, analyzed
and made accessible to be useful to decision makers. However,
this data is often stored in different formats making it
challenging to efficiently analyze the data and gain insight
from it without using powerful data analytics solutions. A 2009
report by IDC indicated that enterprise data volume has grown at
a 52% compounded annual growth rate since 2005.
Disparate Data Sources. In todays
highly competitive marketplace, companies are expanding
operations through geographic diversification, acquisitions and
partnerships. The frequency of these strategic activities can
result in a complex web of infrastructure and software systems
within an organization. In addition, companies are more closely
integrating their systems with those of their customers,
partners and suppliers and adopting new software applications to
improve business efficiency. As a result, large amounts of data
are stored in various repositories across an extended network
creating significant data aggregation challenges. Organizations
often deploy a number of tools, including sophisticated data
integration software, purpose-built data warehouses and business
intelligence systems, to efficiently and reliably aggregate,
synchronize and analyze this disparate business data.
Decentralized Decision-Making. We
believe that many organizations are shifting towards
decentralized decision-making in order to more efficiently
respond to changing industry trends and competitive threats.
This shift has created the need for data analysis tools that
support employees at all levels of the organization as they
assume more responsibility for making critical business
decisions. Additionally, we believe that increases in the power
and performance of mobile networks and devices will drive demand
for mobile access to business data. The widespread use of simple
yet robust personal software applications has driven demand from
business users for intuitive analytical tools to make faster and
better decisions.
59
Traditional
Software Tools are Inadequate
Although there has been increasing adoption of business
intelligence and data analytics tools, we believe that most of
these traditional tools are inadequate to meet the needs of
users and face the following limitations:
Analysis Tools Not Designed for Business
Users. Most traditional business intelligence
tools were developed specifically for data analysts and other
quantitative professionals. These systems require sophisticated
programming skills to construct or modify predefined, inflexible
data sets, known as data cubes. These tools are used
to produce static reports which the business user cannot easily
modify or explore in an interactive manner. A typical business
user does not possess the skills or authority needed to modify
the underlying data cube and therefore must engage their IT
departments to reconfigure the analysis to produce the requested
information between each decision cycle. As a result, business
users often do not have access to critical data in a timely
manner and may miss important insights and opportunities.
Highly Inflexible Solutions are Difficult to Implement and
Maintain. Traditional business intelligence
solutions require the integration of large volumes of data
stored across an organization and its partners and the
development of a pre-defined summarization of the data (or data
warehouse) to support static query and reporting tools. These
tasks can be time-consuming and complex and often require
significant professional services support to complete. In
addition, traditional business intelligence solutions can be
difficult to update and require substantial investments to
refresh the underlying data.
Substantial
Total-Cost-of-Ownership. Organizations incur
significant hardware, software and professional services costs
to deploy and maintain traditional business intelligence
solutions. We believe the average business intelligence platform
implementation takes approximately 18 months from the time
of initial purchase. According to a 2009 report, Gartner
estimates that the cost of development for business intelligence
and data warehouse applications is about three to five times the
cost of the
software.1
These initial and ongoing costs result in a substantial
total-cost-of-ownership for many traditional business
intelligence applications. Most providers of traditional
business intelligence tools rely upon professional services
revenue for a large portion of their total revenue, and thus
have little incentive to migrate to a more customer friendly
license-based model or to solutions that are simple to install
and easy-to-use.
Spreadsheets Not Suited for Data Analysis and Lack
Reliability. Spreadsheets have been widely
adopted by business users for data analysis because they are
readily available. However, spreadsheets are general purpose
business productivity tools designed for data input and
calculation. The performance of spreadsheets declines when
analyzing large data sets or performing real-time, dynamic
calculations. Spreadsheets are often shared and edited by
numerous parties, resulting in multiple versions of similar
material. This lack of version control causes inconsistencies in
analysis, an inability to audit workflows and significant data
reliability challenges. Furthermore, spreadsheets lack
sophisticated data security features and can cause a number of
data security challenges given they can be easily shared via
email or detachable storage drives.
The
Opportunity for the QlikView Solution
QlikView addresses a broader market opportunity than solely
traditional users of business intelligence. According to a 2009
IDC report, the business intelligence market is projected to
grow to $8.6 billion in 2010. We believe that published
market size estimates exclude the vast majority of business
users, as most of these professionals do not use traditional
business intelligence solutions due to their cost and
complexity. According to a 2009 Gartner report, 28% of total
potential users within organizations use business intelligence
software.1
We believe that these potential users instead have adopted
common office productivity software tools for data analysis
tasks and that these users could benefit from a business
intelligence tool with QlikViews capabilities and
accessibility.
The market for our software platform extends beyond large
enterprises which have historically been the most frequent
adopters of traditional business intelligence tools. The
substantial cost and complexity of these traditional tools have
limited adoption by small businesses and medium-sized
enterprises. These potential users and customer segments
represent a large, underpenetrated market opportunity that we
believe will increasingly deploy powerful, enterprise-class
software platforms if they are lower cost and easy to use. Based
on our analysis of 2006 United
60
States Census Bureau data, there are approximately 18,000 large
and medium-sized enterprises (organizations with over
500 employees) and approximately 7.2 million small
businesses (organizations with ten to 500 employees) in the
United States. We believe that a significant number of these
organizations are potential users of QlikView. In addition to
the business intelligence market, we also believe QlikView can
be used to satisfy business users needs in adjacent
markets, such as search and discovery software, which according
to a 2009 IDC report is projected to grow to $2.4 billion
in 2010.
Our
Solution
QlikView is an innovative business intelligence solution that
combines enterprise-class analytics with the simplicity and
ease-of-use found in office productivity software tools. We
designed QlikView to enable business users in organizations of
all sizes to make faster and better decisions. A 2009 IDC study
found that QlikView users achieved an average of 186% return on
investment, or ROI, on their QlikView projects as well as a 23%
increase in cash flow, 20% decrease in operating costs and 34%
increase in productivity. The key differentiators of our
solution include:
Intuitive Experience Drives Broad
Adoption. QlikView empowers business users
with sophisticated analytic capabilities delivered through an
easy-to-use, intuitive user interface. Unlike traditional
business intelligence tools, which typically require advanced
programming by IT professionals to create static data reports,
QlikView allows the business user to search associatively and
define visual charts through simple
point-and-click
technology. Our user interface extends the power of data
analytics to the business user and drives QlikView usage and
adoption.
Faster Decision Cycles Increase Business
Agility. QlikView provides customers with the
tools to make faster, better decisions that help improve
business performance. According to a 2009 IDC survey, 44% of our
customers deploy QlikView in less than one month and 77% of our
customers deploy QlikView in less than three months. Our
customers have indicated to us that their prior implementation
of traditional business intelligence tools often take up to
18 months. Our deployment time significantly shortens
time-to-value
for our customers. In addition, after the initial installation
the customers analysis can be rapidly updated as
underlying data evolves and analytic requirements change.
Furthermore, QlikViews in-memory associative search
technology makes calculations in real time enabling business
users to intuitively interrogate and analyze data, which reduces
decision cycles.
Lower Total-Cost-of-Ownership Yields Higher
ROI. QlikView has approximately 47% of the
total cost of ownership of a generic business
intelligence project, according to a 2009 IDC
report.2
These savings are driven by reduced expenditures across
hardware, software and services from implementation through
ongoing maintenance and support. Traditional business
intelligence tools are typically comprised of a number of
disparate software components. QlikView is a single, cohesive
product that facilitates many types of analysis, whether
dashboards, analytic applications or reports, in a single user
interface with a common look and feel. QlikView can be
implemented in a self-service manner and runs independently with
limited IT support and without extensive infrastructure. As a
result, QlikView customers have reported, according to a 2009
IDC report, spending 39% of the professional services costs
required for traditional business intelligence solutions.
Highly Scalable In-Memory Architecture Leverages Hardware
Advances. QlikViews in-memory
associative technology benefits from two important computer
hardware trends: 64-bit computing, which increases the amount of
memory available on computers, and multi-core central processing
units, or CPUs, which allow for parallel processing of complex
calculations. Because of these capabilities, QlikView is able to
store data in memory and perform real-time calculations on a
massive volume of data from disparate sources. It is our
expectation that the amount of available memory and number of
CPU cores and processing speed will continue to increase in the
future. These expected improvements will drive QlikViews
future performance with minimal incremental investment because
we perform calculations in memory and on multiple cores in
parallel. Our platform integrates with nearly all data sources
and can scale from a single user to enterprise deployments
without requiring significant additional infrastructure.
Open Platform Focus. QlikView is
designed to be the easiest and fastest business intelligence
platform on which business users can develop analytic
applications. We provide a powerful, easy-to-use business
intelligence
61
platform that does not include any purpose-specific applications
when installed
out-of-the-box.
We believe that each of our customers business challenges
are highly unique and change rapidly. Therefore, our customers
are best positioned to create analytical applications that meet
their individual needs, and they require a flexible platform
that empowers them to address their challenges. Additionally, we
license our platform to partners, such as independent software
vendors and systems integrators, to create a wide variety of
applications. We have aligned with partners who have domain
specific knowledge and who will use such knowledge to build and
support purpose-specific analytic applications that they can
license directly to a user.
Our
Business Model
To complement QlikView, we have developed a differentiated
business model that has the following attributes:
Broad User Focus. We seek to market and
sell directly to the business user by providing an intuitive
software platform that can be installed and used with minimal
training. We believe that the ease by which business users can
evaluate and benefit from our platform substantially expands our
addressable market by allowing us to target a wide range of
users, generate incremental business from existing customers and
expand our footprint within their organizations. Unlike most
existing business intelligence tools, QlikView is purpose-built
for business users and does not require substantial IT support
to install, integrate and maintain.
Low Risk Rapid Product Adoption. To
facilitate adoption of our platform, we offer a downloadable,
easy-to-install,
full-featured version of QlikView for individual use
free-of-charge.
We allow our customers to purchase licenses in the way that best
meets their needs, including on an individual, workgroup,
departmental or enterprise wide basis. This provides the
flexibility organizations desire when evaluating software
purchases. When a customer decides to make a purchase, we offer
a 30-day,
money-back guarantee to further encourage rapid adoption of
QlikView. These measures significantly reduce customer trial
risk and provide a needed alternative to costly,
all-or-nothing,
enterprise-wide deployment requirements.
Land and Expand Customer
Penetration. We seek to initially
land within the organization of a new customer by
solving a business need of specific business users or
departments. After demonstrating the value of our solution to
those initial adopters, we work to expand the use of
our solution across the organization by targeting other business
units, geographies and use cases. Our customer penetration
strategy is focused on creating a loyal user base that promotes
adoption through tangible results and powerful,
word-of-mouth
marketing which facilitate incremental sales.
Globally Diversified Distribution
Model. We seek to maximize the reach of the
QlikView platform by employing a multi-pronged sales approach
that leverages a direct sales force and partner network which
includes resellers, OEM relationships and systems integrators.
We typically enter new markets through partnerships and reseller
agreements to minimize cost and risk while we assess demand in
the new market. For example, we successfully grew our initial
sales in France and the United Kingdom without maintaining a
local direct sales office and plan to use this strategy to
target additional international regions. We currently have
distribution capabilities in over 100 countries and a network of
over 1,100 channel partners worldwide to help generate demand
for QlikView.
Community-Based Marketing and
Support. We have established QlikCommunity,
our user community, to augment our development, marketing and
support efforts. This community of over 21,000 registered users
as of December 31, 2009 promotes the use of our software
within their organizations as well as to other organizations. We
utilize the QlikCommunity extensively to provide low-cost user
and developer support and valuable insights used by our research
and development team for product development. This passionate,
user-driven culture and collaboration begins within our company
and extends out to broader communities within our
customers organizations, further driving the QlikView
brand and quality.
Growth
Strategy
We intend to make QlikView the primary platform on which
business users, in companies of all sizes, make critical
business decisions. The key elements of our growth strategy
include:
Increase Our Global Market
Penetration. We intend to expand our presence
in targeted geographies by growing our direct sales force and
global partner network. We began our operations in Sweden, have
established a
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substantial foothold in Western Europe and continue to expand
globally. We intend to increase our presence in North America by
expanding our direct sales force and growing our indirect
channel in the region. We also seek to enter new international
markets by establishing distribution partnerships to drive
sales. We are leveraging our prior experience in Europe with
distribution partners and master resellers to further penetrate
international regions, such as United States, Japan, Australia,
China, Russia and Brazil.
Further Penetrate Our Existing Customer
Base. We intend to increase penetration of
existing customers by capitalizing on current users
satisfaction to promote QlikView to other users and departments
within their organizations. Of our 13,000 customers as of
December 31, 2009, approximately 37% have been working with
the QlikView platform for less than 12 months. We believe a
substantial opportunity exists to increase our sales to these
customers. Historically, we have migrated new customers from
single project and departmental deployments to multi-department
deployments by building on the satisfaction and benefits that
our customers experience using our platform.
Extend Our Software Platform to Provide New Business
Solutions. We plan to enhance our current
platform by adding new functionality that extends our analytics,
visualization and search capabilities to broader use cases.
Today, business intelligence is primarily used to solve
internally focused decision-making by data analysts and other
quantitative professionals. We believe that due to our unique
capabilities, QlikView can be extended to adjacent areas where
data-driven decisions are critical, including website
navigation, content search and information management, external
data communication, product configuration and
e-commerce
applications. Over time, we believe a variety of data-intensive
functions within organizations could be enhanced and made more
efficient by utilizing QlikView.
Expand Our OEM Alliances and Strategic
Relationships. We believe we have a
significant opportunity to expand the use of QlikView through
our OEM relationships, which accounted for approximately 7% of
our sales in 2009, as well as through other distribution
relationships. We have an ongoing effort to increase our number
of OEM alliances with other independent software vendors that
license our technology to embed within and enhance their
solutions. In addition, we seek to expand our strategic reseller
agreements and relationships with systems integrators and
consultants and to use this channel to generate additional
inbound customer prospects.
Enhance Adoption of QlikView by Offering a Robust Mobile
Solution. We intend to offer a variety of
delivery options that enable our customers to use our software
from any location over any device. In May 2009, we began
offering QlikView for the Apple iPhone, and we now also offer a
mobile client on the Android, BlackBerry and Symbian-based smart
phones. QlikView is one of the first business intelligence
platforms to make use of the mobile devices native touch
interface and GPS features to deliver an interactive business
intelligence experience on a mobile device. We believe the
interactive capabilities of QlikView mobile client will help
establish us as a market leader in the emerging mobile business
intelligence space and enhance adoption of QlikView on the
desktop as additional users experience the capabilities and
benefits of our solution.
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Products
Our QlikView product is designed to allow deployments to scale
from the single user to thousands of users. The following
diagram shows the deployment progression for QlikView:
Single
User Deployment
QlikView Local Client is designed to provide business users with
a simple and efficient way to build analytic applications to
solve critical business challenges. QlikView Local Client is a
Windows application that is installed on the users
computer. QlikView Local Client allows the user to load
disparate data sources such as databases, flat files or web
services into memory. Users can create a full array of user
interface objects such as charts, graphs, tables and listboxes
and analyze and visualize the data that is stored in memory. In
addition, any user interface elements can be grouped together
into a static report suitable for printing or emailing. These
analytic applications are valuable on a standalone basis but
gain their real value when shared with others in the
organization.
We offer QlikView Local Client as a free download with full
capabilities to develop analyses, but with the restriction that
users can only use analyses they have built themselves. This is
referred to as a Personal Use License and allows users to
connect to any underlying data source, load data, build user
interfaces and conduct interactive analyses of their data. The
Personal Use License limits the use of the QlikView files to the
person who created it. To share the analysis with another user,
each user must have a QlikView license, rather than a Personal
Use License. The Personal Use License provides a way for
individuals to learn and gain value from QlikView and also
generates leads for our sales organization.
Small
Workgroup Deployment
A small workgroup deployment involves the use of multiple
QlikView Local Clients on standalone client machines without a
central server. In order to share QlikView data and analysis
created by others in the workgroup, each user must have an
individual license. Because all data and analysis is contained
within a QlikView file, each licensed user may share, whether by
email, on a portal or on a shared drive, the QlikView file. This
deployment approach is typically favored by organizations with
small user populations
and/or poor
network connectivity.
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Departmental
and Enterprise Deployments
Departmental and enterprise deployments utilize a server to
provide a central repository for all QlikView analysis. The
QlikView Server component supports authentication and security
models to ensure appropriate user access and simultaneous access
to analyses by large user groups. We designed QlikView Server to
maximize the use of the processing power of standard multi-core
servers by spreading calculations over all available CPU cores.
The QlikView Server can be grouped across more than one physical
server into clusters to provide fault tolerance and additional
scale.
Server based deployments scale from small user groups (less than
25) to enterprise-wide use (tens of thousands of users). We
offer the QlikView Server at two license levels: Small Business
Edition and Enterprise Edition. Small Business Edition is
limited to 25 users and is suitable only for small and midsize
deployments. The Enterprise Edition has no user limits and
includes capabilities designed for larger and more technically
complex implementations.
To manage large deployments of QlikView, we offer our QlikView
Publisher component which is an administrative interface for
maintaining QlikView analyses. QlikView Publisher allows users
to reload data in a QlikView analysis on a periodic basis to
ensure that the most current data is available. QlikView
Publisher also connects to directory servers within
organizations and applies user security rules to a QlikView
analysis to ensure appropriate user access. Finally, QlikView
Publisher can alert end users to changes to a QlikView file and
facilitate distribution via email or a web based interface
called AccessPoint. The QlikView Publisher can be deployed
across one or more physical servers to provide the scale needed
for large QlikView deployments. QlikView Publisher is licensed
on a per server basis and includes a separately licensable
option for PDF report distribution capabilities. For large
enterprise deployments, multiple QlikView Servers and QlikView
Publishers can be clustered to provide load balancing and fail
over capabilities.
Access to the QlikView Server is governed by a Client Access
License (or CAL) licensing model. The most common QlikView
Server license type is a Named User CAL. In addition to access
to the QlikView Server there are separately licensable options
for real-time data streaming capabilities and test and
development servers. QlikView also offers separately licensable
options for a connector to SAP and Salesforce.com.
Technology
QlikViews primary architectural principles are to provide
end user simplicity and rapid deployment. In developing our
solution, we endeavor to obscure the underlying technical
complexity from the user while providing powerful easy-to-use
functionality.
Superior
End User Experience
QlikView is designed to mirror the fluid, associative nature of
human thought. We believe people process information in
non-hierarchical ways when making decisions. Faced with a
decision, each person uses a different path to reach a
conclusion. We designed QlikView to support this type of
decision-making by allowing users to explore data according to
their own thought processes, seeing updated calculations and
relationships with each QlikView interaction.
We call this flexible model of interaction associative
search. Associative search is a non-hierarchical model of
interacting with interrelated data elements. It allows users to
select arbitrary groups of data elements and see how these
selections affect the remaining data elements. In QlikView, the
users selections are shown in green, data elements related
to these selections are shown in white, and data elements not
related to these selections are shown in gray. The users
current selections apply to all the data in QlikView and affect
every calculated value. Thus, with every interaction users see
the relationship between data and also the effect their
selection has on calculations that they are tracking.
Importantly, information is never hidden from the user. All data
is always shown to the user, including information not related
to the user selection. This can lead a user to see unexpected
insights from otherwise excluded data. Finally, all user
interactions and data calculations are performed in real time.
Because of the rapid response time and ease of use, users can
click frequently through data and analysis. Users take advantage
of this speed to surf the data and identify
relationships that they may otherwise miss in competing products.
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Traditional business intelligence query tools filter data that
is not part of the current query, hiding data from the user and
potentially omitting valuable information which did not meet the
initial parameters of the question. Typically the queries that
underlie these tools take many minutes or even hours to run.
This creates a high cost of investigation and may cause users to
avoid running multiple queries. In addition, to improve
performance traditional tools often require reports to be run in
batches and thus be pre-defined ahead of time.
Fast
Deployment
QlikViews architecture reduces the cycle time between data
collection and deployment of analysis to the end user to a few
weeks and sometimes to as little as a few days. By moving all
data in-memory, QlikView does not require the use of data
warehouses for high performance analyses which shortens the time
to access data. QlikView does not require disk-based cubes since
it performs all calculations in real time as the user explores a
data set. This approach allows the user to interactively analyze
a data set and easily modify the scope of an analysis. In
addition, in many cases, end users can build the required
analyses themselves. The QlikView architecture facilitates the
development of all types of analysis, including dashboards,
analytic applications or reports, on a single platform with a
common user interface. QlikView is often deployed with limited
IT intervention enabling IT staff to focus on data integration
and data quality challenges which is where they can be most
valuable.
Traditional business intelligence tools typically require long
and complicated deployments for several reasons. In traditional
deployments, large volumes of data used for decision-making must
be moved into query-only data repositories such as data
warehouses to accommodate the heavy query loads that traditional
tools make on operational systems. Traditional tools store
analyses on disk in pre-calculated cubes to improve perceived
metric calculation performance. These disk-based cubes are
difficult and time-consuming to build and maintain and require
the scope of analysis to be decided ahead of time. Thus, typical
deployments of traditional business intelligence tools require
an extended requirements gathering phase during which IT staff
work with business users in an attempt to document and lock-down
the scope of analysis in advance. Traditional business
intelligence tools have many end user tools for viewing
analyses. Once the data is organized, there is a long process of
selecting and deploying the appropriate end user tool. Finally,
due to product complexity, traditional tools must be managed and
governed by resource constrained IT departments, rather than by
business users. Most traditional deployments require over a year
to implement fully, with changes to the scope of a project
extending the time to value.
Technology
Foundations
Associative search has two key technological foundations: all
data is held in computer memory (RAM), and all calculations are
performed in real time. Two important computing trends have
supported these architectural decisions. The first trend is the
shift from 32-bit computing to 64-bit computing, which has
exponentially raised the amount of available RAM per computer.
It is currently possible to purchase servers with as much as 512
gigabytes of RAM, whereas as recently as 2005, most servers had
four gigabytes of RAM. This increase in available memory has
made it practical to move data storage from disk directly into
RAM. The second trend is the increasing pervasiveness of
multi-core CPUs. In 2005, most servers had single-core CPUs.
Today, commonly available servers can have as many as 48 cores
across eight CPUs. For applications that have been designed to
run calculations in parallel, this shift has provided a large
increase in processing power. These high capacity servers are
readily available for purchase, even online via credit card, for
less than $50,000. Even quite recently this level of computing
power would require a custom built machine costing hundreds of
thousands or even millions of dollars.
QlikViews in-memory architecture allows it to manipulate
large amounts of data, while giving users a high level of
interactivity. QlikView compresses data as it is brought into
memory, and this enables it to store data in-memory more
efficiently than it would be stored on disk in a traditional
relational database. As data is brought into memory, QlikView
also maps the linkages between data elements to help facilitate
visualization of data element associations. In more recent
versions of QlikView, data can be streamed directly into memory
from source applications, providing a mechanism for updating the
data in-memory without reloading.
QlikViews ability to perform real-time calculations allows
it to handle the calculation of complex measures and metrics
quickly. QlikView is designed to spread the calculation load
across all available CPU cores and to
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manage this workload across many concurrent users. In addition,
our platform can cache results across users so that the most
commonly used calculations are performed the least number of
times.
QlikCommunity
We have a loyal base of users on our online community website,
QlikCommunity which is comprised of over 21,000 registered users
as of December 31, 2009. Our QlikCommunity website was
relaunched in May 2009, and during the fourth quarter of 2009 we
averaged approximately 100 new user registrations each day.
QlikCommunity provides our registered users with a low-cost,
user-friendly product support resource, which includes:
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discussion forums to share their QlikView experiences and to
find answers to questions about the product and its features
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user groups based on location, industry and job function
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blogs written by our employees
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user-generated content, including best practices, how-tos,
documentation and other material
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In addition, QlikCommunity provides us with a loyal network of
practitioners who promote the usage of our software and provide
support to users trying to solve technical problems.
QlikCommunity also serves as a valuable feedback loop through
which our product development team gains insights about new
features and functionalities that help guide our future product
development. QlikCommunity users also provide us with their
contact information when they register as a member, and we
effectively target these users as a pool of self-selecting,
low-cost, qualified sales leads.
Research
and Development
Our research and development (or R&D) organization is
responsible for the design, development, testing and support of
our software. Our current research and development efforts are
focused on new releases of existing products as well as new
products and modules.
As of December 31, 2009, we had 54 people in our
R&D organization. Our entire R&D organization is
located in Lund, Sweden on two connected floors in the Ideon
Science Park. The core members of our R&D team have been
with our company since as early as 1996. We believe that the
close physical proximity and the tenure of our core development
organization provide us with a competitive advantage. We use an
agile philosophy in our development process which encourages
broad participation in design and testing and rapid prototyping.
Our development, testing and quality assurance processes use
automated testing extensively and are designed in alignment with
Capability Maturity Model Integration (CMMI), an industry
R&D process improvement approach.
We aim to release major feature releases of QlikView every 12 to
18 months, with service releases every two to four months
between major releases. Some new product capabilities such as
mobile technologies and data connectors that can be developed
independently are released more frequently.
We work closely with our customers in developing our products
and have designed a flexible product development process that is
responsive to customer feedback that we receive throughout the
process. Planning for each major release begins with a
requirements gathering meeting called a Reference Group which
gathers input from our customer-facing implementation
consultants in each of our markets. As the product is developed,
specific customers and partners are identified to provide
detailed feedback on product design. Then, a broad set of
customers and partners are involved in beta testing major
releases of QlikView, which typically occurs for several months
prior to general availability. In addition to local
requirements, we gather all direct customer input from
QlikCommunity, our community website. From the Reference Group
we consolidate and prioritize all customer requirements. These
requirements form the input for the Design Group which comprises
core members from R&D and our Product Marketing team. The
Design Group segments requirements into the product release
cycle and assesses the technical feasibility of all requests.
Within our operations, we are extensive users of our own
product. We install, upgrade and use our product internally in a
pre-release and beta state before allowing it to be made
generally available. Consequently, this
67
process allows us to identify and resolve many deployment issues
prior to making the product available to customers.
Innovation is a critical factor in the success of QlikView, and
identifying and incubating innovation is built into our R&D
process. We have recently added a QlikView Labs department to
consolidate and manage innovative uses of QlikView and new core
technologies. We invest time and money in identifying and
nurturing new product concepts with the intention of
incorporating successful ideas into the product as new product
modules or as entirely new products.
Marketing
and Sales
We market and sell our products and services through our direct
sales force and an indirect sales channel comprised of a global
partner network. Our direct sales force consists of professional
sales people who typically have several years of experience
selling enterprise software. Our global partner network brings
key technological and industry expertise that we utilize to help
us reach customer organizations around the world. These indirect
sales channels often aid us in shortening the sales cycles we
typically face with prospective customers.
Our global partner network includes master resellers, elite
resellers and resellers. These partners are authorized to sell
licenses and to implement and provide first line support for our
products. A master reseller is generally appointed to extend
geographic sales into a territory where we have no direct sales
presence. Designation of elite reseller versus reseller is
driven by the amount of sales volume that they derive from the
sale of our product. Additionally we work with system
integrators and other technological consulting firms who provide
complementary skills and expertise in a certain industry or
region.
Our global partner network also includes OEM partners who use
QlikView technology as a bundled or add-on feature in their
products and services. Typically OEM partners include software
companies, SaaS vendors and information providers. More broadly,
this category applies to any organization seeking to leverage
QlikView to power the analytics in an existing or new product or
in a service offering.
We support our global partner network through a program that
provides a structured framework to effectively recruit, enable
and support partners who sell and deliver complementary QlikView
solutions. Our team provides a complete lifecycle of support to
partners, based on three fundamental principles:
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enable partners through technical support, education, training
and certification
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market with and for partners through branding, awareness,
customer marketing and lead generation programs
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sell QlikView and Powered by QlikView products with
effective sales tools and sales support
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As of December 31, 2009, our global partner network was
comprised of more than 1,100 partners in over 100 countries. No
individual partner represented more than 3% of our revenues in
the fiscal years ended December 31, 2007, 2008 or 2009.
We focus our marketing efforts on increasing brand awareness,
communicating product advantages and generating qualified leads
for our sales force and channel partners. We rely on a variety
of marketing vehicles, including trade shows, advertising,
public relations, industry research, our website and
collaborative relationships with technology vendors. In
addition, we work closely with a number of our global partners
on co-marketing and lead-generation activities in an effort to
broaden our marketing reach.
Maintenance
and Services
Maintenance and Support. Our customers
generally receive one year of software maintenance and support
as part of their initial purchase of our products and have the
option annually to renew their maintenance agreements. These
annual maintenance agreements provide customers the right to
receive unspecified software updates, maintenance releases and
patches, and unlimited access to our support services. We engage
third parties to provide first-line support for our product. We
work closely with these third parties to help ensure that they
have the necessary skills and product knowledge to assist our
customers with installation, maintenance and other
68
requirements. Our internal support personnel are based in our
offices in Lund, Sweden; Raleigh, North Carolina; Dusseldorf,
Germany; and Sydney, Australia; and they work with our third
party partners to handle support issues that may arise.
Services. Our revenue model is license
driven with minimal professional services required to install
and configure our software. We believe that this enables our
customers to achieve rapid
time-to-value.
While the vast majority of implementation projects are conducted
by our partners, we have also established an expert services
department to support customers and partners with more in-depth
technical know-how and best practices about our product
including implementation, scripting, user interface design,
application development and security management. Training is
given either in-person or online. Typically, in-person training
courses are billed on a per person, per class basis. We have
both standard packages as well as customized trainings. We also
utilize and promote QlikCommunity as a supplement support
resource for our customers.
Customers
As of December 31, 2009, we had approximately 13,000
customers in over 100 countries. We provide products and
services to midmarket organizations, as well as large corporate,
government, healthcare and education accounts. We do not believe
our business is substantially dependent on any particular
customer as no customer represented more than 2% of our revenue
in 2007, 2008 or 2009. Our target markets are not confined to
certain industries and geographies as we are focused on
providing a solution that meets the needs of end users
generally. Our customers represent numerous industry verticals,
including consumer packaged goods, financial services,
pharmaceuticals, retail, manufacturing, technology and
healthcare.
Case
Studies
Customer Case Studies. The following case
studies illustrate how our customers use and benefit from our
products, and reflect certain characteristics of our solution,
business model and growth strategy.
Enterprise
Case
Studies:
Heidelberger, a European industrial manufacturer,
lacked the flexibility for new reporting demands and ad hoc
analysis and needed a platform to leverage SAP Business
Information Warehouse data. Following an initial deployment,
they now use QlikView for more than 75 applications across
sales, finance and IT. By using QlikView they were able to
reduce development cycles for new business intelligence
applications by 80% and achieved full return on investment in
just four months with the rate of return calculated at 263%.
QlikView has enabled Heidelberger to improve monitoring of IT
reporting of server and hardware infrastructure equipment with
activity, costs, utilization and versioning and the management
of internal support to meet service levels to each business
unit. Key to their overall strategy, QlikView delivered
integration across multiple data sources allowing for a more
decentralized business intelligence approach.
ING Lease UK, a division of the ING Group, is an
intermediary-led asset finance business. After acquiring three
businesses ING Lease sought to get a consolidated view of its
business by assembling information from the disparate underlying
data sources. Deploying QlikView across the enterprise, they
were able to provide transparency and understand profit and loss
drivers across more than 100 dimensions, including customer,
product, channel, asset, deal size and risk profile. ING saw a
rapid return on its investment and empowered personnel to manage
the business with immediate access to answers.
National Health Service (NHS), NHS North West
Collaborative Commercial Agency, a division of Englands
public health system, needed to compile financial data from a
range of applications throughout the various Trust sponsor
bodies of the North West NHS Collaborative Procurement Hub (or
NWCPH). This would be used to identify areas across the NHS
network to reduce contract spend as part of a supply chain
excellence program. They deployed QlikView to hundreds of users
with a focus on benefits reporting, cost analysis, supplier and
purchaser analysis, benchmarking analysis and category
management analysis. The rapid deployment was complete in less
than 12 weeks, ahead of schedule and on budget. QlikView
improved performance by delivering insights into data and by
saving hours of management time in reporting and analysis. The
NWCPH, which manages $2.4 billion in spend, garnered
$66 million in procurement cost savings over two years.
69
Mid-Market
Case
Studies:
Colonial Life, a leading provider of voluntary
worksite benefits in the United States, needed to improve the
understanding of sales and customer data from enrollment systems
and to provide timely and accurate departmental expense
information and variance analysis. The organization also wanted
to deliver a differentiated toolset of sales performance metrics
in support of top-line growth targets. Colonial Life has
provided online access to sales and customer data to more than
7,800 sales agents, creating greater efficiency in the
enrollment and renewal process. Its nearly 100 QlikView
company-wide applications have been widely adopted by business
users with minimal IT support.
Lifetime Brands, a leading marketer of branded
kitchenware in North America, needed to unlock data stored in
legacy systems that they could not access with SAP. QlikView
made it easy to access data sources from three years prior to
their SAP implementation so they could have a full view to
analyze trends over time for patterns and history. Reports that
had been in progress for years were delivered within the first
two months of the QlikView implementation. Lifetime Brands
consolidated 100 individual reports from disparate systems into
a single QlikView application of all sales and supply chain
activity. Employees can now monitor and analyze inventory turns,
purchase orders, material requirements and vendor performance
across all divisions. Management uses QlikView to identify and
solve problems proactively in the supply chain, from supplier
deliveries and production schedules to warehousing.
OEM Case Studies. The following case studies
illustrate how our OEMs use and benefit from our products and
reflect certain characteristics of our solution, business model
and growth strategy.
Kingdee Software, a leading enterprise resource
planning (or ERP) software company headquartered in China,
selected QlikView to be integrated into the business
intelligence module of its K/3 ERP standard edition system. As
one of the ERP software companies with the largest number of
users in China, Kingdee will extend its offering to include
analysis powered by QlikView and will act as another partner in
our diversified indirect distribution channel. As one of the
largest suppliers of ERP to small to medium enterprises Kingdee
represents a network of 600,000 customers and 1,100 partners.
Surgical Information Systems, LLC (SIS) provides
specialized software solutions for the surgical process from
pre-surgery testing through the procedure to post-surgery care
at over 270 facilities throughout North America. SIS has been
innovative with its
on-site and
mobile QlikView applications which include analysis of surgical
scheduling, anesthesia, tissue tracking and post surgery
antibiotic consumption outcomes. To track hospital surgical
patient flow, they use on-time ratios and retro analysis to
predict outcomes. Calculations by surgeon, anesthesiologist,
patient profile and procedure can be performed to analyze how
long each process should take based on past similar cases. In a
simple dashboard of six easy to read gauges, clinicians tracking
tissues and implants can see the state of the inventory at a
single visual glance with attributed monetary implications of
expiration in this highly regulated function. With the QlikView
iPhone application anesthesiologists, for example, take their
dashboard view to a patients bedside in the palm of their
hands.
Intellectual
Property
Our intellectual property is an essential element of our
business. We rely on a combination of copyright, trademark,
trade dress and trade secret laws, as well as confidentiality
procedures and contractual restrictions, to establish and
protect our proprietary rights both domestically and abroad.
These laws, procedures and restrictions provide only limited
protection. We currently have five patents and have a pending
application for a sixth patent. Any future patents issued to us
may be challenged, invalidated or circumvented. Any patents that
may issue in the future with respect to pending or future patent
applications may not provide sufficiently broad protection or
may not prove to be enforceable in actions against alleged
infringers. We endeavor to enter into agreements with our
employees and contractors and with parties with whom we do
business in order to limit access to and disclosure of our
proprietary information.
We cannot be certain that the steps we have taken will prevent
unauthorized use or reverse engineering of our technology.
Moreover, others may independently develop technologies that are
competitive with ours or that infringe our intellectual
property. The enforcement of our intellectual property rights
also depends on any legal
70
actions against these infringers being successful, but these
actions may not be successful, even when our rights have been
infringed.
Furthermore, effective patent, trademark, trade dress, copyright
and trade secret protection may not be available in every
country in which our products are offered. In addition, the
legal standards relating to the validity, enforceability and
scope of protection of intellectual property rights are
uncertain and still evolving.
From time to time, we may encounter disputes over rights and
obligations concerning intellectual property. Although we
believe that our product offerings do not infringe the
intellectual property rights of any third party, we cannot be
certain that we will prevail in any intellectual property
dispute. If we do not prevail in these disputes, we may lose
some or all of our intellectual property protection, be enjoined
from further sales of products determined to infringe the rights
of others
and/or be
forced to pay substantial royalties to a third party, any of
which could harm our business, financial condition and results
of operations.
Competition
Our technology platform and differentiated business model help
us to compete in the highly competitive business intelligence
market. We face competition from many companies that are
offering, or may soon offer, products that compete with our
products.
To date, we have primarily faced competitors in several broad
categories, including business intelligence software, analytical
processes, query tools, web-based reporting tools and report
delivery technology. Independent competitors that are primarily
focused on business intelligence products include, among others,
MicroStrategy and the SAS Institute. We also compete with large
software corporations, including suppliers of enterprise
resource planning software, that provide one or more
capabilities competitive with our products, such as IBM,
Microsoft, Oracle and SAP AG. We believe we generally compete
favorably with respect to these competitors; however, some of
our competitors and potential competitors have advantages over
us, such as:
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longer operating historicals
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significantly greater financial, technical, marketing or other
resources
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stronger brand and business user recognition
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broader global distribution and presence
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Current and future competitors may also have greater resources
to make strategic acquisitions. For example, Oracle acquired
Hyperion Solutions in April 2007, IBM acquired Cognos in January
2008 and SAP acquired Business Objects in January 2008. By doing
so, these competitors may increase their ability to meet the
needs of our potential customers. Our current or prospective
indirect channel partners may establish cooperative
relationships with our current or future competitors. These
relationships may limit our ability to sell our products through
specific distribution channels. Accordingly, new competitors or
alliances among current and future competitors may emerge and
rapidly gain significant market share. These developments could
limit our ability to obtain revenues from new customers and to
maintain technical support revenues from our installed customer
base.
See the section of this prospectus entitled Risk
Factors for further discussion regarding our competition.
Culture
and Employees
As a global company with 574 employees as of
December 31, 2009, of which 148 were employed in the United
States and 426 were employed outside the United States, having a
strong company culture and set of values is critical to our
success. Our corporate culture provides us with a competitive
advantage by supporting our ability to keep our market offering
consistent despite a globally diverse employee base. To
communicate and reinforce our culture, we have a set of
corporate values which provide a framework for guiding employees
in implementation of our business model without direct
managerial control. Our values are:
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challenge the conventional
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be thorough but keep it simple
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open and straightforward communication
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take responsibility
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teamwork yields the best results
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Our values are taught and reinforced from the moment new
employees join our company. Shortly after being hired, all
employees attend QlikAcademy, a week-long training session in
Lund, Sweden, to learn about our product, our sales model and
our cultural values. Our values form the fabric of our work
ethic, and we believe that they enable us to quickly recruit and
properly manage our highly talented employees. Our culture
encourages the iteration of ideas to address complex technical
challenges. In addition, we embrace individual thinking and
creativity. Despite our growth, we constantly seek to maintain
a small-company feel that promotes interaction and the exchange
of ideas among employees. We try to minimize company hierarchy
to facilitate meaningful communication among employees at all
levels and across all departments. This openness extends to our
partners and customers as well allowing us to establish strong
relationships that contribute to our growth.
Every year since 2000 we have hosted an annual QlikTech summit
where we bring together all our employees in one location to
build cross-border relationships and to facilitate
communications. During the summit we update employees on our
progress, provide training around new initiatives, host
presentations by industry speakers and key customers and allow
open interaction between employees from around the world. Our
summit is a critical mechanism for promoting consistent and
efficient execution of the years strategic plan. Having
the summit at a single time and in a single location provides
our globally distributed organization with an opportunity to
share ideas and best practices. We believe that the summit is
one of the key elements in maintaining a strong company culture
among our employees.
We consider our current relationship with our employees to be
good. We are not a party to a collective bargaining agreement
with any of our employees.
Facilities
We currently lease approximately 17,330 square feet of
space for our corporate headquarters in Radnor, Pennsylvania
under a lease agreement that expires on September 30, 2011.
In connection with our sales efforts, we also lease office space
in California, Illinois, Massachusetts, North Carolina and
Texas. In addition, we lease space for our foreign subsidiaries
in Australia, Austria, Belgium, Denmark, Finland, France,
Germany, India, Italy, Japan, the Netherlands, Portugal,
Singapore, Spain, Sweden, Switzerland and the United Kingdom for
their operations, including local administrative, sales, support
and development personnel.
We believe our current facilities and planned expansion
facilities will be adequate for the foreseeable future; however,
we will continue to seek additional space as needed to satisfy
our growth.
Legal
Proceedings
From time to time, we may become involved in legal proceedings
in the ordinary course of our business. We are not presently a
party to any legal proceedings that, if determined adversely to
us, would individually or in the aggregate have a material
adverse effect on our business, operating results, financial
condition or cash flows.
72
MANAGEMENT
Executive
Officers and Directors
The following table sets forth information concerning our
executive officers and directors as of March 31, 2010:
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Name
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Age
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Position
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Lars Björk
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48
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President, Chief Executive Officer and Director
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William G. Sorenson
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54
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Chief Financial Officer, Treasurer and Secretary
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Leslie Bonney
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52
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Executive Vice President of Global Field Operations
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Anthony Deighton
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36
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Senior Vice President, Products
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Douglas Laird
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48
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Vice President, Marketing
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Jonas Nachmanson
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46
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Chief Technology Officer
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John Gavin,
Jr.(1)(4)
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54
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Director
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Bruce
Golden(2)(3)
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51
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Director and Chairman
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Erel N.
Margalit(2)(3)
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49
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Director
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Alexander
Ott(1)(2)
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45
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Director
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Paul
Wahl(1)
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57
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Director
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(1)
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Member of audit committee.
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(2)
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Member of compensation committee.
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(3)
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Member of nominating/corporate
governance committee.
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(4)
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Appointed to the board of directors
and audit committee effective February 11, 2010.
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Executive
Officers and Directors
Lars
Björk, President, Chief Executive Officer and
Director
Lars Björk has served as our President and Chief Executive
Officer since October 2007 and as a member of our board of
directors since October 2004. From August 2006 to October 2007,
he served as our Chief Financial Officer and Chief Operating
Officer. From August 2000 to August 2006, Mr. Björk
served as Chief Financial Officer of QlikTech International AB.
From January 1999 to August 2000, he served as Chief Information
Officer of Resurs Finance. From May 1994 to January 1999,
Mr. Björk served Chief Financial Officer of
ScandStick, a manufacturer of adhesive material.
Mr. Björk received an MBA from the University of Lund,
Sweden and a Degree in Engineering from the Technical College in
Helsingborg, Sweden.
William
G. Sorenson, Chief Financial Officer, Treasurer and
Secretary
William G. Sorenson has served as our Chief Financial Officer,
Treasurer and Secretary since August 2008. From January 2007 to
April 2008, Mr. Sorenson served as Chief Operating Officer
of Firebrand TV. From November 2005 to November 2006,
Mr. Sorenson served as Chief Financial Officer of Savaje
Technologies, Inc. From January 2002 to March 2005,
Mr. Sorenson served as Chief Financial Officer of EMI Music
Publishing. Prior to that Mr. Sorenson held executive level
positions at Bertlesmann AG and the News Corporation Ltd.
Mr. Sorenson received an M.A. in International Relations
from The American University, Washington, D.C. and a B.A.
in Foreign Languages from LeMoyne College, Syracuse, New York.
Leslie
Bonney, Executive Vice President of Global Field
Operations
Leslie Bonney serves as our Executive Vice President of Global
Field Operations. From October 2007 to March 2010, Mr. Bonney
served as our Senior Vice President Worldwide Sales. From June
2005 to October 2007, Mr. Bonney served as our Vice President
International Markets. From January 2004 to June 2005,
Mr. Bonney served as Senior Vice President and General
Manager Europe, Middle East and Africa markets of StreamServe, a
document management company. Mr. Bonney received a B.Sc. in
Marine Biology from James Cook University.
73
Anthony
Deighton, Senior Vice President, Products
Anthony Deighton has served as our Senior Vice President,
Products since January 2005. He previously served as the General
Manager of Siebel Systems Employee Relationship Management
(ERM) business unit, among a variety of other product marketing
roles at Siebel Systems from October 1999 to January 2005. Prior
to joining Siebel, Mr. Deighton worked as a business
analyst at A.T. Kearney in Chicago, Illinois. Mr. Deighton
received a B.A. in Economics from Northwestern University and an
M.B.A. with high distinction from Harvard Business School.
Douglas
Laird, Vice President, Marketing
Douglas Laird has served as our Vice President, Marketing since
November 2008. From November 2007 to November 2008,
Mr. Laird served as Vice President of Marketing at
SpikeSource, Inc. From August 2006 to November 2007,
Mr. Laird served as Vice President of Marketing at
Trapelenetworks, Inc. From April 2005 to July 2006,
Mr. Laird served as Senior Vice President of Marketing at
SAP America, Inc. From October 1998 to April 2005,
Mr. Laird served as Vice President of Marketing at Siebel
Systems, Inc. Mr. Laird received a B.S. in Business
Administration and Marketing from the University of the Pacific.
Jonas
Nachmanson, Chief Technology Officer
Jonas Nachmanson has served as our Chief Technology Officer
since October 2007. From September 1996 to October 2007, he
served in various positions at our company, including Vice
President of Research and Development, Director of Research and
Development and Manager of Research and Development. From
September 1988 to August 1996, Mr. Nachmanson served in
various positions at Tetra Pak, a liquid food packager.
Mr. Nachmanson received a Masters of Science in Electrical
Engineering and Computer Science from the Lund Institute of
Technology and a B.Sc. in Business Administration from Lund
University, Sweden.
Non-Management
Directors
John
Gavin, Jr., Director
John Gavin, Jr. has served as a member of our board of
directors since February 2010. Since June 2008,
Mr. Gavin has engaged in consulting, advisory and
investment activities. Mr. Gavin served as Chief Financial
Officer of BladeLogic, Inc. from January 2007 until June 2008,
when it was acquired by BMC Software. From April 2004 through
December 2006, Mr. Gavin was Chief Financial Officer of
Navisite, Inc. From February 2000 through December 2001,
Mr. Gavin served as the Senior Vice President and Chief
Financial Officer of Cambridge Technology Partners, which was
acquired by Novell, Inc. Prior to 2000, Mr. Gavin spent
twelve years at Data General Corporation rising to the post of
Chief Financial Officer. Mr. Gavin also spent ten years at
Price Waterhouse LLP and is a certified public accountant.
Mr. Gavin has served on the board of directors as the chair
of the audit committee of Vistaprint, N.V. since 2006. From 2001
to 2005 Mr. Gavin was a member of the board of directors
and the audit chairman for Ascential Software which was acquired
by IBM in April 2005. Mr. Gavin also serves as a
member of the board of directors of Consona Corporation and
BroadSoft, Inc. Mr. Gavin holds a B.S. in accounting from
Providence College.
Bruce
Golden, Director
Bruce Golden has served as a member of our board of directors
since November 2004 and as Chairman of our board of directors
since September 2009. He is a partner at Accel Partners
which he joined in 1997. Mr. Golden has led a number of
investments in enterprise software and Internet-related
companies while at Accel and currently serves as a member of the
board of directors of Comscore, Inc. and several private
companies. Mr. Golden holds an M.B.A. from Stanford
University and a B.A. in political science from Columbia
University.
Erel
N. Margalit, Director
Erel N. Margalit has served as a member of our board of
directors since September 2009. Mr. Margalit has been
Managing Partner of Jerusalem Venture Partners since August
1997. He was a general partner of Jerusalem Pacific
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Ventures from December 1993 to August 1997. From 1990 to 1993,
Mr. Margalit was Director of Business Development of the
City of Jerusalem. Mr. Margalit serves on the board of
directors, which also serves as the compensation committee in
each case, of Cogent Communications Group, Inc., Sepaton, Inc.,
Animation Lab Ltd., Cyber-Ark Software, Inc., Double Fusion
Inc., Magink Display Technologies Inc., CyOptics, Inc., JVP
Media Studio, L.P., Mega Learning Ltd., PopTok Ltd. and Siano
Mobile Silicon, Inc. Mr. Margalit holds a Ph.D in
Philosophy from Columbia University, a Masters in Philosophy
from Columbia University and a B.A. in Philosophy from Hebrew
University.
Alexander
Ott, Director
Alexander Ott has served as a member of our board of directors
since November 2004. Mr. Ott is the owner of Cross
Continental Ventures, a global advisory firm, which he founded
and has managed since 2003. He has also been a Venture Partner
at Jerusalem Venture Partners since 2003. From 1999 to 2003,
Mr. Ott was a member of the executive committee of Siebel
Systems where he ran the Europe, the Middle East and Africa
division and subsequently the Americas division. From 1990 to
1999, Mr. Ott had several executive positions at SAP AG and
SAP America, Inc., including Chief Executive Officer of
International Markets, Senior Vice President of Latin America
and Senior Vice President of Marketing and Global Alliances.
Mr. Ott currently serves on the board of directors of
various private companies. Mr. Ott has a degree in Business
Management from University (BA) Mannheim, Germany.
Paul
Wahl, Director
Paul Wahl has served as a member of our board of directors since
October 2004. From April 1999 until his retirement in March
2003, Mr. Wahl served as president and chief operating
officer of Siebel Systems, Inc. From October 1998 until March
1999, he served as the chief executive officer of TriStrata.
From January 1996 until September 1998, Mr. Wahl served as
chief executive officer of SAP America, Inc. and as an executive
board member of SAP AG. From April 1991 until December 1995, he
was an executive vice president of SAP AG. In the past five
years Mr. Wahl has served on the board of directors of
Lawson Software, Inc., ICWAG and Causata, Inc. Mr. Wahl
holds a degree in business administration from Business School
ULM in Germany.
Election
of Officers
Our officers are currently elected by our board of directors on
an annual basis and serve until their successors are duly
elected and qualified, or until their earlier resignation or
removal. There are no family relationships among any of our
officers or directors.
Corporate
Governance and Board Composition
Selection
Arrangements
Our current directors were elected pursuant to a stockholder
voting agreement among certain holders of our preferred and
common stock. This agreement will terminate upon the closing of
this offering, and there will be no further contractual
obligations regarding the election of our directors.
Classified
Board
Our restated certificate of incorporation that will become
effective as of the closing of this offering provides for a
classified board of directors consisting of three classes of
directors, each serving a staggered three-year term. As a
result, a portion of our board of directors will be elected each
year from and after the closing of this offering. To implement
the classified structure upon the consummation of this offering,
two of the nominees to the board of directors will be elected to
one-year terms, two of the nominees will be elected to two-year
terms and two of the nominees will be elected to three-year
terms. Thereafter, directors will be elected for three-year
terms.
Lars Björk and Bruce Golden have been designated as
Class I directors whose term will expire at the 2011 annual
meeting of stockholders, assuming the completion of this
proposed offering. Erel Margalit and Paul Wahl have been
designated as Class II directors whose term will expire at
the 2012 annual meeting of stockholders, assuming
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completion of this proposed offering. John Gavin, Jr. and
Alexander Ott have been designated as Class III directors
whose term will expire at the 2013 annual meeting of
stockholders, assuming completion of this proposed offering. Our
amended and restated bylaws that will become effective as of the
closing of this offering provide that the number of authorized
directors may be changed only by a majority of directors then
authorized (including any vacancies). Any additional
directorships resulting from an increase in the number of
authorized directors will be distributed among the three classes
so that, as nearly as reasonably possible, each class will
consist of one-third of the directors. The classification of the
board of directors may have the effect of delaying or preventing
changes in control of our company.
Independent
Directors
Each of our directors, other than Lars Björk, qualifies as
an independent director in accordance with the published listing
requirements of the Nasdaq Global Market, or Nasdaq. However,
Mr. Ott may not satisfy the independence criteria
applicable to members of an audit committee under the Nasdaq
listing requirements and SEC rules and regulations. As such,
Mr. Ott will be replaced as a member of our audit committee
within 12 months following this offering. The Nasdaq
independence definition includes a series of objective tests,
such as that the director is not also one of our employees and
has not engaged in various types of business dealings with us.
In addition, as further required by the Nasdaq rules, our board
of directors has made a subjective determination as to each
independent director that no relationships exist which, in the
opinion of our board of directors, would interfere with the
exercise of independent judgment in carrying out the
responsibilities of a director. In making these determinations,
our directors reviewed and discussed information provided by the
directors and us with regard to each directors business
and personal activities as they may relate to us and our
management.
Our board of directors separates the positions of chairman of
the board and chief executive officer. Separating these
positions allows our chief executive officer to focus on our
day-to-day
business, while further enabling the chairman of the board to
lead the board of directors in its fundamental role of providing
advice to and independent oversight of management. The board of
directors recognizes the time, effort and energy that our chief
executive officer is required to devote to his position in the
current business environment, as well as the commitment required
to serve as our chairman, particularly as the board of
directors oversight responsibilities continue to grow. We
believe that having separate positions and having an independent
outside director serve as chairman is the appropriate leadership
structure for our company at this time and demonstrates our
commitment to good corporate governance.
Board
Committees
Our board of directors has established an audit committee, a
compensation committee and a nominating/corporate governance
committee.
Our board of directors and its committees set schedules to meet
throughout the year, and also can hold special meetings and act
by written consent from time to time as appropriate. Our board
of directors has delegated various responsibilities and
authority to its committees as generally described below. The
committees will regularly report on their activities and actions
to the full board of directors. Each member of the compensation
committee and
nominating/corporate
governance committee of our board of directors qualifies as an
independent director in accordance with the Nasdaq standards
described above and SEC rules and regulations. Each member of
the audit committee, other than Alexander Ott, satisfies the
independence criteria applicable to members of an audit
committee under the Nasdaq listing requirements and SEC rules
and regulations. Each committee of our board of directors has a
written charter approved by our board of directors. Upon the
effectiveness of the registration statement of which this
prospectus forms a part, copies of each charter will be posted
on our website at www.qlikview.com under the Investor Relations
section. The inclusion of our website address in this prospectus
does not include or incorporate by reference the information on
our website into this prospectus.
Audit
Committee
Our audit committee currently consists of John Gavin, Jr.,
Alexander Ott and Paul Wahl. Mr. Ott will be replaced as a
member of our audit committee within 12 months following
this offering. Each member of our audit
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committee can read and has an understanding of fundamental
financial statements. Mr. Gavin serves as chairman of the
audit committee.
Mr. Gavin qualifies as an audit committee financial
expert as that term is defined in the rules and
regulations of the SEC. The designation of Mr. Gavin as an
audit committee financial expert does not impose on
him any duties, obligations or liability that are greater than
those that are generally imposed on him as a member of our audit
committee and our board of directors, and his designation as an
audit committee financial expert pursuant to this
SEC requirement does not affect the duties, obligations or
liability of any other member of our audit committee or board of
directors.
The audit committee monitors our corporate financial statements
and reporting and our external audits, including, among other
things, our internal controls and audit functions, the results
and scope of the annual audit and other services provided by our
independent registered public accounting firm and our compliance
with legal matters that have a significant impact on our
financial statements. Our audit committee also consults with our
management and our independent registered public accounting firm
prior to the presentation of financial statements to
stockholders and, as appropriate, initiates inquiries into
aspects of our financial affairs. Our audit committee is
responsible for establishing procedures for the receipt,
retention and treatment of complaints regarding accounting,
internal accounting controls or auditing matters, and for the
confidential, anonymous submission by our employees of concerns
regarding questionable accounting or auditing matters, and has
established such procedures to become effective upon the
effectiveness of the registration statement of which this
prospectus forms a part. In addition, our audit committee is
directly responsible for the appointment, retention,
compensation and oversight of the work of our independent
auditors, including approving services and fee arrangements. All
related party transactions will be approved by our audit
committee before we enter into them.
Both our independent registered public accounting firm and
internal financial personnel regularly meet with, and have
unrestricted access to, the audit committee.
Compensation
Committee
Our compensation committee currently consists of Bruce Golden,
Erel Margalit and Alexander Ott. Each member of this committee
is a non-employee director, as defined pursuant to
Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as
amended, and an outside director, as defined pursuant to
Section 162(m) of the Internal Revenue Code of 1984, as
amended. Alexander Ott serves as chairman of the compensation
committee.
The compensation committee reviews, makes recommendations to the
board of directors and approves our compensation policies and
all forms of compensation to be provided to our executive
officers and directors, including, among other things, annual
salaries, bonuses, stock option and other incentive compensation
arrangements. In addition, our compensation committee will
administer our stock option plans, including reviewing and
granting stock options with respect to our executive officers
and directors and may, from time to time, assist our board of
directors in administering our stock option plans with respect
to all of our other employees.
While the compensation committee is authorized to engage the
services of outside consultants and advisors, neither the
compensation committee nor our management has to date retained a
compensation consultant to review or provide advice with respect
to our policies and procedures with respect to executive
compensation.
Nominating/Corporate
Governance Committee
Our nominating/corporate governance committee currently consists
of Bruce Golden and Erel Margalit. Our nominating/corporate
governance committee identifies, evaluates and recommends
nominees to our board of directors and committees of our board
of directors, conducts searches for appropriate directors and
evaluates the performance of our board of directors and of
individual directors. In evaluating potential nominees to the
board, the nominating/corporate governance committee considers a
wide variety of qualifications, attributes and other factors and
recognizes that a diversity of viewpoints and practical
experience can enhance the effectiveness of our board of
directors. Accordingly, as part of its evaluation of each
candidate, the nominating/corporate governance committee takes
into account that candidates background, experience,
qualifications, attributes and skills that may
77
complement, supplement or duplicate those of other prospective
candidates and current directors. The nominating/corporate
governance committee is also responsible for reviewing
developments in corporate governance practices, evaluating the
adequacy of our corporate governance practices and reporting and
making recommendations to the board of directors concerning
corporate governance matters. Mr. Golden serves as chairman
of the nominating/corporate governance committee.
Director
Qualifications
Prior to this offering, the election of members of our board of
directors was governed by a voting agreement that we entered
into with certain holders of our common stock and holders of our
preferred stock and by related provisions of our restated
certificate of incorporation. The directorship of our board of
directors designated by the holders of a majority of our
Series AA preferred stock is filled by John Gavin, Jr.
The holders of a majority of our Series A preferred stock
have designated Bruce Golden and Erel N. Margalit for election
to our board of directors. The holders of a majority of our
common stock and preferred stock, voting together as a single
class, have designated Lars Björk, Alexander Ott and Paul
Wahl for election to our board of directors. Upon the closing of
this offering, the voting agreement will terminate in its
entirety and none of our stockholders will have any special
rights regarding the election or designation of members of our
board of directors.
In anticipation of this offering our board of directors
conducted an evaluation to confirm that our board is composed of
members whose particular experience, qualifications, attributes
and professional and functional skills, when taken together,
will help enable the board to perform its oversight
responsibilities. When determining whether our current directors
have the experience, qualifications, attributes and skills,
taken as a whole, to help enable our board to perform its
oversight responsibilities effectively in light of our business
and structure, our board focused primarily on the
directors valuable contributions to our success in recent
years and on the information discussed in the biographical
information set forth under Management
Executive Officers and Directors. In connection with its
evaluation, our board considered, among other things, the
following specific experience, qualifications, attributes or
skills of our directors:
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Lars Björk has significant executive experience and
knowledge of our business gained from serving as our Chief
Executive Officer and formerly as our Chief Financial Officer
and Chief Operating Officer
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John Gavin, Jr. has significant executive experience in the
technology industry and substantial knowledge of finance and
accounting
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Bruce Golden has substantial experience resulting from his being
a partner at a global venture capital firm since 1997 where he
has invested in and advised a number of international enterprise
software and internet-related companies
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Erel Margalit has been the managing member of a global venture
capital firm since 1997 and has served as a director of numerous
companies which has provided him with extensive experience
guiding large, complex organizations and dealing with various
business sectors and operational challenges applicable to our
business
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Alexander Ott has substantial experience serving in leadership
roles in numerous international businesses which has provided
him with extensive knowledge relating to financial reporting,
operations management, corporate governance and other areas
applicable to service on our board of directors and its
committees
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Paul Wahl has significant experience in several areas applicable
to service on our board of directors and its committees,
including financial reporting, operations management, corporate
governance and risk management, and has had leadership roles in
numerous international businesses
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Risk
Oversight
Our board of directors oversees the management of risks inherent
in the operation of our business and the implementation of our
business strategies. Our board of directors performs this
oversight role by using several different levels of review. In
connection with its reviews of the operations and corporate
functions of our company and our various operational
subsidiaries, our board of directors and the board of directors
of our subsidiaries address
78
the primary risks associated with those operations and corporate
functions. In addition, our board of directors reviews the risks
associated with our companys business strategies
periodically throughout the year as part of its consideration of
undertaking any such business strategies.
Each of our board committees also oversees the management of our
companys risk that falls within the committees areas
of responsibility. In performing this function, each committee
has full access to management, as well as the ability to engage
advisors. Our Chief Financial Officer reports to the audit
committee and is responsible for identifying, evaluating and
implementing risk management controls and methodologies to
address any identified risks. In connection with its risk
management role, our audit committee meets privately with
representatives from our independent registered public
accounting firm and our Chief Financial Officer. The audit
committee oversees the operation of our risk management program,
including the identification of the primary risks associated
with our business and periodic updates to such risks, and
reports to our board of directors regarding these activities.
Code of
Business Conduct
Our board of directors has adopted a code of business conduct
that will become effective upon the effectiveness of the
registration statement of which this prospectus forms a part.
This code of business conduct will apply to all of our
employees, officers (including our principal executive officer,
principal financial officer, principal accounting officer or
controller, or persons performing similar functions) and
directors. Upon the effectiveness of the registration statement
of which this prospectus forms a part, the full text of our code
of business conduct will be posted on our website at
www.qlikview.com under the Investor Relations section. We intend
to disclose future amendments to certain provisions of our code
of business conduct, or waivers of such provisions, applicable
to our directors and executive officers (including our principal
executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions) at the same location on our website identified above
and also in a Current Report on
Form 8-K
within four business days following the date of such amendment
or waiver. The inclusion of our website address in this
prospectus does not include or incorporate by reference the
information on our website into this prospectus.
Compensation
Committee Interlocks and Insider Participation
As noted above, the compensation committee of our board of
directors currently consists of Bruce Golden, Erel Margalit and
Alexander Ott. None of our executive officers has ever served as
a member of the board of directors or compensation committee of
any other entity that has or has had one or more executive
officers serving as a member of our board of directors or our
compensation committee.
Director
Compensation
Prior to this offering, there was no policy in place to provide
our directors with any cash compensation for their services as
members of our board of directors or any committee of our board
of directors. Mr. Gavin was appointed to our board of
directors in February 2010. In connection with
Mr. Gavins appointment, we agreed to grant him
options to purchase 20,000 shares of our common stock and
to annually provide him with a restricted stock grant equal to
$75,000 based on the market value of our common stock on the
date of grant. In addition, we agreed to pay him an annual
retainer of $25,000 for his service on the board of directors
and $10,000 for his service as chairman of the audit committee
of the board of directors.
In addition, although there was no formal policy in place
relating to the granting of options to purchase shares of common
stock to our directors, as of December 31, 2009, we had
granted an aggregate of 1,593,602 options to purchase shares of
our common stock to our current non-employee directors with a
weighted exercise price of $0.66, of which 1,543,602 options had
been exercised to purchase shares of our common stock at a
weighted average exercise price of approximately $0.63 per share
and 50,000 options to purchase shares of our common stock at an
exercise price of $1.65 per share were outstanding.
Our board of directors adopted during April 2010 a
compensation program for outside directors. This program will
begin on the effective date of this registration statement.
Pursuant to this program, each member of our board of directors
who is not our employee will receive a $25,000 annual retainer.
The chairman of the audit committee will receive an additional
annual retainer of $10,000, and the chairman of each other
committee will receive an additional annual retainer of $5,000.
All retainer fees will be paid in four quarterly payments. Each
non-employee director, other
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than Mr. Gavin whose compensation is discussed above, who
served as a board member prior to the effective date of this
registration statement and who continues as a member of the
board of directors after such date will receive an initial
equity award with a fair market value of $75,000 upon the
effective date of this registration statement. Each year
beginning in 2011, each non-employee director, other than
Mr. Gavin whose compensation is discussed above, who will
continue to be a director after the annual meeting of our
stockholders will be granted an equity award with a fair market
value of $75,000 at that annual meeting. However, a non-employee
director who is receiving the initial award will not receive the
additional annual award in the same calendar year. Each annual
award will vest over the following year. Each award granted
under the directors program that is not fully vested on
the date of grant will become fully vested upon a change in
control of our company and will also become fully vested if the
non-employee directors service terminates due to death.
All options granted to the non-employee directors will have an
exercise price equal to the fair market value of our common
stock on the date of the grant.
We currently have a policy to reimburse our non-employee
directors for travel, lodging and other reasonable expenses
incurred in connection with their attendance at board and
committee meetings.
Limitation
of Liability and Indemnification
Prior to the effective date of this offering, we will enter into
indemnification agreements with each of our directors. The form
of agreement provides that we will indemnify each of our
directors against any and all expenses incurred by that director
because of his or her status as one of our directors, to the
fullest extent permitted by Delaware law, our restated
certificate of incorporation and amended and restated bylaws. In
addition, the form agreement provides that, to the fullest
extent permitted by Delaware law, but subject to various
exceptions, we will advance all expenses incurred by our
directors in connection with a legal proceeding.
Our restated certificate of incorporation and amended and
restated bylaws contain provisions relating to the limitation of
liability and indemnification of directors. The restated
certificate of incorporation provides that our directors will
not be personally liable to us or our stockholders for monetary
damages for any breach of fiduciary duty as a director, except
for liability:
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for any breach of the directors duty of loyalty to us or
our stockholders
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for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law
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in respect of unlawful payments of dividends or unlawful stock
repurchases or redemptions as provided in Section 174 of
the Delaware General Corporation Law
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for any transaction from which the director derives any improper
personal benefit
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Our restated certificate of incorporation also provides that if
Delaware law is amended, after the approval by our stockholders
of our restated certificate of incorporation, to authorize
corporate action further eliminating or limiting the personal
liability of directors, then the liability of our directors will
be eliminated or limited to the fullest extent permitted by
Delaware law. The foregoing provisions of the restated
certificate of incorporation are not intended to limit the
liability of directors or officers for any violation of
applicable federal securities laws. As permitted by
Section 145 of the Delaware General Corporation Law, our
restated certificate of incorporation provides that we may
indemnify our directors to the fullest extent permitted by
Delaware law and the restated certificate of incorporation
provisions relating to indemnity may not be retroactively
repealed or modified so as to adversely affect the protection of
our directors.
In addition, as permitted by Section 145 of the Delaware
General Corporation Law, our amended and restated bylaws provide
that we are authorized to enter into indemnification agreements
with our directors and officers and we are authorized to
purchase directors and officers liability insurance,
which we currently maintain to cover our directors and executive
officers.
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COMPENSATION
DISCUSSION AND ANALYSIS
This section discusses the principles underlying our executive
officer compensation policies, our recent decisions with respect
the executive officers who are named in the Summary
Compensation Table (on page 87 below) and the most
important factors relevant to an analysis of these policies and
decisions.
Overview
and Responsibilities for Compensation Decisions
The compensation committee of our board of directors has
responsibility for evaluating the performance and development of
our executive officers in their respective positions, reviewing
individual compensation as well as corporate compensation
principles and programs, establishing corporate and individual
performance objectives as they affect compensation, making
determinations as to whether and to what extent such performance
objectives have been achieved and ensuring that we have
effective and appropriate compensation programs in place. Our
chief executive officer (CEO) supports our compensation
committee by driving our annual business plan process, providing
information relating to ongoing progress under our annual
business plan and other business and financial results,
undertaking performance assessments of other executives and
presenting other personnel-related data. In addition, as the
manager of our executive team, our CEO assesses each
executives contribution to corporate goals as well as
achievement of their individual goals and makes a recommendation
to our compensation committee with respect to compensation for
executive officers other than himself. Our compensation
committee meets, including in executive sessions, to consider
these recommendations, conducts a similar evaluation of the
CEOs contributions to corporate goals and achievement of
individual goals and makes determinations related to the
CEOs and the other executive officers compensation.
Our overall compensation philosophy is to provide a competitive
total compensation package that will:
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fairly compensate our executive officers;
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attract and retain qualified executive officers who are able to
contribute to the long-term success of our company;
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incent future performance toward clearly defined corporate
goals; and
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align our executives long-term interests with those of our
stockholders.
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Our compensation committee believes that the quality, skills and
dedication of our executive officers are critical factors
affecting our long-term value. Our compensation arrangements
with executive officers are primarily based upon on the
consolidated revenue achievements for our company along with
personal performance objectives agreed at the beginning of the
fiscal year with the respective executive. We believe in
compensating progressively for overachievement of objectives and
applying incentive deductions for underachievement of objectives.
In setting compensation levels for individual officers, our
compensation committee applies its judgment in determining the
amount and mix of compensation elements for each named executive
officer, and to date our compensation process has been a largely
discretionary process based upon the collective experience and
judgment of the compensation committee members acting as a
group. Factors affecting its decisions generally include:
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overall corporate performance;
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the individual officers performance including against
corporate-level strategic goals established as part of our
annual business plan and the officers effectiveness in
managing toward achievement of those goals;
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the nature and scope of the officers
responsibilities; and
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market compensation information for individual officer
positions, including information obtained through publicly
available surveys and as a result of the personal experience of
members of our board of directors.
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While our compensation committee is authorized to engage the
services of outside consultants and advisors, neither the
compensation committee nor our management has to date retained a
compensation consultant to review or provide advice with respect
to our policies and procedures with respect to executive
compensation. To date, we have not formally benchmarked our
executive compensation against peer companies, and we have not
identified a group of peer companies against which we would
compare our compensation practices. While our compensation
committee considers the overall mix of compensation components
in its review of compensation matters, it has not adopted any
formal or informal policies or guidelines for allocating
compensation between long-term and current compensation, between
cash and non-cash compensation or among different forms of
non-cash compensation. The
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compensation committee intends following this offering to
continue to manage our executive officer compensation programs
on a flexible basis that will allow it to respond to market and
business developments as it views appropriate in its judgment.
Prior to this offering, we have reviewed company compensation
annually as part of the business plan process undertaken by
management and the board of directors in the early part of each
year. During this process, the compensation committee reviews
overall compensation, evaluates performance, determines
corporate-level performance goals for that years business
plan and, when appropriate, makes changes to one or more
components of our executives compensation. We expect to
continue this practice after this offering.
Historically, the exercise price of our stock options has been
at least equal to the fair market value of our common stock on
the date of grant. Prior to this offering, the fair market value
of our common stock has been established by our board of
directors with the assistance of management using factors it
considered appropriate for a reasonable valuation. Following
this offering, the fair market value of our common stock will be
the closing price of our stock on the Nasdaq Global Market on
the date of the grant. As a privately owned company prior to the
date of this offering, we have not established a program, plan
or practice pertaining to the timing of stock option grants to
executive officers coinciding with the release of material
non-public information. The compensation committee intends to
evaluate our grant practices from time to time in the future and
change them as it deems necessary and appropriate.
Principal
Elements of Executive Compensation
Compensation for our executive officers has been highly
individualized, at times structured as a result of
arms-length negotiations when an officer is first hired
and always taking into account our financial condition and
available resources. The resulting mix of compensation
components has primarily included:
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base salary;
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annual incentive cash bonus;
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long-term incentive awards in the form of stock options;
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certain benefits payable upon an executive officers
involuntary termination in certain circumstances; and
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other benefits plans generally available to all salaried
employees.
|
Our compensation committee believes this mix is appropriate for
our executive team because, among other things, it provides a
fixed component (base salary) designed to offer the executive
funds from which to manage personal and immediate cash flow
needs and variable components (annual incentive bonuses and
stock options) that incentivize our management team to work
toward achievement of corporate goals and our long-term success,
as well as offering protection (through termination-related
benefits) against abrupt changes in the executives
circumstances in the event of involuntary employment termination
including in the context of a change of control of our company.
Our compensation committee also takes note of the fact that this
mix is typical of companies in our industry and at our stage of
development. It has no current plans to change the mix of
components or vary the relative portions of fixed and variable
compensation that comprise our overall compensation packages.
In March 2010, as part of the annual compensation review the
compensation committee reviewed the compensation of our
executive team and determined that in light of our continued
growth from both a revenue and product development perspective
and in anticipation of our company commencing to undertake a
public offering that it was in our companys best interest
to make certain changes to the compensation packages of our CEO
and other executive officers as set forth below.
Base Salaries. Base salary for our CEO and
other executive officers is established based on the scope of
their responsibilities, length of service with our company,
individual performance during the prior year and competitive
market compensation. Base salaries are reviewed annually and
adjusted from time to time based on competitive conditions,
individual performance, our overall financial results, changes
in job duties and responsibilities and our companys
overall budget for base salary increases. The budget is designed
to allow salary increases to retain and motivate successful
performers while maintaining affordability within our
companys business plan.
In January 2009, as part of the annual compensation review, our
Executive Vice President of Global Field Operations base
salary was increased from £140,000 (approximately $227,097
based on an assumed exchange rate
82
of approximately $1.62 as of December 31, 2009) to
£145,000 (approximately $235,207 based on an assumed
exchange rate of approximately $1.62 as of December 31,
2009) due to our increased sales in 2008 during a difficult
economic climate. In addition, our Senior Vice President,
Products base salary was increased at that time from
$180,000 to $200,000 to recognize his individual contributions
to our software platform and to bring his compensation into line
with the other members of our executive team.
In March 2010, as part of the annual compensation review and as
part of our planning to undertake this offering, our CEOs
base salary was increased from $205,000 to $300,000 in
recognition of his performance as the chief executive officer,
his lack of salary adjustments during the prior two years and
the overall growth and profitability of our company during the
preceding year. At the same time the compensation committee
approved the following base salary increases for each of our
other named executive officers in recognition of their
individual performances and contributions to the growth and
performance of our company during the preceding year:
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2009
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2010
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William G. Sorenson
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$
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275,000
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$
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280,000
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Leslie Bonney
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£
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145,000
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(1)
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£
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170,000
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(2)
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Anthony Deighton
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$
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200,000
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$
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220,000
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Douglas Laird
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$
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180,000
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$
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190,000
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(1)
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Approximately $235,207 based on an
assumed exchange rate of approximately $1.62 as of
December 31, 2009.
|
(2)
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Approximately $275,760 based on an
assumed exchange rate of approximately $1.62 as of
December 31, 2009.
|
The base salary increase for Mr. Sorenson was primarily due
to his efforts implementing corporate expense controls and
assisting with measures to aid profitability, including
additional development of our global financial infrastructure.
Mr. Bonneys base salary was increased primarily as a
result of his management of our sales operations and his
substantial attainment of revenue goals.
Mr. Deightons base salary was increased primarily due
to his support of our product development program, product
launch efforts and relaunching of QlikCommunity. The base salary
increase for Mr. Laird was primarily due to his expansion of our
marketing efforts and infrastructure.
Cash Incentive Bonus. Since 2005, we have
operated an annual cash incentive bonus program to motivate our
executive officers to attain specific short-term performance
objectives that, in turn, further our long-term objectives. This
program is managed as part of our annual business plan process
and involves a high level of discretion on the part of our
compensation committee. Typically, the board of directors
approves a business plan for the year that incorporates
corporate-level objectives, and achievement of those objectives
becomes an important factor considered by the compensation
committee when, after year-end, it makes a final determination
of bonus amounts to be paid. Other factors that are considered
by the compensation committee in determining amounts to pay
include:
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our companys overall performance and business results;
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general market conditions;
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future business prospects;
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funds available from which to pay bonuses;
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individual performance;
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competitive conditions; and
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any other factors it finds relevant.
|
Each executive is measured against the consolidated revenue
achievement of our company as a whole along with their
performance against individual objectives established at the
beginning of the fiscal year with the participation of the
respective executive as part of their total compensation plan.
This discretionary approach to the variable component of our
compensation program allows a fluid approach in how we manage
short-term corporate strategy and executive incentives, while
allowing us to achieve more constancy in our focus on
longer-term corporate objectives. Our compensation committee and
our board of directors believe that this flexibility is
important in managing a growing company, including because it
allows executive officers to respond nimbly to the
83
often changing demands of the business without undue focus on
any one specific short-term performance objective. Our
compensation committee does not have plans at this time to
change the way it manages our annual cash incentive bonus
program or to take a more formal or objective approach to the
way it sets bonus payment amounts.
Each executive officer has a target bonus amount, established at
the time of hire and then reviewed and potentially adjusted
annually over the course of the officers tenure with our
company. Bonus amounts are based upon company-wide targets for
revenue along with personal performance objectives established
for the individual executive depending upon his or her role. The
consolidated revenue targets are based on historical performance
with the assistance of management and are intended to be
reasonably likely to be reached. The revenue portion of the
bonus plan is paid on a graduated basis dependent upon our
company achieving targeted revenue levels, with satisfaction of
a minimum target required in order to be eligible for any bonus.
However, because of the emphasis we place on annual business
plan achievement, actual bonus amounts paid may be zero or an
amount in excess of the target amount.
For 2009, the target bonuses for executive officers varied from
approximately 50% to 125% of base salary based on our
compensation committees belief of respective competitive
levels for each officers overall amount of fixed and
variable compensation. Actual target bonus levels for 2009 are
shown below. For 2009, the corporate-level performance
objectives specified in our business plan related to
consolidated revenue and analysis and planning for strategic
objectives, including a potential initial public offering. At
the time the consolidated revenue targets were established and
based on historical performance, the compensation committee
believed that it was reasonably likely that these financial
targets would be satisfied.
While we did not achieve our full budget revenue target, we did
exceed minimum revenue targets despite the on-going economic
recession. At the same time we increased profitability and began
preparation for an initial public offering. Our compensation
committee determined that it was advisable to award our named
executive officers performance based cash incentive bonuses for
fiscal 2009 in recognition of the committees belief of the
strong performance of our business in fiscal 2009 despite an
extremely difficult global economic environment and
macroeconomic recession. The compensation committee determined
the amounts of these bonuses by assessing the performance of our
company and of the individual named executive officers for
fiscal 2009 in light of these adverse economic conditions. As a
result of our companys performance in 2009 and our
compensation committees review of each named executive
officers individual contribution to this performance and
satisfaction of personal performance objectives, the
compensation committee awarded the named executive officers
performance-based cash incentive bonus awards equal to:
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79% of the target bonus for our CEO;
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93% of the target bonus for our Chief Financial Officer;
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92% of the target bonus for our Executive Vice President of
Global Field Operations;
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111% of the target bonus for our Senior Vice President,
Products; and
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98% of the target bonus for our Vice President, Marketing.
|
The bonus award for our CEO was due to our companys
accomplishments in attaining increased profitability, the
expansion of our sales operations and his supervision of
preparation for a potential initial public offering. The bonus
award given to our Chief Financial Officer exceeded 90% of his
target bonus due to the compensation committees view that
our Chief Financial Officer had made substantial progress in
preparing our companys infrastructure for a potential
initial public offering. The bonus award for our Executive Vice
President of Global Field Operations exceeded 90% of his target
bonus based on his execution of our companys business plan
to increase our global market penetration, expand our sales
operations and further penetrate our existing customer base. The
award given to our Senior Vice President, Products exceeded his
target bonus based on our improving sales results and market
acceptance of our product during 2009 and in recognition of his
contributions to our product development program, including the
release of a new version of QlikView and a mobile platform in
2009. The compensation committee determined to award our Vice
President, Marketing a bonus in excess of 90% of his target
bonus based on his development and execution of various global
marketing initiatives and on the support provided by him to our
sales team.
84
In March 2010, as part of the annual compensation review and in
anticipation of the offering the compensation committee revised
the target bonuses for the named executive officers for 2010 as
follows:
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2009
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|
|
2010
|
|
|
Lars Björk
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$
|
300,000
|
|
|
$
|
300,000
|
|
William G. Sorenson
|
|
$
|
137,500
|
|
|
$
|
175,000
|
|
Leslie Bonney
|
|
£
|
180,000
|
(1)
|
|
£
|
190,000
|
(2)
|
Anthony Deighton
|
|
$
|
100,000
|
|
|
$
|
135,000
|
|
Douglas Laird
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|
$
|
92,400
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|
$
|
110,000
|
|
|
|
|
(1)
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|
$291,982 based on an assumed
exchange rate of approximately $1.62 as of December 31,
2009.
|
(2)
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|
$308,203 based on an assumed
exchange rate of approximately $1.62 as of December 31,
2009.
|
The target bonus for our CEO for 2010 was not revised from 2009
since our compensation committee believed it represented a
competitive market level for our CEO. The target bonuses for our
other named executive officers for 2010 were increased from 2009
to levels that our compensation committee believed were more
competitive market levels and reflected a perceived improvement
in general macroeconomic business conditions affecting our
company.
Long-Term Incentive Compensation. To date, our
only long-term incentive awards have primarily been in the form
of options to purchase our common stock. Our stock options have
an exercise price at least equal to the fair market value of our
common stock on the grant date, generally vest over four years,
with 25% of the option shares vesting after one year of service
and the remainder vesting in equal installments at the end of
each quarter thereafter, and have a ten year term. Additional
vesting acceleration benefits apply in certain circumstances
discussed below.
Generally, a stock option award is made in the year that an
executive officer commences employment. The size of this award
is intended to offer the executive a meaningful opportunity for
stock ownership relative to his or her position and reflects the
compensation committees assessment of market conditions
affecting the position as well as the individuals
potential for future responsibility within our company.
Thereafter, additional option grants may be made in the
discretion of our compensation committee or board of directors.
To date, we have not granted additional options on an annual
basis to executives or other employees, although we do evaluate
individual performance annually. Instead, additional options
have been granted to executives on a
case-by-case
basis reflecting the compensation committees determination
that such grants are appropriate or necessary to reward
exceptional performance (including upon promotion) or to retain
individuals when market conditions change. The size of
additional option grants are determined in the discretion of the
compensation committee or our board of directors, and typically
incorporate our CEOs recommendations (except with respect
to his own option grants).
In 2009, our compensation committee approved option grants to
our Executive Vice President of Global Field Operations and
Senior Vice President, Products based upon their respective
length of service and achievement in improving sales results and
market acceptance of our product. In selecting executive
officers to receive option grants, the compensation committee
considered performance that merited an additional long-term
incentive award and circumstances where an additional option
grant was necessary to achieve a desired total compensation
package (including total equity interest in our company) for the
officer involved. The amounts of these grants are presented
below under Executive Compensation 2009 Grants
of Plan-Based Awards. The respective amounts of these
grants were determined by our compensation committee based on
the respective officers performance ability to impact our
results that drive stockholder value and potential to take on
roles of increasing responsibility. Our compensation committee
made its determination based on quantitative analysis of these
factors.
Other than awards of restricted stock to certain of our
executive officers in 2004, we have not granted restricted stock
or restricted stock unit awards. After this offering, our
compensation committee may consider granting these or other
awards in addition to or in lieu of options.
Severance and Change in Control Benefits. We
have entered into employment agreements with each of our named
executive officers, which provide severance benefits, in certain
cases subject to the consummation of this offering, in the event
the executive officers employment is terminated by us
without cause or the executive officer is terminated without
cause in connection with a change in control, in consideration
of a release of potential claims and other customary covenants.
In accordance with terms that take effect upon the consummation
of the offering, these benefits range from nine months, in the
case of our CEO, to six months for our other executive officers,
of their base salary and benefits. The terms of these agreements
are described in more detail in the section titled
85
Management Estimated Benefits and Payments
Upon Termination of Employment below. Our board of
directors and compensation committee have determined it
appropriate to have these termination-related benefits in place
to preserve morale and productivity and encourage retention in
the face of potentially disruptive circumstances that might
cause an executive to be concerned that his or her employment is
in jeopardy or that might involve an actual or rumored change in
control of our company. No changes were made to our
companys severance and change of control-related benefits
during 2009.
As part of the annual compensation review in March 2010, the
compensation committee approved an amendment to all of the stock
options held by or hereafter granted to our named executive
officers, to take effect upon the consummation of this offering,
that provides for full acceleration of all unvested stock
options if the executives employment is terminated, other
than for cause, within 12 months following a change in
control of our company, sometimes called a double
trigger. We believe this double trigger
benefit improves stockholder value because it prevents an
unintended windfall to executives in the event of a friendly
change of control, while still providing them appropriate
incentives to cooperate in negotiating any change of control in
which they believe they may lose their jobs. We believe
providing these benefits helps us compete for executive talent.
We believe that our change of control benefits are generally in
line with packages offered to executives in our industry.
Other Benefits. We pay Mr. Björk,
our CEO, certain living expenses for him and his family not to
exceed $75,000 per year, adjusted for taxes. Our compensation
committee believes that this additional benefit contributes to
an overall compensation package for our CEO that is competitive
for a global company in our market with substantial operations
and origins in Sweden. We pay Mr. Sorenson, our Chief
Financial Officer, certain living expenses not to exceed $24,000
per year, adjusted for taxes. Our compensation committee
believes that this additional benefit contributes to an overall
compensation package for our Chief Financial Officer that is
competitive for a global company in our market. In addition, we
provide a stipend to Mr. Bonney, our Executive Vice
President of Global Operations, for car expenses. Our
compensation committee believes that a car benefit is customary
for comparable officers at similar companies who are based in
Europe.
We also provide our executive officers with benefits that are
generally available to our salaried employees. These benefits
include health and medical benefits, flexible spending plans and
the opportunity to participate in a 401(k) retirement plan or
comparable foreign plan.
Tax
Matters
Our board of directors and compensation committee will consider
the deductibility of compensation amounts paid to our executive
officers including the potential future effects of
Section 162(m) of the Internal Revenue Code on the
compensation paid to our executive officers in making its
decisions, although prior to this offering such deductibility is
not material to our financial position. Section 162(m)
disallows a tax deduction for any publicly held corporation for
individual compensation exceeding $1.0 million in any
taxable year for our CEO and each of the other named executive
officers (other than our chief financial officer), unless
compensation is performance-based as defined under
Section 162(m). We expect that our compensation committee
will adopt a policy that, where reasonably practicable, we will
seek to qualify the variable compensation paid to our executive
officers for an exemption from the deductibility limitations of
Section 162(m) and may structure the amount and form of
compensation for our executive officers so as to maximize our
ability to deduct it. Our stock option grants are designed to
qualify as performance-based compensation for purposes of
Section 162(m), and we expect compensation amounts related
to options to be fully deductible. However, our compensation
committee may, in its judgment, authorize compensation payments
that are not deductible when it believes that such payments are
appropriate to attract and retain executive talent.
Employee
Compensation Risks
As part of its oversight of our companys executive
compensation program, the compensation committee considers the
impact of the program, and the incentives created by the
compensation awards that it administers, on our companys
risk profile. In addition, the compensation committee reviews
all of our companys compensation policies and procedures,
including the incentives that they create and factors that may
reduce the likelihood of excessive risk taking, to determine
whether they present a significant risk to our company. The
compensation committee has determined that, for all employees,
our companys compensation programs do not encourage
excessive risk and instead encourage behaviors that support
sustainable value creation.
86
EXECUTIVE
COMPENSATION
Summary
Compensation
The following table summarizes the compensation that we paid to
our chief executive officer, chief financial officer and each of
our three other most highly compensated executive officers
during the year ended December 31, 2009. We refer to these
officers in this prospectus as our named executive officers.
Summary
Compensation Table
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Stock
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|
Option
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|
All Other
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Name and Principal
Position
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|
Year
|
|
|
Salary
|
|
|
Bonus(1)
|
|
|
Awards
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|
|
Awards(2)
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|
|
Compensation
|
|
|
Total
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|
Lars Björk
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|
2009
|
|
|
$
|
205,000
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|
|
$
|
238,068
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
94,982
|
(3)
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|
$
|
538,050
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|
Chief Executive Officer
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
William G. Sorenson
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|
|
2009
|
|
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275,000
|
|
|
|
127,250
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|
|
|
|
|
|
|
|
|
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34,660
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(4)
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|
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436,910
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|
Chief Financial Officer
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Leslie Bonney
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|
|
2009
|
|
|
|
235,207
|
(5)
|
|
|
251,429
|
(6)
|
|
|
|
|
|
|
196,394
|
(7)
|
|
|
42,918
|
(8)
|
|
|
725,948
|
(9)
|
Executive Vice President of Global Field Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Anthony Deighton
|
|
|
2009
|
|
|
|
200,000
|
|
|
|
110,800
|
|
|
|
|
|
|
|
196,394
|
|
|
|
13,416
|
(10)
|
|
|
520,610
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|
Senior Vice President, Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Douglas Laird
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|
|
2009
|
|
|
|
180,000
|
|
|
|
90,700
|
|
|
|
|
|
|
|
|
|
|
|
558
|
|
|
|
271,258
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|
Vice President, Marketing
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|
|
|
|
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|
|
|
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(1)
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The amounts in this column reflect
discretionary bonuses approved by our board of directors for
company and individual performance.
|
(2)
|
|
The amounts in this column
represent the aggregate grant date fair value of the stock
option, computed in accordance with Accounting Standards
Codification Topic 718 without consideration of forfeitures. See
Note 13 of the notes to consolidated financial statements
for a discussion of our assumptions in determining the values of
our option awards.
|
(3)
|
|
Includes $94,332 paid by our
company for Mr. Björks housing, living and other
related expenses (including for tax adjustments) and $650 paid
by our company for Group Term Life Insurance.
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(4)
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|
Includes $33,418 paid by our
company for Mr. Sorensons housing, living and other
related expenses (including for tax adjustments) and $1,242 paid
by our company for Group Term Life Insurance.
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(5)
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|
Based on a base salary of
£145,000 and an assumed exchange rate of approximately
$1.62 as of December 31, 2009.
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(6)
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|
Based on a bonus of £155,000
and an assumed exchange rate of approximately $1.62 as of
December 31, 2009.
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(7)
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|
Approximately £121,072 based
on an assumed exchange rate of approximately $1.62 as of
December 31, 2009.
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(8)
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|
Includes $19,465 (based on payments
of £12,000 and an assumed exchange rate of approximately
$1.62 as of December 31, 2009) paid by our company for the
provision of a car for Mr. Bonney and $23,453 (based on
contributions of £14,458 and an assumed exchange rate of
approximately $1.62 as of December 31, 2009) contributed by
our company to Mr. Bonneys U.K. tax qualified defined
contribution plan.
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(9)
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|
Approximately £447,530 based
on an assumed exchange rate of approximately $1.62 as of
December 31, 2009.
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(10)
|
|
Includes $12,288 paid by our
company to Mr. Deighton in exchange for accrued vacation,
$750 contributed by our company to Mr. Deightons
401(k) plan and $378 paid by our company for Group Term Life
Insurance.
|
87
2009
Grants of Plan-Based Awards
The following table sets forth each plan-based award granted to
our named executive officers during the year ended
December 31, 2009.
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Option Awards:
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Exercise
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Grant Date
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|
|
|
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Number of
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Price of
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Fair Value of
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Securities
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Option
|
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Option
|
|
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|
Grant Date
|
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|
Underlying Options
|
|
|
Awards(1)
|
|
|
Awards(2)
|
|
|
Lars Björk
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
William G. Sorenson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leslie Bonney
|
|
|
March 30, 2009
|
|
|
|
200,000
|
|
|
$
|
1.65
|
|
|
$
|
196,394
|
|
Anthony Deighton
|
|
|
March 30, 2009
|
|
|
|
200,000
|
|
|
$
|
1.65
|
|
|
$
|
196,394
|
|
Douglas Laird
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The amounts in this column
represent the fair market value of a share of our common stock,
as determined by our board of directors with the assistance of
management, on the date of grant. See the section titled
Management Compensation Discussion and
Analysis above for a discussion of how we have valued our
common stock.
|
(2)
|
|
The amounts in this column
represent the aggregate grant date fair value of the stock
option, computed in accordance with Accounting Standards
Codification Topic 718 without consideration of forfeitures. See
Note 13 of the notes to consolidated financial statements
for a discussion of our assumptions in determining the values of
our option awards.
|
Outstanding
Equity Awards at 2009 Fiscal Year-End
The following table sets forth information regarding each option
held by each of our named executive officers as of
December 31, 2009. The vesting applicable to each
outstanding option is described in the footnotes to the table
below. For a description of the acceleration of vesting
provisions applicable to the options held by our named executive
officers, please see the section titled
Management Potential Payments Upon Termination
or Change in Control below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
|
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Exercise
|
|
|
|
|
Option
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price
|
|
|
Grant Date
|
|
Expiration Date
|
|
Lars Björk
|
|
|
146,738
|
(1)
|
|
|
33,863
|
|
|
$
|
0.63
|
|
|
September 30, 2006
|
|
September 30, 2016
|
|
|
|
90,300
|
(1)
|
|
|
90,301
|
|
|
$
|
1.65
|
|
|
November 1, 2007
|
|
October 1, 2017
|
|
|
|
386,203
|
(1)
|
|
|
386,202
|
|
|
$
|
1.65
|
|
|
November 15, 2007
|
|
November 14, 2017
|
William G. Sorenson
|
|
|
242,345
|
(2)
|
|
|
533,155
|
|
|
$
|
1.65
|
|
|
September 30, 2008
|
|
September 30, 2018
|
Leslie Bonney
|
|
|
614,040
|
(1)
|
|
|
|
|
|
$
|
0.63
|
|
|
June 30, 2005
|
|
June 30, 2015
|
|
|
|
126,421
|
(1)
|
|
|
126,421
|
|
|
$
|
1.65
|
|
|
October 1, 2007
|
|
October 30, 2017
|
|
|
|
|
|
|
|
200,000
|
(1)
|
|
$
|
1.65
|
|
|
March 30, 2009
|
|
March 30, 2019
|
Anthony Deighton
|
|
|
722,400
|
(3)
|
|
|
|
|
|
$
|
0.63
|
|
|
January 17, 2005
|
|
January 16, 2015
|
|
|
|
50,000
|
(1)
|
|
|
50,000
|
|
|
$
|
1.65
|
|
|
December 30, 2007
|
|
December 30, 2017
|
|
|
|
|
|
|
|
200,000
|
(1)
|
|
$
|
1.65
|
|
|
March 30, 2009
|
|
March 30, 2019
|
Douglas Laird
|
|
|
75,000
|
(1)
|
|
|
225,000
|
|
|
$
|
1.65
|
|
|
December 30, 2008
|
|
December 30, 2018
|
|
|
|
(1)
|
|
The shares subject to these stock
options vest over a four year period, with 1/4th of the shares
subject to such stock options vesting on or around the first
anniversary of the grant date and 6.25% of the shares subject to
the stock options vesting on a quarterly basis thereafter.
Vesting is contingent upon continued service.
|
(2)
|
|
The shares subject to these stock
options vest over a four year period, with 12.5% of the shares
subject to such stock options vesting on the six-month
anniversary of the grant date and 6.25% of the shares subject to
the stock options vesting on a quarterly basis thereafter.
Vesting is contingent upon continued service.
|
(3)
|
|
25% of the shares subject to such
stock option vested on June 30, 2006 and 6.25% of the
shares subject to such stock options vest on a quarterly basis
thereafter. Vesting is contingent upon continued service.
|
88
2009
Option Exercises and Stock Vested
There were no option exercises or share vesting events for
awards held by our named executive officers in 2009.
Employment
Agreements
We have entered into employment agreements
and/or
services agreements with each of our named executive officers.
Employment
Agreement with Lars Björk
In October 2007, we entered into an employment agreement with
Mr. Björk for his position as Chief Executive Officer
and President. Under this agreement, Mr. Björks
initial base salary was $205,000 per year, subject to annual
increases at the sole discretion of our board of directors.
Mr. Björks current annual base salary is
$300,000 and Mr. Björk is eligible currently to
receive a cash bonus of $300,000 based on performance. Pursuant
to this agreement, Mr. Björk received an option to
purchase up to 953,006 shares of common stock. For a period
of twelve months after his termination of employment,
Mr. Björk will be subject to a noncompetition covenant
for a period of 12 months, and he is subject to a
nonsolicitation covenant with respect to customers, clients and
employees of our company or the group for a period of
24 months following the termination of his employment.
Mr. Björks employment agreement also provides
that we shall pay for certain living expenses for him and his
family in an amount not to exceed $75,000 per year. If we
terminate Mr. Björks employment agreement for
cause (as defined in the agreement) or on account of death or
disability (as defined in the agreement), or if
Mr. Björk terminates his employment with us,
Mr. Björk is entitled to no further compensation or
benefits other than those earned through the date of the
termination. If we terminate the agreement without cause (as
defined in the agreement) Mr. Björks agreement
initially provides that we will continue to pay
Mr. Björks base salary for a period of three
months following the termination of his employment, conditioned
upon the execution by Mr. Björk of a release of claims.
In April 2010, we amended and restated
Mr. Björks employment agreement with our
company. Pursuant to the amended and restated employment
agreement, Mr. Björks employment agreement may
be terminated, with or without cause, by him or by us at any
time without notice by either party. If
Mr. Björks employment is terminated by our
company other than due to cause, death or disability, we will
continue to pay Mr. Björks base salary for a
period of nine months following the termination of his
employment, conditioned upon the execution by
Mr. Björk of a release of claims. Effective upon the
consummation of this offering, in addition to this severance
amount Mr. Björk will also receive any earned but
unpaid bonus, and we will also reimburse
Mr. Björks COBRA payments during the period of
his severance payment.
Employment
Agreement with William G. Sorenson
In August 2008, we entered into an employment agreement with
Mr. Sorenson, our Treasurer and Chief Financial Officer.
The term of his employment agreement is one year and is deemed
to have been automatically extended for an additional one year
term (or such other period to have been agreed upon in writing)
upon each anniversary of the agreement unless any party gives
written notice of the non-extension of the employment agreement
to the other party at least 90 days before that anniversary
(or as provided below). Under this agreement,
Mr. Sorensons initial base salary was $275,000 per
year with a bonus potential of $137,500. Our board of directors
adjusts Mr. Sorensons salary and bonus from time to
time. Mr. Sorensons current annual base salary is
$280,000, and Mr. Sorenson is eligible currently to receive
a cash bonus of $175,000 based on performance. The agreement
also provides that the board of directors would grant him an
option to purchase 778,500 shares of common stock. For a
period of twelve months after his termination of employment,
Mr. Sorenson will be subject to certain restrictions on
competition with us and on the solicitation of our employees,
customers and clients. Mr. Sorensons employment
agreement also provides that Mr. Sorenson is eligible to
participate in our general employee benefit plans in accordance
with the terms and conditions of such plans.
Mr. Sorensons employment agreement also provided that
we would pay for certain living expenses for him and his family
for up to $3,000 per month in connection with accommodations in
the Radnor, Pennsylvania area for the first six months of
employment and relocation assistance up to $25,000 in the event
Mr. Sorenson relocates to the Radnor, Pennsylvania area. If
we
89
terminate the agreement without cause (as defined in the
agreement), we will continue to provide Mr. Sorensons
base salary for a period of six months following the termination
of employment, conditioned upon the execution by
Mr. Sorenson of a release of claims. In addition, our
obligation to provide severance payments is limited if
Mr. Sorenson secures compensation through any employment or
consulting arrangements more than three months following a
termination without cause, and the obligations completely cease
if Mr. Sorenson breaches his Proprietary Information,
Assignment of Inventions and Non-Competition Agreement.
In April 2010, we amended and restated Mr. Sorensons
employment agreement with our company. Pursuant to the amended
and restated employment agreement, we will pay living expenses
for Mr. Sorenson and his family for up to $24,000 per year.
Mr. Sorensons employment agreement may be terminated,
with or without cause, by him or by us at any time without
notice by either party. Effective upon the consummation of this
offering, if we terminate the agreement without cause, in
addition to the severance payments that Mr. Sorenson will
receive as described above, Mr. Sorenson will also receive
any earned but unpaid bonus, and we will also reimburse
Mr. Sorensons COBRA payments during the period of his
severance payment.
Employment
Agreement with Leslie Bonney
In May 2005, we entered into an employment agreement with
Mr. Bonney. Mr. Bonney currently serves as our Senior
Vice President of Worldwide Sales. Under this agreement,
Mr. Bonneys initial base salary was £130,000 per
year (approximately $210,876 based on an assumed exchange rate
of approximately $1.62 as of December 31, 2009) and
the agreement initially provided for a bonus potential of up to
£110,000 (approximately $178,433 based on an assumed
exchange rate of approximately $1.62 as of December 31,
2009). Our board of directors adjusts Mr. Bonneys
salary and bonus potential from time to time.
Mr. Bonneys current annual base salary is
£170,000 per year (approximately $275,760 based on an
assumed exchange rate of approximately $1.62 as of
December 31, 2009), and Mr. Bonney is currently
eligible to receive a cash bonus of up to £190,000 per year
(approximately $308,203 based on an assumed exchange rate of
approximately $1.62 as of December 31, 2009) based on
performance. The employment agreement also provides that the
board of directors would grant Mr. Bonney an option to
purchase 614,040 shares of common stock. For a period of
twelve months after his termination of employment,
Mr. Bonney will be subject to certain restrictions on
competition with us and on the solicitation of our employees,
customers and clients. Mr. Bonneys employment
agreement also provides that he is entitled to £1,000
(approximately $1,622 based on an assumed exchange rate of
approximately $1.62 as of December 31, 2009) per month
for car expenses and he is also entitled to related expenses.
Mr. Bonneys employment agreement provides that
Mr. Bonneys employment agreement may be terminated at
any time upon six months notice, unless the employment contract
is breached.
Employment
Agreement with Anthony Deighton
In January 2005, we entered into an employment agreement with
Mr. Deighton. Mr. Deightons employment agreement
provides that he is an at-will employee and his
employment may be terminated at any time by us or
Mr. Deighton. Under this agreement,
Mr. Deightons initial base salary was $150,000 per
year, and Mr. Deighton was initially eligible to receive a
cash bonus of $75,000 based on performance. Our board of
directors adjusts Mr. Deightons salary and bonus
potential from time to time. Mr. Deightons current
annual base salary is $220,000, and Mr. Deighton is
eligible currently to receive a cash bonus of $135,000 based on
performance. Pursuant to this agreement, Mr. Deighton
received an option to purchase up to 722,400 shares of
common stock. For a period of twelve months after his
termination of employment, Mr. Deighton will be subject to
certain restrictions on competition with us and on the
solicitation of our employees, customers and clients.
Mr. Deightons employment agreement also provides that
Mr. Deighton is eligible to participate in our general
employee benefit plans in accordance with the terms and
conditions of such plans.
In April 2010, we amended and restated Mr. Deightons
employment agreement with our company. Pursuant to the amended
and restated employment agreement, Mr. Deightons
employment agreement may be terminated, with or without cause,
by him or by us at any time without notice by either party.
Effective upon the consummation of this offering, if we
terminate the agreement without cause (as defined in the
agreement), we will continue to provide Mr. Deightons
base salary for a period of six months following the termination
of employment, conditioned upon the execution by
Mr. Deighton of a release of claims. In addition to this
severance payment, effective upon
90
consummation of this offering Mr. Deighton will also
receive any earned but unpaid bonus, and we will also reimburse
Mr. Deightons COBRA payments during the period of his
severance payment.
Employment
Agreement with Douglas Laird
In November 2008, we entered into an employment agreement with
Mr. Laird, our Vice President of Marketing. Under this
agreement, Mr. Lairds initial base salary was
$180,000 per year, and Mr. Laird was initially eligible to
receive a cash bonus of up to $90,000 subject to performance.
Our board of directors adjusts Mr. Lairds salary and
bonus potential from time to time. Mr. Lairds current
annual base salary is $190,000, and Mr. Laird is eligible
currently to receive a cash bonus of $110,000 based on
performance. Pursuant to this agreement, Mr. Laird received
an option to purchase up to 300,000 shares of common stock.
For a period of twelve months after his termination of
employment, Mr. Laird will be subject to certain
restrictions on competition with us and on the solicitation of
our employees, customers and clients. Mr. Lairds
employment agreement also provides that Mr. Laird is
eligible to participate in our general employee benefit plans in
accordance with the terms and conditions of such plans.
In April 2010, we amended and restated Mr. Lairds
employment agreement with our company. Pursuant to the amended
and restated employment agreement, Mr. Lairds
employment agreement may be terminated, with or without cause,
by him or by us at any time without notice by either party.
Effective upon the consummation of this offering, if we
terminate the agreement without cause, we will continue to
provide Mr. Lairds base salary for a period of six
months following the termination of employment, conditioned upon
the execution by Mr. Laird of a release of claims. In
addition to this severance payment, effective upon the
consummation of this offering Mr. Laird will also receive
any earned but unpaid bonus, and we will also reimburse
Mr. Lairds COBRA payments during the period of his
severance payment.
Potential
Payments Upon Termination or Change in Control
See Employment Agreements and Compensation
Discussion and Analysis Severance and Change in
Control Benefits above for a description of the severance
and change in control arrangements for our named executive
officers. The following table describes the potential payments
and benefits upon termination of our named executive
officers employment before or after a change in control of
our company, as if each officers employment terminated as
of December 31, 2009.
91
Estimated
Benefits and Payments Upon Termination of Employment
The following table describes the potential payments and
benefits upon termination of our named executive officers
employment before or after a change in control of our company as
described above, as if each officers employment terminated
as of December 31, 2009, the last business day of the 2009
fiscal year, before giving effect to the April 2010 amendments
to the terms of the employment agreements with our named
executive officers discussed above.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
Other than for
|
|
|
Termination
|
|
|
|
|
|
|
|
|
Resignation/
|
|
|
Cause or
|
|
|
Other than for
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Disability
|
|
|
Cause or
|
|
|
Resignation for
|
|
|
|
|
|
for
|
|
|
Prior
|
|
|
Disability after a
|
|
|
Good Reason
|
|
|
|
|
|
Cause or
|
|
|
to Change in
|
|
|
Change in
|
|
|
after a Change in
|
|
Name
|
|
Benefit
|
|
Disability
|
|
|
Control
|
|
|
Control
|
|
|
Control
|
|
|
Lars Björk
|
|
Severance
|
|
$
|
|
|
|
$
|
75,000
|
|
|
$
|
75,000
|
|
|
$
|
|
|
|
|
Option Acceleration
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COBRA Premiums
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation Payout
|
|
|
23,654
|
|
|
|
23,654
|
|
|
|
23,654
|
|
|
|
23,654
|
|
|
|
Total Value
|
|
$
|
23,654
|
|
|
$
|
98,654
|
|
|
$
|
|
|
|
$
|
23,654
|
|
William G. Sorenson
|
|
Severance
|
|
$
|
|
|
|
$
|
137,500
|
|
|
$
|
68,750
|
|
|
$
|
|
|
|
|
Option Acceleration
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COBRA Premiums
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation Payout
|
|
|
15,865
|
|
|
|
15,865
|
|
|
|
15,865
|
|
|
|
15,865
|
|
|
|
Total Value
|
|
$
|
15,865
|
|
|
$
|
153,365
|
|
|
$
|
|
|
|
$
|
15,865
|
|
Leslie Bonney
|
|
Severance
|
|
£
|
|
|
|
£
|
72,500
|
(1)
|
|
£
|
72,500
|
(1)
|
|
£
|
|
|
|
|
Option Acceleration
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COBRA Premiums
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Value
|
|
£
|
|
|
|
£
|
72,500
|
(1)
|
|
£
|
|
|
|
£
|
|
|
Anthony Deighton
|
|
Severance
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
Option Acceleration
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COBRA Premiums
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation Payout
|
|
|
8,013
|
|
|
|
8,013
|
|
|
|
8,013
|
|
|
|
8,013
|
|
|
|
Total Value
|
|
$
|
8,013
|
|
|
$
|
8,013
|
|
|
$
|
|
|
|
$
|
8,013
|
|
Douglas Laird
|
|
Severance
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
Option Acceleration
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COBRA Premiums
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation Payout
|
|
|
8,495
|
|
|
|
8,495
|
|
|
|
8,495
|
|
|
|
8,495
|
|
|
|
Total Value
|
|
$
|
8,495
|
|
|
$
|
8,495
|
|
|
$
|
|
|
|
$
|
8,495
|
|
|
|
|
(1)
|
|
Approximately $117,604 based on an
assumed exchange rate of approximately $1.62 as of
December 31, 2009.
|
For purposes of valuing the severance and vacation payments in
the table above, we used each executive officers base
salary in effect at the end of 2009 and the number of accrued
but unused vacation days at the end of 2009.
The value of option acceleration shown in the tables above was
calculated based on the assumption that the officers
employment was terminated and the change in control (if
applicable) occurred on December 31, 2009 and that the fair
market value of our common stock on that date was
$ , which represents the midpoint
of the range of the initial public offering price set forth on
the cover page of this prospectus. The value of the vesting
acceleration was calculated by multiplying the number of
unvested shares subject to each option by the difference between
the fair market value of our common stock as of
December 31, 2009 and the exercise price of the option.
2009 Director
Compensation
We have a policy of reimbursing all of our non-employee
directors for their reasonable
out-of-pocket
expenses incurred in attending board and committee meetings. In
April of 2009, we granted Mr. Wahl an option to purchase
50,000 shares of our common stock at an exercise price of
$1.65 per share. The option vests in full on April 1, 2010.
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The following table sets forth information regarding
compensation earned by each of our non-employee directors during
the fiscal year ended December 31, 2009.
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Change in Pension
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Value and
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Nonqualified
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Fees Earned
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Non-Equity
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Deferred
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All Other
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or Paid in
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Stock
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Option
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Incentive Plan
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Compensation
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Compensation
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Name
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Cash ($)
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Awards ($)
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Awards
($)(1)
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Compensation ($)
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Earnings ($)
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($)
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Total ($)
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Claes
Björk(2)
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$
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$
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$
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$
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$
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$
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$
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Bruce Golden
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Måns
Hultman(3)
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269,867(4
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39,749(5
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309,616
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(6)
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Alexander Ott
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Paul
Wahl(7)
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49,099
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49,099
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(1)
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The amounts in this column
represent the aggregate grant date fair value of the stock
option, computed in accordance with Accounting Standards
Codification Topic 718 without consideration of forfeitures. See
Note 13 of the notes to consolidated financial statements
for a discussion of our assumptions in determining the values of
our option awards.
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(2)
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Mr. Björk resigned from
the board of directors effective December 2, 2009.
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(3)
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Mr. Hultman resigned from the
board of directors effective March 15, 2010.
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(4)
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Includes $175,368 (based on
director compensation of 1,248,000 Swedish kronor and an
assumed exchange rate of approximately $0.14 as of
December 31, 2009) and $94,499 (based on a bonus paid of
672,500 Swedish kronor and an assumed exchange rate of
approximately $0.14 as of December 31, 2009).
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(5)
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Includes $7,799 (based on payments
of 55,500 Swedish kronor and an assumed exchange rate of
approximately $0.14 as of December 31, 2009) paid by our
company for the provision of a car for Mr. Hultman and
$31,950 (based on contributions of 227,370 Swedish kronor
and an assumed exchange rate of approximately $0.14 as of
December 31, 2009) contributed by our company to
Mr. Hultmans Swedish tax qualified contribution plan.
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(6)
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Approximately
2,203,370 Swedish kronor based on an assumed exchange rate
of approximately $0.14 as of December 31, 2009.
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(7)
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Mr. Wahl held options to
purchase an aggregate of 50,000 shares of common stock as
of December 31, 2009.
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Mr. Gavin was appointed to the board of directors of our
company effective February 11, 2010 and in connection with
his appointment was granted during March 2010 an option to
purchase 20,000 shares of our common stock. Following this
offering, our non-employee directors will be eligible for cash
compensation and for stock option grants under our 2010 Equity
Incentive Plan. See Management Director
Compensation for additional information.
Equity
Benefit Plans
2004
Omnibus Stock Option and Award Plan
Our board of directors adopted and our stockholders approved the
2004 Omnibus Stock Option and Award Plan (the 2004
Plan) in November 2004. As of December 31, 2009,
4,130,882 shares of common stock had been issued upon the
exercise of options granted under the 2004 Plan, options to
purchase 5,588,478 shares of common stock were outstanding
at a weighted-average exercise price of $0.93 per share and no
shares remained available for future grant. Following our
adoption of the 2007 Plan on November 1, 2007, no further
grants of stock options or awards were made under the 2004 Plan.
The awards outstanding following such time under the 2004 Plan
continue to be governed by their existing terms.
Administration. The compensation committee of
our board of directors administers the 2004 Plan. Our
compensation committee has complete discretion to make all
decisions relating to the plans.
Eligibility. Employees of our company or its
subsidiaries and non-employee members of our board of directors,
as well as any other persons whose participation the
compensation committee determine is in our best interest,
subject to certain limitations, are eligible to participate in
our 2004 Plan.
Types of Award. Our 2004 Plan provide for the
following types of award:
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incentive and non-statutory stock options to purchase shares of
our common stock;
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restricted shares of our common stock;
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stock awards; and
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stock units.
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Change in Control. In the event we experience
a change in control, all awards granted under the 2004 Plan
shall be subject to the agreement evidencing such change in
control, and with respect to a stock option such agreement shall
provide for one or more of the following:
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the continuation or assumption of such outstanding stock options
by the surviving corporation or its parent;
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the substitution by the surviving corporation or its parent of
new options for such outstanding stock options;
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full acceleration of the vesting of such stock options; or
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the cancellation of such stock options in exchange for a payment
equal to the excess of the fair market value of the shares
subject to such stock options (whether or not such stock options
are then exercisable or such shares are then vested) over the
exercise price of such stock options.
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For purposes of the 2004 Plan, a change in control includes a
merger or consolidation of our company with or into another
entity where existing stockholders of our company immediately
prior to the merger or consolidation do not hold a majority of
the voting power of the capital stock of the surviving entity,
the sale of all or substantially all of our assets and the
dissolution, liquidation or winding up of our company.
Payment. The exercise price for options
granted under the 2004 Plan may not be less than 100% of the
fair market value of our common stock on the grant date.
Optionees may pay the exercise price of options by using:
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cash or cash equivalents;
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shares of common stock that the optionee already owns;
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a full recourse promissory note, under certain
circumstances; or
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following this offering, an immediate sale of the option shares
through a broker designated by us.
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Shares and stock units may be awarded under the 2004 Plan in
consideration of services rendered to us prior to the grant date
of the award.
2007
Omnibus Stock Option and Award Plan
Our board of directors adopted and our stockholders approved the
2007 Omnibus Stock Option and Award Plan (the 2007
Plan) in November 2007. As of December 31, 2009,
103,548 shares of common stock had been issued upon the
exercise of options granted under the 2007 Plan, options to
purchase 6,752,996 shares of common stock were outstanding
at a weighted-average exercise price of $2.00 per share and
1,548,497 shares remained available for future grant. Upon
the effective date of this offering, no further option grants
will be made under the 2007 Plan. The awards outstanding after
this offering under the 2007 Plan will continue to be governed
by their existing terms.
Administration. The compensation committee of
our board of directors administers the 2007 Omnibus Stock Option
and Award Plan. Our compensation committee has complete
discretion to make all decisions relating to the plans.
Eligibility. Employees of our company or its
subsidiaries and non-employee members of our board of directors,
as well as any other persons whose participation the
compensation committee determine is in our best interest,
subject to certain limitations, are eligible to participate in
our 2007 Plan.
Types of Award. Our 2007 Plan provide for the
following types of award:
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incentive and non-statutory stock options to purchase shares of
our common stock;
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restricted shares of our common stock;
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stock awards; and
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stock units.
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Change in Control. In the event we experience
a change in control, awards outstanding under the 2007 Plan are
to be assumed by our acquirer. The compensation committee has
the authority to determine the effect of any such transaction on
outstanding options or awards. For purposes of our 2007 Plan, a
change in control includes a merger involving our company, or
any other corporate reorganization to which our company is a
part that involves the exchange, conversion, adjustment or other
modification of outstanding shares of our common stock.
Payment. The exercise price for options and
stock appreciation rights granted under the 2007 Plan may not be
less than 100% of the fair market value of our common stock on
the grant date. Optionees may pay the exercise price of options
by using:
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cash or cash equivalents;
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shares of common stock that the optionee already owns;
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a full recourse promissory note, under certain
circumstances; or
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following this offering, an immediate sale of the option shares
through a broker designated by us.
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Shares and stock units may be awarded under the 2007 Plan in
consideration of services rendered to us prior to the grant date
of the award.
Special
considerations for Swedish Employees
Swedish tax law requires that Swedish plan participants purchase
their stock options. Because such Swedish plan participants
purchase their stock options pursuant to Swedish law, these
participants keep these stock options or awards even if they
leave our company. Pursuant to our non-qualified stock option
award agreements with our Swedish employees, stock options and
awards are subject to our right of repurchase upon a termination
of service of the participant at a price equal to the fair
market value on the date of termination of service. We have a
right of first refusal to purchase any stock option or awards
proposed to be transferred to any third parties which shall
terminate upon the earlier to occur of a public offering of our
shares of common stock at a price per share of not less than
$3.15 and greater than $30,000,000 in the aggregate or the
consummation of a liquidation event. Upon a change in control,
our right to repurchase award shares in the event of a
termination of service terminates if the participant is still
actively employed by us on the date of the change of control and
in such event the stock option and awards shall remain subject
to our right of first refusal.
2010
Equity Incentive Plan
Our board of directors adopted our 2010 Equity Incentive Plan
(the 2010 Plan) during March 2010, and our
stockholders approved it
on ,
2010. The 2010 Plan will take effect on the effective date of
the registration statement of which this prospectus is a part.
Our 2010 Plan will replace our 2007 Plan, and no further grants
will be made under such plan after this offering. However, the
options outstanding after this offering under the 2007 Plan and
the 2004 Plan will continue to be governed by their existing
terms.
Shares Reserved. We have reserved
3,300,000 shares of our common stock for issuance under the
2010 Equity Incentive Plan. The number of shares reserved for
issuance under the plan will be increased automatically on
January 1 of each year, starting with 2011, by a number equal to
the smallest of:
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3,300,000 shares;
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3.75% of the shares of common stock outstanding at that
time; or
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the number of shares determined by our board of directors.
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In general, to the extent that awards under the 2010 Plan are
forfeited or lapse without the issuance of shares, if shares are
applied to pay the purchase price or withholding amounts due in
connection with awards or shares are otherwise not issued in
connection with an award, then in each case the shares
forfeited, withheld or otherwise not
95
issued will again become available for awards. All share numbers
described in this summary of the 2010 Plan are automatically
adjusted in the event of a stock split, a stock dividend, or a
reverse stock split.
Administration. The compensation committee of
our board of directors administers the 2010 Plan. The committee
has the complete discretion to make all decisions relating to
the plan and outstanding awards.
Eligibility. Employees, members of our board
of directors who are not employees, and consultants are eligible
to participate in our 2010 Plan.
Types of Award. Our 2010 Plan provides for the
following types of award:
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incentive and non-statutory stock options to purchase shares of
our common stock;
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stock appreciation rights;
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restricted shares of our common stock; and
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stock units.
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Options and Stock Appreciation Rights. The
exercise price for options granted under the 2010 Plan may not
be less than 100% of the fair market value of our common stock
on the option grant date. Optionees may pay the exercise price
by using, with the consent of the compensation committee in all
cases except with respect to cash:
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cash;
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shares of common stock that the optionee already owns;
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an immediate sale of the option shares through a broker approved
by us; or
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other methods permitted by applicable law and approved by the
compensation committee.
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A participant who exercises a stock appreciation right receives
the increase in value of our common stock over the base price.
The base price for stock appreciation rights may not be less
than 100% of the fair market value of our common stock on the
grant date. The settlement value of a stock appreciation right
may be paid in cash or shares of common stock or a combination
of both. Options and stock appreciation rights vest at the time
or times determined by the compensation committee. In most
cases, they will vest over a four-year period following the date
of grant. Options and stock appreciation rights also expire at
the time determined by the compensation committee but in no
event more than 10 years after they are granted. They
generally expire earlier if the participants service
terminates earlier. No participant may be granted, in aggregate
during any fiscal year, options or stock appreciation rights
under the 2010 Plan covering more than 800,000 shares of
common stock.
Restricted Shares and Stock Units. Restricted
shares and stock units may be awarded under the 2010 Plan in
return for any lawful consideration, and participants who
receive restricted shares or stock units generally are not
required to pay for their awards in cash. In general, these
awards will be subject to vesting. Vesting may be based on
length of service, the attainment of performance-based
milestones, or a combination of both, as determined by the
compensation committee. No participant may be granted, in
aggregate during any fiscal year, awards pursuant to the 2010
Plan for restricted shares or stock units with performance-based
vesting covering more than 200,000 shares of common stock.
Settlement of vested stock units may be made in the form of
cash, shares of common stock, or a combination of both.
Change in Control. In the event we experience
a change in control, outstanding awards granted under the 2010
Plan will be subject to the terms of the definitive transaction
agreement, which will provide that the awards will be continued
(if we survive the transaction), assumed or substituted for
equivalent awards by our acquirer, or cancelled including with
respect to vested shares in exchange for a cash payment equal to
the difference between the fair market value of the underlying
stock less any applicable exercise or purchase price. The
compensation committee has the discretion to provide that an
award granted under the 2010 Plan will vest on an accelerated
basis if a change in control of our company occurs or if the
participant is subject to an involuntary termination after the
change in control, and has already so provided with respect to
certain of our executive officers as described above in
Compensation Discussion and Analysis and
Employment Agreements.
96
A change in control includes:
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a merger after which our own stockholders own less than 50% of
the surviving corporation or its parent company;
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a sale of all or substantially all of our assets;
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a proxy contest that results in the replacement of more than
one-half of our directors over a
24-month
period; or
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an acquisition of 50% or more of our outstanding stock by any
person or group, other than a person related to our company,
such as a holding company owned by our stockholders.
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Amendments or Termination. Our board of
directors may amend or terminate the 2010 Plan at any time. If
our board of directors amends the plan, it does not need to ask
for stockholder approval of the amendment unless required by
applicable law or exchange listing requirements. The 2010 Plan
will continue in effect for 10 years, unless our board of
directors decides to terminate the plan earlier or unless our
board of directors and stockholders later approve an extension
of this term.
97
CERTAIN
RELATIONSHIPS AND RELATED PERSONS TRANSACTIONS
In addition to the compensation arrangements with directors and
executive officers and the registration rights described
elsewhere in this prospectus, the following is a description of
each transaction since January 1, 2007 and each currently
proposed transaction in which:
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we have been or are to be a participant;
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the amount involved exceeds $120,000; and
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any of our directors, executive officers or holders of more than
5% of our capital stock, or any immediate family member of or
person sharing the household with any of these individuals
(other than tenants or employees), had or will have a direct or
indirect material interest.
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All of the transactions set forth below were approved by a
majority of our board of directors, including a majority of the
independent and disinterested members of our board of directors.
We believe that we have executed all of the transactions set
forth below on terms no less favorable to us than we could have
obtained from unaffiliated third parties. It is our intention to
ensure that all future transactions between us and our officers,
directors and principal stockholders and their affiliates are
approved by the audit committee and a majority of the members of
our board of directors, including a majority of the independent
and disinterested members of our board of directors, and are on
terms no less favorable to us than those that we could obtain
from unaffiliated third parties.
Investors
Rights Agreement
In November 2004 we entered into an investors rights
agreement with the purchasers of our outstanding preferred
stock, including entities affiliated with Accel Europe, L.P. and
Jerusalem Venture Partners IV, L.P. Erel Margalit, one of our
directors, is the managing member of Jerusalem Venture Partners,
and Bruce Golden, one of our directors, is a partner of the
Accel Partners. See Principal and Selling
Stockholders for additional information regarding the
shares held by these entities. As of March 31, 2010, the
holders of 32,990,113 shares of our common stock, including
the shares of common stock issuable upon the automatic
conversion of our preferred stock, are entitled to rights with
respect to the registration of their shares under the Securities
Act of 1933 pursuant to the investors rights agreement.
Certain stockholders who are a party to this agreement are
entitled to certain financial information regarding us and to
visit and inspect our properties and books of account. These
information and inspection rights will terminate upon the
closing of this offering. In addition, stockholders who are a
party to this agreement are provided rights to demand
registration of shares of common stock issuable upon conversion
of their preferred stock and to participate in a registration of
our common stock that we may decide to do, from time to time.
These registration rights will survive this offering and will
terminate as to any holder at such time as such holder holds 1%
or less of our companys outstanding common stock and all
of such holders securities (together with any affiliate of
the holder with whom such holder must aggregate its sales) could
be sold within a three month period without compliance with the
registration requirements of the Securities Act of 1933 pursuant
to Rule 144, but in any event no later than the five-year
anniversary of this offering. These demand registration rights,
however, may not be exercised until six months after this
offering. All of the shares subject to this agreement are held
by affiliates of certain of our directors and by holders of 5%
of our capital stock. In addition, Lars Björk, Alexander
Ott, Paul Wahl, Måns Hultman and Sundet Investments AB are
subject to the 180-day post-initial public offering lock-up
provisions contained in the investors rights agreement.
This is not a complete description of this investors
rights agreement and is qualified by the full text of the
investors rights agreement which have been filed as
exhibits to the registration statement of which this prospectus
is a part.
Voting
Agreement
The election of the members of our board of directors is
governed by a voting agreement that we entered into with certain
holders of our common stock and holders of our preferred stock
and related provisions of our restated certificate of
incorporation. The directorship of our board of directors
designated by the holders of a majority of our Series AA
preferred stock is filled by John Gavin, Jr. The holders of
a majority of our Series A preferred stock have designated
Bruce Golden and Erel N. Margalit for election to our board of
directors. The holders of a majority of our common stock and
preferred stock, voting together as a single class, have
designated Lars Björk, Alexander Ott and
98
Paul Wahl for election to our board of directors. Upon the
closing of this offering, the voting agreement will terminate in
its entirety and none of our stockholders will have any special
rights regarding the election or designation of members of our
board of directors.
Other
Transactions with our Executive Officers, Directors, Key
Employees and Significant Stockholders.
Debt Facility with Stiftelsen
Industrifonden. In June 2008 we entered into a
60 million Swedish kronor (approximately $8.4 million
as of December 31, 2009 based on an exchange rate of
approximately 0.14) long-term note payable with Stiftelsen
Industrifonden, one of our stockholders. This note has an
interest rate of 10% per annum, and as of December 31,
2009, we have made $2.3 million in principal payments and
$400,000 in interest payments under this note. As of
December 31, 2009, the long-term note payable had a balance
of 49.7 million Swedish kronor (approximately
$6.9 million based on an exchange rate of approximately
0.14 as of December 31, 2009). Under the terms of the
agreement, quarterly payments of principal and interest are
required until the agreement matures in March 2012. The note is
secured by 65% of the outstanding shares of QlikTech
International, AB, our Swedish subsidiary and operating company.
We currently intend to prepay all amounts owed under this
agreement, including applicable prepayment fees, with the
proceeds of this offering. The note is subject to a prepayment
fee of an amount equal to interest on the amount prepaid from
the date of prepayment through March 31, 2012 at a rate
equal to
one-half the
Swedish Reference Rate (0.25% as of December 31, 2009)
applicable on the date of prepayment. In connection with the
debt facility, we issued a warrant to Stiftelsen Industrifonden
to purchase 214,200 shares of our Series A preferred
stock at an exercise price of $2.31 per share.
Indemnification Agreements. Upon the closing
of this offering, we will enter into indemnification agreements
with each of our directors and executive officers. The form of
agreement provides that we will indemnify each of our directors
and executive officers against any and all expenses incurred by
that director or executive officer because of his or her status
as one of our directors or executive officers to the fullest
extent permitted by Delaware law, our restated certificate of
incorporation and our amended and restated bylaws (except in a
proceeding initiated by such person without board approval). In
addition, the form agreement provides that, to the fullest
extent permitted by Delaware law, we will advance all expenses
incurred by our directors and executive officers in connection
with a legal proceeding in which they may be entitled to
indemnification.
Stock Option Awards. For information regarding
stock options and stock awards granted to our named executive
officers and directors, see Management
Director Compensation and Management
Executive Compensation.
99
PRINCIPAL
AND SELLING STOCKHOLDERS
The following table provides information concerning beneficial
ownership of our common stock as of March 31, 2010, and as
adjusted to reflect the completion of this offering, for:
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each stockholder, or group of affiliated stockholders, known to
us to beneficially own more than 5% of our outstanding common
stock;
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each of the selling stockholders
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each of our named executive officers;
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each of our directors; and
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all of our current executive officers and directors as a group.
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The percentage ownership information shown in the table is based
upon 63,757,594 shares of common stock outstanding as of
March 31, 2010, assuming the renaming of our Series A
common stock as common stock, the conversion of all outstanding
shares of our Series A preferred stock and Series AA
preferred stock into shares of our common stock and all
outstanding warrants to purchase preferred stock into warrants
to purchase common stock upon completion of this offering, and
the issuance
of shares
of common stock in this offering. The percentage ownership
information assumes no exercise of the underwriters
over-allotment option.
Information with respect to beneficial ownership has been
furnished by each director, officer or beneficial owner of more
than 5% of our common stock. We have determined beneficial
ownership in accordance with the rules of the SEC. These rules
generally attribute beneficial ownership of securities to
persons who possess sole or shared voting power or investment
power with respect to those securities. In addition, the rules
include shares of common stock issuable pursuant to the exercise
of stock options or warrants that are either immediately
exercisable or exercisable on or before May 30, 2010, which
is 60 days after March 31, 2010. These shares are
deemed to be outstanding and beneficially owned by the person
holding those options or warrants for the purpose of computing
the percentage ownership of that person, but they are not
treated as outstanding for the purpose of computing the
percentage ownership of any other person. Unless otherwise
indicated, the persons or entities identified in this table have
sole voting and investment power with respect to all shares
shown as beneficially owned by them, subject to applicable
community property laws. Beneficial ownership representing less
than one percent is denoted with an *.
100
Except as otherwise noted below, the principal address of each
of the stockholders below is
c/o Qlik
Technologies Inc., 150 Radnor Chester Road, Suite E220,
Radnor, Pennsylvania 19087.
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Shares Beneficially
|
|
|
|
|
|
Shares Beneficially
|
|
|
|
Owned Prior to This
|
|
|
Number
|
|
|
Owned After to This
|
|
|
|
Offering
|
|
|
of Shares
|
|
|
Offering
|
|
Name of Beneficial
Owner
|
|
Number
|
|
|
Percentage
|
|
|
Being Offered
|
|
|
Number
|
|
|
Percentage
|
|
|
5% Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accel Europe,
L.P.(1)
|
|
|
16,887,594
|
|
|
|
26.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Jerusalem Venture Partners IV,
L.P.(2)
|
|
|
16,102,519
|
|
|
|
25.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Stiftelsen
Industrifonden(3)
|
|
|
6,400,787
|
|
|
|
10.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Måns
Hultman(4)
|
|
|
4,485,989
|
|
|
|
7.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors and Named Executive Officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Erel N.
Margalit(2)(5)
|
|
|
16,102,519
|
|
|
|
25.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Lars
Björk(6)
|
|
|
2,042,856
|
|
|
|
3.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Alexander Ott
|
|
|
1,083,602
|
|
|
|
1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Anthony
Deighton(7)
|
|
|
828,650
|
|
|
|
1.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Leslie
Bonney(8)
|
|
|
822,066
|
|
|
|
1.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul
Wahl(9)
|
|
|
510,000
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William G.
Sorenson(10)
|
|
|
290,813
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas
Laird(11)
|
|
|
93,750
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Gavin,
Jr.(12)
|
|
|
1,666
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bruce
Golden(13)
|
|
|
0
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All current directors and executive officers as a
group
(11 persons)(14)
|
|
|
22,598,022
|
|
|
|
33.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Includes 16,492,423 shares
held by Accel Europe L.P. and 395,171 shares held by Accel
Europe Investors 2004 L.P. (collectively, the Accel
Funds). Accel Europe Associates L.L.C. is the general
partner of Accel Europe Associates L.P., which is the general
partner of Accel Europe L.P. and has the sole voting and
investment power. Accel Europe Associates L.L.C. is the general
partner of Accel Europe Investors 2004 L.P. and has the sole
voting and investing power. Voting and investment power over the
shares beneficially owned by Accel Europe Associates L.L.C. is
shared by its managing members, Kevin Comolli and James R.
Swartz. The general partners and managing members disclaim
beneficial ownership of the shares owned by the Accel Funds
except to the extent of their proportionate pecuniary interest
therein. The address for Accel Europe L.P. and Accel Europe
Investors 2004 L.P. is 428 University Avenue, Palo Alto,
California 94301.
|
(2)
|
|
Includes 14,827,461 shares
held by held by Jerusalem Venture Partners IV, L.P.,
126,561 shares held by Jerusalem Venture Partners IV-A,
L.P., 132,815 shares held by Jerusalem Venture Partners
Entrepreneurs Fund IV, L.P. and 658,936 shares held by
JVP IV Annex Fund, L.P. and its affiliates (collectively,
the US JVP Funds) and 356,746 shares held by
Jerusalem Venture Partners IV (Israel), L.P. JVP
Corp IV is the general partner of JP Media V, L.P.,
which is the general partner of JVP IV Annex Fund L.P.
JVP Corp. IV is the general partner of Jerusalem Partners IV,
L.P., which is the general partner of Jerusalem Venture Partners
IV, L.P., Jerusalem Venture Partners IV-A, L.P. and Jerusalem
Venture Partners Entrepreneurs Fund IV, L.P. JVP Corp. IV
is the general partner of Jerusalem Partners IV
Venture Capital, L.P., which is the general partner of Jerusalem
Venture Partners IV (Israel), L.P. Voting and investment
power over the shares beneficially owned by JVP Corp. IV. is
controlled by Erel Margalit, its managing member. The general
partners and managing members disclaim beneficial ownership of
the shares owned by the JVP Funds except to the extent of their
proportionate pecuniary interest therein. The address for
Jerusalem Venture Partners IV, L.P. is 156 Fifth Avenue,
Suite 410, New York, NY 10010.
|
|
|
|
(3)
|
|
Includes 214,200 shares
issuable upon exercise of a warrant at an exercise price of
$2.31 per share that is exercisable within 60 days of
March 31, 2010. Stiftelsen Industrifonden is an investment
foundation financed by the Swedish government without outside
capital, and its board of directors is appointed by the Swedish
government. Voting and investment power over the shares
beneficially owned by Stiftelsen Industrifonden is controlled by
this board of directors. The address for Stiftelsen
Industrifonden is Attn: Lennart Gustafson, Box 1163,
SE-111 91
Stockholm, Sweden.
|
101
|
|
|
(4)
|
|
Includes 1,750,000 shares held
by Sundet Investment AB. Mr. Hultman is a co-founder and
co-owner of Sundet Investments. Voting and investment power over
the shares beneficially owned by Sundet Investments is shared by
Mr. Hultman and Mats Nilstoft. Includes options to purchase
111,589 shares of our companys common stock that
expire on June 18, 2010. The address for Sundet Investments
is Sundet Investment AB, Norra Vallgatan 54, Box 4107, SE-20312
Malmö, Sweden.
|
|
|
|
(5)
|
|
Mr. Margalit is the managing
member of JVP Corp. IV, and he disclaims beneficial ownership of
any of the US JVP Funds shares or Jerusalem Venture
Partners IV (Israel), L.P.s shares except to the
extent of his proportionate pecuniary interest therein.
|
|
|
|
(6)
|
|
Includes 753,656 shares
issuable upon exercise of options exercisable within
60 days of March 31, 2010. Excludes
379,951 shares subject to options that are not exercisable
within 60 days of March 31, 2010.
|
|
|
|
(7)
|
|
Includes 828,650 shares
issuable upon exercise of options exercisable within
60 days of March 31, 2010. Excludes
193,750 shares subject to options that are not exercisable
within 60 days of March 31, 2010.
|
|
|
|
(8)
|
|
Includes 822,066 shares
issuable upon exercise of options exercisable within
60 days of March 31, 2010. Excludes
244,816 shares subject to options that are not exercisable
within 60 days of March 31, 2010.
|
|
|
|
(9)
|
|
Includes 50,000 shares
issuable upon exercise of options exercisable within
60 days of March 31, 2010.
|
|
|
|
(10)
|
|
Includes 290,813 shares
issuable upon exercise of options exercisable within
60 days of March 31, 2010. Excludes
484,687 shares subject to options that are not exercisable
within 60 days of March 31, 2010.
|
|
|
|
(11)
|
|
Includes 93,750 shares
issuable upon exercise of options exercisable within
60 days of March 31, 2010. Excludes
206,250 shares subject to options that are not exercisable
within 60 days of March 31, 2010.
|
|
|
|
(12)
|
|
Includes 1,666 shares issuable upon
exercise of options exercisable within 60 days of March 31,
2010. Excludes 18,334 shares subject to options that are not
exercisable within 60 days of March 31, 2010.
|
|
|
|
(13)
|
|
Mr. Golden is a partner of
Accel Partners, and he disclaims beneficial ownership of any of
the Accel Funds shares except to the extent of his
proportionate pecuniary interest therein. See footnote
(1) of this table for further details of ownership by Accel
Funds.
|
|
|
|
(14)
|
|
Includes 2,903,101 shares
issuable upon exercise of options exercisable within
60 days of March 31, 2010. Excludes
1,565,288 shares subject to options that are not
exercisable within 60 days of March 31, 2010.
|
102
DESCRIPTION
OF CAPITAL STOCK
General
Upon the closing of this offering and the filing of our restated
certificate of incorporation, our authorized capital stock will
consist
of shares
of common stock, par value $0.0001 per share,
and shares
of preferred stock, par value $0.0001 per share. The following
summary of our capital stock and certain provisions of our
restated certificate of incorporation and bylaws does not
purport to be complete and is qualified in its entirety by the
provisions of our restated certificate of incorporation and
bylaws, copies of which have been filed as exhibits to the
registration statement of which this prospectus is a part.
Common
Stock
Outstanding Shares. Based on
63,350,570 shares of common stock outstanding as of
December 31, 2009, assuming the renaming of our
Series A common stock as common stock, the conversion of
all outstanding shares of our Series A preferred stock and
Series AA preferred stock into shares of common stock
immediately prior to the closing of this offering and the
issuance
of shares
of common stock in this offering, and no exercise of outstanding
options or warrants, there will
be shares
of common stock outstanding upon the closing of this offering.
As of December 31, 2009, assuming the renaming of our
Series A common stock as common stock and the conversion of
all outstanding shares of our Series A preferred stock and
Series AA preferred stock into common stock upon the
closing of this offering, we had approximately 257 record
holders of our common stock.
As of December 31, 2009, there were 12,341,473 shares
of common stock subject to outstanding options.
Voting Rights. Each holder of common stock is
entitled to one vote for each share of common stock held on all
matters submitted to a vote of the stockholders, including the
election of directors. Our restated certificate of incorporation
and amended and restated bylaws do not provide for cumulative
voting rights. Because of this, the holders of a majority of the
shares of common stock entitled to vote in any election of
directors can elect all of the directors standing for election,
if they should so choose.
Dividends. Subject to preferences that may be
applicable to any then outstanding preferred stock, the holders
of our outstanding shares of common stock are entitled to
receive dividends, if any, as may be declared from time to time
by our board of directors out of legally available funds. At
present, we have no plans to issue dividends. See the section
titled Dividend Policy.
Liquidation. In the event of our liquidation,
dissolution or winding up, holders of common stock will be
entitled to share ratably in the net assets legally available
for distribution to stockholders after the payment of all of our
debts and other liabilities, subject to the satisfaction of any
liquidation preference granted to the holders of any outstanding
shares of preferred stock.
Other Rights and Preferences. Holders of our
common stock have no preemptive, conversion or subscription
rights, and there are no redemption or sinking fund provisions
applicable to our common stock. The rights, preferences and
privileges of the holders of common stock are subject to, and
may be adversely affected by, the rights of the holders of
shares of any series of our preferred stock that we may
designate and issue in the future.
Fully Paid and Nonassessable. All of our
outstanding shares of common stock are, and the shares of common
stock to be issued in this offering will be, fully paid and
nonassessable.
Preferred
Stock
Upon the closing of this offering, we will have no shares of our
preferred stock outstanding. Outstanding shares of
Series AA preferred stock will be converted into
26,875,145 shares of common stock and outstanding shares of
Series A preferred stock will be converted into
19,846,279 shares of common stock.
Our board of directors is authorized to issue preferred stock in
one or more series, to establish the number of shares to be
included in each such series and to fix the designation, powers,
preferences and rights of such shares and any qualifications,
limitations or restrictions thereof. The issuance of preferred
stock may have the effect of delaying, deferring or preventing a
change in control of our company without further action by the
stockholders and
103
may adversely affect the voting and other rights of the holders
of common stock. The issuance of preferred stock with voting and
conversion rights may adversely affect the voting power of the
holders of common stock, including the loss of voting control to
others. At present, we have no plans to issue any preferred
stock.
Warrants
At December 31, 2009, assuming the renaming of our
Series A common stock as common stock and the conversion of
all preferred stock into common stock upon the closing of this
offering, we had warrants to purchase an aggregate of
568,263 shares of our common stock at a weighted exercise
price of approximately $1.43 per share.
The holder of a warrant exercisable to purchase
93,981 shares of our common stock at an exercise price of
$1.65 per share has the right to exercise such warrant until
December 31, 2010 and to require us to purchase the
acquired shares for an aggregate of 1.8 million less
the exercise price of the warrant (approximately
$2.4 million based on an assumed exchange rate of
approximately $1.43 as of December 31, 2009). In the event
the holder does not exercise this right to cause us to
repurchase these shares, the warrant would remain outstanding
and be exercisable until its expiration on December 31,
2014.
Registration
Rights
After the completion of this offering, holders
of shares
of our common stock will be entitled to rights with respect to
the registration of those shares under the Securities Act. Under
the terms of the investors rights agreement between us and
the holders of these registrable securities, if we propose to
register any of our securities under the Securities Act, either
for our own account or for the account of other security holders
exercising registration rights, these holders are entitled to
notice of registration and are entitled to include their shares
of common stock in the registration. The holders of these
registrable securities are also entitled to specified demand
registration rights under which they may require us to file a
registration statement under the Securities Act at our expense
with respect to our shares of common stock, and we are required
to use our commercially reasonable efforts to effect this
registration. Further, the holders of these registrable
securities may require us to file additional registration
statements on
Form S-3.
All of these registration rights are subject to conditions and
limitations, among them the right of the underwriters of an
offering to limit the number of shares included in the
registration and our right not to effect a requested
registration within six months following the initial offering of
our securities, including this offering. This is not a complete
description of this registration rights agreement and is
qualified by the full text of the investors rights
agreement which has been filed as an exhibit to the registration
statement of which this prospectus is a part.
In addition in connection with a Loan Facility Agreement between
our subsidiary, QlikTech International AB, and ETV Capital SA,
we issued a warrant to purchase 260,082 shares of our
Series A preferred stock to ETV Capital. This warrant
provides that upon its exercise the holder shall have no demand
registration rights but will have certain rights to participate
in registrations of our common stock that we may decide to do,
from time to time. Additionally, the holder of this warrant will
be subject to the provisions regarding indemnification as set
forth in the investors rights agreement upon the exercise
of this warrant.
Anti-Takeover
Effects of Our Certificate of Incorporation, Bylaws and Delaware
Law
Some provisions of Delaware law and our restated certificate of
incorporation and amended and restated bylaws could make the
following transactions more difficult:
|
|
|
|
|
acquisition of our company by means of a tender offer, a proxy
contest or otherwise; and
|
|
|
|
removal of our incumbent officers and directors.
|
These provisions of our restated certificate of incorporation
and amended and restated bylaws, summarized below, are expected
to discourage and prevent coercive takeover practices and
inadequate takeover bids. These provisions are designed to
encourage persons seeking to acquire control of our company to
negotiate first with our board of directors. They are also
intended to provide our management with the flexibility to
enhance the likelihood of continuity and stability if our board
of directors determines that a takeover is not in the best
interests of our stockholders. These provisions, however, could
have the effect of discouraging attempts to acquire us, which
could
104
deprive our stockholders of opportunities to sell their shares
of common stock at prices higher than prevailing market prices.
Election and Removal of Directors. Our
restated certificate of incorporation and our amended and
restated bylaws contain provisions that establish specific
procedures for appointing and removing members of the board of
directors. Under our restated certificate of incorporation and
amended and restated bylaws, our board of directors will be
classified into three classes of directors and directors will be
elected by a plurality of the votes cast in each election. Only
one class will stand for election at each annual meeting, and
directors will be elected to serve three-year terms. In
addition, our restated certificate of incorporation and amended
and restated bylaws will provide that vacancies and newly
created directorships on the board of directors may be filled
only by a majority vote of the directors then serving on the
board of directors (except as otherwise required by law or by
resolution of the board). Under our restated certificate of
incorporation and amended and restated bylaws, directors may be
removed only for cause.
Special Stockholder Meetings. Under our
restated certificate of incorporation and amended and restated
bylaws, only the chairman of the board, our chief executive
officer and our board of directors may call special meetings of
stockholders.
Requirements for Advance Notification of Stockholder
Nominations and Proposals. Our amended and
restated bylaws establish advance notice procedures with respect
to stockholder proposals and the nomination of candidates for
election as directors, other than nominations made by or at the
direction of the board of directors or a committee of the board
of directors.
Delaware Anti-Takeover Law. Following this
offering, we will be subject to Section 203 of the Delaware
General Corporation Law which is an anti-takeover law. In
general, Section 203 prohibits a publicly held Delaware
corporation from engaging in a business combination with an
interested stockholder for a period of three years following the
date that the person became an interested stockholder, unless
the business combination or the transaction in which the person
became an interested stockholder is approved in a prescribed
manner. Generally, a business combination includes a merger,
asset or stock sale, or another transaction resulting in a
financial benefit to the interested stockholder. Generally, an
interested stockholder is a person who, together with affiliates
and associates, owns 15% or more of the corporations
voting stock. The existence of this provision may have an
anti-takeover effect with respect to transactions that are not
approved in advance by our board of directors, including
discouraging attempts that might result in a premium over the
market price for the shares of common stock held by stockholders.
Elimination of Stockholder Action by Written
Consent. Our restated certificate of
incorporation and amended and restated bylaws eliminate the
right of stockholders to act by written consent without a
meeting after this offering.
No Cumulative Voting. Under Delaware law,
cumulative voting for the election of directors is not permitted
unless a corporations certificate of incorporation
authorizes cumulative voting. Our restated certificate of
incorporation and amended and restated bylaws do not provide for
cumulative voting in the election of directors. Cumulative
voting allows a minority stockholder to vote a portion or all of
its shares for one or more candidates for seats on the board of
directors. Without cumulative voting, a minority stockholder
will not be able to gain as many seats on our board of directors
based on the number of shares of our stock the stockholder holds
as the stockholder would be able to gain if cumulative voting
were permitted. The absence of cumulative voting makes it more
difficult for a minority stockholder to gain a seat on our board
of directors to influence our boards decision regarding a
takeover.
Undesignated Preferred Stock. The
authorization of undesignated preferred stock makes 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 change control of our company.
Amendment of Charter Provisions. The amendment
of most of the above provisions in our restated certificate of
incorporation and our amended and restated bylaws requires
approval by holders of at least two-thirds of our outstanding
capital stock entitled to vote generally in the election of
directors.
105
These and other provisions could have the effect of discouraging
others from attempting hostile takeovers and, as a consequence,
they may also inhibit temporary fluctuations in the market price
of our common stock that often result from actual or rumored
hostile takeover attempts. These provisions may also have the
effect of preventing changes in our management. It is possible
that these provisions could make it more difficult to accomplish
transactions that stockholders may otherwise deem to be in their
best interests.
Transfer
Agent and Registrar
The transfer agent and registrar for our common stock will be
American Stock Transfer and Trust Company. Its telephone
number is
1-800-937-5449.
Nasdaq
Global Market Listing
We intend to apply to have our common stock approved for
quotation on the Nasdaq Global Market under the symbol
QLIK.
106
SHARES ELIGIBLE
FOR FUTURE SALE
Prior to this offering, there has been no public market for our
common stock, and we cannot assure you that a significant public
market for our common stock will develop or be sustained after
this offering. Future sales of substantial amounts of shares of
our common stock, including shares issued upon the exercise of
outstanding options, in the public market after this offering,
or the possibility of these sales occurring, could adversely
affect the prevailing market prices. Furthermore, since only a
limited number of shares will be available for sale shortly
after this offering because of contractual and legal
restrictions on resale described below, sales of substantial
amounts of common stock in the public market after the
restrictions lapse could adversely affect the prevailing market
price for our common stock, as well as our ability to raise
equity capital in the future.
Based on the number of shares of common stock outstanding as of
December 31, 2009, upon the completion of this
offering, shares
of common stock will be outstanding, assuming no exercise of the
underwriters overallotment option and no exercise of
outstanding options or warrants following December 31,
2009. The shares to be sold in this offering will be freely
tradable, except that any shares acquired by our affiliates, as
that term is defined in Rule 144 under the Securities Act,
in this offering may only be sold in compliance with the
limitations described below. The remaining
63,350,570 shares of common stock outstanding after this
offering will be restricted as a result of securities laws or
lock-up
agreements as described below. Following the expiration of the
lock-up
period, all shares will be eligible for resale in compliance
with Rule 144 or Rule 701. Restricted
securities as defined under Rule 144 were issued and
sold by us in reliance on exemptions from the registration
requirements of the Securities Act. These shares may be sold in
the public market only if registered or pursuant to an exemption
from registration, such as Rule 144 or Rule 701 under
the Securities Act.
Lock-Up
Agreements
We, the selling stockholders, all of our directors, our
executive officers and substantially all of our other
stockholders and optionholders have agreed with the underwriters
that for a period of 180 days following the date of this
prospectus we or they will not offer, sell, assign, transfer,
pledge, contract to sell or otherwise dispose of or hedge any
shares of our common stock or any securities convertible into or
exchangeable for shares of common stock, subject to specified
exceptions. Morgan Stanley & Co. Incorporated may, in
its sole discretion, at any time without prior notice, release
all or any portion of the shares from the restrictions in any
such agreement.
The 180-day
restricted period described in the preceding paragraph will be
extended if:
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|
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|
|
during the last 17 days of the
180-day
restricted period we issue a release regarding earnings or
regarding material news or events relating to us; or
|
|
|
|
prior to the expiration of the
180-day
restricted period, we announce that we will release earnings
results during the
16-day
period beginning on the last day of the
180-day
period, in which case the restrictions described in the
preceding paragraph will continue to apply until the expiration
of the
18-day
period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.
|
This agreement is subject to certain exceptions, as set forth in
the section entitled Underwriters.
Rule 144
In general, under Rule 144 as currently in effect, once we
have been subject to public company reporting requirements for
at least 90 days, a person who is not deemed to have been
one of our affiliates for purposes of the Securities Act at any
time during 90 days preceding a sale and who has
beneficially owned the shares proposed to be sold for at least
six months, including the holding period of any prior owner
other than our affiliates, is entitled to sell such shares
without complying with the manner of sale, volume limitation or
notice provisions of Rule 144 subject to compliance with
the public information requirements of Rule 144. If such a
person has beneficially owned the shares proposed to be sold for
at least one year, including the holding period of any prior
owner other than our affiliates, then such person is entitled to
sell such shares without complying with any of the requirements
of Rule 144.
107
In general, under Rule 144, as currently in effect, our
affiliates or persons selling shares on behalf of our affiliates
are entitled to sell upon expiration of the
lock-up
agreements described above, within any three-month period
beginning 90 days after the date of this prospectus, a
number of shares that does not exceed the greater of:
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|
|
|
|
1% of the number of shares of common stock then outstanding,
which immediately after this offering will equal
approximately shares; or
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the average weekly trading volume of the common stock during the
four calendar weeks preceding the filing of a notice on
Form 144 with respect to such sale.
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Sales under Rule 144 by our affiliates or persons selling
shares on behalf of our affiliates are also subject to certain
manner of sale provisions and notice requirements and to the
availability of current public information about us.
Rule 701
Rule 701 generally allows a stockholder who purchased
shares of our common stock pursuant to a written compensatory
plan or contract and who is not deemed to have been an affiliate
of our company during the immediately preceding 90 days to
sell these shares in reliance upon Rule 144, but without
being required to comply with the public information, holding
period, volume limitation, or notice provisions of
Rule 144. Rule 701 also permits affiliates of our
company to sell their Rule 701 shares under
Rule 144 without complying with the holding period
requirements of Rule 144. All holders of
Rule 701 shares, however, are required to wait until
90 days after the date of this prospectus before selling
such shares pursuant to Rule 701.
Registration
Rights
Upon completion of this offering, the holders
of shares
of common stock and, upon exercise by the holder of a warrant to
purchase 260,082 shares of our common stock, such holder,
will be entitled to various rights with respect to the
registration of these shares under the Securities Act.
Registration of these shares under the Securities Act would
result in these shares becoming fully tradable without
restriction under the Securities Act immediately upon the
effectiveness of the registration, except for shares purchased
by affiliates. See Description of Capital
Stock Registration Rights for additional
information. Shares covered by a registration statement will be
eligible for sales in the public market upon the expiration or
release from the terms of the
lock-up
agreement. Any sales of securities by these stockholders could
have a material adverse effect on the trading price of our
common stock.
Equity
Incentive Plans
We intend to file a registration statement on
Form S-8
under the Securities Act following this offering to register all
of the shares of common stock issued or reserved for issuance
under our stock option plans. We expect to file this
registration statement as soon as practicable after this
offering. Shares covered by this registration statement will be
eligible for sale in the public market, upon the expiration or
release from the terms of the
lock-up
agreements, and subject to vesting of such shares.
108
CERTAIN
MATERIAL U.S. FEDERAL INCOME TAX
CONSIDERATIONS TO
NON-U.S.
HOLDERS
The following is a summary of the material United States federal
income tax consequences of the ownership and disposition of our
common stock to
non-U.S.
holders who are beneficial owners of our common stock acquired
pursuant to this offering and who hold our common stock as a
capital asset (generally, an asset held for investment
purposes), but does not purport to be a complete analysis of all
the potential tax considerations relating thereto. This summary
is based upon the provisions of the Internal Revenue Code of
1986, as amended (the Code), Treasury regulations
promulgated thereunder, administrative rulings and judicial
decisions, all as of the date hereof. These authorities may be
changed, possibly retroactively, so as to result in United
States federal income tax consequences different from those set
forth below. We have not sought any ruling from the Internal
Revenue Service, or the IRS, with respect to the statements made
and the conclusions reached in the following summary, and there
can be no assurance that the IRS will agree with such statements
and conclusions.
This summary does not address the tax considerations arising
under the laws of any foreign, state or local jurisdiction.
Except to the limited extent below, this summary does not
address tax considerations arising under estate or gift tax
laws. In addition, this discussion does not address tax
considerations applicable to an investors particular
circumstances or to investors that may be subject to special tax
rules, including, without limitation:
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banks, insurance companies or other financial institutions;
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persons subject to the alternative minimum tax;
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tax-exempt organizations;
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dealers in securities or currencies;
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traders in securities that elect to use a
mark-to-market
method of accounting for their securities holdings;
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persons that own, or have owned, actually or constructively,
more than five percent of our capital stock (except to the
extent specifically set forth below);
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certain former citizens or long-term residents of the United
States;
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persons who hold our common stock as a position in a hedging
transaction, straddle, conversion
transaction or other risk reduction transaction; or
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persons deemed to sell our common stock under the constructive
sale provisions of the Code.
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In addition, if a partnership (including any other entity
classified as a partnership for United States federal income tax
purposes) holds our common stock, the tax treatment of a partner
generally will depend on the status of the partner and upon the
activities of the partnership. Accordingly, this summary does
not address tax considerations applicable to partnerships that
hold our common stock, and partners in such partnerships should
consult their tax advisors.
PROSPECTIVE PURCHASERS ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE APPLICATION OF THE UNITED STATES
FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS, AS WELL
AS ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF OUR COMMON STOCK ARISING UNDER THE UNITED STATES
FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY
STATE, LOCAL, FOREIGN OR OTHER TAXING JURISDICTION OR UNDER ANY
APPLICABLE TAX TREATY.
Non-U.S.
Holder Defined
For purposes of this discussion, you are a
non-U.S.
holder if you are any beneficial owner of our common stock,
other than:
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an individual citizen or resident of the United States;
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109
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a corporation or other entity taxable as a corporation, created
or organized in the United States or under the laws of the
United States or any political subdivision thereof;
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an estate whose income is subject to United States federal
income tax regardless of its source; or
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a trust (x) whose administration is subject to the primary
supervision of a United States court and which has one or more
United States persons who have the authority to control all
substantial decisions of the trust or (y) which has in
effect a valid election to be treated as a United States person.
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An individual who is present in the United States for
183 days or more in the taxable year of disposition or is
otherwise a resident of the United States for federal income tax
purposes. Such an individual is urged to consult his or her own
tax advisor regarding United States federal income tax
consequences of the ownership of our common stock.
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Distributions
We have not made any distributions on our common stock, and we
do not plan to make any distributions for the foreseeable
future. However, if we do make distributions on our common
stock, those payments will constitute dividends for United
States tax purposes to the extent paid from our current or
accumulated earnings and profits, as determined under United
States federal income tax principles. To the extent those
distributions exceed both our current and our accumulated
earnings and profits, they will constitute a return of capital
and will first reduce your basis in our common stock, but not
below zero, and then will be treated as gain from the sale of
stock.
Any dividend paid to you generally will be subject to United
States withholding tax either at a rate of 30% of the gross
amount of the dividend or such lower rate as may be specified by
an applicable income tax treaty. Generally, in order for us or
our paying agent to withhold tax at a lower treaty rate, a
non-United
States holder must certify its entitlement to treaty benefits. A
non-U.S. holder
generally can meet this certification requirement by providing a
Form W-8BEN
(or any successor form) or appropriate substitute form to us or
our paying agent. If the holder holds the stock through a
financial institution or other agent acting on the holders
behalf, the holder will be required to provide appropriate
documentation to the agent. The holders agent will then be
required to provide certification to us or our paying agent,
either directly or through other intermediaries. For payments
made to a foreign partnership or other pass-through entity, the
certification requirements generally apply to the partners or
other owners rather than to the partnership or other entity, and
the partnership or other entity must provide the partners
or other owners documentation to us or our paying agent.
Dividends received by you that are effectively connected with
your conduct of a United States trade or business are exempt
from such withholding tax. In order to obtain this exemption,
you must provide us with an applicable IRS
form W-8
(generally
Form W-8ECI)
properly certifying such exemption. Such effectively connected
dividends, although not subject to withholding tax, are taxed at
the same graduated rates applicable to United States persons,
net of certain deductions and credits subject to an applicable
income tax treaty providing otherwise. In addition, if you are a
corporate
non-U.S. holder,
that portion of your earnings and profits that is effectively
connected with your conduct of a United States trade or
business, subject to certain adjustments, may also be subject to
a branch profits tax at a rate of 30% or such lower rate as may
be specified by an applicable income tax treaty.
If you are eligible for a reduced rate of withholding tax
pursuant to a tax treaty, you may obtain a refund of any excess
amounts currently withheld if you timely file an appropriate
claim for refund with the IRS.
Gain on
Disposition of Common Stock
You generally will not be subject to United States federal
income tax on any gain realized upon the sale or other
disposition of our common stock unless:
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the gain is effectively connected with your conduct of a United
States trade or business (and, if an income tax treaty so
requires, the gain is attributable to a permanent United States
establishment maintained by you); or
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our common stock constitutes a United States real property
interest by reason of our status as a United States
real property holding corporation for United States
federal income tax purposes, or a
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USRPHC, at any time within the shorter of the five-year period
preceding the disposition or your holding period for our common
stock.
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We believe that we are not currently and will not become a
USRPHC. However, because the determination of whether we are a
USRPHC depends on the fair market value of our United States
real property interests relative to the fair market value of our
other business assets, there can be no assurance that we will
not become a USRPHC in the future. Even if we become a USRPHC,
however, as long as our common stock is regularly traded on an
established securities market, such common stock will be treated
as a United States real property interest only if you actually
or constructively hold more than five percent of such regularly
traded common stock at any time during the applicable period
that is specified in the Internal Revenue Code.
If you are a
non-U.S.
holder described in the first bullet above, you will generally
be required to pay tax on the net gain derived from the sale
under regular graduated United States federal income tax rates,
and corporate
non-U.S.
holders described in the first bullet above may be subject to
the additional branch profits tax at a 30% rate or such lower
rate as may be specified by an applicable income tax treaty. If
you are an individual
non-U.S.
holder described in the second bullet above, you will be
required to pay a flat 30% tax on the gain derived from the
sale, which tax may be offset by United States source capital
losses (even though you are not considered a resident of the
United States). You should consult any applicable income tax or
other treaties that may provide for different rules.
Federal
Estate Tax
Our common stock that is held by an individual
non-U.S.
holder at the time of death will be included in such
holders gross estate for United States federal estate tax
purposes, unless an applicable estate tax treaty provides
otherwise.
Backup
Withholding and Information Reporting
Generally, we must report annually to the IRS the amount of
dividends paid to you, your name and address, and the amount of
tax withheld, if any. A similar report will be sent to you.
Pursuant to applicable income tax treaties or other agreements,
the IRS may make these reports available to tax authorities in
your country of residence.
Payments of dividends or of proceeds on the disposition of stock
made to you may be subject to additional information reporting
and backup withholding (currently at a rate of 28%) unless you
establish an exemption, for example by properly certifying your
non-U.S.
status on a
Form W-8BEN
or another appropriate version of IRS
Form W-8.
Notwithstanding the foregoing, backup withholding and
information reporting may apply if either we or our paying agent
has actual knowledge, or reason to know, that you are a United
States person.
Backup withholding is not an additional tax; rather, the United
States income tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund or
credit may be obtained, provided that the required information
is furnished to the IRS in a timely manner.
Recent legislation generally imposes a withholding tax of 30% on
payments to certain foreign entities, after December 31,
2012, of dividends on and the gross proceeds of dispositions of
United States common stock, unless various United States
information reporting and due diligence requirements that are
different from, and in addition to, the beneficial owner
certification requirements described above have been satisfied.
Non-U.S. holders
should consult their tax advisers regarding the possible
implications of this legislation on their investment in our
common stock.
THE PRECEDING DISCUSSION OF UNITED STATES FEDERAL TAX
CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY. IT IS NOT TAX
ADVICE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN TAX
ADVISOR REGARDING THE PARTICULAR UNITED STATES FEDERAL, STATE,
LOCAL AND FOREIGN TAX CONSEQUENCES OF PURCHASING, HOLDING AND
DISPOSING OF OUR COMMON STOCK, INCLUDING THE CONSEQUENCES OF ANY
PROPOSED CHANGE IN APPLICABLE LAWS.
111
UNDERWRITERS
Under the terms and subject to the conditions contained in an
underwriting agreement dated the date of this prospectus, the
underwriters named below, for whom Morgan Stanley &
Co. Incorporated, Citigroup Global Markets Inc. and
J.P. Morgan Securities Inc. are serving as the
representatives, have severally agreed to purchase, and we and
the selling stockholders have agreed to sell to them, severally,
the number of shares indicated below:
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Number of
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Name
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Shares
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Morgan Stanley & Co. Incorporated
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Citigroup Global Markets Inc.
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J.P. Morgan Securities Inc.
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Jefferies & Company, Inc.
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Thomas Weisel Partners LLC
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Total
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The underwriters and the representatives are collectively
referred to as the underwriters and the
representatives, respectively. The underwriters are
offering the shares of common stock subject to their acceptance
of the shares from us and the selling stockholders and subject
to prior sale. The underwriting agreement provides that the
obligations of the several underwriters to pay for and accept
delivery of the shares of common stock offered by this
prospectus are subject to the approval of certain legal matters
by their counsel and to certain other conditions. The
underwriters are obligated to take and pay for all of the shares
of common stock offered by this prospectus if any such shares
are taken. However, the underwriters are not required to take or
pay for the shares covered by the underwriters
over-allotment option described below.
The underwriters initially propose to offer part of the shares
of common stock directly to the public at the initial public
offering price listed on the cover page of this prospectus and
part to certain dealers at a price that represents a concession
not in excess of $ a share under
the initial public offering price. Any underwriter may allow a
concession not in excess of $ a
share to other underwriters or to certain dealers. After the
initial offering of the shares of common stock, the offering
price and other selling terms may from time to time be varied by
the representatives, including in connection with sales of
unsold allotments of common stock or subsequent sales of common
stock purchased by the representatives in stabilizing and
related transactions.
We and the selling stockholders have granted to the underwriters
an option, exercisable for 30 days from the date of this
prospectus, to purchase up
to
additional shares of our common stock at the initial public
offering price listed on the cover page of this prospectus, less
underwriting discounts and commissions. Of the additional shares
of common stock subject to the option, up to an
additional shares
would be sold by us and up to an
additional shares
would be sold by the selling stockholders. The underwriters may
exercise this option solely for the purpose of covering
over-allotments, if any, made in connection with the offering of
the shares of common stock offered by this prospectus. To the
extent the option is exercised, each underwriter will become
obligated, subject to certain conditions, to purchase about the
same percentage of the additional shares of common stock as the
number listed next to the underwriters name in the
preceding table bears to the total number of shares of common
stock listed next to the names of all underwriters in the
preceding table.
112
The following table shows the per share and total public
offering price, underwriting discounts and commissions, and
proceeds before expenses to us and the selling stockholders.
These amounts are shown assuming both no exercise and full
exercise of the underwriters option to purchase up to an
additional shares
of our common stock.
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Total
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No
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Full
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Per Share
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Exercise
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Exercise
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Public offering price
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$
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$
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$
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Underwriting discounts and commissions to be paid by
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Us
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$
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$
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$
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The selling stockholders
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$
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$
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$
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Proceeds, before expenses, to us
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$
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$
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$
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Proceeds, before expenses, to the selling stockholders
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$
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$
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$
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The estimated offering expenses payable by us, exclusive of the
underwriting discounts and commissions, are approximately
$ , which includes legal,
accounting and printing costs and various other fees associated
with the registration and listing of our common stock.
The underwriters have informed us that they do not intend sales
to discretionary accounts to exceed 5% of the total number of
shares of common stock offered by them.
We intend to apply to have our common stock listed on the Nasdaq
Global Market under the symbol QLIK.
We, all of our directors and officers, the selling stockholders
and the holders of substantially all of our outstanding stock
and stock options have agreed that, without the prior written
consent of Morgan Stanley & Co. Incorporated on behalf
of the underwriters, we and they will not, during the period
ending 180 days after the date of this prospectus:
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offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend or
otherwise transfer or dispose of, directly or indirectly, any
shares of common stock or any securities convertible into or
exercisable or exchangeable for shares of common stock;
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enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences
of ownership of the common stock; or
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file any registration statement with the Securities and Exchange
Commission relating to the offering of any shares of common
stock or any securities convertible into or exercisable or
exchangeable for common stock (other than a registration
statement on
Form S-8);
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whether any such transaction described in the first two bullet
points above is to be settled by delivery of common stock or
such other securities, in cash or otherwise. In addition, we and
each such person agrees that, without the prior written consent
of Morgan Stanley & Co. Incorporated, on behalf of the
underwriters, it will not, during the period ending
180 days after the date of this prospectus, make any demand
for, or exercise any right with respect to, the registration of
any shares of common stock or any security convertible into or
exercisable or exchangeable for common stock.
The restrictions described in the immediately preceding
paragraph do not apply to:
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the sale of shares to the underwriters;
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the issuance by us of shares of common stock upon the exercise
of an option or a warrant or the conversion of a security
outstanding on the date of this prospectus;
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the establishment of a trading plan by certain persons pursuant
to
Rule 10b5-1
under the Securities Exchange Act of 1934, as amended, provided
that no transfers occur under such plan during the
180-day
restricted period and that the establishment of such plan will
not result in any public filing or other public announcement of
such plan by us or such persons during the
180-day
restricted period;
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the issuance by us of up
to shares
of common stock in connection with any strategic transaction,
equipment loan or leasing arrangement, real property leasing
arrangement or debt financing from a bank or
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similar financial institute, provided that any recipient agrees
to the restrictions described in the immediately preceding
paragraph;
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transactions by any person other than us relating to shares of
common stock or other securities acquired in open market
transactions after the completion of the offering of the shares,
provided that no filing under Section 16(a) of the
Securities Exchange Act of 1934, as amended is required or
voluntarily made in connection with subsequent sales of the
common stock or other securities acquired in such open market
transactions;
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receipt by the stockholder of shares of common stock upon the
exercise of an option or warrant or in connection with the
vesting of restricted stock or restricted stock units, or the
disposition of shares of common stock to us in a transaction
exempt from Section 16(b) of the Exchange Act solely in
connection with the payment of taxes due;
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the exercise of options to acquire shares of common stock or the
conversion of any security convertible into common stock,
provided that any shares of common stock received upon such
exercise or conversion shall be subject to the restrictions
described in the immediately preceding paragraph;
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transfers of shares of common stock or any security convertible
into common stock as a bona fide gift;
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distributions of shares of common stock or any security
convertible into common stock to partners, members or
stockholders of the stockholder; or
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transfers of shares of common stock or any security convertible
into common stock to immediate relatives of the stockholder, to
a trust of which the stockholder or his or her immediate
relatives are the only beneficiaries, to a corporation or other
entity of which the stockholder or his or her immediate
relatives are at all times the direct or indirect legal and
beneficial owners, or to a partnership, the partners of which
are exclusively the stockholder or his or her immediate
relatives;
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provided that in the case of the transactions described in the
last three bullet points above, each donee, distributee or
transferee agrees to be subject to the restrictions described in
the immediately preceding paragraph and in the case of the
transactions described in the last five bullet points above, no
filing under Section 16(a) of the Securities Exchange Act
of 1934, as amended, is required or voluntarily made in
connection with these transactions during the
180-day
restricted period.
The 180-day
restricted period described in the preceding paragraphs will be
extended if:
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during the last 17 days of the
180-day
restricted period, we issue an earnings release or material news
or a material event relating to us occurs; or
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prior to the expiration of the
180-day
restricted period, we announce that we will release earnings
results during the
16-day
period beginning on the last day of the
180-day
period;
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in which case the restrictions described in the preceding
paragraphs will continue to apply until the expiration of the
18-day
period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.
In order to facilitate this offering of the common stock, the
underwriters may engage in transactions that stabilize, maintain
or otherwise affect the price of the common stock. Specifically,
the underwriters may sell more shares than they are obligated to
purchase under the underwriting agreement, creating a short
position. A short sale is covered if the short position is no
greater than the number of shares available for purchase by the
underwriters under the over-allotment option. The underwriters
can close out a covered short sale by exercising the
over-allotment option or purchasing shares in the open market.
In determining the source of shares to close out a covered short
sale, the underwriters will consider, among other things, the
open market price of shares compared to the price available
under the over-allotment option. The underwriters may also sell
shares in excess of the over-allotment option, creating a naked
short position. The underwriters must close out any naked short
position by purchasing shares in the open market. A naked short
position is more likely to be created if the underwriters are
concerned that there may be downward pressure on the price of
the common stock in the open market after pricing that could
adversely affect investors who purchase in this offering. In
addition, to stabilize the price of common stock, the
underwriters may bid for, and purchase, shares of common stock
in the open market. Finally, the underwriting syndicate may
reclaim selling concessions allowed to an underwriter or a
dealer for distributing the common stock in this offering, if
the syndicate repurchases previously distributed common stock to
cover syndicate short positions
114
or to stabilize the price of the common stock. These activities
may raise or maintain the market price of the common stock above
independent market levels or prevent or retard a decline in the
market price of the common stock. The underwriters are not
required to engage in these activities and may end any of these
activities at any time.
In connection with this offering, the underwriters may engage in
passive market making transactions in the common stock on the
Nasdaq Global Select Market in accordance with Rule 103 of
Regulation M under the Securities Exchange Act of 1934
during the period before the commencement of offers or sales of
common stock and extending through the completion of
distribution. A passive market maker must display its bids at a
price not in excess of the highest independent bid of the common
stock. However, if all independent bids are lowered below the
passive market makers bid, that bid must be lowered when
specified purchase limits are exceeded.
From time to time, certain of the underwriters
and/or their
respective affiliates may provide investment banking services to
us. In addition, affiliates of Morgan Stanley & Co.
Incorporated and Citigroup Global Markets Inc. are our customers
and the contracts governing such relationships were entered into
at arms length and on customary terms.
We, the selling stockholders and the underwriters have agreed to
indemnify each other against certain liabilities, including
liabilities under the Securities Act.
A prospectus in electronic format may be made available on
websites maintained by one or more underwriters, or selling
group members, if any, participating in this offering. The
representatives may agree to allocate a number of shares of
common stock to underwriters for sale to their online brokerage
account holders. Internet distributions will be allocated by the
representatives to underwriters that may make Internet
distributions on the same basis as other allocations.
Pricing
of the Offering
Prior to this offering, there has been no public market for our
common stock. The initial public offering price was determined
by negotiations among us, the selling stockholders and the
representatives. Among the factors considered in determining the
initial public offering price were our future prospects and
those of our industry in general, our sales, earnings and
certain other financial and operating information in recent
periods, and the price-earnings ratios, price-sales ratios,
market prices of securities, and certain financial and operating
information of companies engaged in activities similar to ours.
The estimated initial public offering price range set forth on
the cover page of this preliminary prospectus is subject to
change as a result of market conditions and other factors.
Directed
Share Program
At our request, the underwriters have
reserved
percent of the shares of common stock offered by this prospectus
for sale, at the initial public offering price, to our
directors, officers, employees, business associates and related
persons. If purchased by these persons, these shares will be
subject to a
180-day
lock-up
restriction. The number of shares of common stock available for
sale to the general public will be reduced to the extent these
individuals purchase such reserved shares. Any reserved shares
that are not so purchased will be offered by the underwriters to
the general public on the same basis as the other shares offered
by this prospectus.
Selling
Restrictions
European
Economic Area
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive, each Manager has
represented and agreed that with effect from and including the
date on which the Prospectus Directive is implemented in that
Member State it has not made and will not make an offer of
shares to the public in that Member State, except that it may,
with effect from and including such date, make an offer of
shares to the public in that Member State:
(a) at any time to legal entities which are authorised or
regulated to operate in the financial markets or, if not so
authorised or regulated, whose corporate purpose is solely to
invest in securities;
(b) at any time to any legal entity which has two or more
of (1) an average of at least 250 employees during the
last financial year; (2) a total balance sheet of more than
43,000,000 and (3) an annual net turnover of more
than 50,000,000, as shown in its last annual or
consolidated accounts; or
115
(c) at any time in any other circumstances which do not
require the publication by us of a prospectus pursuant to
Article 3 of the Prospectus Directive.
For the purposes of the above, the expression an offer of
shares to the public in relation to any shares in any
Member State means the communication in any form and by any
means of sufficient information on the terms of the offer and
the shares to be offered so as to enable an investor to decide
to purchase or subscribe the shares, as the same may be varied
in that Member State by any measure implementing the Prospectus
Directive in that Member State and the expression Prospectus
Directive means Directive 2003/71/EC and includes any relevant
implementing measure in that Member State.
United
Kingdom
Each Manager has represented and agreed that it has only
communicated or caused to be communicated and will only
communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning
of Section 21 of the Financial Services and Markets Act
2000) in connection with the issue or sale of the shares in
circumstances in which Section 21(1) of such Act does not
apply to us and it has complied and will comply with all
applicable provisions of such Act with respect to anything done
by it in relation to any shares in, from or otherwise involving
the United Kingdom.
LEGAL
MATTERS
The validity of the common stock being offered will be passed
upon for us by Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP, Waltham, Massachusetts. The
underwriters are represented by Davis Polk &
Wardwell LLP, New York, New York.
EXPERTS
The consolidated financial statements of Qlik Technologies Inc.
at December 31, 2008 and 2009, and for each of the three
years in the period ended December 31, 2009 appearing in
this prospectus and the related registration statement have been
audited by Ernst & Young LLP, independent registered
public accounting firm, as set forth in their report thereon
appearing elsewhere herein, and are included in reliance upon
such report given on the authority of such firm as experts in
accounting and auditing.
WHERE YOU
CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on
Form S-1
under the Securities Act of 1933, as amended, with respect to
the shares of common stock being offered by this prospectus.
This prospectus does not contain all of the information in the
registration statement and its exhibits. For further information
with respect to us and the common stock offered by this
prospectus, we refer you to the registration statement and its
exhibits. Statements contained in this prospectus as to the
contents of any contract or any other document referred to are
not necessarily complete, and in each instance, we refer you to
the copy of the contract or other document filed as an exhibit
to the registration statement. Each of these statements is
qualified in all respects by this reference.
You can read our SEC filings, including the registration
statement, over the Internet at the SECs website at
http://www.sec.gov.
You may also read and copy any document we file with the SEC at
its public reference facilities at 100 F Street NE,
Washington, D.C. 20549. You may also obtain copies of these
documents at prescribed rates by writing to the Public Reference
Section of the SEC at 100 F Street NE,
Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330
for further information on the operation of the public reference
facilities.
Upon the closing of this offering, we will be subject to the
information reporting requirements of the Securities Exchange
Act of 1934, as amended, and we will file reports, proxy
statements and other information with the SEC. These reports,
proxy statements and other information will be available for
inspection and copying at the public reference room and website
of the SEC referred to above. We also maintain a website at
www.qlikview.com, at which you may access these materials free
of charge as soon as reasonably practicable after they are
electronically filed with, or furnished to, the SEC. The
information contained in, or that can be accessed through, our
website is not part of this prospectus.
116
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Page
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F-2
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F-3
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F-4
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F-5
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F-6
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F-7
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F-1
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Qlik Technologies Inc. and
Subsidiaries
We have audited the accompanying consolidated balance sheets of
Qlik Technologies Inc. and subsidiaries as of December 31,
2008 and 2009, and the related consolidated statements of
operations, convertible preferred stock and stockholders
equity (deficit), and cash flows for each of the three years in
the period ended December 31, 2009. These financial
statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial
statements are free of material misstatement. We were not
engaged to perform an audit of the Companys internal
control over financial reporting. Our audits included
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Companys internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Qlik Technologies Inc. and subsidiaries as
of December 31, 2008 and 2009, and the consolidated results
of their operations and their cash flows for each of the three
years in the period ended December 31, 2009, in conformity
with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
April 1, 2010
F-2
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2009
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
(in thousands, except for share and per share data)
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
14,800
|
|
|
$
|
24,852
|
|
|
$
|
24,852
|
|
Accounts receivable, net of allowance for doubtful accounts of
$868 and $1,171, respectively
|
|
|
41,110
|
|
|
|
63,729
|
|
|
|
63,729
|
|
Prepaid expenses and other current assets
|
|
|
3,539
|
|
|
|
3,970
|
|
|
|
3,878
|
|
Deferred income taxes
|
|
|
312
|
|
|
|
810
|
|
|
|
810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
59,761
|
|
|
|
93,361
|
|
|
|
93,269
|
|
Property and equipment, net
|
|
|
2,028
|
|
|
|
3,244
|
|
|
|
3,244
|
|
Intangible assets, net
|
|
|
562
|
|
|
|
417
|
|
|
|
417
|
|
Goodwill
|
|
|
1,268
|
|
|
|
1,308
|
|
|
|
1,308
|
|
Deferred income taxes
|
|
|
3,056
|
|
|
|
4,207
|
|
|
|
4,207
|
|
Deposits and other noncurrent assets
|
|
|
343
|
|
|
|
430
|
|
|
|
430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
67,018
|
|
|
$
|
102,967
|
|
|
$
|
102,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities, convertible preferred stock, and
stockholders equity (deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
1,900
|
|
|
$
|
3,022
|
|
|
$
|
3,022
|
|
Line of credit
|
|
|
|
|
|
|
242
|
|
|
|
242
|
|
Income taxes payable
|
|
|
499
|
|
|
|
3,203
|
|
|
|
3,203
|
|
Accounts payable
|
|
|
4,496
|
|
|
|
5,232
|
|
|
|
5,232
|
|
Deferred revenues
|
|
|
22,143
|
|
|
|
35,575
|
|
|
|
35,575
|
|
Accrued payroll and other related costs
|
|
|
12,012
|
|
|
|
18,818
|
|
|
|
18,818
|
|
Accrued expenses
|
|
|
6,556
|
|
|
|
10,015
|
|
|
|
10,015
|
|
Stock warrant liability
|
|
|
|
|
|
|
2,425
|
|
|
|
2,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
47,606
|
|
|
|
78,532
|
|
|
|
78,532
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
6,178
|
|
|
|
3,777
|
|
|
|
3,777
|
|
Deferred taxes
|
|
|
766
|
|
|
|
326
|
|
|
|
326
|
|
Other long-term liabilities
|
|
|
3,251
|
|
|
|
3,322
|
|
|
|
3,322
|
|
Stock warrant liability
|
|
|
2,684
|
|
|
|
2,212
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
60,485
|
|
|
|
88,169
|
|
|
|
85,957
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible preferred stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A convertible preferred stock, $0.0001 par
value, 20,320,561 shares authorized; 19,846,279 issued and
outstanding (liquidation preference of $12,499 at
December 31, 2009)
|
|
|
12,082
|
|
|
|
12,082
|
|
|
|
|
|
Series AA convertible preferred stock, $0.0001 par
value, 26,875,145 shares authorized, issued and outstanding
(liquidation preference of $16,926 at December 31, 2009)
|
|
|
11,819
|
|
|
|
11,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total convertible preferred stock
|
|
|
23,901
|
|
|
|
23,901
|
|
|
|
|
|
Stockholders equity (deficit):
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A common stock, $0.0001 par value,
78,068,237 shares authorized; 16,629,146 and 15,978,930
issued and outstanding at December 31, 2009 and 2008,
respectively
|
|
|
2
|
|
|
|
2
|
|
|
|
|
|
Common stock, $0.0001 par value, 63,350,570 shares
issued and outstanding at December 31, 2009, pro forma
|
|
|
|
|
|
|
|
|
|
|
6
|
|
Additional paid-in capital
|
|
|
4,014
|
|
|
|
5,743
|
|
|
|
31,760
|
|
Accumulated deficit
|
|
|
(20,244
|
)
|
|
|
(13,383
|
)
|
|
|
(13,383
|
)
|
Accumulated other comprehensive loss
|
|
|
(1,140
|
)
|
|
|
(1,465
|
)
|
|
|
(1,465
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity (deficit)
|
|
|
(17,368
|
)
|
|
|
(9,103
|
)
|
|
|
16,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities, convertible preferred stock and
stockholders equity (deficit)
|
|
$
|
67,018
|
|
|
$
|
102,967
|
|
|
$
|
102,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See notes to consolidated financial statements
F-3
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
|
(in thousands, except for share
|
|
|
|
and per share data)
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
License revenue
|
|
$
|
51,482
|
|
|
$
|
74,446
|
|
|
$
|
99,864
|
|
Maintenance revenue
|
|
|
17,747
|
|
|
|
29,401
|
|
|
|
41,390
|
|
Professional services revenue
|
|
|
11,357
|
|
|
|
14,417
|
|
|
|
16,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
80,586
|
|
|
|
118,264
|
|
|
|
157,359
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
License revenue
|
|
|
2,949
|
|
|
|
3,071
|
|
|
|
3,663
|
|
Maintenance revenue
|
|
|
580
|
|
|
|
1,365
|
|
|
|
1,635
|
|
Professional services revenue
|
|
|
8,177
|
|
|
|
9,562
|
|
|
|
11,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of revenue
|
|
|
11,706
|
|
|
|
13,998
|
|
|
|
17,100
|
|
Gross profit
|
|
|
68,880
|
|
|
|
104,266
|
|
|
|
140,259
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
48,249
|
|
|
|
74,267
|
|
|
|
93,349
|
|
Research and development
|
|
|
5,419
|
|
|
|
8,258
|
|
|
|
8,735
|
|
General and administrative
|
|
|
15,154
|
|
|
|
20,190
|
|
|
|
25,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
68,822
|
|
|
|
102,715
|
|
|
|
127,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
58
|
|
|
|
1,551
|
|
|
|
13,166
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(269
|
)
|
|
|
(653
|
)
|
|
|
(976
|
)
|
Interest income
|
|
|
72
|
|
|
|
292
|
|
|
|
35
|
|
Change in fair value of warrants
|
|
|
(451
|
)
|
|
|
(463
|
)
|
|
|
(1,953
|
)
|
Foreign exchange gain (loss)
|
|
|
195
|
|
|
|
4,230
|
|
|
|
(1,635
|
)
|
Other income (expense), net
|
|
|
(10
|
)
|
|
|
(102
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense)
|
|
|
(463
|
)
|
|
|
3,304
|
|
|
|
(4,529
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(405
|
)
|
|
|
4,855
|
|
|
|
8,637
|
|
Benefit (provision) for income taxes
|
|
|
40
|
|
|
|
(1,860
|
)
|
|
|
(1,776
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(365
|
)
|
|
$
|
2,995
|
|
|
$
|
6,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
$
|
0.07
|
|
Diluted
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
$
|
0.06
|
|
Weighted average number of common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
13,526,926
|
|
|
|
14,552,999
|
|
|
|
16,267,186
|
|
Diluted
|
|
|
13,526,926
|
|
|
|
16,523,443
|
|
|
|
20,778,448
|
|
Unaudited pro forma net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited pro forma weighted average number of common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
62,988,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
67,606,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See notes to consolidated financial statements
F-4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible Preferred Stock
|
|
|
|
Stockholders Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
Comprehensive
|
|
|
|
|
|
|
Series A Preferred
|
|
|
Series AA Preferred
|
|
|
|
Series A Common
|
|
|
Paid-in
|
|
|
Accumulated
|
|
|
Income
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
(Loss)
|
|
|
Total
|
|
Balance at January 1, 2007
|
|
|
19,846,279
|
|
|
$
|
12,082
|
|
|
|
26,875,145
|
|
|
$
|
11,819
|
|
|
|
|
13,504,483
|
|
|
$
|
1
|
|
|
$
|
1,107
|
|
|
$
|
(22,874
|
)
|
|
$
|
505
|
|
|
|
(21,261
|
)
|
Exercise of stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
91,051
|
|
|
|
|
|
|
|
57
|
|
|
|
|
|
|
|
|
|
|
|
57
|
|
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
190
|
|
|
|
|
|
|
|
|
|
|
|
190
|
|
Payments for stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
293
|
|
|
|
|
|
|
|
|
|
|
|
293
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(365
|
)
|
|
|
|
|
|
|
(365
|
)
|
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
209
|
|
|
|
209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(156
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2007
|
|
|
19,846,279
|
|
|
|
12,082
|
|
|
|
26,875,145
|
|
|
|
11,819
|
|
|
|
|
13,595,534
|
|
|
|
1
|
|
|
|
1,647
|
|
|
|
(23,239
|
)
|
|
|
714
|
|
|
|
(20,877
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,383,396
|
|
|
|
1
|
|
|
|
1,553
|
|
|
|
|
|
|
|
|
|
|
|
1,554
|
|
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
731
|
|
|
|
|
|
|
|
|
|
|
|
731
|
|
Payments for stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
83
|
|
|
|
|
|
|
|
|
|
|
|
83
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,995
|
|
|
|
|
|
|
|
2,995
|
|
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,854
|
)
|
|
|
(1,854
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2008
|
|
|
19,846,279
|
|
|
|
12,082
|
|
|
|
26,875,145
|
|
|
|
11,819
|
|
|
|
|
15,978,930
|
|
|
|
2
|
|
|
|
4,014
|
|
|
|
(20,244
|
)
|
|
|
(1,140
|
)
|
|
|
(17,368
|
)
|
Exercise of stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
650,216
|
|
|
|
|
|
|
|
513
|
|
|
|
|
|
|
|
|
|
|
|
513
|
|
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,479
|
|
|
|
|
|
|
|
|
|
|
|
1,479
|
|
Excess tax benefit from stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
53
|
|
Payments for stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
123
|
|
|
|
|
|
|
|
|
|
|
|
123
|
|
Repurchase of stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(439
|
)
|
|
|
|
|
|
|
|
|
|
|
(439
|
)
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,861
|
|
|
|
|
|
|
|
6,861
|
|
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(325
|
)
|
|
|
(325
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2009
|
|
|
19,846,279
|
|
|
$
|
12,082
|
|
|
|
26,875,145
|
|
|
$
|
11,819
|
|
|
|
|
16,629,146
|
|
|
$
|
2
|
|
|
$
|
5,743
|
|
|
$
|
(13,383
|
)
|
|
$
|
(1,465
|
)
|
|
$
|
(9,103
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See notes to consolidated financial statements.
F-5
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
|
(in thousands)
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(365
|
)
|
|
$
|
2,995
|
|
|
$
|
6,861
|
|
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash interest expense, including amortization of debt
discount
|
|
|
24
|
|
|
|
498
|
|
|
|
60
|
|
Depreciation and amortization
|
|
|
430
|
|
|
|
793
|
|
|
|
1,108
|
|
Stock based compensation expense
|
|
|
190
|
|
|
|
731
|
|
|
|
1,479
|
|
Deferred income taxes
|
|
|
(317
|
)
|
|
|
866
|
|
|
|
(1,998
|
)
|
Excess tax benefit from stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
(53
|
)
|
Provision for bad debts
|
|
|
233
|
|
|
|
826
|
|
|
|
837
|
|
Change in fair value of warrants
|
|
|
451
|
|
|
|
463
|
|
|
|
1,953
|
|
Unrealized foreign currency loss (gain), net
|
|
|
34
|
|
|
|
(2,298
|
)
|
|
|
(201
|
)
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(12,694
|
)
|
|
|
(13,118
|
)
|
|
|
(20,692
|
)
|
Prepaid expenses and other assets
|
|
|
(1,210
|
)
|
|
|
(1,970
|
)
|
|
|
(101
|
)
|
Other noncurrent assets
|
|
|
(47
|
)
|
|
|
(102
|
)
|
|
|
(75
|
)
|
Accounts payable
|
|
|
1,610
|
|
|
|
1,275
|
|
|
|
298
|
|
Deferred revenues
|
|
|
6,709
|
|
|
|
7,445
|
|
|
|
12,007
|
|
Accrued expenses and other liabilities
|
|
|
7,808
|
|
|
|
4,227
|
|
|
|
11,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
2,856
|
|
|
|
2,631
|
|
|
|
13,036
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions, net of cash acquired
|
|
|
(283
|
)
|
|
|
(442
|
)
|
|
|
|
|
Purchase of property and equipment
|
|
|
(739
|
)
|
|
|
(1,716
|
)
|
|
|
(2,128
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(1,022
|
)
|
|
|
(2,158
|
)
|
|
|
(2,128
|
)
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
(Payments) borrowings on line of credit, net
|
|
|
2,962
|
|
|
|
(3,691
|
)
|
|
|
229
|
|
Payments on long-term debt
|
|
|
(832
|
)
|
|
|
(1,020
|
)
|
|
|
(2,270
|
)
|
Borrowings of long-term debt
|
|
|
|
|
|
|
10,000
|
|
|
|
|
|
Excess tax benefit from stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
53
|
|
Proceeds from issuance of stock options
|
|
|
293
|
|
|
|
83
|
|
|
|
123
|
|
Repurchase of stock options
|
|
|
|
|
|
|
|
|
|
|
(439
|
)
|
Proceeds from exercise of common stock options
|
|
|
57
|
|
|
|
1,554
|
|
|
|
513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
2,480
|
|
|
|
6,926
|
|
|
|
(1,791
|
)
|
Effect of exchange rates on cash
|
|
|
499
|
|
|
|
(1,813
|
)
|
|
|
935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
|
4,813
|
|
|
|
5,586
|
|
|
|
10,052
|
|
Cash and cash equivalents at beginning of year
|
|
|
4,401
|
|
|
|
9,214
|
|
|
|
14,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of year
|
|
$
|
9,214
|
|
|
$
|
14,800
|
|
|
$
|
24,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
251
|
|
|
$
|
148
|
|
|
$
|
977
|
|
Cash paid for income taxes
|
|
$
|
160
|
|
|
$
|
670
|
|
|
$
|
822
|
|
Non-cash investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants issued for acquisition of business
|
|
$
|
|
|
|
$
|
1,492
|
|
|
$
|
|
|
See notes to consolidated financial statements
F-6
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
|
|
1.
|
Description
of Business
|
QlikTech International AB (QlikTech Sweden) was
founded in Sweden in 1993. From 1993 until 1999, QlikTech
Swedens activities were focused on software research and
development that resulted in the core technology for
QlikView, software for business intelligence and
data analysis. From 1999 until 2004, QlikTech Sweden focused on
the commercialization of this technology primarily in the Nordic
market and limited regions of Europe. In 2004, Qlik Technologies
Inc. (the Company) was incorporated in Delaware,
acquired all of the outstanding securities of QlikTech Sweden
and began to broaden these marketing and sales activities in the
United States and to continue this expansion in Europe. Through
its wholly owned subsidiaries, the Company sells software
solutions that deliver fast, powerful and affordable data
analysis and reporting solutions. QlikView is built upon
techniques which offer greater flexibility for the user than
traditional analysis software.
|
|
2.
|
Significant
Accounting Policies
|
Basis
of Presentation and Consolidation
The accompanying consolidated financial statements include the
accounts of the Company and its wholly owned subsidiaries. All
material intercompany balances and transactions have been
eliminated.
Unaudited
Pro Forma Balance Sheet Presentation
The unaudited pro forma balance sheet as of December 31,
2009, reflects the renaming of 16,629,146 outstanding shares of
Series A common stock as 16,629,146 outstanding shares of
common stock and the conversion of 19,846,279 shares of
Series A preferred stock and 26,875,145 shares of
Series AA preferred stock into 46,721,424 shares of
common stock as though the completion of the initial public
offering (IPO) contemplated by the filing of the
Companys prospectus had occurred on December 31,
2009. The shares of common stock issued in the IPO and any
related estimated net proceeds are excluded from such pro forma
information. In addition, the Company has outstanding warrants
to purchase 474,282 shares of Series A preferred
stock, which will automatically convert into warrants to
purchase 474,282 shares of common stock. The liability
related to these warrants has been reclassified to additional
paid in capital as these warrants will no longer be exercisable
for preferred shares which are considered contingently
redeemable.
Use of
Estimates
The preparation of consolidated financial statements in
conformity with accounting principles generally accepted in the
United States requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements and the reported amounts
of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
On an ongoing basis, the Company evaluates its estimates,
including those related to the accounts receivable allowance,
useful lives of long-lived assets, the recoverability of
goodwill and other intangible assets, the value of common stock
and assumptions used for the purpose of determining stock-based
compensation, the value of common and preferred stock warrants,
and income taxes, among others. The Company bases its estimates
on historical experience and on various other assumptions that
are believed to be reasonable, the results of which forms the
basis for making judgments about the carrying value of assets
and liabilities as well as reported revenue and expenses during
the periods presented.
Foreign
Currency Translation
The financial statements of the Companys foreign
operations are measured using the local currency as the
functional currency. The local currency assets and liabilities
are translated at the rate of exchange to the U.S. dollar
on the balance sheet date and the local currency revenues and
expenses are translated at average rates of exchange to
F-7
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
the U.S. dollar during the reporting periods. Foreign
currency transaction gains (losses) have been reflected as a
component of the Companys results from operations and
foreign currency translation gains (losses) have been included
as a component of accumulated other comprehensive income (loss).
Gains and losses from foreign currency transactions are included
as a component of other income (expense).
Cash
and Cash Equivalents
The Company considers all highly liquid investments having an
original maturity of three months or less when purchased to be
cash equivalents. The Company maintains deposits with financial
institutions, the balances of which from time to time exceed the
federally insured amount.
Fair
Value of Financial Instruments
The carrying amount of cash and cash equivalents, accounts
receivable, other current assets and accounts payable
approximate fair value, due to their short-term nature. The
carrying value of the warrant liability is the estimated fair
value of the liability (See Note 5).
Accounts
Receivable
The Company makes estimates regarding the collectability of
accounts receivable. When the Company evaluates the adequacy of
its allowance for doubtful accounts, it considers multiple
factors, including historical write-off experience, the need for
specific customer reserves, the aging of receivables, customer
creditworthiness and changes in customer payment cycles.
Historically, the allowance for doubtful accounts has been
adequate based on actual results. If any of the factors used to
calculate the allowance for doubtful accounts change or if the
allowance does not reflect the Companys future ability to
collect outstanding receivables, additional provisions for
doubtful accounts may be needed, and future results of
operations could be materially affected.
The following table summarizes the changes in the Companys
allowance for doubtful accounts for the period indicated
(dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
Balance at the beginning of the period
|
|
$
|
108
|
|
|
$
|
285
|
|
|
$
|
868
|
|
Amounts to expense
|
|
$
|
233
|
|
|
$
|
826
|
|
|
$
|
837
|
|
Accounts written off
|
|
$
|
(56
|
)
|
|
$
|
(243
|
)
|
|
$
|
(534
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the end of the period
|
|
$
|
285
|
|
|
$
|
868
|
|
|
$
|
1,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concentration
of Credit Risk
The Companys principal financial instruments subject to
potential concentration of credit risk are cash and cash
equivalents and accounts receivable, which are unsecured. The
Companys cash and cash equivalents are maintained at
various financial institutions across different geographies.
Deposits held with banks may at times exceed the amount of
insurance provided on such deposits. Generally, these deposits
may be redeemed upon demand and, therefore, management believes
they bear minimal risk. Concentration of credit risk with
respect to trade accounts receivables is generally limited by a
large customer base and its geographic dispersion. The Company
has a wide customer base consisting of Fortune 500 corporations,
universities, large international companies and other smaller
businesses. As of and for the years ended December 31,
2007, 2008 or 2009, there were no significant concentrations
with respect to the Companys consolidated revenue or
accounts receivable.
F-8
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Property
and Equipment
Property and equipment are recorded at cost. Depreciation is
computed using the straight-line method over estimated useful
lives of the assets. The depreciation of assets under capital
leases is included with depreciation on Company-owned assets.
Expenditures for major additions and improvements are
capitalized, while minor replacements, maintenance and repairs
are charged to expense as incurred. When property is retired or
otherwise disposed of, the costs and accumulated depreciation
are removed from the accounts. Any resulting gain or loss is
recognized currently.
Long-Lived
Assets
The Company considers whether indicators of impairment of
long-lived assets, including identified intangible assets, held
for use are present. If such indicators are present, the Company
determines whether the sum of the estimated undiscounted future
cash flows attributable to such assets is less than their
carrying amount, and if so, the Company recognizes an impairment
loss based on the excess of the carrying amount of the assets
over their fair value.
Goodwill
and Other Intangible Assets
The Company amortizes intangible assets over their estimated
useful lives unless the lives are determined to be indefinite.
Goodwill is the excess of the purchase price paid over the fair
value of the net assets of businesses acquired. Goodwill is not
amortized but is subject to tests for impairment at least
annually on October 1st of each year or whenever
events or changes in circumstances indicate an impairment may
have occurred, by comparing the fair value of the recorded
assets to their carrying amount. If the carrying amount of the
goodwill exceeds its fair value, an impairment loss is
recognized. The annual evaluation of goodwill requires the use
of estimates about future operating results of its reporting
unit in order to determine their estimated fair value.
Revenue
Recognition
The Company derives its revenues from three sources: (i) license
revenues; (ii) maintenance revenues; and (iii) professional
services. The majority of license revenue is from the sale of
perpetual licenses to customers or resellers. Maintenance, which
generally has a contractual term of 12 months, includes
telephone and web-based support, software updates and rights to
software upgrades on a when-and-if-available basis. Professional
services include training, implementation, consulting and expert
services.
For each arrangement, we recognize revenue when: (a) persuasive
evidence of an arrangement exists (e.g., a signed contract or
purchase order); (b) delivery of the product has occurred and
there are no remaining obligations or substantive customer
acceptance provisions; (c) the fee is fixed or determinable; and
(d) collection of the fee is deemed reasonably assured. Delivery
is considered to have occurred upon electronic transfer of the
license key that provides immediate availability of the product
to the purchaser.
As substantially all of the Companys software licenses are
sold in multiple-element arrangements that include either
maintenance or both maintenance and professional services, the
Company uses the residual method to determine the amount of
license revenue to be recognized. Under the residual method,
consideration is allocated to undelivered elements based upon
vendor-specific objective evidence (VSOE) of the
fair value of those elements, with the residual of the
arrangement fee allocated to and recognized as license revenue.
The Company has established VSOE of the fair value of
maintenance through independent maintenance renewals, which
demonstrate a consistent relationship of maintenance pricing as
a percentage of the contractual license fee. Maintenance revenue
is deferred and recognized ratably over the contractual period
of the maintenance arrangement, which is generally 12 months.
Arrangements that include other professional services are
evaluated to determine whether those services are essential to
the functionality of other elements of the arrangement. The
Company has determined that these services are not considered
essential and the amounts allocated to the services are
recognized as revenue when the
F-9
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
services are performed. The VSOE of fair value of the
Companys professional services is based on the price for
these same services when they are sold separately. Revenue for
services that are sold either on a stand-alone basis or included
in multiple-element arrangements is recognized as the services
are performed.
For sales through resellers, the Company recognizes revenue upon
the shipment of the product only if those resellers provide the
Company, at the time of placing their order, with the identity
of the end-user customer to whom the product has been sold. The
Companys resellers do not carry inventory of its software.
Sales through resellers are evidenced by a reseller agreement,
together with purchase orders on a transaction-by-transaction
basis.
The Company also sells software licenses to original equipment
manufacturers (OEMs) who integrate the
Companys product for distribution with their applications.
The OEMs end-user customer is licensed to use the
Companys products solely in conjunction with the
OEMs application. In OEM arrangements, key delivery is
required as the basis for revenue recognition. However,
depending upon the OEM partners business model the Company
recognize revenues either up-front or over time in subscription
or royalty based models.
The Company offers a standard 30-day money back guarantee on
license sales to its customers. The Company considers its
history of sales returns in determining the amount of sales
return allowance to be recorded. To date, sales returns have not
been material in any period presented.
The Company records taxes collected on revenue-producing
activities on a net basis.
Deferred
Revenue
Deferred revenue primarily consists of billings or payments
received in advance of revenue recognition from the
Companys maintenance agreements described above and is
recognized as the revenue recognition criteria are met. The
Company generally invoices its customers in annual installments.
Accordingly, the deferred revenue balance does not represent the
total contract value of annual maintenance agreements.
Cost
of License and Maintenance Revenue
Cost of license revenue is primarily comprised of distribution
costs for initial product licenses and referral fees paid to
third parties in connection with software license sales.
Cost of maintenance revenue is primarily comprised of the costs
associated with the customer support and research and
development personnel that provide maintenance and support
services to the Companys customers.
Product
Warranties
Substantially all of the Companys software products are
covered by a standard 90 day warranty. In the event of a
failure of software covered by this warranty, the Company must
repair or replace the software or, if those remedies are
insufficient, provide a refund. To date, the Company has not
been required to record any reserve or revise any of the
Companys assumptions or estimates used in determining its
warranty allowance. If the historical data the Company uses to
calculate the adequacy of the warranty allowance is not
indicative of future requirements, a warranty reserve may be
required.
Commissions
The Company records commission expense for orders that include
products in the same period in which the product revenue is
recognized. Commission expense is recorded for arrangements that
consist solely of service in the period in which the
non-cancelable order for the services is received.
F-10
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Research
and Development
Software development costs are expensed as incurred until
technological feasibility has been established, at which time
such costs are capitalized to the extent that the capitalizable
costs do not exceed the realizable value of such costs, until
the product is available for general release to customers. Based
on the Companys product development process, technological
feasibility is established upon the completion of a working
model of the software product that has been tested to be
consistent with the product design specifications and that is
free of any uncertainties related to high-risk development
issues. Costs incurred by the Company between completion of the
working model and the point at which the product is ready for
general release have been insignificant. Accordingly, the
Company has charged all such costs to research and development
expense in the accompanying statements of operations.
Advertising
Advertising costs are charged to operations as incurred and
include direct marketing, events, public relations, sales
collateral materials and partner programs. Advertising expense
was approximately $7.5 million, $11.9 million and
$15.1 million for the years ended December 31, 2007,
2008 and 2009, respectively.
Income
Taxes
Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss
and tax credit carryforwards. These deferred tax assets and
liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary
differences are expected to be reversed or utilized. The effect
on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the
enactment date. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely
than not that some portion or all of the deferred tax assets
will not be realized.
The Company uses a more-likely-than-not recognition threshold
based on the technical merits of tax positions taken. Tax
positions that meet the more-likely-than-not recognition
threshold are measured as the largest amount of the tax
benefits, determined on a cumulative probability basis, which is
more likely than not to be realized upon ultimate settlement in
the financial statements. The Company recognizes interest and
penalties related to income tax matters in income tax expense.
Stock-Based
Compensation
The Company recognizes the cost of employee services received in
exchange for stock option awards, based on the fair value of
those awards at the date of grant over the requisite service
period. The Company uses the Black-Scholes-Merton
(Black-Scholes) option pricing model to determine
the fair value of stock-option awards. Stock-based compensation
plans, related expenses and assumptions used in the
Black-Scholes option pricing model are more fully described in
Note 13. The estimated fair value of stock options on the
date of grant is amortized on a straight-line basis over the
requisite service period. Stock-based compensation expense is
recorded within cost of revenue and selling, general and
administrative expenses and totaled $0.2 million,
$0.7 million and $1.5 million for the years ended
December 31, 2007, 2008 and 2009, respectively.
Net
Income (Loss) Attributable to Common Shares
The Company uses the two-class method to compute net income
(loss) per common share because the Company has issued
securities, other than common stock, that contractually entitle
the holders to participate in dividends and earnings of the
company. The two class method requires earnings available to
common stockholders for the period, after an allocation of
earnings to participating securities, to be allocated between
common and
F-11
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
participating securities based upon their respective rights to
receive distributed and undistributed earnings. The
Companys Series A and Series AA preferred stock
are each entitled to receive annual non-cumulative dividends of
$0.0504 per share, payable prior and in preference to holders of
Series A common stock (hereinafter referred to as
Common Stock) when and if declared by the Board. In
the event a dividend is paid on Common Stock, holders of
Series A and Series AA preferred stock are entitled to
a proportionate share of any such dividend as if they were
holders of common shares (on an as-if converted basis).
For periods with net income, net income per common share
information is computed using the two-class method. Under the
two-class method, basic net income per common share is computed
by dividing the net income attributable to common stockholders
by the weighted average number of shares of Common Stock
outstanding during the period. Basic net income attributable to
common stockholders is computed by an adjustment to subtract
from net income the portion of current year earnings that the
preferred shareholders would have been entitled to receive
pursuant to their dividend rights had all of the years
earnings been distributed. No such adjustment to earnings is
made during periods with a net loss, as the holders of the
convertible preferred shares have no obligation to fund losses.
Diluted net income (loss) per common share is computed by using
the weighted-average number of shares of Common Stock
outstanding, plus, for periods with net income attributable to
common stock, the dilutive effects of stock options and
warrants. Potential dilutive shares consist of incremental
Common Stock issuable upon the exercise of stock options and
warrants.
F-12
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The following table sets forth the computation of basic and
diluted net income (loss) per share for the periods indicated
(dollars in thousands except per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
Year Ended December 31,
|
|
|
December 31,
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2009 (Pro forma)
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
Basic net income (loss) per common share
calculation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(365
|
)
|
|
$
|
2,995
|
|
|
$
|
6,861
|
|
|
$
|
6,861
|
|
Less: Undistributed earnings allocated to participating
securities
|
|
|
|
|
|
|
(2,843
|
)
|
|
|
(5,697
|
)
|
|
|
|
|
Plus: Charges related to preferred stock warrant liability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common shares basic
|
|
|
(365
|
)
|
|
|
152
|
|
|
|
1,164
|
|
|
|
8,233
|
|
Basic weighted average common shares outstanding
|
|
|
13,526,926
|
|
|
|
14,552,999
|
|
|
|
16,267,186
|
|
|
|
62,988,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per share
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
$
|
0.07
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per common share
calculation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(365
|
)
|
|
$
|
2,995
|
|
|
$
|
6,861
|
|
|
$
|
6,861
|
|
Less: Undistributed earnings allocated to participating
securities
|
|
|
|
|
|
|
(2,843
|
)
|
|
|
(5,697
|
)
|
|
|
|
|
Plus: Charges related to preferred stock warrant liability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common shares
diluted
|
|
|
(365
|
)
|
|
|
152
|
|
|
|
1,164
|
|
|
|
8,233
|
|
Weighted average shares used to compute basic net income (loss)
per share
|
|
|
13,526,926
|
|
|
|
14,552,999
|
|
|
|
16,267,186
|
|
|
|
62,988,610
|
|
Effect of potentially dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee stock options
|
|
|
|
|
|
|
1,970,444
|
|
|
|
4,511,262
|
|
|
|
4,511,262
|
|
Warrants
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
106,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used to compute diluted net income
(loss) per share
|
|
|
13,526,926
|
|
|
|
16,523,443
|
|
|
|
20,778,448
|
|
|
|
67,606,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per share
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
$
|
0.06
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-13
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Diluted net (loss) income per share for the years presented do
not reflect the following potential common shares, as the effect
would be antidilutive:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
|
December 31,
|
|
December 31,
|
|
|
2007
|
|
2008
|
|
2009
|
|
2009
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
Stock options and warrants
|
|
|
13,417,220
|
|
|
|
1,520,757
|
|
|
|
1,578,834
|
|
|
|
1,104,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The pro forma net income per share is computed using the
weighted-average number of shares of Common Stock outstanding
and assumes the conversion of all outstanding shares of
preferred stock into an aggregate of 46,721,424 shares of
common stock upon completion of the Companys planned IPO,
as if such conversion had occurred at the beginning of the
period. In addition, pro forma net income per share assumes that
the preferred stock warrants have been automatically converted
to common stock warrants at the beginning of the period.
Accordingly, the charges recorded to mark the preferred stock
warrants to market have been added back to net income to arrive
at net income attributable to common shares pro
forma. The Company believes the unaudited pro forma net income
per share provides material information to investors, as the
conversion of the Companys preferred stock to common stock
is expected to occur upon the closing of an IPO and the
preferred stock warrants will be converted to common stock
warrants upon the closing of an IPO, and therefore the
disclosure of pro forma net income per share thus provides an
indication of net income per share that is comparable to what
will be reported by the Company as a public company. Pro forma
net income attributable to common shares basic and
diluted is higher than basic and diluted net income attributable
to common shares as there would only be one class of stock
outstanding for purposes of computing earnings per share on a
pro forma basis.
Recent
Accounting Pronouncements
In December 2007, the FASB issued new accounting guidance on
business combinations. While retaining the fundamental
requirements of the previous U.S. generally accepted
accounting principles, this new statement makes various
modifications to the accounting for contingent consideration,
preacquisition contingencies, purchased in-process research and
development, acquisition-related transaction costs,
acquisition-related restructuring costs, and changes in tax
valuation allowances and tax uncertainty accruals. The Company
adopted this guidance effective January 1, 2009. The impact
of adopting the guidance will depend on the nature and terms of
business combinations that the Company consummates on or after
January 1, 2009.
In June 2008, the FASB issued new guidance related to assessing
whether an equity-linked financial instrument (or embedded
feature) is indexed to an entitys own stock for the
purposes of determining whether such equity-linked financial
instrument (or embedded feature) is subject to derivative
accounting. The Company adopted this new guidance effective
January 1, 2009. The adoption of this guidance did not have
a material impact on the Companys consolidated financial
statements.
In May 2009, the FASB issued a standard that sets forth the
period after the balance sheet date during which management of a
reporting entity should evaluate events or transactions that may
occur for potential recognition or disclosure in the financial
statements; the circumstances under which an entity should
recognize events or transactions occurring after the balance
sheet date in its financial statements; and the disclosures that
an entity should make about events or transactions that occurred
after the balance sheet date. This standard is effective for
interim and annual periods ending after June 15, 2009. The
Company adopted this standard in the year ended
December 31, 2009, and it did not impact the Companys
consolidated financial results.
In June 2009, FASB Accounting Standards Codification
(Codification) was issued, effective for financial statements
issued for interim and annual periods ending after
September 15, 2009. The Codification supersedes literature
of the FASB, Emerging Issues Task Force and other sources. The
Codification did not change
F-14
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
U.S. generally accepted accounting principles. The
implementation of this standard did not have a material impact
on the Companys consolidated financial statements.
In October 2009, the FASB clarified the accounting guidance for
sales of tangible products containing both software and hardware
elements and issued new guidance that amends the criteria for
evaluating the individual items in a multiple deliverable
revenue arrangement and how to allocate the consideration
received to the individual items. The guidance is effective for
revenue arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010, with
early adoption permitted. The Company has evaluated the
potential impact of the revised guidance on the Companys
financial position and results of operations and has concluded
that they will not have a material impact on its consolidated
financial statements.
On January 1, 2008, the Company acquired the operations and
tangible assets related to QlikView of PC Business Intelligence,
S.L. (PCB), a referral partner in Madrid, Spain. The
acquisition is part of the Companys strategy to establish
a local presence in key markets and further develop the direct
sales and reseller networks. The Company paid consideration of
$1.9 million, which includes $0.4 million in cash and
$1.5 million in a warrant to purchase shares of the
Companys Common Stock. The acquisition was accounted for
under the purchase method of accounting. The assets acquired and
liabilities assumed were recorded at their fair values as of
January 1, 2008. Of the total estimated purchase price,
approximately $0.6 million has been allocated to definite
lived intangible assets acquired, which consist principally of
the value assigned to PCBs customer relationships, and
approximately $1.3 million has been allocated to goodwill,
none of which is tax deductible.
In connection with this acquisition, PCB was granted a warrant
(the PCB warrant) to purchase 93,981 shares of
the Companys Common Stock at a purchase price of $1.65 per
share. Because the IPO did not occur on or before
February 1, 2010, PCB has the right (the Put
Right) to exercise the PCB warrant and on or before
December 31, 2010 require the Company to purchase the
shares acquired upon exercise for an aggregate purchase price,
not to exceed 1.8 million, equal to 50% of the Gross
Sales (as defined in the purchase agreement related to the PCB
warrant) of QlikTech Ibérica S.L. (the Companys
Spanish subsidiary) during the fiscal year ended
December 31, 2009 (the Put Right Purchase
Price). The estimated fair value of the PCB warrant of
$1.5 million was recorded as purchase price on the date of
the PCB acquisition. As of December 31, 2008, the estimated
fair value of the PCB warrant of $1.8 million is classified
in other long-term liabilities on the accompanying consolidated
balance sheet. As of December 31, 2009, the fair value of
the PCB warrant of $2.4 million is classified in current
liabilities as the warrant holder has the ability to exercise
the Put Right by December 31, 2010. Subsequent changes in
the fair value of the warrant are recorded as a component of
other income (expense) in the accompanying consolidated
statement of operations. Refer to Note 5 for fair value
measurement considerations.
|
|
4.
|
Goodwill
and other Intangible Assets
|
The following table provides information regarding the
Companys intangible assets subject to amortization
(dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2009
|
|
|
|
Gross
|
|
|
Accumulated
|
|
|
Net
|
|
|
Gross
|
|
|
Accumulated
|
|
|
Net
|
|
|
|
Amount
|
|
|
Amortization
|
|
|
Amount
|
|
|
Amount
|
|
|
Amortization
|
|
|
Amount
|
|
|
Purchased technology
|
|
$
|
172
|
|
|
$
|
(69
|
)
|
|
$
|
103
|
|
|
$
|
189
|
|
|
$
|
(114
|
)
|
|
$
|
75
|
|
Customer relationships and other identified intangible assets
|
|
|
554
|
|
|
|
(95
|
)
|
|
|
459
|
|
|
|
571
|
|
|
|
(229
|
)
|
|
|
342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
726
|
|
|
$
|
(164
|
)
|
|
$
|
562
|
|
|
$
|
760
|
|
|
$
|
(343
|
)
|
|
$
|
417
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-15
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The cost of definite-lived intangible assets is amortized on a
straight-line basis over the estimated useful lives of five
years. Amortization of intangible assets amounted to
$0.1 million, $0.1 million and $0.2 million for
the years ended December 31, 2007, 2008 and 2009,
respectively. The estimated aggregate amortization expense for
each of the succeeding years is as follows: $0.2 million in
2010; $0.2 million in 2011; and $0.1 million in 2012.
The change in goodwill in the consolidated balance sheet during
2009 was due to foreign currency translation.
|
|
5.
|
Fair
Value Measurements
|
Fair value is defined as the price that would be received from
selling an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
When determining the fair value measurements for assets and
liabilities required or permitted to be recorded at fair value,
the Company considers the principal or most advantageous market
in which it would transact and it considers assumptions that
market participants would use when pricing the asset or
liability. The Company evaluates the fair value of certain
assets and liabilities using the following fair value hierarchy
which ranks the quality and reliability of inputs, or
assumptions, used in the determination of fair value:
|
|
|
|
|
Level 1 quoted prices in active markets for
identical assets and liabilities
|
|
|
|
Level 2 inputs other than Level 1 quoted
prices that are directly or indirectly observable
|
|
|
|
Level 3 unobservable inputs that are not
corroborated by market data
|
The Company evaluates assets and liabilities subject to fair
value measurements on a recurring and nonrecurring basis to
determine the appropriate level to classify them for each
reporting period. This determination requires significant
judgments to be made by the Company. The following table sets
forth the Companys assets and liabilities that were
measured at fair value as of December 31, 2008 and 2009, by
level within the fair value hierarchy (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts at
|
|
Fair Value Measurement Using
|
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
As of December 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
14,800
|
|
|
$
|
14,800
|
|
|
$
|
|
|
|
|
$
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock warrant liability
|
|
|
$2,684
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
2,684
|
|
As of December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
24,852
|
|
|
$
|
24,852
|
|
|
$
|
|
|
|
|
$
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock warrant liability
|
|
|
$4,637
|
|
|
|
$
|
|
|
$
|
|
|
|
$
|
4,637
|
|
Assets and liabilities that are measured at fair value on a
non-recurring basis include intangible assets and goodwill.
These items are recognized at fair value when they are
considered to be impaired. During the year ended
December 31, 2009, there were no fair value adjustments for
assets and liabilities measured on a non-recurring basis.
The fair value of the long-term debt at December 31, 2008
and 2009 is approximately $8.6 million and
$7.2 million, respectively, compared to its carrying value
of $8.1 million and $6.8 million, respectively. The
Company estimates the fair value of its long-term debt using a
combination of quoted market prices for similar
F-16
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
financing arrangements and expected future payments discounted
at risk-adjusted rates, which are considered level 2 inputs.
In January 2008, the Company granted a warrant to PCB to
purchase 93,981 shares of the Companys Common Stock,
in connection with a business acquisition which is more fully
described in Note 3.
In March 2006, in connection with the Companys note
payable, the Company granted a warrant (the ETV
warrant) to ETV Capital S.A. to purchase
260,082 shares of the Companys Series A
preferred stock at $0.6298 per share (See Note 8). The
value of the ETV warrant at the date of grant of
$0.1 million was recorded as a warrant liability with the
offset to debt discount. The debt discount is being amortized to
interest expense over the term of the note payable.
In June 2008, in connection with the Companys note
payable, the Company granted a warrant (the Industrifonden
warrant) to Stiftelsen Industrifonden
(Industrifonden) to purchase 214,200 shares of
the Companys Series A preferred stock at $2.31 per
share (See Note 8). The value of the Industrifonden warrant
at the grant date was $0.2 million and was recorded as a
warrant liability, with the offset to debt discount. The debt
discount is being amortized to interest expense over the term of
the note payable.
The ETV warrant and Industrifonden warrant are classified as
liabilities on the accompanying balance sheets as the warrant
entitles the holder to purchase preferred stock which is
considered contingently redeemable. The PCB warrant is
classified as warrant liability as this warrant contains a put
feature and, accordingly, the warrant may be settled in cash.
The fair value of the stock warrant liability is based on
Level 3 inputs. For this liability, the Company developed
its own assumptions that do not have observable inputs or
available market data to support the fair value. The Company
estimated the fair value of the PCB warrant at both the issuance
date of the warrant in January 2008 and at December 31,
2008 and 2009 by utilizing a fair value methodology which
incorporates both the Black Scholes pricing model, as well as
the probability of an IPO occurring by February 1, 2010,
estimates of the level of Gross Sales of QlikTech Ibérica
S.L. for 2009, and an estimated discount rate. The Company
estimated the fair value of the ETV warrant and the
Industrifonden warrant by utilizing a Black Scholes based option
pricing model, which considered the estimated fair value of
these preferred stock warrants in both an IPO scenario
(IPO scenario), in which the warrants have
attributes of common stock warrants, and a merger and
acquisition scenario (M&A scenario), in which
the warrants have attributes of preferred stock warrants. In the
IPO scenario, the inputs in the Black Scholes model included an
expected term equal to the remaining contractual life of the
warrant, a risk free rate commensurate with the remaining term
of the warrant, volatility of comparable companies for a period
consistent with the expected term, and a dividend yield of 0% as
the Company has never paid dividends. In the M&A scenario,
the Companys Black Scholes model included an expected term
commensurate with the estimated timing of a liquidity event, a
risk free rate commensurate with the expected term, volatility
of comparable companies for a period consistent with the
expected term, and a dividend yield of 0%. The estimates of the
fair value of the PCB warrant, the ETV warrant and the
Industrifonden warrant require a significant amount of judgment.
F-17
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The reconciliation of the stock warrant liability measured at
fair value on a recurring basis using significant unobservable
inputs (Level 3) is as follows (dollars in thousands):
|
|
|
|
|
|
|
Stock
|
|
|
|
Warrant
|
|
|
|
Liability
|
|
|
Balance at January 1, 2008
|
|
$
|
523
|
|
Issuance of PCB warrant
|
|
|
1,492
|
|
Issuance of Industrifonden warrant
|
|
|
206
|
|
Change in fair value of stock warrant liability
|
|
|
463
|
|
|
|
|
|
|
Balance at December 31, 2008
|
|
|
2,684
|
|
Change in fair value of stock warrant liability
|
|
$
|
1,953
|
|
|
|
|
|
|
Balance at December 31, 2009
|
|
$
|
4,637
|
|
|
|
|
|
|
As reported in balance sheet:
|
|
|
|
|
Current
|
|
$
|
2,425
|
|
Non-current
|
|
$
|
2,212
|
|
|
|
6.
|
Property
and Equipment
|
The following is a summary of property and equipment, net
(dollars in thousands) and the related lives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
Lives
|
|
|
2008
|
|
|
2009
|
|
|
Computers and equipment
|
|
|
3 years
|
|
|
$
|
1,725
|
|
|
$
|
3,061
|
|
Furniture and fixtures
|
|
|
5 years
|
|
|
|
1,537
|
|
|
|
1,998
|
|
Leasehold improvements
|
|
|
3 years
|
|
|
|
181
|
|
|
|
506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,443
|
|
|
|
5,565
|
|
Less accumulated depreciation
|
|
|
1,415
|
|
|
|
2,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,028
|
|
|
$
|
3,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense totaled $0.4 million,
$0.7 million and $0.9 million for the years ended
December 31, 2007, 2008 and 2009, respectively.
During 2008 and 2009, a wholly owned subsidiary of the Company
in Sweden had an agreement with a bank in Sweden from which it
may borrow up to a maximum of 60 million Swedish kronor
(SEK) (approximately $8.4 million based on the
December 31, 2009 exchange rate of 0.1393). At
December 31, 2008 and 2009, the amounts outstanding were $0
and $0.2 million, respectively. The maximum borrowing is
collateralized by the subsidiarys total assets. The terms
of this agreement require payment of an unused credit line fee
equal to 0.5% of the unused portion and a variable interest rate
equivalent to the Swedish Riksbank Repo Rate (0.25% at
December 31, 2009) plus 1.75% of the outstanding
balance. The line of credit agreement expires on June 30,
2010.
F-18
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
On June 16, 2008, the Company entered into a
60.0 million SEK note payable to Industrifonden, a
stockholder of the Company, which bears interest at a fixed 10%
rate per annum through March 2012. The loan agreement stipulates
that interest accrued between the loan initiation and first
scheduled payment on June 30, 2009 will be capitalized and
added to the principal amount of the loan. The total principal
as of June 30, 2009 (approximately 66.2 million SEK)
will be paid off in 12 equal quarterly payments, including
accrued interest. Borrowings under the loan are collateralized
by shares of the Companys wholly owned Swedish subsidiary.
As the note payable is denominated in SEK, the impact of
exchange rate changes on the principal and interest of the note
is recorded as gain/(loss) in the consolidated statement of
operations. The gain/(loss) recorded during the years ended
December 31, 2008 and 2009 are $2.4 million and
$0.8 million, respectively.
On March 10, 2006, the Company signed a
2.0 million note payable to ETV Capital S.A., payable
in 36 monthly installments of 0.1 million, which
bore interest at a fixed 9% interest rate through March 2009.
This loan was satisfied in March 2009.
The following table summarizes notes payable held by the Company
(dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2009
|
|
|
Note payable to Industrifonden
|
|
|
$8,019
|
|
|
|
$6,921
|
|
Note payable to ETV Capital S.A.
|
|
|
243
|
|
|
|
|
|
Less current portion
|
|
|
(1,900
|
)
|
|
|
(3,022
|
)
|
Less unaccreted discount
|
|
|
(184
|
)
|
|
|
(122
|
)
|
|
|
|
|
|
|
|
|
|
Total noncurrent borrowings
|
|
|
$6,178
|
|
|
|
$3,777
|
|
|
|
|
|
|
|
|
|
|
Aggregate maturities required on long-term debt obligations at
December 31, 2009 are due in future years as follows
(dollars in thousands):
|
|
|
|
|
2010
|
|
$
|
3,076
|
|
2011
|
|
|
3,076
|
|
2012
|
|
|
769
|
|
|
|
|
|
|
Total
|
|
$
|
6,921
|
|
|
|
|
|
|
The effective tax rates for the years ended December 31,
2007, 2008 and 2009 were 9.9%, 38.3% and 20.6% respectively. It
is anticipated that the Companys effective tax rate may
fluctuate in the future due to the mix of foreign and domestic
pre-tax earnings.
Income (loss) before (provision) benefit for income taxes is
allocated as follows for the years ended December 31 (dollars in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
U.S. operations
|
|
$
|
(1,153
|
)
|
|
$
|
565
|
|
|
$
|
(4,611
|
)
|
Foreign operations
|
|
|
748
|
|
|
|
4,290
|
|
|
|
13,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(405
|
)
|
|
$
|
4,855
|
|
|
$
|
8,637
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-19
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
(Provision for) benefit from income taxes is comprised of the
following (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
Deferred
|
|
|
Total
|
|
|
Year ended December 31, 2007:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. federal
|
|
$
|
(112
|
)
|
|
$
|
|
|
|
$
|
(112
|
)
|
State and local
|
|
|
(22
|
)
|
|
|
|
|
|
|
(22
|
)
|
Foreign
|
|
|
(143
|
)
|
|
|
317
|
|
|
|
174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(277
|
)
|
|
$
|
317
|
|
|
$
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. federal
|
|
$
|
90
|
|
|
$
|
(577
|
)
|
|
$
|
(487
|
)
|
State and local
|
|
|
(22
|
)
|
|
|
(8
|
)
|
|
|
(30
|
)
|
Foreign
|
|
|
(1,039
|
)
|
|
|
(304
|
)
|
|
|
(1,343
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(971
|
)
|
|
$
|
(889
|
)
|
|
$
|
(1,860
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. federal
|
|
$
|
(1
|
)
|
|
$
|
1,535
|
|
|
$
|
1,534
|
|
State and local
|
|
|
(36
|
)
|
|
|
123
|
|
|
|
87
|
|
Foreign
|
|
|
(3,598
|
)
|
|
|
201
|
|
|
|
(3,397
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(3,635
|
)
|
|
$
|
1,859
|
|
|
$
|
(1,776
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The (provision for) benefit from income taxes differs from the
amount of taxes determined by applying the U.S. federal
statutory rate to income (loss) before (provision for) benefit
from income taxes as a result of the following for the years
ended December 31 (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
Statutory federal income tax
|
|
$
|
137
|
|
|
$
|
(1,651
|
)
|
|
$
|
(2,937
|
)
|
Increase (reduction) in income taxes resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign tax benefit for income taxed at lower rates
|
|
|
47
|
|
|
|
389
|
|
|
|
1,611
|
|
Foreign withholding taxes
|
|
|
|
|
|
|
(273
|
)
|
|
|
(504
|
)
|
Foreign tax credit
|
|
|
|
|
|
|
|
|
|
|
180
|
|
Change in the valuation allowance
|
|
|
107
|
|
|
|
62
|
|
|
|
916
|
|
State and local income taxes, net of federal income tax benefit
|
|
|
(22
|
)
|
|
|
(22
|
)
|
|
|
100
|
|
Permanent differences - warrant liability
|
|
|
(153
|
)
|
|
|
(38
|
)
|
|
|
(719
|
)
|
Permanent differences - other
|
|
|
28
|
|
|
|
(302
|
)
|
|
|
(392
|
)
|
Other
|
|
|
(104
|
)
|
|
|
(25
|
)
|
|
|
(31
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
40
|
|
|
$
|
(1,860
|
)
|
|
$
|
(1,776
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets and liabilities reflect the net tax effects
of temporary differences between the carrying amount of assets
and liabilities for financial reporting purposes and the amounts
used for income tax purposes.
F-20
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Significant components of the Companys deferred tax assets
and liabilities are as follows as of December 31 (dollars in
thousands):
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2009
|
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
Accrued expenses
|
|
$
|
694
|
|
|
$
|
501
|
|
Foreign tax credits
|
|
|
|
|
|
|
273
|
|
Other tax credits
|
|
|
35
|
|
|
|
15
|
|
Other assets
|
|
|
175
|
|
|
|
604
|
|
Net operating loss carryforwards
|
|
|
5,502
|
|
|
|
5,444
|
|
|
|
|
|
|
|
|
|
|
Total gross deferred tax assets
|
|
|
6,406
|
|
|
|
6,837
|
|
|
|
|
|
|
|
|
|
|
Less: valuation allowance
|
|
|
(3,038
|
)
|
|
|
(1,741
|
)
|
|
|
|
|
|
|
|
|
|
Net deferred tax assets
|
|
|
3,368
|
|
|
|
5,096
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
Exchange gains/losses
|
|
|
(766
|
)
|
|
|
(326
|
)
|
Other
|
|
|
|
|
|
|
(79
|
)
|
|
|
|
|
|
|
|
|
|
Total deferred tax liabilities
|
|
|
(766
|
)
|
|
|
(405
|
)
|
|
|
|
|
|
|
|
|
|
Total net deferred tax assets
|
|
$
|
2,602
|
|
|
$
|
4,691
|
|
|
|
|
|
|
|
|
|
|
As reported
|
|
|
|
|
|
|
|
|
Deferred tax assets, current
|
|
$
|
312
|
|
|
$
|
810
|
|
Deferred tax assets, non-current
|
|
|
3,056
|
|
|
|
4,207
|
|
Deferred tax liabilities, current
|
|
|
|
|
|
|
|
|
Deferred tax liabilities, non-current
|
|
|
(766
|
)
|
|
|
(326
|
)
|
|
|
|
|
|
|
|
|
|
Total net deferred tax assets
|
|
$
|
2,602
|
|
|
$
|
4,691
|
|
|
|
|
|
|
|
|
|
|
In assessing the realizability of deferred tax assets,
management considers whether it is more likely than not that
some portion or all of the deferred tax assets will not be
realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during
the periods in which those temporary differences become
deductible. Based upon the level of historical taxable income
and projections for future taxable income over the periods in
which the deferred tax assets are deductible as of
December 31, 2009, management believes it is more likely
than not that the Company will realize the benefits of these
deductible differences, with the exception of foreign net
operating losses. The amount of the deferred tax asset
considered realizable, however, could be reduced in the near
term if estimates of future taxable income during the carry
forward period are reduced.
Section 382 of the Internal Revenue Code limits the
utilization of net operating losses when ownership changes, as
defined by that section, occur. The Company has performed an
analysis to identify its Section 382 ownership changes.
Because of the ownership changes, the utilization of some of its
United States federal and state net operating loss carryforwards
may be limited. The Company has not completed the analysis to
determine the annual Section 382 limitation, but estimates
that approximately $2.0 million of its United States
federal and state net operating loss carryforwards may be
limited. Therefore, no federal or state tax benefit has been
recorded on that portion of the net operating loss. Such
limitations may have an impact on the ultimate realization of
the Companys carry forwards and future tax deductions.
F-21
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
At December 31, 2008 and 2009, there were approximately
$7.6 million and $7.2 million of United States federal
and $6.2 million and $6.1 million of state net
operating loss carry forwards, respectively. The majority of
these net operating loss carryforwards will expire, if unused,
between 2020 and 2029. A valuation allowance
of $2.0 million and $0.8 million was recorded at
December 31, 2008 and 2009, respectively, in relation to
the deferred tax assets attributable to these net operating
losses.
In addition, at December 31, 2008 and 2009, there were
approximately $8.9 million and $7.3 million of gross
foreign net operating loss carryforwards, respectively. The
majority of these net operating loss carryforwards have an
indefinite carryforward period. A valuation allowance of
$1.0 million and $0.6 million was recorded at
December 31, 2008 and 2009, respectively, in relation to
the foreign net operating losses.
The Company has made no provision for United States taxes
on cumulative earnings of $20.7 million of foreign
subsidiaries as those earnings are intended to be reinvested for
an indefinite period of time. Upon distribution of these
earnings in the form of dividends or otherwise, the Company may
be subject to United States income taxes and foreign
withholding taxes. It is not practical, however, to estimate the
amount of taxes that may be payable on the eventual repatriation
of these earnings.
As a result of the adoption of FIN 48 (codified in
ASC 740) effective January 1, 2007, the Company
analyzed its tax return filing positions in all of the federal,
state and foreign filing jurisdictions where it is required to
file income tax returns, as well as all open years in those
jurisdictions, and concluded that there are no uncertain tax
positions which would require a cumulative effect adjustment to
retained earnings.
The following table indicates the changes to the Companys
uncertain tax positions for the years ended December 31 (dollars
in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
Beginning balance
|
|
$
|
2,745
|
|
|
$
|
3,438
|
|
|
$
|
3,251
|
|
Expiration of statute of limitations for the assessment of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) related to current tax year
|
|
|
693
|
|
|
|
(187
|
)
|
|
|
71
|
|
Payment to taxing authorities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
3,438
|
|
|
$
|
3,251
|
|
|
$
|
3,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All of the Companys unrecognized tax benefit liability
would affect the Companys effective tax rate if
recognized. Because of the existence of net operating loss
carryforwards, the resultant unfavorable resolution of any of
the Companys uncertain tax positions would not result in
material interest and penalties. Accordingly, the Company did
not record any interest and penalties related to unrecognized
tax benefit liability for the years ended December 31, 2008
and 2009. For the year ended December 31, 2007, less than
$0.1 million of the $0.7 million increase caused an
increase in foreign tax expense. The remainder of the 2007
increase caused a decrease in the valuation allowance of an
equal amount. The Company does not expect its unrecognized tax
benefit liability to change significantly over the next
12 months.
Although the Company believes that the estimates and assumptions
supporting its assessments are reasonable, the final
determination of tax audits and any related litigation could be
materially different than that which is reflected in the
historical income tax provision and recorded assets and
liabilities. Based on the results of an audit or litigation,
there could be a material effect on the Companys income
tax provision, net income (loss) or cash flows in the period or
periods for which that determination is made.
As of December 31, 2009, the Company is subject to U.S.
Federal Income Tax examination for the tax years 2006 through
2009, and to non-U.S. income tax examination for the tax years
2001 through 2009. In addition, because of net operating losses,
the Companys U.S. federal tax returns for 2003 and
later years will remain subject to examination until the losses
are utilized.
F-22
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Series A
Common Stock
Voting
Rights
The holders of Common Stock shall have one vote per share.
Liquidation
Preference
After payment in full of the Series A and AA Liquidation
Preferences (discussed below), the holders of Common Stock are
entitled to the remaining assets and funds of the Company on a
pro rata basis. The holders of Series A and Series AA
preferred stock are treated as holders of Common Stock (on an
as-converted basis) for purposes of any distributions.
Convertible
Preferred Stock
Voting
Rights
Holders of Series A and Series AA preferred stock (the
Preferred Stock), issued in November 2004, have
the number of votes equal to the number of common shares to
which the Preferred Stock are convertible and shall vote with
the Common Stock as a single class, except with respect to
certain corporate actions (such as a public offering or a change
in rights, preferences or privileges of any series of preferred
stock) that require approval of certain series of preferred
stock, as defined in the Companys Restated Certificate of
Incorporation.
Dividends
No dividends shall be paid on Common Stock unless an equivalent
dividend for such year has been declared and paid on the
Preferred Stock. Dividends on the preferred stock shall accrue
and be payable when and if declared by the Board of Directors at
an annual rate of $0.0504 per share on a non-cumulative basis.
The Preferred Stock has preference with respect to dividends
over the common stock. There have been no dividends accrued or
paid as of December 31, 2009.
Conversion
Each share of Preferred Stock is convertible to Common Stock, at
the option of the holder, initially on a
one-for-one
basis, adjusted for splits, stock dividends, consolidation,
merger and other noncash dilutive events as if the
investors interest were a common stock equity interest.
The initial conversion prices for Series A and
Series AA Preferred Stock are $0.6298. The conversion
prices are adjusted for certain events that result in dilution
of the initial conversion prices.
The Preferred Stock automatically converts into Common Stock
upon (i) the election of a Voting Threshold of
the outstanding shares of Preferred Stock voting as a class or
(ii) consummation of underwritten public offering with
aggregate proceeds in excess of $30.0 million, at an
original issue price of not less than five times the original
Series A per share purchase price (a Qualified Public
Offering).
Liquidation
Preference
In the event of liquidation or dissolution of the Company, the
holders of the Preferred Stock shall be entitled to receive
prior and in preference to any distribution of any of the assets
or surplus funds of the Company to the holders of Common Stock
an amount equal to $0.6298 per share (as adjusted for any
combination, consolidation, stock distribution or stock dividend
with respect to such shares), plus all (or any) declared but
unpaid dividends thereon (the Series A and AA
Liquidation Preference). Any remaining proceeds shall be
paid pro rata to the holders of Common Stock and Preferred
Stock, on an as-converted basis.
F-23
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Redemption Rights
The Preferred Stock is subject to redemption under certain
deemed liquidation events, as defined, and as such,
the Preferred Stock is considered contingently redeemable for
financial accounting purposes.
|
|
11.
|
Commitments
and Contingencies
|
Litigation
From time to time, the Company is involved in disputes or legal
actions arising in the ordinary course of business. Management
does not believe the outcome of such legal actions will have a
material adverse effect on the Companys financial
position, results of operations or cash flows.
Leases
The Company conducts its operations in leased facilities under
leases expiring at various dates to 2015. Rent expense was
approximately $2.0 million, $3.5 million and
$4.0 million for the years ended December 31, 2007,
2008 and 2009, respectively.
The future minimum lease payments under noncancelable operating
leases are as follows (dollars in thousands):
|
|
|
|
|
Year ending December 31:
|
|
|
|
|
2010
|
|
$
|
5,522
|
|
2011
|
|
|
4,174
|
|
2012
|
|
|
2,993
|
|
2013
|
|
|
2,139
|
|
2014
|
|
|
1,225
|
|
Thereafter
|
|
|
609
|
|
|
|
|
|
|
Total future minimum lease payments
|
|
$
|
16,662
|
|
|
|
|
|
|
|
|
12.
|
Business
and Geographic Segment Information
|
The Company currently operates in one business segment, namely,
the development, commercialization and implementation of
software products and related services. The Company is managed
and operated as one business. A single management team that
reports to the chief operating decision maker comprehensively
manages the entire business. The Company does not operate any
material separate lines of business or separate business
entities with respect to its products or product development.
Accordingly, the Company views its business and manages its
operations as one reportable segment.
The Companys revenues were generated in the following
geographic regions (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
United States
|
|
$
|
18,660
|
|
|
$
|
27,737
|
|
|
$
|
35,899
|
|
Europe
|
|
|
54,843
|
|
|
|
76,180
|
|
|
|
103,824
|
|
Other
|
|
|
7,083
|
|
|
|
14,347
|
|
|
|
17,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated total
|
|
$
|
80,586
|
|
|
$
|
118,264
|
|
|
$
|
157,359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-24
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
During the years ended December 31, 2007, 2008 and 2009,
sales from customers in Sweden were $18.4 million,
$21.4 million and $23.2 million, respectively. During
the years ended December 31, 2007, 2008 and 2009, sales
from customers in Germany were $12.3 million,
$13.7 million and $20.1 million, respectively.
Long-lived assets by geographic area consist of property and
equipment and are as follows (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|
|
|
2008
|
|
|
2009
|
|
|
United States
|
|
$
|
398
|
|
|
$
|
623
|
|
Europe
|
|
|
1,630
|
|
|
|
2,621
|
|
|
|
|
|
|
|
|
|
|
Consolidated total
|
|
$
|
2,028
|
|
|
$
|
3,244
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2008 and 2009, long-lived assets held in
Sweden were $0.8 million and $1.8 million,
respectively. As of December 31, 2008 and 2009, long-lived
assets held in Germany were $0.3 million.
In 2004, the Companys Board of Directors and stockholders
approved the Companys 2004 Stock Option and Award Plan
providing for the granting of either incentive or nonqualified
stock options to purchase up to 11,124,400 shares of the
Companys Common Stock. In 2007, the Companys Board
of Directors and stockholders approved the Companys 2007
Omnibus Stock Option and Award Plan (the 2007 Plan).
The 2007 Plan provides for the granting of either incentive
stock options or nonqualified stock options to purchase up to
18,124,400 shares of the Companys Common Stock. The
plan provides for stock-based awards to employees, directors and
advisors. Stock options are granted at a strike price not less
than the estimated fair market value at the date of grant as
determined by the Board of Directors.
The 2007 Plan is designed to help attract and retain the Company
and its subsidiaries personnel, to reward employees and
directors for past services and to motivate such individuals
through added incentives to further contribute to the success of
the Company. The maximum term for the options granted is four
years to Swedish employees, directors and advisors and ten years
for all others. Options granted pursuant to the 2007 Plan
generally vest at 25% after the first year and then vest 6.25%
each quarter over the remaining three years. Swedish tax law
requires that Swedish plan participants purchase their stock
options at a purchase price equal to the estimated fair value of
the options on the date of grant. Accordingly, payments received
for the grant of Swedish stock options were $0.3 million,
$0.1 million and $0.1 million for the years ended
December 31, 2007, 2008 and 2009, respectively.
Pursuant to our non-qualified stock option award agreements with
our Swedish employees, stock options are subject to the
Companys right of repurchase upon a termination of service
to the participant at a price equal to the fair market value on
the date of termination of service. Total proceeds from options
repurchased by the Company were $0, $0 and $0.4 million in
2007, 2008 and 2009, respectively. The Company does not intend
to repurchase any additional options granted in the future.
The Company uses the Black-Scholes option-pricing model to value
stock option awards. The Black-Scholes option-pricing model
requires the input of subjective assumptions, including the
expected life of the share-based payment awards and stock price
volatility. The Company does not have sufficient historical
volatility for the expected term of the options. Prior to 2008,
the Company established the expected volatility assumption by
determining an appropriate industry sector that was
representative of the nature of its operations as well as its
market capitalization size (mid-cap software industry). As of
January 1, 2008 and forward, the Company uses comparable
public companies as a basis for its expected volatility to
calculate the fair value of option grants and
F-25
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
intends to continue to consistently apply this process using
comparable companies until a sufficient amount of historical
information regarding the volatility of the Companys share
price becomes available. The expected term for all Swedish
option grants is four years based on the contractual expiration
date of the option and based on the history of option exercise
behavior. The expected term for all other option grants is based
on the simplified method provided by SEC guidance. The risk-free
interest rate is based on U.S. Treasury yield curve with a
remaining term equal to the expected life assumed at grant. The
assumptions used in calculating the fair value of share-based
payment awards represent managements best estimate and
involve inherent uncertainties and the application of
managements judgment. As a result, if factors change and
management uses different assumptions, share-based compensation
expense could be materially different in the future.
Common
Stock Valuations
For all option grants during 2007, 2008 and 2009, the fair value
of the Common Stock underlying the option grants was determined
by the Companys Board of Directors, with the assistance of
management, which intended all options granted to be exercisable
at a price per share not less than the per share fair value of
the Companys Common Stock underlying those options on the
date of grant. The Company utilized the guidance set forth by
the American Institute of Certified Public Accountants, or the
AICPA, in the AICPA Technical Practice Aid, Valuation
of Privately-Held-Company Equity Securities Issued as
Compensation, referred to herein as the AICPA Practice
Aid, when estimating the fair value of common stock at each
grant date.
The Board of Directors, with the assistance of management, used
the market approach and the income approach in order to estimate
the fair value of Common Stock underlying the Companys
option grants during 2007, 2008 and 2009. The Company believes
both of these approaches are appropriate methodologies given its
stage of development. For the market approach, the Company
utilized the guideline company method by analyzing a population
of comparable companies and selected those technology companies
that it considered to be the most comparable in terms of product
offerings, revenues, margins, and growth. Under the market
approach, the Company then use these guideline companies to
develop relevant market multiples and ratios, which are then
applied to its corresponding financial metrics to estimate the
Companys equity value. For the income approach, the
Company performed discounted cash flow analyses which utilize
projected cash flows as well as a residual value, which are then
discounted to the present in order to arrive at its current
equity value. In 2007 and 2008, the Company used an option
pricing model to allocate the estimated equity value to the
various securities outstanding. In 2009, the Company utilized a
probability weighted expected return model (PWERM) to allocate
value to the various securities outstanding in the
Companys capital structure.
The significant input assumptions used in the valuation models
during 2007 through 2009 are based on subjective future
expectations combined with management judgment, including:
Income approach assumptions:
|
|
|
|
|
expected revenue, operating performance and cash flows for the
current and future years, determined as of the valuation date
based on the Companys estimates;
|
|
|
|
a discount rate, which is applied to discretely forecasted
future cash flows in order to calculate the present value of
those cash flows; and
|
|
|
|
a terminal value multiple, which is applied to the last year of
discretely forecasted cash flows to calculate the residual value
of the Companys future cash flows.
|
Assumptions utilized in the market approach are:
|
|
|
|
|
expected revenue, operating performance and cash flows for the
current and future years, determined as of the valuation date
based on the Companys estimates;
|
F-26
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
|
|
|
multiples of market value to trailing revenues, determined as of
the valuation date, based on a group of comparable public
companies identified; and
|
|
|
|
multiples of market value to expected future revenues,
determined as of the valuation date, based on the same group of
comparable public companies.
|
The following provides a summary of the option activity for the
Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-
|
|
|
|
|
|
|
|
|
|
Weighted-
|
|
|
Average
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
Remaining
|
|
|
|
Available for
|
|
|
Number
|
|
|
Exercise
|
|
|
Contractual
|
|
|
|
Grant
|
|
|
of Shares
|
|
|
Price
|
|
|
Term (Years)
|
|
|
Outstanding at January 1, 2007
|
|
|
2,802,921
|
|
|
|
9,199,694
|
|
|
$
|
0.63
|
|
|
|
8.70
|
|
Authorized
|
|
|
5,000,000
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
Granted
|
|
|
(4,230,900
|
)
|
|
|
4,230,900
|
|
|
$
|
1.49
|
|
|
|
|
|
Exercised
|
|
|
|
|
|
|
(91,051
|
)
|
|
$
|
0.63
|
|
|
|
|
|
Forfeited
|
|
|
194,338
|
|
|
|
(182,405
|
)
|
|
$
|
0.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31, 2007
|
|
|
3,766,359
|
|
|
|
13,157,138
|
|
|
$
|
0.91
|
|
|
|
8.26
|
|
Authorized
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
Granted
|
|
|
(3,372,225
|
)
|
|
|
3,372,225
|
|
|
$
|
1.65
|
|
|
|
|
|
Exercised
|
|
|
|
|
|
|
(2,383,311
|
)
|
|
$
|
0.65
|
|
|
|
|
|
Forfeited
|
|
|
2,008,003
|
|
|
|
(2,008,003
|
)
|
|
$
|
0.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31, 2008
|
|
|
2,402,137
|
|
|
|
12,138,049
|
|
|
$
|
1.19
|
|
|
|
8.26
|
|
Authorized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
(2,709,754
|
)
|
|
|
2,709,754
|
|
|
$
|
2.53
|
|
|
|
|
|
Exercised
|
|
|
|
|
|
|
(650,216
|
)
|
|
$
|
0.79
|
|
|
|
|
|
Forfeited
|
|
|
1,856,114
|
|
|
|
(1,856,114
|
)
|
|
$
|
1.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31, 2009
|
|
|
1,548,497
|
|
|
|
12,341,473
|
|
|
$
|
1.51
|
|
|
|
6.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at December 31, 2009
|
|
|
|
|
|
|
6,566,745
|
|
|
$
|
1.10
|
|
|
|
6.27
|
|
Vested and expected to vest at December 31, 2009
|
|
|
|
|
|
|
11,719,354
|
|
|
|
|
|
|
|
|
|
During 2007, 2008 and 2009, the Company issued options
exercisable for 4,230,900, 3,372,225 and 2,709,754 shares
of Common Stock, respectively, to employees and non-employee
directors. The grant date weighted-average fair value per option
for the years ended December 31, 2007, 2008 and 2009 was
$0.34, $1.00 and $1.23, respectively.
The total intrinsic value of options exercised during 2007, 2008
and 2009 was $0.1 million, $2.4 million and
$1.3 million, respectively. The aggregate intrinsic value
of options outstanding and fully vested as of December 31,
2008 and December 31, 2009 is $26.8 million and
$45.2 million, respectively.
F-27
QLIK
TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The assumptions used in the Black-Scholes option pricing model
are:
|
|
|
|
|
|
|
|
|
2007
|
|
2008
|
|
2009
|
|
Expected dividend yield
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
Risk-free interest rate
|
|
3.7% - 4.8%
|
|
1.2% - 3.1%
|
|
1.5% - 2.4%
|
Expected volatility
|
|
18.5% - 21.8%
|
|
48.0% - 88.8%
|
|
44.7%-62.4%
|
Expected life (Swedish grants, in years)
|
|
4
|
|
4
|
|
4
|
Expected life (all other grants, in years)
|
|
6.25
|
|
6.25
|
|
6.25
|
Estimated fair value of common stock (per share)
|
|
$0.63 - $1.65
|
|
$1.63-$1.65
|
|
$1.65-$3.81
|
For the years ended December 31, 2007, 2008 and 2009, the
Company recorded stock-based compensation expense for stock
options to employees and non-employees of $0.2 million,
$0.7 million and $1.5 million, respectively.
As of December 31, 2009, there was $4.3 million of
total unrecognized compensation cost, net of estimated
forfeitures, related to non-vested employee and non-employee
director stock options. That remaining cost is expected to be
recognized over a weighted-average period of approximately
1.54 years.
|
|
14.
|
Shares Reserved
for Future Issuance
|
At December 31, 2009, the Company had reserved a total of
its authorized shares of Common Stock for stock options and
conversion of other classes of stock for future issuance as
follows:
|
|
|
|
|
Granted and outstanding stock options
|
|
|
12,341,473
|
|
Future issuance of stock options
|
|
|
1,548,497
|
|
Conversion of Series A preferred
|
|
|
19,846,279
|
|
Conversion of Series AA preferred
|
|
|
26,875,145
|
|
Conversion of Series A preferred warrants
|
|
|
474,282
|
|
Conversion of Series A common warrants
|
|
|
93,981
|
|
|
|
|
|
|
|
|
|
61,179,657
|
|
|
|
|
|
|
The Company sponsors a 401(k) savings plan covering
substantially all U.S. employees who meet certain age and
employment criteria. Employees may contribute up to the Internal
Revenue Service maximum employee contribution each year. The
Company has contributed a 3% non-elective contribution based on
eligible employee earnings which is made in the first quarter
following the end of the plan year. There is no vesting period
for non-elective contributions. In the foreign entities, the
Company has a defined contribution plan for the employees
retirements who meet certain age, employment and salary
criteria. The Companys benefit plans expense was
approximately $1.4 million, $2.4 million and
$2.3 million for the years ended December 31, 2007,
2008 and 2009, respectively.
On January 22, 2010, the Company acquired the outstanding
stock of Syllogic Corporation, a Japanese reseller, for
120,000 shares of its Series A common stock, valued at
$0.6 million, contingent consideration not to exceed
$0.8 million, and net liabilities assumed of
$0.5 million, for a total purchase price of
$1.9 million.
The Company has evaluated subsequent events through
April 1, 2010, the date of issuance of the
December 31, 2009 financial statements.
F-28
PART II
Information
Not Required in Prospectus
|
|
Item 13.
|
Other
Expenses of Issuance and Distribution
|
The following table presents the costs and expenses, other than
underwriting discounts and commissions, payable by us in
connection with the sale of common stock being registered. All
amounts are estimates except the SEC registration fee, the FINRA
filing fees and the Nasdaq Global Market listing fee.
|
|
|
|
|
SEC registration fee
|
|
$
|
7,130
|
|
FINRA filing fee
|
|
$
|
10,500
|
|
Nasdaq Global Market listing fee
|
|
|
*
|
|
Printing and engraving expenses
|
|
|
*
|
|
Legal fees and expenses
|
|
|
*
|
|
Accounting fees and expenses
|
|
|
*
|
|
Blue sky fees and expenses (including related legal fees)
|
|
|
*
|
|
Transfer agent and registrar fees
|
|
|
*
|
|
Miscellaneous fees and expenses
|
|
|
*
|
|
Total
|
|
$
|
*
|
|
|
|
|
*
|
|
To be completed in subsequent
amendment
|
|
|
Item 14.
|
Indemnification
of Directors and Officers
|
Section 145 of the Delaware General Corporation Law
authorizes a corporations board of directors to grant, and
authorizes a court to award, indemnity to officers, directors
and other corporate agents.
As permitted by Section 102(b)(7) of the Delaware General
Corporation Law, or DGCL, the registrants certificate of
incorporation to be in effect upon the closing of this offering
includes provisions that eliminate the personal liability of its
directors and officers for monetary damages for breach of their
fiduciary duty as directors and officers.
In addition, as permitted by Section 145 of the DGCL, the
bylaws of the registrant to be effective upon completion of this
offering provide that:
|
|
|
|
|
The registrant shall indemnify its directors and officers for
serving the registrant in those capacities or for serving other
business enterprises at the registrants request, to the
fullest extent permitted by Delaware law. Delaware law provides
that a corporation may indemnify such person if such person
acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the
registrant and, with respect to any criminal proceeding, had no
reasonable cause to believe such persons conduct was
unlawful.
|
|
|
|
The registrant may, in its discretion, indemnify employees and
agents in those circumstances where indemnification is permitted
by applicable law.
|
|
|
|
The registrant is required to advance expenses, as incurred, to
its directors and officers in connection with defending a
proceeding, except that such director or officer shall undertake
to repay such advances if it is ultimately determined that such
person is not entitled to indemnification.
|
|
|
|
The registrant will not be obligated pursuant to the bylaws to
indemnify a person with respect to proceedings initiated by that
person, except with respect to proceedings authorized by the
registrants board of directors or brought to enforce a
right to indemnification.
|
II-1
|
|
|
|
|
The rights conferred in the bylaws are not exclusive, and the
registrant is authorized to enter into indemnification
agreements with its directors, officers, employees and agents
and to obtain insurance to indemnify such persons.
|
|
|
|
The registrant may not retroactively amend the bylaw provisions
to reduce its indemnification obligations to directors,
officers, employees and agents.
|
|
|
|
The registrants policy is to enter into separate
indemnification agreements with each of its directors and
officers that provide the maximum indemnity allowed to directors
and executive officers by Section 145 of the DGCL and also
provides for certain additional procedural protections. The
registrant also maintains directors and officers insurance to
insure such persons against certain liabilities.
|
|
|
|
These indemnification provisions and the indemnification
agreements entered into between the registrant and its officers
and directors may be sufficiently broad to permit
indemnification of the registrants officers and directors
for liabilities (including reimbursement of expenses incurred)
arising under the Securities Act.
|
|
|
|
The underwriting agreement filed as Exhibit 1.1 to this
registration statement provides for indemnification by the
underwriters of the registrant and its officers and directors
for certain liabilities arising under the Securities Act and
otherwise.
|
|
|
Item 15.
|
Recent
Sales of Unregistered Securities
|
During the last three years, the Registrant made sales of the
following unregistered securities:
(1) From May 3, 2007 through May 4, 2010, the
Registrant sold and issued to its employees and service
providers an aggregate of 3,483,827 shares of its
Series A common stock pursuant to option exercises under
Registrants 2004 Omnibus Stock Option and Award Plan and
Registrants 2007 Omnibus Stock Option and Award Plan at
prices ranging from $0.6298 to $1.65 per share for an aggregate
purchase price of $2,438,162.50.
(2) From May 3, 2007 through May 4, 2010, the
Registrant granted to its employees and service providers
options to purchase an aggregate of 10,203,179 shares of
its Series A common stock under the Registrants 2004
Omnibus Stock Option and Award Plan and 2007 Omnibus Stock
Option and Award Plan at prices ranging from $1.65 to $5.18 per
share for an aggregate purchase price of $21,118,327.42.
(3) On March 23, 2006, the Registrant issued a warrant
to purchase an aggregate of 260,082 shares of the
Registrants Series A preferred stock at an exercise
price of $0.6298 per share to ETV Capital (Jersey) Limited. The
warrant may be exercised at any time prior to its termination
date of March 23, 2016.
(4) On January 21, 2008, the Registrant issued a
warrant to purchase an aggregate of 93,981 shares of the
Registrants Series A common stock at an exercise
price of $1.65 per share to PC Compatible Business Intelligence,
S.L. The warrant may be exercised at any time prior to its
termination date of December 31, 2014.
(5) On June 16, 2008, the Registrant issued a warrant
to purchase an aggregate of 214,200 shares of the
Registrants Series A preferred stock at an exercise
price of $2.31 per share to Stiftelsen Industrifonden. The
warrant may be exercised at any time prior to its termination
date of June 16, 2018.
(6) On January 22, 2010, the Registrant issued an
aggregate of 120,000 shares of the Registrants
Series A common stock at a price of $3.81 per share to
three individuals in connection with the acquisition of Syllogic
Corporation.
No underwriters were involved in the foregoing sales of
securities. The issuances of the securities described above were
deemed to be exempt from registration under the Securities Act
in reliance on Section 4(2) of the Securities Act,
Rule 701 promulgated under Section 3(b) of the
Securities Act or Regulation S under the Securities Act.
The recipients of securities in each such transaction
represented their intention to acquire the securities for
investment only and not with a view to or for sale in connection
with any distribution thereof and appropriate legends were
affixed to the stock certificates, warrant agreements and option
agreements issued in such transactions.
II-2
|
|
Item 16.
|
Exhibits
and Financial Statement Schedules
|
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
1
|
.1*
|
|
Form of Underwriting Agreement
|
|
3
|
.1**
|
|
Restated Certificate of Incorporation of Registrant, as amended
on various dates
|
|
3
|
.2**
|
|
Form of Restated Certificate of Incorporation to be effective
upon closing
|
|
3
|
.3**
|
|
Amended and Restated Bylaws of the Registrant
|
|
3
|
.4**
|
|
Amended and Restated Bylaws of the Registrant to be effective
upon closing
|
|
4
|
.1
|
|
Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4
|
|
4
|
.2*
|
|
Form of Registrants Common Stock Certificate
|
|
4
|
.3**
|
|
Investors Rights Agreement, dated November 17, 2004
and as amended on various dates, by and among the Registrant,
certain stockholders and the investors listed on the signature
pages thereto
|
|
4
|
.4**
|
|
First Refusal and Co-Sale Agreement, dated November 17,
2004 and as amended on various dates, by and among the
Registrant, certain stockholders and the investors listed on the
signature pages thereto
|
|
4
|
.5**
|
|
Voting Agreement, dated November 17, 2004 and as amended on
various dates, by and among the Registrant, certain stockholders
and the investors listed on the signature pages thereto
|
|
4
|
.6**
|
|
First Amendment to Voting Agreement, dated October 10,
2007, by and among the Registrant, QlikTech International AB and
certain stockholders
|
|
5
|
.1*
|
|
Opinion of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP
|
|
10
|
.1*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and Lars Björk
|
|
10
|
.2*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and John Gavin, Jr.
|
|
10
|
.3*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and Bruce Golden
|
|
10
|
.4*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and Erel Margalit
|
|
10
|
.5*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and Alexander Ott
|
|
10
|
.6*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and Paul Wahl
|
|
10
|
.7*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and William G. Sorenson
|
|
10
|
.8*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and Leslie Bonney
|
|
10
|
.9*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and Anthony Deighton
|
|
10
|
.10*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and Douglas Laird
|
|
10
|
.11*
|
|
Amended and Restated Employment Agreement, dated
April , 2010, by and between the Registrant and
Lars Björk
|
|
10
|
.12*
|
|
Amended and Restated Employment Agreement, dated
April , 2010, by and between the Registrant and
William Sorenson
|
|
10
|
.13*
|
|
Employment Agreement, dated May 2, 2005, by and between the
Registrant and Leslie Bonney
|
|
10
|
.14*
|
|
Amended and Restated Employment Offer Letter, dated
April , 2010, by and between the Registrant and
Anthony Deighton
|
|
10
|
.15*
|
|
Amended and Restated Employment Offer Letter, dated
April , 2010, by and between the Registrant and
Douglas Laird
|
|
10
|
.16**
|
|
Amended and Restated Consulting Agreement, dated
September 1, 2005, by and between the Registrant and Paul
Wahl
|
|
10
|
.17**
|
|
Consulting Agreement, dated October 1, 2004, by and between
the Registrant and Alexander Ott
|
|
10
|
.18**
|
|
2004 Omnibus Stock Option and Award Plan
|
|
10
|
.19**
|
|
2007 Omnibus Stock Option and Award Plan
|
|
10
|
.20**
|
|
2010 Equity Incentive Plan (to be effective upon closing of the
offering)
|
|
10
|
.21**
|
|
Form of Notice of Stock Option Grant and Stock Option Agreement
under 2010 Equity Incentive Plan
|
II-3
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
10
|
.22**
|
|
Translation of Agreement by and between the Registrant, QlikTech
International AB and Svenska Handelsbanken AB dated as of
July 11, 2008
|
|
10
|
.23**
|
|
Translation of Amendment Agreement by and between the
Registrant, QlikTech International AB and Svenska
Handelsbanken AB dated as of July 13, 2009
|
|
10
|
.24**
|
|
Omnibus Stock Option and Award Plan Non-Qualified Stock Option
Award Agreement granted to Alexander Ott under the 2004 Omnibus
Stock Option and Award Plan
|
|
10
|
.25**
|
|
Omnibus Stock Option and Award Plan Non-Qualified Stock Option
Award Agreements granted to Anthony Deighton under the 2004
Omnibus Stock Option and Award Plan and under the 2007 Omnibus
Stock Option and Award Plan, and Side letter, dated November
2006, between the Registrant and Anthony Deighton
|
|
10
|
.26**
|
|
Omnibus Stock Option and Award Plan Non-Qualified Stock Option
Award Agreement granted to Douglas Laird under the 2007 Omnibus
Stock Option and Award Plan
|
|
10
|
.27**
|
|
Omnibus Stock Option and Award Plan Non-Qualified Stock Option
Award Agreements granted to Lars Björk under the 2004
Omnibus Stock Option and Award Plan and the 2007 Omnibus Stock
Option and Award Plan
|
|
10
|
.28**
|
|
2004, 2005 and 2009 Omnibus Stock Option and Award Plans and
Sub-Plans
for the UK Agreements granted to Leslie Bonney
|
|
10
|
.29**
|
|
Omnibus Stock Option and Award Plan Non-Qualified Stock Option
Award Agreements granted to Paul Wahl under the 2004
Omnibus Stock Option and Award Plan and 2007 Omnibus Stock
Option and Award Plan
|
|
10
|
.30**
|
|
Omnibus Stock Option and Award Plan Non-Qualified Stock Option
Award Agreement granted to William Sorenson under the 2007
Omnibus Stock Option and Award Plan
|
|
10
|
.31*
|
|
Omnibus Stock Option and Award Plan Non-Qualified Stock Option
Award Agreement granted to John Gavin, Jr. under the 2007
Omnibus Stock Option and Award Plan
|
|
10
|
.32**
|
|
Term Loan Facility Agreement, dated June 16, 2008, between
the Registrant and Stiftelsen Industrifonden
|
|
10
|
.33**
|
|
Warrant to Purchase Shares of Preferred Stock, dated
June 16, 2008, issued by the Registrant to Stiftelsen
Industrifonden
|
|
10
|
.34**
|
|
Share Pledge Agreement, dated June 16, 2008, between the
Registrant and Stiftelsen Industrifonden
|
|
10
|
.35**
|
|
Stock Purchase Agreement, dated November 17, 2004, between
the Registrant, QlikTech International AB and the Investors (as
defined therein)
|
|
10
|
.36**
|
|
Lease, dated November 15, 2005, between the Registrant and
Radnor Properties-SDC, L.P.
|
|
10
|
.37**
|
|
First Amendment to Lease, dated March 13, 2009, between the
Registrant and Radnor Properties-SDC, L.P.
|
|
10
|
.38
|
|
Translation of Hyreskontrakt for local, dated
May 22, 2007, between QlikTech International AB and Ideon AB
|
|
10
|
.39
|
|
Reference is made to Exhibits 4.3, 4.4, 4.5 and 4.6
|
|
21
|
.1**
|
|
List of subsidiaries of the Registrant (including jurisdiction
of organization and names under which subsidiaries do business)
|
|
23
|
.1
|
|
Consent of Ernst & Young LLP, Independent Registered
Public Accounting Firm
|
|
23
|
.2*
|
|
Consent of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP (contained in
Exhibit 5.1)
|
|
24
|
.1**
|
|
Powers of Attorney (included in the signature pages to the
registration statement)
|
|
|
|
|
|
Compensation arrangement
|
*
|
|
To be filed by amendment
|
II-4
|
|
(b)
|
Financial
Statement Schedules
|
All schedules have been omitted as they are not required, not
applicable, or the required information is otherwise included in
the Notes to the consolidated financial statements.
The undersigned Registrant hereby undertakes to provide to the
underwriters at the closing specified in the underwriting
agreement certificates in such denominations and registered in
such names as required by the underwriters to permit prompt
delivery to each purchaser.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the provisions described in Item 14 above, or otherwise,
the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as
of the time it was declared effective.
(2) For purposes of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 1 to this
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Radnor,
Commonwealth of Pennsylvania, on this 5th day of May, 2010.
QLIK TECHNOLOGIES INC.
Lars Björk
President and Chief Executive Officer (Principal Executive
Officer)
II-6
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment No. 1 to this Registration
Statement has been signed by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated:
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
/s/ Lars
Björk
Lars
Björk
|
|
President, Chief Executive Officer and Director (Principal
Executive Officer)
|
|
May 5, 2010
|
|
|
|
|
|
/s/ William
G. Sorenson
William
G. Sorenson
|
|
Chief Financial Officer (Principal Accounting and Financial
Officer)
|
|
May 5, 2010
|
|
|
|
|
|
*
John
Gavin, Jr.
|
|
Director
|
|
May 5, 2010
|
|
|
|
|
|
*
Bruce
Golden
|
|
Director
|
|
May 5, 2010
|
|
|
|
|
|
*
Erel
Margalit
|
|
Director
|
|
May 5, 2010
|
|
|
|
|
|
*
Alexander
Ott
|
|
Director
|
|
May 5, 2010
|
|
|
|
|
|
*
Paul
Wahl
|
|
Director
|
|
May 5, 2010
|
|
|
|
|
|
|
|
* By:
|
|
/s/ William
G. Sorenson
Attorney-in-Fact
|
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|
|
|
II-7
INDEX TO
EXHIBITS
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
1
|
.1*
|
|
Form of Underwriting Agreement
|
|
3
|
.1**
|
|
Restated Certificate of Incorporation of Registrant, as amended
on various dates
|
|
3
|
.2**
|
|
Form of Restated Certificate of Incorporation to be effective
upon closing
|
|
3
|
.3**
|
|
Amended and Restated Bylaws of the Registrant
|
|
3
|
.4**
|
|
Amended and Restated Bylaws of the Registrant to be effective
upon closing
|
|
4
|
.1
|
|
Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4
|
|
4
|
.2*
|
|
Form of Registrants Common Stock Certificate
|
|
4
|
.3**
|
|
Investors Rights Agreement, dated November 17, 2004
and as amended on various dates, by and among the Registrant,
certain stockholders and the investors listed on the signature
pages thereto
|
|
4
|
.4**
|
|
First Refusal and Co-Sale Agreement, dated November 17,
2004 and as amended on various dates, by and among the
Registrant, certain stockholders and the investors listed on the
signature pages thereto
|
|
4
|
.5**
|
|
Voting Agreement, dated November 17, 2004 and as amended on
various dates, by and among the Registrant, certain stockholders
and the investors listed on the signature pages thereto
|
|
4
|
.6**
|
|
First Amendment to Voting Agreement, dated October 10,
2007, by and among the Registrant, QlikTech International AB and
certain stockholders
|
|
5
|
.1*
|
|
Opinion of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP
|
|
10
|
.1*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and Lars Björk
|
|
10
|
.2*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and John Gavin, Jr.
|
|
10
|
.3*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and Bruce Golden
|
|
10
|
.4*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and Erel Margalit
|
|
10
|
.5*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and Alexander Ott
|
|
10
|
.6*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and Paul Wahl
|
|
10
|
.7*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and William G. Sorenson
|
|
10
|
.8*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and Leslie Bonney
|
|
10
|
.9*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and Anthony Deighton
|
|
10
|
.10*
|
|
Indemnification Agreement,
dated ,
2010, between the Registrant and Douglas Laird
|
|
10
|
.11*
|
|
Amended and Restated Employment Agreement, dated
April , 2010, by and between the Registrant and
Lars Björk
|
|
10
|
.12*
|
|
Amended and Restated Employment Agreement, dated
April , 2010, by and between the Registrant and
William Sorenson
|
|
10
|
.13*
|
|
Employment Agreement, dated May 2, 2005, by and between the
Registrant and Leslie Bonney
|
|
10
|
.14*
|
|
Amended and Restated Employment Offer Letter, dated
April , 2010, by and between the Registrant and
Anthony Deighton
|
|
10
|
.15*
|
|
Amended and Restated Employment Offer Letter, dated
April , 2010, by and between the Registrant and
Douglas Laird
|
|
10
|
.16**
|
|
Amended and Restated Consulting Agreement, dated
September 1, 2005, by and between the Registrant and Paul
Wahl
|
|
10
|
.17**
|
|
Consulting Agreement, dated October 1, 2004, by and between
the Registrant and Alexander Ott
|
|
10
|
.18**
|
|
2004 Omnibus Stock Option and Award Plan
|
|
10
|
.19**
|
|
2007 Omnibus Stock Option and Award Plan
|
|
10
|
.20**
|
|
2010 Equity Incentive Plan (to be effective upon closing of the
offering)
|
|
10
|
.21**
|
|
Form of Notice of Stock Option Grant and Stock Option Agreement
under 2010 Equity Incentive Plan
|
|
10
|
.22**
|
|
Translation of Agreement by and between the Registrant, QlikTech
International AB and Svenska Handelsbanken AB dated as of
July 11, 2008
|
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
10
|
.23**
|
|
Translation of Amendment Agreement by and between the
Registrant, QlikTech International AB and Svenska
Handelsbanken AB dated as of July 13, 2009
|
|
10
|
.24**
|
|
Omnibus Stock Option and Award Plan Non-Qualified Stock Option
Award Agreement granted to Alexander Ott under the 2004 Omnibus
Stock Option and Award Plan
|
|
10
|
.25**
|
|
Omnibus Stock Option and Award Plan Non-Qualified Stock Option
Award Agreements granted to Anthony Deighton under the 2004
Omnibus Stock Option and Award Plan and under the 2007 Omnibus
Stock Option and Award Plan, and Side letter, dated November
2006, between the Registrant and Anthony Deighton
|
|
10
|
.26**
|
|
Omnibus Stock Option and Award Plan Non-Qualified Stock Option
Award Agreement granted to Douglas Laird under the 2007 Omnibus
Stock Option and Award Plan
|
|
10
|
.27**
|
|
Omnibus Stock Option and Award Plan Non-Qualified Stock Option
Award Agreements granted to Lars Björk under the 2004
Omnibus Stock Option and Award Plan and the 2007 Omnibus Stock
Option and Award Plan
|
|
10
|
.28**
|
|
2004, 2005 and 2009 Omnibus Stock Option and Award Plans and
Sub-Plans
for the UK Agreements granted to Leslie Bonney
|
|
10
|
.29**
|
|
Omnibus Stock Option and Award Plan Non-Qualified Stock Option
Award Agreements granted to Paul Wahl under the 2004
Omnibus Stock Option and Award Plan and 2007 Omnibus Stock
Option and Award Plan
|
|
10
|
.30**
|
|
Omnibus Stock Option and Award Plan Non-Qualified Stock Option
Award Agreement granted to William Sorenson under the 2007
Omnibus Stock Option and Award Plan
|
|
10
|
.31*
|
|
Omnibus Stock Option and Award Plan Non-Qualified Stock Option
Award Agreement granted to John Gavin, Jr. under the 2007
Omnibus Stock Option and Award Plan
|
|
10
|
.32**
|
|
Term Loan Facility Agreement, dated June 16, 2008, between
the Registrant and Stiftelsen Industrifonden
|
|
10
|
.33**
|
|
Warrant to Purchase Shares of Preferred Stock, dated
June 16, 2008, issued by the Registrant to Stiftelsen
Industrifonden
|
|
10
|
.34**
|
|
Share Pledge Agreement, dated June 16, 2008, between the
Registrant and Stiftelsen Industrifonden
|
|
10
|
.35**
|
|
Stock Purchase Agreement, dated November 17, 2004, between
the Registrant, QlikTech International AB and the Investors (as
defined therein)
|
|
10
|
.36**
|
|
Lease, dated November 15, 2005, between the Registrant and
Radnor Properties-SDC, L.P.
|
|
10
|
.37**
|
|
First Amendment to Lease, dated March 13, 2009, between the
Registrant and Radnor Properties-SDC, L.P.
|
|
10
|
.38
|
|
Translation of Hyreskontrakt for local, dated
May 22, 2007, between QlikTech International AB and Ideon AB
|
|
10
|
.39
|
|
Reference is made to Exhibits 4.3, 4.4, 4.5 and 4.6
|
|
21
|
.1**
|
|
List of subsidiaries of the Registrant (including jurisdiction
of organization and names under which subsidiaries do business)
|
|
23
|
.1
|
|
Consent of Ernst & Young LLP, Independent Registered
Public Accounting Firm
|
|
23
|
.2*
|
|
Consent of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP (contained in
Exhibit 5.1)
|
|
24
|
.1**
|
|
Powers of Attorney (included in the signature pages to the
registration statement)
|
|
|
|
|
|
Compensation arrangement
|
*
|
|
To be filed by amendment
|