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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Epocrates, Inc. (MM) | NASDAQ:EPOC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 11.73 | 0 | 01:00:00 |
ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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94-3326769
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.001 per share
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The NASDAQ Stock Market LLC
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
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Name
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Age
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Position
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Andrew J. Hurd
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49
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President, Chief Executive Officer and Interim Chief Financial Officer
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Matthew A. Kaminer
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39
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General Counsel and Secretary
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Heather A. Gervais
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42
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Senior Vice President, Commercial Operations
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Adam E. Budish
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52
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Senior Vice President, Sales
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David Ward
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52
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Executive Vice President, Business Development
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Amy Ferretti
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54
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Senior Vice President, Marketing
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•
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our ability to provide current, relevant and reliable healthcare content, drug and clinical reference tools, formulary hosting and other services that meet the needs of healthcare professionals, including physicians;
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•
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our ability to provide reliable applications and to enhance the functionality, availability, performance and features of our existing and future services to meet the evolving requirements and expectations of our existing and future members;
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•
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deterioration of our reputation and brand for any reason, including member concerns with our privacy practices or our relationships with the healthcare industry; and
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•
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the ability of the developers of mobile operating systems and mobile devices with which our products are compatible to remain competitive in the marketplace and to be adopted into medical practice and practice workflow.
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•
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hire and retain qualified physician and pharmacist editors and authors;
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•
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license accurate and relevant content from third parties;
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•
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contract with health plans and insurers to host formulary information; and
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•
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monitor and respond to changes in member interest in specific topics.
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•
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lost or delayed market acceptance and sales of our applications and services;
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•
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loss of members and clients;
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•
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inability to attract new members and clients;
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•
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product liability or breach of contract suits against us;
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•
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diversion of development resources;
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•
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injury to our brand and reputation; and
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•
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increased maintenance and warranty costs.
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•
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add additional sales and marketing personnel in various locations;
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•
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control expenses;
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•
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maintain and enhance our information technology support for enterprise resource planning, accounting and design engineering by adapting and expanding our systems and tool capabilities;
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•
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recruit, hire, train and manage additional qualified people; and
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•
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manage operations in multiple locations and time zones.
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•
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demand for and market acceptance of our services;
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•
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factors relating to pharmaceutical company budget cycles and other factors that may affect the timing of promotional campaigns for specific products or demand for our services by our clients;
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•
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changes in pharmaceutical company demand as a result of delays or changes in product approvals, changes in marketing strategies, modifications of client budgets and similar matters;
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•
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the length of sales cycles and fulfillment periods of our services to pharmaceutical companies and other segments of the healthcare industry;
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•
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expansion of marketing and support operations;
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•
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the timing of new product introductions and product enhancements by us or our competitors; and
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•
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the cost of being a public company.
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•
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variations in the marketing budgets allocated for the types of services we offer;
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•
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the timing of federal Food and Drug Administration, or FDA, approval for new pharmaceutical products or for new approved uses for existing products;
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•
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regulatory concerns related to the marketing of pharmaceutical products; and
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•
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factors that may affect the timing of promotional campaigns for specific products.
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•
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government regulation or private initiatives that affect the manner in which healthcare providers interact with patients, pharmaceutical companies, payors or other healthcare industry participants, including changes in pricing or means of delivery of healthcare products and services;
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•
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consolidation of healthcare companies;
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•
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reductions in governmental funding for healthcare; and
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•
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adverse changes in business or economic conditions affecting healthcare payors or providers, the pharmaceutical industry or other healthcare companies.
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•
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a decrease in the number of, or the market exclusivity available to, new drugs coming to market;
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•
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decreases in marketing expenditures by pharmaceutical companies as a result of governmental regulation or private initiatives that discourage or prohibit advertising or sponsorship activities by pharmaceutical companies;
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•
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state or federal legislation requiring the disclosure of, or otherwise regulating, honorarium payments to physicians for participation in market research activities; and
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•
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changes in the design of health insurance plans.
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•
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unexpected changes in regulatory requirements, taxes, trade laws, tariffs, export quotas, custom duties or other trade restrictions;
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exposure to a broader, more diverse set of regulations;
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•
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more stringent regulations relating to data privacy and the unauthorized use of, or access to, commercial and personal information, particularly in Europe and Canada;
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changes in a specific country's or region's political or economic conditions;
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•
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unfavorable currency exchange rates;
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•
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exposure to competitors who are more familiar with local markets;
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•
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limited or unfavorable intellectual property protection; and
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•
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restrictions on repatriation of earnings.
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•
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quarterly variations in our operating results, or the operating results of our competitors;
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•
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the timing of revenue recognition;
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•
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the volume and timing of orders from our clients and members;
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•
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the announcement of new products or service enhancements by us or our competitors;
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•
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announcements related to litigation;
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changes in earnings estimates, investors' perceptions, recommendations by securities analysts or our failure to achieve analysts' earnings estimates;
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the depth and liquidity of the market for our common stock;
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changing legal or regulatory requirements;
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developments in our industry or the medical or pharmaceutical industries generally; and
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general market conditions and other factors unrelated to our operating performance or the operating performance of our competitors.
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our Board of Directors will be authorized, without prior stockholder approval, to create and issue preferred stock, commonly referred to as "blank check" preferred stock, with rights senior to those of common stock;
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advance notice will be required of stockholders to nominate candidates to serve on our Board of Directors or to propose matters that can be acted upon at stockholder meetings;
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stockholder action by written consent will be prohibited;
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special meetings of the stockholders will be permitted to be called only by a majority of our Board of Directors, the chairman of our Board of Directors or our Chief Executive Officer;
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stockholders will not be permitted to cumulate their votes for the election of directors;
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newly created directorships resulting from an increase in the authorized number of directors or vacancies on our Board of Directors will be filled only by majority vote of the remaining directors, even though less than a quorum is then in office;
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our Board of Directors will be expressly authorized to modify, alter or repeal our amended and restated bylaws; and
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stockholders will be permitted to amend our amended and restated bylaws only upon receiving at least two-thirds of the votes entitled to be cast by holders of all outstanding shares then entitled to vote generally in the election of directors, voting together as a single class.
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the diversion of management and employee attention and the unavoidable disruption to our relationships with customers and vendors may detract from our ability to grow revenues and minimize costs;
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we have incurred and will continue to incur significant expenses related to the merger;
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the merger agreement restricts us from engaging in business activities outside of our ordinary course of business without athenahealth's permission and, if we determine that doing so would be advantageous and athenahealth does not consent, we would not be able to pursue those advantageous activities; and
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•
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we may be unable to respond effectively to competitive pressures, industry developments and future opportunities.
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High
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Low
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|||||||
Year Ended December 31, 2012:
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||
1
st
Quarter
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$
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10.73
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$
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7.20
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2
nd
Quarter
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8.85
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6.90
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3
rd
Quarter
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11.97
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6.93
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4
th
Quarter
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11.77
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8.38
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High
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Low
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|||||
Year Ended December 31, 2011:
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1
st
Quarter
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$
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30.24
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$
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19.02
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2
nd
Quarter
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25.14
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15.90
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3
rd
Quarter
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19.82
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7.51
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4
th
Quarter
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9.13
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7.55
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(1)
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This Section is not "soliciting material," is not deemed "filed" with the SEC and is not to be incorporated by reference in any filing of iPass under the 1933 Act or the 1934 Act whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
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•
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For the
year
ended
December 31, 2012
, we recorded total revenues of
$111.1 million
, a decrease of approximately
$2.2 million
, or
2%
, from the
year
ended
December 31, 2011
. The decrease was primarily due to an unusually high number of unused pharmaceutical license code expirations for which we recognized revenue in the
year
ended
December 31, 2011
, as well as lower iTunes App Store
SM
sales for the
year
ended
December 31, 2012
.
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•
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Net loss was
$3.4 million
for the
year
ended
December 31, 2012
, versus net loss of
$3.6 million
for the
year
ended
December 31, 2011
. Results for 2012 include $1.5 million of proceeds from the sale of the EHR component technology for the
year
ended
December 31, 2012
.
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•
|
Net loss per share was
$0.14
for the
year
ended
December 31, 2012
, compared to net loss per share of
$0.17
for the
year
ended
December 31, 2011
.
|
•
|
Loss from continuing operations was
$1.8 million
for the
year
ended
December 31, 2012
versus income from continuing operations of
$5.3 million
for the
year
ended
December 31, 2011
. Income from continuing operations for the
year
ended
December 31, 2011
includes a $6.4 million gain on settlement as a result of an agreement entered into with the sellers of MedCafe, Inc. during June 2011. Excluding the gain on settlement and change in fair value of contingent consideration, results for both the
year
ended
December 31, 2012
and 2011 would have been comparable.
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•
|
Loss from continuing operations per share was
$0.07
for the
year
ended
December 31, 2012
, compared to income from continuing operations of
$0.23
per share for the
year
ended
December 31, 2011
.
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•
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Earnings before interest, taxes, non-cash and other items ("adjusted EBITDA"), as defined in the GAAP to non-GAAP reconciliation provided in "Non-GAAP Financial Measures," for the
year
ended
December 31, 2012
, was $13.0 million compared to $20.2 million for the
year
ended
December 31, 2011
, or a 35% decrease from the prior year. The decrease in adjusted EBITDA for the
year
ended
December 31, 2012
, was primarily attributable to increased operating expenses as well as decreased revenues coupled with an increase in cost of revenues compared to the
year
ended
December 31, 2011
.
|
•
|
Total cash, cash equivalents and short-term investments declined by
8%
to
$78.2 million
at
December 31, 2012
, compared to
$85.2 million
at
December 31, 2011
.
|
•
|
there is persuasive evidence that an arrangement exists in the form of a written contract, amendments to that contract, or purchase orders from a third party;
|
•
|
delivery has occurred or services have been rendered;
|
•
|
the price is fixed or determinable after evaluating the risk of concession; and
|
•
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collectability is probable and/or reasonably assured based on customer creditworthiness and past history of collection.
|
|
Twelve Months Ended
December 31, |
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Stock-based compensation expense
|
$
|
4,317
|
|
|
$
|
7,805
|
|
|
$
|
5,962
|
|
Stock-based compensation associated with outstanding repriced options
|
17
|
|
|
(463
|
)
|
|
394
|
|
|||
Total stock-based compensation expense
|
$
|
4,334
|
|
|
$
|
7,342
|
|
|
$
|
6,356
|
|
|
Twelve Months Ended
December 31, |
|||||||||||||||||||
|
2012
|
|
% Revenue
|
|
2011
|
|
% Revenue
|
|
2010
|
|
% Revenue
|
|||||||||
Total revenues, net
|
$
|
111,129
|
|
|
100.0
|
%
|
|
$
|
113,321
|
|
|
100.0
|
%
|
|
$
|
103,988
|
|
|
100.0
|
%
|
Total cost of revenues
|
43,689
|
|
|
39.3
|
%
|
|
40,192
|
|
|
35.5
|
%
|
|
31,730
|
|
|
30.5
|
%
|
|||
Gross profit
|
67,440
|
|
|
60.7
|
%
|
|
73,129
|
|
|
64.5
|
%
|
|
72,258
|
|
|
69.5
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
—
|
%
|
|
|
|
—
|
%
|
|||||
Sales and marketing
|
27,895
|
|
|
25.1
|
%
|
|
26,602
|
|
|
23.5
|
%
|
|
27,328
|
|
|
26.3
|
%
|
|||
Research and development
|
20,698
|
|
|
18.6
|
%
|
|
21,087
|
|
|
18.6
|
%
|
|
15,704
|
|
|
15.1
|
%
|
|||
General and administrative
|
18,949
|
|
|
17.1
|
%
|
|
22,700
|
|
|
20.0
|
%
|
|
15,729
|
|
|
15.1
|
%
|
|||
Facilities exit costs
|
—
|
|
|
—
|
%
|
|
618
|
|
|
0.5
|
%
|
|
—
|
|
|
—
|
%
|
|||
Gain on settlement and change in fair value of contingent consideration
|
—
|
|
|
—
|
%
|
|
(5,933
|
)
|
|
(5.2
|
)%
|
|
(1,946
|
)
|
|
(1.9
|
)%
|
|||
Total operating expenses
|
67,542
|
|
|
60.8
|
%
|
|
65,074
|
|
|
57.4
|
%
|
|
56,815
|
|
|
54.6
|
%
|
|||
(Loss) income from operations
|
(102
|
)
|
|
(0.1
|
)%
|
|
8,055
|
|
|
7.1
|
%
|
|
15,443
|
|
|
14.9
|
%
|
|||
Interest income
|
35
|
|
|
—
|
%
|
|
75
|
|
|
0.1
|
%
|
|
93
|
|
|
0.1
|
%
|
|||
Other income, net
|
13
|
|
|
—
|
%
|
|
183
|
|
|
0.2
|
%
|
|
1,475
|
|
|
1.4
|
%
|
|||
Income before income taxes
|
(54
|
)
|
|
—
|
%
|
|
8,313
|
|
|
7.3
|
%
|
|
17,011
|
|
|
16.4
|
%
|
|||
Provision for income taxes
|
(1,699
|
)
|
|
(1.5
|
)%
|
|
(3,060
|
)
|
|
(2.7
|
)%
|
|
(8,815
|
)
|
|
(8.5
|
)%
|
|||
(Loss) income from continuing operations
|
(1,753
|
)
|
|
(1.6
|
)%
|
|
5,253
|
|
|
4.6
|
%
|
|
8,196
|
|
|
7.9
|
%
|
|||
Gain (loss) from discontinued operations, net of tax
|
(1,666
|
)
|
|
(1.5
|
)%
|
|
(8,826
|
)
|
|
(7.8
|
)%
|
|
(4,393
|
)
|
|
(4.2
|
)%
|
|||
Net (loss) income
|
$
|
(3,419
|
)
|
|
(3.1
|
)%
|
|
$
|
(3,573
|
)
|
|
(3.2
|
)%
|
|
$
|
3,803
|
|
|
3.7
|
%
|
|
Twelve Months Ended
December 31, |
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Subscriptions
|
$
|
19,033
|
|
|
$
|
22,495
|
|
|
$
|
24,683
|
|
Interactive Services
|
92,096
|
|
|
90,826
|
|
|
79,305
|
|
|||
|
$
|
111,129
|
|
|
$
|
113,321
|
|
|
$
|
103,988
|
|
|
Twelve Months Ended
December 31, |
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Subscriptions
|
$
|
7,393
|
|
|
$
|
7,670
|
|
|
$
|
6,516
|
|
Interactive Services
|
36,296
|
|
|
32,522
|
|
|
25,214
|
|
|||
|
$
|
43,689
|
|
|
$
|
40,192
|
|
|
$
|
31,730
|
|
•
|
EBITDA is widely used by investors to measure a company’s operating performance without regard to such items as non-recurring items, interest (income) expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired; and
|
•
|
investors commonly adjust EBITDA information to eliminate the effect of stock-based compensation expenses and other charges, which can vary widely from company to company and impair comparability.
|
•
|
as a measure of operating performance to assist in comparing performance from period to period on a consistent basis;
|
•
|
as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations;
|
•
|
in communications with the Board of Directors, stockholders, analysts and investors concerning our financial performance; and
|
•
|
as a significant performance measurement included in our bonus plan.
|
|
Twelve Months Ended
December 31, |
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Net (loss) income, as reported
|
$
|
(3,419
|
)
|
|
$
|
(3,573
|
)
|
|
$
|
3,803
|
|
Loss from discontinued operations, net of tax
|
(1,666
|
)
|
|
(8,826
|
)
|
|
(4,393
|
)
|
|||
(Loss) income from continuing operations
|
$
|
(1,753
|
)
|
|
$
|
5,253
|
|
|
$
|
8,196
|
|
Add: (Income) expenses unrelated to core business activities
|
|
|
|
|
|
|
|
||||
Interest income
|
(35
|
)
|
|
(75
|
)
|
|
(93
|
)
|
|||
Other income, net
|
(13
|
)
|
|
(183
|
)
|
|
(1,475
|
)
|
|||
Provision for income taxes
|
1,699
|
|
|
3,060
|
|
|
8,815
|
|
|||
Add: Non-recurring and non-cash charges (income)
|
|
|
|
|
|
||||||
Depreciation and amortization expense (including intangible assets) related to core business
|
7,968
|
|
|
7,913
|
|
|
4,385
|
|
|||
Stock-based compensation
|
4,260
|
|
|
7,342
|
|
|
6,356
|
|
|||
Gain on settlement and change in fair value of contingent consideration
(1)
|
—
|
|
|
(5,933
|
)
|
|
(1,946
|
)
|
|||
Other
(2)
|
922
|
|
|
2,811
|
|
|
694
|
|
|||
Adjusted EBITDA
|
$
|
13,048
|
|
|
$
|
20,188
|
|
|
$
|
24,932
|
|
(1)
|
Includes a $6.4 million gain recognized in the second quarter of 2011 related to the settlement of the contingent consideration liability with the sellers of MedCafe, Inc., a company we acquired in 2010.
|
(2)
|
For the year ended December 31, 2012, represents approximately $0.7 million for severance payments and approximately $0.3 million for fees incurred as a result of the potential merger agreement with athenahealth. For the year ended December 31, 2011, represents $1.0 million in legal expenses associated with the SEC subpoena, $1.0 million in severance payments,$0.6 million in facilities exit costs and a $0.2 million rent refund. For the year ended December 31, 2010, the entire amount represents severance payments.
|
|
December 31,
2012 |
|
December 31,
2011 |
||||
Assets
|
|
|
|
|
|||
Current assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
58,944
|
|
|
$
|
75,326
|
|
Short-term investments
|
19,301
|
|
|
9,897
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $142 and $85, respectively
|
26,568
|
|
|
22,748
|
|
||
Deferred tax asset
|
3,687
|
|
|
7,390
|
|
||
Prepaid expenses and other current assets
|
3,252
|
|
|
3,218
|
|
||
Total current assets
|
111,752
|
|
|
118,579
|
|
||
Property and equipment, net
|
7,853
|
|
|
7,283
|
|
||
Deferred tax asset
|
2,486
|
|
|
1,280
|
|
||
Goodwill
|
17,959
|
|
|
17,959
|
|
||
Other intangible assets, net
|
2,768
|
|
|
6,771
|
|
||
Other assets
|
358
|
|
|
352
|
|
||
Total assets
|
$
|
143,176
|
|
|
$
|
152,224
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
3,436
|
|
|
$
|
3,282
|
|
Deferred revenue
|
38,045
|
|
|
46,429
|
|
||
Other accrued liabilities
|
9,521
|
|
|
9,600
|
|
||
Total current liabilities
|
51,002
|
|
|
59,311
|
|
||
Deferred revenue, less current portion
|
5,885
|
|
|
8,088
|
|
||
Other liabilities
|
1,330
|
|
|
1,893
|
|
||
Total liabilities
|
58,217
|
|
|
69,292
|
|
||
Commitments and contingencies (Note 10)
|
—
|
|
|
—
|
|
||
Stockholders’ equity
|
|
|
|
|
|
||
Preferred stock: $0.001 par value; 10,000 shares authorized; no shares issued and outstanding at December 31, 2012 and 2011, respectively
|
—
|
|
|
—
|
|
||
Common stock: $0.001 par value; 100,000 shares authorized; 24,902 and 24,370 shares issued and outstanding at December 31, 2012 and 2011, respectively
|
25
|
|
|
24
|
|
||
Additional paid-in capital
|
134,682
|
|
|
129,238
|
|
||
Accumulated other comprehensive loss
|
(1
|
)
|
|
(2
|
)
|
||
Accumulated deficit
|
(49,747
|
)
|
|
(46,328
|
)
|
||
Total stockholders’ equity
|
84,959
|
|
|
82,932
|
|
||
Total liabilities and stockholders’ equity
|
$
|
143,176
|
|
|
$
|
152,224
|
|
|
Years Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Subscription revenues
|
$
|
19,033
|
|
|
$
|
22,495
|
|
|
$
|
24,683
|
|
Interactive services revenues
|
92,096
|
|
|
90,826
|
|
|
79,305
|
|
|||
Total revenues, net
|
111,129
|
|
|
113,321
|
|
|
103,988
|
|
|||
|
|
|
|
|
|
||||||
Cost of subscription revenues
|
7,393
|
|
|
7,670
|
|
|
6,516
|
|
|||
Cost of interactive services revenues
|
36,296
|
|
|
32,522
|
|
|
25,214
|
|
|||
Total cost of revenues
|
43,689
|
|
|
40,192
|
|
|
31,730
|
|
|||
Gross profit
|
67,440
|
|
|
73,129
|
|
|
72,258
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|||||
Sales and marketing
|
27,895
|
|
|
26,602
|
|
|
27,328
|
|
|||
Research and development
|
20,698
|
|
|
21,087
|
|
|
15,704
|
|
|||
General and administrative
|
18,949
|
|
|
22,700
|
|
|
15,729
|
|
|||
Facilities exit costs
|
—
|
|
|
618
|
|
|
—
|
|
|||
Gain on settlement and change in fair value of contingent consideration
|
—
|
|
|
(5,933
|
)
|
|
(1,946
|
)
|
|||
Total operating expenses
|
67,542
|
|
|
65,074
|
|
|
56,815
|
|
|||
(Loss) income from operations
|
(102
|
)
|
|
8,055
|
|
|
15,443
|
|
|||
Interest income
|
35
|
|
|
75
|
|
|
93
|
|
|||
Other income, net
|
13
|
|
|
183
|
|
|
1,475
|
|
|||
Income before income taxes
|
(54
|
)
|
|
8,313
|
|
|
17,011
|
|
|||
Provision for income taxes
|
(1,699
|
)
|
|
(3,060
|
)
|
|
(8,815
|
)
|
|||
(Loss) income from continuing operations
|
(1,753
|
)
|
|
5,253
|
|
|
8,196
|
|
|||
Loss from discontinued operations, net of tax (includes 2012 proceeds from sale of component technology of $1.5 million)
|
(1,666
|
)
|
|
(8,826
|
)
|
|
(4,393
|
)
|
|||
Net (loss) income
|
$
|
(3,419
|
)
|
|
$
|
(3,573
|
)
|
|
$
|
3,803
|
|
Unrealized gains (losses) on available-for-sale securities, net
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||
Comprehensive (loss) income
|
$
|
(3,418
|
)
|
|
$
|
(3,574
|
)
|
|
$
|
3,803
|
|
|
|
|
|
|
|
||||||
Net (loss) income attributable to common stockholders – basic
|
$
|
(3,419
|
)
|
|
$
|
(3,867
|
)
|
|
$
|
113
|
|
Net (loss) income attributable to common stockholders – diluted
|
$
|
(3,419
|
)
|
|
$
|
(3,867
|
)
|
|
$
|
126
|
|
|
|
|
|
|
|
||||||
Net (loss) income per share – basic
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(0.07
|
)
|
|
$
|
0.23
|
|
|
$
|
0.59
|
|
Discontinued operations, net of tax
|
(0.07
|
)
|
|
(0.40
|
)
|
|
(0.58
|
)
|
|||
Net (loss) income per share attributable to common stockholders
|
$
|
(0.14
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
0.01
|
|
|
|
|
|
|
|
||||||
Net (loss) income per share – diluted
|
|
|
|
|
|
|
|||||
Continuing operations
|
$
|
(0.07
|
)
|
|
$
|
0.23
|
|
|
$
|
0.59
|
|
Discontinued operations, net of tax
|
(0.07
|
)
|
|
(0.40
|
)
|
|
(0.58
|
)
|
|||
Net (loss) income per share attributable to common stockholders
|
$
|
(0.14
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
0.01
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding – basic
|
24,722
|
|
|
22,297
|
|
|
7,558
|
|
|||
Weighted average common shares outstanding – diluted
|
24,722
|
|
|
23,875
|
|
|
9,145
|
|
|
Mandatorily Redeemable Convertible Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Treasury Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Accumulated Deficit
|
|
Total Stockholders' Equity (Deficit)
|
|
Comprehensive Income (Loss)
|
||||||||||||||||||
Balance at January 1, 2010
|
13,142
|
|
|
$
|
70,502
|
|
|
7,509
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
6,291
|
|
|
$
|
(1
|
)
|
|
$
|
(43,962
|
)
|
|
$
|
(37,664
|
)
|
|
|
|
|
Issuance of common stock upon exercise of stock options
|
—
|
|
|
—
|
|
|
663
|
|
|
—
|
|
|
—
|
|
|
2,680
|
|
|
—
|
|
|
—
|
|
|
2,680
|
|
|
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,962
|
|
|
—
|
|
|
—
|
|
|
5,962
|
|
|
|
|
||||||||
Stock compensation associated with outstanding repriced options
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
394
|
|
|
—
|
|
|
—
|
|
|
394
|
|
|
|
|
||||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(120
|
)
|
|
—
|
|
|
(3,491
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,491
|
)
|
|
|
|
||||||||
Retirement of treasury stock
|
—
|
|
|
—
|
|
|
(250
|
)
|
|
—
|
|
|
3,491
|
|
|
(895
|
)
|
|
—
|
|
|
(2,596
|
)
|
|
—
|
|
|
|
|
||||||||
Accrued dividend on Series B mandatorily redeemable convertible preferred stock
|
—
|
|
|
2,840
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,840
|
)
|
|
—
|
|
|
—
|
|
|
(2,840
|
)
|
|
|
|
||||||||
Excess tax benefit from stock-based compensation awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
319
|
|
|
—
|
|
|
—
|
|
|
319
|
|
|
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,803
|
|
|
3,803
|
|
|
3,803
|
|
||||||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,803
|
|
||||||||
Balance at December 31, 2010
|
13,142
|
|
|
$
|
73,342
|
|
|
7,802
|
|
|
$
|
8
|
|
|
—
|
|
|
$
|
11,911
|
|
|
$
|
(1
|
)
|
|
$
|
(42,755
|
)
|
|
$
|
(30,837
|
)
|
|
|
|
||
Issuance of common stock in an initial public offering (“IPO”), net of discounts and issuance costs
|
—
|
|
|
—
|
|
|
4,378
|
|
|
4
|
|
|
—
|
|
|
62,159
|
|
|
—
|
|
|
—
|
|
|
62,163
|
|
|
|
|
||||||||
Accrued dividend on Series B mandatorily redeemable convertible preferred stock
|
—
|
|
|
255
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(255
|
)
|
|
—
|
|
|
—
|
|
|
(255
|
)
|
|
|
|
||||||||
Payment of accrued dividends on Series B mandatorily redeemable convertible preferred stock
|
—
|
|
|
(29,586
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
||||||||
Conversion of mandatorily redeemable convertible preferred stock to common stock in conjunction with the IPO
|
(13,142
|
)
|
|
(44,011
|
)
|
|
11,089
|
|
|
11
|
|
|
—
|
|
|
44,000
|
|
|
—
|
|
|
—
|
|
|
44,011
|
|
|
|
|
||||||||
Conversion of preferred stock warrant to common stock warrant
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|
|
|
||||||||
Issuance of common stock upon exercise of stock options
|
—
|
|
|
—
|
|
|
1,084
|
|
|
1
|
|
|
—
|
|
|
3,483
|
|
|
—
|
|
|
—
|
|
|
3,484
|
|
|
|
|
Issuance of common stock upon release of restricted stock units ("RSUs")
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,935
|
|
|
—
|
|
|
—
|
|
|
7,935
|
|
|
|
|
||||||||
Stock compensation associated with outstanding repriced options
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(463
|
)
|
|
—
|
|
|
—
|
|
|
(463
|
)
|
|
|
|
||||||||
Unrealized loss on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||||
Excess tax benefit from stock-based compensation awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
328
|
|
|
—
|
|
|
—
|
|
|
328
|
|
|
|
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,573
|
)
|
|
(3,573
|
)
|
|
(3,573
|
)
|
||||||||
Comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
(3,574
|
)
|
|||||||
Balance at December 31, 2011
|
—
|
|
|
$
|
—
|
|
|
24,370
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
129,238
|
|
|
$
|
(2
|
)
|
|
$
|
(46,328
|
)
|
|
$
|
82,932
|
|
|
|
|
|
Issuance of common stock upon exercise of stock options
|
—
|
|
|
—
|
|
|
487
|
|
|
1
|
|
|
—
|
|
|
1,710
|
|
|
—
|
|
|
—
|
|
|
1,711
|
|
|
|
|
||||||||
Issuance of common stock upon release of RSUs
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,402
|
|
|
—
|
|
|
—
|
|
|
4,402
|
|
|
|
|||||||||
Stock compensation associated with outstanding repriced options
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
|
|||||||||
Unrealized loss on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||||
Excess tax benefit from stock-based compensation awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(685
|
)
|
|
—
|
|
|
—
|
|
|
(685
|
)
|
|
|
|||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,419
|
)
|
|
(3,419
|
)
|
|
(3,419
|
)
|
||||||||
Comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
(3,418
|
)
|
|||||||
Balance at December 31, 2012
|
—
|
|
|
$
|
—
|
|
|
24,902
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
134,682
|
|
|
$
|
(1
|
)
|
|
$
|
(49,747
|
)
|
|
$
|
84,959
|
|
|
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||
Net (loss) income
|
$
|
(3,419
|
)
|
|
$
|
(3,573
|
)
|
|
$
|
3,803
|
|
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
|
|||||
Stock-based compensation
|
4,334
|
|
|
7,342
|
|
|
6,356
|
|
|||
Depreciation and amortization
|
3,965
|
|
|
4,557
|
|
|
3,083
|
|
|||
Amortization of intangible assets
|
4,003
|
|
|
4,181
|
|
|
1,319
|
|
|||
Loss on write-off of property and equipment
|
220
|
|
|
187
|
|
|
—
|
|
|||
Change in carrying value of preferred stock liability
|
—
|
|
|
—
|
|
|
33
|
|
|||
Allowance for doubtful accounts and sales returns reserve
|
57
|
|
|
(56
|
)
|
|
119
|
|
|||
Facilities exit costs
|
—
|
|
|
618
|
|
|
—
|
|
|||
Impairment of long-lived assets and goodwill
|
—
|
|
|
8,501
|
|
|
—
|
|
|||
Excess tax benefit from stock based awards
|
(422
|
)
|
|
(328
|
)
|
|
(319
|
)
|
|||
Gain on settlement and change in fair value of contingent consideration
|
—
|
|
|
(8,145
|
)
|
|
(1,034
|
)
|
|||
Gain on sale-leaseback of building
|
—
|
|
|
—
|
|
|
(1,689
|
)
|
|||
Changes in assets and liabilities, net of effect of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(3,877
|
)
|
|
(1,591
|
)
|
|
(3,911
|
)
|
|||
Deferred tax asset, current and non-current
|
1,812
|
|
|
(2,920
|
)
|
|
4,495
|
|
|||
Prepaid expenses and other assets
|
(40
|
)
|
|
797
|
|
|
(1,165
|
)
|
|||
Accounts payable
|
130
|
|
|
27
|
|
|
1,210
|
|
|||
Deferred revenue
|
(10,587
|
)
|
|
(379
|
)
|
|
(7,464
|
)
|
|||
Other accrued liabilities and other payables
|
(772
|
)
|
|
(399
|
)
|
|
4,276
|
|
|||
Net cash (used in) provided by operating activities
|
(4,596
|
)
|
|
8,819
|
|
|
9,112
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|||||
Purchase of property and equipment
|
(4,516
|
)
|
|
(10,064
|
)
|
|
(4,657
|
)
|
|||
Business acquisitions
|
—
|
|
|
—
|
|
|
(14,600
|
)
|
|||
Purchase of short-term investments
|
(20,083
|
)
|
|
(24,849
|
)
|
|
(27,793
|
)
|
|||
Sale of short-term investments
|
—
|
|
|
8,590
|
|
|
1,797
|
|
|||
Decrease in restricted cash
|
—
|
|
|
500
|
|
|
—
|
|
|||
Maturity of short-term investments
|
10,680
|
|
|
24,800
|
|
|
11,725
|
|
|||
Net cash used in investing activities
|
(13,919
|
)
|
|
(1,023
|
)
|
|
(33,528
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|||||
Net cash proceeds from issuance of common stock
|
—
|
|
|
64,188
|
|
|
—
|
|
|||
Payment and settlement of contingent consideration
|
—
|
|
|
(6,871
|
)
|
|
—
|
|
|||
Acquisition of common stock
|
—
|
|
|
—
|
|
|
(3,491
|
)
|
|||
Payment of accrued dividends on Series B mandatorily redeemable convertible preferred stock
|
—
|
|
|
(29,586
|
)
|
|
—
|
|
|||
Excess tax benefit from stock-based compensation awards
|
422
|
|
|
328
|
|
|
319
|
|
|||
Proceeds from exercise of common stock options
|
1,711
|
|
|
3,484
|
|
|
2,680
|
|
|||
Net cash provided by (used in) financing activities
|
2,133
|
|
|
31,543
|
|
|
(492
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(16,382
|
)
|
|
39,339
|
|
|
(24,908
|
)
|
|||
Cash and cash equivalents at beginning of period
|
75,326
|
|
|
35,987
|
|
|
60,895
|
|
|||
Cash and cash equivalents at end of period
|
$
|
58,944
|
|
|
$
|
75,326
|
|
|
$
|
35,987
|
|
|
|
|
|
|
|
||||||
Supplemental Disclosures:
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
11
|
|
|
691
|
|
|
—
|
|
|||
Cash refunded for income taxes
|
(9
|
)
|
|
(293
|
)
|
|
(969
|
)
|
|||
Cash paid for interest
|
—
|
|
|
—
|
|
|
214
|
|
|||
|
|
|
|
|
|
||||||
Non-Cash Investing and Financing Activities:
|
|
|
|
|
|
|
|
|
|||
Stock-based compensation capitalized in capitalized software
|
85
|
|
|
130
|
|
|
—
|
|
|||
Retirement of treasury stock
|
—
|
|
|
—
|
|
|
2,596
|
|
|||
Unrealized gain (loss) on available-for-sale securities, net of tax effect
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||
Dividend accrued on Series B mandatorily redeemable convertible preferred stock
|
—
|
|
|
255
|
|
|
2,840
|
|
|||
Accrued purchase of property and equipment and other assets
|
24
|
|
|
62
|
|
|
(843
|
)
|
|||
Contingent consideration recorded in connection with business acquisitions
|
—
|
|
|
—
|
|
|
14,750
|
|
|||
Conversion of mandatorily redeemable convertible preferred stock into common stock
|
—
|
|
|
44,011
|
|
|
—
|
|
|||
Reclassification of costs of issuance of common stock from prepaid expenses and other current assets
|
—
|
|
|
2,025
|
|
|
—
|
|
Computer equipment
|
36 months
|
Office equipment, furniture and fixtures
|
36 – 44 months
|
Software
|
36 months
|
Leasehold improvements
|
Shorter of useful life or lease term
|
•
|
a subscription to one of three premium mobile products the Company offers that a member downloads to their mobile device;
|
•
|
a subscription to the Company’s premium online product or site licenses for access via the Internet on a desktop or laptop; and
|
•
|
license codes that can be redeemed for such mobile or online premium products.
|
•
|
there is persuasive evidence that an arrangement exists, in the form of a written contract, amendments to that contract, or purchase orders from a third party;
|
•
|
delivery has occurred or services have been rendered;
|
•
|
the price is fixed or determinable after evaluating the risk of concession; and
|
•
|
collectability is probable based on customer creditworthiness and past history of collection.
|
•
|
there is persuasive evidence that an arrangement exists, in the form of a written contract, amendments to that contract, or purchase orders from a third party;
|
•
|
delivery has occurred or services have been rendered;
|
•
|
the price is fixed or determinable after evaluating the risk of concession; and
|
•
|
collectability is reasonably assured based on customer creditworthiness and past history of collection.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2012
|
|
2011
|
|
2010
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
(Loss) income from continuing operations
|
|
$
|
(1,753
|
)
|
|
$
|
5,253
|
|
|
$
|
8,196
|
|
Loss from discontinued operations, net of tax
|
|
(1,666
|
)
|
|
(8,826
|
)
|
|
(4,393
|
)
|
|||
Net (loss) income
|
|
(3,419
|
)
|
|
(3,573
|
)
|
|
3,803
|
|
|||
Less: Accrued dividend on Series B mandatorily redeemable convertible preferred stock plus an 8% non-cumulative dividend on Series A and Series C mandatorily redeemable convertible preferred stock
|
|
—
|
|
|
294
|
|
|
3,523
|
|
|||
Less: Allocation of net income to participating preferred shares
|
|
—
|
|
|
—
|
|
|
167
|
|
|||
Numerator for basic calculation
|
|
(3,419
|
)
|
|
(3,867
|
)
|
|
113
|
|
|||
Undistributed earnings re-allocated to common stockholders
|
|
—
|
|
|
—
|
|
|
13
|
|
|||
Numerator for diluted calculation
|
|
$
|
(3,419
|
)
|
|
$
|
(3,867
|
)
|
|
$
|
126
|
|
Denominator:
|
|
|
|
|
|
|
||||||
Denominator for basic calculation, weighted average number of common shares outstanding
|
|
24,722
|
|
|
22,297
|
|
|
7,558
|
|
|||
Dilutive effect of stock options, restricted stock units and warrants using the treasury stock method
|
|
—
|
|
|
1,578
|
|
|
1,587
|
|
|||
Denominator for diluted calculation
|
|
24,722
|
|
|
23,875
|
|
|
9,145
|
|
|||
Net (loss) income per share – basic
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(0.07
|
)
|
|
$
|
0.23
|
|
|
$
|
0.59
|
|
Discontinued operations, net of tax
|
|
(0.07
|
)
|
|
(0.40
|
)
|
|
(0.58
|
)
|
|||
Net (loss) income per share attributable to common stockholders
|
|
$
|
(0.14
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
0.01
|
|
Net (loss) income per share – diluted
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(0.07
|
)
|
|
$
|
0.23
|
|
|
$
|
0.59
|
|
Discontinued operations, net of tax
|
|
(0.07
|
)
|
|
(0.40
|
)
|
|
(0.58
|
)
|
|||
Net (loss) income per share attributable to common stockholders
|
|
$
|
(0.14
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
0.01
|
|
|
|
Years Ended December 31,
|
|||||||
|
|
2012
|
|
2011
|
|
2010
|
|||
Common stock warrants
(1)
|
|
5
|
|
|
11
|
|
|
18
|
|
Outstanding unexercised options and restricted stock units
|
|
4,092
|
|
|
3,034
|
|
|
3,138
|
|
Mandatorily redeemable convertible preferred stock
|
|
—
|
|
|
972
|
|
|
13,142
|
|
Total outstanding
|
|
4,097
|
|
|
4,017
|
|
|
16,298
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2012
|
|
2011
|
|
2010
|
||||||
Net (loss) income
|
|
$
|
(3,419
|
)
|
|
$
|
(3,573
|
)
|
|
$
|
3,803
|
|
Change in unrealized gain (loss) on available-for-sale securities, net of tax effect
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||
Comprehensive (loss) income
|
|
$
|
(3,418
|
)
|
|
$
|
(3,574
|
)
|
|
$
|
3,803
|
|
As of December 31, 2012
|
|
Total Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds
|
|
$
|
905
|
|
|
$
|
905
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investments (See Note 4):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Obligations of U.S. government agencies
|
|
9,013
|
|
|
9,013
|
|
|
—
|
|
|
—
|
|
||||
Obligations of U.S. corporations
|
|
6,952
|
|
|
—
|
|
|
6,952
|
|
|
—
|
|
||||
Obligations of Non-U.S. corporations
|
|
3,336
|
|
|
—
|
|
|
3,336
|
|
|
—
|
|
||||
Total short-term investments
|
|
19,301
|
|
|
9,013
|
|
|
10,288
|
|
|
—
|
|
||||
TOTAL FINANCIAL ASSETS
|
|
$
|
20,206
|
|
|
$
|
9,918
|
|
|
$
|
10,288
|
|
|
$
|
—
|
|
As of December 31, 2011
|
|
Total Fair
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds
|
|
$
|
10,035
|
|
|
$
|
10,035
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Agency bonds
|
|
275
|
|
|
—
|
|
|
275
|
|
|
—
|
|
||||
Short-term investments (See Note 4):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Obligations of U.S. government agencies
|
|
6,219
|
|
|
6,219
|
|
|
—
|
|
|
—
|
|
||||
Obligations of U.S. corporations
|
|
2,630
|
|
|
—
|
|
|
2,630
|
|
|
—
|
|
||||
Obligations of Non-U.S. corporations
|
|
1,048
|
|
|
—
|
|
|
1,048
|
|
|
—
|
|
||||
Total short-term investments
|
|
9,897
|
|
|
6,219
|
|
|
3,678
|
|
|
—
|
|
||||
TOTAL FINANCIAL ASSETS
|
|
$
|
20,207
|
|
|
$
|
16,254
|
|
|
$
|
3,953
|
|
|
$
|
—
|
|
December 31, 2012
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Cash, Cash Equivalents and Available-for-Sale Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Obligations of U.S. government agencies
|
|
$
|
9,013
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
9,013
|
|
Obligations of U.S. corporations
|
|
6,953
|
|
|
—
|
|
|
(1
|
)
|
|
6,952
|
|
||||
Obligations of Non-U.S. corporations
|
|
3,336
|
|
|
—
|
|
|
—
|
|
|
3,336
|
|
||||
Money market funds
|
|
905
|
|
|
—
|
|
|
—
|
|
|
905
|
|
||||
Cash
|
|
58,039
|
|
|
—
|
|
|
—
|
|
|
58,039
|
|
||||
|
|
$
|
78,246
|
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
78,245
|
|
Amounts included in cash and cash equivalents
|
|
$
|
58,944
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
58,944
|
|
Amounts included in short-term investments
|
|
19,302
|
|
|
1
|
|
|
(2
|
)
|
|
19,301
|
|
||||
|
|
$
|
78,246
|
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
78,245
|
|
December 31, 2011
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Cash, Cash Equivalents and Available-for-Sale Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Obligations of U.S. government agencies
|
|
$
|
6,219
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
6,219
|
|
Obligations of U.S. corporations
|
|
2,633
|
|
|
—
|
|
|
(3
|
)
|
|
2,630
|
|
||||
Obligations of Non-U.S. corporations
|
|
1,048
|
|
|
—
|
|
|
—
|
|
|
1,048
|
|
||||
Agency bonds
|
|
275
|
|
|
—
|
|
|
—
|
|
|
275
|
|
||||
Money market funds
|
|
10,035
|
|
|
—
|
|
|
—
|
|
|
10,035
|
|
||||
Cash
|
|
65,016
|
|
|
—
|
|
|
—
|
|
|
65,016
|
|
||||
|
|
$
|
85,226
|
|
|
$
|
1
|
|
|
$
|
(4
|
)
|
|
$
|
85,223
|
|
Amounts included in cash and cash equivalents
|
|
$
|
75,326
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75,326
|
|
Amounts included in short-term investments
|
|
9,900
|
|
|
1
|
|
|
(4
|
)
|
|
9,897
|
|
||||
|
|
$
|
85,226
|
|
|
$
|
1
|
|
|
$
|
(4
|
)
|
|
$
|
85,223
|
|
|
|
December 31,
|
||||||
|
|
2012
|
|
2011
|
||||
Computer equipment and purchased software
|
|
$
|
9,100
|
|
|
$
|
9,955
|
|
Software developed for internal use
|
|
10,602
|
|
|
8,947
|
|
||
Furniture and fixtures
|
|
2,683
|
|
|
3,131
|
|
||
Leasehold improvements
|
|
2,185
|
|
|
2,112
|
|
||
|
|
24,570
|
|
|
24,145
|
|
||
Less: Accumulated depreciation and amortization
|
|
(16,717
|
)
|
|
(16,862
|
)
|
||
|
|
$
|
7,853
|
|
|
$
|
7,283
|
|
|
|
December 31,
|
||||||
|
|
2012
|
|
2011
|
||||
Accrued employee compensation
|
|
$
|
3,135
|
|
|
3,021
|
|
|
Accrued market research honoraria
|
|
1,783
|
|
|
1,476
|
|
||
Accrued royalties payable
|
|
425
|
|
|
1,273
|
|
||
Other accrued expenses
|
|
4,178
|
|
|
3,830
|
|
||
|
|
$
|
9,521
|
|
|
$
|
9,600
|
|
|
|
Caretools
|
|
MedCafe
|
|
Modality
|
|
Total
|
||||||||
Balance at December 31, 2010
|
|
$
|
1,120
|
|
|
$
|
9,620
|
|
|
$
|
8,339
|
|
|
$
|
19,079
|
|
Impairment
|
|
(1,120
|
)
|
|
—
|
|
|
—
|
|
|
(1,120
|
)
|
||||
Balance at December 31, 2011
|
|
$
|
—
|
|
|
$
|
9,620
|
|
|
$
|
8,339
|
|
|
$
|
17,959
|
|
Balance at December 31, 2012
|
|
$
|
—
|
|
|
$
|
9,620
|
|
|
$
|
8,339
|
|
|
$
|
17,959
|
|
|
December 31, 2012
|
|
December 31, 2011
|
||||||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Impairment
|
|
Net
Carrying
Amount
|
||||||||||||||
Technology
|
$
|
11,260
|
|
|
$
|
8,696
|
|
|
$
|
2,564
|
|
|
$
|
11,780
|
|
|
$
|
5,015
|
|
|
$
|
448
|
|
|
$
|
6,317
|
|
Client relationships
|
30
|
|
|
30
|
|
|
—
|
|
|
60
|
|
|
34
|
|
|
26
|
|
|
—
|
|
|||||||
Trademarks and trade name
|
40
|
|
|
40
|
|
|
—
|
|
|
50
|
|
|
31
|
|
|
9
|
|
|
10
|
|
|||||||
Non-compete agreement
|
850
|
|
|
646
|
|
|
204
|
|
|
870
|
|
|
423
|
|
|
3
|
|
|
444
|
|
|||||||
|
$
|
12,180
|
|
|
$
|
9,412
|
|
|
$
|
2,768
|
|
|
$
|
12,760
|
|
|
$
|
5,503
|
|
|
$
|
486
|
|
|
$
|
6,771
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2012
|
|
2011
|
|
2010
|
||||||
Tax computed at the federal statutory rate
|
|
$
|
(18
|
)
|
|
$
|
2,826
|
|
|
$
|
5,973
|
|
State tax, federally effected
|
|
19
|
|
|
173
|
|
|
1,212
|
|
|||
Stock compensation
|
|
1,459
|
|
|
21
|
|
|
1,080
|
|
|||
Tax credits
|
|
(261
|
)
|
|
(131
|
)
|
|
(152
|
)
|
|||
State rate adjustment
|
|
(21
|
)
|
|
15
|
|
|
764
|
|
|||
Meals & entertainment
|
|
72
|
|
|
75
|
|
|
49
|
|
|||
Transaction costs
|
|
146
|
|
|
—
|
|
|
35
|
|
|||
Uncertain tax positions
|
|
6
|
|
|
8
|
|
|
14
|
|
|||
Return to provision
|
|
60
|
|
|
40
|
|
|
(80
|
)
|
|||
Rate differential
|
|
—
|
|
|
2
|
|
|
(80
|
)
|
|||
Valuation allowance
|
|
237
|
|
|
31
|
|
|
—
|
|
|||
Income tax provision
|
|
$
|
1,699
|
|
|
$
|
3,060
|
|
|
$
|
8,815
|
|
|
Years Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Current tax expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
(566
|
)
|
|
$
|
3,539
|
|
|
$
|
4,194
|
|
State
|
86
|
|
|
495
|
|
|
508
|
|
|||
|
(480
|
)
|
|
4,034
|
|
|
4,702
|
|
|||
Deferred tax expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
2,058
|
|
|
(584
|
)
|
|
1,987
|
|
|||
State
|
121
|
|
|
(390
|
)
|
|
2,126
|
|
|||
|
2,179
|
|
|
(974
|
)
|
|
4,113
|
|
|||
Income tax provision
|
$
|
1,699
|
|
|
$
|
3,060
|
|
|
$
|
8,815
|
|
|
December 31,
|
||||||
|
2012
|
|
2011
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating losses
|
$
|
1,420
|
|
|
$
|
1,300
|
|
Tax credits
|
2,039
|
|
|
911
|
|
||
Deferred revenue
|
4,186
|
|
|
7,021
|
|
||
Stock compensation
|
2,174
|
|
|
3,718
|
|
||
Accrued expenses
|
849
|
|
|
1,388
|
|
||
Charitable contributions
|
20
|
|
|
—
|
|
||
Total deferred tax assets
|
10,688
|
|
|
14,338
|
|
||
Valuation allowance
|
(904
|
)
|
|
(668
|
)
|
||
|
9,784
|
|
|
13,670
|
|
||
Fixed assets
|
(1,902
|
)
|
|
(2,126
|
)
|
||
Intangible assets
|
(1,709
|
)
|
|
(2,875
|
)
|
||
Net deferred tax assets
|
$
|
6,173
|
|
|
$
|
8,669
|
|
Balance as of January 1, 2010
|
$
|
668
|
|
Additions based on tax positions related to the current year
|
142
|
|
|
Additions for tax positions of prior years
|
—
|
|
|
Additions related to Modality acquisition
|
83
|
|
|
Reductions for tax positions of prior years
|
(2
|
)
|
|
Settlements
|
—
|
|
|
Balance as of December 31, 2010
|
891
|
|
|
Additions based on tax positions related to the current year
|
236
|
|
|
Additions for tax positions of prior years
|
—
|
|
|
Reductions for tax positions of prior years
|
(1
|
)
|
|
Settlements
|
—
|
|
|
Balance as of December 31, 2011
|
1,126
|
|
|
Additions based on tax positions related to the current year
|
97
|
|
|
Additions for tax positions of prior years
|
1
|
|
|
Reductions for tax positions of prior years
|
(1
|
)
|
|
Settlements
|
—
|
|
|
Balance as of December 31, 2012
|
$
|
1,223
|
|
|
|
Total
|
|
Less than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5 Years
|
||||||||||
Operating lease obligations
|
|
$
|
4,503
|
|
|
$
|
2,565
|
|
|
$
|
1,938
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Minimum royalty and content license fee commitments
|
|
7,980
|
|
|
6,152
|
|
|
1,828
|
|
|
—
|
|
|
—
|
|
|||||
Uncertain tax positions
(1)
|
|
1,223
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,223
|
|
|||||
Total
|
|
$
|
13,706
|
|
|
$
|
8,717
|
|
|
$
|
3,766
|
|
|
$
|
—
|
|
|
$
|
1,223
|
|
(1)
|
Represents uncertain tax positions for which we could not make a reasonable estimate of the amount or the exact period of related future payments. Refer to Note 9. Income Taxes.
|
Series
|
|
Par Value
|
|
Shares Authorized
|
|
Shares Outstanding
|
|
Liquidation Preference
|
|
Proceeds Net of Issuance Costs
|
||||||||
A
|
|
$
|
0.001
|
|
|
5,050
|
|
|
4,195
|
|
|
$
|
4,195
|
|
|
$
|
4,150
|
|
B
|
|
0.001
|
|
|
6,250
|
|
|
6,217
|
|
|
64,830
|
|
|
35,455
|
|
|||
C
|
|
0.001
|
|
|
4,004
|
|
|
2,730
|
|
|
4,348
|
|
|
4,302
|
|
|||
|
|
|
|
15,304
|
|
|
13,142
|
|
|
$
|
73,373
|
|
|
$
|
43,907
|
|
|
|
December 31,
|
||||
|
|
2012
|
|
2011
|
||
Warrants
|
|
17
|
|
|
17
|
|
Options
|
|
3,655
|
|
|
4,684
|
|
Restricted stock units
|
|
421
|
|
|
137
|
|
Total outstanding
|
|
4,093
|
|
|
4,838
|
|
|
Options Outstanding
|
|
|
|
|
|||||||
|
Number
of Options |
|
Weighted
Average Exercise Price |
|
Weighted
Average Contractual Term (Years) |
|
Aggregate
Intrinsic Value |
|||||
Balances, January 1, 2010
|
5,918
|
|
|
$
|
7.89
|
|
|
7.26
|
|
$
|
18,790
|
|
Granted
|
1,629
|
|
|
13.39
|
|
|
|
|
|
|||
Forfeited, canceled or expired
|
(636
|
)
|
|
10.73
|
|
|
|
|
|
|||
Exercised
|
(664
|
)
|
|
4.04
|
|
|
|
|
|
|||
Balances, December 31, 2010
|
6,247
|
|
|
$
|
9.44
|
|
|
7.23
|
|
$
|
28,424
|
|
Options vested and expected to vest at December 31, 2010
|
5,957
|
|
|
$
|
9.27
|
|
|
7.12
|
|
$
|
28,141
|
|
Options exercisable at December 31, 2010
|
3,348
|
|
|
$
|
6.82
|
|
|
5.67
|
|
$
|
24,007
|
|
Granted
|
527
|
|
|
$
|
15.08
|
|
|
|
|
|
||
Forfeited, canceled or expired
|
(1,006
|
)
|
|
12.53
|
|
|
|
|
|
|||
Exercised
|
(1,084
|
)
|
|
3.22
|
|
|
|
|
|
|||
Balances, December 31, 2011
|
4,684
|
|
|
$
|
10.85
|
|
|
5.32
|
|
$
|
4,318
|
|
Options vested and expected to vest at December 31, 2011
|
4,524
|
|
|
$
|
10.73
|
|
|
5.19
|
|
4,318
|
|
|
Options exercisable at December 31, 2011
|
3,328
|
|
|
$
|
9.83
|
|
|
3.95
|
|
4,317
|
|
|
Granted
|
1,992
|
|
|
$
|
8.72
|
|
|
|
|
|
|
|
Forfeited, canceled or expired
|
(2,534
|
)
|
|
12.06
|
|
|
|
|
|
|
||
Exercised
|
(487
|
)
|
|
3.51
|
|
|
|
|
|
|
||
Balances, December 31, 2012
|
3,655
|
|
|
$
|
9.82
|
|
|
7.53
|
|
$
|
3,059
|
|
Options vested and expected to vest at December 31, 2012
|
3,184
|
|
|
$
|
9.95
|
|
|
7.26
|
|
$
|
2,862
|
|
Options exercisable at December 31, 2012
|
1,752
|
|
|
$
|
10.44
|
|
|
5.81
|
|
$
|
2,257
|
|
|
Options Outstanding
|
|
Options Vested
|
||||||||||||
Exercise Price
|
Number
Outstanding |
|
Weighted
Average Remaining Contractual Life (Years) |
|
Weighted
Average Exercise Price |
|
Number
Exercisable |
|
Weighted
Average Exercise Price |
||||||
$0.20-$5.50
|
356
|
|
|
2.61
|
|
$
|
2.88
|
|
|
355
|
|
|
$
|
2.88
|
|
$5.50-$10.17
|
2,195
|
|
|
8.76
|
|
$
|
8.71
|
|
|
511
|
|
|
$
|
9.36
|
|
$10.17-$12.11
|
144
|
|
|
5.03
|
|
$
|
11.73
|
|
|
122
|
|
|
$
|
11.90
|
|
$12.11-$13.26
|
336
|
|
|
5.06
|
|
$
|
13.25
|
|
|
336
|
|
|
$
|
13.25
|
|
$13.26-$13.99
|
411
|
|
|
7.52
|
|
$
|
13.53
|
|
|
290
|
|
|
$
|
13.46
|
|
$13.99-$22.97
|
213
|
|
|
8.34
|
|
$
|
19.10
|
|
|
138
|
|
|
$
|
19.43
|
|
|
3,655
|
|
|
7.51
|
|
$
|
9.82
|
|
|
1,752
|
|
|
$
|
10.44
|
|
|
Number of
RSUs Outstanding |
|
Weighted
Average Remaining Contractual Life (Years) |
|
Aggregate
Intrinsic Value |
|||
Balances at January 1, 2010
|
49
|
|
|
2.49
|
|
$
|
506
|
|
Awarded
|
149
|
|
|
|
|
|
||
Forfeited or canceled
|
(30
|
)
|
|
|
|
|
||
Balances at December 31, 2010
|
168
|
|
|
2.67
|
|
$
|
2,346
|
|
RSUs vested and expected to vest at December 31, 2010
|
119
|
|
|
2.65
|
|
$
|
1,663
|
|
Awarded
|
20
|
|
|
|
|
|
||
Released
|
(17
|
)
|
|
|
|
|
||
Forfeited or canceled
|
(34
|
)
|
|
|
|
|
||
Balances at December 31, 2011
|
136
|
|
|
1.74
|
|
$
|
1,072
|
|
RSUs vested and expected to vest at December 31, 2011
|
122
|
|
|
1.70
|
|
798
|
|
|
Awarded
|
441
|
|
|
|
|
|
|
|
Released
|
(45
|
)
|
|
|
|
|
|
|
Forfeited or cancelled
|
(110
|
)
|
|
|
|
|
|
|
Balances, December 31, 2012
|
422
|
|
|
2.29
|
|
$
|
3,716
|
|
RSUs vested and expected to vest at December 31, 2012
|
288
|
|
|
1.99
|
|
$
|
2,544
|
|
|
Twelve Months Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Stock-based compensation expense
|
$
|
4,317
|
|
|
$
|
7,805
|
|
|
$
|
5,962
|
|
Stock-based compensation associated with outstanding repriced options
|
17
|
|
|
(463
|
)
|
|
394
|
|
|||
Total stock-based compensation
|
$
|
4,334
|
|
|
$
|
7,342
|
|
|
$
|
6,356
|
|
|
|
Twelve Months Ended
|
||||||||||
|
|
December 31,
|
||||||||||
|
|
2012
|
|
2011
|
|
2010
|
||||||
Dividend yield
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Expected volatility
|
|
55%-58%
|
|
|
50%-60%
|
|
|
51%-52%
|
|
|||
Risk-free interest rate
|
|
.60%-1.09%
|
|
|
.94%-2.14%
|
|
|
1.20%-2.30%
|
|
|||
Expected life of options (in years)
|
|
4.25-4.50
|
|
|
4.50-5.00
|
|
|
4.50-4.75
|
|
|||
Weighted-average grant date fair value
|
|
$
|
4.07
|
|
|
$
|
6.96
|
|
|
$
|
5.96
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
|
|
2012
|
|
2012
(1)
|
|
2012
(2)
|
|
2012
(3)
|
||||||||
|
|
(in thousands, except per share information)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Total revenues, net
|
|
$
|
27,531
|
|
|
$
|
26,824
|
|
|
$
|
26,025
|
|
|
$
|
30,780
|
|
Gross profit
|
|
17,244
|
|
|
15,875
|
|
|
15,222
|
|
|
19,130
|
|
||||
Net loss
|
|
(1,438
|
)
|
|
(399
|
)
|
|
(608
|
)
|
|
(973
|
)
|
||||
Net loss per common share - basic
(4)
|
|
(0.06
|
)
|
|
(0.02
|
)
|
|
(0.02
|
)
|
|
(0.04
|
)
|
||||
Net loss per common share - diluted
(4)
|
|
(0.06
|
)
|
|
(0.02
|
)
|
|
(0.02
|
)
|
|
(0.04
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended
|
||||||||||||||
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
|
|
2011
(5)
|
|
2011
|
|
2011
(6)
|
|
2011
|
||||||||
|
|
(in thousands, except per share information)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Total revenues, net
|
|
$
|
29,177
|
|
|
$
|
27,860
|
|
|
$
|
26,595
|
|
|
$
|
29,689
|
|
Gross profit
|
|
19,787
|
|
|
18,092
|
|
|
16,312
|
|
|
18,938
|
|
||||
Gain on settlement and change in fair value of contingent consideration
(7)
|
|
506
|
|
|
(6,439
|
)
|
|
—
|
|
|
—
|
|
||||
Net (loss) income
|
|
(1,125
|
)
|
|
3,393
|
|
|
686
|
|
|
(6,527
|
)
|
||||
Net (loss) income per common share - basic
(4)
|
|
(0.08
|
)
|
|
0.14
|
|
|
0.03
|
|
|
(0.27
|
)
|
||||
Net (loss) income per common share - diluted
(4)
|
|
(0.08
|
)
|
|
0.13
|
|
|
0.03
|
|
|
(0.27
|
)
|
(1)
|
During the
second
quarter of
2012
, the Company recorded correcting entries to increase operating expenses by
$51 thousand
for the correction of immaterial errors in accrued expenses in the
three months
ended
June 30, 2012
.
|
(2)
|
During the
third
quarter of
2012
, the Company recorded a correcting entry to reduce stock-based compensation expense by
$32 thousand
for the correction of immaterial errors in additional paid-in capital for the
three months
ended
September 30, 2012
.
|
(3)
|
During the
fourth
quarter of
2012
, the Company recorded correcting entries to reduce revenue by
$87 thousand
for the correction of immaterial errors in deferred revenue balances, to reduce stock-based compensation expense by
$106 thousand
for the correction of immaterial errors in additional paid-in capital, to increase royalty expenses by
$39 thousand
for the correction of immaterial errors in accrued royalties and to increase sales tax expense by
$106 thousand
for the correction of immaterial errors in other assets.
|
(4)
|
Net (loss) income per share for the four quarters of each fiscal year may not sum to the total for the fiscal year because of the different number of shares outstanding during each period.
|
(5)
|
During the
first
quarter of
2011
, the Company recorded correcting entries to increase consulting expenses by
$36 thousand
for the correction of immaterial errors in accrued expenses and to increase revenue by
$88 thousand
for the correction of immaterial errors in deferred revenue.
|
(6)
|
During the
third
quarter of
2011
, the Company recorded correcting entries to increase royalty and consulting expenses by
$127 thousand
for the correction of immaterial errors in capitalization of costs related to internal use software.
|
(7)
|
For the three months ended
June 30, 2011
, includes a
$6.4 million
gain relating to the settlement of the contingent consideration liability with the sellers of MedCafe, Inc., a company that Epocrates acquired in
2010
.
|
(i)
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets,
|
(ii)
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors, and
|
(iii)
|
provide reasonable assurance regarding prevention or timely detection of any unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.
|
Name
|
|
Age
|
|
Position
|
Andrew J. Hurd
|
|
49
|
|
President, Chief Executive Officer and Interim Chief Financial Officer
|
Peter C. Brandt
|
|
55
|
|
Chairman of the Board
|
Philippe O. Chambon, M.D., Ph.D.
|
|
54
|
|
Director
|
Gary G. Greenfield
|
|
58
|
|
Director
|
Thomas L. Harrison
|
|
65
|
|
Director
|
Patrick S. Jones
|
|
68
|
|
Director
|
Erick N. Tseng
|
|
33
|
|
Director
|
Mark A. Wan
|
|
47
|
|
Director
|
Name
|
|
Title
|
Andrew J. Hurd
|
|
President, Chief Executive Officer (“CEO”) and Interim Chief Financial Officer (“CFO”)
|
Peter C. Brandt
|
|
Former Interim President and CEO
|
Patrick D. Spangler
|
|
Former CFO
|
Matthew A. Kaminer
|
|
General Counsel and Secretary
|
Heather A. Gervais
|
|
Senior Vice President, Commercial Operations
|
Adam E. Budish
|
|
Senior Vice President, Sales
|
•
|
provide a means for us to attract, retain and reward high-quality executives who will contribute to the long-term success of Epocrates;
|
•
|
inspire our executive officers to achieve our business objectives;
|
•
|
encourage our executive officers to work as a team; and
|
•
|
align the financial interests of the executive officers with those of the stockholders.
|
•
|
compensation levels paid by companies in our peer group, with a particular focus on having the cash and equity compensation at between the 50
th
and 75
th
percentile of that of similarly-situated officers employed by those peer companies, as we believe this approach helps us to compete in hiring and retaining the best possible talent while at the same time maintaining a reasonable and responsible cost structure;
|
•
|
corporate and/or individual performance, as we believe this encourages our executives to focus on achieving our business objectives;
|
•
|
the need to motivate executives to address particular business challenges that are unique to any given year;
|
•
|
internal pay equity of the compensation paid to one NEO as compared to another, as we believe this contributes to retention and a spirit of teamwork among our executives while recognizing that compensation opportunities should increase based on increased levels of responsibility as between executive officers;
|
•
|
the potential dilutive effect on our stockholders generally from equity awards;
|
•
|
broader economic conditions, in order to ensure that our pay strategies are effective yet responsible; and
|
•
|
individual negotiations with executives, particularly in connection with their initial compensation package, as these executives may be leaving meaningful compensation opportunities at their prior employer in order to come work for us, as well as upon their departures, as we recognize the benefit to our stockholders of seamless transitions.
|
•
|
determining, reviewing, modifying and approving the compensation and other terms of employment of our executive officers;
|
•
|
reviewing and approving corporate performance goals and objectives relevant to such compensation and compensation of senior management;
|
•
|
administering our equity and cash-based incentive plans and recommending to the Board the adoption, amendment and termination of such plans;
|
•
|
establishing policies with respect to equity compensation arrangements; and
|
•
|
reviewing and approving the terms of any employment agreements, severance arrangements, change-of-control protections and any other compensatory arrangements for our executive officers.
|
•
|
conducted a review of the compensation arrangements for all of our executive officers, including providing advice on the design and structure of our annual management bonus plan;
|
•
|
conducted a review of our equity compensation program (including an analysis of equity mix, aggregate share usage and target grant levels);
|
•
|
conducted a review of Board member compensation, and provided market data and summaries to the Nominating Committee and Compensation Committee regarding Board pay structure; and
|
•
|
updated the Compensation Committee on emerging trends/best practices in the area of executive compensation.
|
Computer Programs and Systems
Healthstream
Icad
Medassets
Medidata Solutions
|
|
Mediware Information Systems
Merge Healthcare
Omnicell
PDI
Quality Systems
|
|
Transcend Services
WebMD Health
|
•
|
annual cash compensation targeted at the 50
th
to 75
th
percentile for our public company peer group companies; and
|
•
|
target equity compensation at the 50
th
to 75
th
percentile (to the extent doing so did not cause unreasonable dilution) for public and pre-IPO companies that approximate our size and stage of life.
|
Compensation element
|
|
Material factors considered in 2012 in determining amount
|
|
Objective
|
||||
Base salary
|
|
Board members' experience and knowledge
Broader market conditions
Individual performance and demonstration of successful contributions and results
Public company market data
|
|
Attract and retain experienced executives
Compensation for performing expectations of the role
|
||||
Annual performance-based cash bonuses
|
|
Board members' experience and knowledge
Achievement of corporate objectives, particularly in light of broader market conditions
Internal pay equity; contribution by level (for targets as percent of salary)
Corporate performance against pre-established financial goals
|
|
Attract and retain exceptional talent
Motivate executives to achieve company objectives while working as a team
Link corporate performance with compensation paid
Provide incentives to promote our growth and create stockholder value, thereby aligning the financial interests
of the executive officers with those of the stockholders
|
Time-based stock options and restricted stock units
|
|
Board members' experience and knowledge
Internal pay equity
The potential dilutive effect on our stockholders
Comparable market data for peer companies
Potential gain and unvested holdings
|
|
Attract and retain exceptional talent
Link corporate performance with compensation paid
Provide incentives to promote our growth and create stockholder value, thereby aligning the financial interests
of the executive officers with those of the stockholders
|
||||
Performance-based option awards
|
|
Board members' experience and knowledge
Achievement of corporate objectives, particularly in light of broader market conditions
Internal pay equity
The potential dilutive effect on our stockholders
Comparable market data for peer companies
Potential gain and unvested holdings
|
|
Attract and retain exceptional talent
Motivate executives to achieve company objectives while working as a team
Provide incentives to promote our growth and create stockholder value, thereby aligning the financial interests
of the executive officers with those of the stockholders
|
||||
Employee benefits and limited perquisites
|
|
Board members' experience and knowledge
Internal pay equity
Individual negotiations with executives
|
|
Attract and retain exceptional talent
Encourage officers to work as a team
|
||||
Severance and change in control benefits
|
|
Board members' experience and knowledge
Internal pay equity
Individual negotiations with executives
|
|
Attract and retain exceptional talent
Motivate executives to achieve company objectives which may in any given year include completion of a strategic transaction
Align the financial interests of the executive officers with those of the stockholders - that is, the completion of a desired transaction without regard to executive's own compensation/job security
|
Name
|
|
2012 Base
Salary
|
|
|
2011 Base
Salary
|
|
|
%
Change
|
|
||||
Andrew J. Hurd
|
|
$
|
390,000
|
|
|
|
$
|
—
|
|
|
|
—
|
|
Peter C. Brandt
|
|
$
|
305,000
|
|
|
|
$
|
305,000
|
|
|
|
—
|
|
Patrick D. Spangler
|
|
$
|
300,000
|
|
|
|
$
|
300,000
|
|
|
|
—
|
|
Matthew A. Kaminer
|
|
$
|
250,000
|
|
|
|
$
|
250,000
|
|
|
|
—
|
|
Heather A. Gervais
|
|
$
|
240,000
|
|
|
|
$
|
240,000
|
|
|
|
—
|
|
Adam E. Budish
|
|
$
|
250,000
|
|
|
|
$
|
250,000
|
|
|
|
—
|
|
Name
|
|
2012
Target
Bonus %
|
|
2011
Target
Bonus %
|
|
Change
(absolute)
|
|
Market
Position
(percentile)
|
Andrew J. Hurd
|
|
70%
|
|
—
|
|
—
|
|
50
th
|
Peter C. Brandt
|
|
—
|
|
—
|
|
—
|
|
—
|
Patrick D. Spangler
|
|
60%
|
|
60%
|
|
—
|
|
75
th
|
Matthew A. Kaminer
|
|
40%
|
|
40%
|
|
—
|
|
50
th
|
Heather A. Gervais
|
|
40%
|
|
20%
|
|
20%
|
|
75
th
|
Adam E. Budish
|
|
40%
|
|
40%
|
|
—
|
|
<50
th
|
•
|
The belief that the incentive opportunity should make up a larger portion of a NEO's target total compensation as the executive's level of responsibility increases; and
|
•
|
The belief that these levels were internally fair and financially responsible, yet still provided appropriate motivation to executives to achieve our growth objectives.
|
•
|
sales bookings, meaning total dollar amount of business contracted during the year;
|
•
|
revenue, measured as GAAP revenue calculated in accordance with our revenue recognition policies in effect at the time; and
|
•
|
adjusted EBITDA, measured as GAAP net income before interest income, interest expense, other income (expense) net, provision for income taxes, depreciation and amortization expense, and stock-based compensation expense.
|
•
|
92% of our business plan for sales bookings;
|
•
|
96% of our business plan for revenue; and
|
•
|
89% of our business plan for adjusted EBITDA.
|
% Attainment
|
|
<92
|
|
%
|
92
|
|
%
|
100
|
|
%
|
108
|
|
%
|
>
115
|
|
%
|
Bonus % Payout
|
|
—
|
|
%
|
75
|
|
%
|
100
|
|
%
|
125
|
|
%
|
150
|
|
%
|
% Attainment
|
|
<96
|
|
%
|
96
|
|
%
|
100
|
|
%
|
102
|
|
%
|
>
104
|
|
%
|
Bonus % Payout
|
|
—
|
|
%
|
75
|
|
%
|
100
|
|
%
|
125
|
|
%
|
150
|
|
%
|
% Attainment
|
|
<89
|
|
%
|
89
|
|
%
|
100
|
|
%
|
110
|
|
%
|
>
120
|
|
%
|
Bonus % Payout
|
|
—
|
|
%
|
75
|
|
%
|
100
|
|
%
|
125
|
|
%
|
150
|
|
%
|
|
|
Estimated Future Payouts Under
Equity Incentive Plan Awards
(1)
|
|
|
|||||
Name
|
|
Threshold (#)
|
Target (#)
|
Maximum (#)
|
|
Market Position for 2012
Performance RSU Opportunity
(percentile)
|
|||
Andrew J. Hurd
|
|
49,755
|
|
64,200
|
|
80,250
|
|
|
<50
th
|
Peter C. Brandt
|
|
—
|
|
—
|
|
—
|
|
|
—
|
Patrick D. Spangler
|
|
19,685
|
|
25,400
|
|
31,750
|
|
|
<50
th
|
Matthew A. Kaminer
|
|
11,858
|
|
15,300
|
|
19,125
|
|
|
<50
th
|
Heather A. Gervais
|
|
3,875
|
|
5,000
|
|
6,250
|
|
|
<50
th
|
Adam E. Budish
|
|
3,875
|
|
5,000
|
|
6,250
|
|
|
<50
th
|
(1)
|
Represents all awards granted under our 2012 executive bonus plan in 2012, which were determined based on performance in 2012. This table shows the awards that were possible at the maximum level of performance. Ninety percent of the target number of RSUs was granted.
|
•
|
The need to attract and retain exceptional talent in a competitive locale for critical executive roles;
|
•
|
The belief that the incentive opportunity should make up a larger portion of a NEO's target total compensation as the executive's level of responsibility increases;
|
•
|
The overall contribution provided based on tenure with Epocrates and the level of unvested/potential gains;
|
•
|
Comparable levels of awards for similar positions;
|
•
|
The desire to be internally consistent by providing each new hire executive officer with an initial option grant that was comparable to grants held by continuing executives; and
|
•
|
The belief that these levels were internally fair and financially responsible and yet still provided appropriate motivation to executives to achieve our objectives in light of their respective existing aggregate equity holdings.
|
•
|
CEO: Four times annual Base Salary;
|
•
|
CFO: Three times annual Base Salary; and
|
•
|
Other senior executive officers: Two times annual Base Salary.
|
Name and
principal position
|
|
Year
|
|
Salary ($)
|
|
Bonus ($)
|
|
|
Stock awards ($)
(1)
|
|
Option
awards
($)
(1)
|
|
Non-equity incentive plan compensation ($)
|
|
|
All other compensation ($)
|
|
|
Total ($)
|
|||||||
Andrew J. Hurd,
President, CEO and Interim CFO
(2)
|
|
2012
|
|
299,886
|
|
|
188,638
|
|
|
|
459,351
|
|
|
3,212,800
|
|
|
—
|
|
|
|
285
|
|
(7)
|
|
4,160,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Peter C. Brandt,
Former Interim President and CEO
(3)
|
|
2012
|
|
72,785
|
|
|
—
|
|
|
|
—
|
|
|
42,942
|
|
|
—
|
|
|
|
38,379
|
|
(4)
|
|
154,106
|
|
|
|
2011
|
|
38,126
|
|
|
—
|
|
|
|
180,000
|
|
|
909,948
|
|
|
—
|
|
|
|
58,486
|
|
(4)
|
|
1,186,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Patrick D. Spangler, Former CFO
(5)
|
|
2012
|
|
187,500
|
|
|
—
|
|
|
|
252,413
|
|
|
283,242
|
|
|
—
|
|
|
|
645
|
|
(7)
|
|
723,800
|
|
|
|
2011
|
|
300,000
|
|
|
87,030
|
|
(6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
1,032
|
|
(7)
|
|
388,062
|
|
|
|
2010
|
|
73,864
|
|
|
—
|
|
|
|
—
|
|
|
1,767,333
|
|
|
53,093
|
|
(8)
|
|
65
|
|
(7)
|
|
1,894,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Matthew A. Kaminer,
General Counsel and Secretary
|
|
2012
|
|
250,000
|
|
|
90,000
|
|
|
|
109,472
|
|
|
236,035
|
|
|
—
|
|
|
|
576
|
|
(9)
|
|
686,083
|
|
|
|
2011
|
|
128,788
|
|
|
25,758
|
|
(6)
|
|
—
|
|
|
410,905
|
|
|
—
|
|
|
|
177
|
|
(9)
|
|
565,628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Heather A. Gervais, Senior Vice President, Commercial Operations
|
|
2012
|
|
240,000
|
|
|
86,400
|
|
|
|
32,850
|
|
|
75,531
|
|
|
—
|
|
|
|
1,428
|
|
(11)
|
|
436,209
|
|
|
|
2011
|
|
205,000
|
|
|
47,100
|
|
(10)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
1,266
|
|
(11)
|
|
253,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Adam E. Budish, Senior Vice President, Sales
|
|
2012
|
|
250,000
|
|
|
90,000
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
552
|
|
(7)
|
|
340,552
|
|
(1)
|
Amounts shown in this column do not reflect dollar amounts actually received by our NEOs. Instead, these amounts reflect the aggregate grant date fair value of each stock awards granted computed in accordance with the provisions of FASB ASC Topic 718. As required by SEC rules, the amounts shown for performance-based grants exclude the impact of estimated forfeitures related to service-based vesting conditions. Assumptions used in the calculation of these amounts are included in Note 14 to our audited financial statements for the fiscal year ended December 31, 2012 included in this Annual Report on Form 10-K. Our NEOs will only realize compensation to the extent the trading price of our common stock is greater than the exercise/grant price of such stock awards.
|
(2)
|
Mr. Hurd's employment with us commenced in March 2012.
|
(3)
|
Mr. Brandt's employment with us commenced in November 2011 and ended on March 27, 2012. With respect to restricted stock unit awards and stock options granted to Mr. Brandt, the awards vested monthly over six months while Mr. Brandt served as our Interim President and CEO.
|
(4)
|
For 2012, represents $258 of costs related to group term life insurance premiums, $34,375 for services rendered as a non-employee member of the Board of Directors and $3,746 of reimbursement for expenses. For 2011, represents $48,625 for services rendered as a non-employee member of the Board of Directors and Audit Committee, and as Chair of the Compensation Committee, $9,792 of reimbursement for personal travel and $69 for costs related to group term life insurance premiums.
|
(5)
|
Mr. Spangler's employment with us commenced in September 2010 and ended on August 15, 2012.
|
(6)
|
Represents discretionary bonus paid in 2012 for performance in 2011. These bonuses were approved by our Compensation Committee on February 15, 2012.
|
(7)
|
Represents costs related to group term life insurance premiums.
|
(8)
|
Represents a cash bonus paid in 2011 for performance in 2010 pursuant to our 2010 Cash Bonus Plan. Cash bonuses pursuant to our 2010 Cash Bonus Plan were approved by our Compensation Committee on March 24, 2011.
|
(9)
|
For 2012, represents $216 of costs related to group term life insurance premiums and $360 of amounts paid for gym reimbursement. For 2011, represents $72 of costs related to group term life insurance premiums and $105 of amounts paid for gym reimbursement.
|
(10)
|
Represents $2,000 of cash referral bonus paid to Ms. Gervais in 2010 and $45,100 of discretionary bonus to be paid in 2012 for performance in 2011. This bonus was approved by our Compensation Committee on February 15, 2012.
|
(11)
|
For 2012, represents $228 for costs related to group term life insurance premiums and $1,200 for amounts paid for opting out of Epocrates' medical insurance benefit plan. For 2011, represents $66 for costs related to group term life insurance premiums and $1,200 for amounts paid for opting out of Epocrates' medical insurance benefit plan.
|
|
|
Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards
|
Estimated Future Payouts Under Equity Incentive Plan Awards
(2)
|
All Other Stock Awards: Number of Shares of Stock or Units (#)
|
All Other Option Awards: Number of Securities Underlying Options
(#)
(3)
|
Exercise or Base Price of Option Awards ($/Share)
|
Grant Date Fair Value of Stock and Option
Awards ($)
|
|||||||||||||||
Name
|
Grant Date
|
Threshold ($)
|
Target ($)
|
Maximum ($)
|
Threshold (#)
|
Target (#)
|
Maximum (#)
|
|||||||||||||||
Andrew J. Hurd
|
4/24/2012
(1)
|
|
—
|
|
—
|
|
—
|
|
49,755
|
|
64,200
|
|
80,250
|
|
—
|
|
800,000
|
|
8.46
|
|
3,212,800
|
|
|
12/26/2012
(4)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
83,097
|
|
103,871
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Peter C. Brandt
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11,790
|
|
8.14
|
|
42,942
|
|
Patrick D. Spangler
|
4/24/2012
(1)
|
|
—
|
|
—
|
|
—
|
|
11,858
|
|
15,300
|
|
19,125
|
|
—
|
|
60,000
|
|
9.99
|
|
283,242
|
|
Matthew S. Kaminer
|
4/24/2012
(1)
|
|
—
|
|
—
|
|
—
|
|
19,685
|
|
25,400
|
|
31,750
|
|
—
|
|
50,000
|
|
9.99
|
|
236,035
|
|
|
12/26/2012
(4)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
20,822
|
|
26,028
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Heather A. Gervais
|
8/1/2012
(1)
|
|
—
|
|
—
|
|
—
|
|
3,875
|
|
5,000
|
|
6,250
|
|
—
|
|
16,000
|
|
9.99
|
|
75,531
|
|
|
12/26/2012
(4)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
20,822
|
|
26,028
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Adam E. Budish
|
8/1/2012
(1)
|
|
—
|
|
—
|
|
—
|
|
3,875
|
|
5,000
|
|
6,250
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
12/26/2012
(4)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9,464
|
|
11,830
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1)
|
Represents potential awards under our 2012 executive bonus plan in 2012, which were determined based on performance in 2012. This table shows the awards that are possible at the threshold, target and maximum levels of performance. The RSUs were not granted and the number of RSUs that the NEO will be granted will be based on achievement of 2012 corporate goals. Once determined, the RSUs would be granted and the shares subject to the RSU will vest in four equal annual installments, subject in each case to the recipient's continued service, commencing on January 1, 2013. In January 2013, the Compensation Committee determined that 90% of the target number RSUs were actually earned and granted based on achievement of 2012 corporate goals.
|
(2)
|
The RSUs were granted under our 2010 Equity Incentive Plan.
|
(3)
|
The stock options were granted under our 2010 Equity Incentive Plan. The shares subject to this stock option vest as to 20% of the shares subject to the option after one year, with the remaining shares subject to the stock option vesting on an equal monthly basis over the following 48 months, subject in each case to recipient's continued service.
|
(4)
|
Represents all awards granted under our 2013 executive bonus plan in 2012, which were determined based on performance in 2012. This table shows the awards that are possible at the target and maximum levels of performance. The maximum number of RSUs were granted, but the number of RSUs actually earned is subject to reduction based on achievement of 2013 corporate goals. Once determined, the RSUs would be granted and the shares subject to the RSU will vest in four equal annual installments, subject in each case to the recipient's continued service, commencing on January 1, 2014. If, prior to the achievement of the 2013 corporate goals, there is a change of control of the Company, the 2013 goals will be deemed to have been achieved at the target level and the RSUs will begin vesting in four equal annual installments, subject to the recipient's continued service, as of immediately prior to the closing of the change in control.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Option awards
|
Stock awards
|
|
||||||||||||||||||
Name
|
|
Number of
securities
underlying
unexercised
options (#)
exercisable
(1)
|
|
Number of
securities
underlying
unexercised
options
(#) unexercisable
|
|
Option
exercise
price ($)
|
|
Option
expiration
date
|
|
|
Number of
shares or
units of
stock that
have not
vested (#)
|
|
|
Market value
of shares or
units of
stock that
have not
vested ($)
|
|
|||||||
Andrew J. Hurd
|
|
—
|
|
|
800,000
|
|
|
$
|
8.46
|
|
|
3/26/2022
|
|
|
57,780
|
|
(3)
|
|
$
|
509,620
|
|
|
|
|
|
|
|
|
|
|
|
|
83,097
|
|
(4)
|
|
732,916
|
|
|
||||||
Peter C. Brandt
|
|
19,650
|
|
|
—
|
|
|
16.00
|
|
|
2/1/2021
|
|
|
—
|
|
|
|
—
|
|
|
||
|
|
11,790
|
|
|
—
|
|
|
21.98
|
|
|
5/6/2021
|
|
|
—
|
|
|
|
—
|
|
|
||
|
|
100,000
|
|
|
—
|
|
|
8.74
|
|
|
12/7/2021
|
|
|
—
|
|
|
|
—
|
|
|
||
|
|
3,930
|
|
|
7,860
|
|
|
8.14
|
|
|
8/13/2022
|
|
|
—
|
|
|
|
—
|
|
|
||
Patrick D. Spangler
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
||
Matthew A. Kaminer
|
|
15,000
|
|
|
35,000
|
|
|
17.95
|
|
|
6/27/2021
|
|
|
13,770
|
|
(3)
|
|
121,451
|
|
|
||
|
|
9,166
|
|
|
40,834
|
|
|
9.99
|
|
|
1/20/2022
|
|
|
20,822
|
|
(4)
|
|
183,650
|
|
|
||
Heather A. Gervais
|
|
5,305
|
|
|
6,485
|
|
|
13.36
|
|
|
10/28/2020
|
|
|
4,500
|
|
(3)
|
|
39,690
|
|
|
||
|
|
2,933
|
|
|
13,067
|
|
|
9.99
|
|
|
1/20/2022
|
|
|
20,822
|
|
(4)
|
|
183,650
|
|
|
||
Adam E. Budish
|
|
3,250
|
|
|
11,750
|
|
|
8.74
|
|
|
12/7/2021
|
|
|
4,500
|
|
(3)
|
|
39,690
|
|
|
||
|
|
|
|
|
|
|
|
|
|
9,464
|
|
(4)
|
|
83,472
|
|
|
(1)
|
Fully vested.
|
(2)
|
The shares subject to this stock option vest in equal monthly installments over 12 months, subject in each case to the recipient's continued service.
|
(3)
|
Represents the number of shares subject to RSUs granted upon our compensation committee's determination of achievement of our 2012 corporate goals on January 5, 2012.
|
(4)
|
Represents the maximum number of RSUs granted pursuant to our 2013 bonus plan on December 26, 2013.
|
(5)
|
The value is determined based on the closing price of our stock on 1/31/12 of $8.82 per share multiplied by the number of shares that have not vested, without taking into account any taxes that may be payable in connection with the transaction.
|
(6)
|
The shares subject to this stock option vest as to 20% of the shares subject to the option after one year, with the remaining shares subject to the stock option vesting on an equal monthly basis over the following 48 months, subject in each case to recipient's continued service.
|
(7)
|
Represents shares subject to outstanding and unearned options granted pursuant to our 2011 bonus plan.
|
|
|
Option Awards
|
|
Restricted Stock Units
|
|||||||
Name
|
|
Number of shares
acquired on exercise
|
Value realized
on exercise
(1)
|
|
Number of
shares vested
|
Value realized
on vesting
(2)
|
|||||
Andrew J. Hurd
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
Peter C. Brandt
|
|
—
|
|
—
|
|
|
13,729
|
|
$
|
96,173
|
|
Patrick D. Spangler
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
Matthew A. Kaminer
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
Heather A. Gervais
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
Adam E. Budish
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(1)
|
The value realized on exercise is determined based on the price sold multiplied by the number of shares that were exercised and subtracting the exercise price, without taking into account any taxes that may be payable in connection with the transaction.
|
(2)
|
The value realized upon vesting is determined by multiplying the number of restricted stock units by the market value of the underlying shares on the vesting date.
|
|
|
No Change-of-Control
(1)
|
|
Change-of
Control
|
|
Change-of-Control
|
|||||||||||||||||||||||
|
|
Termination without Cause
(2)(3)
|
|
No Termination
|
|
Termination without Cause
or for Good Reason
(4)
|
|||||||||||||||||||||||
Name
|
|
Base
salary
|
|
COBRA
premiums
|
|
Vesting acceleration
(5)
|
|
Vesting acceleration
(5)
|
|
Base
salary
|
|
COBRA
premiums
|
|
Vesting
acceleration
(5)
|
|||||||||||||||
Andrew J. Hurd
|
|
$
|
390,000
|
|
(6
|
)
|
$
|
15,338
|
|
(7)
|
$
|
510,178
|
|
|
$
|
765,268
|
|
|
$
|
585,000
|
|
(8)
|
$
|
15,338
|
|
(7)
|
$
|
1,530,535
|
|
Peter C. Brandt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Patrick D. Spangler
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Matthew A. Kaminer
|
|
125,000
|
|
(9
|
)
|
12,018
|
|
(10)
|
—
|
|
|
—
|
|
|
187,500
|
|
(12)
|
18,028
|
|
(13)
|
305,101
|
|
|||||||
Heather A. Gervais
|
|
120,000
|
|
(9
|
)
|
—
|
|
|
—
|
|
|
—
|
|
|
180,000
|
|
(12)
|
—
|
|
|
223,340
|
|
|||||||
Adam E. Budish
|
|
125,000
|
|
(9
|
)
|
12,163
|
|
(11)
|
—
|
|
|
—
|
|
|
187,500
|
|
(12)
|
18,245
|
|
(14)
|
124,102
|
|
(1)
|
A “c
hange-of-control
” generally means the consummation of any transaction by Epocrates whereby fifty percent (50%) or more of the voting stock of Epocrates changes ownership pursuant to that transaction.
|
(2)
|
“Cause”
is generally defined as the NEO's:
|
•
|
embezzlement, misappropriation of corporate funds, or other material acts of dishonesty;
|
•
|
conviction, plea of guilty, or nolo contendere to any felony (not involving the operation of a motor vehicle), or of any misdemeanor involving moral turpitude;
|
•
|
engagement in any activity that such NEO knows or should know could materially harm the business or reputation of Epocrates, provided that such activity is not undertaken in a good faith belief that such action was in the best interest of Epocrates;
|
•
|
material violation of any statutory, contractual, or common law duty or obligation owed to Epocrates, including, without limitation, a material breach of any confidentiality obligation and the duty of loyalty which causes demonstrable injury to Epocrates; or
|
•
|
repeated failure, in the reasonable judgment of Epocrates, to substantially perform his or her assigned duties or responsibilities after written notice from Epocrates describing the failure(s) in reasonable detail and such NEO's failure to cure such failure(s) within thirty (30) days of receiving such written notice, provided that written notice only must be provided if the failure(s) are capable of cure.
|
(3)
|
For Mr. Hurd only, this includes a resignation for Good Reason.
|
(4)
|
“Good Reason”
is generally defined as the following actions taken without the consent of the NEO following the consummation of a change-of-control of Epocrates that terminates such NEO's employment (in each case where the NEO has provided written notice within 30 days of the action, such action is not remedied by Epocrates within 30 days following such notice, and such termination occurs within ninety (90) days following the initial existence of one or more of the conditions that constitute Good Reason):
|
•
|
a relocation of the NEO's assigned office which results in an increase in his or her one-way commuting distance by more than thirty-five (35) miles;
|
•
|
a material decrease in the then current base salary of the NEO (except for salary decreases generally applicable to Epocrates' other executive employees); or
|
•
|
a material reduction in the scope of the NEO's duties or responsibilities in effect immediately prior to the change-of-control of Epocrates.
|
(5)
|
The value of vesting acceleration is calculated based on the closing price of our common stock on December 31, 2012 with respect to unvested option shares or unvested awards subject to acceleration minus the exercise price of the unvested option shares.
|
(6)
|
Represents continuation of base salary for a period of twelve months.
|
(7)
|
Represents payment of twelve months of continued COBRA premiums for medical, dental and vision coverage, calculated at $1,278.17 per month for the 12-month period ended December 31, 2012, including a 2% administrative fee.
|
(8)
|
Represents continuation of base salary for a period of 18 months.
|
(9)
|
Represents continuation of base salary for a period of six months.
|
(10)
|
Represents payment of six months of continued COBRA premiums for medical, dental and vision coverage, calculated at $2,003.07 per month for the 12-month period ended December 31, 2012, including a 2% administrative fee.
|
(11)
|
Represents payment of six months of continued COBRA premiums for medical, dental and vision coverage, calculated at $2,027.17 per month for the 12-month period ended December 31, 2012, including a 2% administrative fee.
|
(12)
|
Represents continuation of base salary for a period of nine months.
|
(13)
|
Represents payment of nine months of continued COBRA premiums for medical, dental and vision coverage, calculated at $2,003.07 per month for the 12-month period ended December 31, 2012, including a 2% administrative fee.
|
(14)
|
Represents payment of nine months of continued COBRA premiums for medical, dental and vision coverage, calculated at $2,027.17 per month for the 12-month period ended December 31, 2012, including a 2% administrative fee.
|
•
|
$30,000 per year for service as a Board member, payable quarterly;
|
•
|
$25,000 per year for service as Chairperson of the Board, payable quarterly;
|
•
|
$20,000 per year for service as Chairperson of the Audit Committee, payable quarterly;
|
•
|
$15,000 per year for service as Chairperson of the Compensation Committee, payable quarterly;
|
•
|
$10,000 per year for service as Chairperson of the Corporate Governance and Nominating Committee, payable quarterly;
|
•
|
$1,000 for each Board meeting attended in person;
|
•
|
$500 for each Board meeting attended telephonically or by videoconference;
|
•
|
$12,000 per year for service on the Audit Committee, payable quarterly; and
|
•
|
$7,000 per year for service on the Compensation Committee and Corporate Governance and Nominating Committee, payable quarterly.
|
Name
|
|
Fees earned or
paid in cash ($)
|
|
Option awards
($)
(1)(2)(3)
|
|
Total ($)
|
||||||
Philippe O. Chambon
|
|
$
|
54,500
|
|
|
$
|
42,942
|
|
|
$
|
97,442
|
|
Thomas L. Harrison
|
|
53,000
|
|
|
42,942
|
|
|
95,942
|
|
|||
Gary G. Greenfield
|
|
49,500
|
|
|
42,942
|
|
|
92,442
|
|
|||
Patrick S. Jones
|
|
89,538
|
|
|
42,942
|
|
|
132,480
|
|
|||
Erick N. Tseng
|
|
38,000
|
|
|
42,942
|
|
|
80,942
|
|
|||
Mark A. Wan
|
|
51,000
|
|
|
42,942
|
|
|
93,942
|
|
(1)
|
Amounts shown in this column do not reflect dollar amounts actually received by our directors. Instead, these amounts reflect the aggregate grant date fair value of each stock option granted in the fiscal year ended December 31, 2012 computed in accordance with the provisions of ASC 718. Assumptions used in the calculation of these amounts are included in Note 14 to our audited financial statements for the fiscal year ended December 31, 2012 included in this Annual Report on Form 10-K. Only one option was granted to each non-employee director in 2012, and the grant date fair value of each option is set forth in the table. Our directors will only realize compensation to the extent the trading price of our common stock is greater than the exercise price of such stock options.
|
(2)
|
As of December 31, 2012, the aggregate number of shares subject to outstanding option awards held by each of the directors listed in the table above was as follows: Dr. Chambon, 55,020 shares; Mr. Harrison, 128,379 shares; Mr. Greenfield, 31,440 shares; Mr. Jones, 132,209 shares; Mr. Tseng, 31,440 shares; and Mr. Wan, 55,020 shares.
|
(3)
|
1/12th of the shares subject to each option award vest monthly over one year, subject in each case to the recipient's continued service as a director.
|
Name and Address of Beneficial Owner (1)
|
|
Shares of common stock beneficially owned (2)
|
Shares That May Be Acquired Within 60 Days of
January 31, 2013
|
|
Percent of Total (2)
|
||
Entities affiliated with The Goldman Sachs Group, Inc. (3)
|
|
2,869,786
|
|
—
|
|
|
11.5%
|
Entities affiliated with Credit Suisse AG/ (4)
|
|
2,644,170
|
|
—
|
|
|
10.6%
|
Entities affiliated with InterWest Partners VII, L.P. (5)
|
|
2,003,651
|
|
31,440
|
|
|
8.0%
|
Three Arch Partners II, L.P. (6)
|
|
1,655,329
|
|
—
|
|
|
6.6%
|
FMR LLC (7)
|
|
2,049,059
|
|
—
|
|
|
8.2%
|
Peter C. Brandt
|
|
177,046
|
|
138,317
|
|
|
*
|
Adam E. Budish
|
|
5,578
|
|
4,453
|
|
|
*
|
Philippe O. Chambon, M.D., Ph.D. (8)
|
|
2,694,278
|
|
50,108
|
|
|
10.8%
|
Andrew Hurd
|
|
14,445
|
|
—
|
|
|
*
|
Heather A. Gervais
|
|
11,204
|
|
10,079
|
|
|
*
|
Gary G. Greenfield
|
|
26,528
|
|
26,528
|
|
|
*
|
Thomas L. Harrison
|
|
123,467
|
|
123,467
|
|
|
*
|
Patrick S. Jones
|
|
127,397
|
|
127,397
|
|
|
*
|
Matthew A. Kaminer
|
|
41,307
|
|
32,865
|
|
|
*
|
Patrick D. Spangler
|
|
—
|
|
—
|
|
|
—
|
Erick N. Tseng
|
|
26,528
|
|
26,528
|
|
|
*
|
Mark A. Wan (7)
|
|
1,705,437
|
|
50,108
|
|
|
6.8%
|
All current directors and executive officers as a group (12 persons)
|
|
4,953,215
|
|
589,850
|
|
|
19.4%
|
(1)
|
Except as otherwise indicated, the address of each beneficial owner is c/o Epocrates, Inc., 1100 Park Place, Suite 300, San Mateo, California 94403.
|
(2)
|
This table is based upon information supplied by officers and directors and upon information gathered by Epocrates about principal stockholders known to us based on a Schedule 13G or 13D filed with the Securities and Exchange Commission (the "SEC"). Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, we believe that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based on 24,952,827 shares outstanding on January 31, 2013, and adjusted as required by rules promulgated by the SEC. All shares of common stock subject to options or other equity awards currently exercisable or exercisable within 60 days after January 31, 2013, are deemed to be outstanding for the purpose of computing the percentage of ownership of the person holding such options, but are not deemed to be outstanding for computing the percentage of ownership of any other person.
|
(3)
|
Goldman, Sachs & Co. also reports beneficial ownership of these shares. Each of these Goldman Sachs entities has shared voting and investment power with respect to these shares. These Goldman Sachs entities disclaim beneficial ownership of the securities beneficially owned by (i) any client accounts with respect to which the Goldman Sachs reporting units or their employees have voting or investment discretion or both, or with respect to which there are limits on their voting or investment authority or both and (ii) certain investment entities of which the Goldman Sachs reporting units act as the general partner, managing general partner or other manager, to the extent interests in such entities are held by persons other than the Goldman Sachs reporting units. The address for The Goldman Sachs Group, Inc. and Goldman, Sachs & Co. is 200 West Street, 7th Floor, New York, New York 10282. The beneficial ownership of these securities is based on a Schedule 13G filed by these entities on February 13, 2013 reporting beneficial ownership as of December 31, 2012, and therefore does not reflect any changes in beneficial ownership after that date.
|
(4)
|
The shares are held by direct and indirect subsidiaries of Credit Suisse AG. The address of the principal business office of Credit Suisse AG is Uetlibergstrasse 231, P.O. Box 900, CH 8070 Zurich, Switzerland. The ultimate parent company of Credit Suisse AG is Credit Suisse Group AG, and its business address is Paradeplatz 8, P.O. Box 1, CH 8070 Zurich, Switzerland. Credit Suisse AG and Credit Suisse Group AG disclaim beneficial ownership of shares beneficially owned by their direct and indirect subsidiaries, including by the Sprout Funds (as defined below). Of the shares referred to above, 2,434,175 shares are held by Sprout Capital IX, L.P., or Sprout IX, 158,773 shares are held by DLJ ESC II, L.P., or ESC
|
(5)
|
Includes 1,885,124 shares held by InterWest Partners VII, L.P. and 87,087 shares held by InterWest Investors VII, L.P., collectively, the InterWest Funds. InterWest Management Partners VII, LLC is the general partner of the InterWest Funds and thereby has sole voting and investment control over the shares owned by the InterWest Funds. Dr. Gilbert H. Kliman, Harvey B. Cash, Philip T. Gianos, W. Scott Hedrick, W. Stephen Holmes, Thomas L. Rosch and Arnold L. Oronsky are managing directors of InterWest Management Partners VII, LLC and have shared voting and investment control over the shares owned by the InterWest Funds. The managing directors and members of InterWest Management Partners VII, LLC disclaim beneficial ownership of the shares owned by the InterWest Funds, except to the extent of their respective pecuniary interest therein. Also includes options to purchase 31,440 shares issuable pursuant to options exercisable within 60 days of December 31, 2012 granted to Dr. Kliman, one of our former directors. The address for each of these entities is 2710 Sand Hill Road, Second Floor, Menlo Park, California 94025. The beneficial ownership of these securities is based on a Schedule 13G filed by these entities on February 14, 2013 reporting beneficial ownership as of December 31, 2012, and therefore does not reflect any changes in beneficial ownership after that date.
|
(6)
|
Represents shares held by Three Arch Partners II, L.P., or Three Arch, over which Three Arch has sole voting and investment power. Three Arch Management II, L.L.C., or TAM II, is the general partner of Three Arch, and thereby has sole voting and investment control over the shares owned by the Three Arch. Mr. Wan, one of our directors, and Wilfred E. Jaeger, are managing members of TAM II and have shared voting and investment control over the shares owned by Three Arch. Mr. Wan disclaims beneficial ownership of the shares held by Three Arch except to the extent of his pecuniary interest therein. The address for each of these entities is 3200 Alpine Road, Portola Valley, California 94028. In addition to the shares beneficially owned by Mr. Wan by virtue of the shares owned by Three Arch, Mr. Wan has beneficial ownership of 49,125 shares subject to stock options exercisable within 60 days of December 31, 2012 granted to Mr. Wan. The beneficial ownership of these securities is based on a Schedule 13G filed by these entities on February 14, 2013 reporting beneficial ownership as of December 31, 2012, and therefore does not reflect any changes in beneficial ownership after that date.
|
(7)
|
Fidelity Management & Research Company (“Fidelity”), a wholly-owned subsidiary of FMR LLC, is an investment advisor and beneficially owns these shares by virtue of having sole investment power over these shares. Edward C. Johnson 3d, the Chairman of FMR, LLC, and FMR LLC, through its control of Fidelity, also beneficially owns these shares. Members of the family of Mr. Johnson are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. Neither FMR LLC nor Mr. Johnson has the sole power to vote or direct the voting of the shares owned directly by the Fidelity Funds, which power resides with the Funds' Boards of Trustees. The address for FMR LLC, Mr. Johnson and Fidelity is 82 Devonshire Street, Boston, Massachusetts 02109. The beneficial ownership of these securities is based on a Schedule 13G filed by these entities on February 14, 2013, and therefore does not reflect any changes in beneficial ownership that may have occurred after that date.
|
(8)
|
Includes 50,108 shares issuable pursuant to options exercisable within 60 days of December 31, 2012. Also includes 2,644,170 shares held by the Sprout Funds. See footnote 4 above. Dr. Chambon disclaims beneficial ownership of the shares held by the Sprout Funds, except to the extent of his pecuniary interest therein. The address for Dr. Chambon is 11 Madison Avenue, 13th Floor, New York, New York 10010.
|
Plan Category
|
|
Number of securities
to be issued upon
exercise of options,
warrants and rights
(a)
|
|
Weighted average
exercise price of
outstanding options
warrants and rights
(b)
|
|
Number of available
securities remaining
for future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
(c)
|
|
|||||
Equity compensation plans approved by stockholders
(1)
|
|
|
6,912,444
|
|
|
$
|
9.82
|
|
|
2,835,749
|
|
(2)
|
(1)
|
Consists of three plans: our 1999 Stock Option Plan, our 2008 Equity Incentive Plan and our 2010 Equity Incentive Plan.
|
(2)
|
The number of shares reserved for issuance under our 2010 Equity Incentive Plan will automatically increase on January 1
st
each year, starting on January 1, 2012 and continuing through January 1, 2014, by the lesser of (a) four percent (4%) of the total number of shares of our common stock outstanding on the last day of the preceding calendar year, (b) 1,965,000 shares of our common stock or (c) a number determined by our Board that is less than (a) or (b).
|
(1)
|
Relates to tax compliance services provided.
|
(2)
|
Relates to license fees for accounting research software.
|
(a)
|
We have filed the following documents as part of this Annual Report on Form 10-K:
|
Epocrates, Inc.
|
|
|
|
By:
|
/s/ ANDREW J. HURD
|
|
ANDREW J. HURD,
President, Chief Executive Officer and Interim Chief Financial Officer
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
|
Signatures
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ ANDREW J. HURD
|
|
President, Chief Executive Officer, Interim Chief Financial Officer and Director
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
|
|
March 11, 2013
|
ANDREW J. HURD
|
|
|||
|
|
|
|
|
/s/ PETER C. BRANDT
|
|
Chairman of the Board
|
|
March 11, 2013
|
PETER C. BRANDT
|
|
|||
|
|
|
|
|
/s/ PATRICK S. JONES
|
|
Director
|
|
March 11, 2013
|
PATRICK S. JONES
|
|
|
||
|
|
|
|
|
/s/ PHILIPPE O. CHAMBON
|
|
Director
|
|
March 11, 2013
|
PHILIPPE O. CHAMBON, M.D., PH.D.
|
|
|||
|
|
|
|
|
/s/ GARY G. GREENFIELD
|
|
Director
|
|
March 11, 2013
|
GARY G. GREENFIELD
|
|
|||
|
|
|
|
|
/s/ THOMAS L. HARRISON
|
|
Director
|
|
March 11, 2013
|
THOMAS L. HARRISON
|
|
|||
|
|
|
|
|
/s/ ERICK N. TSENG
|
|
Director
|
|
March 11, 2013
|
ERICK N. TSENG
|
|
|||
|
|
|
|
|
/s/ MARK A. WAN
|
|
Director
|
|
March 11, 2013
|
MARK A. WAN
|
|
Description
|
|
Beginning Balance
|
|
Charged to
Costs and Expenses
|
|
Reversals
|
|
Utilizations
|
|
Ending Balance
|
|||||||||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2012
|
|
$
|
85
|
|
|
$
|
219
|
|
|
$
|
—
|
|
|
$
|
(162
|
)
|
|
$
|
142
|
|
|
2011
|
|
$
|
141
|
|
|
$
|
665
|
|
|
$
|
—
|
|
|
$
|
(721
|
)
|
|
$
|
85
|
|
|
2010
|
|
$
|
22
|
|
|
$
|
282
|
|
|
$
|
—
|
|
|
$
|
(163
|
)
|
|
$
|
141
|
|
|
Valuation allowance for deferred tax assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2012
|
|
$
|
(668
|
)
|
|
$
|
(237
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(905
|
)
|
|
2011
|
|
$
|
(159
|
)
|
|
$
|
(509
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(668
|
)
|
|
2010
|
|
$
|
—
|
|
|
$
|
(159
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(159
|
)
|
Exhibit
Number |
Description of Document
|
|
|
10.33 (9)
|
Form of Voting Agreement, dated January 7, 2013, by and among athenahealth, Inc. and the directors and certain executive officers and stockholders of the Registrant
|
|
|
23.1
|
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.
|
|
|
24.1
|
Power of Attorney (reference is made to the signature page).
|
|
|
31.1
|
Certification of Principal Executive Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
Certification of Principal Financial Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
+
|
Management contract or compensatory plan.
|
(1)
|
Filed as Exhibit 3.1 to our Annual Report on Form 10-K (Reg No. 001-35062) with the SEC on March 31, 2011, and incorporated herein by reference.
|
(2)
|
Filed as Exhibit 3.4 to our Registration Statement on Form S-1, as amended (Reg. No. 333-168176), and incorporated herein by reference.
|
(3)
|
Filed as the like-described exhibit to our Registration Statement on Form S-1, as amended (Reg. No. 333-168176), and incorporated herein by reference.
|
(4)
|
Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q (Reg No. 001-35062) with the SEC on August 12, 2011, and incorporated herein by reference.
|
(5)
|
Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q (Reg No. 001-35062) with the SEC on August 12, 2011, and incorporated herein by reference.
|
(6)
|
Filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q (Reg No. 001-35062) with the SEC on August 12, 2011, and incorporated herein by reference.
|
(7)
|
Filed as Exhibit 10.1 to our current report on Form 8-K with the SEC on March 26, 2012, and incorporated herein by reference.
|
(8)
|
Filed as Exhibit 10.1 to our current report on Form 8-K with the SEC on August 7, 2012, and incorporated herein by reference.
|
(9)
|
Filed as the like-described exhibit to our current report on Form 8-K with the SEC on January 7, 2013, and incorporated herein by reference.
|
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