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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 24, 2024
Marin Software Incorporated
(Exact name of Registrant as Specified in Its Charter)
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Delaware |
001-35838 |
20-4647180 |
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
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149 New Montgomery Street, 4th Floor San Francisco, California |
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94105 |
(Address of Principal Executive Offices) |
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(Zip Code) |
(415) 399-2580
Registrant’s Telephone Number, Including Area Code
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Common stock, par value $0.001 per share |
MRIN |
The Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On July 24, 2024, Marin Software Incorporated (the “Company”) entered into a Search Ads Innovation Agreement (the “Agreement”) with Google LLC (“Google” and together with the Company generally, the “Parties”) for the Company to continue to develop its enterprise technology platform and software products. The Agreement is effective as of October 1, 2024 (the “Effective Date”).
The Agreement will take effect after the scheduled expiration on September 30, 2024 of a similar Revenue Share Agreement that the Company and Google signed in September 2021 (the “Current Agreement”). The Company will receive innovation payments from Google based on (a) revenue generated on the Company’s tech platform in connection with the Company’s clients’ spend on Search Ads (as defined in the Agreement) appearing on Google Search only, during a relevant calendar quarter (“Eligible Google Search Revenue”), and (b) revenue generated on Company’s tech platform in connection with its clients’ spend on Search Ads appearing on the Eligible Search Engines (as defined in the Agreement), excluding Google Search, during the relevant Contract Year (as defined below) (“Eligible Non-Google Search Revenue”). In the case of Eligible Google Search Revenue, following Alphabet Inc.’s public confirmation of its earnings for each calendar quarter, Google will provide the Company with the Eligible Google Search Revenue for the applicable calendar quarter and will make an innovation payment to the Company. In the case of Eligible Non-Google Search Revenue, at the end of each annual period of the Agreement commencing with the Effective Date (a “Contract Year”), the Company will submit a report containing its Eligible Non-Google Search Revenue to an independent third-party auditor appointed by Google (the “Auditor”), whereby such Auditor will report its findings to Google on the accuracy of the reported revenue. If the Auditor determines that the Company accurately reported its Eligible Non-Google Search Revenue, Google will make an innovation payment to the Company. If the Auditor determines that the Company inaccurately reported its Eligible Non-Google Search Revenue, then Google will have no obligation to make any innovation payment until the Auditor determines such amount to be accurately reported.
Each innovation payment will consist of a baseline innovation payment and a potential incremental innovation payment, with the baseline innovation payment being calculated as a fixed percentage against all applicable Eligible Google Search Revenue and Eligible Non-Google Search Revenue, subject to a minimum payment amount each quarter in the same amount as under the Current Agreement. At the end of each Contract Year, if all aggregate Eligible Google Search Revenue and Eligible Non-Google Search Revenue for all calendar quarters during such Contract Year exceeds the aggregate minimum baseline for such revenues during the same Contract Year, then the Company will be entitled to an incremental true-up payment equal to a higher specified percentage against the actual Eligible Google Search Revenue and Eligible Non-Google Search Revenue in excess of the aggregate minimum baseline for such revenues, up to a maximum specified amount.
The Company has agreed to reinvest a fixed percentage of the baseline innovation payments received during the term of the Agreement to drive tech platform innovation. The Company has also agreed to reinvest a specified percentage of its incremental innovation payments received during the term of the Agreement, where such percentage escalates each Contract Year, up to 100% in the third Contract Year. Such reinvestments will be made exclusively for the growth, development, innovation and expansion of the Company’s enterprise tech business. Additionally, the Company has agreed to invest a specified amount of its own funds each Contract Year to further its enterprise business. Such investments will be subject to review and assessment by the Auditor.
The Agreement contains customary confidentiality provisions, and representations and warranties of each of the Parties.
The Agreement expires on September 30, 2027; provided, however, that at least three months prior to the expiration, the Parties will consider extending or renewing the Agreement. Google may terminate the Agreement under certain circumstances, including the Company’s material uncured breach of the Agreement, the Company’s breach of the confidentiality and publicity provisions of the Agreement, the Company’s breach of its representations and warranties, or the Company is unable to pay its debts as they fall due. The Company may terminate the Agreement at any time for any reason by giving at least seven days’ notice in writing. In the event that either Party experiences a Change of Control (as defined in the Agreement) then the other Party may immediately terminate the Agreement at any time for a period of 30 days following the Party’s receipt of notice of such Change of Control.
The foregoing summary of the Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the Agreement, which the Company has filed as an exhibit to Current Report on Form 8-K and is incorporated in this Item 1.01 by reference.
Item 2.02 Results of Operations and Financial Condition.
On July 29, 2024, Marin Software Incorporated (the “Company”) issued a press release announcing estimated preliminary financial results for the three months ended June 30, 2024. The press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
The information in this Current Report on Form 8-K and Exhibit 99.1 attached hereto are being furnished pursuant to Item 2.02 of Form 8-K and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor will it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.
Item 8.01 Other Events
Liquidity, Going Concern, Strategic Transaction Process, and Potential Dissolution and Liquidation
There is substantial doubt raised about the Company’s ability to continue as a going concern. Due to the fact that we have been unable to obtain funding to sustain operations or realize a net positive cash flow, management and our board of directors determined that it was in the best interests of the stockholders to seek strategic alternatives. As part of this process, we are considering a wide range of options with a focus on maximizing stockholder value, including a potential sale of assets of the company, a sale of all of the Company, a merger or other strategic transaction. We have engaged an investment banker to act as our financial advisor in connection with this review. There can be no assurance that this process will result in the Company pursuing or completing any particular transaction or other strategic outcome or as to the terms or timing of any potential transaction.
We are currently engaged in preliminary discussions with a small number of private companies and other counterparties regarding potential "reverse merger" and "take-private" transactions. Any such completed transaction would have a dramatic impact on Marin stockholders. Given the preliminary stage of such discussions, at this time there is no way to quantify the potential impact of a transaction, if any. For any such potential transaction to progress, substantial due diligence by all involved parties would be need to be conducted, as well as agreement of transaction terms, negotiation and approval of transaction documents and the satisfaction of applicable closing conditions. Any such process would be time-consuming and expensive and there can be no assurance that any of the above potential transactions or other transaction will ultimately be successful.
If we are unable to complete a satisfactory transaction soon, it will be necessary to seek additional financing or pursue a dissolution and liquidation in the near future, where holders of the Company’s common stock may receive little or no recovery for their shares of common stock. Even if we do complete a satisfactory strategic transaction, our stockholders may not recognize any return on their investment in shares of our common stock. We are simultaneously preparing for a potential statutory dissolution under the Delaware General Corporate Law and liquidation in the event we cannot raise additional capital or complete a strategic transaction in the near future, and we have engaged advisors to help us prepare for a potential dissolution and liquidation.
Additional Risk Factors
There is substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain further financing and may require us to pursue a dissolution and liquidation.
Our ability to continue as a going concern is substantially dependent upon our ability to improve customer retention rates, increase new bookings and manage our cash flows. To achieve this, we plan to attempt to increase our market share for our current services through sales and marketing efforts, continue development of new platform features and deliver efficient service to customers, which may require additional capital and expenditures, which may be difficult, especially considering our financial condition and recent results of operations and if general macroeconomic conditions worsen.
We intend to continue to make investments to sustain and grow our business and may require additional funds to respond to business challenges, including the need to develop new features or enhance our existing platform and improve our operating infrastructure, and engage in equity or debt financing to secure additional funds. If we raise additional funds through further issuance of equity or convertible debt securities, our existing stockholders could suffer significant dilution.
We are also exploring a wide range of options with a focus on maximizing stockholder value, including a potential sale of assets of the company, a sale of all of the company, a merger or other strategic transaction. We have engaged an investment banker to act as our financial advisor in connection with the review of strategic alternatives. For a description of this process, please see the second paragraph of the section above titled “Liquidity, Going Concern, Strategic Transaction Process, and Potential Dissolution and Liquidation”. There can be no assurance that we will be able to complete any of these strategic alternatives or that stockholders will receive any significant return on their shares of our common stock in any transaction. We are simultaneously preparing for a potential dissolution and liquidation in the event we cannot raise additional capital or complete a satisfactory strategic transaction in the near future. If we cannot continue as a viable entity, we will highly likely be required to pursue a liquidation of the Company in the near future, and our stockholders would likely lose most or all of their investment in us.
If we do not complete a strategic transaction, or do not receive sufficient financing from our existing “at-the-market” common stock offering facility or through any other financing, we are highly likely to pursue dissolution and liquidation.
If we do not complete a strategic transaction or receive sufficient financing from our existing at-the-market securities offering facility or any other financing in the near future, it is highly likely that we will pursue a statutory dissolution under the Delaware General Corporate Law and liquidation. We are currently preparing for a potential dissolution and liquidation in the event we cannot raise additional capital or complete a strategic transaction, and we have engaged advisors in connection therewith. In the event of a dissolution and liquidation, our stockholders would likely lose most or all of their investment in us.
Our future results of operations may be affected by uncertainty regarding our future prospects.
Given uncertainty regarding our future prospects, our future results of operations may be adversely affected if customers, potential customers, suppliers, partners or employees become increasingly concerned about our financial condition and do not enter into or new continuing relationships with us or resign from their employment with the Company.
We have a current “at-the-market” common stock offering facility. In the event we sell shares of our common stock pursuant to this facility, the actual number of shares we will issue in that facility, at any one time or in total, is uncertain.
We are party to an equity distribution agreement with Citizens JMP Securities, LLC (“Citizens JMP”) (formerly known as JMP Securities LLC) for the sale of up to $50.0 million of new securities in an “at-the-market” common stock offering facility. In accordance with the SEC’s Instruction I.B.6 of Registration Statement on Form S-3, we adjusted the maximum aggregate market value of the securities that may be sold pursuant to this current "at-the-market" securities offering facility from $50.0 million to approximately $22.8 million based on our market capitalization on the date we filed our Annual Report on Form 10-K for the year ended December 31, 2021. Subject to certain limitations in the sales agreement and compliance with applicable law, we have the discretion to deliver a placement notice to Citizens JMP at any time throughout the term of the equity distribution agreement. We currently intend to immediately deliver a placement notice to Citizens JMP to raise additional capital. The number of shares that are sold by Citizens JMP after delivering a placement notice will fluctuate based on the market price of the common stock during the sales period and limits we set with Citizens JMP. Because the price per share of each share sold will fluctuate based on the market price of our common stock during the sales period, it is not possible at this stage to predict the number of shares that will be ultimately issued.
Forward‑Looking Statements
This Current Report on Form 8‑K contains forward‑looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Current Report on Form 8‑K other than statements of historical fact are forward-looking statement, including statements regarding the parties’ obligations and responsibilities under the Agreement, our ability to continue as a going concern, our ability to raise any additional financing or the terms or timing of any additional financing, our ability to negotiate or complete any strategic transaction or the terms or timing of any strategic transaction, our ability to dissolve and liquidate the Company or the terms and timing of any dissolution, and any potential return to stockholders that may result from any strategic transaction or dissolution and liquidation. The words “will,” and “may,” and similar expressions are intended to identify forward‑looking statements. These forward‑looking statements are based on current expectations for the relationship between the Company and Google and the terms of the Agreement. These forward‑looking statements are subject to a number of risks, uncertainties and assumptions, including the ability of the Parties to carry out their obligations and responsibilities under the Agreement and achieve the anticipated benefits of the relationship, and those described in the “Risk Factors” section of the Company’s Quarterly Report on Form 10‑Q for the three months ended March 31, 2024. In addition, new risks may emerge from time to time and it is not possible for the Company to predict all risks, nor can it assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward‑looking statements made. In light of these risks, uncertainties and assumptions, the future events discussed in this Current Report on Form 8‑K may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward‑looking statements.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Marin Software Incorporated |
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Date: July 29, 2024 |
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By: |
/s/ Robert Bertz |
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Robert Bertz |
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Chief Financial Officer |
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(Principal Financial and Accounting Officer) |
EXHIBIT 10.1
Contract ID: [*****]
Certain identified information has been excluded from this exhibit because (i) it is both not material and would be competitively harmful if disclosed and (ii) it is personal information that may be redacted in accordance with Item 601(a)(6) of Regulation S-K. Information that was omitted has been noted in this document with a placehold idenitifed by the mark [*****].
Search Ads Innovation Agreement
This Search Ads Innovation Agreement (the “Agreement”) is entered into by:
(1)Google LLC, a Delaware limited liability company whose principal place of business is 1600 Amphitheatre Parkway, Mountain View, CA 94043 (“Google”); and
(2)Marin Software Incorporated, a Delaware corporation whose principal place of business is at 123 Mission Street, 27th Floor, San Francisco, CA 94105 (“Company”),
each a “party” and together the “parties”.
INTRODUCTION
(A)The innovation payments described in this Agreement are intended to encourage Company to develop its search advertising platforms, products and expertise generally in order to improve the services it provides to its advertiser clients.
(B)Company wishes to develop its search advertising platforms, products and expertise and Google will make available the innovation payments described in this Agreement, subject to the terms and conditions of this Agreement.
(C)This Agreement governs the commercial relationship between Google and Company insofar as it relates to the benefits expressly provided by this Agreement. This Agreement does not govern Company’s use of any product or service provided by Google or a Google Affiliate.
The parties agree as follows.
In this Agreement, the following definitions apply unless expressly stated otherwise.
1.1.“Affiliate” means with respect to a party, an entity that directly or indirectly Controls, is Controlled by or is under common Control with such party.
1.2.“Agreement Expiry Date” means 30 September 2027.
1.3.“Auditor” means an independent third-party auditor appointed by Google, as notified to Company by Google from time to time.
1.4.“Baseline Innovation Payment” means the payment to Company by Google of a percentage of Eligible Google Search Revenue for the relevant Calendar Quarter, as set out in the columns titled “Baseline Revenue Share Payments” in the tables in Exhibit A.
1.5.“Calendar Quarter” means a three-month period, ending on either 31 March, 30 June, 30 September or 31 December during the Term.
1.6. “Confidential Information” means this Agreement, the Innovation Payments, and any information that one party (or an Affiliate) discloses to the other party under this Agreement, and that is marked as confidential or would normally be considered confidential information under the circumstances. It does not include information that is independently developed by the recipient, is rightfully given to the recipient by a third party without confidentiality obligations, or becomes public through no fault of the recipient.
1.7.“Contract Year” means a 1 year period starting on the Effective Date or an anniversary of the Effective Date.
1.8.“Control” means (i) the beneficial ownership of more than 50% of the issued share capital of a company; or (ii) the direct or indirect power to control a company’s management and policies, including through ownership of voting securities or by contract.
1.9.“Currency” means US dollars.
1.10.“Effective Date” means 1 October 2024.
1.11.“Eligible Search Engines” means [*****].
1.12.“Eligible Google Search Revenue” means, subject to section 6, revenue generated on Company’s search platform in connection with its clients’ spend on Search Ads appearing on Google Search only, during the relevant Calendar Quarter.
1.13.“Eligible Non-Google Search Revenue” means, subject to section 6, revenue generated on Company’s search platform in connection with its clients’ spend on Search Ads appearing on the Eligible Search Engines, excluding Google Search, during the relevant Contract Year.
1.14.“Eligible Search Revenue Baseline” means the minimum amount against which an Innovation Payment will be calculated, as set out in the column titled “Eligible Search Revenue Baseline” in the table in Exhibit A.
1.15.“Eligible Search Revenue Cap” means the applicable amount for a given Contract Year set out in the column titled “Eligible Search Revenue Cap” in the table in Exhibit A.
1.16.“Incremental Innovation Payment” means the payment to Company by Google of a percentage of Eligible Google Search Revenue or Eligible Non-Google Search Revenue (as applicable) that is in excess of the Eligible Search Revenue Baseline for the relevant Contract Year, as set out in the in the column titled “Incremental Innovation Payments” in the tables in Exhibit A.
1.17.“Program Manager” means the named contacts for Google and Company as set out in Exhibit B.
1.18.“Innovation Payment” means, collectively, Baseline Innovation Payments and Incremental Innovation Payments.
1.19.“Search Ads” means advertisements managed by Company for and on behalf of its clients via its own platform which appear on the Eligible Search Engines only, and in respect of Google Search specifically, that run through Google Ads (f/k/a AdWords) via Search or Shopping campaigns (and not, for the avoidance of doubt, Hotel Ads), including through Google Search partners.
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1.20.“Term” has the meaning given in section 10.1.
1.21.The words "include" and "including" will not limit the generality of any words preceding them.
2.Eligible Google Search Revenue
2.1.All Eligible Google Search Revenue will be determined by Google (acting reasonably, but in its sole discretion), in accordance with internal data sources available to Google.
2.2.As soon as is reasonably practicable following Alphabet Inc.’s public confirmation of its earnings for each Calendar Quarter, Google will give notice to Company’s Program Manager by email of its Eligible Google Search Revenue for each Calendar Quarter (and, following the final Calendar Quarter of the relevant Contract Year, Company’s Eligible Google Search Revenue for that Contract Year).
2.3.Following notification to the Company in accordance with section 2.2, Google will make the applicable Innovation Payment to Company in accordance with Exhibit A and section 4.
3.Eligible Non-Google Search Revenue
3.1.Following the end of each Contract Year to which the financial report relates, Company will submit to Auditor a financial report which states its Eligible Non-Google Search Revenue for the previous Contract Year.
3.2.In submitting a financial report for assessment by Auditor, Company will send Auditor a summary of its Eligible Non-Google Search Revenue in the Currency, which shows the amounts spent on Search Ads on the Eligible Search Engines in aggregate (excluding Google Search), together with sufficient information and materials to enable such Auditor to verify the level of Eligible Non-Google Search Revenue achieved.
3.3.If Auditor reasonably requests additional information or assistance in relation to a financial report submitted by Company for assessment, then Company will provide such additional information or assistance as the Auditor may reasonably require, or an explanation as to why such information is not available. Company will provide Auditor with all reasonable access to all relevant Company records and facilities to enable it to verify the level of Eligible Non-Google Search Revenue achieved. The Auditor will complete its assessment within a reasonable timeframe following receipt of information required from Company.
3.4.If the Auditor determines that Company has accurately reported its Eligible Non-Google Search Revenue for the relevant Contract Year, then Google will (a) give notice to Company’s Program Manager by email, and (b) make the applicable Innovation Payment in accordance with Exhibit A and section 4.
3.5.If Auditor determines that Company has inaccurately reported its Eligible Non-Google Search Revenue for the relevant Contract Year, then Google will give notice to Company’s Program Manager by email. Google is under no obligation to make any Innovation Payments with respect to Eligible Non-Google Search Revenue for a given Contract Year until the Auditor determines that Company has accurately reported its Eligible Non-Google Search Revenue for the relevant Contract Year.
3.6.In the event that Google, having used reasonable endeavors to do so, is unable to appoint an Auditor to carry out the assessment of Eligible Non-Google Search Revenue
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in accordance with this section 3, then Google will notify Company, and Company will submit a financial report to Google for assessment (instead of the Auditor) on an annual basis, provided that:
3.6.1.Company will provide Google with the same information and assistance as it is obliged to provide the Auditor pursuant to this section 3;
3.6.2.Company will only submit a financial report to Google for assessment at least 3 months after the end of the Contract Year in which the Eligible Non-Google Search Revenue was accrued, and to which the financial report relates; and
3.6.3.the financial report is in an aggregated format, and does not identify any of the Eligible Search Engines, or the level of Eligible Non-Google Search Revenue attributable to any individual Eligible Search Engine.
3.7.For the avoidance of doubt, in no circumstances will Company provide a financial report to Google which identifies any of the Eligible Search Engines, or the level of Eligible Non-Google Search Revenue attributable to any individual Eligible Search Engine.
4.1.Google will pay Company the Innovation Payment for the previous Calendar Quarter or Contract Year (as applicable) within 45 days from the date on which (as applicable):
4.1.1.Company provides Google with an invoice for the applicable Innovation Payment following Google’s notification to Company of its Eligible Google Search Revenue for the relevant Calendar Quarter or Contract Year pursuant to section 2.2; or
4.1.2.Google’s Program Manager notifies Company pursuant to section 3.4 that Auditor (or Google, as applicable) has completed its assessment of Company’s financial reports pursuant to section 3, and that Company has accurately reported its Eligible Non-Google Search Revenue for the relevant Contract Year.
4.2.Innovation Payments will be made in the Currency.
4.3.Google will not be obliged to make Innovation Payments for Eligible Google Search Revenue and Eligible Non-Google Search in excess of the Eligible Search Revenue Cap for the relevant Contract Year.
4.4.Google will apply an exchange rate to all Eligible Google Search Revenue or Eligible Non-Google Search Revenue (as applicable) reported in a currency other than the Currency in order to verify Eligible Google Search Revenue or Eligible Non-Google Search Revenue (as applicable) and assess any Innovation Payment due to Company. Such exchange rate will be the average daily rate of exchange quoted by a reputable third party selected by Google.
4.5.Any payments by Google pursuant to this Agreement are exclusive of taxes imposed by any governmental entity. Company will pay any applicable taxes including sales, use, personal property, VAT, excise, customs fees, import duties or other similar taxes and duties imposed by governmental entities of whatever kind and imposed with respect to the transactions for services provided under the Agreement, including penalties and interest, but specifically excluding taxes based upon Google's net income. If Google has a legal obligation to withhold any taxes from its payments to Company, Google will remit such taxes to the appropriate government authority, and reduce its payment to Company by the amount of the taxes withheld.
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4.6.Google will make any payment due under this Agreement by wire transfer. Google will use the wire transfer information provided by Company in writing (which may include e-mail), and Company will provide on request such instructions, information and documentation required by Google to enable Google to complete the transfer to the appropriate account.
5.Reinvestment of Innovation Payments
5.1.Company will reinvest [*****]% of Baseline Innovation Payments received during the Term exclusively into the growth, development, innovation and expansion of its Search Ads business. This includes: (a) the continued development of support for new and existing [*****]; and (b) investment in Company’s platform, research, partnerships, acquisitions, media mix planning, measurement, testing, client success, and sales and marketing in connection with the use of the [*****], provided that the primary purpose of such development and investment referred to in (a) and (b) is to improve the planning, implementation and measurement of [*****]. Company may not enter into any type of arrangement with a third party where either party receives a financial benefit in connection with any Eligible Google Search Revenue, Eligible Non-Google Search Revenue or Innovation Payments, including any arrangement where Company transfers or shares the value of the Innovation Payments to its clients, or uses the Innovation Payments to subsidize discounted rates for its clients.
5.1.1.For any Incremental Innovation Payments made to the Company, the following reinvestment will be required:
5.1.1.1.Contract Year 1: [*****]%
5.1.1.2.Contract Year 2: [*****]%
5.1.1.3.Contract Year 3: [*****]%
5.2.In addition to the reinvestment of all Innovation Payments received during the Term in accordance with section 5.1, Company will also invest at least the following additional amounts of its own funds in each Contract Year into the growth, development, innovation and expansion of its Search Ads business (the “Search Investment Amounts”):
5.2.1.Contract Year 1 (1 October 2024 - 30 September 2025) - $[*****].
5.2.2.Contract Year 2 (1 October 2025 - 30 September 2026) - an amount agreed by the parties in writing (both acting reasonably) within 30 days of completion of Auditor’s assessment of Company’s investment of the Innovation Payments and Search Investment Amounts for Contract Year 1. If the parties are unable to agree the Contract Year 2 Search Investment Amount within such 30 day period, the Search Investment Amount for Contract Year 2 will be $[*****].
5.2.3.Contract Year 3 (1 October 2026 - 30 September 2027) - an amount agreed by the parties in writing (both acting reasonably) within 30 days of completion of Auditor’s assessment of Company’s investment of the Innovation Payments and Search Investment Amounts for Contract Year 2. If the parties are unable to agree the Contract Year 3 Search Investment Amount within such 30 day period, the Search Investment Amount for Contract Year 3 will be $[*****].
5.3.To verify that the Company is investing all Innovation Payments and Search Investment Amounts into the growth, innovation and expansion of its Search Ads business in accordance with sections 5.1 and 5.2, the following will apply not more than once for
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each Contract Year of the Term, including if such right is exercised in the 12 months after the expiration or termination of the Agreement:
5.3.1.Within 10 days of Google’s written request, Company will provide Google with a certification signed by a Company officer verifying that (a) all Innovation Payments are being reinvested by Company in accordance with section 5.1; and (b) all Search Investment Amounts are being invested by Company in accordance with section 5.2.
5.3.2.Google may appoint an Auditor to examine and verify that (a) all Innovation Payments are being reinvested by Company in accordance with section 5.1; and (b) all Search Investment Amounts are being invested by Company in accordance with section 5.2.
5.3.3.Company will provide Auditor with all reasonable access to the relevant Company records and facilities, and such additional information or assistance as the Auditor may reasonably require to carry out an assessment pursuant to this section 5.
5.3.4.Assessments will be conducted during regular business hours at Company’s facilities, where reasonably necessary, and will not unreasonably interfere with Company’s business activities.
5.3.5.If an assessment reveals that either: (a) Company has not reinvested all Innovation Payments by Google during the assessment period; or (b) Company has not invested at least the Search Investment Amounts during the assessment period, then Google will notify Company’s Program Manager by email, and unless Company can demonstrate to the Auditor’s reasonable satisfaction that it has reinvested all outstanding amounts within 90 days of notification from Google, Google will be entitled to terminate this Agreement immediately on written notice to Company. In the event of such termination by Google, Google will cease making Innovation Payments to Company, other than Innovation Payments (i) due and payable to Company for the Calendar Quarter(s) and/or Contract Year(s) preceding the Calendar Quarter in which this Agreement is terminated; and (ii) applicable to Eligible Google Search Revenue and Eligible Non-Google Search Revenue accrued during the Calendar Quarter and/or Contract Year in which the Agreement is terminated, on a pro-rata basis up to the date of termination.
6.Acquisitions; Review of Eligible Google/Non-Google Search Revenue, Innovation Payments and the Eligible Search Revenue Cap
6.1.If Company enters into a definitive agreement to obtain Control of an entity (for example, through a stock purchase or sale, merger, or other form of corporate transaction) (an “Acquisition”) during the Term it will notify Google within 30 days of entering into such agreement. Any revenue which may be generated by Company through Search Ads as a result of an Acquisition for which Company entered into a definitive agreement for such Acquisition will not count towards the calculation of Eligible Google Search Revenue or Eligible Non-Google Search Revenue, unless otherwise agreed in writing by Google.
6.2.Within a reasonable time following (i) completion of an Acquisition or (ii) at the end of each Contract Year, Google and Company will meet to discuss whether to make any changes to the Eligible Search Revenue Cap, the Innovation Payments, or how Eligible Google Search Revenue is calculated. Moreover, at such time the parties may also discuss whether or not to include other revenue streams (i.e., beyond Eligible Google Search Revenue) in connection with future Innovation Payments, and to the extent the parties agree on any such change, it will be memorialized in a written and signed
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agreement (such as an amendment to this Agreement).
6.3.In order to be legally binding, any agreement to: (a) include additional revenue generated by Company as a result of an Acquisition within the calculation of Eligible Google Search Revenue or Eligible Non-Google Search Revenue; (b) to amend the Eligible Search Revenue Cap or the Innovation Payments; or (c) to change how Eligible Google Search Revenue is calculated, must be made in accordance with section 11.7.
7.Confidentiality and Publicity
7.1.The recipient will not disclose the other party’s Confidential Information, except to employees, Affiliates, agents, professional advisors, or prospective investors (“Delegates”) who need to know it and who have a legal obligation to keep it confidential. The recipient will use the other party’s Confidential Information only to exercise rights and fulfil obligations under this Agreement. The recipient will ensure that its Delegates are also subject to no less restrictive non-disclosure and use obligations. The recipient may disclose Confidential Information when required by law after giving reasonable notice to the discloser, if permitted by law.
7.2.Neither party may make any public statement regarding this Agreement without the other’s written approval.
7.3.Notwithstanding anything to the contrary in this Section 7 or otherwise, either party shall be permitted to disclose the existence and terms of this Agreement pursuant to the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Nasdaq Stock Market Rules (the “Permitted Disclosures”) and following such disclosures, make public statements regarding this Agreement consistent with such disclosures; provided that, to the extent reasonably practicable and permitted by law, (i) Company shall provide Google with prior notice of and an opportunity to review (1) any Form 8-K to be filed by Company in connection with the entry into this Agreement, (2) any copy of this Agreement to be filed by Company as an exhibit to a current or periodic report pursuant to the Securities Exchange Act of 1934, as amended, and (3) any subsequent current or periodic report that contains new disclosure of the terms of this Agreement (it being understood that the foregoing obligation shall not apply to revenue or other financial information relating to the Company’s performance under this Agreement, or any information that Company deems to be commercially sensitive or material non-public information), and (ii) Company shall submit a confidential treatment request (“CTR”) seeking to obtain confidential treatment of certain commercially-sensitive information in the Agreement and Company shall consider in good faith, as part of that CTR submission, any reasonable requests from Google to redact additional commercially-sensitive portions of the Agreement.
8.Representations, Warranties, Compliance with Law
8.1.Each party warrants and represents that:
8.1.1.it will use reasonable care and skill in complying with its obligations under this Agreement;
8.1.2.it has full power and authority to enter into this Agreement and to carry out all of its obligations set out in this Agreement; and
8.1.3.execution, delivery and consummation of the transactions contemplated by this Agreement will not conflict with, or result in any violation or breach of, any
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CONFIDENTIAL ~ DMS Template ID: 4535100 (v1.0) ~ pg. 7 |
provision of any other contract or other agreement between such party and any third party.
8.2.Notwithstanding its obligations under section 8.1, and for the avoidance of doubt, Company warrants and represents to Google that it will not disclose the existence of this Agreement, or the payment or amount of any Innovation Payments paid or payable under this Agreement, to its clients or partners except where required by law, including the Permitted Disclosures and after giving reasonable notice to Google, if permitted by law. Any such disclosure to clients or partners shall be subject to such clients or partners being bound by confidentiality obligations no less restrictive than the confidentiality obligations set out in this Agreement.
8.3.To the maximum extent permitted by applicable law, the parties’ only representations and warranties under this Agreement are expressly stated in this section. To the maximum extent permitted by law, subject to Section 9.2 (Exceptions to Limitations), the parties disclaim all other representations and warranties (express or implied), including any warranties of merchantability, satisfactory quality, conformance with description, content accuracy, error-free operation, non-infringement and fitness for purpose.
9.Limitation of Liability
9.1.Liability. “Liability” means any liability, whether under contract, tort (including negligence) or otherwise, and whether or not foreseeable or contemplated by the parties.
9.2.Exceptions to Limitations. Nothing in this Agreement will exclude or limit either party’s Liability:
9.2.1.for death or personal injury resulting from its negligence or the negligence of its employees or agents;
9.2.2.for fraud or fraudulent misrepresentation;
9.2.3.for payment of Innovation Payments properly due and owing to Company in accordance with the criteria and requirements of this Agreement;
9.2.4.breach of section 7 (Confidentiality and Publicity); or
9.2.5.matters for which liability cannot be excluded or limited under applicable law.
9.3.Limitations. Subject to section 9.2 (Exceptions to Limitations):
9.3.1. neither party will have any Liability for any:
9.3.1.1.loss of revenues;
9.3.1.3.loss of contracts;
9.3.1.4.loss of or corruption of data;
9.3.1.5.loss of business opportunity;
9.3.1.6.loss of anticipated savings;
9.3.1.7.loss of goodwill or reputation; or
9.3.1.8.indirect or consequential losses.
9.3.2.each party’s total aggregate Liability arising out of or relating to this Agreement is limited to $[*****] USD.
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CONFIDENTIAL ~ DMS Template ID: 4535100 (v1.0) ~ pg. 8 |
10.1.The Agreement shall commence on the Effective Date and will continue until the Agreement Expiry Date unless terminated earlier in accordance with this Agreement (the period during which this Agreement is in full force and effect being the “Term”).
10.2.At least 3 months before the Agreement Expiry Date, the parties will meet to discuss the possibility of extending or renewing this Agreement. In order to be binding, any agreement to extend or renew this Agreement must be made in accordance with section 11.7 (Amendments).
10.3.Termination by Google: Google may terminate this agreement with immediate effect at any time by giving notice in writing to Company (including by email) if:
10.3.1.Company is in material breach of this Agreement where the breach is incapable of remedy;
10.3.2.Company is in material breach of this Agreement where the breach is capable of remedy and Company fails to remedy the breach within thirty (30) days after receiving written notice of the breach from Google;
10.3.3.regardless of whether the breach would be considered material or is capable of remedy, Company is in breach of section 7 or 8 of this Agreement
10.3.4.Google reasonably suspects or discovers that Company has committed a fraudulent act or acts in the nature of fraud upon Google or any Google Affiliate;
10.3.5.(i) Company is, or is deemed for the purposes of any applicable law to be, unable to pay its debts as they fall due for payment; (ii) a petition is presented or documents filed with a court or any registrar or any resolution is passed for Company’s winding–up, administration or dissolution or for the seeking of any relief under any applicable bankruptcy, insolvency, Company or similar law; (iii) any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager receiver, supervisor, administrative receiver, administrator or similar officer is appointed in respect of any of Company’s assets; or (iv) any event analogous to the events listed in (i) to (iii) above takes place in respect of Company in any jurisdiction;
10.3.6.the conduct of Company is, in the reasonable opinion of Google, prejudicial to Google’s legitimate interests;
10.3.7.if the effect of any legislation, regulation, judgment, order or decree is likely (as determined by Google, acting reasonably) to adversely affect (i) the relationship between the parties under this Agreement or (ii) the ability of Google to make or the Company to receive the payments provided for under this Agreement;
10.3.8.the arrangements between the parties under this Agreement breaches any third-party rights (including rights under contract); or
10.3.9.Google believes, in good faith, that Company has violated or caused Google to violate any Anti-Bribery Laws (as defined in section 11.3) below), or that such a violation is reasonably likely to occur.
10.4.Termination by Company: Company may terminate this Agreement at any time for any reason by giving at least 7 days’ notice in writing to Google.
10.5.Subject to section 10.6, any provision of this Agreement which expressly or by implication is intended to come into or continue in force on or after termination of this Agreement will remain in full force and effect, including Company’s obligations in sections 5.1 and 5.2, and the assessment rights in section 5.3.
10.6.For the avoidance of doubt, the expiry or termination of this Agreement will not of itself
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CONFIDENTIAL ~ DMS Template ID: 4535100 (v1.0) ~ pg. 9 |
give rise to any claim against Google for indemnification or compensation, whether for loss of income or revenue, loss of agency rights, loss of goodwill or any analogous loss, other than a claim for damages if and to the extent that the termination was a breach of contract by Google.
10.7.If the Agreement is terminated by Google pursuant to section 10.3 or by the Company pursuant to section 10.4, Google will not be required to pay any further Innovation Payments due under the Agreement, including any Innovation Payments that may have been payable to Company for the Calendar Quarter in which this Agreement is terminated.
11.1.Notices. All notices must be in English and in writing. Notices of termination or breach must be addressed to the other party’s Legal Department. The email address for notices being sent to Google’s Legal Department is legal-notices@google.com. All other notices must be addressed to the other party’s primary contact. Emails are written notices. Notice will be treated as given on receipt, as verified by written or automated receipt or by electronic log (as applicable).
11.2.Assignment. Google may assign any part of this Agreement to an Affiliate provided that Google notifies Company of such assignment. Company may assign any part of this Agreement to an Affiliate provided that: (a) the assignee has agreed in writing to be bound by the terms of this Agreement; (b) the Company remains liable for obligations under the Agreement if the assignee defaults on them; and (c) the Company notifies Google of the assignment. Any other attempt to assign is void.
11.3.Compliance with Anti-Bribery Laws. In performing its obligations under this Agreement, Company will comply with all applicable anti-bribery laws (“Anti-Bribery Laws”), including, the U.S. Foreign Corrupt Practices Act of 1977 and the UK Bribery Act of 2010, which prohibit corrupt offers of anything of value, either directly or indirectly to anyone, including government officials, to obtain or keep business or to secure any other improper commercial advantage. Company will not make any facilitation payments, which are payments to induce officials to perform routine functions that they are otherwise obligated to perform. “Government officials” include any government employee; candidate for public office; and employee of government-owned or government-controlled companies, public international organizations, and political parties.
11.4.Change of Control. During the Term, if a party experiences a change of Control (for example, through a stock purchase or sale, merger, or other form of corporate transaction): (a) the party experiencing the change of Control will give written notice to the other party within 30 days after the change of Control, and (b) the other party may immediately terminate this Agreement any time between the change of Control and 30 days after it receives the written notice of this.
11.5.Subcontracting. Either party may subcontract any of its obligations under this Agreement, but will remain liable for all subcontracted obligations and its subcontractors’ acts or omissions.
11.6.Equitable Relief. Nothing in this Agreement will limit either party’s ability to seek equitable relief.
11.7.Amendments. Any amendment must be in writing, expressly state that it is amending this Agreement, and be signed by both parties.
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CONFIDENTIAL ~ DMS Template ID: 4535100 (v1.0) ~ pg. 10 |
11.8.No Waiver. A party’s delay or omission in exercising any right under this Agreement will not be treated as a waiver of that right. To be effective, a waiver must expressly state the right being waived under this Agreement and be signed by the waiving party.
11.9.Severability. If any part of this Agreement is invalid, illegal or unenforceable, the rest of the Agreement will remain in effect.
11.10.Independent Contractors; No Agency. The parties are independent contractors. This Agreement does not create any agency, partnership, joint venture or employment relationship.
11.11.No Third Party Beneficiaries. There are no third-party beneficiaries under this Agreement unless the Agreement expressly states that there are. The parties can amend, rescind, or terminate this Agreement without any third-party beneficiary’s consent.
11.12.Raising Issues with Public Authorities. Nothing in this Agreement prevents a party from raising issues with any relevant public authority regarding non-compliance with the law. To the extent this section conflicts with any other part of this Agreement, this section will govern.
11.13.Force Majeure. Neither party will be liable for failure or delay in performance to the extent caused by circumstances beyond its reasonable control.
11.14.Signatures. The parties may sign this Agreement using counterparts and electronic copies as originals. The parties may sign this Agreement electronically if permitted by applicable law.
11.15.Export Compliance. Company agrees to comply with all applicable export control and sanctions laws and regulations, including (A) the EAR (Export Administration Regulations) maintained by the U.S. Department of Commerce, (B) trade and economic sanctions maintained by the U.S. Treasury Department’s Office of Foreign Assets Control, and (C) the ITAR (International Traffic in Arms Regulations) maintained by the U.S. Department of State.
11.16.Entire Agreement. This Agreement states all terms agreed between the parties and supersedes all other agreements between the parties relating to its subject matter. In entering into this Agreement, the parties have relied solely on the express statements in this Agreement. Neither party has relied on, and neither party will have any right or remedy based on, any other statement, representation, or warranty (whether made negligently or innocently).
11.17.Governing Law. ALL CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY RELATED GOOGLE PRODUCTS OR SERVICES WILL BE GOVERNED BY CALIFORNIA LAW, EXCLUDING CALIFORNIA'S CONFLICT OF LAWS RULES, AND WILL BE LITIGATED EXCLUSIVELY IN THE FEDERAL OR STATE COURTS OF SANTA CLARA COUNTY, CALIFORNIA, USA; THE PARTIES CONSENT TO PERSONAL JURISDICTION IN THOSE COURTS.
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CONFIDENTIAL ~ DMS Template ID: 4535100 (v1.0) ~ pg. 11 |
Signed by the parties’ authorized representatives on the dates below.
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Google LLC |
Marin Software Incorporated |
By: /s/ Philipp Schindler |
By: /s/ Chris Lien |
Name: Philipp Schindler |
Name: Chris Lien |
Title: Authorized Signatory |
Title: CEO |
Date: 7/24/2024 |
Date: 7/24/2024 |
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CONFIDENTIAL ~ DMS Template ID: 4535100 (v1.0) ~ pg. 12 |
Exhibit A – Innovation Payments
Table 1 - Innovation Payments applicable from the Effective Date
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Contract Year |
Calendar Quarter |
Dates |
Eligible Search Revenue Baseline ($1.1B per Contract Year)* |
Baseline Innovation Payment (per Calendar Quarter) |
Incremental Innovation Payment above Baseline (applied per Contract Year) |
Eligible Search Revenue Cap** (per Contract Year) |
1 |
1 |
1 October 2024 – 31 December 2024 |
$[*****] |
[*****]% |
[*****]% |
$[*****] |
2 |
1 January 2025 – 31 March 2025 |
$[*****] |
[*****]% |
3 |
1 April 2025 – 30 June 2025 |
$[*****] |
[*****]% |
4 |
1 July 2025 – 30 September 2025 |
$[*****] |
[*****]% |
2 |
5 |
1 October 2025 – 31 December 2025 |
$[*****] |
[*****]% |
[*****]% |
$[*****] |
6 |
1 January 2026 – 31 March 2026 |
$[*****] |
[*****]% |
7 |
1 April 2026 – 30 June 2026 |
$[*****] |
[*****]% |
8 |
1 July 2026 – 30 September 2026 |
$[*****] |
[*****]% |
3 |
9 |
1 October 2026 – 31 December 2026 |
$[*****] |
[*****]% |
[*****]% |
$[*****] |
10 |
1 January 2027 – 31 March 2027 |
$[*****] |
[*****]% |
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CONFIDENTIAL ~ DMS Template ID: 4535100 (v1.0) ~ pg. 13 |
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11 |
1 April 2027 – 30 June 2027 |
$[*****] |
[*****]% |
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12 |
1 July 2027– 30 September 2027 |
$[*****] |
[*****]% |
*NB: The Eligible Search Revenue Baseline for each Contract Year is $[*****] (i.e. $[*****] x 4)
**NB: The Eligible Search Revenue Cap for each Contract Year is $[*****].
1.Table 1 sets out the Innovation Payments which are payable to Company from the Effective Date.
2.Innovation Payments consist of Baseline Innovation Payments and, to the extent applicable, Incremental Innovation Payments:
a.Baseline Innovation Payments are payable by Google to Company each Calendar Quarter.
b.Incremental Innovation Payments are payable per Contract Year on Eligible Google Search Revenue and Eligible Non-Google Search Revenue in the Contract Year in excess of the Eligible Search Revenue Baseline, subject always to the Eligible Search Revenue Cap.
3.When calculating Incremental Innovation Payments for each Contract Year, Google will carry out a true-up against Baseline Innovation Payments already paid by Google to Company for the previous Calendar Quarters in that Contract Year, and will make a payment to the Company which represents the outstanding balance due.
4.Subject to the provisions of this Agreement, and in particular paragraphs 7 and 8 of this Exhibit A, Google will make a Baseline Innovation Payment to Company each Calendar Quarter, and if applicable, Incremental Innovation Payments each Contract Year during the Term.
5.Incremental Innovation Payments will be calculated as a percentage of Company’s (a) Eligible Google Search Revenue for the relevant Contract Year (calculated in accordance with internal data sources available to Google); and (b) Eligible Non-Google Search Revenue for the relevant Contract Year (calculated in accordance with the Auditor’s determination pursuant to section 3 of this Agreement), (as applicable). The applicable percentages that will be applied are as set out in the tables above. For the avoidance of doubt, an Incremental Innovation Payment is only payable as a percentage of the Eligible Google Search Revenue and Eligible Non-Google Search Revenue in excess of the Eligible Search Revenue Baseline for that Contract Year.
6.Where the Company’s Eligible Google Search Revenue and Eligible Non-Google Search Revenue in a Calendar Quarter or the Contract Year (as applicable) is less than or equal to the Eligible Search Revenue Baseline, the only Innovation Payments due to Company for that Calendar Quarter or Contract Year (as applicable) will be the applicable percentage of the Eligible Search Revenue Baseline as set out in the column titled “Baseline Innovation Payments in the tables above.
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CONFIDENTIAL ~ DMS Template ID: 4535100 (v1.0) ~ pg. 14 |
7.Google will only make Incremental Innovation Payments to Company on Eligible Google Search Revenue and Eligible Non-Google Search Revenue up to the Eligible Search Revenue Cap for the relevant Contract Year. No Innovation Payments will be due to Company with respect to Eligible Google Search Revenue and Eligible Non-Google Search Revenue achieved by Company in excess of the Eligible Search Revenue Cap.
8.The following worked example demonstrates how the applicable Innovation Payment will be calculated. The figures used for the Eligible Google Search Revenue, Eligible Non-Google Search Revenue and Innovation Payments are examples only:
From the Effective Date
e.g., Contract Year 1
If:
●Calendar Quarter 1 - Eligible Google Search Revenue = $[*****]
○The Baseline Innovation Payment will be $[*****] (i.e. [*****]% x $0[*****])
●Calendar Quarter 2 - Eligible Google Search Revenue = $[*****]
○The Baseline Innovation Payment will be $[*****] (i.e. [*****]% x $0[*****])
●Calendar Quarter 3 - Eligible Google Search Revenue = $[*****]
○The Baseline Innovation Payment will be $[*****] (i.e. [*****]% x $0[*****])
●Calendar Quarter 4 - Eligible Google Search Revenue = $[*****]
○The Baseline Innovation Payment will be $[*****] (i.e. [*****]% x $0[*****])
Total Baseline Innovation Payments paid to Company = $[*****]
Total Eligible Google Search Revenue for Contract Year 1: $[*****]
Total Eligible Non-Google Search Revenue for Contract Year 1: $[*****]
Total Actual spend for Contract Year 1: $[*****], which is $[*****] above the Eligible Revenue Baseline (($[*****] + $[*****]) – $[*****]).
True-Up:
●Eligible Search Revenue Baseline = $[*****]
○$[*****] x [*****]% = $[*****]
●Incremental Innovation Payments
○ $[*****] x [*****]% = $[*****]
●TOTAL DUE TO COMPANY FOR CONTRACT YEAR 1 = $[*****]
●Baseline Innovation Payments already paid to Company = $[*****]
●Outstanding true-up payment due to Company at the end of Contract Year 1 = $[*****] (i.e., $[*****] - $[*****])
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CONFIDENTIAL ~ DMS Template ID: 4535100 (v1.0) ~ pg. 15 |
Exhibit B
Program Managers
Google:
Name: [*****]
Email: [*****]
Telephone: [*****]
Company:
Name: [*****]
Email: [*****]
Telephone: [*****]
Google and Company may update the contact details for the Program Managers from time to time by giving notice to the other party (email sufficient).
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CONFIDENTIAL ~ DMS Template ID: 4535100 (v1.0) ~ pg. 16 |
EXHIBIT 99.1
Marin Software Announces Estimated Preliminary Second Quarter 2024 Financial Results
San Francisco, CA (July 29, 2024) – Marin Software Incorporated (NASDAQ: MRIN) (“Marin”, “Marin Software” or the “Company”), a leading provider of digital marketing software for performance-driven advertisers and agencies, today announced the following estimated preliminary financial results for the second quarter ended June 30, 2024.
Second Quarter 2024 Estimated Preliminary Financial Results:
•Net revenue is estimated to total $4.0 million, as compared to $4.0 million for the first quarter of 2024 and $4.4 million for the second quarter of 2023.
•GAAP loss from operations is estimated to range from ($2.3) million to ($2.1) million, as compared to ($2.5) million for the first quarter of 2024 and ($6.0) million for the second quarter of 2023.
•Non-GAAP loss from operations is estimated to range from ($1.9) million to ($1.7) million, as compared to a non-GAAP loss from operations of ($2.0) million for the first quarter of 2024 and ($4.8) million for the second quarter of 2023.
•Cash and cash equivalents are estimated to be $7.9 million as of June 30, 2024.
The estimated preliminary results presented above are based on the information available to us as of the date of this press release. Our actual results for the second quarter ended June 30, 2024 may vary from these estimated preliminary results and will not be finalized until after the date of this press release.
Reconciliations of GAAP to non-GAAP financial measures have been provided in the financial statement tables included in this press release. An explanation of these measures is also included below, under the heading “Non-GAAP Financial Measures.”
About Marin Software
Marin Software Incorporated’s (NASDAQ: MRIN) mission is to give advertisers the power to drive higher efficiency and transparency in their paid marketing programs that run on the world’s largest publishers. Marin Software provides enterprise marketing software for advertisers and agencies to integrate, align, and amplify their digital advertising spend across the web and mobile devices. Marin Software offers a unified SaaS advertising management platform for search, social, and eCommerce advertising. The Company helps digital marketers convert precise audiences, improve financial performance, and make better decisions. Headquartered in San Francisco with offices worldwide, Marin Software’s technology powers marketing campaigns around the globe. For more information about Marin Software, please visit www.marinsoftware.com.
Non-GAAP Financial Measures
Marin uses certain non-GAAP financial measure in this release. Marin uses this non-GAAP financial measure internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating its ongoing operational performance. Marin believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors. Non-GAAP financial measures that Marin uses may differ from measures that other companies may use.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.
Non-GAAP loss from operations. Marin defines non-GAAP operating loss as GAAP operating loss, adjusted for stock-based compensation expense, amortization of internally developed software and intangible assets, capitalization of internally developed software, and non-recurring costs associated with restructurings.
Forward-Looking Statements
This press release contains forward-looking statements. including our estimated preliminary financial results for the three months ended June 30, 2024. Actual results for the three months ended June 30, 2024 may differ materially from these estimated preliminary results. These estimates should not be viewed as a substitute for our full financial statements prepared in accordance with generally accepted accounting principles in the United States. Accordingly, you should not place undue reliance on this preliminary data. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to, our ability to reduce our expenses or raise additional capital to meet our obligations as a going concern; our ability to successfully implement a restructuring plan that we commenced in July 2023 and the expected costs and savings from the restructuring plan; the amount of digital advertising spend managed by our customers using our products; the extent of customer acceptance, adoption and usage of our MarinOne platform; the productivity of our personnel and other aspects of our business; our ability to maintain or grow sales to new and existing customers; any adverse changes in our relationships with and access to publishers and advertising agencies and strategic business partners, including any adverse changes in our revenue sharing agreement with Google; our ability to retain and attract qualified management, technical and sales and marketing personnel; any delays in the release of updates to our product platform or new features or delays in customer deployment of any such updates or features; competitive factors, including but not limited to pricing pressures, entry of new competitors and new applications; quarterly fluctuations in our operating results due to a number of factors; delays, reductions or slower growth in the amount spent on online and mobile advertising and the development of the market for cloud-based software; progress in our efforts to update our software platform; our ability to maintain or expand sales of our solutions in channels other than search advertising; any slow-down in the search advertising market generally; any shift in customer digital advertising budgets from search to segments in which we are not as deeply penetrated; the development of the market for digital advertising; our ability to provide high-quality technical support to our customers; material defects in our platform including those resulting from any updates we introduce to our platform, service interruptions at our single third-party data center or breaches in our security measures; our ability to develop enhancements to our platform; our ability to protect our intellectual property; our ability to manage risks associated with international operations; the impact of fluctuations in currency exchange rates, particularly an increase in the value of the dollar; near term changes in sales of our software services or spend under management may not be immediately reflected in our results due to our subscription business model; our ability to maintain the listing of our common stock on the Nasdaq; and adverse changes in general economic or market conditions. These forward-looking statements are based on current expectations and are subject to uncertainties and changes in condition, significance, value and effect as well as other risks detailed in documents filed with the Securities and Exchange Commission, including our most recent report on Form 10-K, recent reports on Form 10-Q and current reports on Form 8-K, which we may file from time to time, and all of which are available free of charge at the SEC’s website at www.sec.gov. Any of these risks could cause actual results to differ materially from expectations set forth in the forward-looking statements. All forward-looking statements in this press release reflect Marin’s expectations as of July 29, 2024. Marin assumes no obligation to, and expressly disclaims any obligation to update any such forward-looking statements after the date of this release.
Investor Relations, Marin Software
ir@marinsoftware.com
Media Contact
Wesley MacLaggan
Marketing, Marin Software
(415) 399-2580
press@marinsoftware.com
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Marin Software Incorporated |
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Reconciliation of GAAP to Non-GAAP Measures |
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Three Months Ended |
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Jun 30, 2023 |
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Mar 31, 2024 |
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Jun 30, 2024 |
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(Unaudited; in millions) |
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Actual |
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Actual |
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Low Estimate |
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High Estimate |
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Operating loss (GAAP) |
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$ |
(6.0 |
) |
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$ |
(2.5 |
) |
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$ |
(2.3 |
) |
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$ |
(2.1 |
) |
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Stock-based compensation |
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1.3 |
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0.4 |
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0.3 |
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0.3 |
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Amortization of internally developed software |
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0.4 |
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- |
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- |
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- |
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Restructuring related expenses |
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- |
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- |
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- |
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- |
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Capitalization of internally developed software |
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(0.6 |
) |
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- |
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- |
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- |
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Third-party subpoena-related expenses |
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0.1 |
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0.1 |
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0.1 |
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0.1 |
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Impairment loss on long-lived assets |
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- |
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- |
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- |
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- |
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Operating loss (Non-GAAP) |
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$ |
(4.8 |
) |
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$ |
(2.0 |
) |
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$ |
(1.9 |
) |
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$ |
(1.7 |
) |
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v3.24.2
| X |
- DefinitionBoolean flag that is true when the XBRL content amends previously-filed or accepted submission.
| Name: |
dei_AmendmentFlag |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionFor the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
| Name: |
dei_DocumentPeriodEndDate |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:dateItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
| Name: |
dei_DocumentType |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:submissionTypeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionAddress Line 1 such as Attn, Building Name, Street Name
| Name: |
dei_EntityAddressAddressLine1 |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionAddress Line 2 such as Street or Suite number
| Name: |
dei_EntityAddressAddressLine2 |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- Definition
+ References
+ Details
| Name: |
dei_EntityAddressCityOrTown |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCode for the postal or zip code
| Name: |
dei_EntityAddressPostalZipCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the state or province.
| Name: |
dei_EntityAddressStateOrProvince |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:stateOrProvinceItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionLine items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
| Name: |
dei_EntityAddressesLineItems |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:stringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityCentralIndexKey |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:centralIndexKeyItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionIndicate if registrant meets the emerging growth company criteria. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityEmergingGrowthCompany |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
| Name: |
dei_EntityFileNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:fileNumberItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
| Name: |
dei_EntityIncorporationStateCountryCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarStateCountryItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityRegistrantName |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityTaxIdentificationNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:employerIdItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionLocal phone number for entity.
| Name: |
dei_LocalPhoneNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
| Name: |
dei_PreCommencementIssuerTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
| Name: |
dei_PreCommencementTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTitle of a 12(b) registered security. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
| Name: |
dei_Security12bTitle |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:securityTitleItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14a
-Subsection 12
| Name: |
dei_SolicitingMaterial |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
| Name: |
dei_TradingSymbol |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:tradingSymbolItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
| Name: |
dei_WrittenCommunications |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
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