Note 15 - Subsequent Events

9 Months Ended

Sep. 30, 2014

15. Subsequent Events

Initial Public Offering and Repayment of Bank Borrowings

On October 8, 2014, the Company completed its IPO in which it issued and sold 6.25 million shares of common stock at a public offering price of $12.00 per share. The Company received net proceeds of $65.95 million after deducting underwriting discounts and commissions of $5.25 million and other estimated issuance costs of $3.8 million. Immediately prior to the closing of the IPO, all shares of the Company’s then-outstanding convertible preferred stock automatically converted into an aggregate of 14.4 million shares of common stock. On October 27, 2014, the underwriters exercised their option to purchase 760,724 shares of the Company’s common stock at a public offering price of $12.00 per share. The Company received net proceeds of $8.5 million after deducting underwriting discounts and commissions of $0.6 million. In October 2014, the Company repaid the outstanding balance of $9.6 million as of September 30, 2014, under the credit facility.

The pro forma balance sheet data in the table below reflects the sale of common stock by the Company in its IPO and the exercise by the underwriters of their option to purchase shares of the Company’s common stock after deducting the underwriting discounts and commissions, and estimated offering expenses payable by the Company, and the repayment of the outstanding balance under the credit facility upon receipt of proceeds from the IPO. In addition, the pro forma balance sheet reflects the automatic conversion of all outstanding shares of the convertible preferred stock into the shares of the common stock, which conversion occurred immediately prior to the closing of the IPO, and the reclassification of preferred stock warrant liabilities to additional paid-in capital.

Pro forma Balance Sheet

	Historical as of September 30, 2014			Pro Forma Adjustments			Pro forma as of September 30, 2014
ASSETS	(in thousands)
Total current assets	$	25,848		$	66,083		$	91,931
Total long-term assets		17,733			(3,787	)		13,946
Total assets		43,581			62,296			105,877
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Total current liabilities		32,170			(11,509	)		20,661
Total long-term liabilities		6,230			(1,557	)		4,673
Convertible preferred stock		102,224			(102,224	)		–
Stockholders’ equity (deficit):
Common stock		8			21			29
Additional paid-in capital		257,429			177,565			434,994
Accumulated other comprehensive loss		(1,640	)		–			(1,640	)
Accumulated deficit		(352,840	)		–			(352,840	)
Total stockholders’ equity (deficit)		(97,043	)		177,586			80,543
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	43,581		$	62,296		$	105,877

Operating Lease

In October 2014, the operating lease for the Company’s corporate headquarters in Redwood City, California of approximately 36,000 square feet of space was amended to extend the lease until March 31, 2022 and include approximately 12,000 square feet of additional office space for a term effective through March 31, 2022 with a total cost of $14.1 million payable over the lease term.