10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________

FORM 10-Q

_____________________________________

þ    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from             to            .

Commission file number 001-36360

AMBER ROAD, INC.

(Exact name of registrant as specified in its charter)

Delaware	22-2590301
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

One Meadowlands Plaza, East Rutherford, NJ 07073

(Address and zip code of principal executive offices)

(201) 935-8588

(Registrant’s telephone number, including area code)

_____________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes þ   No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨		Accelerated filer	þ
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	¨
			Emerging growth company	þ

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. þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

On August 8, 2018, the registrant had outstanding 27,520,695 shares of common stock, $0.001 par value per share.

AMBER ROAD, INC.

FORM 10-Q

For the Quarterly Period Ended June 30, 2018

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017	4
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2018 and 2017	5
	Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2018 and 2017	6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	30
Signature Page		31

Amber Road, the Amber Road logo, Global Knowledge, Enterprise Technology Framework and other trademarks of Amber Road appearing in this report on Form 10-Q are the property of Amber Road. All other trademarks, service marks and trade names in this report on Form 10-Q are the property of their respective owners. We have omitted the ® and ™ designations, as applicable, for the trademarks used in this report on Form 10-Q.

2

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “would” or the negative or plural of these words or similar expressions or variations. Such forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, including those discussed in the section titled “Risk Factors”, set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the year ended December 31, 2017, and in our other SEC filings. You should not rely upon forward-looking statements as predictions of future events. Furthermore, such forward-looking statements speak only as of the date of this Quarterly Report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. As used in this report, the terms "Amber Road", "we", "us", and "our" mean Amber Road, Inc. and its subsidiaries unless the context indicates otherwise.

3

PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

	June 30, 2018			December 31, 2017
Assets
Current assets:
Cash and cash equivalents	$	7,508,655		$	9,360,601
Accounts receivable, net	16,102,172			16,957,044
Unbilled receivables	912,268			884,104
Deferred commissions	4,271,834			4,400,015
Prepaid expenses and other current assets	2,284,206			1,715,534
Total current assets	31,079,135			33,317,298
Property and equipment, net	9,700,769			9,370,104
Goodwill	43,700,512			43,768,269
Other intangibles, net	4,466,739			4,999,885
Deferred commissions	8,456,002			6,734,326
Deposits and other assets	1,446,860			1,180,163
Total assets	$	98,850,017		$	99,370,045
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,947,271		$	2,650,582
Accrued expenses	6,735,396			7,589,482
Current portion of capital lease obligations	1,398,234			1,352,456
Deferred revenue	37,323,361			37,812,239
Current portion of term loan, net of discount	714,391			714,391
Total current liabilities	48,118,653			50,119,150
Capital lease obligations, less current portion	1,399,052			1,461,101
Deferred revenue, less current portion	265,324			1,830,706
Term loan, net of discount, less current portion	12,482,196			12,839,392
Revolving credit facility	6,000,000			6,000,000
Other noncurrent liabilities	1,862,405			1,619,744
Total liabilities	70,127,630			73,870,093
Commitments and contingencies (Note 11)
Stockholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized; issued and outstanding 27,496,442 and 27,288,985 shares at June 30, 2018 and December 31, 2017, respectively	27,497			27,289
Additional paid-in capital	199,819,099			195,203,097
Accumulated other comprehensive loss	(1,852,667		)	(1,822,396		)
Accumulated deficit	(169,271,542		)	(167,908,038		)
Total stockholders’ equity	28,722,387			25,499,952
Total liabilities and stockholders’ equity	$	98,850,017		$	99,370,045

See accompanying notes to condensed consolidated financial statements.

4

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Revenue:
Subscription	$	15,427,422		$	14,686,744		$	30,516,534		$	28,588,052
Professional services	5,628,933			4,988,541			10,604,213			9,641,789
Total revenue	21,056,355			19,675,285			41,120,747			38,229,841
Cost of revenue (1):
Cost of subscription revenue	5,447,788			5,783,131			10,662,839			11,163,159
Cost of professional services revenue	4,286,163			4,126,958			8,545,125			8,148,704
Total cost of revenue	9,733,951			9,910,089			19,207,964			19,311,863
Gross profit	11,322,404			9,765,196			21,912,783			18,917,978
Operating expenses (1):
Sales and marketing	5,885,177			5,688,937			11,692,492			11,492,323
Research and development	3,801,215			3,835,729			7,249,780			7,371,144
General and administrative	4,425,541			3,923,928			8,501,545			7,730,635
Total operating expenses	14,111,933			13,448,594			27,443,817			26,594,102
Loss from operations	(2,789,529		)	(3,683,398		)	(5,531,034		)	(7,676,124		)
Interest income	2,639			521			3,632			1,326
Interest expense	(339,571		)	(244,183		)	(639,170		)	(479,351		)
Loss before income taxes	(3,126,461		)	(3,927,060		)	(6,166,572		)	(8,154,149		)
Income tax expense	77,661			590,411			204,742			776,518
Net loss	$	(3,204,122	)	$	(4,517,471	)	$	(6,371,314	)	$	(8,930,667	)
Net loss per share (Note 10):
Basic and diluted	$	(0.12	)	$	(0.16	)	$	(0.23	)	$	(0.33	)
Weighted-average shares outstanding (Note 10):
Basic and diluted	27,683,120			27,418,487			27,639,835			27,329,183

(1) Includes stock-based compensation as follows:
	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Cost of subscription revenue	$	219,951	$	174,660	$	428,388	$	377,932
Cost of professional services revenue	179,201		132,008		336,817		251,772
Sales and marketing	389,046		248,682		734,079		459,400
Research and development	503,257		302,222		931,323		585,860
General and administrative	988,269		371,091		1,854,705		779,334
	$	2,279,724	$	1,228,663	$	4,285,312	$	2,454,298

See accompanying notes to condensed consolidated financial statements.

5

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net loss	$	(3,204,122	)	$	(4,517,471	)	$	(6,371,314	)	$	(8,930,667	)
Other comprehensive loss:
Foreign currency translation	176,909			(45,436		)	(30,271		)	(274,668		)
Total other comprehensive income (loss)	176,909			(45,436		)	(30,271		)	(274,668		)
Comprehensive loss	$	(3,027,213	)	$	(4,562,907	)	$	(6,401,585	)	$	(9,205,335	)

See accompanying notes to condensed consolidated financial statements.

6

AMBER ROAD, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended June 30,
	2018			2017
Cash flows from operating activities:
Net loss	$	(6,371,314	)	$	(8,930,667	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	2,547,268			3,008,155
Bad debt expense	167,327			478,519
Stock-based compensation	4,285,312			2,454,298
Changes in fair value of contingent consideration liability	—			18,525
Accretion of debt discount	17,804			20,079
Changes in operating assets and liabilities:
Accounts receivable and unbilled receivables	664,339			4,802,249
Prepaid expenses and other assets	(665,835		)	737,378
Accounts payable	(637,658		)	(515,904		)
Accrued expenses	(807,023		)	(1,867,288		)
Settlement of contingent accrued compensation related to former ecVision founder	—			(2,366,469		)
Other liabilities	268,276			(184,101		)
Deferred revenue	1,305,675			1,256,536
Net cash provided by (used in) operating activities	774,171			(1,088,690		)
Cash flows from investing activities:
Capital expenditures	(78,394		)	(55,579		)
Addition of capitalized software development costs	(1,569,092		)	(839,409		)
Cash paid for deposits	(164,780		)	(169,140		)
Net cash used in investing activities	(1,812,266		)	(1,064,128		)
Cash flows from financing activities:
Proceeds from revolving line of credit	13,650,000			12,250,000
Payments on revolving line of credit	(13,650,000		)	(12,000,000		)
Payments on term loan	(375,000		)	(281,250		)
Debt financing costs	—			(35,701		)
Repayments on capital lease obligations	(720,109		)	(845,967		)
Proceeds from the exercise of stock options	330,898			98,348
Contingent consideration related to ecVision acquisition	—			(1,308,531		)
Net cash used in financing activities	(764,211		)	(2,123,101		)
Effect of exchange rate on cash, cash equivalents and restricted cash	(49,640		)	(49,083		)
Net decrease in cash, cash equivalents and restricted cash	(1,851,946		)	(4,325,002		)
Cash, cash equivalents and restricted cash at beginning of period	9,417,001			15,464,274
Cash, cash equivalents and restricted cash at end of period	$	7,565,055		$	11,139,272
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet:
Cash and cash equivalents	$	7,508,655		$	11,082,872
Restricted cash in deposits and other assets	56,400			56,400
Total cash, cash equivalents and restricted cash	$	7,565,055		$	11,139,272
Supplemental disclosures of cash flow information:
Cash paid for interest	$	621,366		$	453,666
Non-cash property and equipment acquired under capital lease	703,838			1,384,336
Non-cash property and equipment purchases in accounts payable	14,061			11,603

See accompanying notes to condensed consolidated financial statements.

7

AMBER ROAD, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(1) Background

Amber Road, Inc. (we, our or us) is a leading provider of a cloud-based global trade management solution, including modules for logistics contract and rate management, supply chain visibility and event management, international trade compliance, Global Knowledge trade content database, supply chain collaboration with overseas factories and vendors, and duty management solutions to importers and exporters, nonvessel owning common carriers (resellers), and ocean carriers. Our solution is primarily delivered using an on-demand, cloud-based, delivery model. We are incorporated in the state of Delaware and our corporate headquarters are located in East Rutherford, New Jersey. We also have offices in McLean, Virginia; Raleigh, North Carolina; Munich, Germany; Bangalore, India; Shenzhen and Shanghai, China; and Hong Kong.

(2) Summary of Significant Accounting Policies and Practices

(a) Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements and footnotes have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles (GAAP) in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for the fair statement have been included. The accompanying condensed consolidated financial statements include our accounts and those of our wholly-owned subsidiaries primarily located in India, China and Europe. All significant intercompany balances and transactions have been eliminated in consolidation. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for other interim periods or future years. The consolidated balance sheet as of December 31, 2017 is derived from the audited financial statements as of that date. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Form 10-K for the year ended December 31, 2017.

(b) Use of Estimates

The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include the carrying amount of intangibles and goodwill; valuation allowance for receivables and deferred income tax assets; revenue; capitalization of software costs; and valuation of share-based payments. Actual results could differ from those estimates.

(c) Revenue from Contracts with Customers

Adoption of Accounting Standards Codification Topic 606

Effective January 1, 2018, we adopted the requirements of Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606), and all the related amendments (the new revenue standard) using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of accumulated deficit as of the adoption date. The comparative information for 2017 has not been restated and continues to be reported under the accounting standards in effect for that period.

Revenue Recognition

We primarily generate revenue from the sale of subscriptions and subscription-related professional services. In instances involving subscriptions, revenue is generated under customer contracts with multiple elements, which are comprised of (1) subscription fees that provide the customers with access to our on-demand application and content, unspecified solution and content upgrades, and customer support, (2) professional services associated with consulting services (primarily implementation services), and (3) transaction-related fees (including publishing services). Our initial customer contracts usually have contract terms from 3 years to 5 years in length. Typically, the customer does not take possession of the software nor does the customer have the right to take possession of the software supporting the on-demand application service. However, in certain instances, we have customers that take possession of the software whereby the application is installed on the customer’s premises. Our subscription service arrangements typically may only be terminated for cause and do not contain refund provisions.

We determine revenue recognition through the following steps:

• Identification of the contract, or contracts, with a customer

• Identification of the performance obligations in the contract

8

AMBER ROAD, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

• Determination of the transaction price

• Allocation of the transaction price to the performance obligations in the contract

• Recognition of revenue when, or as, we satisfy a performance obligation

The subscription fees typically begin the first month following contract execution, whether or not we have completed the solution’s implementation. In addition, any services performed by us for our customers are not essential to the functionality of our products.

Subscription Revenue for Hosted and On-Premise Customers

Subscription revenue, which primarily consists of fees to provide customers access to our solution, is recognized ratably over contract terms beginning on the commencement date of each contract, which is the date our service is made available to customers. Typically, amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. Transaction-related revenue is recognized as the transactions occur.

Professional Services Revenue for Hosted Customers

Professional services revenue primarily consists of fees for deployment of our solution. The majority of professional services contracts are on a time and material basis. When these services are not combined with subscription revenue as a single unit of accounting, as discussed below, this revenue is recognized as the services are rendered for time and material contracts, and when the milestones are achieved and accepted by the customer for fixed price contracts.

Professional Services Revenue for On-Premise Customers

For customers that take possession of the software, billings for professional services will be recognized as revenue when services are performed, unlike under the previous standard where revenue from these billings was deferred and amortized ratably over the subscription term of the related contract. The adoption of ASC 606 will reduce revenue due to the loss of deferred services revenue from professional services billings delivered prior to December 31, 2017 for on-premise installations of our software. Deferred revenue associated with on-premise professional services at December 31, 2017 will not be amortized in 2018 and beyond.

Multiple Performance Obligations

Some of our contracts with customers contain multiple performance obligations that generally include subscription, professional services (primarily implementation) as well as transaction-related fees.

For contracts with enterprise customers (customers with annual revenues that we believe are greater than $1 billion), we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. We determine the standalone selling prices based on our overall pricing objectives, taking into consideration market conditions and other factors, including the value of our contracts, the solution sold, taking into account the modules included, term of the arrangement, and base transaction volume, customer demographics, and geographic locations.

For contracts with mid-market customers (customers with annual revenues that we believe are less than $1 billion), both subscription and professional services are combined and there is only one observable price. For these contracts that bundle the performance obligations into one annual fee, the transaction price is allocated based on the standard professional service rates and implementation hours.

Other Revenue Items

Sales tax collected from customers and remitted to governmental authorities is accounted for on a net basis and, therefore, is not included in revenue and cost of revenue in the condensed consolidated statements of operations. We classify customer reimbursements received for direct costs paid to third parties and related expenses as revenue, in accordance with ASC 606.

Costs to Obtain and Fulfill a Contract

We defer commission costs that are incremental and directly related to the acquisition of customer contracts. Commission costs are accrued and deferred upon execution of the sales contract by the customer. Payments to sales personnel are made shortly after the receipt of the related customer payment. Under ASC 606, deferred commissions are amortized over an estimated customer life of 6 years, which differs from the previous standard whereby deferred commissions were

9

AMBER ROAD, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

amortized over the initial customer contract term. We determined the period of amortization of deferred commissions under ASC 606 by taking into consideration our customer contracts, our technology and other factors.

Our commission costs deferred and amortized in the period are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Commission costs deferred	$	1,401,372	$	1,042,901	$	2,071,409	$	1,679,646
Commission costs amortized	1,127,025		1,247,018		2,126,601		2,484,761

Financial Statement Impact of Adopting ASC 606

We adopted ASC 606 using the modified retrospective method. The cumulative effect of applying the new guidance to all contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to accumulated deficit as of the adoption date. As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to the following balance sheet accounts as follows:

	As Reported			Adjustments									As Adjusted
	December 31, 2017			Subscription Revenue			Professional Services Revenue			Cost to Obtain a Contract			January 1,  2018
Deferred commissions, current	$	4,400,015		$	—		$	—		$	(562,607	)	$	3,837,408
Deferred commissions, non-current	6,734,326			—			—			2,211,294			8,945,620
Deferred revenue, current	37,812,239			229,093			(2,170,118		)	—			35,871,214
Deferred revenue, non-current	1,830,706			—			(1,418,098		)	—			412,608
Accumulated deficit	(167,908,038		)	(229,093		)	3,588,216			1,648,687			(162,900,228		)

Impact of New Revenue Standard on Financial Statement Line Items

In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our condensed consolidated balance sheet as of June 30, 2018 and our condensed consolidated statement of operations for the three and six months ended June 30, 2018 is as follows:

	June 30, 2018
	As Reported			Balance Without Adoption of ASC 606			Effect of Change Higher/(Lower)
Balance Sheet
Deferred commissions, current	$	4,271,834		$	4,618,161		$	(346,327	)
Deferred commissions, non-current	8,456,002			6,057,014			2,398,988
Deferred revenue, current	37,323,361			38,842,476			1,519,115
Deferred revenue, non-current	265,324			1,917,884			1,652,560
Accumulated deficit	(169,271,542		)	(174,495,878		)	5,224,336

	Three Months Ended June 30, 2018									Six Months Ended June 30, 2018
	As Reported			Balance Without Adoption of ASC 606			Effect of Change Higher/(Lower)			As Reported			Balance Without Adoption of ASC 606			Effect of Change Higher/(Lower)
Statement of Operations
Subscription revenue	$	15,427,422		$	15,389,328		$	38,094		$	30,516,534		$	30,438,617		$	77,917
Professional services revenue	5,628,933			5,741,109			(112,176		)	10,604,213			10,869,578			(265,365		)
Sales and marketing	5,885,177			6,044,815			159,638			11,692,492			12,096,466			403,974
Net loss	(3,204,122		)	(3,289,678		)	85,556			(6,371,314		)	(6,587,840		)	216,526

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AMBER ROAD, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Deferred Revenue and Performance Obligations

Deferred revenue from subscriptions represents amounts collected from (or invoiced to) customers in advance of earning subscription revenue. Typically, we bill our annual subscription fees in advance of providing the service. Deferred revenue from professional services represents revenue for time and material contracts where the revenue is recognized when milestones are achieved and accepted by the customer for fixed price contracts.

	June 30, 2018		December 31, 2017
Current:
Subscription revenue	$	37,202,140	$	35,247,750
Professional services revenue	121,221		2,564,489
Total current	37,323,361		37,812,239
Noncurrent:
Subscription revenue	265,324		412,608
Professional services revenue	—		1,418,098
Total noncurrent	265,324		1,830,706
Total deferred revenue	$	37,588,685	$	39,642,945

The amount of subscription revenue and professional services revenue recognized that was included in the beginning balance of deferred revenue is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Subscription revenue	$	12,787,589	$	11,617,239	$	25,952,511	$	23,748,293
Professional services revenue	161,580		508,620		510,802		1,113,588

As of June 30, 2018, $131,236,306 of revenue is expected to be recognized from remaining performance obligations for subscription contracts and is expected to be recognized over the next 6.7 years. Remaining performance obligations for professional services contracts are recognized within one year or less.

(d) Cost of Revenue

Cost of subscription revenue. Cost of subscription revenue consists primarily of personnel and related costs of our hosting, support, and content teams, including salaries, benefits, bonuses, payroll taxes, stock-based compensation and allocated overhead, as well as software license fees, hosting costs, Internet connectivity, and depreciation expenses directly related to delivering our solutions, as well as amortization of capitalized software development costs. Our cost of subscription revenue is generally expensed as the costs are incurred.

Cost of professional services revenue. Cost of professional services revenue consists primarily of personnel and related costs, including salaries, benefits, bonuses, payroll taxes, stock-based compensation, the costs of contracted third-party vendors, reimbursable expenses and allocated overhead. As our personnel are employed on a full-time basis, our cost of professional services is largely fixed in the short term, while our professional services revenue may fluctuate, leading to fluctuations in professional services gross profit. Cost of professional services revenue is generally expensed as costs are incurred.

(e) Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents at June 30, 2018 and December 31, 2017 consists of the following:

	June 30, 2018		December 31, 2017
Cash	$	7,466,548	$	9,318,074
Money market accounts	42,107		42,527
	$	7,508,655	$	9,360,601

11

AMBER ROAD, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(f) Fair Value of Financial Instruments and Fair Value Measurements

Our financial instruments consist of cash equivalents, accounts receivable, accounts payable, and accrued expenses. Management believes that the carrying values of these instruments are representative of their fair value due to the relatively short-term nature of those instruments.

We follow Financial Accounting Standards Board (FASB) accounting guidance on fair value measurements for financial assets and liabilities measured on a recurring basis. Accounting Standards Codification (ASC) 820, Fair Value Measurements, among other things, defines fair value, establishes a framework for measuring fair value, and requires disclosure about such fair value measurements. Assets and liabilities measured at fair value are based on one or more of three valuation techniques provided for in the standards.

The three value techniques are as follows:

Market Approach —    Prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities;

Income Approach —     Techniques to convert future amounts to a single present amount based on market expectations     (including present value techniques and option pricing models); and

Cost Approach —     Amount that currently would be required to replace the service capacity of an asset (often referred to as replacement cost).

The standards clarify that fair value is an exit price, representing the amount that would be received to sell an asset, based on the highest and best use of the asset, or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for evaluating such assumptions, the standards establish a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities;

Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; or

Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions about what market participants would use in pricing the asset or liability.

The following tables provide the financial assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2018 and December 31, 2017:

	Fair Value Measurements at Reporting Date Using
June 30, 2018	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents - money market accounts	$	42,107	$	42,107	$	—	$	—
Restricted cash - money market accounts	56,400		56,400		—		—
Total assets measured at fair value on a recurring basis	$	98,507	$	98,507	$	—	$	—
December 31, 2017
Assets:
Cash equivalents - money market accounts	$	42,527	$	42,527	$	—	$	—
Restricted cash - money market accounts	56,400		56,400		—		—
Total assets measured at fair value on a recurring basis	$	98,927	$	98,927	$	—	$	—

(g) Accounts Receivable and Allowance for Doubtful Accounts

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in our existing accounts receivable. We determine the allowance based on historical write-off experience, the industry, and the economy. We review our allowance for doubtful accounts monthly. Past-due balances over 90 days and over a specified amount are reviewed individually for collectibility. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. We do not have any off-balance-sheet credit exposure related to our customers. Typically,

12

AMBER ROAD, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

we record unbilled receivables for contracts on which revenue has been recognized, but for which the customer has not yet been billed.

(h) Major Customers and Concentrations of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables. Our customer base is principally comprised of enterprise and mid-market companies within industries including Chemical/Pharmaceutical, High Technology/Electronics, Industrial/Manufacturing, Logistics, Oil & Gas, and Retail/Apparel. We do not require collateral from our customers. For the three and six months ended June 30, 2018, one customer accounted for 10.8% and 11.5%, respectively, of our total revenue. For the three and six months ended June 30, 2017, one customer accounted for 10.5% and 11.7%, respectively, of our total revenue. As of June 30, 2018 and December 31, 2017, no single customer accounted for more than 10% of our total accounts receivable.

(i) Geographic Information

Disaggregation of Revenue

We sell our subscription contracts and related professional services to customers primarily in two geographical markets. Revenue by geographic location based on the billing address of our customers is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
Country	2018		2017		2018		2017
United States	$	15,924,542	$	14,878,864	$	31,162,042	$	28,945,017
International	5,131,813		4,796,421		9,958,705		9,284,824
Total revenue	$	21,056,355	$	19,675,285	$	41,120,747	$	38,229,841

For the three and six months ended June 30, 2018 and 2017, no single country other than the United States had revenue greater than 10% of our total revenue.

Long-lived assets by geographic location is as follows:

Country	June 30, 2018		December 31, 2017
United States	$	8,878,939	$	8,535,281
International	821,830		834,823
Total long-lived assets	$	9,700,769	$	9,370,104

(j) Recent Accounting Pronouncements

In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which removes Step 2 of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. The adoption of this standard is not expected to have a material effect on our condensed consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which amends ASC 230, Statement of Cash Flows. This ASU requires that a statement of cash flows explain the change during the reporting period in the total of cash, cash equivalents, and restricted cash or restricted cash equivalents. We adopted this standard on January 1, 2018 using the retrospective transition approach. The adoption of this standard did not have a material effect on our condensed consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments, which amends ASC 230, Statement of Cash Flows. This ASU provides guidance on the statement of cash flows presentation of certain transactions where diversity in practice exists. The adoption of this standard on January 1, 2018 did not have a material effect on our condensed consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The standard requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those

13

AMBER ROAD, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

fiscal years. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements but believe the most significant changes will be related to the recognition of new right-of-use assets and lease liabilities on our balance sheet for real estate operating leases. At June 30, 2018, we had long-term operating leases with $13,707,184 of remaining minimum lease payments. The new standard will require the present value of these leases to be recorded in the condensed consolidated balance sheets as a right of use asset and lease liability.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), a new accounting standard that requires recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The FASB has also issued several updates to ASU 2014-09. We adopted this standard on January 1, 2018 using the modified retrospective method. See 2(c) above for an explanation of the effect the adoption of this standard had on our condensed consolidated financial statements.

(3) Property and Equipment

	June 30, 2018			December 31, 2017
Computer software and equipment	$	15,171,904		$	14,296,247
Software development costs	15,549,963			13,980,872
Furniture and fixtures	1,741,747			1,741,918
Leasehold improvements	2,546,669			2,546,686
Total property and equipment	35,010,283			32,565,723
Less: accumulated depreciation and amortization	(25,309,514		)	(23,195,619		)
Total property and equipment, net	$	9,700,769		$	9,370,104

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Depreciation and amortization expense	$	1,003,429	$	1,193,506	$	2,028,282	$	2,415,618

Certain development costs of our software solution are capitalized in accordance with ASC Topic 350-40, Internal Use Software, which outlines the stages of computer software development and specifies when capitalization of costs is required. Projects that are determined to be in the development stage are capitalized and amortized over their useful lives of five years. Projects that are determined to be within the preliminary stage are expensed as incurred.

Information related to capitalized software costs is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Software costs capitalized	$	718,719	$	365,612	$	1,569,092	$	839,409
Software costs amortized (1)	459,655		549,303		913,887		1,086,142
(1) Included in cost of subscription revenue on the accompanying condensed consolidated statements of operations.
					June 30, 2018		December 31, 2017
Capitalized software costs not yet subject to amortization					$	1,367,340	$	824,738

(4) Accrued Expenses

	June 30, 2018		December 31, 2017
Accrued bonus	$	1,895,382	$	1,980,218
Accrued commissions	1,896,498		1,901,132
Deferred rent	401,616		380,077
Accrued professional fees	903,079		712,345
Accrued taxes	799,524		805,555
Other accrued expenses	839,297		1,810,155
Total	$	6,735,396	$	7,589,482

14

AMBER ROAD, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(5) Leases

We have several noncancelable operating leases that expire through 2024. These leases generally contain renewal options for periods ranging from 3 years to 5 years and require us to pay all executory costs such as maintenance and insurance. Rental expense for operating leases is allocated to various line items in the condensed consolidated statements of operations.

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Rental expense from operating leases	$	890,000	$	939,000	$	1,781,000	$	1,859,000

Information related to the carrying value of assets recorded under capital leases and related accumulated amortization is as follows:

	June 30, 2018		December 31, 2017
Carry value of capital leases	$	2,678,379	$	3,691,383
Accumulated amortization included in carry value	6,488,824		6,864,443

Amortization of assets held under capital leases is allocated to various line items in the condensed consolidated statements of operations.

Future minimum lease payments under noncancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum capital lease payments as of June 30, 2018 are as follows:

	Capital Leases			Operating Leases
Remainder of 2018	$	856,692		$	2,409,267
2019	1,290,658			4,601,730
2020	578,442			3,019,786
2021	303,428			1,857,130
2022	97,326			1,200,797
2023 and thereafter	—			618,474
Total minimum lease payments	3,126,546			$	13,707,184
Less amount representing interest	(329,260		)
Present value of net minimum capital lease payments	2,797,286
Less current installments of obligations under capital leases	(1,398,234		)
Obligations under capital leases excluding current installments	$	1,399,052

(6) Debt

In March 2015, we entered into a credit agreement (the Credit Agreement) providing for financing comprised of (i) a senior secured term loan facility (the Term Loan) of $20,000,000, and (ii) a senior secured revolving credit facility (the Revolver) that was amended in November 2015 to allow for a borrowing limit of $10,000,000, and includes a $2,000,000 sublimit for the issuance of letters of credit. The original maturity date of the Credit Agreement was March 4, 2018. The Credit Agreement contains customary affirmative and negative covenants for financings of its type that are subject to customary exceptions. As of June 30, 2018, we were in compliance with all the reporting and financial covenants.

On February 15, 2017, we entered into Amendment No. 2 (the Second Amendment) to the Credit Agreement. The Second Amendment revised language in the Credit Agreement to include changes to the applicable margins with respect to Eurodollar and Base Rate loans, increased the available borrowing under the Revolver from $10,000,000 to $15,000,000, and extended the maturity date for both the Term Loan and the Revolver to December 31, 2019.

On March 6, 2018, we entered into Amendment No. 3 (the Third Amendment) to the Credit Agreement. The Third Amendment amends the definition of “Quick Liabilities” for purposes of calculating performance against the Credit Agreement covenant provisions.

The outstanding balance for the Term Loan as of June 30, 2018 was $13,196,587, net of unaccreted discount and deferred financing costs of $53,413, and the outstanding balance under the Revolver was $6,000,000. For the six months ended June 30, 2018, the weighted average interest rate used was 5.26% for the Term Loan and 5.91% for the Revolver.

15

AMBER ROAD, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table reflects the schedule of principal payments for the Term Loan as of June 30, 2018:

	Principal Payments
Remainder of 2018	$	375,000
2019	12,875,000
	$	13,250,000

(7) Stockholders' Equity

Common Stock

The following table presents our activity for common stock during the six months ended June 30, 2018:

	Shares	Par Value
Balance at December 31, 2017	27,288,985	$	27,289
Exercise of stock options	54,750	55
Issuance of common stock for vested restricted stock units	152,707	153
Balance at June 30, 2018	27,496,442	$	27,497

(8) Stock-Based Compensation

We grant stock-based incentive awards to attract, motivate and retain qualified employees (including officers), non-employee directors and consultants, and those of our affiliates. Awards granted under our 2012 Omnibus Incentive Compensation Plan (the 2012 Plan) include common stock options, restricted stock units (RSUs), performance-based restricted stock units (PSUs), and restricted stock awards. The 2002 Stock Option Plan (the 2002 Plan) expired in 2012 and we are no longer making grants under it. Information related to the 2012 Plan and the 2002 Plan as of June 30, 2018 is as follows:

	2012 Plan	2002 Plan
Shares of common stock authorized for issuance	9,646,696	4,939,270
Stock options outstanding	4,419,036	288,635
RSUs outstanding	1,210,997	—
PSUs outstanding	223,440	—
Shares available for future grant	2,752,955	—

Stock Options

The fair value of option grants is estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

	Three Months Ended June 30,		Six Months Ended June 30,
	2018	2017	2018	2017
Risk-free interest rate	2.94%	1.9%	2.72%	1.9%
Expected volatility	31.22%	33.62%	31.22%	33.62%
Expected dividend yield	—	—	—	—
Expected life in years	6.25	6.25	6.25	6.25
Weighted average fair value of options granted	$3.33	$2.75	$3.63	$2.75

The computation of expected volatility for each period is based on historical volatility of comparable public companies. The volatility percentage represents the mean volatility of these companies. The computation of expected life for each period was determined based on the simplified method. The risk-free interest rate is based on U.S. Treasury yields for zero-coupon bonds with a term consistent with the expected life of the options. The forfeiture rate for option grants is an estimate based on forfeitures expected to occur over the vesting period.

16

AMBER ROAD, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Information for the 2002 Plan and 2012 Plan is as follows:

	Options Outstanding		Weighted Average Exercise Price
Balance at December 31, 2017	4,632,654		$9.79
Granted	195,150		9.88
Exercised	(54,750	)	6.04
Canceled	(35,109	)	7.87
Expired	(30,274	)	13.00
Balance at June 30, 2018	4,707,671		9.83

	June 30,
	2018		2017
Total intrinsic value of options exercised	$	185,390	$	157,461
Weighted average exercise price of fully vested options	$	10.42	$	10.12
Weighted average remaining term of fully vested options	6.1 years		7.4 years
Total unrecognized compensation cost related to non-vested stock options	$	3,407,963	$	6,785,960
Weighted average period to recognize compensation cost related to non-vested stock options	2.6 years		2.1 years

Options outstanding and exercisable under the 2002 Plan and the 2012 Plan at June 30, 2018 were as follows:

						Options Outstanding				Options Exercisable
Exercise Price Per Share						Options Outstanding	Weighted Average Remaining Contractual Life	Intrinsic Value		Options Exercisable	Weighted Average Remaining Contractual Life	Intrinsic Value
$	2.31	-	$	3.74	.	473,944	5.0 years	$	3,100,011	378,058	4.3 years	$	2,556,337
4.13		-	7.20		.	747,462	7.8 years	2,010,031		341,863	6.6 years	1,069,910
8.07		-	12.62		.	1,486,107	7.8 years	1,410,926		722,951	6.7 years	911,343
13.00		-	15.90		.	2,000,158	6.1 years	—		1,875,133	6.1 years	—
						4,707,671		$	6,520,968	3,318,005		$	4,537,590

Restricted Stock and Performance Stock Units

The following table is a summary of our RSU and PSU activity for the six months ended June 30, 2018:

	Number of RSU's Outstanding		Number of PSU's Outstanding		Total		Weighted Average Grant Date Fair Value
Balance at December 31, 2017	812,262		466,499		1,278,761		$7.41
Granted	502,268		25,000		527,268		9.59
Vested	(103,533	)	—		(103,533	)	5.84
Canceled	—		(268,059	)	(268,059	)	7.95
Balance at June 30, 2018	1,210,997		223,440		1,434,437		8.23
							June 30, 2018
Total unrecognized compensation cost related to non-vested combined RSU/PSU							$9,245,675
Weighted average period to recognize compensation cost related to non-vested combined RSU/PSU							2.9 years

(9) Income Taxes

Our income tax provision for the three and six months ended June 30, 2018 and 2017 reflects our estimate of the effective tax rates expected to be applicable for the full fiscal years, adjusted for any discrete events that are recorded in the

17

AMBER ROAD, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

period in which they occur. The estimates are re-evaluated each quarter based on our estimated tax expense for the full fiscal year. The tax provision for the three and six months ended June 30, 2018 is primarily related to current foreign income taxes.

We have historically incurred operating losses and, given our cumulative losses and no history of profits, we have recorded a full valuation allowance against our deferred tax assets at June 30, 2018 and December 31, 2017.

We have a federal net operating loss (NOL) carryforward of $90,901,000 and $82,141,000 as of December 31, 2017 and 2016, respectively. We expect to be in a taxable loss position for 2018. The federal NOL carryforward will begin to expire in 2019. If not used, these NOLs may be subject to limitation under Internal Revenue Code (IRC) Section 382 should there be a greater than 50% ownership change as determined under the regulations.

Under IRC Section 382, substantial changes in ownership may limit the amount of NOL carryforwards that may be utilized annually in the future to offset taxable income. We completed an IRC Section 382 study through June 30, 2016, which concluded that we have experienced several ownership changes, causing limitations on the annual use of NOL carryforwards. Provided there is sufficient taxable income, $2,131,290 of NOL carryforwards are expected to expire without utilization between 2019 and 2022. Additionally, our ability to use our NOL carryforwards to reduce future taxable income may be further limited as a result of any future equity transactions, including, but not limited to, an issuance of shares of stock or sales of common stock by our existing stockholders.

For state income tax purposes, we have state NOL carryforwards in a number of jurisdictions in varying amounts and with varying expiration dates from 2018 through 2038.

Tax benefits of uncertain tax positions are recognized only if it is more likely than not that we will be able to sustain a position taken on an income tax return. We have no liability for uncertain positions. Interest and penalties, if any, related to unrecognized tax benefits, would be recognized as income tax expense.

We file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Tax years 2014 and forward remain open for examination for federal tax purposes and tax years 2013 and forward remain open for examination for our more significant state tax jurisdictions. To the extent utilized in future years’ tax returns, NOL carryforwards at December 31, 2016 will remain subject to examination until the respective tax year is closed.

On December 22, 2017, H.R. 1 (also, known as the Tax Cuts and Jobs Act (the Act)) was signed into law. Among its numerous changes to the Internal Revenue Code, the Act reduces U.S. federal corporate tax rate from 35% to 21%. As a result, we believe that the most significant impact on our consolidated financial statements will be a reduction in deferred tax assets related to NOLs and other deferred tax assets. Such reduction was offset by an equal reduction to our valuation allowance. Additionally, we have investments in various foreign subsidiaries. At December 31, 2017 and November 2, 2017, the cumulative earnings and profits of these entities combined were negative. Accordingly, we are not liable for the transition tax enacted under the Act. We have completed the accounting for the tax impact of the Act as of December 31, 2017 and have recorded no provisional amounts.

(10) Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Numerator:
Net loss	$	(3,204,122	)	$	(4,517,471	)	$	(6,371,314	)	$	(8,930,667	)
Denominator:
Weighted average shares outstanding	27,683,120			27,418,487			27,639,835			27,329,183
Basic and diluted net loss per share	$	(0.12	)	$	(0.16	)	$	(0.23	)	$	(0.33	)

Diluted net loss per share does not include the effect of the following antidilutive common equivalent shares:

	Three Months Ended June 30,		Six Months Ended June 30,
	2018	2017	2018	2017
Stock options outstanding	4,707,671	4,569,402	4,707,671	4,569,402
Restricted stock and performance stock units	1,434,437	848,772	1,434,437	848,772
	6,142,108	5,418,174	6,142,108	5,418,174

18

AMBER ROAD, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(11) Commitments and Contingencies

(a) Legal Proceedings

We are involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters is not expected to have a material adverse effect on our financial position, results of operations, or liquidity.

(b) Indemnifications

In the ordinary course of business and under the indemnification clause of our standard customer agreement, we provide indemnifications of varying scope to customers against claims of intellectual property infringement made by third parties arising from the use of our licensed materials. At present, we do not expect to incur any infringement liability as a result of the customer indemnification clauses.

To the extent permitted under Delaware law, we have agreements whereby we indemnify our senior officers and directors for certain events or occurrences while the officer or director is or was serving at our request in such capacity. The indemnification period covers all pertinent events and occurrences so long as such officer or director may be subject to any possible claim. The maximum potential amount of future payments we could be required to make under these indemnification agreements is undetermined; however, we have director and officer insurance coverage that reduces our exposure and may enable us to recover a portion of any future amounts paid. We believe the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal.

19

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations and cash flows should be read in conjunction with (i) the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q, and (ii) the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2017 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC). As discussed in the section titled “Cautionary Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included under Part II, Item 1A below and in Item 1A in our Annual Report on Form 10-K.

Overview

As a leading provider of cloud based global trade management (GTM) solutions, our mission is to dramatically transform the way companies conduct global trade. We help companies all over the world create value through their global supply chain by improving margins, achieving greater agility and lowering risk. We do this by creating a comprehensive digital model of the global supply chain, which enables collaboration among buyers, sellers and logistics companies. We replace manual and outdated processes with full automation of import and export activities, and we also provide rich data analytics to uncover areas for optimization, and a platform that is responsive and flexible to adapt to the ever-changing nature of global trade.

We deliver our GTM solution using a Software-as-a-Service (SaaS) model and leverage a highly flexible technology framework to quickly and efficiently meet our customers’ unique requirements around the world. It can be delivered in individual modules or as a suite, depending on our customers’ needs.

We sell our GTM solution to many of the largest enterprises in the world, representing diversified industry verticals including Chemical/Pharmaceutical, High Technology/Electronics, Industrial/Manufacturing, Logistics, Oil & Gas, and Retail/Apparel. Our customers pay us subscription fees and implementation service fees for the use of our solutions under agreements that typically have an initial term of three to five years.

We face a variety of challenges and risks, which we will need to address and manage as we pursue our growth strategy. In particular, the growth of our business and our future success are dependent upon many factors, including our ability to innovate in the face of a rapidly changing technology landscape and changing regulatory environment, manage our future growth effectively and in a cost effective manner, grow and retain our customer base, including our base of large enterprise customers, expand deployment of our solution within existing customers and focus on customer satisfaction. Our management team continuously focuses on these and other challenges. However, we cannot assure you that we will be successful in addressing and managing these and the many challenges and risks that we face.

Key Metrics

We regularly review the following key metrics to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions.

Annualized Recurring Revenue Retention. We believe our annualized recurring revenue retention rate is an important metric to measure the long-term value of customer agreements with regard to revenue and billings visibility. We calculate our annualized recurring revenue retention rate by comparing, for a given quarter, subscription revenue for all customers in the corresponding quarter of the prior year to the subscription revenue from those same customers in the given quarter and calculating the average of the four quarters for the stated year. The annualized recurring revenue retention rate for the quarters ended June 30, 2018 and 2017 was 102% and 103%, respectively.

Adjusted EBITDA. EBITDA consists of net income (loss) plus depreciation and amortization, interest expense (income) and income tax expense (benefit). Adjusted EBITDA consists of EBITDA plus our non-cash stock-based compensation expense and the change in fair value of contingent consideration liability. We use adjusted EBITDA as a measure of operating performance because it assists us in comparing performance on a consistent basis across reporting periods, as it removes from our operating results the impact of our capital structure. We believe adjusted EBITDA is useful to an investor in evaluating our operating performance because it is widely used to measure a company’s operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of performance exclusive of our capital structure and the method by which assets were acquired.

20

Adjusted EBITDA is a financial measure that is not calculated in accordance with generally accepted accounting principles, or GAAP. We have provided below a reconciliation of adjusted EBITDA to net loss, the most directly comparable GAAP financial measure. Our use of adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

• adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• adjusted EBITDA does not reflect the potentially dilutive impact of stock-based compensation;

• adjusted EBITDA does not reflect interest or tax payments that may represent a reduction in cash available to us; and

• other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these and other limitations, you should consider adjusted EBITDA together with other GAAP-based financial performance measures, including various cash flow metrics, net loss and our other GAAP results.

The following table provides a reconciliation of net loss to adjusted EBITDA:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net loss	$	(3,204,122	)	$	(4,517,471	)	$	(6,371,314	)	$	(8,930,667	)
Depreciation and amortization	1,262,922			1,454,941			2,547,268			3,008,155
Interest expense	339,571			244,183			639,170			479,351
Interest income	(2,639		)	(521		)	(3,632		)	(1,326		)
Income tax expense	77,661			590,411			204,742			776,518
EBITDA	(1,526,607		)	(2,228,457		)	(2,983,766		)	(4,667,969		)
Stock-based compensation	2,279,724			1,228,663			4,285,312			2,454,298
Change in fair value of contingent consideration liability	—			—			—			18,525
Adjusted EBITDA	$	753,117		$	(999,794	)	$	1,301,546		$	(2,195,146	)

Components of Operating Results

Revenue

Revenue. We primarily generate revenue from the sale of subscriptions and subscription-related professional services. Our subscriptions are multi-year arrangements for software and content, and in certain instances include a transactional component. We derive professional services revenue from implementation, integration and other elements associated with solution and content subscriptions.

We typically invoice subscription customers in advance on an annual basis, with payment due upon receipt of the invoice. We reflect invoiced amounts on our balance sheet as accounts receivable or as cash when collected, and as deferred revenue until earned and recognized as revenue ratably over the performance period. Accordingly, deferred revenue represents the amount billed to customers that has not yet been earned or recognized as revenue, pursuant to agreements executed during current and prior periods, and does not reflect that portion of a contract to be invoiced to customers on a periodic basis for which payment is not yet due.

Subscription Revenue. We derive our subscription revenue from fees paid to us by our customers for access to our solution. Typically, we recognize the revenue associated with subscription agreements ratably on a straight-line basis over the term of the agreement, provided all criteria required for revenue recognition have been met.

Professional Services Revenue. Professional services revenue consists primarily of fees charged for implementation, integration, training and other services associated with the subscription agreements entered into with our customers. Generally, we charge for professional services to implement our solution on a time and materials basis.

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Cost of Revenue

Cost of Subscription Revenue. Cost of subscription revenue consists primarily of personnel and related costs of our hosting, support, and content teams, including salaries, benefits, bonuses, payroll taxes, stock-based compensation and allocated overhead, software license fees, hosting costs, Internet connectivity, depreciation expenses directly related to delivering our solution, as well as amortization of capitalized software development costs. We generally expense our cost of subscription revenue as we incur the costs. Full year cost of subscription revenue for 2018 is expected to be consistent with 2017 expenses.

Cost of Professional Services Revenue. Cost of professional services revenue consists primarily of personnel and related costs of our professional services team, including salaries, benefits, bonuses, payroll taxes, stock-based compensation, the costs of contracted third-party vendors, reimbursable expenses and depreciation, amortization and other allocated costs. As our personnel are employed on a full-time basis, our cost of professional services is largely fixed in the short-term, while our professional services revenue may fluctuate, leading to fluctuations in professional services gross profit. We expense our cost of professional services revenue as we incur the costs. Full year cost of professional services revenue for 2018 is expected to be consistent with 2017 expenses.

Operating Expenses

Our operating expenses are classified into three categories: sales and marketing, research and development, and general and administrative.

Sales and Marketing. Sales and marketing expenses primarily consist of personnel and related costs for our sales and marketing staff, including salaries, benefits, commissions, bonuses, payroll taxes and stock-based compensation. It also includes the costs of promotional events, corporate communications, online marketing, solution marketing and other brand-building activities, in addition to depreciation, amortization and other allocated costs. When the initial customer contract is signed and upon any renewal, we capitalize and amortize commission costs as an expense ratably over the term of the related customer contract in proportion to the recognition of the subscription revenue. If a subscription agreement is terminated, we recognize the unamortized portion of any deferred commission cost as an expense immediately upon such termination. We believe that sales and marketing expenses for the full year 2018 as a percentage of revenue will be consistent with or slightly lower than 2017 expenses.

Research and Development. Research and development expenses primarily consist of personnel and related costs of our research and development staff, including salaries, benefits, bonuses, payroll taxes, stock-based compensation and costs of certain third-party contractors, as well as depreciation, amortization and other allocated costs. We capitalize development costs related to the development of our solution modules and amortize them over their useful life. We have devoted our solution modules development efforts primarily to enhancing the functionality and expanding the capabilities of our solution. We believe that our research and development expenses for the full year 2018 as a percentage of revenue will be consistent with or slightly lower than 2017 expenses as the number of personnel remains steady and revenues increase.

General and Administrative. General and administrative expenses primarily consist of personnel and related costs for our executive, administrative, finance, information technology, legal, accounting and human resource staffs, including salaries, benefits, bonuses, payroll taxes and stock-based compensation, professional fees, other corporate expenses and depreciation, amortization and other allocated costs. We believe that our general and administrative expenses for the full year 2018 as a percentage of revenue will be higher than 2017 expenses.

Interest and Other Income (Expense)

Interest and other income (expense) consists primarily of interest income on our cash balances, and interest expense on outstanding debt and capital lease obligations.

Income Tax Expense

Because we have generated net losses in all periods to date and recorded a full valuation allowance against our deferred tax assets, we have historically not recorded a provision for federal or state income taxes. The tax provision for the year ended December 31, 2018 will be exclusively related to actual foreign income taxes and is a result of the cost-plus transfer pricing agreements we have in place with our foreign subsidiaries, primarily in India, Germany and the United Kingdom. Realization of any of our deferred tax assets depends upon future earnings, the timing and amount of which are uncertain. Utilization of our net operating losses may be subject to annual limitations due to the ownership change rules under the Internal Revenue Code of 1986, as amended, and similar state provisions. We completed an Internal Revenue Code Section 382 study through June 2016, which concluded that we have experienced several ownership changes, causing limitations on

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the annual use of the net operating loss carryforwards. In the event we have future changes in ownership, the availability of net operating losses could be further limited.

Critical Accounting Policies

We prepare our condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States. The preparation of condensed consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made by our management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. We believe that the estimates and judgments used for revenue recognition, stock-based compensation, goodwill, and capitalized software costs have the greatest potential impact on our condensed consolidated financial statements, and consider these to be our critical accounting policies and estimates.

During the six months ended June 30, 2018, other than the adoption of Accounting Standards Codification 606 (ASC 606) (see Note 2(c)) in our notes to the condensed consolidated financial statements, there were no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in our Annual Report on Form 10-K.

Recent Accounting Pronouncements

For detailed information regarding recently issued accounting pronouncements and the expected impact on our condensed consolidated financial statements, see Note 2, "Summary of Significant Accounting Policies" in the accompanying Notes to our Condensed Consolidated Financial Statements included in Item 1 of this Report on Form 10-Q.

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Results of Operations

The following tables summarize key components of our results of operations for the periods indicated, both in dollars and as a percentage of revenue. The period-to-period comparison of financial results is not necessarily indicative of financial results to be achieved in future periods.

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Revenue:
Subscription	$	15,427,422		$	14,686,744		$	30,516,534		$	28,588,052
Professional services	5,628,933			4,988,541			10,604,213			9,641,789
Total revenue	21,056,355			19,675,285			41,120,747			38,229,841
Cost of revenue:
Cost of subscription revenue	5,447,788			5,783,131			10,662,839			11,163,159
Cost of professional services revenue	4,286,163			4,126,958			8,545,125			8,148,704
Total cost of revenue	9,733,951			9,910,089			19,207,964			19,311,863
Gross profit	11,322,404			9,765,196			21,912,783			18,917,978
Operating expenses:
Sales and marketing	5,885,177			5,688,937			11,692,492			11,492,323
Research and development	3,801,215			3,835,729			7,249,780			7,371,144
General and administrative	4,425,541			3,923,928			8,501,545			7,730,635
Total operating expenses	14,111,933			13,448,594			27,443,817			26,594,102
Loss from operations	(2,789,529		)	(3,683,398		)	(5,531,034		)	(7,676,124		)
Interest income	2,639			521			3,632			1,326
Interest expense	(339,571		)	(244,183		)	(639,170		)	(479,351		)
Loss before income taxes	(3,126,461		)	(3,927,060		)	(6,166,572		)	(8,154,149		)
Income tax expense	77,661			590,411			204,742			776,518
Net loss	$	(3,204,122	)	$	(4,517,471	)	$	(6,371,314	)	$	(8,930,667	)

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Revenue:
Subscription	73	%	75	%	74	%	75	%
Professional services	27		25		26		25
Total revenue	100		100		100		100
Cost of revenue:
Cost of subscription revenue (1)	35		39		35		39
Cost of professional services revenue (1)	76		83		81		85
Total cost of revenue	46		50		47		51
Gross profit	54		50		53		49
Operating expenses:
Sales and marketing	28		29		28		30
Research and development	18		19		18		19
General and administrative	21		20		21		20
Total operating expenses	67		68		67		69
Loss from operations	(13	)	(18	)	(14	)	(20	)
Interest income	0		0		0		0
Interest expense	(2	)	(1	)	(2	)	(1	)
Loss before income taxes	(15	)	(19	)	(16	)	(21	)
Income tax expense	0		3		0		2
Net loss	(15	)%	(22	)%	(16	)%	(23	)%
(1) The table shows cost of revenue as a percentage of each component of revenue.

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Three Months Ended June 30, 2018 Compared to the Three Months Ended June 30, 2017

On January 1, 2018, we adopted Accounting Standards Codification Topic 606 (ASC 606) using the modified retrospective method. The comparative information for 2017 has not been restated and continues to be reported under the accounting standards in effect for those periods. The adoption of ASC 606 will reduce 2018 professional services revenue compared to 2017 due to the loss of the amortization of deferred services revenue from professional services billings delivered prior to December 31, 2017 for on-premise installations of our software. Also, under ASC 606, deferred commissions are amortized over an estimated customer life of six years, which differs from the previous standard whereby deferred commissions were amortized over the initial customer contract term. See Note 2(c) in our notes to the condensed consolidated financial statements for an explanation of the effect the adoption of this standard had on our condensed consolidated financial statements.

Revenue:	Three Months Ended June 30,				Change
	2018		2017		$		%
Subscription	$	15,427,422	$	14,686,744	$	740,678	5.0	%
Professional services	5,628,933		4,988,541		640,392		12.8	%
Total revenue	$	21,056,355	$	19,675,285	$	1,381,070	7.0	%

Subscription Revenue. The increase was primarily related to an increase in both enterprise and mid-market customers for the three months ended June 30, 2018 compared to 2017. We have increased our customer count through our sales and marketing efforts.

Professional Services Revenue. The increase in professional services revenue was due to projects for new customers and existing customer upgrades, which resulted in higher demand for our professional services during the three months ended June 30, 2018 compared to 2017.

Total Revenue. Revenue from international customers accounted for 24% of total revenue for both the three months ended June 30, 2018 and 2017. For the three months ended June 30, 2018, one customer accounted for 10.8% of our total revenue and for the three months ended June 30, 2017, one customer accounted for 10.5% of total revenue.

Cost of Revenue:	Three Months Ended June 30,				Change
	2018		2017		$			%
Cost of subscription revenue	$	5,447,788	$	5,783,131	$	(335,343	)	(5.8	)%
Cost of professional services revenue	4,286,163		4,126,958		159,205			3.9	%
Total cost of revenue	$	9,733,951	$	9,910,089	$	(176,138	)	(1.8	)%

Cost of Subscription Revenue. The decrease was primarily the result of lower depreciation, amortization and other allocated costs of $0.2 million and a decrease of $0.2 million for lower employee-related compensation costs.

Cost of Professional Services Revenue. The increase was primarily the result of higher employee-related compensation costs of $0.1 million due to higher average headcount.

Operating Expenses:	Three Months Ended June 30,				Change
	2018		2017		$			%
Sales and marketing	$	5,885,177	$	5,688,937	$	196,240		3.4	%
Research and development	3,801,215		3,835,729		(34,514		)	(0.9	)%
General and administrative	4,425,541		3,923,928		501,613			12.8	%
Total operating expenses	$	14,111,933	$	13,448,594	$	663,339		4.9	%

Sales and Marketing Expenses. The increase was primarily due to an increase of $0.3 million in employee-related compensation costs, a $0.1 million increase in stock-based compensation costs and an increase of $0.1 million for North American marketing events. This was offset by a decrease in commission costs of $0.1 million due to the change in how deferred commission costs are amortized under ASC 606 and a decrease of $0.2 million in European marketing events.

Research and Development Expenses. The slight decrease was primarily due to additional software development costs capitalized in the period of $0.4 million compared to 2017 that was offset by an increase in employee-related compensation costs of $0.1 million and a $0.2 million increase in stock compensation costs.

General and Administrative Expenses. The increase was primarily due to an increase in stock compensation costs of $0.6 million and an increase in employee-related costs of $0.2 million offset by a $0.2 million decrease in professional fees.

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Six Months Ended June 30, 2018 Compared to the Six Months Ended June 30, 2017

Revenue:	Six Months Ended June 30,				Change
	2018		2017		$		%
Subscription	$	30,516,534	$	28,588,052	$	1,928,482	6.7	%
Professional services	10,604,213		9,641,789		962,424		10.0	%
Total revenue	$	41,120,747	$	38,229,841	$	2,890,906	7.6	%

Subscription Revenue. The increase was primarily related to increases in both enterprise and mid-market customers for the six months ended June 30, 2018 when compared to the six months ended June 30, 2017. We have increased our customer count through our increased sales and marketing efforts.

Professional Services Revenue. The increase in professional services revenue was due to projects for new customers and existing customer upgrades, which resulted in higher demand for our professional services during the six months ended June 30, 2018 compared to 2017.

Total Revenue. Revenue from international customers accounted for 24% of total revenue for both the six months ended June 30, 2018 and 2017, respectively. For the six months ended June 30, 2018, one customer accounted for 11.5% of our total revenue and for the six months ended June 30, 2017, one customer accounted for 11.7% of total revenue.

Cost of Revenue:	Six Months Ended June 30,				Change
	2018		2017		$			%
Cost of subscription revenue	$	10,662,839	$	11,163,159	$	(500,320	)	(4.5	)%
Cost of professional services revenue	8,545,125		8,148,704		396,421			4.9	%
Total cost of revenue	$	19,207,964	$	19,311,863	$	(103,899	)	(0.5	)%

Cost of Subscription Revenue. The decrease was primarily the result of lower depreciation, amortization and other allocated costs of $0.4 million and a decrease of $0.2 million for lower employee-related compensation costs.

Cost of Professional Services Revenue. The increase was primarily the result of higher employee-related compensation costs of $0.2 million due to higher average headcount and a $0.1 million increase for stock compensation costs.

Operating Expenses:	Six Months Ended June 30,				Change
	2018		2017		$			%
Sales and marketing	$	11,692,492	$	11,492,323	$	200,169		1.7	%
Research and development	7,249,780		7,371,144		(121,364		)	(1.6	)%
General and administrative	8,501,545		7,730,635		770,910			10.0	%
Total operating expenses	$	27,443,817	$	26,594,102	$	849,715		3.2	%

Sales and Marketing Expenses. The increase was primarily due to an increase of $0.5 million in employee-related compensation costs, a $0.2 million increase in stock-based compensation costs and an increase of $0.1 million for North American marketing events. This was offset by a decrease in commission costs of $0.4 million due to the change in how deferred commission costs are amortized under ASC 606 and a decrease of $0.2 million in European marketing events.

Research and Development Expenses. The decrease was primarily due to additional software development costs capitalized in the period of $0.7 million compared to 2017 that was offset by an increase in employee-related compensation costs of $0.3 million and a $0.3 million increase in stock compensation costs.

General and Administrative Expenses. The increase was primarily due to an increase of $1.1 million in stock-based compensation costs, a $0.2 million increase in employee-related compensation costs and a $0.1 million increase in professional fees. This was offset by a $0.2 million decrease in other taxes and a $0.3 million decrease in foreign exchange transaction costs.

Liquidity and Capital Resources

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	Six Months Ended June 30,
	2018			2017
Cash provided by (used in):
Operating activities	$	774,171		$	(1,088,690	)
Investing activities	(1,812,266		)	(1,064,128		)
Financing activities	(764,211		)	(2,123,101		)

	2018		12/31/2017
Cash and cash equivalents	$	7,508,655	$	9,360,601
Accounts receivable, net	16,102,172		16,957,044

Historically, we have financed our operations through the sale of stock and borrowing from credit facilities. Our principal sources of liquidity are our cash and cash equivalents, our accounts receivable, cash from operations and borrowings from our credit facility. We bill our customers in advance for annual subscriptions, while professional services are typically billed on a monthly basis as services are performed. As a result, the amount of our accounts receivable at the end of a period is driven significantly by our annual subscription and professional services billings for the last month of the period, and our cash flows from operations are affected by our collection of amounts due from customers for subscription and professional services billings that resulted in the recognition of revenue in a prior period.

Net Cash Flows from Operating Activities

For the six months ended June 30, 2018, net cash provided by operating activities was $0.8 million, which reflects our net loss of $6.4 million, adjusted for non-cash charges of $7.0 million consisting primarily of $4.3 million for stock-based compensation and $2.5 million for depreciation and amortization. Additionally, we had a $0.1 million increase in our working capital accounts consisting primarily of an increase of $1.3 million in deferred revenue, a $0.7 million increase in accounts and unbilled receivables and a $0.3 million increase in other liabilities. This was offset by a $0.7 million decrease in prepaid and other expenses, a $0.6 million decrease in accounts payable, and a $0.8 million decrease in accrued expenses.

For the six months ended June 30, 2017, net cash used in operating activities was $1.1 million, which reflects our net loss of $8.9 million, adjusted for non-cash charges of $6.0 million consisting primarily of $2.5 million for stock-based compensation and $3.0 million for depreciation and amortization. Additionally, we had a $1.9 million increase in our working capital accounts consisting primarily of a decrease of $4.8 million in accounts receivable and a $1.3 million increase in deferred revenue. This was offset by a decrease of $0.5 million in accounts payable, a $1.9 million decrease in accrued expenses and a $2.4 million decrease for acquisition contingent consideration paid related to the ecVision acquisition.

Our deferred revenue was $37.6 million at June 30, 2018 and $39.6 million at December 31, 2017. Deferred revenue reflects the timing of invoicing to new and existing customers offset by amortization of previously billed subscription agreements. Customers are invoiced annually in advance for their annual subscription fee and the invoices are recorded in accounts receivable and deferred revenue, which is then recognized ratably over the term of the subscription agreement. With respect to professional services fees, customers are invoiced as the services are performed, and the invoices are recorded in accounts receivable. The adoption of ASC 606 on January 1, 2018, required us to change how we account for professional service contracts for on-premise customers, which had a direct impact on deferred revenue. See Note 2 (c) to our condensed consolidated financial statements for the full impact of the adoption of ASC 606.

Net Cash Flows from Investing Activities

For the six months ended June 30, 2018, net cash used in investing activities was $1.8 million and primarily consisted of $1.6 million for capitalization of software development costs.

For the six months ended June 30, 2017, net cash used in investing activities was $1.1 million and primarily consisted of$0.8 million for capitalization of software development costs.

Net Cash Flows from Financing Activities

For the six months ended June 30, 2018, net cash used in financing activities was $0.8 million and consisted of capital lease repayments of $0.7 million and term loan repayments of $0.4 million offset by cash received of $0.3 million for stock option exercises.

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For the six months ended June 30, 2017, net cash used in financing activities was $2.1 million and consists of $1.3 million paid for acquisition contingent consideration related to the ecVision acquisition, capital lease repayments of $0.8 million and term loan repayments of $0.3 million.

Credit Agreement

In March 2015 we entered into a credit agreement (the Credit Agreement) providing for financing comprised of (i) a senior secured term loan facility (the Term Loan) of $20.0 million, and (ii) a senior secured revolving credit facility (the Revolver) that was amended in November 2015 to allow for a borrowing limit of $10.0 million, and includes a $2.0 million sublimit for the issuance of letters of credit. The original maturity date of the Credit Agreement was March 4, 2018. The Credit Agreement contains customary affirmative and negative covenants for financings of its type that are subject to customary exceptions. As of June 30, 2018, we were in compliance with all the reporting and financial covenants.

On February 15, 2017, we entered into Amendment No. 2 (the Second Amendment) to the Credit Agreement. The Second Amendment revised language in the Credit Agreement to include changes to the applicable margins with respect to Eurodollar and Base Rate loans, increased the available borrowing under the Revolver from $10.0 million to $15.0 million, and extended the maturity date for both the Term Loan and the Revolver to December 31, 2019.

On March 6, 2018, we entered into Amendment No. 3 (the Third Amendment) to the Credit Agreement. The Third Amendment amends the definition of “Quick Liabilities” for purposes of calculating performance against the Credit Agreement covenant provisions.

The outstanding balance for the Term Loan as of June 30, 2018 was $13.2 million, net of unaccreted discount and deferred financing costs of $0.1 million, and the outstanding balance under the Revolver was $6.0 million. For the six months ended June 30, 2018, the weighted average interest rate used was 5.26% for the Term Loan and 5.91% for the Revolver.

Off-Balance Sheet Arrangements

As of June 30, 2018, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Other than our operating leases for office space, we do not engage in off-balance sheet financing arrangements. Our operating lease arrangements do not and are not reasonably likely to have a material current or future effect on our financial condition, results of operations, liquidity, capital resources and capital expenditures. In addition, we do not engage in trading activities involving non-exchange traded contracts. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

Capital Resources

Historically, we have incurred net losses and negative cash flows from operations and have an accumulated deficit of $169.3 million as of June 30, 2018. Our primary sources of liquidity have been proceeds from our initial public offering, cash and cash equivalents, accounts receivable, cash from operations and borrowings from our credit facility.

Additional financing may be required for us to successfully implement our growth strategy. There can be no assurance that additional financing, if needed, can be obtained on terms acceptable to us. Our ability to maintain successful operations will depend on, among other things, new business, the retention of customers, and the effectiveness of sales and marketing initiatives. If anticipated revenue growth is not achieved, we may be required to curtail spending to reduce cash outflows.

Based upon our existing cash balance, borrowings from our credit facility and our projected operating results, management believes that we have adequate resources to satisfy our liquidity requirements through at least the next twelve months from issuance of this quarterly report.

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Item 3.    Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Exchange Risk. We bill our customers predominately in U.S. dollars and receive payment predominately in U.S. dollars. However, because most of our international sales are denominated in the currency of the country where the purchaser is located, as we continue to expand our direct sales presence in international regions, the portion of our accounts receivable denominated in foreign currencies may continue to increase. Historically, our greatest accounts receivable foreign currency exposure has been related to revenue denominated in Euros. In addition, we incur significant costs related to our operations in India in Rupees, in China in Renminbi, and in Hong Kong dollars. As a result of these factors, our results of operations and cash flows are and will increasingly be subject to fluctuations due to changes in foreign currency exchange rates.

Interest Rate Sensitivity. Interest income is sensitive to changes in the general level of U.S. interest rates. However, based on the nature and current level of our investments, which are primarily cash and cash equivalents, we believe there is no material risk of exposure. Although interest expense related to our credit agreement is sensitive to changes in the Prime rate and the LIBOR rate, we believe that we have no material risk of exposure.

Item 4.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and we necessarily were required to apply our judgment in evaluating whether the benefits of the controls and procedures that we adopt outweigh their costs.

As required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended, an evaluation as of June 30, 2018 was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of June 30, 2018, were effective for the purposes stated above.

Changes in Internal Control over Financial Reporting

Except as discussed below, there was no change in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

In connection with the adoption of ASC 606, we have modified documentation of certain internal processes and procedures. We believe that the implementation of ASC 606 does not have a significant effect on our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

We are involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on our financial position, results of operations, or liquidity.

Item 1A.    Risk Factors

There have been no material changes to the Risk Factors we previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2017.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.    Defaults Upon Senior Securities

None.

Item 4.    Mine Safety Disclosures

Not applicable.

Item 5.    Other Information

None.

Item 6.    Exhibits

See exhibits listed under the Exhibit Index below.

30

SIGNATURE

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.

	AMBER ROAD, INC.
Date: August 9, 2018	By:	/s/ THOMAS E. CONWAY
		Thomas E. Conway
		Chief Financial Officer
		(Principal Financial and Accounting Officer and Duly Authorized Signatory)

31

EXHIBIT INDEX

Exhibit Number	Description
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1**	Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350.
32.2**	Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350.
101.INS*	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*	XBRL Taxonomy Extension Schema Linkbase Document.
101.CAL*	XBRL Taxonomy Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Label Linkbase Document.
101.PRE*	XBRL Taxonomy Presentation Linkbase Document.
* Filed herewith
** Furnished herewith

32

EX-31.1

Exhibit 31.1

CERTIFICATION

I, James W. Preuninger, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Amber Road, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2018	/s/ JAMES W. PREUNINGER
	James W. Preuninger
	Chief Executive Officer and Director
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Thomas E. Conway, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Amber Road, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2018	/s/ THOMAS E. CONWAY
	Thomas E. Conway
	Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Amber Road, Inc. (the “Company”) for the period ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, James W. Preuninger, Chief Executive Officer and Director of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that to the best of my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2018	/s/ JAMES W. PREUNINGER
	James W. Preuninger
	Chief Executive Officer and Director
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Amber Road, Inc. (the “Company”) for the period ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Thomas E. Conway, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that to the best of my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2018	/s/ THOMAS E. CONWAY
	Thomas E. Conway
	Chief Financial Officer
	(Principal Financial Officer)

XML

Document and Entity Information Document - shares	6 Months Ended
	Jun. 30, 2018	Aug. 08, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	Amber Road, Inc.
Entity Central Index Key	0001314223
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		27,520,695

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 7,508,655	$ 9,360,601
Accounts receivable, net	16,102,172	16,957,044
Unbilled receivables	912,268	884,104
Deferred commissions	4,271,834	4,400,015
Prepaid expenses and other current assets	2,284,206	1,715,534
Total current assets	31,079,135	33,317,298
Property and equipment, net	9,700,769	9,370,104
Goodwill	43,700,512	43,768,269
Other intangibles, net	4,466,739	4,999,885
Deferred commissions	8,456,002	6,734,326
Deposits and other assets	1,446,860	1,180,163
Total assets	98,850,017	99,370,045
Current liabilities:
Accounts payable	1,947,271	2,650,582
Accrued expenses	6,735,396	7,589,482
Current portion of capital lease obligations	1,398,234	1,352,456
Deferred revenue	37,323,361	37,812,239
Current portion of term loan, net of discount	714,391	714,391
Total current liabilities	48,118,653	50,119,150
Capital lease obligations, less current portion	1,399,052	1,461,101
Deferred revenue, less current portion	265,324	1,830,706
Term loan, net of discount, less current portion	12,482,196	12,839,392
Revolving credit facility	6,000,000	6,000,000
Other noncurrent liabilities	1,862,405	1,619,744
Total liabilities	70,127,630	73,870,093
Commitments and contingencies (Note 11)
Stockholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized; issued and outstanding 27,496,442 and 27,288,985 shares at June 30, 2018 and December 31, 2017, respectively	27,497	27,289
Additional paid-in capital	199,819,099	195,203,097
Accumulated other comprehensive loss	(1,852,667)	(1,822,396)
Accumulated deficit	(169,271,542)	(167,908,038)
Total stockholders’ equity	28,722,387	25,499,952
Total liabilities and stockholders’ equity	$ 98,850,017	$ 99,370,045

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Common stock, par value (USD per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	27,496,442	27,288,985
Common stock, shares outstanding (in shares)	27,496,442	27,288,985

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)		3 Months Ended		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenue:
Subscription		$ 15,427,422	$ 14,686,744	$ 30,516,534	$ 28,588,052
Professional services		5,628,933	4,988,541	10,604,213	9,641,789
Total revenue		21,056,355	19,675,285	41,120,747	38,229,841
Cost of revenue:
Cost of subscription revenue	[1]	5,447,788	5,783,131	10,662,839	11,163,159
Cost of professional services revenue	[1]	4,286,163	4,126,958	8,545,125	8,148,704
Total cost of revenue		9,733,951	9,910,089	19,207,964	19,311,863
Gross profit		11,322,404	9,765,196	21,912,783	18,917,978
Operating expenses:
Sales and marketing	[1]	5,885,177	5,688,937	11,692,492	11,492,323
Research and development	[1]	3,801,215	3,835,729	7,249,780	7,371,144
General and administrative	[1]	4,425,541	3,923,928	8,501,545	7,730,635
Total operating expenses		14,111,933	13,448,594	27,443,817	26,594,102
Loss from operations		(2,789,529)	(3,683,398)	(5,531,034)	(7,676,124)
Interest income		2,639	521	3,632	1,326
Interest expense		(339,571)	(244,183)	(639,170)	(479,351)
Loss before income taxes		(3,126,461)	(3,927,060)	(6,166,572)	(8,154,149)
Income tax expense		77,661	590,411	204,742	776,518
Net loss		$ (3,204,122)	$ (4,517,471)	$ (6,371,314)	$ (8,930,667)
Net loss per share (Note 10):
Basic and diluted (USD per share)		$ (0.12)	$ (0.16)	$ (0.23)	$ (0.33)
Weighted-average shares outstanding (Note 10):
Basic and diluted (in shares)		27,683,120	27,418,487	27,639,835	27,329,183

[1] (1) Includes stock-based compensation as follows:                 Three Months Ended
June 30,   Six Months Ended
June 30,   2018   2017   2018   2017 Cost of subscription revenue $ 219,951
  $ 174,660
  $ 428,388
  $ 377,932
Cost of professional services revenue 179,201
  132,008
  336,817
  251,772
Sales and marketing 389,046
  248,682
  734,079
  459,400
Research and development 503,257
  302,222
  931,323
  585,860
General and administrative 988,269
  371,091
  1,854,705
  779,334
  $ 2,279,724
  $ 1,228,663
  $ 4,285,312
  $ 2,454,298

XML

Condensed Consolidated Statements of Operations (Unaudited) - Stock-based Compensation Allocation - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	$ 2,279,724	$ 1,228,663	$ 4,285,312	$ 2,454,298
Cost of subscription revenue
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	219,951	174,660	428,388	377,932
Cost of professional services revenue
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	179,201	132,008	336,817	251,772
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	389,046	248,682	734,079	459,400
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	503,257	302,222	931,323	585,860
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	$ 988,269	$ 371,091	$ 1,854,705	$ 779,334

XML

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Net loss	$ (3,204,122)	$ (4,517,471)	$ (6,371,314)	$ (8,930,667)
Other comprehensive loss:
Foreign currency translation	176,909	(45,436)	(30,271)	(274,668)
Total other comprehensive income (loss)	176,909	(45,436)	(30,271)	(274,668)
Comprehensive loss	$ (3,027,213)	$ (4,562,907)	$ (6,401,585)	$ (9,205,335)

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net loss	$ (6,371,314)	$ (8,930,667)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	2,547,268	3,008,155
Bad debt expense	167,327	478,519
Stock-based compensation	4,285,312	2,454,298
Changes in fair value of contingent consideration liability	0	18,525
Accretion of debt discount	17,804	20,079
Changes in operating assets and liabilities:
Accounts receivable and unbilled receivables	664,339	4,802,249
Prepaid expenses and other assets	(665,835)	737,378
Accounts payable	(637,658)	(515,904)
Accrued expenses	(807,023)	(1,867,288)
Payment for Contingent Consideration Liability, Operating Activities	0	2,366,469
Other liabilities	268,276	(184,101)
Deferred revenue	1,305,675	1,256,536
Net cash provided by (used in) operating activities	774,171	(1,088,690)
Cash flows from investing activities:
Capital expenditures	(78,394)	(55,579)
Addition of capitalized software development costs	(1,569,092)	(839,409)
Cash paid for deposits	(164,780)	(169,140)
Net cash used in investing activities	(1,812,266)	(1,064,128)
Cash flows from financing activities:
Proceeds from revolving line of credit	13,650,000	12,250,000
Payments on revolving line of credit	(13,650,000)	(12,000,000)
Payments on term loan	(375,000)	(281,250)
Debt financing costs	0	(35,701)
Repayments on capital lease obligations	(720,109)	(845,967)
Proceeds from the exercise of stock options	330,898	98,348
Payment for Contingent Consideration Liability, Financing Activities	0	1,308,531
Net cash used in financing activities	(764,211)	(2,123,101)
Effect of exchange rate on cash, cash equivalents and restricted cash	(49,640)	(49,083)
Net decrease in cash, cash equivalents and restricted cash	(1,851,946)	(4,325,002)
Proceeds from revolving line of credit	9,417,001	15,464,274
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet:
Cash, cash equivalents and restricted cash at end of period	7,508,655	11,082,872
Restricted cash in deposits and other assets	56,400	56,400
Total cash, cash equivalents and restricted cash	7,565,055	11,139,272
Supplemental disclosures of cash flow information:
Cash paid for interest	621,366	453,666
Non-cash property and equipment acquired under capital lease	703,838	1,384,336
Non-cash property and equipment purchases in accounts payable	$ 14,061	$ 11,603

XML

Background	6 Months Ended
	Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Background	Background Amber Road, Inc. (we, our or us) is a leading provider of a cloud-based global trade management solution, including modules for logistics contract and rate management, supply chain visibility and event management, international trade compliance, Global Knowledge trade content database, supply chain collaboration with overseas factories and vendors, and duty management solutions to importers and exporters, nonvessel owning common carriers (resellers), and ocean carriers. Our solution is primarily delivered using an on-demand, cloud-based, delivery model. We are incorporated in the state of Delaware and our corporate headquarters are located in East Rutherford, New Jersey. We also have offices in McLean, Virginia; Raleigh, North Carolina; Munich, Germany; Bangalore, India; Shenzhen and Shanghai, China; and Hong Kong.

XML

Summary of Significant Accounting Policies and Practices

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies and Practices

Summary of Significant Accounting Policies and Practices

(a) Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements and footnotes have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles (GAAP) in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for the fair statement have been included. The accompanying condensed consolidated financial statements include our accounts and those of our wholly-owned subsidiaries primarily located in India, China and Europe. All significant intercompany balances and transactions have been eliminated in consolidation. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for other interim periods or future years. The consolidated balance sheet as of December 31, 2017 is derived from the audited financial statements as of that date. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Form 10-K for the year ended December 31, 2017.

(b) Use of Estimates

The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include the carrying amount of intangibles and goodwill; valuation allowance for receivables and deferred income tax assets; revenue; capitalization of software costs; and valuation of share-based payments. Actual results could differ from those estimates.

(c) Revenue from Contracts with Customers

Adoption of Accounting Standards Codification Topic 606

Effective January 1, 2018, we adopted the requirements of Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606), and all the related amendments (the new revenue standard) using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of accumulated deficit as of the adoption date. The comparative information for 2017 has not been restated and continues to be reported under the accounting standards in effect for that period.

Revenue Recognition

We primarily generate revenue from the sale of subscriptions and subscription-related professional services. In instances involving subscriptions, revenue is generated under customer contracts with multiple elements, which are comprised of (1) subscription fees that provide the customers with access to our on-demand application and content, unspecified solution and content upgrades, and customer support, (2) professional services associated with consulting services (primarily implementation services), and (3) transaction-related fees (including publishing services). Our initial customer contracts usually have contract terms from 3 years to 5 years in length. Typically, the customer does not take possession of the software nor does the customer have the right to take possession of the software supporting the on-demand application service. However, in certain instances, we have customers that take possession of the software whereby the application is installed on the customer’s premises. Our subscription service arrangements typically may only be terminated for cause and do not contain refund provisions.

We determine revenue recognition through the following steps:

• Identification of the contract, or contracts, with a customer

• Identification of the performance obligations in the contract

• Determination of the transaction price

• Allocation of the transaction price to the performance obligations in the contract

• Recognition of revenue when, or as, we satisfy a performance obligation

The subscription fees typically begin the first month following contract execution, whether or not we have completed the solution’s implementation. In addition, any services performed by us for our customers are not essential to the functionality of our products.

Subscription Revenue for Hosted and On-Premise Customers

Subscription revenue, which primarily consists of fees to provide customers access to our solution, is recognized ratably over contract terms beginning on the commencement date of each contract, which is the date our service is made available to customers. Typically, amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. Transaction-related revenue is recognized as the transactions occur.

Professional Services Revenue for Hosted Customers

Professional services revenue primarily consists of fees for deployment of our solution. The majority of professional services contracts are on a time and material basis. When these services are not combined with subscription revenue as a single unit of accounting, as discussed below, this revenue is recognized as the services are rendered for time and material contracts, and when the milestones are achieved and accepted by the customer for fixed price contracts.

Professional Services Revenue for On-Premise Customers

For customers that take possession of the software, billings for professional services will be recognized as revenue when services are performed, unlike under the previous standard where revenue from these billings was deferred and amortized ratably over the subscription term of the related contract. The adoption of ASC 606 will reduce revenue due to the loss of deferred services revenue from professional services billings delivered prior to December 31, 2017 for on-premise installations of our software. Deferred revenue associated with on-premise professional services at December 31, 2017 will not be amortized in 2018 and beyond.

Multiple Performance Obligations

Some of our contracts with customers contain multiple performance obligations that generally include subscription, professional services (primarily implementation) as well as transaction-related fees.

For contracts with enterprise customers (customers with annual revenues that we believe are greater than $1 billion), we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. We determine the standalone selling prices based on our overall pricing objectives, taking into consideration market conditions and other factors, including the value of our contracts, the solution sold, taking into account the modules included, term of the arrangement, and base transaction volume, customer demographics, and geographic locations.

For contracts with mid-market customers (customers with annual revenues that we believe are less than $1 billion), both subscription and professional services are combined and there is only one observable price. For these contracts that bundle the performance obligations into one annual fee, the transaction price is allocated based on the standard professional service rates and implementation hours.

Other Revenue Items

Sales tax collected from customers and remitted to governmental authorities is accounted for on a net basis and, therefore, is not included in revenue and cost of revenue in the condensed consolidated statements of operations. We classify customer reimbursements received for direct costs paid to third parties and related expenses as revenue, in accordance with ASC 606.

Costs to Obtain and Fulfill a Contract

We defer commission costs that are incremental and directly related to the acquisition of customer contracts. Commission costs are accrued and deferred upon execution of the sales contract by the customer. Payments to sales personnel are made shortly after the receipt of the related customer payment. Under ASC 606, deferred commissions are amortized over an estimated customer life of 6 years, which differs from the previous standard whereby deferred commissions were

amortized over the initial customer contract term. We determined the period of amortization of deferred commissions under ASC 606 by taking into consideration our customer contracts, our technology and other factors.

Our commission costs deferred and amortized in the period are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Commission costs deferred	$	1,401,372	$	1,042,901	$	2,071,409	$	1,679,646
Commission costs amortized	1,127,025		1,247,018		2,126,601		2,484,761

Financial Statement Impact of Adopting ASC 606

We adopted ASC 606 using the modified retrospective method. The cumulative effect of applying the new guidance to all contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to accumulated deficit as of the adoption date. As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to the following balance sheet accounts as follows:

	As Reported			Adjustments									As Adjusted
	December 31, 2017			Subscription Revenue			Professional Services Revenue			Cost to Obtain a Contract			January 1,  2018
Deferred commissions, current	$	4,400,015		$	—		$	—		$	(562,607	)	$	3,837,408
Deferred commissions, non-current	6,734,326			—			—			2,211,294			8,945,620
Deferred revenue, current	37,812,239			229,093			(2,170,118		)	—			35,871,214
Deferred revenue, non-current	1,830,706			—			(1,418,098		)	—			412,608
Accumulated deficit	(167,908,038		)	(229,093		)	3,588,216			1,648,687			(162,900,228		)

Impact of New Revenue Standard on Financial Statement Line Items

In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our condensed consolidated balance sheet as of June 30, 2018 and our condensed consolidated statement of operations for the three and six months ended June 30, 2018 is as follows:

	June 30, 2018
	As Reported			Balance Without Adoption of ASC 606			Effect of Change Higher/(Lower)
Balance Sheet
Deferred commissions, current	$	4,271,834		$	4,618,161		$	(346,327	)
Deferred commissions, non-current	8,456,002			6,057,014			2,398,988
Deferred revenue, current	37,323,361			38,842,476			1,519,115
Deferred revenue, non-current	265,324			1,917,884			1,652,560
Accumulated deficit	(169,271,542		)	(174,495,878		)	5,224,336

	Three Months Ended June 30, 2018									Six Months Ended June 30, 2018
	As Reported			Balance Without Adoption of ASC 606			Effect of Change Higher/(Lower)			As Reported			Balance Without Adoption of ASC 606			Effect of Change Higher/(Lower)
Statement of Operations
Subscription revenue	$	15,427,422		$	15,389,328		$	38,094		$	30,516,534		$	30,438,617		$	77,917
Professional services revenue	5,628,933			5,741,109			(112,176		)	10,604,213			10,869,578			(265,365		)
Sales and marketing	5,885,177			6,044,815			159,638			11,692,492			12,096,466			403,974
Net loss	(3,204,122		)	(3,289,678		)	85,556			(6,371,314		)	(6,587,840		)	216,526

Deferred Revenue and Performance Obligations

Deferred revenue from subscriptions represents amounts collected from (or invoiced to) customers in advance of earning subscription revenue. Typically, we bill our annual subscription fees in advance of providing the service. Deferred revenue from professional services represents revenue for time and material contracts where the revenue is recognized when milestones are achieved and accepted by the customer for fixed price contracts.

	June 30, 2018		December 31, 2017
Current:
Subscription revenue	$	37,202,140	$	35,247,750
Professional services revenue	121,221		2,564,489
Total current	37,323,361		37,812,239
Noncurrent:
Subscription revenue	265,324		412,608
Professional services revenue	—		1,418,098
Total noncurrent	265,324		1,830,706
Total deferred revenue	$	37,588,685	$	39,642,945

The amount of subscription revenue and professional services revenue recognized that was included in the beginning balance of deferred revenue is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Subscription revenue	$	12,787,589	$	11,617,239	$	25,952,511	$	23,748,293
Professional services revenue	161,580		508,620		510,802		1,113,588

As of June 30, 2018, $131,236,306 of revenue is expected to be recognized from remaining performance obligations for subscription contracts and is expected to be recognized over the next 6.7 years. Remaining performance obligations for professional services contracts are recognized within one year or less.

(d) Cost of Revenue

Cost of subscription revenue. Cost of subscription revenue consists primarily of personnel and related costs of our hosting, support, and content teams, including salaries, benefits, bonuses, payroll taxes, stock-based compensation and allocated overhead, as well as software license fees, hosting costs, Internet connectivity, and depreciation expenses directly related to delivering our solutions, as well as amortization of capitalized software development costs. Our cost of subscription revenue is generally expensed as the costs are incurred.

Cost of professional services revenue. Cost of professional services revenue consists primarily of personnel and related costs, including salaries, benefits, bonuses, payroll taxes, stock-based compensation, the costs of contracted third-party vendors, reimbursable expenses and allocated overhead. As our personnel are employed on a full-time basis, our cost of professional services is largely fixed in the short term, while our professional services revenue may fluctuate, leading to fluctuations in professional services gross profit. Cost of professional services revenue is generally expensed as costs are incurred.

(e) Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents at June 30, 2018 and December 31, 2017 consists of the following:

	June 30, 2018		December 31, 2017
Cash	$	7,466,548	$	9,318,074
Money market accounts	42,107		42,527
	$	7,508,655	$	9,360,601

(f) Fair Value of Financial Instruments and Fair Value Measurements

Our financial instruments consist of cash equivalents, accounts receivable, accounts payable, and accrued expenses. Management believes that the carrying values of these instruments are representative of their fair value due to the relatively short-term nature of those instruments.

We follow Financial Accounting Standards Board (FASB) accounting guidance on fair value measurements for financial assets and liabilities measured on a recurring basis. Accounting Standards Codification (ASC) 820, Fair Value Measurements, among other things, defines fair value, establishes a framework for measuring fair value, and requires disclosure about such fair value measurements. Assets and liabilities measured at fair value are based on one or more of three valuation techniques provided for in the standards.

The three value techniques are as follows:

Market Approach —    Prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities;

Income Approach —     Techniques to convert future amounts to a single present amount based on market expectations     (including present value techniques and option pricing models); and

Cost Approach —     Amount that currently would be required to replace the service capacity of an asset (often referred to as replacement cost).

The standards clarify that fair value is an exit price, representing the amount that would be received to sell an asset, based on the highest and best use of the asset, or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for evaluating such assumptions, the standards establish a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities;

Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; or

Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions about what market participants would use in pricing the asset or liability.

The following tables provide the financial assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2018 and December 31, 2017:

	Fair Value Measurements at Reporting Date Using
June 30, 2018	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents - money market accounts	$	42,107	$	42,107	$	—	$	—
Restricted cash - money market accounts	56,400		56,400		—		—
Total assets measured at fair value on a recurring basis	$	98,507	$	98,507	$	—	$	—
December 31, 2017
Assets:
Cash equivalents - money market accounts	$	42,527	$	42,527	$	—	$	—
Restricted cash - money market accounts	56,400		56,400		—		—
Total assets measured at fair value on a recurring basis	$	98,927	$	98,927	$	—	$	—

(g) Accounts Receivable and Allowance for Doubtful Accounts

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in our existing accounts receivable. We determine the allowance based on historical write-off experience, the industry, and the economy. We review our allowance for doubtful accounts monthly. Past-due balances over 90 days and over a specified amount are reviewed individually for collectibility. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. We do not have any off-balance-sheet credit exposure related to our customers. Typically,

we record unbilled receivables for contracts on which revenue has been recognized, but for which the customer has not yet been billed.

(h) Major Customers and Concentrations of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables. Our customer base is principally comprised of enterprise and mid-market companies within industries including Chemical/Pharmaceutical, High Technology/Electronics, Industrial/Manufacturing, Logistics, Oil & Gas, and Retail/Apparel. We do not require collateral from our customers. For the three and six months ended June 30, 2018, one customer accounted for 10.8% and 11.5%, respectively, of our total revenue. For the three and six months ended June 30, 2017, one customer accounted for 10.5% and 11.7%, respectively, of our total revenue. As of June 30, 2018 and December 31, 2017, no single customer accounted for more than 10% of our total accounts receivable.

(i) Geographic Information

Disaggregation of Revenue

We sell our subscription contracts and related professional services to customers primarily in two geographical markets. Revenue by geographic location based on the billing address of our customers is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
Country	2018		2017		2018		2017
United States	$	15,924,542	$	14,878,864	$	31,162,042	$	28,945,017
International	5,131,813		4,796,421		9,958,705		9,284,824
Total revenue	$	21,056,355	$	19,675,285	$	41,120,747	$	38,229,841

For the three and six months ended June 30, 2018 and 2017, no single country other than the United States had revenue greater than 10% of our total revenue.

Long-lived assets by geographic location is as follows:

Country	June 30, 2018		December 31, 2017
United States	$	8,878,939	$	8,535,281
International	821,830		834,823
Total long-lived assets	$	9,700,769	$	9,370,104

(j) Recent Accounting Pronouncements

In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which removes Step 2 of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. The adoption of this standard is not expected to have a material effect on our condensed consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which amends ASC 230, Statement of Cash Flows. This ASU requires that a statement of cash flows explain the change during the reporting period in the total of cash, cash equivalents, and restricted cash or restricted cash equivalents. We adopted this standard on January 1, 2018 using the retrospective transition approach. The adoption of this standard did not have a material effect on our condensed consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments, which amends ASC 230, Statement of Cash Flows. This ASU provides guidance on the statement of cash flows presentation of certain transactions where diversity in practice exists. The adoption of this standard on January 1, 2018 did not have a material effect on our condensed consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The standard requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those

fiscal years. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements but believe the most significant changes will be related to the recognition of new right-of-use assets and lease liabilities on our balance sheet for real estate operating leases. At June 30, 2018, we had long-term operating leases with $13,707,184 of remaining minimum lease payments. The new standard will require the present value of these leases to be recorded in the condensed consolidated balance sheets as a right of use asset and lease liability.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), a new accounting standard that requires recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The FASB has also issued several updates to ASU 2014-09. We adopted this standard on January 1, 2018 using the modified retrospective method. See 2(c) above for an explanation of the effect the adoption of this standard had on our condensed consolidated financial statements.

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Property and Equipment

6 Months Ended

Jun. 30, 2018

Property and Equipment [Abstract]

Consolidated Balance Sheet Components

Property and Equipment

	June 30, 2018			December 31, 2017
Computer software and equipment	$	15,171,904		$	14,296,247
Software development costs	15,549,963			13,980,872
Furniture and fixtures	1,741,747			1,741,918
Leasehold improvements	2,546,669			2,546,686
Total property and equipment	35,010,283			32,565,723
Less: accumulated depreciation and amortization	(25,309,514		)	(23,195,619		)
Total property and equipment, net	$	9,700,769		$	9,370,104

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Depreciation and amortization expense	$	1,003,429	$	1,193,506	$	2,028,282	$	2,415,618

Certain development costs of our software solution are capitalized in accordance with ASC Topic 350-40, Internal Use Software, which outlines the stages of computer software development and specifies when capitalization of costs is required. Projects that are determined to be in the development stage are capitalized and amortized over their useful lives of five years. Projects that are determined to be within the preliminary stage are expensed as incurred.

Information related to capitalized software costs is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Software costs capitalized	$	718,719	$	365,612	$	1,569,092	$	839,409
Software costs amortized (1)	459,655		549,303		913,887		1,086,142
(1) Included in cost of subscription revenue on the accompanying condensed consolidated statements of operations.
					June 30, 2018		December 31, 2017
Capitalized software costs not yet subject to amortization					$	1,367,340	$	824,738

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Leases

6 Months Ended

Jun. 30, 2018

Leases [Abstract]

Leases

Leases

We have several noncancelable operating leases that expire through 2024. These leases generally contain renewal options for periods ranging from 3 years to 5 years and require us to pay all executory costs such as maintenance and insurance. Rental expense for operating leases is allocated to various line items in the condensed consolidated statements of operations.

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Rental expense from operating leases	$	890,000	$	939,000	$	1,781,000	$	1,859,000

Information related to the carrying value of assets recorded under capital leases and related accumulated amortization is as follows:

	June 30, 2018		December 31, 2017
Carry value of capital leases	$	2,678,379	$	3,691,383
Accumulated amortization included in carry value	6,488,824		6,864,443

Amortization of assets held under capital leases is allocated to various line items in the condensed consolidated statements of operations.

Future minimum lease payments under noncancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum capital lease payments as of June 30, 2018 are as follows:

	Capital Leases			Operating Leases
Remainder of 2018	$	856,692		$	2,409,267
2019	1,290,658			4,601,730
2020	578,442			3,019,786
2021	303,428			1,857,130
2022	97,326			1,200,797
2023 and thereafter	—			618,474
Total minimum lease payments	3,126,546			$	13,707,184
Less amount representing interest	(329,260		)
Present value of net minimum capital lease payments	2,797,286
Less current installments of obligations under capital leases	(1,398,234		)
Obligations under capital leases excluding current installments	$	1,399,052

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Debt

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Debt

Debt

In March 2015, we entered into a credit agreement (the Credit Agreement) providing for financing comprised of (i) a senior secured term loan facility (the Term Loan) of $20,000,000, and (ii) a senior secured revolving credit facility (the Revolver) that was amended in November 2015 to allow for a borrowing limit of $10,000,000, and includes a $2,000,000 sublimit for the issuance of letters of credit. The original maturity date of the Credit Agreement was March 4, 2018. The Credit Agreement contains customary affirmative and negative covenants for financings of its type that are subject to customary exceptions. As of June 30, 2018, we were in compliance with all the reporting and financial covenants.

On February 15, 2017, we entered into Amendment No. 2 (the Second Amendment) to the Credit Agreement. The Second Amendment revised language in the Credit Agreement to include changes to the applicable margins with respect to Eurodollar and Base Rate loans, increased the available borrowing under the Revolver from $10,000,000 to $15,000,000, and extended the maturity date for both the Term Loan and the Revolver to December 31, 2019.

On March 6, 2018, we entered into Amendment No. 3 (the Third Amendment) to the Credit Agreement. The Third Amendment amends the definition of “Quick Liabilities” for purposes of calculating performance against the Credit Agreement covenant provisions.

The outstanding balance for the Term Loan as of June 30, 2018 was $13,196,587, net of unaccreted discount and deferred financing costs of $53,413, and the outstanding balance under the Revolver was $6,000,000. For the six months ended June 30, 2018, the weighted average interest rate used was 5.26% for the Term Loan and 5.91% for the Revolver.

The following table reflects the schedule of principal payments for the Term Loan as of June 30, 2018:

	Principal Payments
Remainder of 2018	$	375,000
2019	12,875,000
	$	13,250,000

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Stockholders' Equity

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Stockholders' Equity

Stockholders' Equity

Common Stock

The following table presents our activity for common stock during the six months ended June 30, 2018:

	Shares	Par Value
Balance at December 31, 2017	27,288,985	$	27,289
Exercise of stock options	54,750	55
Issuance of common stock for vested restricted stock units	152,707	153
Balance at June 30, 2018	27,496,442	$	27,497

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Stock-based Compensation

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation

Stock-Based Compensation

We grant stock-based incentive awards to attract, motivate and retain qualified employees (including officers), non-employee directors and consultants, and those of our affiliates. Awards granted under our 2012 Omnibus Incentive Compensation Plan (the 2012 Plan) include common stock options, restricted stock units (RSUs), performance-based restricted stock units (PSUs), and restricted stock awards. The 2002 Stock Option Plan (the 2002 Plan) expired in 2012 and we are no longer making grants under it. Information related to the 2012 Plan and the 2002 Plan as of June 30, 2018 is as follows:

	2012 Plan	2002 Plan
Shares of common stock authorized for issuance	9,646,696	4,939,270
Stock options outstanding	4,419,036	288,635
RSUs outstanding	1,210,997	—
PSUs outstanding	223,440	—
Shares available for future grant	2,752,955	—

Stock Options

The fair value of option grants is estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

	Three Months Ended June 30,		Six Months Ended June 30,
	2018	2017	2018	2017
Risk-free interest rate	2.94%	1.9%	2.72%	1.9%
Expected volatility	31.22%	33.62%	31.22%	33.62%
Expected dividend yield	—	—	—	—
Expected life in years	6.25	6.25	6.25	6.25
Weighted average fair value of options granted	$3.33	$2.75	$3.63	$2.75

The computation of expected volatility for each period is based on historical volatility of comparable public companies. The volatility percentage represents the mean volatility of these companies. The computation of expected life for each period was determined based on the simplified method. The risk-free interest rate is based on U.S. Treasury yields for zero-coupon bonds with a term consistent with the expected life of the options. The forfeiture rate for option grants is an estimate based on forfeitures expected to occur over the vesting period.

Information for the 2002 Plan and 2012 Plan is as follows:

	Options Outstanding		Weighted Average Exercise Price
Balance at December 31, 2017	4,632,654		$9.79
Granted	195,150		9.88
Exercised	(54,750	)	6.04
Canceled	(35,109	)	7.87
Expired	(30,274	)	13.00
Balance at June 30, 2018	4,707,671		9.83

	June 30,
	2018		2017
Total intrinsic value of options exercised	$	185,390	$	157,461
Weighted average exercise price of fully vested options	$	10.42	$	10.12
Weighted average remaining term of fully vested options	6.1 years		7.4 years
Total unrecognized compensation cost related to non-vested stock options	$	3,407,963	$	6,785,960
Weighted average period to recognize compensation cost related to non-vested stock options	2.6 years		2.1 years

Options outstanding and exercisable under the 2002 Plan and the 2012 Plan at June 30, 2018 were as follows:

						Options Outstanding				Options Exercisable
Exercise Price Per Share						Options Outstanding	Weighted Average Remaining Contractual Life	Intrinsic Value		Options Exercisable	Weighted Average Remaining Contractual Life	Intrinsic Value
$	2.31	-	$	3.74	.	473,944	5.0 years	$	3,100,011	378,058	4.3 years	$	2,556,337
4.13		-	7.20		.	747,462	7.8 years	2,010,031		341,863	6.6 years	1,069,910
8.07		-	12.62		.	1,486,107	7.8 years	1,410,926		722,951	6.7 years	911,343
13.00		-	15.90		.	2,000,158	6.1 years	—		1,875,133	6.1 years	—
						4,707,671		$	6,520,968	3,318,005		$	4,537,590

Restricted Stock and Performance Stock Units

The following table is a summary of our RSU and PSU activity for the six months ended June 30, 2018:

	Number of RSU's Outstanding		Number of PSU's Outstanding		Total		Weighted Average Grant Date Fair Value
Balance at December 31, 2017	812,262		466,499		1,278,761		$7.41
Granted	502,268		25,000		527,268		9.59
Vested	(103,533	)	—		(103,533	)	5.84
Canceled	—		(268,059	)	(268,059	)	7.95
Balance at June 30, 2018	1,210,997		223,440		1,434,437		8.23
							June 30, 2018
Total unrecognized compensation cost related to non-vested combined RSU/PSU							$9,245,675
Weighted average period to recognize compensation cost related to non-vested combined RSU/PSU							2.9 years

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Income Taxes

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our income tax provision for the three and six months ended June 30, 2018 and 2017 reflects our estimate of the effective tax rates expected to be applicable for the full fiscal years, adjusted for any discrete events that are recorded in the

period in which they occur. The estimates are re-evaluated each quarter based on our estimated tax expense for the full fiscal year. The tax provision for the three and six months ended June 30, 2018 is primarily related to current foreign income taxes.

We have historically incurred operating losses and, given our cumulative losses and no history of profits, we have recorded a full valuation allowance against our deferred tax assets at June 30, 2018 and December 31, 2017.

We have a federal net operating loss (NOL) carryforward of $90,901,000 and $82,141,000 as of December 31, 2017 and 2016, respectively. We expect to be in a taxable loss position for 2018. The federal NOL carryforward will begin to expire in 2019. If not used, these NOLs may be subject to limitation under Internal Revenue Code (IRC) Section 382 should there be a greater than 50% ownership change as determined under the regulations.

Under IRC Section 382, substantial changes in ownership may limit the amount of NOL carryforwards that may be utilized annually in the future to offset taxable income. We completed an IRC Section 382 study through June 30, 2016, which concluded that we have experienced several ownership changes, causing limitations on the annual use of NOL carryforwards. Provided there is sufficient taxable income, $2,131,290 of NOL carryforwards are expected to expire without utilization between 2019 and 2022. Additionally, our ability to use our NOL carryforwards to reduce future taxable income may be further limited as a result of any future equity transactions, including, but not limited to, an issuance of shares of stock or sales of common stock by our existing stockholders.

For state income tax purposes, we have state NOL carryforwards in a number of jurisdictions in varying amounts and with varying expiration dates from 2018 through 2038.

Tax benefits of uncertain tax positions are recognized only if it is more likely than not that we will be able to sustain a position taken on an income tax return. We have no liability for uncertain positions. Interest and penalties, if any, related to unrecognized tax benefits, would be recognized as income tax expense.

We file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Tax years 2014 and forward remain open for examination for federal tax purposes and tax years 2013 and forward remain open for examination for our more significant state tax jurisdictions. To the extent utilized in future years’ tax returns, NOL carryforwards at December 31, 2016 will remain subject to examination until the respective tax year is closed.

On December 22, 2017, H.R. 1 (also, known as the Tax Cuts and Jobs Act (the Act)) was signed into law. Among its numerous changes to the Internal Revenue Code, the Act reduces U.S. federal corporate tax rate from 35% to 21%. As a result, we believe that the most significant impact on our consolidated financial statements will be a reduction in deferred tax assets related to NOLs and other deferred tax assets. Such reduction was offset by an equal reduction to our valuation allowance. Additionally, we have investments in various foreign subsidiaries. At December 31, 2017 and November 2, 2017, the cumulative earnings and profits of these entities combined were negative. Accordingly, we are not liable for the transition tax enacted under the Act. We have completed the accounting for the tax impact of the Act as of December 31, 2017 and have recorded no provisional amounts.

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Net Loss Per Share

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Net Loss Per Share

Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Numerator:
Net loss	$	(3,204,122	)	$	(4,517,471	)	$	(6,371,314	)	$	(8,930,667	)
Denominator:
Weighted average shares outstanding	27,683,120			27,418,487			27,639,835			27,329,183
Basic and diluted net loss per share	$	(0.12	)	$	(0.16	)	$	(0.23	)	$	(0.33	)

Diluted net loss per share does not include the effect of the following antidilutive common equivalent shares:

	Three Months Ended June 30,		Six Months Ended June 30,
	2018	2017	2018	2017
Stock options outstanding	4,707,671	4,569,402	4,707,671	4,569,402
Restricted stock and performance stock units	1,434,437	848,772	1,434,437	848,772
	6,142,108	5,418,174	6,142,108	5,418,174

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

(a) Legal Proceedings

We are involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters is not expected to have a material adverse effect on our financial position, results of operations, or liquidity.

(b) Indemnifications

In the ordinary course of business and under the indemnification clause of our standard customer agreement, we provide indemnifications of varying scope to customers against claims of intellectual property infringement made by third parties arising from the use of our licensed materials. At present, we do not expect to incur any infringement liability as a result of the customer indemnification clauses.

To the extent permitted under Delaware law, we have agreements whereby we indemnify our senior officers and directors for certain events or occurrences while the officer or director is or was serving at our request in such capacity. The indemnification period covers all pertinent events and occurrences so long as such officer or director may be subject to any possible claim. The maximum potential amount of future payments we could be required to make under these indemnification agreements is undetermined; however, we have director and officer insurance coverage that reduces our exposure and may enable us to recover a portion of any future amounts paid. We believe the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal.

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Summary of Significant Accounting Policies and Practices (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and footnotes have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles (GAAP) in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for the fair statement have been included.

Principles of Consolidation

The accompanying condensed consolidated financial statements include our accounts and those of our wholly-owned subsidiaries primarily located in India, China and Europe. All significant intercompany balances and transactions have been eliminated in consolidation. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for other interim periods or future years. The consolidated balance sheet as of December 31, 2017 is derived from the audited financial statements as of that date. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Form 10-K for the year ended December 31, 2017.

Use of Estimates

Use of EstimatesThe preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include the carrying amount of intangibles and goodwill; valuation allowance for receivables and deferred income tax assets; revenue; capitalization of software costs; and valuation of share-based payments. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and Cash EquivalentsWe consider all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.

Fair Value of Financial Instruments and Fair Value Measurements

Fair Value of Financial Instruments and Fair Value Measurements

Our financial instruments consist of cash equivalents, accounts receivable, accounts payable, and accrued expenses. Management believes that the carrying values of these instruments are representative of their fair value due to the relatively short-term nature of those instruments.

We follow Financial Accounting Standards Board (FASB) accounting guidance on fair value measurements for financial assets and liabilities measured on a recurring basis. Accounting Standards Codification (ASC) 820, Fair Value Measurements, among other things, defines fair value, establishes a framework for measuring fair value, and requires disclosure about such fair value measurements. Assets and liabilities measured at fair value are based on one or more of three valuation techniques provided for in the standards.

The three value techniques are as follows:

Market Approach —    Prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities;

Income Approach —     Techniques to convert future amounts to a single present amount based on market expectations     (including present value techniques and option pricing models); and

Cost Approach —     Amount that currently would be required to replace the service capacity of an asset (often referred to as replacement cost).

The standards clarify that fair value is an exit price, representing the amount that would be received to sell an asset, based on the highest and best use of the asset, or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for evaluating such assumptions, the standards establish a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities;

Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; or

Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions about what market participants would use in pricing the asset or liability.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in our existing accounts receivable. We determine the allowance based on historical write-off experience, the industry, and the economy. We review our allowance for doubtful accounts monthly. Past-due balances over 90 days and over a specified amount are reviewed individually for collectibility. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. We do not have any off-balance-sheet credit exposure related to our customers. Typically,

we record unbilled receivables for contracts on which revenue has been recognized, but for which the customer has not yet been billed.

Major Customers and Concentrations of Credit Risk

Major Customers and Concentrations of Credit RiskFinancial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables. Our customer base is principally comprised of enterprise and mid-market companies within industries including Chemical/Pharmaceutical, High Technology/Electronics, Industrial/Manufacturing, Logistics, Oil & Gas, and Retail/Apparel. We do not require collateral from our customers.

Revenue

Revenue from Contracts with Customers

Adoption of Accounting Standards Codification Topic 606

Effective January 1, 2018, we adopted the requirements of Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606), and all the related amendments (the new revenue standard) using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of accumulated deficit as of the adoption date. The comparative information for 2017 has not been restated and continues to be reported under the accounting standards in effect for that period.

Revenue Recognition

We primarily generate revenue from the sale of subscriptions and subscription-related professional services. In instances involving subscriptions, revenue is generated under customer contracts with multiple elements, which are comprised of (1) subscription fees that provide the customers with access to our on-demand application and content, unspecified solution and content upgrades, and customer support, (2) professional services associated with consulting services (primarily implementation services), and (3) transaction-related fees (including publishing services). Our initial customer contracts usually have contract terms from 3 years to 5 years in length. Typically, the customer does not take possession of the software nor does the customer have the right to take possession of the software supporting the on-demand application service. However, in certain instances, we have customers that take possession of the software whereby the application is installed on the customer’s premises. Our subscription service arrangements typically may only be terminated for cause and do not contain refund provisions.

We determine revenue recognition through the following steps:

• Identification of the contract, or contracts, with a customer

• Identification of the performance obligations in the contract

• Determination of the transaction price

• Allocation of the transaction price to the performance obligations in the contract

• Recognition of revenue when, or as, we satisfy a performance obligation

The subscription fees typically begin the first month following contract execution, whether or not we have completed the solution’s implementation. In addition, any services performed by us for our customers are not essential to the functionality of our products.

Subscription Revenue for Hosted and On-Premise Customers

Subscription revenue, which primarily consists of fees to provide customers access to our solution, is recognized ratably over contract terms beginning on the commencement date of each contract, which is the date our service is made available to customers. Typically, amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. Transaction-related revenue is recognized as the transactions occur.

Professional Services Revenue for Hosted Customers

Professional services revenue primarily consists of fees for deployment of our solution. The majority of professional services contracts are on a time and material basis. When these services are not combined with subscription revenue as a single unit of accounting, as discussed below, this revenue is recognized as the services are rendered for time and material contracts, and when the milestones are achieved and accepted by the customer for fixed price contracts.

Professional Services Revenue for On-Premise Customers

For customers that take possession of the software, billings for professional services will be recognized as revenue when services are performed, unlike under the previous standard where revenue from these billings was deferred and amortized ratably over the subscription term of the related contract. The adoption of ASC 606 will reduce revenue due to the loss of deferred services revenue from professional services billings delivered prior to December 31, 2017 for on-premise installations of our software. Deferred revenue associated with on-premise professional services at December 31, 2017 will not be amortized in 2018 and beyond.

Multiple Performance Obligations

Some of our contracts with customers contain multiple performance obligations that generally include subscription, professional services (primarily implementation) as well as transaction-related fees.

For contracts with enterprise customers (customers with annual revenues that we believe are greater than $1 billion), we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. We determine the standalone selling prices based on our overall pricing objectives, taking into consideration market conditions and other factors, including the value of our contracts, the solution sold, taking into account the modules included, term of the arrangement, and base transaction volume, customer demographics, and geographic locations.

For contracts with mid-market customers (customers with annual revenues that we believe are less than $1 billion), both subscription and professional services are combined and there is only one observable price. For these contracts that bundle the performance obligations into one annual fee, the transaction price is allocated based on the standard professional service rates and implementation hours.

Other Revenue Items

Sales tax collected from customers and remitted to governmental authorities is accounted for on a net basis and, therefore, is not included in revenue and cost of revenue in the condensed consolidated statements of operations. We classify customer reimbursements received for direct costs paid to third parties and related expenses as revenue, in accordance with ASC 606.

Costs to Obtain and Fulfill a Contract

We defer commission costs that are incremental and directly related to the acquisition of customer contracts. Commission costs are accrued and deferred upon execution of the sales contract by the customer. Payments to sales personnel are made shortly after the receipt of the related customer payment. Under ASC 606, deferred commissions are amortized over an estimated customer life of 6 years, which differs from the previous standard whereby deferred commissions were

amortized over the initial customer contract term. We determined the period of amortization of deferred commissions under ASC 606 by taking into consideration our customer contracts, our technology and other factors.

Our commission costs deferred and amortized in the period are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Commission costs deferred	$	1,401,372	$	1,042,901	$	2,071,409	$	1,679,646
Commission costs amortized	1,127,025		1,247,018		2,126,601		2,484,761

Financial Statement Impact of Adopting ASC 606

We adopted ASC 606 using the modified retrospective method. The cumulative effect of applying the new guidance to all contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to accumulated deficit as of the adoption date. As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to the following balance sheet accounts as follows:

	As Reported			Adjustments									As Adjusted
	December 31, 2017			Subscription Revenue			Professional Services Revenue			Cost to Obtain a Contract			January 1,  2018
Deferred commissions, current	$	4,400,015		$	—		$	—		$	(562,607	)	$	3,837,408
Deferred commissions, non-current	6,734,326			—			—			2,211,294			8,945,620
Deferred revenue, current	37,812,239			229,093			(2,170,118		)	—			35,871,214
Deferred revenue, non-current	1,830,706			—			(1,418,098		)	—			412,608
Accumulated deficit	(167,908,038		)	(229,093		)	3,588,216			1,648,687			(162,900,228		)

Impact of New Revenue Standard on Financial Statement Line Items

In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our condensed consolidated balance sheet as of June 30, 2018 and our condensed consolidated statement of operations for the three and six months ended June 30, 2018 is as follows:

	June 30, 2018
	As Reported			Balance Without Adoption of ASC 606			Effect of Change Higher/(Lower)
Balance Sheet
Deferred commissions, current	$	4,271,834		$	4,618,161		$	(346,327	)
Deferred commissions, non-current	8,456,002			6,057,014			2,398,988
Deferred revenue, current	37,323,361			38,842,476			1,519,115
Deferred revenue, non-current	265,324			1,917,884			1,652,560
Accumulated deficit	(169,271,542		)	(174,495,878		)	5,224,336

	Three Months Ended June 30, 2018									Six Months Ended June 30, 2018
	As Reported			Balance Without Adoption of ASC 606			Effect of Change Higher/(Lower)			As Reported			Balance Without Adoption of ASC 606			Effect of Change Higher/(Lower)
Statement of Operations
Subscription revenue	$	15,427,422		$	15,389,328		$	38,094		$	30,516,534		$	30,438,617		$	77,917
Professional services revenue	5,628,933			5,741,109			(112,176		)	10,604,213			10,869,578			(265,365		)
Sales and marketing	5,885,177			6,044,815			159,638			11,692,492			12,096,466			403,974
Net loss	(3,204,122		)	(3,289,678		)	85,556			(6,371,314		)	(6,587,840		)	216,526

Deferred Revenue and Performance Obligations

Deferred revenue from subscriptions represents amounts collected from (or invoiced to) customers in advance of earning subscription revenue. Typically, we bill our annual subscription fees in advance of providing the service. Deferred revenue from professional services represents revenue for time and material contracts where the revenue is recognized when milestones are achieved and accepted by the customer for fixed price contracts.

	June 30, 2018		December 31, 2017
Current:
Subscription revenue	$	37,202,140	$	35,247,750
Professional services revenue	121,221		2,564,489
Total current	37,323,361		37,812,239
Noncurrent:
Subscription revenue	265,324		412,608
Professional services revenue	—		1,418,098
Total noncurrent	265,324		1,830,706
Total deferred revenue	$	37,588,685	$	39,642,945

The amount of subscription revenue and professional services revenue recognized that was included in the beginning balance of deferred revenue is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Subscription revenue	$	12,787,589	$	11,617,239	$	25,952,511	$	23,748,293
Professional services revenue	161,580		508,620		510,802		1,113,588

As of June 30, 2018, $131,236,306 of revenue is expected to be recognized from remaining performance obligations for subscription contracts and is expected to be recognized over the next 6.7 years. Remaining performance obligations for professional services contracts are recognized within one year or less.

Cost of Revenue

Cost of Revenue

Cost of subscription revenue. Cost of subscription revenue consists primarily of personnel and related costs of our hosting, support, and content teams, including salaries, benefits, bonuses, payroll taxes, stock-based compensation and allocated overhead, as well as software license fees, hosting costs, Internet connectivity, and depreciation expenses directly related to delivering our solutions, as well as amortization of capitalized software development costs. Our cost of subscription revenue is generally expensed as the costs are incurred.

Cost of professional services revenue. Cost of professional services revenue consists primarily of personnel and related costs, including salaries, benefits, bonuses, payroll taxes, stock-based compensation, the costs of contracted third-party vendors, reimbursable expenses and allocated overhead. As our personnel are employed on a full-time basis, our cost of professional services is largely fixed in the short term, while our professional services revenue may fluctuate, leading to fluctuations in professional services gross profit. Cost of professional services revenue is generally expensed as costs are incurred.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which removes Step 2 of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This ASU is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. The adoption of this standard is not expected to have a material effect on our condensed consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which amends ASC 230, Statement of Cash Flows. This ASU requires that a statement of cash flows explain the change during the reporting period in the total of cash, cash equivalents, and restricted cash or restricted cash equivalents. We adopted this standard on January 1, 2018 using the retrospective transition approach. The adoption of this standard did not have a material effect on our condensed consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments, which amends ASC 230, Statement of Cash Flows. This ASU provides guidance on the statement of cash flows presentation of certain transactions where diversity in practice exists. The adoption of this standard on January 1, 2018 did not have a material effect on our condensed consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The standard requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those

fiscal years. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements but believe the most significant changes will be related to the recognition of new right-of-use assets and lease liabilities on our balance sheet for real estate operating leases. At June 30, 2018, we had long-term operating leases with $13,707,184 of remaining minimum lease payments. The new standard will require the present value of these leases to be recorded in the condensed consolidated balance sheets as a right of use asset and lease liability.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), a new accounting standard that requires recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The FASB has also issued several updates to ASU 2014-09. We adopted this standard on January 1, 2018 using the modified retrospective method. See 2(c) above for an explanation of the effect the adoption of this standard had on our condensed consolidated financial statements.

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Summary of Significant Accounting Policies and Practices (Tables)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Summary of Cash and Cash Equivalents

Cash and cash equivalents at June 30, 2018 and December 31, 2017 consists of the following:

	June 30, 2018		December 31, 2017
Cash	$	7,466,548	$	9,318,074
Money market accounts	42,107		42,527
	$	7,508,655	$	9,360,601

Summary of Financial Assets and Liabilities Carried at Fair Value, Measured on a Recurring Basis

The following tables provide the financial assets and liabilities carried at fair value measured on a recurring basis as of June 30, 2018 and December 31, 2017:

	Fair Value Measurements at Reporting Date Using
June 30, 2018	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents - money market accounts	$	42,107	$	42,107	$	—	$	—
Restricted cash - money market accounts	56,400		56,400		—		—
Total assets measured at fair value on a recurring basis	$	98,507	$	98,507	$	—	$	—
December 31, 2017
Assets:
Cash equivalents - money market accounts	$	42,527	$	42,527	$	—	$	—
Restricted cash - money market accounts	56,400		56,400		—		—
Total assets measured at fair value on a recurring basis	$	98,927	$	98,927	$	—	$	—

Schedule of Deferred Charges

Our commission costs deferred and amortized in the period are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Commission costs deferred	$	1,401,372	$	1,042,901	$	2,071,409	$	1,679,646
Commission costs amortized	1,127,025		1,247,018		2,126,601		2,484,761

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our condensed consolidated balance sheet as of June 30, 2018 and our condensed consolidated statement of operations for the three and six months ended June 30, 2018 is as follows:

	June 30, 2018
	As Reported			Balance Without Adoption of ASC 606			Effect of Change Higher/(Lower)
Balance Sheet
Deferred commissions, current	$	4,271,834		$	4,618,161		$	(346,327	)
Deferred commissions, non-current	8,456,002			6,057,014			2,398,988
Deferred revenue, current	37,323,361			38,842,476			1,519,115
Deferred revenue, non-current	265,324			1,917,884			1,652,560
Accumulated deficit	(169,271,542		)	(174,495,878		)	5,224,336

	Three Months Ended June 30, 2018									Six Months Ended June 30, 2018
	As Reported			Balance Without Adoption of ASC 606			Effect of Change Higher/(Lower)			As Reported			Balance Without Adoption of ASC 606			Effect of Change Higher/(Lower)
Statement of Operations
Subscription revenue	$	15,427,422		$	15,389,328		$	38,094		$	30,516,534		$	30,438,617		$	77,917
Professional services revenue	5,628,933			5,741,109			(112,176		)	10,604,213			10,869,578			(265,365		)
Sales and marketing	5,885,177			6,044,815			159,638			11,692,492			12,096,466			403,974
Net loss	(3,204,122		)	(3,289,678		)	85,556			(6,371,314		)	(6,587,840		)	216,526

As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to the following balance sheet accounts as follows:

	As Reported			Adjustments									As Adjusted
	December 31, 2017			Subscription Revenue			Professional Services Revenue			Cost to Obtain a Contract			January 1,  2018
Deferred commissions, current	$	4,400,015		$	—		$	—		$	(562,607	)	$	3,837,408
Deferred commissions, non-current	6,734,326			—			—			2,211,294			8,945,620
Deferred revenue, current	37,812,239			229,093			(2,170,118		)	—			35,871,214
Deferred revenue, non-current	1,830,706			—			(1,418,098		)	—			412,608
Accumulated deficit	(167,908,038		)	(229,093		)	3,588,216			1,648,687			(162,900,228		)

Schedule of Revenue and Long-Lived Assets, by Geographical Area

Revenue by geographic location based on the billing address of our customers is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
Country	2018		2017		2018		2017
United States	$	15,924,542	$	14,878,864	$	31,162,042	$	28,945,017
International	5,131,813		4,796,421		9,958,705		9,284,824
Total revenue	$	21,056,355	$	19,675,285	$	41,120,747	$	38,229,841

For the three and six months ended June 30, 2018 and 2017, no single country other than the United States had revenue greater than 10% of our total revenue.

Long-lived assets by geographic location is as follows:

Country	June 30, 2018		December 31, 2017
United States	$	8,878,939	$	8,535,281
International	821,830		834,823
Total long-lived assets	$	9,700,769	$	9,370,104

Deferred Revenue, by Arrangement, Disclosure [Table Text Block]

	June 30, 2018		December 31, 2017
Current:
Subscription revenue	$	37,202,140	$	35,247,750
Professional services revenue	121,221		2,564,489
Total current	37,323,361		37,812,239
Noncurrent:
Subscription revenue	265,324		412,608
Professional services revenue	—		1,418,098
Total noncurrent	265,324		1,830,706
Total deferred revenue	$	37,588,685	$	39,642,945

The amount of subscription revenue and professional services revenue recognized that was included in the beginning balance of deferred revenue is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Subscription revenue	$	12,787,589	$	11,617,239	$	25,952,511	$	23,748,293
Professional services revenue	161,580		508,620		510,802		1,113,588

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Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2018

Property and Equipment [Abstract]

Schedule of Property and Equipment

	June 30, 2018			December 31, 2017
Computer software and equipment	$	15,171,904		$	14,296,247
Software development costs	15,549,963			13,980,872
Furniture and fixtures	1,741,747			1,741,918
Leasehold improvements	2,546,669			2,546,686
Total property and equipment	35,010,283			32,565,723
Less: accumulated depreciation and amortization	(25,309,514		)	(23,195,619		)
Total property and equipment, net	$	9,700,769		$	9,370,104

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Depreciation and amortization expense	$	1,003,429	$	1,193,506	$	2,028,282	$	2,415,618

Information Related to Capitalized Software Costs

Information related to capitalized software costs is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Software costs capitalized	$	718,719	$	365,612	$	1,569,092	$	839,409
Software costs amortized (1)	459,655		549,303		913,887		1,086,142
(1) Included in cost of subscription revenue on the accompanying condensed consolidated statements of operations.
					June 30, 2018		December 31, 2017
Capitalized software costs not yet subject to amortization					$	1,367,340	$	824,738

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Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2018

Accrued Expenses [Abstract]

Schedule of Accrued Liabilities [Table Text Block]

	June 30, 2018		December 31, 2017
Accrued bonus	$	1,895,382	$	1,980,218
Accrued commissions	1,896,498		1,901,132
Deferred rent	401,616		380,077
Accrued professional fees	903,079		712,345
Accrued taxes	799,524		805,555
Other accrued expenses	839,297		1,810,155
Total	$	6,735,396	$	7,589,482

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Leases (Tables)

6 Months Ended

Jun. 30, 2018

Leases [Abstract]

Schedule of Rental Expense

Rental expense for operating leases is allocated to various line items in the condensed consolidated statements of operations.

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Rental expense from operating leases	$	890,000	$	939,000	$	1,781,000	$	1,859,000

Schedule of Assets Recorded Under Capital Leases

Information related to the carrying value of assets recorded under capital leases and related accumulated amortization is as follows:

	June 30, 2018		December 31, 2017
Carry value of capital leases	$	2,678,379	$	3,691,383
Accumulated amortization included in carry value	6,488,824		6,864,443

Schedule of Future Minimum Rental Payments for Operating Leases

Future minimum lease payments under noncancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum capital lease payments as of June 30, 2018 are as follows:

	Capital Leases			Operating Leases
Remainder of 2018	$	856,692		$	2,409,267
2019	1,290,658			4,601,730
2020	578,442			3,019,786
2021	303,428			1,857,130
2022	97,326			1,200,797
2023 and thereafter	—			618,474
Total minimum lease payments	3,126,546			$	13,707,184
Less amount representing interest	(329,260		)
Present value of net minimum capital lease payments	2,797,286
Less current installments of obligations under capital leases	(1,398,234		)
Obligations under capital leases excluding current installments	$	1,399,052

Schedule of Future Minimum Lease Payments for Capital Leases

Future minimum lease payments under noncancelable operating leases (with initial or remaining lease terms in excess of one year) and future minimum capital lease payments as of June 30, 2018 are as follows:

	Capital Leases			Operating Leases
Remainder of 2018	$	856,692		$	2,409,267
2019	1,290,658			4,601,730
2020	578,442			3,019,786
2021	303,428			1,857,130
2022	97,326			1,200,797
2023 and thereafter	—			618,474
Total minimum lease payments	3,126,546			$	13,707,184
Less amount representing interest	(329,260		)
Present value of net minimum capital lease payments	2,797,286
Less current installments of obligations under capital leases	(1,398,234		)
Obligations under capital leases excluding current installments	$	1,399,052

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Debt (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Schedule of Maturities of Long-term Debt

The following table reflects the schedule of principal payments for the Term Loan as of June 30, 2018:

	Principal Payments
Remainder of 2018	$	375,000
2019	12,875,000
	$	13,250,000

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Schedule of common stock activity

The following table presents our activity for common stock during the six months ended June 30, 2018:

	Shares	Par Value
Balance at December 31, 2017	27,288,985	$	27,289
Exercise of stock options	54,750	55
Issuance of common stock for vested restricted stock units	152,707	153
Balance at June 30, 2018	27,496,442	$	27,497

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Stock-based Compensation (Tables)

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Information Related to 2012 Plan and 2002 Plan

Information related to the 2012 Plan and the 2002 Plan as of June 30, 2018 is as follows:

	2012 Plan	2002 Plan
Shares of common stock authorized for issuance	9,646,696	4,939,270
Stock options outstanding	4,419,036	288,635
RSUs outstanding	1,210,997	—
PSUs outstanding	223,440	—
Shares available for future grant	2,752,955	—

Summary of Fair Value Weighted Average Assumption

The fair value of option grants is estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

	Three Months Ended June 30,		Six Months Ended June 30,
	2018	2017	2018	2017
Risk-free interest rate	2.94%	1.9%	2.72%	1.9%
Expected volatility	31.22%	33.62%	31.22%	33.62%
Expected dividend yield	—	—	—	—
Expected life in years	6.25	6.25	6.25	6.25
Weighted average fair value of options granted	$3.33	$2.75	$3.63	$2.75

Schedule of Share-based Compensation Activity

Information for the 2002 Plan and 2012 Plan is as follows:

	Options Outstanding		Weighted Average Exercise Price
Balance at December 31, 2017	4,632,654		$9.79
Granted	195,150		9.88
Exercised	(54,750	)	6.04
Canceled	(35,109	)	7.87
Expired	(30,274	)	13.00
Balance at June 30, 2018	4,707,671		9.83

	June 30,
	2018		2017
Total intrinsic value of options exercised	$	185,390	$	157,461
Weighted average exercise price of fully vested options	$	10.42	$	10.12
Weighted average remaining term of fully vested options	6.1 years		7.4 years
Total unrecognized compensation cost related to non-vested stock options	$	3,407,963	$	6,785,960
Weighted average period to recognize compensation cost related to non-vested stock options	2.6 years		2.1 years

Schedule of Share-based Compensation by Exercise Price Range

Options outstanding and exercisable under the 2002 Plan and the 2012 Plan at June 30, 2018 were as follows:

						Options Outstanding				Options Exercisable
Exercise Price Per Share						Options Outstanding	Weighted Average Remaining Contractual Life	Intrinsic Value		Options Exercisable	Weighted Average Remaining Contractual Life	Intrinsic Value
$	2.31	-	$	3.74	.	473,944	5.0 years	$	3,100,011	378,058	4.3 years	$	2,556,337
4.13		-	7.20		.	747,462	7.8 years	2,010,031		341,863	6.6 years	1,069,910
8.07		-	12.62		.	1,486,107	7.8 years	1,410,926		722,951	6.7 years	911,343
13.00		-	15.90		.	2,000,158	6.1 years	—		1,875,133	6.1 years	—
						4,707,671		$	6,520,968	3,318,005		$	4,537,590

Schedule of RSU Activity

The following table is a summary of our RSU and PSU activity for the six months ended June 30, 2018:

	Number of RSU's Outstanding		Number of PSU's Outstanding		Total		Weighted Average Grant Date Fair Value
Balance at December 31, 2017	812,262		466,499		1,278,761		$7.41
Granted	502,268		25,000		527,268		9.59
Vested	(103,533	)	—		(103,533	)	5.84
Canceled	—		(268,059	)	(268,059	)	7.95
Balance at June 30, 2018	1,210,997		223,440		1,434,437		8.23
							June 30, 2018
Total unrecognized compensation cost related to non-vested combined RSU/PSU							$9,245,675
Weighted average period to recognize compensation cost related to non-vested combined RSU/PSU							2.9 years

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Net Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth the computation of basic and diluted net loss per share:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Numerator:
Net loss	$	(3,204,122	)	$	(4,517,471	)	$	(6,371,314	)	$	(8,930,667	)
Denominator:
Weighted average shares outstanding	27,683,120			27,418,487			27,639,835			27,329,183
Basic and diluted net loss per share	$	(0.12	)	$	(0.16	)	$	(0.23	)	$	(0.33	)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

Diluted net loss per share does not include the effect of the following antidilutive common equivalent shares:

	Three Months Ended June 30,		Six Months Ended June 30,
	2018	2017	2018	2017
Stock options outstanding	4,707,671	4,569,402	4,707,671	4,569,402
Restricted stock and performance stock units	1,434,437	848,772	1,434,437	848,772
	6,142,108	5,418,174	6,142,108	5,418,174

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Summary of Significant Accounting Policies and Practices - Revenue (Details) - USD ($)		3 Months Ended		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Jan. 01, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Revenue recognition, customer contract period, minimum				3 years
Revenue recognition, customer contract period, maximum				5 years
Revenue Recognition [Line Items]
Deferred Sales Commissions		$ 1,401,372	$ 1,042,901	$ 2,071,409	$ 1,679,646
License and Maintenance Revenue		15,427,422	14,686,744	30,516,534	28,588,052
Technology Services Revenue		5,628,933	4,988,541	10,604,213	9,641,789
Cost of Services, Licenses and Maintenance Agreements	[1]	5,447,788	5,783,131	10,662,839	11,163,159
Technology Services Costs	[1]	4,286,163	4,126,958	8,545,125	8,148,704
Accounts Receivable, Net, Current		16,102,172		16,102,172			$ 16,957,044
Unbilled Receivables, Current		912,268		912,268			884,104
Deferred Sales Commission, Current		4,271,834		4,271,834			4,400,015
Deferred Sales Commission		8,456,002		8,456,002			6,734,326
Deferred Revenue, Current		37,323,361		37,323,361			37,812,239
Deferred Revenue, Noncurrent		265,324		265,324			1,830,706
Professional services consideration recognized, period services are expected to be recognized				131,236,306
Retained Earnings (Accumulated Deficit)		(169,271,542)		(169,271,542)		$ (162,900,228)	(167,908,038)
Selling and Marketing Expense	[1]	5,885,177	5,688,937	11,692,492	11,492,323
Income Tax Expense (Benefit)		77,661	590,411	204,742	776,518
Net Income (Loss) Attributable to Parent		(3,204,122)	(4,517,471)	(6,371,314)	(8,930,667)
Amortization of Deferred Sales Commissions		1,127,025	1,247,018	2,126,601	2,484,761
Subscription revenue
Revenue Recognition [Line Items]
Deferred Revenue, Revenue Recognized		12,787,589	11,617,239	25,952,511	23,748,293
Professional services revenue
Revenue Recognition [Line Items]
Deferred Revenue, Revenue Recognized		161,580	$ 508,620	510,802	$ 1,113,588
Calculated under Revenue Guidance in Effect before Topic 606
Revenue Recognition [Line Items]
Retained Earnings (Accumulated Deficit)							$ (167,908,038)
Accounting Standards Update 2014-09 | Calculated under Revenue Guidance in Effect before Topic 606
Revenue Recognition [Line Items]
License and Maintenance Revenue		15,389,328		30,438,617
Technology Services Revenue		5,741,109		10,869,578
Deferred Sales Commission, Current		4,618,161		4,618,161
Deferred Sales Commission		6,057,014		6,057,014
Deferred Revenue, Current		38,842,476		38,842,476
Deferred Revenue, Noncurrent		1,917,884		1,917,884
Retained Earnings (Accumulated Deficit)		(174,495,878)		(174,495,878)
Selling and Marketing Expense		6,044,815		12,096,466
Net Income (Loss) Attributable to Parent		(3,289,678)		(6,587,840)
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606
Revenue Recognition [Line Items]
License and Maintenance Revenue		38,094		77,917
Technology Services Revenue		(112,176)		(265,365)
Deferred Sales Commission, Current		(346,327)		(346,327)
Deferred Sales Commission		2,398,988		2,398,988
Deferred Revenue, Current		1,519,115		1,519,115
Deferred Revenue, Noncurrent		1,652,560		1,652,560
Retained Earnings (Accumulated Deficit)		5,224,336		5,224,336
Selling and Marketing Expense		159,638		403,974
Net Income (Loss) Attributable to Parent		$ 85,556		$ 216,526

[1] (1) Includes stock-based compensation as follows:                 Three Months Ended
June 30,   Six Months Ended
June 30,   2018   2017   2018   2017 Cost of subscription revenue $ 219,951
  $ 174,660
  $ 428,388
  $ 377,932
Cost of professional services revenue 179,201
  132,008
  336,817
  251,772
Sales and marketing 389,046
  248,682
  734,079
  459,400
Research and development 503,257
  302,222
  931,323
  585,860
General and administrative 988,269
  371,091
  1,854,705
  779,334
  $ 2,279,724
  $ 1,228,663
  $ 4,285,312
  $ 2,454,298

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Summary of Significant Accounting Policies and Practices - Deferred Commissions (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Accounting Policies [Abstract]
Capitalized contract cost, amortization period			6 years
Commission costs deferred	$ 1,401,372	$ 1,042,901	$ 2,071,409	$ 1,679,646
Commission costs amortized	$ 1,127,025	$ 1,247,018	$ 2,126,601	$ 2,484,761

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Summary of Significant Accounting Policies and Practices - Cash and Cash Equivalents (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017
Accounting Policies [Abstract]
Cash	$ 7,466,548	$ 9,318,074
Money market accounts	42,107	42,527
Total cash and cash equivalents	$ 7,508,655	$ 9,360,601	$ 11,082,872

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Summary of Significant Accounting Policies and Practices - Fair Value of Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017
Assets:
Restricted Cash	$ 56,400		$ 56,400
Total assets measured at fair value on a recurring basis	98,507	$ 98,927
Cash Equivalents
Assets:
Money market accounts	42,107	42,527
Restricted Cash
Assets:
Money market accounts		56,400
Level 1
Assets:
Total assets measured at fair value on a recurring basis	98,507	98,927
Level 1 | Cash Equivalents
Assets:
Money market accounts	42,107	42,527
Level 1 | Restricted Cash
Assets:
Money market accounts	56,400	56,400
Level 2
Assets:
Total assets measured at fair value on a recurring basis	0	0
Level 2 | Cash Equivalents
Assets:
Money market accounts	0	0
Level 2 | Restricted Cash
Assets:
Money market accounts	0	0
Level 3
Assets:
Total assets measured at fair value on a recurring basis	0	0
Level 3 | Cash Equivalents
Assets:
Money market accounts	0	0
Level 3 | Restricted Cash
Assets:
Money market accounts	$ 0	$ 0

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Summary of Significant Accounting Policies and Practices Summary of Significant Accounting Policies and Practices - Concentration Risk (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Concentration Risk [Line Items]
Operating Leases, Future Minimum Payments Due	$ 13,707,184		$ 13,707,184
Revenue
Concentration Risk [Line Items]
Concentration risk, percentage	10.80%	10.50%	11.50%	11.70%
Accounts Receivable
Concentration Risk [Line Items]
Concentration risk, percentage			10.00%

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Summary of Significant Accounting Policies and Practices - Sales and Long Lived-Assets by Geographic Location (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 21,056,355	$ 19,675,285	$ 41,120,747	$ 38,229,841
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	15,924,542	14,878,864	31,162,042	28,945,017
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 5,131,813	$ 4,796,421	$ 9,958,705	$ 9,284,824

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Summary of Significant Accounting Policies and Practices Long-lived assets by geographic location (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Revenues from External Customers and Long-Lived Assets [Line Items]
Total long-lived assets	$ 9,700,769		$ 9,700,769		$ 9,370,104
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Total long-lived assets	8,878,939		8,878,939		8,535,281
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Total long-lived assets	$ 821,830		$ 821,830		$ 834,823
Sales Revenue, Net [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration Risk, Percentage	10.80%	10.50%	11.50%	11.70%
Sales Revenue, Net [Member] | Non-US [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration Risk, Percentage			10.00%

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Summary of Significant Accounting Policies and Practices Deferred Revenue and Performance Obligations (Details) - USD ($)	Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
Deferred Revenue Arrangement [Line Items]
Deferred Revenue, Current	$ 37,323,361		$ 37,812,239
Contract with Customer, Liability, Current		$ 35,871,214
Deferred Revenue, Noncurrent	265,324		1,830,706
Contract with Customer, Liability, Noncurrent		$ 412,608
Deferred Revenue	37,588,685		39,642,945
Software License Arrangement [Member]
Deferred Revenue Arrangement [Line Items]
Deferred Revenue, Current	37,202,140		35,247,750
Deferred Revenue, Noncurrent	265,324		412,608
Software Service, Support and Maintenance Arrangement [Member]
Deferred Revenue Arrangement [Line Items]
Deferred Revenue, Current	121,221		2,564,489
Deferred Revenue, Noncurrent	$ 0		$ 1,418,098

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Summary of Significant Accounting Policies and Practices ASC 606 Adoption Table (Details) - USD ($)	Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
Revenue Recognition [Line Items]
Deferred Revenue, Noncurrent	$ 265,324		$ 1,830,706
Deferred commissions, current		$ 3,837,408
Deferred commissions, non-current		8,945,620
Deferred revenue, current		35,871,214
Deferred revenue, non-current		412,608
Accumulated deficit	(169,271,542)	(162,900,228)	(167,908,038)
Calculated under Revenue Guidance in Effect before Topic 606
Revenue Recognition [Line Items]
Deferred commissions, current			4,400,015
Deferred commissions, non-current			6,734,326
Deferred revenue, current			37,812,239
Deferred revenue, non-current			1,830,706
Accumulated deficit			$ (167,908,038)
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606
Revenue Recognition [Line Items]
Deferred Revenue, Noncurrent	1,652,560
Accumulated deficit	5,224,336
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | Subscription Revenue
Revenue Recognition [Line Items]
Deferred revenue, current		229,093
Accumulated deficit		(229,093)
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | Professional Services Revenue
Revenue Recognition [Line Items]
Deferred revenue, current		(2,170,118)
Deferred revenue, non-current		(1,418,098)
Accumulated deficit		3,588,216
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | Cost to Obtain a Contract
Revenue Recognition [Line Items]
Deferred commissions, current		(562,607)
Deferred commissions, non-current		2,211,294
Accumulated deficit		$ 1,648,687
Accounting Standards Update 2014-09 | Calculated under Revenue Guidance in Effect before Topic 606
Revenue Recognition [Line Items]
Deferred Revenue, Noncurrent	1,917,884
Accumulated deficit	$ (174,495,878)

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Summary of Significant Accounting Policies and Practices Summary of Significant Accounting Policies and Practices - Remaining Revenue Performance Obligation Period (Details)	6 Months Ended
	Jun. 30, 2018
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, expected timing of satisfaction, period	6 years 8 months 12 days

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Property and Equipment (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 35,010,283		$ 35,010,283		$ 32,565,723
Less: accumulated depreciation and amortization	(25,309,514)		(25,309,514)		(23,195,619)
Total property and equipment, net	9,700,769		9,700,769		9,370,104
Depreciation and amortization expense	1,003,429	$ 1,193,506	2,028,282	$ 2,415,618
Computer software and equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	15,171,904		15,171,904		14,296,247
Software development costs
Property, Plant and Equipment [Line Items]
Total property and equipment	15,549,963		15,549,963		13,980,872
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment	1,741,747		1,741,747		1,741,918
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 2,546,669		$ 2,546,669		$ 2,546,686

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Property and Equipment - Capitalized Software (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Software costs capitalized	$ 718,719	$ 365,612	$ 1,569,092	$ 839,409
Software costs amortized	459,655	$ 549,303	913,887	$ 1,086,142
Capitalized software costs not yet subject to amortization	$ 1,367,340		$ 1,367,340		$ 824,738
Software Development
Property, Plant and Equipment [Line Items]
Useful life	5 years

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Accrued Expenses (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Accrued Expenses [Abstract]
Accrued Bonuses, Current	$ 1,895,382	$ 1,980,218
Accrued Sales Commission, Current	1,896,498	1,901,132
Deferred Rent Credit, Current	401,616	380,077
Accrued Professional Fees	903,079	712,345
Accrued Income Taxes, Current	799,524	805,555
Other Accrued Liabilities, Current	839,297	1,810,155
Accrued Liabilities, Current	$ 6,735,396	$ 7,589,482

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Leases - Operating Leases - (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Operating Leased Assets [Line Items]
Rental expense from operating leases	$ 890,000	$ 939,000	$ 1,781,000	$ 1,859,000
Minimum
Operating Leased Assets [Line Items]
Operating lease, renewal term	3 years
Maximum
Operating Leased Assets [Line Items]
Operating lease, renewal term	5 years

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Leases - Capital Leases - (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Leases [Abstract]
Carry value of capital leases	$ 2,678,379	$ 3,691,383
Accumulated amortization included in carry value	$ 6,488,824	$ 6,864,443

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Leases - Future Minimum Lease Payments - (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Capital Leases
Remainder of 2018	$ 856,692
2018	1,290,658
2019	578,442
2020	303,428
2021	97,326
2023 and thereafter	0
Total minimum lease payments	3,126,546
Less amount representing interest	(329,260)
Present value of net minimum capital lease payments	2,797,286
Less current installments of obligations under capital leases	(1,398,234)	$ (1,352,456)
Obligations under capital leases excluding current installments	1,399,052	$ 1,461,101
Operating Leases
Remainder of 2018	2,409,267
2018	4,601,730
2019	3,019,786
2020	1,857,130
2021	1,200,797
2023 and thereafter	618,474
Total minimum lease payments	$ 13,707,184

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Debt - Credit Agreement (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017	Feb. 15, 2017	Nov. 05, 2015	Mar. 04, 2015
Debt Instrument [Line Items]
Outstanding balance	$ 13,250,000
Revolving credit facility	$ 6,000,000	$ 6,000,000
London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Interest rate at period end	5.26%
Prime Rate
Debt Instrument [Line Items]
Interest rate at period end	5.91%
Secured Debt | Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity					$ 20,000,000
Outstanding balance	$ 13,196,587
Unaccreted discount	$ 53,413
Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 15,000,000	$ 10,000,000
Letter of Credit | Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity					$ 2,000,000

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Debt - Maturity - (Details)	Jun. 30, 2018 USD ($)
Debt Disclosure [Abstract]
Remainder of 2018	$ 375,000
2019	12,875,000
Long-term debt	$ 13,250,000

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Stockholders' Equity - Common Stock (Details)	6 Months Ended
	Jun. 30, 2018 USD ($) shares
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period (in shares)	27,288,985
Exercise of common stock options (in shares)	54,750
Balance, end of period (in shares)	27,496,442
Balance, beginning of period | $	$ 27,289
Balance, end of period | $	$ 27,497
Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of common stock options (in shares)	54,750
Exercise of stock options | $	$ 55
Common Stock | Restricted Stock Units (RSUs)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for vested restricted stock units (in shares)	152,707
Issuance of common stock for vested restricted stock units | $	$ 153

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Stock-based Compensation Stock-based Compensation - Information Related to 2012 Plan and 2002 Plan (Details) - shares	Jun. 30, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options outstanding (in shares)	4,707,671	4,632,654
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding (in shares)	1,210,997	812,262
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding (in shares)	223,440	466,499
2012 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock authorized for issuance (in shares)	9,646,696
Stock options outstanding (in shares)	4,419,036
Shares available for future grant (in shares)	2,752,955
2012 Plan | RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding (in shares)	1,210,997
2012 Plan | PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding (in shares)	223,440
2002 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock authorized for issuance (in shares)	4,939,270
Stock options outstanding (in shares)	288,635

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Stock-based Compensation - Fair Value Weighted Average Assumptions (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	2.94%	1.90%	2.72%	1.90%
Expected volatility	31.22%	33.62%	31.22%	33.62%
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
Expected life (in years)	6 years 3 months	6 years 3 months	6 years 3 months	6 years 3 months
Weighted average fair value of options granted (USD per share)	$ 3.33	$ 2.75	$ 3.63	$ 2.75
Options granted (in shares)			195,150

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Stock-based Compensation - Schedule of Share-based Compensation Activity (Details)	6 Months Ended
	Jun. 30, 2018 USD ($) $ / shares shares	Jun. 30, 2017 USD ($) $ / shares
Options Outstanding
Balance Outstanding at Beginning of Period (in shares) | shares	4,632,654
Granted (in shares) | shares	195,150
Exercised (in shares) | shares	(54,750)
Canceled (in shares) | shares	(35,109)
Expired (in shares) | shares	(30,274)
Balance Outstanding at Ending of Period (in shares) | shares	4,707,671
Weighted Average Exercise Price
Balance at beginning of period, outstanding options (USD per share) | $ / shares	$ 9.79
Granted (USD per share) | $ / shares	9.88
Exercised (USD per share) | $ / shares	6.04
Canceled (USD per share) | $ / shares	7.87
Expired (USD per share) | $ / shares	13.00
Balance at end of period, outstanding options (USD per share) | $ / shares	9.83
Weighted average exercise price of fully vested options (USD per share) | $ / shares	$ 10.42	$ 10.12
Weighted average remaining term of fully vested options	6 years 1 month 6 days	7 years 4 months 24 days
Total unrecognized compensation cost related to non-vested stock options | $	$ 3,407,963	$ 6,785,960
Employee Stock Option
Weighted Average Exercise Price
Total intrinsic value of options exercised | $	$ 185,390	$ 157,461
Weighted average period to recognize compensation cost related to non-vested stock options	2 years 7 months 6 days	2 years 1 month 6 days
2012 Plan
Options Outstanding
Balance Outstanding at Ending of Period (in shares) | shares	4,419,036

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Stock-based Compensation - Outstanding and Exercisable by Exercise Price (Details)	6 Months Ended
	Jun. 30, 2018 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options outstanding (in shares) | shares	4,707,671
Outstanding, aggregate intrinsic value | $	$ 6,520,968
Number of exercisable options (in shares) | shares	3,318,005
Exercisable options, aggregate intrinsic value | $	$ 4,537,590
$2.31-$3.74
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options outstanding (in shares) | shares	473,944
Options outstanding average remaining contractual life	5 years
Outstanding, aggregate intrinsic value | $	$ 3,100,011
Number of exercisable options (in shares) | shares	378,058
Exercisable options, weighted average term remaining	4 years 3 months 18 days
Exercisable options, aggregate intrinsic value | $	$ 2,556,337
$4.13-$7.20
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options outstanding (in shares) | shares	747,462
Options outstanding average remaining contractual life	7 years 9 months 18 days
Outstanding, aggregate intrinsic value | $	$ 2,010,031
Number of exercisable options (in shares) | shares	341,863
Exercisable options, weighted average term remaining	6 years 7 months 6 days
Exercisable options, aggregate intrinsic value | $	$ 1,069,910
$8.07-$12.62
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options outstanding (in shares) | shares	1,486,107
Options outstanding average remaining contractual life	7 years 9 months 18 days
Outstanding, aggregate intrinsic value | $	$ 1,410,926
Number of exercisable options (in shares) | shares	722,951
Exercisable options, weighted average term remaining	6 years 8 months 12 days
Exercisable options, aggregate intrinsic value | $	$ 911,343
$13.00-$15.90
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options outstanding (in shares) | shares	2,000,158
Options outstanding average remaining contractual life	6 years 1 month 6 days
Outstanding, aggregate intrinsic value | $	$ 0
Number of exercisable options (in shares) | shares	1,875,133
Exercisable options, weighted average term remaining	6 years 1 month 6 days
Exercisable options, aggregate intrinsic value | $	$ 0
Minimum | $2.31-$3.74
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Per Share (USD per share) | $ / shares	$ 2.31
Minimum | $4.13-$7.20
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Per Share (USD per share) | $ / shares	4.13
Minimum | $8.07-$12.62
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Per Share (USD per share) | $ / shares	8.07
Minimum | $13.00-$15.90
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Per Share (USD per share) | $ / shares	13.00
Maximum | $2.31-$3.74
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Per Share (USD per share) | $ / shares	3.74
Maximum | $4.13-$7.20
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Per Share (USD per share) | $ / shares	7.20
Maximum | $8.07-$12.62
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Per Share (USD per share) | $ / shares	12.62
Maximum | $13.00-$15.90
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price Per Share (USD per share) | $ / shares	$ 15.90

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Stock-based Compensation - Restricted Stock Units (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2018 USD ($) $ / shares shares	Jun. 30, 2018 USD ($) $ / shares shares
RSUs
Number of RSU's/PSU's Outstanding
Balance Outstanding at Beginning of Period (in shares)		812,262
Granted (in shares)		502,268
Vested (in shares)		(103,533)
Canceled (in shares)		0
Balance Outstanding at End of Period (in shares)	1,210,997	1,210,997
PSUs
Number of RSU's/PSU's Outstanding
Balance Outstanding at Beginning of Period (in shares)		466,499
Granted (in shares)		25,000
Vested (in shares)		0
Canceled (in shares)		(268,059)
Balance Outstanding at End of Period (in shares)	223,440	223,440
RSU's and PSU's
Number of RSU's/PSU's Outstanding
Balance Outstanding at Beginning of Period (in shares)		1,278,761
Granted (in shares)		527,268
Vested (in shares)		(103,533)
Canceled (in shares)		(268,059)
Balance Outstanding at End of Period (in shares)	1,434,437	1,434,437
Weighted Average Grant Date Fair Value
Balance at beginning of period (USD per share) | $ / shares		$ 7.41
Granted (USD per share) | $ / shares		9.59
Vested (USD per share) | $ / shares		5.84
Canceled (USD per share) | $ / shares		7.95
Balance at end of period (USD per share) | $ / shares	$ 8.23	$ 8.23
Total unrecognized compensation cost related to non-vested combined RSU/PSU | $	$ 9,245,675	$ 9,245,675
Weighted average period to recognize compensation cost related to non-vested combined RSU/PSU	2 years 10 months 24 days

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Stock-based Compensation - Additional Information (Details)	6 Months Ended
	Jun. 30, 2018 shares
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awarded (in shares)	25,000

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Income Taxes (Details) - Domestic Tax Authority - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Operating Loss Carryforwards [Line Items]
Federal net operating loss (NOL) carryforward	$ 90,901,000	$ 82,141,000
Net operating loss carry forwards expected to expire without utilization	$ 2,131,290

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Net Loss Per Share - Basic and Diluted Net Loss Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share [Abstract]
Net loss attributable to common stockholders	$ (3,204,122)	$ (4,517,471)	$ (6,371,314)	$ (8,930,667)
Weighted average shares used in computing net loss attributable to common stockholders (in shares)	27,683,120	27,418,487	27,639,835	27,329,183
Basic and diluted net loss per share (USD per share)	$ (0.12)	$ (0.16)	$ (0.23)	$ (0.33)

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Net Loss Per Share - Antidilutive Securities (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted net loss per share	6,142,108	5,418,174	6,142,108	5,418,174
Stock options outstanding
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted net loss per share	4,707,671	4,569,402	4,707,671	4,569,402
Restricted Stock Units (RSUs)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted net loss per share	1,434,437	848,772	1,434,437	848,772