R
|
ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
|
For the fiscal year ended
December 31, 2007
|
|
|
|
OR
|
|
|
£
|
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF
1934
|
|
For the transition period
from to
|
Delaware
|
93-1214598
|
(State or Other
Jurisdiction
|
(I.R.S.
Employer
|
of Incorporation or
Organization)
|
Identification
No.)
|
Title of Each
Class
|
Name of Each Exchange on Which
Registered
|
Common
Stock, $0.001 Per Share Par Value
|
NASDAQ
Global Market
|
|
|
Page
|
|
PART I.
|
|
|
PART II.
|
|
|
PART
III.
|
|
|
PART IV.
|
|
•
|
Intuitive User
Interface.
iPassConnect mobility manager was designed with over seven years of
experience and customer feedback, resulting in a user-friendly interface
with many features.
|
•
|
Automatic
Updates.
iPassConnect mobility manager also provides enterprises with the ability to
schedule periodic software modifications or updates of iPassConnect to
their end users without handling each end user device separately. These
upgrades are securely downloaded to the user’s computer or other electronic
device when the user logs in, at no
additional cost to the
customer.
|
•
|
Central Policy
Control.
iPassConnect mobility manager enables an enterprise to define a set of
criteria, such as length of session or idle timeouts, once and apply those
criteria to manage its remote access policies across
its entire workforce.
|
•
|
Dynamic
Directory.
iPassConnect mobility manager enables enterprises to adjust the order of
narrowband access points that are displayed to the end user, based on
service quality. Customers also have the flexibility of integrating
in-house access numbers with iPass’ access points in cases where
both networks are being
utilized.
|
•
|
Third Party Application
Integration.
iPassConnect mobility manager can be configured to automatically launch a
variety of third
party VPNs upon successful connection to the Internet. iPassConnect can
also monitor anti-virus software, personal firewalls and VPNs and
disconnect a user if there not running (based on the customer’s
policy).
|
•
|
Support for multiple operating
systems and
languages.
iPassConnect mobility manager supports a wide range of computer operating
systems, including Microsoft Windows 2000, XP, Mac OS X and above, and
Windows Mobile. Additionally, iPassConnect for Windows is localized in
Brazilian Portuguese, Portuguese, Simplified Chinese,
Traditional Chinese, French, German, Japanese, Korean and
Spanish.
|
•
|
Client-Side
SQM.
Client-side SQM captures detailed status and usage information from
connection attempts
and uploads this information to a central iPass database when a successful
connection is made. SQM records and reports access points from which
connections are made, client configuration, error codes, connection
speeds, time to authenticate and other information important in
diagnosing network health. Our SQM software is deployed on networks
worldwide to gather data on local access points and network conditions and
allows us to monitor our virtual network from a customer’s point of
view.
|
•
|
SQM Reporting. Our SQM infrastructure enables
our iOQ service and provides information such as detailed access point
performance, individual and corporate connection success rates, and other
connection data to our customers and to us. With this data, our customer
support and
development teams can monitor service quality and continue to improve the
reliability and performance of our service offering. Through our iOQ
service, our customers benefit from this SQM technology because it enables
them to diagnose problems their users are
experiencing.
|
•
|
Phonebook/Connection
Directory.
Based on input from the SQM infrastructure, the phonebook tool within the
iPassConnect mobility manager places the highest quality access point at
the top of the directory in order to enhance the experience for our
customers’ end
users.
|
|
•
|
the
willingness of enterprises to make additional information technology
expenditures;
|
|
•
|
the
availability of security products necessary to ensure data privacy over
the public networks;
|
|
•
|
the
quality, cost and functionality of these services and competing
services;
|
|
•
|
the
increased adoption of wired and wireless broadband access methods;
and
|
|
•
|
the
proliferation of electronic devices such as handhelds and smartphones and
related applications.
|
|
•
|
longer
payment cycles for foreign customers, including delays due to currency
controls and fluctuations;
|
|
•
|
the
impact of changes in foreign currency exchange rates on the attractiveness
of our pricing;
|
|
•
|
high
taxes in some foreign jurisdictions;
|
|
•
|
difficulty
in complying with Internet-related regulations in foreign
jurisdictions;
|
|
•
|
difficulty
in staffing and managing foreign operations; and
|
|
•
|
difficulty
in enforcing intellectual property rights and weaker laws protecting these
rights.
|
|
•
|
managing
our research and development efforts for new and evolving
technologies;
|
|
•
|
expanding
the capacity and performance of our network and software
infrastructure;
|
|
•
|
developing
our administrative, accounting and management information systems and
controls; and
|
|
•
|
effectively
maintaining coordination among our various departments, particularly as we
expand internationally.
|
Low Sale
Price
|
High Sale
Price
|
|||||||
Fiscal year ended December 31,
2007:
|
||||||||
First
Quarter
|
$ |
4.76
|
$ |
6.07
|
||||
Second
Quarter
|
4.98
|
5.69
|
||||||
Third
Quarter
|
3.92
|
5.62
|
||||||
Fourth
Quarter
|
3.88
|
4.86
|
||||||
Fiscal year ended December 31,
2006:
|
||||||||
First
Quarter
|
$ |
6.40
|
$ |
8.01
|
||||
Second
Quarter
|
5.11
|
8.52
|
||||||
Third
Quarter
|
4.16
|
5.75
|
||||||
Fourth
Quarter
|
4.25
|
5.92
|
7/24/03
|
12/31/03
|
12/31/04
|
12/31/05
|
12/31/06
|
12/31/07
|
|||||||||||||||||||
iPass
Inc.
|
100.00
|
85.75
|
39.64
|
35.14
|
31.49
|
21.75
|
||||||||||||||||||
Russell
2000 Index
|
100.00
|
116.99
|
137.46
|
142.03
|
166.28
|
158.06
|
||||||||||||||||||
Nasdaq
Market Index
|
100.00
|
115.67
|
126.78
|
129.82
|
143.27
|
155.34
|
Year Ended December
31,
|
||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||
(In thousands, except per share
data)
|
||||||||||||||||||||
Statement of Operations
Data
|
||||||||||||||||||||
Revenues
|
$ |
191,732
|
$ |
182,711
|
$ |
169,373
|
$ |
166,319
|
$ |
136,078
|
||||||||||
Total
operating expenses
|
206,077
|
202,001
|
151,474
|
137,353
|
113,721
|
|||||||||||||||
Operating
income (loss)
|
(14,345 | ) | (19,290 | ) |
17,899
|
28,966
|
22,357
|
|||||||||||||
Net
income (loss)
|
(34,214 | ) | (8,089 | ) |
12,895
|
19,068
|
13,902
|
|||||||||||||
Net
income (loss) per share:
|
||||||||||||||||||||
Basic
|
(0.54 | ) | (0.13 | ) |
0.20
|
0.31
|
0.26
|
|||||||||||||
Diluted
|
(0.54 | ) | (0.13 | ) |
0.19
|
0.29
|
0.23
|
As of December
31,
|
|||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
|||||||||||||||||
(In
thousands)
|
|||||||||||||||||||||
Balance Sheet
Data
|
|||||||||||||||||||||
Total
assets
|
$ |
221,898
|
$ |
263,602
|
$ |
254,474
|
$ |
230,513
|
$ |
190,117
|
|||||||||||
Total
stockholders’ equity
|
181,108
|
221,389
|
226,251
|
207,222
|
171,722
|
December
31,
|
||||||||||||||||||||||||||||
Change
|
Change
|
|||||||||||||||||||||||||||
2007
|
$
|
%
|
2006
|
$
|
%
|
2005
|
||||||||||||||||||||||
(In thousands, except
percentages)
|
||||||||||||||||||||||||||||
Total
Revenue
|
$ |
191,732
|
$ |
9,021
|
4.9 | % | $ |
182,711
|
$ |
13,338
|
7.9 | % | $ |
169,373
|
December
31,
|
||||||||||||||||||||||||||||
Change
|
Change
|
|||||||||||||||||||||||||||
2007
|
$
|
%
|
2006
|
$
|
%
|
2005
|
||||||||||||||||||||||
(In thousands, except
percentages)
|
||||||||||||||||||||||||||||
Broadband
|
$ |
75,073
|
$ |
35,137
|
88.0 | % | $ |
39,936
|
$ |
31,121
|
353.0 | % | $ |
8,815
|
||||||||||||||
As
a percent of revenue
|
39.2 | % |
—
|
17.3 | % | 21.9 | % |
—
|
16.7 | % | 5.2 | % | ||||||||||||||||
Dial
up
|
$ |
67,826
|
$ | (37,856 | ) | (35.8 | %) | $ |
105,682
|
$ | (32,375 | ) | (23.5 | %) | $ |
138,057
|
||||||||||||
As
a percent of revenue
|
35.4 | % |
—
|
(22.5 | %) | 57.8 | % |
—
|
(23.7 | %) | 81.5 | % | ||||||||||||||||
Services
fees and other
|
$ |
48,833
|
$ |
11,740
|
31.7 | % | $ |
37,093
|
$ |
14,592
|
64.9 | % | $ |
22,501
|
||||||||||||||
As
a percent of revenue
|
25.5 | % |
—
|
5.2 | % | 20.3 | % |
—
|
7.0 | % | 13.3 | % |
December
31,
|
||||||||||||||||||||||||||||
2007
|
Change $
|
Change %
|
2006
|
Change $
|
Change %
|
2005
|
||||||||||||||||||||||
Network
access expenses
|
$ |
69,143
|
$ |
12,214
|
21.5 | % | $ |
56,929
|
$ |
14,820
|
35.2 | % | $ |
42,109
|
||||||||||||||
As
a percent of revenue
|
36.1 | % |
—
|
4.9 | % | 31.2 | % |
—
|
6.3 | % | 24.9 | % |
December
31,
|
||||||||||||||||||||||||||||
2007
|
Change $
|
Change %
|
2006
|
Change $
|
Change %
|
2005
|
||||||||||||||||||||||
Network
operations expense
|
$ |
34,258
|
$ |
2,245
|
7.0 | % | $ |
32,013
|
$ |
11,067
|
52.8 | % | $ |
20,946
|
||||||||||||||
As
a percent of revenue
|
17.8 | % |
—
|
0.3 | % | 17.5 | % |
—
|
5.1 | % | 12.4 | % |
December
31,
|
||||||||||||||||||||||||||||
2007
|
Change $
|
Change %
|
2006
|
Change $
|
Change %
|
2005
|
||||||||||||||||||||||
Research
and development expenses
|
$ |
21,141
|
$ |
(1,416
|
) | (6.3) | % | $ |
22,557
|
$ |
4,811
|
27.1 | % | $ |
17,746
|
|||||||||||||
As
a percent of revenue
|
11.0 | % |
—
|
(1.3) | % | 12.3 | % |
—
|
1.8 | % | 10.5 | % |
December
31,
|
||||||||||||||||||||||||||||
2007
|
Change $
|
Change %
|
2006
|
Change $
|
Change %
|
2005
|
||||||||||||||||||||||
Sales
and marketing expenses
|
$ |
52,809
|
$ |
(5,811
|
) | (9.9) | % | $ |
58,620
|
$ |
7,907
|
15.6 | % | $ |
50,713
|
|||||||||||||
As
a percent of revenue
|
27.5 | % |
—
|
(4.4) | % | 31.9 | % |
—
|
2.0 | % | 29.9 | % |
December
31,
|
||||||||||||||||||||||||||||
2007
|
Change $
|
Change %
|
2006
|
Change $
|
Change %
|
2005
|
||||||||||||||||||||||
General
and administrative expenses
|
$ |
21,358
|
$ |
(1,820
|
) | (7.9) | % | $ |
23,178
|
$ |
5,585
|
31.7 | % | $ |
17,593
|
|||||||||||||
As
a percent of revenue
|
11.1 | % |
—
|
(1.6) | % | 12.7 | % |
—
|
2.3 | % | 10.4 | % |
Year
ending December 31:
|
||||
2008
|
$
|
5,068
|
||
2009
|
14,181
|
|||
2010
|
15,075
|
|||
$
|
34,324
|
Year
ending December 31:
|
||||
2008
|
$
|
7,496
|
||
2009
|
6,785
|
|||
2010
|
4,650
|
|||
2011
|
3,559
|
|||
2012
and thereafter
|
9,322
|
|||
$
|
31,812
|
Payments Due by
Period
|
||||||||||||||||||||
Contractual
Obligations
|
Total
|
|
Less Than 1
Yr
|
1-3
Years
|
3-5
Years
|
More Than 5
Yrs
|
||||||||||||||
Operating
Lease Obligations
|
$ |
31,812
|
$ |
7,496
|
$ |
11,435
|
$ |
6,288
|
$ |
6,593
|
||||||||||
Purchase
Obligations
|
34,324
|
5,068
|
29,256
|
—
|
—
|
|||||||||||||||
Total
Contractual Obligations
|
$ |
66,136
|
$ |
12,564
|
$ |
40,691
|
$ |
6,288
|
$ |
6,593
|
Expected Maturity Date for Par
Value Amounts for the Year Ended December 31,
|
As of Dec. 31, 2007
|
|||||||||||||||||||
2008
|
2009
|
2010
|
Total Cost
Value
|
Total Fair
Value
|
||||||||||||||||
Government
agencies
|
$ |
4,250
|
$ |
—
|
$ |
—
|
$ |
4,256
|
$ |
4,258
|
||||||||||
Total
|
$ |
4,250
|
$ |
—
|
$ |
—
|
$ |
4,256
|
$ |
4,258
|
Quarter
Ended
|
||||||||||||||||
March 31
|
June 30
|
September
30
|
December
31
|
|||||||||||||
Year Ended December 31,
2007
|
||||||||||||||||
Revenues
|
$ |
46,888
|
$ |
47,597
|
$ |
47,736
|
$ |
49,511
|
||||||||
Operating
loss
|
(3,288 | ) | (3,705 | ) | (2,709 | ) | (4,643 | ) | ||||||||
Net
loss
|
(468 | ) | (2,313 | ) | (1,081 | ) | (30,352 | ) | ||||||||
Basic
net loss per share
|
$ | (0.01 | ) | $ | (0.04 | ) | $ | (0.02 | ) | $ | (0.49 | ) | ||||
Diluted
net loss per share
|
$ | (0.01 | ) | $ | (0.04 | ) | $ | (0.02 | ) | $ | (0.49 | ) |
Quarter
Ended
|
||||||||||||||||
March 31
|
June 30
|
September
30
|
December
31
|
|||||||||||||
Year Ended December 31,
2006
|
||||||||||||||||
Revenues
|
$ |
44,270
|
$ |
47,384
|
$ |
45,900
|
$ |
45,157
|
||||||||
Operating
loss
|
(2,255 | ) | (5,142 | ) | (4,695 | ) | (7,198 | ) | ||||||||
Net
loss
|
(65 | ) | (2,054 | ) | (2,209 | ) | (3,761 | ) | ||||||||
Basic
net loss per share
|
$ | (0.00 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.06 | ) | ||||
Diluted
net loss per share
|
$ | (0.00 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.06 | ) |
|
Page
|
Consolidated
Financial Statements:
|
|
As of December
31,
|
||||||||
2007
|
2006
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ |
70,907
|
$ |
15,492
|
||||
Short-term
investments
|
4,258
|
83,708
|
||||||
Accounts
receivable, net of allowance for doubtful accounts of $2,792 and $3,089,
respectively
|
35,938
|
28,579
|
||||||
Prepaid
expenses and other current assets
|
7,116
|
6,341
|
||||||
Deferred
tax assets
|
575
|
8,070
|
||||||
Total
current assets
|
118,794
|
142,190
|
||||||
Property
and equipment, net
|
9,272
|
10,519
|
||||||
Other
assets
|
4,876
|
3,344
|
||||||
Long-term
deferred tax assets
|
—
|
14,952
|
||||||
Acquired
intangibles, net
|
9,504
|
13,705
|
||||||
Goodwill
|
79,543
|
78,892
|
||||||
Total
assets
|
$ |
221,989
|
$ |
263,602
|
||||
LIABILITIES AND STOCKHOLDERS’
EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ |
15,923
|
$ |
14,830
|
||||
Accrued
liabilities
|
15,788
|
18,535
|
||||||
Deferred
revenue—short term
|
6,606
|
5,411
|
||||||
Total
current liabilities
|
38,317
|
38,776
|
||||||
Deferred
tax liability-long term
|
575
|
—
|
||||||
Deferred
revenue—long term
|
949
|
1,468
|
||||||
Other
long term liabilities
|
1,040
|
1,969
|
||||||
Total
liabilities
|
40,881
|
42,213
|
||||||
Commitments
(Note 13)
|
||||||||
Stockholders’
equity:
|
||||||||
Common
stock, $0.001 par value; authorized 250,000,000 shares; issued and
outstanding 61,812,598 and 63,467,796 shares,
respectively
|
62
|
63
|
||||||
Additional
paid-in capital
|
241,703
|
247,882
|
||||||
Accumulated
other comprehensive income (loss)
|
15
|
(98 | ) | |||||
Accumulated
deficit
|
(60,672 | ) | (26,458 | ) | ||||
Total
stockholders’ equity
|
181,108
|
221,389
|
||||||
Total
liabilities and stockholders’ equity
|
$ |
221,989
|
$ |
263,602
|
For the Year Ended December
31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Revenues
|
$ |
191,732
|
$ |
182,711
|
$ |
169,373
|
||||||
Operating
expenses (1):
|
||||||||||||
Network
access
|
69,143
|
56,929
|
42,109
|
|||||||||
Network
operations
|
34,258
|
32,013
|
20,946
|
|||||||||
Research
and development
|
21,141
|
22,557
|
17,746
|
|||||||||
Sales
and marketing
|
52,809
|
58,620
|
50,713
|
|||||||||
General
and administrative
|
21,358
|
23,178
|
17,593
|
|||||||||
Restructuring
charges
|
3,167
|
4,733
|
—
|
|||||||||
Amortization
of acquired intangibles
|
4,201
|
3,971
|
2,367
|
|||||||||
Total
operating expenses
|
206,077
|
202,001
|
151,474
|
|||||||||
Operating
income (loss)
|
(14,345 | ) | (19,290 | ) |
17,899
|
|||||||
Interest
income
|
3,282
|
3,659
|
3,899
|
|||||||||
Income
(loss) before income taxes
|
(11,063 | ) | (15,631 | ) |
21,798
|
|||||||
Provision
for (benefit from) income taxes
|
23,151
|
(7,195 | ) |
8,903
|
||||||||
Net
income (loss) before cumulative effect of change in accounting
principle
|
(34,214 | ) | (8,436 | ) |
12,895
|
|||||||
Cumulative
effect of change in accounting principle, net of zero tax
effect
|
—
|
(347 | ) |
—
|
||||||||
Net
income (loss)
|
$ | (34,214 | ) | $ | (8,089 | ) | $ |
12,895
|
||||
Net
income (loss) per share before cumulative effect of change in accounting
principle:
|
||||||||||||
Basic
|
$ | (0.54 | ) | $ | (0.13 | ) | $ |
0.20
|
||||
Diluted
|
$ | (0.54 | ) | $ | (0.13 | ) | $ |
0.19
|
||||
Per
share effect of cumulative change in accounting
principle:
|
||||||||||||
Basic
|
$ |
—
|
$ |
—
|
$ |
—
|
||||||
Diluted
|
$ |
—
|
$ |
—
|
$ |
—
|
||||||
Net
income (loss) per share:
|
||||||||||||
Basic
|
$ | (0.54 | ) | $ | (0.13 | ) | $ |
0.20
|
||||
Diluted
|
$ | (0.54 | ) | $ | (0.13 | ) | $ |
0.19
|
||||
Number
of shares used in per share calculations:
|
||||||||||||
Basic
|
63,211,888
|
64,572,603
|
63,353,779
|
|||||||||
Diluted
|
63,211,888
|
64,572,603
|
66,277,342
|
|||||||||
(1)
Stock-based compensation is included in the following expense line
items:
|
||||||||||||
Network
operations
|
$ |
799
|
$ |
1,031
|
$ |
163
|
||||||
Research
and development
|
959
|
1,235
|
175
|
|||||||||
Sales
and marketing
|
1,246
|
2,206
|
265
|
|||||||||
General
and administrative
|
1,914
|
1,706
|
534
|
Common Stock
|
||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Additional Paid-In
Capital
|
Deferred Stock-Based
Compensation
|
Accumulated Comprehensive
Income (Loss)
|
Accumulated
Deficit
|
Total Stockholders'
Equity
|
Comprehensive Income
(Loss)
|
|||||||||||||||||||||||||
Balances,
December 31, 2004
|
62,757
|
$ |
63
|
$ |
240,629
|
$ | (1,782 | ) | $ | (424 | ) | $ | (31,264 | ) | $ |
207,222
|
$ |
18,519
|
||||||||||||||
Exercise
of stock options — common stock issued
|
1,041
|
1
|
1,960
|
—
|
—
|
—
|
1,961
|
—
|
||||||||||||||||||||||||
Employee
stock purchase plan — common stock issued
|
405
|
—
|
1,840
|
—
|
—
|
—
|
1,840
|
—
|
||||||||||||||||||||||||
Cancellation
of unvested stock options
|
—
|
—
|
(52 | ) |
52
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||
Amortization
of stock-based compensation
|
—
|
—
|
—
|
1,137
|
—
|
—
|
1,137
|
—
|
||||||||||||||||||||||||
Tax
benefit from employee stock option plans
|
—
|
—
|
1,079
|
—
|
—
|
—
|
1,079
|
—
|
||||||||||||||||||||||||
Unrealized
gain on available-for-sale investments, net
|
—
|
—
|
—
|
—
|
117
|
—
|
117
|
117
|
||||||||||||||||||||||||
Net
income
|
—
|
—
|
—
|
—
|
—
|
12,895
|
12,895
|
12,895
|
||||||||||||||||||||||||
Balances,
December 31, 2005
|
64,203
|
$ |
64
|
$ |
245,456
|
$ | (593 | ) | $ | (307 | ) | $ | (18,369 | ) | $ |
226,251
|
$ |
13,012
|
||||||||||||||
Exercise
of stock options — common stock issued
|
1,831
|
2
|
5,622
|
—
|
—
|
—
|
5,624
|
—
|
||||||||||||||||||||||||
Employee
stock purchase plan — common stock issued
|
409
|
—
|
1,884
|
—
|
—
|
—
|
1,884
|
—
|
||||||||||||||||||||||||
Outstanding
common stock repurchased and retired
|
(2,975 | ) | (3 | ) | (16,188 | ) |
—
|
—
|
—
|
(16,191 | ) |
—
|
||||||||||||||||||||
Reversal
of unearned stock-based compensation upon adoption of SFAS No.
123(R)
|
—
|
—
|
(593 | ) |
593
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||
Cumulative
effect of change in accounting principle
|
—
|
—
|
(347 | ) |
—
|
—
|
—
|
(347 | ) |
—
|
||||||||||||||||||||||
Fair
value of options assumed in acquisition of GoRemote
|
—
|
—
|
5,826
|
—
|
—
|
—
|
5,826
|
—
|
||||||||||||||||||||||||
Stock-based
compensation
|
—
|
—
|
6,178
|
—
|
—
|
6,178
|
—
|
|||||||||||||||||||||||||
Tax
benefit from employee stock option plans
|
—
|
—
|
44
|
—
|
—
|
—
|
44
|
—
|
||||||||||||||||||||||||
Unrealized
gain on available-for-sale investments, net
|
—
|
—
|
—
|
—
|
209
|
—
|
209
|
209
|
||||||||||||||||||||||||
Net
income (loss)
|
—
|
—
|
—
|
—
|
—
|
(8,089 | ) | (8,089 | ) | (8,089 | ) | |||||||||||||||||||||
Balances,
December 31, 2006
|
63,468
|
$ |
63
|
$ |
247,882
|
$ |
—
|
$ | (98 | ) | $ | (26,458 | ) | $ |
221,389
|
$ | (7,880 | ) | ||||||||||||||
Exercise
of stock options — common stock issued
|
515
|
1
|
879
|
—
|
—
|
—
|
880
|
—
|
||||||||||||||||||||||||
Employee
stock purchase plan — common stock issued
|
425
|
1
|
1,822
|
—
|
—
|
—
|
1,823
|
—
|
||||||||||||||||||||||||
Outstanding
common stock repurchased and retired
|
(2,595 | ) | (3 | ) | (13,798 | ) |
—
|
—
|
—
|
(13,801 | ) |
—
|
||||||||||||||||||||
Stock-based
compensation
|
—
|
—
|
4,918
|
—
|
—
|
4,918
|
—
|
|||||||||||||||||||||||||
Unrealized
gain on available-for-sale investments, net
|
—
|
—
|
—
|
—
|
113
|
—
|
113
|
113
|
||||||||||||||||||||||||
Net
income (loss)
|
—
|
—
|
—
|
—
|
—
|
(34,214 | ) | (34,214 | ) | (34,214 | ) | |||||||||||||||||||||
Balances,
December 31, 2007
|
61,813
|
$ |
62
|
$ |
241,703
|
$ |
—
|
$ |
15
|
$ | (60,672 | ) | $ |
181,108
|
$ | (34,101 | ) |
For the Year Ended December
31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Cash flows from operating
activities:
|
||||||||||||
Net
income (loss)
|
$ | (34,214 | ) | $ | (8,089 | ) | $ |
12,895
|
||||
Adjustments
to reconcile net income (loss) to net cash provided by (used
in) operating activities:
|
||||||||||||
Amortization
of stock-based compensation for employees
|
4,918
|
6,178
|
1,137
|
|||||||||
Amortization
of acquired intangibles
|
4,201
|
3,971
|
2,367
|
|||||||||
Depreciation,
amortization and accretion
|
4,545
|
5,989
|
4,732
|
|||||||||
Loss
on disposal of property and equipment
|
1,018
|
—
|
—
|
|||||||||
Tax
benefit from employee stock option plans
|
—
|
27
|
1,079
|
|||||||||
Deferred
income taxes
|
22,310
|
(6,739 | ) |
5,700
|
||||||||
Provision
for doubtful accounts
|
29
|
1,056
|
163
|
|||||||||
Cumulative
effect of change in accounting principle
|
—
|
(347 | ) |
—
|
||||||||
Realized
loss on investments, net
|
52
|
—
|
31
|
|||||||||
Changes
in operating assets and liabilities, net of assets acquired and
liabilities assumed:
|
||||||||||||
Accounts
receivable
|
(7,388 | ) |
868
|
374
|
||||||||
Prepaid
expenses and other current assets
|
(775 | ) | (1,102 | ) | (616 | ) | ||||||
Other
assets
|
(62 | ) | (1,015 | ) | (337 | ) | ||||||
Accounts
payable
|
1,093
|
(38 | ) |
3,515
|
||||||||
Accrued
liabilities
|
(2,747 | ) | (4,253 | ) |
1,011
|
|||||||
Deferred
revenue
|
676
|
3,848
|
47
|
|||||||||
Other
liabilities
|
(929 | ) |
1,969
|
—
|
||||||||
Net
cash provided by (used in) operating activities
|
(7,273 | ) |
2,323
|
32,098
|
||||||||
Cash flows from investing
activities:
|
||||||||||||
Purchases
of short-term investments
|
(440,294 | ) | (140,490 | ) | (170,422 | ) | ||||||
Maturities
of short-term investments
|
520,658
|
207,695
|
141,839
|
|||||||||
Purchases
of property and equipment
|
(5,108 | ) | (5,222 | ) | (3,882 | ) | ||||||
Restricted
cash pledged for letter of credit
|
(1,470 | ) |
—
|
—
|
||||||||
Acquisition
of GoRemote, net of cash acquired
|
—
|
(77,960 | ) |
—
|
||||||||
Net
cash provided by (used in) investing activities
|
73,786
|
(15,977 | ) | (32,465 | ) | |||||||
Cash flows from financing
activities:
|
||||||||||||
Proceeds
from issuance of common stock
|
2,703
|
7,508
|
3,801
|
|||||||||
Cash
used in repurchase of common stock
|
(13,801 | ) | (16,191 | ) |
—
|
|||||||
Net
cash provided by (used in) financing activities
|
(11,098 | ) | (8,683 | ) |
3,801
|
|||||||
Net
increase (decrease) in cash and cash equivalents
|
55,415
|
(22,337 | ) |
3,434
|
||||||||
Cash
and cash equivalents at beginning of year
|
15,492
|
37,829
|
34,395
|
|||||||||
Cash
and cash equivalents at end of year
|
$ |
70,907
|
$ |
15,492
|
$ |
37,829
|
||||||
Supplemental disclosures of
cash flow information:
|
||||||||||||
Assumption
of GoRemote options
|
$ |
—
|
$ |
5,826
|
$ |
—
|
||||||
Cash
paid for taxes
|
$ |
929
|
$ |
1,471
|
$ |
1,094
|
Consolidated Statement of Cash
Flows
|
Consolidated Balance
Sheet
|
|||||||||||||||||||||||||||
Excess tax benefit from
employee stock option plans
|
Net cash provided by operating
activities
|
Tax benefit from employee stock
option plans
|
Net cash used in financing
activities
|
Goodwill
|
Accrued
Liabilities
|
Additional Paid in
Capital
|
||||||||||||||||||||||
As
previously reported
|
$ | (1,962 | ) | $ |
361
|
$ |
1,962
|
$ | (6,721 | ) | $ |
78,757
|
$ |
16,482
|
$ |
249,800
|
||||||||||||
Revision
|
1,918
|
1,918
|
(1,962 | ) | (1,962 | ) |
135
|
2,053
|
1,918
|
|||||||||||||||||||
As
reported
|
(44 | ) |
2,279
|
—
|
(8,683 | ) |
78,892
|
18,535
|
247,882
|
Year Ended December
31,
|
||||||||||||
2007
|
2006
|
2005
|
|
|||||||||
Net
income (loss)
|
$ | (34,214 | ) | $ | (8,089 | ) | $ |
12,895
|
||||
Comprehensive
income (loss):
|
||||||||||||
Change
in accumulated unrealized gain (loss) on available-for-sale securities,
net of taxes
|
113
|
209
|
117
|
|||||||||
Total
comprehensive income (loss)
|
$ | (34,101 | ) | $ | (7,880 | ) | $ |
13,012
|
For the Year Ended December 31,
2005
|
||||
Net
income — as reported
|
$
|
12,895
|
||
Add:
Stock-based employee compensation expense included in the reported net
income, net of related tax effects
|
671
|
|||
Deduct:
Stock-based employee compensation expense using the fair value method, net
of related tax effects
|
(3,570
|
)
|
||
Pro
forma net income
|
$
|
9,996
|
||
Basic
net income per common share:
|
||||
As
reported
|
$
|
0.20
|
||
Pro
forma
|
$
|
0.16
|
||
Diluted
net income per common share:
|
||||
As
reported
|
$
|
0.19
|
||
Pro
forma
|
$
|
0.15
|
Employee Stock Options For the
Year Ended December 31, 2005
|
Employee Stock Purchase Plan
For the Year Ended December 31, 2005
|
|||||||
Risk-free
rate
|
3.9 | % | 3.7 | % | ||||
Expected
dividend yield
|
0 | % | 0 | % | ||||
Expected
volatility
|
35-41 | % | 36-41 | % | ||||
Expected
life
|
3
Years
|
.5
Years
|
Cash
consideration for common and preferred stockholders
|
$
|
75,806
|
||
Estimated
fair value of options assumed
|
5,826
|
|||
Direct
transaction costs
|
3,097
|
|||
Total
purchase price
|
$
|
84,729
|
Cash
acquired
|
$
|
6,706
|
||
Accounts
receivable
|
7,138
|
|||
Other
tangible assets acquired
|
2,550
|
|||
Deferred
tax assets, net
|
10,876
|
|||
Amortizable
intangible assets:
|
||||
Customer
relationships
|
7,600
|
|||
Supplier
contracts
|
950
|
|||
Internally
developed software
|
350
|
|||
Goodwill
|
60,713
|
|||
Deferred
revenues
|
(1,025
|
)
|
||
Restructuring
liabilities
|
(1,249
|
)
|
||
Other
liabilities assumed
|
(9,880
|
)
|
||
Total
purchase price
|
$
|
84,729
|
Year Ended December
31,
|
||||||||
2006
|
2005
|
|
||||||
Total
revenue
|
$ |
187,734
|
$ |
212,492
|
||||
Net
income (loss) before cumulative change in accounting
principle
|
$ | (13,124 | ) | $ |
1,935
|
|||
Net
income (loss)
|
$ | (12,777 | ) | $ |
1,935
|
|||
Net
income (loss) per share:
|
||||||||
Basic
|
$ | (0.20 | ) | $ |
0.03
|
|||
Diluted
|
$ | (0.20 | ) | $ |
0.03
|
|||
Number
of shares used in per share calculations:
|
||||||||
Basic
|
64,572,779
|
63,353,779
|
||||||
Diluted
|
64,572,779
|
66,277,342
|
Short-Term
Investments
|
||||||||||||||||
December 31,
2007
|
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair
Value
|
||||||||||||
Government
agencies
|
$ |
4,256
|
$ |
2
|
$ |
—
|
$ |
4,258
|
||||||||
Total
|
$ |
4,256
|
$ |
2
|
$ |
—
|
$ |
4,258
|
Short-Term
Investments
|
||||||||||||||||
December 31,
2006
|
Cost
|
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair
Value
|
|||||||||||
Government
agencies
|
$ |
58,818
|
$ |
19
|
$ | (181 | ) | $ |
58,656
|
|||||||
Money
market securities
|
$ |
25,051
|
$ |
1
|
$ |
—
|
$ |
25,052
|
||||||||
Total
|
$ |
83,869
|
$ |
20
|
$ | (181 | ) | $ |
83,708
|
Expected Maturity Date for Par
Value Amounts
for the Year Ended December
31,
|
As of Dec. 31, 2007
|
|
||||||||||||||||||
2008
|
|
2009
|
2010
|
Total Cost
Value
|
Total Fair
Value
|
|||||||||||||||
Government
agencies
|
$ |
4,250
|
$ |
—
|
$ |
—
|
$ |
4,256
|
$ |
4,258
|
||||||||||
Total
|
$ |
4,250
|
$ |
—
|
$ |
—
|
$ |
4,256
|
$ |
4,258
|
Beginning
Balance
|
Provisions
|
Charge
Offs
|
Ending
Balance
|
|||||||||||||
Year
ended December 31, 2005
|
$ |
2,071
|
$ |
163
|
$ | (194 | ) | $ |
2,040
|
|||||||
Year
ended December 31, 2006
|
$ |
2,040
|
$ |
1,667
|
$ | (618 | ) | $ |
3,089
|
|||||||
Year
ended December 31, 2007
|
$ |
3,089
|
$ |
29
|
$ | (326 | ) | $ |
2,792
|
December 31,
2007
|
December 31,
2006
|
|||||||
Equipment
|
$ |
32,390
|
$ |
30,283
|
||||
Furniture
and fixtures
|
4,297
|
3,794
|
||||||
Computer
software and equipment
|
10,138
|
10,705
|
||||||
Leasehold
improvements
|
3,882
|
2,502
|
||||||
50,707
|
47,284
|
|||||||
Less:
Accumulated depreciation and amortization
|
(41,435 | ) | (36,765 | ) | ||||
Property
and equipment, net
|
$ |
9,272
|
$ |
10,519
|
December 31,
2006
|
Adjustment
|
Acquisition
|
Amortization
|
December
31,2007
|
||||||||||||||||
Goodwill
|
$ |
78,892
|
$ |
651
|
$ |
—
|
$ |
—
|
$ |
79,543
|
||||||||||
Intangibles:
|
||||||||||||||||||||
Existing
technology
|
4,361
|
—
|
—
|
(1,612 | ) |
2,749
|
||||||||||||||
Patent/Core
technology
|
1,564
|
—
|
—
|
(563 | ) |
1,001
|
||||||||||||||
Maintenance
agreements and certain relationships
|
256
|
—
|
—
|
(67 | ) |
189
|
||||||||||||||
Customer
relationships
|
6,476
|
—
|
—
|
(1,671 | ) |
4,805
|
||||||||||||||
Supplier
contracts
|
742
|
—
|
—
|
(238 | ) |
504
|
||||||||||||||
Internally
developed software
|
306
|
—
|
—
|
(50 | ) |
256
|
||||||||||||||
$ |
92,597
|
$ |
651
|
$ |
—
|
$ | (4,201 | ) | $ |
89,047
|
Twelve Months Ended December
31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Intangibles:
|
||||||||||||
Existing
technology
|
$ | (1,612 | ) | $ | (1,612 | ) | $ | (1,613 | ) | |||
Patent/Core
technology
|
(563 | ) | (563 | ) | (563 | ) | ||||||
Maintenance
agreements and certain relationships
|
(67 | ) | (66 | ) | (67 | ) | ||||||
Customer
relationships
|
(1,671 | ) | (1,478 | ) | (125 | ) | ||||||
Supplier
contracts
|
(238 | ) | (208 | ) |
—
|
|||||||
Internally
developed software
|
(50 | ) | (44 | ) |
—
|
|||||||
$ | (4,201 | ) | $ | (3,971 | ) | $ | (2,367 | ) |
December 31,
2007
|
|||||||||||||
Amortization
Life
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
Net Carrying
Amount
|
||||||||||
Intangibles:
|
|||||||||||||
Existing
technology
|
4-8
yrs
|
$ |
7,900
|
$ | (5,151 | ) | $ |
2,749
|
|||||
Patent/Core
technology
|
4-8
yrs
|
2,800
|
(1,799 | ) |
1,001
|
||||||||
Maintenance
agreements and certain relationships
|
5
yrs
|
400
|
(211 | ) |
189
|
||||||||
Customer
relationships
|
4-7
yrs
|
8,100
|
(3,295 | ) |
4,805
|
||||||||
Supplier
contracts
|
4
yrs
|
950
|
(446 | ) |
504
|
||||||||
Internally
developed software
|
7
yrs
|
350
|
(94 | ) |
256
|
||||||||
$ |
20,500
|
$ | (10,996 | ) | $ |
9,504
|
December 31,
2006
|
|||||||||||||
Amortization
Life
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
Net Carrying
Amount
|
||||||||||
Intangibles:
|
|||||||||||||
Existing
technology
|
4-8
yrs
|
$ |
7,900
|
$ | (3,539 | ) | $ |
4,361
|
|||||
Patent/Core
technology
|
4-8
yrs
|
2,800
|
(1,236 | ) |
1,564
|
||||||||
Maintenance
agreements and certain relationships
|
5
yrs
|
400
|
(144 | ) |
256
|
||||||||
Customer
relationships
|
4-7
yrs
|
8,100
|
(1,624 | ) |
6,476
|
||||||||
Supplier
contracts
|
4
yrs
|
950
|
(208 | ) |
742
|
||||||||
Internally
developed software
|
7
yrs
|
350
|
(44 | ) |
306
|
||||||||
$ |
20,500
|
$ | (6,795 | ) | $ |
13,705
|
Fiscal
Year
|
||||
2008
|
$ |
3,901
|
||
2009
|
2,401
|
|||
2010
|
1,241
|
|||
2011
|
1,021
|
|||
2012
|
875
|
|||
Thereafter
|
65
|
|||
$ |
9,504
|
December 31,
2007
|
December 31,
2006
|
|||||||
Accrued
commissions
|
$ |
4,613
|
$ |
3,899
|
||||
Accrued
liabilities
|
5,582
|
7,408
|
||||||
Deferred
rent
|
945
|
1,013
|
||||||
Paid
time off payable
|
1,301
|
1,960
|
||||||
Taxes
payable
|
1,553
|
1,958
|
||||||
Accrued
restructuring liabilities - current
|
1,794
|
2,297
|
||||||
$ |
15,788
|
$ |
18,535
|
Excess Facility
Costs
|
Severance
Costs
|
Total Restructuring
Accrual
|
||||||||||
Balance
as of December 31, 2005
|
$ |
—
|
$ |
—
|
$ |
—
|
||||||
Restructuring
charges
|
3,028
|
1,705
|
4,733
|
|||||||||
Reclassification
of deferred rent
|
461
|
—
|
461
|
|||||||||
Payments
|
(444 | ) | (1,302 | ) | (1,746 | ) | ||||||
Balance
as of December 31, 2006
|
$ |
3,045
|
$ |
403
|
$ |
3,448
|
||||||
Restructuring
charges
|
1,093
|
2,196
|
3,289
|
|||||||||
Adjustments
|
—
|
(179 | ) | (179 | ) | |||||||
Net
present value accretion
|
57
|
—
|
57
|
|||||||||
Payments
|
(1,329 | ) | (1,653 | ) | (2,982 | ) | ||||||
Write-off
of capitalized assets
|
(900 | ) |
—
|
(900 | ) | |||||||
Balance
as of December 31, 2007
|
$ |
1,966
|
$ |
767
|
$ |
2,733
|
Excess Facility
Costs
|
||||
Balance
as of December 31, 2005
|
$
|
—
|
||
Accrued
acquisition-related restructuring costs
|
1,249
|
|||
Payments
|
(432
|
)
|
||
Balance
as of December 31, 2006
|
$
|
817
|
||
Payments
|
(717
|
)
|
||
Balance
as of December 31, 2007
|
$
|
100
|
2007
|
|
2006
|
2005
|
|
||||||||
Current
|
||||||||||||
U.S.
federal
|
$ |
—
|
$ | (600 | ) | $ |
1,972
|
|||||
State
|
130
|
(364 | ) |
828
|
||||||||
Foreign
|
629
|
507
|
402
|
|||||||||
759
|
(457 | ) |
3,202
|
|||||||||
Deferred
|
||||||||||||
U.S.
federal
|
19,640
|
(5,966 | ) |
5,182
|
||||||||
State
|
2,716
|
(772 | ) |
518
|
||||||||
Other
|
36
|
—
|
—
|
|||||||||
22,392
|
(6,738 | ) |
5,700
|
|||||||||
Total
provision for (benefit from) income taxes
|
$ |
23,151
|
$ | (7,195 | ) | $ |
8,902
|
2007
|
2006
|
|||||||
Deferred
tax assets:
|
||||||||
Net
operating loss carryforwards
|
$ |
43,278
|
$ |
41,641
|
||||
Reserves
and accruals
|
8,834
|
8,401
|
||||||
Research
and development credits
|
5,722
|
4,907
|
||||||
Fixed
assets
|
1,967
|
1,679
|
||||||
Total
deferred tax assets
|
59,802
|
56,628
|
||||||
Valuation
allowance
|
(56,040 | ) | (28,289 | ) | ||||
Net
deferred tax assets
|
$ |
3,762
|
$ |
28,339
|
||||
Deferred
tax liabilities:
|
||||||||
Acquired
intangibles
|
$ | (3,762 | ) | $ | (5,316 | ) | ||
Total
net deferred tax assets
|
$ |
—
|
$ |
23,023
|
2007
|
2006
|
2005
|
||||||||||
Federal
statutory rate
|
(35 | )% | (35 | )% | 35 | % | ||||||
State
taxes, net of federal benefit
|
(5 | ) | (4 | ) |
5
|
|||||||
Foreign
taxes
|
(5 | ) |
2
|
2
|
||||||||
Amortization
of stock-based compensation
|
3
|
2
|
1
|
|||||||||
Research
and development benefit
|
(5 | ) | (7 | ) | (4 | ) | ||||||
Tax
exempt interest
|
(4 | ) | (6 | ) |
—
|
|||||||
Other
|
4
|
2
|
2
|
|||||||||
Valuation
Allowance
|
256
|
|||||||||||
Provision
for (benefit from) income taxes
|
209 | % | (46 | )% | 41 | % |
Balance
at January 1, 2007
|
$ |
3,603
|
||
Increases
for positions taken in prior years
|
98
|
|||
Increases
for positions related to the current year
|
563
|
|||
Settlements
with taxing authorities
|
(510 | ) | ||
Balance
at December 31, 2007(1)
|
$ |
3,754
|
(1)
|
$3.0 million is included as a
reserve against deferred tax assets and $800,000 is included in accrued
liabilities in the consolidated balance
sheet.
|
For The Year Ended December 31,
2007
|
For The Year Ended December 31,
2006
|
|||||||
Risk-free
rate
|
4.73 | % | 4.86 | % | ||||
Expected
dividend yield
|
0 | % | 0 | % | ||||
Expected
volatility
|
49 | % | 50 | % | ||||
Expected
life
|
6.1
years
|
6.1
years
|
Shares Available for
Grant
|
Options
Outstanding
|
Weighted Average Exercise
Price
|
||||||||||
Balance
as of December 31, 2004
|
7,378,671
|
10,114,986
|
$ |
4.78
|
||||||||
Authorized
|
3,637,835
|
—
|
—
|
|||||||||
Granted
|
(1,045,300 | ) |
1,045,300
|
5.88
|
||||||||
Exercised
|
—
|
(1,041,176 | ) |
1.88
|
||||||||
Cancelled
|
771,085
|
(771,085 | ) |
6.09
|
||||||||
Balance
as of December 31, 2005
|
10,742,291
|
9,348,025
|
$ |
5.12
|
||||||||
Authorized
|
3,248,060
|
—
|
—
|
|||||||||
Options
granted
|
(2,071,823 | ) |
2,071,823
|
6.85
|
||||||||
Awards
granted
|
(446,303 | ) |
—
|
—
|
||||||||
Assumed
in acquisition of GoRemote
|
—
|
1,710,353
|
18.58
|
|||||||||
Exercised
|
—
|
(1,831,995 | ) |
3.03
|
||||||||
Cancelled
|
1,897,781
|
(1,897,781 | ) |
7.09
|
||||||||
Balance
as of December 31, 2006
|
13,370,006
|
9,400,425
|
$ |
7.96
|
||||||||
Options
granted
|
(1,445,525 | ) |
1,445,525
|
5.10
|
||||||||
Awards
granted
|
(560,094 | ) |
—
|
—
|
||||||||
Exercised
|
—
|
(473,280 | ) |
1.86
|
||||||||
Cancelled
|
2,229,681
|
(2,164,711 | ) |
15.14
|
||||||||
Balance
at December 31, 2007
|
12,689,263
|
8,207,959
|
$ |
5.92
|
||||||||
Exercisable
as of December 31, 2005
|
4,945,870
|
$ |
4.39
|
|||||||||
Exercisable
as of December 31, 2006
|
5,703,614
|
$ |
8.85
|
|||||||||
Exercisable
as of December 31, 2007
|
5,488,540
|
$ |
5.94
|
Shares
|
Weighted Average Exercise Price
per Share
|
Weighted Average Remaining
Contractual Term (Years)
|
Aggregate Intrinsic
Value
|
|||||||||||||
(In thousands, except share and
per share amounts)
|
||||||||||||||||
Options
outstanding at December 31, 2007
|
8,207,959
|
$ |
5.92
|
6.06
|
$ |
2,843
|
||||||||||
Options
vested and expected to vest at December, 31, 2007
|
7,353,474
|
$ |
5.93
|
5.78
|
$ |
2,843
|
||||||||||
Options
exercisable at December 31, 2007
|
5,488,540
|
$ |
5.94
|
4.91
|
$ |
2,843
|
Shares
|
Weighted Average Exercise Price
per Share
|
|||||||
Exercise
price less than fair value
|
—
|
$ |
—
|
|||||
Exercise
price equal to fair value
|
1,445,525
|
$ |
5.10
|
|||||
Exercise
price more than fair value
|
—
|
$ |
—
|
Options
Outstanding
|
Options
Exercisable
|
|||||||||||||||||||||
Range of Exercise
Prices
|
Number
Outstanding
|
Weighted-
Average
Remaining Contractual Life (in
Years)
|
Weighted-Average
Exercise Price per
Share
|
Number
Exercisable
|
Weighted-Average
Exercise Price per
Share
|
|||||||||||||||||
$ |
0.10
— 2.10
|
1,042,636
|
4.43
|
$ |
1.37
|
1,042,636
|
$ |
1.37
|
||||||||||||||
2.60 — 5.05
|
1,384,528
|
4.72
|
4.78
|
1,308,543
|
4.79
|
|||||||||||||||||
5.09 —
5.09
|
994,200
|
9.07
|
5.09
|
—
|
—
|
|||||||||||||||||
5.13
— 5.30
|
152,283
|
8.42
|
5.23
|
44,006
|
5.29
|
|||||||||||||||||
5.32 —
5.35
|
1,159,597
|
5.37
|
5.35
|
1,003,397
|
5.35
|
|||||||||||||||||
5.38 —
6.12
|
829,440
|
5.97
|
5.72
|
628,143
|
5.76
|
|||||||||||||||||
6.13 — 6.49
|
887,673
|
7.43
|
6.34
|
374,085
|
6.43
|
|||||||||||||||||
6.51— 7.59
|
829,017
|
7.31
|
6.89
|
279,897
|
7.35
|
|||||||||||||||||
7.68 — 20.02
|
867,934
|
4.83
|
11.62
|
747,202
|
11.91
|
|||||||||||||||||
20.80
— 250.00
|
60,651
|
4.20
|
38.03
|
60,640
|
38.04
|
|||||||||||||||||
Total
|
8,207,959
|
6.06
|
5.92
|
5,488,540
|
5.94
|
Shares
|
Weighted Average Grant Date
Fair Value
|
|||||||
Nonvested
at December 31, 2005
|
—
|
$ |
—
|
|||||
Granted
|
446,303
|
$ |
6.32
|
|||||
Vested
|
—
|
$ |
—
|
|||||
Forfeited
|
(33,950 | ) | $ |
6.39
|
||||
Nonvested
at December 31, 2006
|
412,353
|
$ |
6.34
|
|||||
Granted
|
560,094
|
$ |
5.09
|
|||||
Vested
|
(41,667 | ) | $ |
6.01
|
||||
Forfeited
|
(131,535 | ) | $ |
5.65
|
||||
Nonvested
at December 31, 2007
|
799,245
|
$ |
5.60
|
For The Year Ended December 31,
2007
|
For The Year Ended December 31,
2006
|
|||||||
Risk-free
rate
|
3.89 | % | 4.95 | % | ||||
Expected
dividend yield
|
0 | % | 0 | % | ||||
Expected
volatility
|
46 | % | 55 | % | ||||
Expected
life
|
0.5
to 1 year
|
0.5
to 1 year
|
Year
ending December 31:
|
||||
2008
|
$
|
7,496
|
||
2009
|
6,785
|
|||
2010
|
4,650
|
|||
2011
|
3,559
|
|||
2012
and thereafter
|
9,322
|
|||
$
|
31,812
|
Year
ending December 31:
|
||||
2008
|
$
|
5,068
|
||
2009
|
14,181
|
|||
2010
|
15,075
|
|||
$
|
34,324
|
For the Year Ended December
31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Numerator:
|
||||||||||||
Net
income (loss)
|
$ | (34,214 | ) | $ | (8,089 | ) | $ |
12,895
|
||||
Denominator:
|
||||||||||||
Denominator
for basic net income per common share
|
||||||||||||
Weighted
average shares outstanding
|
63,211,888
|
64,572,603
|
63,353,779
|
|||||||||
Effect
of dilutive securities:
|
||||||||||||
Stock
options
|
--
|
--
|
2,923,563
|
|||||||||
Denominator
for diluted net income (loss) per common share —
adjusted
|
63,211,888
|
64,572,603
|
66,277,342
|
|||||||||
Basic
net income (loss) per common share
|
$ | (0.54 | ) | $ | (0.13 | ) | $ |
0.20
|
||||
Diluted
net income (loss) per common share
|
$ | (0.54 | ) | $ | (0.13 | ) | $ |
0.19
|
For the Year Ended December
31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Options
to purchase common stock
|
8,207,959
|
9,400,425
|
1,904,406
|
|||||||||
Unvested
restricted stock awards
|
799,245
|
323,303
|
--
|
For the Year Ended December
31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Broadband
|
$ |
75,073
|
$ |
39,936
|
$ |
8,815
|
||||||
Dial-up
|
67,826
|
105,682
|
138,057
|
|||||||||
Service fees and other | 48,833 | 37,093 | 22,501 | |||||||||
191,732 | 182,711 | 169,373 |
iPass Inc.
|
|
|
|
By: /s/ Kenneth
D. Denman
|
|
|
By: /s/ Frank
E. Verdecanna
|
Kenneth
D. Denman, Chairman, President and Chief Executive
Officer
(Principal Executive
Officer)
|
|
|
Frank
E. Verdecanna, Vice President and Chief Financial
Officer
(Principal Financial
Officer)
|
Signature
|
Title
|
Date
|
|
|
|
/s/
Kenneth D. Denman
|
Chairman,
President, Chief Executive Officer and Director (Principal Executive
Officer)
|
March
17, 2008
|
Kenneth
D. Denman
|
|
|
|
|
|
/s/
Frank E. Verdecanna
|
Vice
President and Chief Financial Officer (Principal Financial
Officer)
|
March
17, 2008
|
Frank
E. Verdecanna
|
|
|
|
|
|
/s/
A. Gary Ames
|
Director
|
March
17, 2008
|
A.
Gary Ames
|
|
|
|
|
|
/s/
John D. Beletic
|
Director
|
March
17, 2008
|
John
D. Beletic
|
|
|
|
|
|
/s/
Peter G. Bodine
|
Director
|
March
17, 2008
|
Peter
G. Bodine
|
|
|
|
|
|
/s/
Peter C. Clapman
|
Director
|
March
17, 2008
|
Peter
C. Clapman
|
|
|
|
|
|
/s/
Michael J. McConnell
|
Director
|
March
17, 2008
|
Michael
J. McConnell
|
|
|
|
|
|
/s/
Arthur C. Patterson
|
Director
|
March
17, 2008
|
Arthur
C. Patterson
|
|
|
|
|
|
/s/
Olof Pripp
|
Director
|
March
17, 2008
|
Olof
Pripp
|
|
|
|
|
|
/s/
Allan R. Spies
|
Director
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March
17, 2008
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Allan
R. Spies
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(1
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)
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Previously
filed as the like-numbered exhibit to our Annual Report on Form 10-K
(Commission No. 000-50327) filed with the Securities and Exchange
Commission on March 15, 2005, and incorporated by reference
herein.
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(2
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)
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Previously
filed as exhibit 10.22 on our Current Report on Form 8-K (Commission No.
000-50327) filed with the Securities and Exchange Commission on December
12, 2005, and incorporated by reference herein.
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(3
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)
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Previously
filed as the like-numbered exhibit to our Registration Statement on Form
S-1 (Commission No. 333-102715), as amended, originally filed with the
Securities and Exchange Commission on January 24, 2003, as amended, and
incorporated by reference herein.
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(4
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)
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Previously
filed as the like-numbered exhibit to our Annual Report on Form 10-K
(Commission No. 000-50327) filed with the Securities and Exchange
Commission on March 16, 2006, and incorporated by reference
herein
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(5
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)
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Previously
filed as exhibit 10.1 on our Current Report on Form 8-K (Commission No.
000-50327) filed with the Securities and Exchange Commission on August 16,
2006, and incorporated by reference herein.
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(6
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)
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Previously
filed as Item 5.02 on our Current Report on Form 8-K (Commission No.
000-50327) filed with the Securities and Exchange Commission on February
13, 2007, and incorporated by reference herein.
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(7
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)
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Previously
disclosed under the caption “Compensation of Directors” in our Definitive
Proxy Statement on Schedule 14A filed with the Securities and Exchange
Commission on April 30, 2007, and incorporated by reference
herein.
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(8
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)
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Filed
as the like-described exhibit to iPass’ Quarterly Report on Form 10-Q
(Commission No. 000-50327), filed with the SEC on May 10, 2007, and
incorporated herein by reference.
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(9
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)
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Previously
filed as exhibit 10.23 on our Current Report on Form 8-K (Commission No.
000-50327) filed with the Securities and Exchange Commission on February
16, 2006, and incorporated by reference herein.
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(10
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)
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Previously
filed as exhibit 10.24 on our Current Report on Form 8-K (Commission No.
000-50327) filed with the Securities and Exchange Commission on February
16, 2006, and incorporated by reference herein.
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(11
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) |
Previously
filed as exhibit 99.1 on our Current Report on Form 8-K (Commission No.
000-50327) filed with the Securities and Exchange Commission on February
21, 2007.
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(12
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)
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Previously
filed as the like-numbered exhibit to our Annual Report on form 10-K
(Commission No. 000-50327) filed with the Securities and Exchange
Commission on March 29, 2007, and incorporated by reference
herein
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(13
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)
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Previously
filed as exhibit 3.1 on our Current Report on Form 8-K (Commission No.
000-50327) filed with the Securities and Exchange Commission on November
13, 2007, and incorporated by reference herein.
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(14 | ) |
Previously
filed as the description in Item 5.02 of the Current Report on Form
8-K and incorporated herein by reference.
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(15
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)
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Previously
filed as the like-described exhibit to iPass’ Current Report on Form 8-K
(Commission No. 000-50327), filed with the SEC on August 15, 2007, and
incorporated herein by reference. Participation in the plan by executive
officers is described in Item 5.02 of the Current Report on Form
8-K and incorporated herein by reference.
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(16
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)
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Previously
filed as the like-described exhibit to iPass’ Current Report on Form 8-K
(Commission No. 000-50327), filed with the SEC on December 26, 2007, and
incorporated herein by reference.
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(17
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)
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Previously
filed as the like-described exhibit to iPass’ Current Report on Form 8-K
(Commission No. 000-50327), filed with the SEC on February 15, 2008, and
incorporated herein by reference. Participation in the plan by executive
officers is described in Item 5.02 of the Current Report on Form
8-K and incorporated herein by
reference.
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