1、UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K Annual Report pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934For the fiscal year ended December 31,2021OR Transition report pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934Commissi
2、on File Number:001-35838Marin Software Incorporated(Exact name of registrant as specified in its charter)Delaware20-4647180(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification No.)123 Mission Street,27th FloorSan Francisco,CA 94105(Address of principal executive
3、 offices)(415)399-2580(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon stock,par value$0.001 per shareMRINThe Nasdaq Global MarketSecurities registered pursu
4、ant to section 12(g)of the Act:Not applicableIndicatebycheckmarkiftheregistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct.YesNoIndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)ofAct.YesNoIndicatebycheckmarkwhethertheregistrant(1)hasfi
5、ledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheRegistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.YesNoIndicatebycheckmarkwhethertheregistranthassubmittedelectro
6、nicallyeveryInteractiveDataFilerequiredtobesubmittedpursuanttoRule405ofRegulationS-T(232.405ofthischapter)duringthepreceding12months(orforsuchshorterperiodthattheRegistrantwasrequiredtosubmitsuchfiles).YesNoIndicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-accel
7、eratedfiler,asmallerreportingcompany,oranemerginggrowthcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler,”“smallerreportingcompany,”and“emerginggrowthcompany”inRule12b-2oftheExchangeAct.Largeacceleratedfiler Acceleratedfiler Non-acceleratedfiler Smallerreportingcompany Emerginggro
8、wthcompany Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.Indicatebycheckmarkwhethertheregistranthasfiledareportonandattestationtoitsman
9、agementsassessmentoftheeffectivenessofitsinternalcontroloverfinancialreportingunderSection404(b)oftheSarbanes-OxleyAct(15U.S.C.7262(b)bytheregisteredpublicaccountingfirmthatpreparedorissueditsauditreport.Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheAct).YesNoBasedo
10、ntheclosingpriceoftheregistrantsCommonStockonTheNasdaqGlobalMarketof$10.73onthelastbusinessdayoftheregistrantsmostrecentlycompletedsecondfiscalquarter,whichwasJune30,2021,theaggregatemarketvalueofitssharesheldbynon-affiliateswasapproximately$112.6million.SharesoftheregistrantsCommonStockheldbyeachex
11、ecutiveofficeranddirectorwereexcludedinthatsuchpersonsmaybedeemedtobeaffiliates.Thisdeterminationofaffiliatestatusisnotnecessarilyaconclusivedeterminationforotherpurposes.AsofFebruary18,2022,therewereapproximately15,537,538sharesoftheregistrantsCommonStockoutstanding.DOCUMENTS INCORPORATED BY REFERE
12、NCEPortionsoftheRegistrantsdefinitiveproxystatementforits2022AnnualMeetingofStockholders(“ProxyStatement”),tobefiledwithin120daysoftheRegistrantsfiscalyearendedDecember31,2021,areincorporatedbyreferenceinPartIIIofthisAnnualReportonForm10-K.Exceptwithrespecttoinformationspecificallyincorporatedbyrefe
13、renceinthisForm10-K,theProxyStatementisnotdeemedtobefiledaspartofthisAnnualReportonForm10-K.MARIN SOFTWARE INCORPORATEDFORM 10-KFor the Fiscal Year Ended December 31,2021TABLE OF CONTENTS PagePART I.4Item1.Business4Item1A.RiskFactors9Item1B.UnresolvedStaffComments32Item2.Properties32Item3.LegalProce
14、edings33Item4.MineSafetyDisclosures33PART II.34Item5.MarketforRegistrantsCommonEquity,RelatedStockholderMattersandIssuerPurchasesofEquitySecurities34Item6.Reserved35Item7.ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations36Item7A.QuantitativeandQualitativeDisclosuresAboutMark
15、etRisk49Item8.FinancialStatementsandSupplementaryData51Item9.ChangesinandDisagreementswithAccountantsonAccountingandFinancialDisclosure51Item9A.ControlsandProcedures51Item9B.OtherInformation52Item9C.DisclosureRegardingForeignJurisdictionsthatPreventInspections52PART III.53Item10.Directors,ExecutiveO
16、fficersandCorporateGovernance53Item11.ExecutiveCompensation53Item12.SecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockholderMatters53Item13.CertainRelationshipsandRelatedTransactions,andDirectorIndependence53Item14.PrincipalAccountantFeesandServices53PART IV.54Item15.ExhibitsandF
17、inancialStatementSchedules54Item16.Form10-KSummary56Signatures802SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTSThisAnnualReportonForm10-K,includingthe“ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations,”containsforward-lookingstatementsregardingfutureeventsandourfutureresu
18、lts,including,amongotherthings,statementsregardingourbusiness,thecapabilitiesofourtechnologyplatformandupgradestotheplatform,productcapabilitiesandtheirbenefitsforourcustomers,andexpectationsastoourfuturefinancialoperatingresultsandfinancialcondition,thataresubjecttothesafeharborscreatedundertheSecu
19、ritiesActof1933,asamended,andtheSecuritiesExchangeActof1934,asamended.AllstatementscontainedinthisAnnualReportonForm10-Kotherthanstatementsofhistoricalfact,includingstatementsregardingourfutureresultsofoperationsandfinancialposition,ourbusinessstrategyandplans,andourobjectivesforfutureoperations,are
20、forward-lookingstatementswithinthemeaningofthePrivateSecuritiesLitigationReformActof1995.Thewords“believe,”“may,”“potentially,”“will,”“estimate,”“continue,”“anticipate,”“intend,”“could,”“should,”“would,”“project,”“plan,”“predict,”“expect,”“seek,”“likely,”andsimilarexpressionsareintendedtoidentifyfor
21、ward-lookingstatements.Wehavebasedtheseforward-lookingstatementslargelyonourcurrentexpectations,estimatesandprojectionsaboutfutureeventsandtrendsthatwebelievemayaffectourfinancialcondition,resultsofoperations,businessstrategy,short-termandlong-termbusinessoperationsandobjectives,andfinancialneeds.Th
22、esestatementsreflectourbeliefsandcertainassumptionsbaseduponinformationavailabletousatthetimewefilethisAnnualReportonForm10-Korthetimeofthedocumentsincorporatedbyreference.Suchforward-lookingstatementsareonlypredictions,whichmaydiffermateriallyfromactualresultsorfutureevents.Althoughwebelievethatour
23、expectations,estimatesandprojectionsreflectedintheforward-lookingstatementsarereasonable,wecannotbesurethattheywillbeachieved.Theseforward-lookingstatementsaresubjecttoanumberofrisks,uncertaintiesandassumptions,includingthosedescribedinthe“RiskFactors”section.Moreover,weoperateinaverycompetitiveandr
24、apidlychangingenvironment.Newrisksemergefromtimetotime,includingtheriskofadverseeconomiceffectsoftheCOVID-19pandemic.Itisnotpossibleforourmanagementtopredictallrisks,norcanweassesstheimpactofallfactorsonourbusinessortheextenttowhichanyfactor,orcombinationoffactors,maycauseactualresultstodiffermateri
25、allyfromthosecontainedinanyforward-lookingstatementswemaymake.Inlightoftheserisks,uncertaintiesandassumptions,thefutureeventsandtrendsdiscussedinthisreportmaynotoccurandactualresultscoulddiffermateriallyandadverselyfromthoseanticipatedorimpliedintheforward-lookingstatements.Weundertakenoobligationto
26、reviseorpubliclyreleasetheresultsofanyrevisiontotheseforward-lookingstatements,exceptasrequiredbylaw.Giventheserisksanduncertainties,readersarecautionednottoplaceunduerelianceonsuchforward-lookingstatements.Asusedinthisreport,theterms“Marin,”“Registrant,”“we,”“us,”“our,”andthe“Company”meanMarinSoftw
27、areIncorporatedanditssubsidiariesunlessthecontextindicatesotherwise.Referencesto“fiscal2021”and“fiscal2020”refertotheyearendedDecember31,2021andtheyearendedDecember31,2020,respectively.3PART IITEM 1.BUSINESSWearealeadingproviderofdigitalmarketingsoftwareforsearch,socialandeCommerceadvertisingchannel
28、s,offeredasaunifiedsoftware-as-a-service,orSaaS,advertisingmanagementplatformforperformance-drivenadvertisersandagencies.Ourplatformisananalytics,workflowandoptimizationsolutionformarketingprofessionals,allowingthemtoeffectivelymanagetheirdigitaladvertisingspend.Wemarketandselloursolutionstoadvertis
29、ersdirectlyandthroughleadingadvertisingagencies,andourcustomerscollectivelymanagebillionsofdollarsinadvertisingspendonourplatformgloballyacrossawiderangeofindustries.Webelievethismakesusoneofthelargestprovidersofindependentadvertisingcloudsolutions.Oursoftwaresolutionisdesignedtohelpourcustomers:mea
30、suretheeffectivenessoftheiradvertisingcampaignsthroughourproprietaryreportingandanalyticscapabilities;manageandexecutecampaignsthroughourintuitiveuserinterfaceandunderlyingtechnologythatstreamlinesandautomateskeyfunctions,suchasadvertisementcreationandbidding,acrossmultiplepublishersandchannels;ando
31、ptimizecampaignsacrossmultiplepublishersandchannelsbasedonmarketandbusinessdatatoachievedesiredrevenueoutcomesusingourpredictivebidmanagementtechnology.Advertisersuseourplatformtocreate,targetandconvertpreciseaudiencesbasedonrecentbuyingsignalsfromuserssearch,socialandeCommerceinteractions.Ourplatfo
32、rmisintegratedwithleadingpublisherssuchasAmazon,Apple,Baidu,Bing,Criteo,Facebook,Google,Instacart,Instagram,Pinterest,Twitter,Yahoo!,Yahoo!JapanandYandex.Additionally,wehaveintegrationswithdozensofleadingwebanalyticsandadvertisement-servingsolutionsandkeyenterpriseapplications,enablingourcustomersto
33、moreaccuratelymeasurethereturnoninvestmentoftheirmarketingprograms.Oursoftwareplatformservesasanintegrationpointforadvertisingperformance,salesandrevenuedata,allowingadvertiserstoconnectthedotsbetweenadvertisingspendandrevenueoutcomes.Throughanintuitiveinterface,weenableourcustomerstosimultaneouslyr
34、unlarge-scaledigitaladvertisingcampaignsacrossmultiplepublishersandchannels,makingiteasyformarketerstocreate,publish,modifyandoptimizecampaigns.Ourpredictivebidmanagementandoptimizationtechnologyalsoallowsadvertiserstoforecastoutcomesandoptimizecampaignsacrossmultiplepublishersandchannelstoachieveth
35、eirbusinessgoals.Ouroptimizationtechnologycanhelpadvertisersincreaseadvertisementspendonthosecampaigns,publishersandchannelsthatareperformingwellwhilereducinginvestmentinthosethatarenot.Thiscategoryofsolutions,whichwerefertoascross-channelbidandcampaignoptimization,helpsbusinessesintelligentlyandeff
36、icientlymeasure,manage,andoptimizetheirdigitaladvertisingspendtoachievedesiredbusinessresults.HeadquarteredinSanFrancisco,wewereincorporatedintheStateofDelawarein2006.Themailingaddressofourheadquartersis123MissionStreet,27thFloor,SanFrancisco,California94105andourtelephonenumberatthatlocationis(415)
37、399-2580.Offered SolutionsOurcloud-basedplatformhelpsourcustomerstomeasure,manageandoptimizetheirdigitalmarketingcampaignstoimproveperformanceoftheironlineadvertisingcampaigns,realizeefficienciesandtimesavings,andmakebetterbusinessdecisions.Weoffersolutionsfordirectadvertisersofallsizesandtheagencie
38、sthatrepresentthem,includingenterprise,mid-marketorsmallbusinesses.WeofferSaaSsolutionsandmanagedservicesforsearch,socialandeCommerce.Search,Social and eCommerceOurcurrentproductlineupconsistsofMarinOneandourtwolegacyproducts,MarinSearchandMarinSocial.WehaverecentlymigratedcustomersfromMarinSearchan
39、dMarinSocialtoMarinOne.MarinOne.Ournext-generationplatformthatbringssearch,socialandeCommerceadvertisingintoasingle-platform.MarinOnehelpsadvertisersmaximizeacustomerjourneythatspansGoogle,Facebook,andAmazonbycombiningthepowerofMarinSearchandMarinSocialwithnewerchannelslikeLinkedIn,AppleSearchAdsand
40、YouTube.Marin Search.Ouroriginalproductforlargeadvertisersandagencies,Marin Searchisdesignedtoprovidesearchadvertiserswiththepower,scaleandflexibilityrequiredtomanagelarge-scaleadvertisingcampaigns.4Marin Social.HelpsadvertisersmanagetheirFacebook,InstagramandTwitteradvertisingspendatscale.Ourplatfo
41、rmsarecomprisedofthefollowingmodules:Optimization.OurOptimizationmodulehelpsadvertisersmanagebidsacrosspublisherstomeetrevenuegoalsandidentifyopportunitiesforcampaignimprovements,whichwebelievecanimprovefinancialperformanceandefficiencies.Forecastingcapabilitieshelppredictcampaignperformance,whichsi
42、mplifiesthebudgetingprocessformarketingdepartments.Reporting and Analytics.OurReporting and Analyticsmoduleenablesadvertiserstoreportresultsatabusinesslevelandanalyzecross-channelperformancetrends,whichwebelievecanleadtoimprovedvisibilityandgeneratesignificanttimesavings.Campaign Management.OurCampa
43、ign Managementmoduleprovidesthedigitaladvertiserwithaunifiedinterfacetocreate,manageandoptimizecampaignsacrossabroadrangeofpublishers,creatinggreaterefficienciesandincreasingflexibility.Ourgoalistocomplementandenhancethetoolsofferedbythesepublisherstoprovidedigitaladvertiserstheabilitytoeasilymanage
44、theircampaignsonaglobalscale.Connect.OurConnectmoduleenablesadvertiserstoautomateandstreamlinethecaptureofrevenue,costandaudiencedatafromarangeofsourcessuchasadvertisementservers,analyticssystems,CRMplatforms,publishersandthird-partydatabases.Throughintegrationsacrossmultipledatasources,ourConnectmo
45、dulecanhelpadvertisershaveaholisticpictureoftheirdigitaladvertisingcampaigns.Technology and Supporting PlatformWedesignedourcloud-basedplatformtosupportlargeglobaladvertisers.ThemajorityofoursoftwareiswritteninJava.Ourhardwareconsistsofindustry-standardserversandnetworkinfrastructure.Ourstandardoper
46、atingsystemisLinux.Oursoftwareplatformischaracter-set,language,currency,andtime-zoneindependent.Ourtechnologyplatformhasthefollowingkeybenefits:Scalability.Ourplatformisdesignedtohandlebillionsofadvertisingunitsacrossthousandsofadvertisers,whiledeliveringaresponsivebrowsingandeditingexperience.Ifthe
47、numberofadvertisersandresultingcomputingandstoragerequirementschanges,wecanaddorremovehardwaretoourplatformtoaccommodatethedemand.Availability.Ourcustomersarehighlydependentontheavailabilityofourplatform,whichisdesignedtobeavailable24x7,365daysayear.Weoperateourownhardwareandusethird-partydatacenter
48、sthatofferserverredundancy,back-upcommunicationsandpowerandphysicalsecurity.Security.Ourplatformmanagesalargequantityofcustomerdata.Weemploytechnologies,policiesandprocedurestoprotectcustomerdata.Theprimarythird-partydatacenterthatweusetohostourplatformhasSSAENo.18,Type2SOC1,SOC2andSOC3attestationsa
49、ndisISO27001certified.Wearecontinuouslyupgradingoursoftwareplatforminamannerthatwebelievewillcost-effectivelyextendthescalability,speed,resiliencyandavailabilityofourservicesandfacilitateourabilitytoaddnewfeaturestoourproducts.Strategic AgreementsWehaveenteredintolong-termstrategicagreementswithcert
50、ainleadingsearchpublishers.Underthesestrategicagreements,wereceiveconsiderationbasedonapercentageofthesearchadvertisingspendthatourcustomersmanageonourplatform.InSeptember2021,weenteredintoanewrevenueshareagreementwithGoogle,withaneffectivedateofOctober1,2021forathree-yeartermcontinuinguntilSeptembe
51、r30,2024.UnderthisnewGoogleRevenueShareAgreement,weareeligibletoreceivefixedandvariablerevenuesharepaymentsbasedonapercentageofcertainsearchadvertisingspendthatismanagedthroughourplatform.GooglehastherighttoterminatethisnewGoogleRevenueShareAgreementincertaincircumstances,andanyterminationoramendmen
52、tofthisagreementwouldhaveamaterialadverseeffectonourresultsofoperations.CustomersWemarketandsellourtechnologysolutionstoadvertisersdirectlyandthroughadvertisingagenciesthatuseourplatformonbehalfoftheircustomers.Advertisersthatweservethroughourrelationshipswithagenciesgenerallyrepresentedapproximatel
53、yone-thirdtoone-quarterofouroverallrevenues.Wealsogeneraterevenuesfromleadingpublishersthroughourlong-termstrategicagreements.5CompetitionThedigitaladvertisingcloudmarketishighlycompetitive,fragmented,andsubjecttochangesinbothtechnologyandcustomerbehavior.Wefacesignificantcompetitiontodayandexpectco
54、mpetitiontointensifyinthefuture.Tomaintainandimproveourcompetitiveposition,wemustkeeppacewiththeevolvingneedsofourcustomersandcontinuetodevelopandintroducenewmodules,featuresandservicesinatimelyandefficientmanner.Wecurrentlycompetewithlarge,well-establishedcompanies,suchasAdobeSystemsIncorporated,Fa
55、cebook,Inc.,GoogleInc.andSkai(formerlyknownasKenshooLtd.).Wealsocompetewithin-houseproprietarytools,toolsfrompublishersandcustomsolutions,includingspreadsheets.Webelievetheprincipalcompetitivefactorsinourmarketincludethefollowing:solutionquality,breadth,stability,flexibilityandfunctionality;tangible
56、platformbenefits;levelofcustomersatisfactionandourabilitytorespondtocustomerneedsrapidly;breadthandqualityofadvertiserandagencyrelationships;abilitytoinnovateanddevelopneworimprovedproductsandfeatureswhilemaintainingplatformspeedandstability;abilitytorespondtochangesinpublishersapplicationprogrammin
57、ginterfaces;brandawarenessandreputation;andsizeofcustomerbase.Apartfromcross-channelplatformcompetitors,wealsocompetewithchannelsolutionsinthesocialadvertisingmarket.Competitorsinthesocialadvertisingmarketincludecompaniessuchas4CInsights,Inc.,SandSmartly.ioInc.Ourabilitytoremaincompetitivewilllargel
58、ydependonourongoingperformanceintheareasofthequality,functionalityandbreadthofoursolutionandtheavailabilityandknowledgeabilityofourcustomersupport.Sales and MarketingWeselloursolutionsdirectlytoadvertisersandagenciesinawiderangeofindustriesthroughourglobalsalesteam.Oursalescyclecanvarysubstantiallyb
59、yadvertiserandagency,butcantakebetweenthreeandninemonths.Wehaveeightaccountdirectorsorganizedbygeographyandmarketsegments.Thesameaccountdirectorsareresponsibleforlong-termcustomersatisfactionandretention,renewal,supportanddrivinganincreaseinthevolumeofmediamanagedbycustomersonourplatform.Ourmarketin
60、gteamisfocusedondrivingawarenessanddemandgenerationacrossmajormarkets.Thisteamprovidesthoughtleadershipintheformofwhitepapers,benchmarkingreports,bylines,presentingatindustryconferencesandspeakingtothepress.Inaddition,theyareresponsibleforthecreationoffieldenablementassetssuchascasestudies,blogposts
61、andcorporateandproductcollateral.Research and DevelopmentOurresearchanddevelopmentteamisresponsibleforthedesign,development,andmaintenanceofourplatform.Ourresearchanddevelopmentprocessemphasizesfrequent,iterativeandincrementaldevelopmentcycles.Withinourresearchanddevelopmentorganizations,wehavesever
62、alprojectteamsthatfocusonplatformandfeaturedevelopmentforouradvertisingcloudsolutions.Eachoftheseprojectteamsincludesengineers,qualityengineersandproductmanagers,asneeded,responsiblefortheinitialandongoingdevelopmentfortheirprojects.Government RegulationWearesubjecttoanumberoflawsandregulationsthata
63、ffectcompaniesconductingbusinessintheadvertisingandSaaSindustriesandontheInternet,manyofwhicharestillevolvingandcouldbeinterpretedinwaysthatcouldharmourbusiness.ThemannerinwhichexistinglawsandregulationswillbeappliedtotheSaaSandadvertisingindustriesandtheInternetingeneralandhowtheywillrelatetoourbus
64、inessinparticular,areoftenunclear.Forexample,weoftencannotbecertainhowexistinglawswillapplyintheeCommerceandonlinecontext,includingwithrespecttosuchtopicsasprivacy,advertising,pricing,taxation,contentregulation,qualityofproductsandservicesandintellectualpropertyownershipandinfringement.Inaddition,in
65、2020U.S.federalandstateandforeigngovernmentsandregulatoryagenciesinitiatedlawsuitsorinvestigationsagainstGoogleandFacebookrelatedto6certainoftheiranticompetitivebusinesspracticesandconductinthedigitaladvertisingandsocialmediaindustriesandwecannotbecertainastohowsuchlawsuitsandinvestigationsmightaffe
66、ctGoogleorFacebookorotherwiseaffectthedigitaladvertisingindustry.NumerouslawsandregulatoryschemeshavebeenadoptedatthenationalandstatelevelintheUnitedStates,andinsomecasesinternationally,thathaveadirectimpactonourbusinessandoperations.Forexample,theCaliforniaConsumerPrivacyAct,orCCPA,whichwentintoeff
67、ectonJanuary1,2020,providesconsumerstherighttoknowwhatpersonaldatacompaniescollect,howitisused,andtherighttoaccess,delete,andoptoutofthesaleoftheirpersonalinformationtothirdparties.Italsoexpandsthedefinitionofpersonalinformationandgivesconsumersincreasedprivacyrightsandprotectionsforthatinformation.
68、TheCCPAalsoincludesspecialrequirementsforCaliforniaconsumersundertheageof16.TheNevadaOnlinePrivacyLaw,whichwentintoeffectOctober1,2021providesNevadaresidentswiththerighttoknowourdatapracticesandtherighttoopt-outofthesaleofcertain“coveredinformation.”TheCaliforniaPrivacyRightsAct,orCPRA,VirginiaConsu
69、merDataProtectionAct,CDPA,andColoradoPrivacyAct,orCPAallcomeintoeffectonJanuary1,2023.Theselawsprovideconsumerswiththerighttoknowwhatpersonaldatacompaniescollect,howitisused,andtherighttoaccess,delete,andoptoutofthesaleoftheirpersonalinformationtothirdparties.TheCPRAalsoincludesspecialrequirementsfo
70、rCaliforniaconsumersundertheageof16.TheGeneralDataProtectionRegulation,orGPDR,whichwentintoeffectinMay2018givesEUresidents,amongotherthings,rightstorighttoknowwhatpersonaldatawecollectfromthem,howitisused,andtherighttoaccess,correct,delete,andoptoutofthesaleoftheirpersonalinformationtothirdparties.W
71、emayalsoberequiredtoobtainconsentfromanyconsumersincertaincircumstancesandadheretocertaindatatransfermechanismstotransferEUpersonaldatatocertainotherjurisdictions.TheSafeHarborframeworkthatmanycompaniesreliedontotransferdatawasrecentlyfoundtobeinvalid.Werelyonstandardcontractsfordatatransfersfromthe
72、EU.Thestandardcontractualclauseswererecentlyrevisedsubstantiallyandweareintheprocessofimplementingnewstandardcontractualclauses.Asregulatoryauthoritiescontinuetoissuefurtherguidanceonpersonaldata,wecouldsufferadditionalcosts,complaintsorregulatoryinvestigationsorfines.TheGDPRsetsamaximumfineof20mill
73、ion(about18million)or4%ofannualglobalturnoverforinfringementswhicheverisgreater.Ifweareunabletotransferdatabetweenandamongcountriesinwhichweoperate,itcouldaffectthemannerinwhichweprovideourservices,thegeographicallocationorsegregationofoursystemsandoperations,andcouldadverselyaffectourfinancialresul
74、ts.TheUnitedKingdomsDataProtectionAct2018,orDataProtectionAct,andUKGeneralDataProtectionRegulation,orUKGDPR,applytoouractivitiesintheUnitedKingdom.TheyhavesimilarrequirementstothosenotedaboverelatingtoGDPR.TheDataProtectionActandUKGDPRsetamaximumfineof17.5millionor4%ofannualglobalturnoverforinfringe
75、mentswhicheverisgreaterforinfringements.Human Capital ResourcesOuremployeesareourgreatestasset.Ourperformancedependsuponidentifying,attracting,developing,motivatingandretainingahighlyskilledworkforceinmultipleareas,includingengineering,salesandmarketing,andcustomerservice.Collectively,ouremployeesha
76、veextensiveexperienceandknowledgeindigitalmarketingandwebelievethatweemploysomeofthetoptalentinourindustry.Workforce DemographicsAsofDecember31,2021,wehadatotalof156employees,whichwasdownfromatotalof229employeesatDecember31,2019andatotalof162employeesatDecember31,2020.AtDecember31,2021,approximately
77、54%ofouremployeeswerelocatedintheUnitedStates,withapproximately29%ofouremployeeslocatedinEuropeandapproximately17%ofouremployeeslocatedinAsia.AtDecember31,2021,approximately40%ofouremployeeswereonourengineeringandresearchanddevelopmentteams,withtheremainderofouremployeescomprisingoursalesandmarketin
78、g,customerservice,andgeneralandadministrativeteams.During2020,oneofourstrategicinitiativeswastheimplementationofarestructuringplaninthethirdquarterof2020,whichincludedaglobalreduction-in-forceandothercostsavingactionstoreduceouroperatingexpensesandaddresstheimpactoftheCOVID-19pandemiconourbusiness(t
79、he“2020RestructuringPlan”).The2020RestructuringPlanresultedinthereductionofourglobalworkforcebyapproximately60employees,approximatelyhalfofwhichwerelocatedoutsideoftheUnitedStates.Wealsoexperiencedsomeseniormanagementturnoverin2020,withthedeparturesofthepreviousmanagersofoursalesteamandourcustomerse
80、rviceteamsduringthethirdquarterof2020.Webelievewehavesuccessfullyrestructuredtheseteamsandhavepromotedatalentedandexperiencednewleaderfortherestructuredteamsfromwithinourranks.Followingtherestructuringeffortsin2020,webelievethatwehavebetteralignedourhumancapitalresourceswiththecurrentandplannedneeds
81、ofourbusiness.Wearenowfocusedonretainingandmotivatingouremployeesatalllevelsandinallpartsoftheorganization,andwearecommittedtomaintainingaworkplaceenvironmentthatpromotesemployeeproductivityandsatisfaction.Weexpecttoincreasethesizeofouremployeebaseinthenearfuture.7Compensation,Benefits and Well-bein
82、gWebelievethatweofferfaircompensationandbenefitsthatsupportouremployeesoverallwell-beingandarecompetitiveinourindustryandinthecommunitiesinwhichweoperate.Topromotealignmentwithourshort-andlong-termobjectives,ourcompensationpracticesforemployeesincludebasepay,annualbonusesandothershort-termincentives
83、,andequitygrantsandotheropportunitiesforlong-termincentives.Weofferanarrayofbenefits,includingcomprehensivehealthandwealthinsurance.Weprovideemotionalwell-beingservicesthroughanEmployeeAssistanceProgram.InresponsetotheCOVID-19pandemic,weimplementedsignificantchangesin2020thatwedeterminedwereinthebes
84、tinterestsofourcompanyandouremployeesaswellasthecommunitiesinwhichweoperate.ThevastmajorityofouremployeeshavebeenworkingfromhomesinceMarch2020andwilllikelycontinuetodosointhenearfuture.WehavebeenencouragedbyhowouremployeeshaverespondedtothechallengesthathavestemmedfromtheCOVID-19pandemicandhavegener
85、allymaintainedtheirproductivityundertheevolvingworkingconditions.Communication and EngagementWebelievethatoursuccessdependsupononouremployeesunderstandinghowtheirworkcontributestoouroverallstrategyandplans.Tothisend,wetrytocommunicatewithourworkforcethroughavarietyofchannelsandencourageopenanddirect
86、communication,includingquarterlycompany-wideCEOupdatemeetings,regularcompany-widecallonavarietyoftopicsofinterestandfrequentemailcorporatecommunications.Diversity and InclusionWestrivetopromoteandadvancediversityandinclusionacrossthecountryandwevaluediverseperspectivesandlifeexperiences.Webelievetha
87、teveryonedeservesrespectandequaltreatment,regardlessofgender,race,ethnicity,age,disability,sexualorientation,genderidentity,culturalbackground,orreligiousbelief.Intellectual PropertyOurintellectualpropertyrightsareakeycomponentofoursuccess.Werelyonacombinationofpatent,trademark,copyright,unfaircompe
88、titionandtradesecretlaws,aswellasconfidentialityproceduresandcontractualrestrictions,toestablish,maintainandprotectourproprietaryrights.AsofDecember31,2021,wehadfiveissuedpatentsandonepatentapplicationpendingintheUnitedStates.Weownandusetrademarksonorinconnectionwithourproductsandservices,includingt
89、woregisteredtrademarksintheUnitedStates,Canada,theEuropeanUnion,Australia,China,JapanandRussia;oneregisteredmarkinSouthKoreaandSingapore;andunregisteredcommonlawmarksandpendingtrademarkapplicationsintheUnitedStates,CanadaandtheEuropeanUnion.WehavealsoregisterednumerousInternetdomainnames.Available I
90、nformationThemailingaddressofourheadquartersis123MissionStreet,27thFloor,SanFrancisco,California94105andourtelephonenumberatthatlocationis(415)399-2580.O.ThroughalinkontheInvestorCentersectionofourwebsite,wemakeavailablethefollowingfilingsassoonasreasonablypracticableaftertheyareelectronicallyfiledw
91、ithorfurnishedtotheSecuritiesandExchangeCommission,ortheSEC:ourAnnualReportonForm10-K,QuarterlyReportsonForm10-Q,CurrentReportsonForm8-K,andanyamendmentstothosereportsfiledorfurnishedpursuanttoSection13(a)or15(d)oftheSecuritiesExchangeActof1934,asamended.Allsuchfilingsarefreeofcharge.Theinformationp
92、ostedtoourwebsiteisnotincorporatedintothisAnnualReportonForm10-K.ThepublicmayreadandcopyanymaterialsthatwefilewiththeSECatitswebsiteatwww.sec.gov.WeuseourInvestorRelationswebsite(http:/ 1A.RISK FACTORSSUMMARY OF RISK FACTORSInvesting in our common stock involves a high degree of risk.You should care
93、fully consider the risks and uncertainties described below,together with all of the other information contained in this Annual Report on Form 10-K,including our consolidated financial statements and the related notes thereto,before making a decision to invest in our common stock.The risks and uncert
94、ainties summarized and described below are not the only ones we face.Additional risks and uncertainties that we are unaware of,or that we currently believe are not material,may also become important factors that affect us.If any of the following risks occur,our business,financial condition,operating
95、 results and prospects could be materially and adversely affected.In that event,the price of our common stock could decline,and you could lose part or all of your investment.Risks Related to the COVID-19 PandemicTheCOVID-19globalpandemichasadverselyaffected,andmaycontinuetoadverselyaffect,ourbusines
96、sandoperatingresults.Amongotherthings,theCOVID-19globalpandemichascaused,andlingeringeffectsofthepandemiccouldcontinuetocause,someofourcustomerstoreducetheirpurchasesofourproductsortoreducetheamountofdigitaladvertisingspendthattheymanageusingourproducts,whichcouldhaveamaterialadverseeffectonourbusin
97、ess.Risks Related to our Financial Condition and Future Operating ResultsItisdifficulttopredictourfutureoperatingresultsformanyreasons,includingthecontinuingCOVID-19pandemicanditseffectsonourcustomersanddigitaladvertisingspend.Wehaveahistoryoflossesandwemaynotachieveorsustainprofitabilityinthefuture
98、.Weexpecttocontinuetoincurlossesandexperiencenegativecashflows,andwemayneedtoreduceoperatingexpenses,selladditionalsecurities,sellassetsorborrowadditionalfundstofundourbusinessplans.Wemayrequireadditionalcapitaltosupportbusinessgrowth,andthiscapitalmightnotbeavailableonacceptableterms,ifatall.Wemaye
99、xperiencequarterlyfluctuationsinouroperatingresultsduetoanumberoffactors,whichmakeourfutureresultsdifficulttopredict.Risks Related to our Business and MarketIfthemarketfordigitaladvertisingslowsordeclines,ourbusiness,growthprospects,andfinancialconditionwouldbeadverselyaffected.Wemustdevelopandintro
100、duceenhancementsandnewfeaturesthatachievemarketacceptanceorthatkeeppacewithtechnologicaldevelopmentstoremaincompetitiveinourevolvingindustry.Ifweareunabletomaintainourrelationshipswith,andaccessto,publishers,advertisingexchangeplatformsandotherplatformsthataggregatethesupplyofadvertisinginventory,ou
101、rbusinesswillsuffer.Ourgrowthdependsinpartonthesuccessofourrelationshipswithadvertisingagenciesandourstrategicrelationshipswiththirdparties.Ourmarketishighlycompetitiveandcomplex.Wemaynotbeabletocompetesuccessfullyagainstcurrentandfuturecompetitors.Ourbusinessdependsonourcustomerscontinuedwillingnes
102、stomanageadvertisingspendonourplatform.Operational RisksOurbusinessdependsonretainingandattractingqualifiedpersonnel,andturnovermayresultinoperationalinefficienciesthatcouldnegativelyaffectourbusiness.9Weincurupfrontcostsassociatedwithonboardingadvertiserstoourplatformandmaynotrecoupourinvestmentifw
103、edonotmaintaintheadvertiserrelationshipovertime.Becausewegenerallybillourcustomersoverthetermofthecontract,neartermdeclineinneworrenewedsubscriptionsmaynotbereflectedimmediatelyinouroperatingresults.AnydecreaseinourcustomersuseofsearchadvertisingorourinabilitytofurtherpenetratesocialandeCommerceadve
104、rtisingchannelswouldharmourbusiness.Oursalescyclecanbelongandunpredictableandrequireconsiderabletimeandexpense,whichmaycauseouroperatingresultstofluctuate.Ourabilitytogeneraterevenuedependsonourcollectionofsignificantamountsofdatafromvarioussources.Materialdefectsorerrorsinoursoftwareplatformcouldha
105、rmourreputation,resultinsignificantcoststousandimpairourabilitytoselloursubscriptionservices.Weprimarilyderiveourrevenuesfromasinglesoftwareplatformandanyfactoradverselyaffectingsubscriptionstoourplatformcouldharmourbusinessandoperatingresults.Ifmobileconnecteddevices,theiroperatingsystemsorcontentd
106、istributionchannels,includingthosecontrolledbyourcompetitors,developinwaysthatpreventouradvertisingcampaignsfrombeingdeliveredtotheirusers,ourabilitytogrowourbusinesswillbeimpaired.Ifoursecuritymeasuresarebreachedorunauthorizedaccesstocustomerdataorourdataisotherwiseobtained,oursolutionsmaybeperceiv
107、edasnotbeingsecure,customersmayreducetheuseoforstopusingoursolutionsandwemayincursignificantliabilities.Weprimarilyusethird-partydatacenterstodeliverourservices.Anydisruptionofserviceatthesefacilitiescouldharmourbusiness.Wemayneedtocontinuallyimproveourhostinginfrastructuretoavoidserviceinterruption
108、sorslowersystemperformance.Oursolutionsmustintegratewithourcustomersenterpriseapplicationsandinfrastructures.Ifwecannotefficientlyimplementoursolutionsforourcustomers,wemaylosecustomers.Ifweareunabletomaintainorexpandoursalesandmarketingcapabilities,wemaynotbeabletogenerateanticipatedrevenues.Anyfai
109、luretoofferhigh-qualitytechnicalsupportservicesmayadverselyaffectourrelationshipswithourcustomersandharmourfinancialresults.Anyfailuretoprotectourintellectualpropertyrightscouldimpairourabilitytoprotectourproprietarytechnologyandourbrand.Regulatory and Compliance RisksDomesticandforeigngovernmentreg
110、ulationandenforcementofdatapracticesanddatatrackingtechnologiesisexpansive,notclearlydefinedandrapidlyevolving.Suchregulationcoulddirectlyrestrictportionsofourbusinessorindirectlyaffectourbusinessbyconstrainingourcustomersuseofourplatformorlimitingthegrowthofourmarkets.Ifourcustomersfailtoabidebyapp
111、licableprivacylawsortoprovideadequatenoticeand/orobtainconsentfromendusers,wecouldbesubjecttolitigationorenforcementactionorreduceddemandforourservices.Industryself-regulatorystandardsmaybeimplementedinthefuturethatcouldaffectdemandforourplatformandourabilitytoaccessdataweusetoprovideourplatform.Ifw
112、eexperiencematerialweaknessesordeficienciesinthefutureorotherwisefailtomaintainaneffectivesystemofinternalcontrols,wemaynotbeabletoaccuratelyortimelyreportourfinancialconditionorresultsofoperations,whichmayadverselyaffectinvestorconfidenceinusand,asaresult,thevalueofourcommonstock.Risks Related to t
113、he Ownership of Our Common Stock10IfwecannotmeetthecontinuedlistingrequirementofTheNasdaqGlobalMarket,TheNasdaqGlobalMarketmayde-listourcommonstock,whichwouldhaveanadverseeffectonthetradingvolume,liquidityandmarketpriceofourcommonstock.Themarketpriceofourcommonstockhasbeen,andislikelytocontinuetobe,
114、subjecttowidefluctuationsandcouldsubjectustolitigation.Ifweselladditionalsharesofourcommonstock,thepercentageownershipofourstockholderswillbediluted.RISK FACTORSRisks related to the COVID-19 PandemicThe ongoing COVID-19 global pandemic has adversely affected and may continue to adversely affect our
115、business and operating results.WebelievethattheCOVID-19pandemichashadandmaycontinuetohaveanadverseeffectonmanyofourcustomersandtheirbusinessesandtheirspendingondigitaladvertisingandhashadanadverseeffectonourrecentresultsofoperationsandmaycontinuetoaffectourfutureresultsofoperations.TheCOVID-19pandem
116、ichasresultedintravelrestrictions,prohibitionsoforrestrictionsonnon-essentialactivities,disruptionandshutdownofbusinessesandgreateruncertaintyinglobalfinancialmarkets.WecannotpredicttheextenttowhichtheCOVID-19pandemicwillaffectourbusinessoroperatingresults,whichishighlydependentoninherentlyuncertain
117、futuredevelopments,includingtheseverityofoutbreaksofCOVID-19,theeffectsofnewvariants,theactionstakenbygovernmentsandprivatebusinessesinrelationtoCOVID-19containment,theavailability,deploymentandefficacyofvaccines,andthetransitionfromCOVID-19frombeingapandemictoanendemicillness.Ingeographiesinwhichwe
118、orourcustomersoperate,healthconcernsandpoliticalorgovernmentaldevelopmentsinresponsetoCOVID-19haveresultedin,andcouldcontinuetoresultin,economic,socialorlaborinstabilityorprolongedcontractionsintheindustriesinwhichourcustomersoperate,slowoursalesprocess,resultincustomersnotpurchasingorrenewingsubscr
119、iptionstoourplatformorfailingtomakepayments,andcouldotherwisehaveamaterialadverseeffectonourbusinessandourresultsofoperationsandfinancialcondition.Becauseourplatformisofferedasasubscription-basedservice,theeffectofthepandemicmaynotbefullyreflectedinouroperatingresultsuntilfutureperiods,ifatall.Since
120、mid-March2020,someofourcustomershavereducedtheamountofdigitaladvertisingspendthattheymanageusingourproducts,whichhashadanadverseeffectonourresultsofoperations,andsomeofourcustomershaverequestedextendedpaymentterms,reducedfeesorfeewaivers,earlycontractterminationsandotherformsofcontractrelief.Also,si
121、ncemid-March2020,mostofouremployeeshavenotbeenabletoworkfromourofficesandhavebeenworkingfromhome,whichcouldcausesomedisruptionordelaysinourbusinessactivities,includingourproductdevelopmentefforts.IftheCOVID-19globalpandemiccontinuesforanextendedperiodoftimeorevolvesintoamoresevereworldwidehealthcris
122、isitcouldhaveamaterialadverseeffectonourbusiness,resultsofoperations,financialconditionandcashflows.Risks related to our Financial Condition and Future Operating ResultsIt is difficult to predict our future operating results for many reasons,including because of the ongoing COVID-19 pandemic and its
123、 effects on our customers and digital advertising spend.Ourabilitytoaccuratelyforecastourfutureoperatingresultsislimitedandsubjecttoanumberofuncertainties,includingplanningforandmodelingfuturegrowth.Wehaveencountered,andwillcontinuetoencounter,risksanduncertaintiesfrequentlyexperiencedbygrowingcompa
124、niesinrapidlychangingindustries.Ifourassumptionsregardingtheserisksanduncertainties,whichweusetoplanourbusiness,areincorrectorchangeduetoindustryormarketdevelopments,orifwedonotaddresstheseriskssuccessfully,ouroperatingresultscoulddiffermateriallyfromourexpectationsandourbusinesscouldsuffer.Specific
125、ally,theCOVID-19pandemichassignificantlyaffectedbothU.S.andworldwideeconomicactivity.WebelievethattheCOVID-19pandemichashadanadverseeffectonmanyofourcustomersandtheirbusinessesandtheirspendingondigitaladvertisingandhashadan11adverseeffectonourrecentresultsofoperationsandmaycontinuetoaffectourfuturer
126、esultsofoperations.TheCOVID-19pandemiccouldresultinoneormoreofthefollowingconditions,amongotherpotentialconditions,thatcouldaffectusandourcustomers:increasedriskincollectabilityofaccountsreceivable;reducedstaffproductivityduetoworkingathomeforextendedperiods;loststaffproductivityduetoillnessand/oril
127、lnessinthefamily;increasedcustomerlosses/churn;increasedchallengesinacquiringnewcustomers;extremecurrencyexchange-ratefluctuations;andchallengeswithInternetinfrastructureduetohighloads.ThedurationandscopeoftheCOVID-19pandemicishighlyuncertain.WecontinuetomonitortheeffectthattheCOVID-19pandemicmayhav
128、e,andwhileitisnotpossibleatthistimetoestimatetheongoingimpactthatCOVID-19willhaveonourbusiness,thecontinuedspreadofCOVID-19,includingnewvariants,andthemeasurestakenbythegovernmentsofcountriesaffected,mayhaveanadverseimpactonglobaleconomicconditions,whicharelikelytohaveanadverseeffectonourbusinessand
129、financialcondition.We have a history of losses and we may not achieve or sustain profitability in the future.Wehaveincurredsignificantlossesineachfiscalyearsinceourincorporationin2006.Weexperiencedanetlossof$12.9millionand$14.1millionduringtheyearsended2021and2020,respectively.AsofDecember31,2021,we
130、hadanaccumulateddeficitof$304.1million.Thelossesandaccumulateddeficithavebeenduelargelytothesubstantialinvestmentsthatwehavemadeandcontinuetomaketoattempttogrowourbusinessandacquirecustomers.Ourcostofrevenuesandoperatingexpensescouldincreaseinthefutureduetoinvestmentstogrowourbusiness,acquirecustome
131、rsanddevelopourplatformandnewfunctionality.Theseeffortsmayprovemoreexpensivethanwecurrentlyanticipate,andwemaynotsucceedinincreasingourrevenuessufficientlytooffsetthesehigherexpenses.ManyofoureffortstogeneraterevenuesfromourbusinessarenewandunprovenandexacerbatedbytheeffectsoftheCOVID-19pandemic,and
132、anyfailuretoincreaseourrevenuesorgeneraterevenuesfromnewsolutionsortomaintainorincreaserevenuesfromexistingproductsandcustomerscouldpreventusfromattainingorincreasingprofitability.Ourrevenueshavedecreasedinrecentperiods,includingadeclinefrom$30.0millionin2020to$24.4millionin2021.Wedonotexpecttobepro
133、fitablein2022,andwecannotbecertainthatwewillbeabletoattainprofitabilityonaquarterlyorannualbasis,orifwedo,thatwewillsustainprofitability.We expect to continue to incur losses and experience negative cash flows,and we may need to reduce operating expenses,sell additional securities,sell assets or bor
134、row additional funds to fund our business plans.Wecurrentlyoperateatalossandweanticipatethatwewillcontinuetohaveoperatinglossesinthenearterm.Ourbusinesshasnotgeneratedenoughcashflowtofundoursalesandmarketingactivities,researchanddevelopmentinitiativesandotherbusinessactivities.Weanticipatethatincrea
135、singourmarketshareforourcurrentservicesthroughsalesandmarketingefforts,continuingdevelopmentofnewplatformfeaturesanddeliveringefficientservicetocustomerswillrequireadditionalcapitalandexpendituresandmaybemademorechallenginggiventhelingeringeffectsoftheCOVID-19pandemic.Ifwedonotrealizeincreasesinourr
136、evenue,wemayneedtoreduceoperatingexpensesthroughsuccessfulcost-cuttingmeasuresorseektoselladditionalsecurities,sellassetsorborrowadditionalfundstofundourbusinessplans.Thereisnoguaranteethatwewillbeabletosuccessfullyreduceouroperatingexpensesthroughsuccessfulcostcuttingmeasures.Further,thereisnoguara
137、nteethatwewillbeabletoissueadditionalsecuritiesorsellassetsinfutureperiodsorborrowfundsoncommerciallyreasonableterms,oratall,inordertomeetourcashneeds.Ourabilitytoraiseadditionalfinancingissubjecttoanumberofuncertainties,includingbutnotlimitedto,themarketdemandforourstock,ourfinancialperformanceando
138、utlook,themarketdemandforproductsandservices,negativeeconomicdevelopments,theeconomiceffectsoftheCOVID-19pandemicandadversemarketconditions.Ourabilitytoreturntogrowthandtorealizeprofitabilityissubstantiallydependentuponourabilitytoimprovecustomerretentionrates,increasenewbookings,andmanageourcashflo
139、ws.Otherfactorsthatmaysignificantlyaffectourabilitytofundourbusinessplansincludeoneormoreofthefollowing;ourabilitytoraiseadditionalfinancing,andourabilitytofurtherreduceourexpenses.We may require additional capital to support business growth,and this capital might not be available on acceptable term
140、s,if at all.Weintendtocontinuetomakeinvestmentstosupportourbusinessgrowthandmayrequireadditionalfundstorespondtobusinesschallenges,includingtheneedtodevelopnewfeaturesorenhanceourexistingplatform,continuethedeploymentofMarinOne,improveouroperatinginfrastructureoracquirecomplementarybusinessesandtech
141、nologies.Accordingly,wemayneedtoengageinequityordebtfinancingstosecureadditionalfunds.Ifweraiseadditionalfundsthroughfurtherissuancesofequityorconvertibledebtsecuritiesourexistingstockholderscouldsuffersignificantdilution,andanynewequitysecuritiesweissuecould12haverights,preferencesandprivilegessupe
142、riortothoseofholdersofourcommonstock.DuringtheyearendedDecember31,2021,wesold5.5millionsharesofourcommonstockunderequitydistributionagreementswithJMPSecuritiesLLC,orJMPSecurities,andreceivedproceedsofapproximately$41.7million,netofofferingcostsof$1.5million,ataweightedaveragesalespriceof$7.85pershar
143、e.The5.5millionsharesofourcommonstockthatweissuedundertheequitydistributionagreementsduring2021increasedthenumberofoutstandingsharesofourcommonstockbyapproximately57%,resultingindilutiontothepercentageownershipofourpreviouslyexistingstockholders.OnAugust2,2021,weenteredintoanewequitydistributionagre
144、ementwithJMPSecuritiesandestablishedanew$50.0million“at-the-market”securitiesofferingfacility,pursuanttowhichwemaybeabletoissueandsellsharesofourcommonstock.WehavenotyetsoldanysharesunderthisAugust2021equitydistributionagreement.InaccordancewiththeSECsInstructionI.B.6ofRegistrationStatementonFormS-3
145、,weareadjustingthemaximumaggregatemarketvalueofthesecuritiesthatmaybesoldpursuanttothiscurrentat-the-marketsecuritiesofferingfacilityfrom$50.0milliontoapproximately$22.8millionbasedonourestimatedmarketcapitalizationonthedatewefilethisAnnualReportuntilsuchtimewhenweareeligibletoconductsuchofferingina
146、ccordancewithInstructionI.B.1oftheRegistrationStatementonFormS-3.InMay2020,weenteredintoaloanagreementwithHarvestSmallBusinessFinance,LLC,ortheLender,asthelenderforaloaninanaggregateprincipalamountof$3.3million,ortheLoan,pursuanttothePaycheckProtectionProgramundertheCoronavirusAid,Relief,andEconomic
147、Security(CARES)Act.Anaggregateprincipalamountof$3.1millionoftheLoanwasforgiveninJanuary2022andwerepaidtheremainingoutstandingbalanceof$0.2millioninFebruary2022.TheU.S.DepartmentoftheTreasury,ortheTreasury,andtheU.S.SmallBusinessAdministration,ortheSBA,haveannouncedthattheywillreviewallPayrollProtect
148、ionProgramloansthatequalorexceed$2.0million.WhilewebelievethatweactedingoodfaithandcompliedwithallrequirementsofthePayrollProtectionProgram,ifTreasuryorSBAdeterminedthatourLoanapplicationwasnotmadeingoodfaithorthatwedidnototherwisemeettheeligibilityrequirementsofthePayrollProtectionProgram,wecouldbe
149、requiredtoreturntheLoanoraportionthereof.Anyadditionaldebtfinancingsecuredbyusinthefuturecouldinvolverestrictivecovenantsrelatingtoourcapitalraisingactivitiesandotherfinancialandoperationalmatters,whichmaymakeitmoredifficultforustoobtainadditionalcapitalandtopursuebusinessopportunities,includingpote
150、ntialacquisitions.Inaddition,wemaynotbeabletoobtainadditionalfinancingontermsfavorabletous,ifatall.Ifweareunabletoobtainadequatefinancingorfinancingontermssatisfactorytous,whenwerequireit,ourabilitytocontinuetosupportourbusinessgrowthandtorespondtobusinesschallengescouldbesignificantlyimpaired.Our u
151、sage-based pricing model makes it difficult to forecast revenues from our current customers and future prospects.Weprimarilyhaveausage-basedpricingmodelinwhichmostofourfeesarecalculatedasapercentageofcustomersadvertisingspendmanagedonourplatform.Thispricingmodelmakesitdifficulttoaccuratelyforecastre
152、venuesbecauseourcustomersadvertisingspendmanagedbyourplatformmayvaryfrommonthtomonthbasedonthevarietyofindustriesinwhichouradvertisersoperate,theseasonalityofthoseindustriesandfluctuationsinourcustomersadvertisingbudgetsorotherfactors.Themarketfordigitaladvertisingmaybeadverselyaffectedbyadversemark
153、etconditions,includingtheeconomiceffectsoftheCOVID-19pandemic,whichhascausedsomeadvertisersto,andmaycontinuetoleadadvertisersto,reducetheamountoftheirdigitaladvertisingspend.Oursubscriptioncontractswithourdirectadvertisercustomersgenerallycontainaminimummonthlyplatformfee,whichisgenerallygreaterthan
154、one-halfofourestimatedmonthlyrevenuesfromthecustomeratthetimethecontractissigned,and,asaresult,theminimummonthlyplatformfeemaynotbeagoodindicatorofourrevenuesfromthatcustomer.Inaddition,advertisersthatuseourplatformthroughouragencycustomerstypicallydonothaveaminimummonthlyspendamountoraminimumtermdu
155、ringwhichtheymustuseourplatform,andasaresult,ourabilitytoforecastrevenuesfromtheseadvertisersisdifficult.Ifweincorrectlyforecastrevenuesfortheseadvertisersandtheamountofrevenueislessthanprojectionsweprovidetoinvestors,thepriceofourcommonstockcoulddeclinesubstantially.Additionally,ifweoverestimateusa
156、ge,wemayincuradditionalexpensesinaddinginfrastructure,withoutacommensurateincreaseinrevenues,whichwouldharmourgrossmarginsandotheroperatingresults.We may experience quarterly fluctuations in our operating results due to a number of factors which make our future results difficult to predict and could
157、 cause our operating results to fall below expectations or our guidance.Ourquarterlyoperatingresultsmayfluctuateduetoavarietyoffactors,manyofwhichareoutsideofourcontrol.Asaresult,comparingouroperatingresultsonaperiod-to-periodbasismaynotbemeaningful.Youshouldnotrelyonourpastresultsasindicativeofourf
158、utureperformance.Ifourrevenuesoroperatingresultsfallbelowtheexpectationsofinvestorsorsecuritiesanalysts,orbelowanyguidancewemayprovidetothemarket,thepriceofourcommonstockcoulddeclinesubstantially.Inadditiontootherriskfactorslistedinthissection,factorsthatmayaffectourquarterlyoperatingresultsincludet
159、hefollowing:theimpactof,includingbutnotlimitedto,themarketvolatilityandeconomicdisruptioncausedby,COVID-19oranyotherworldwidepandemic;thelevelofadvertisingspendmanagedthroughourplatformforaparticularquarter;13fluctuationsinthecontractualratesofourstrategicagreementswithpublishers;customerrenewalrate
160、s,andthepricingandusageofourplatforminanyrenewalterm;demandforourplatformandthesizeandtimingofoursales;customersdelayingpurchasingdecisionsinanticipationofnewreleasesbyusorofnewproductsbyourcompetitors;anyterminationoradversechangesintheGoogleRevenueShareAgreement,oranychangesinanyothercurrentorfutu
161、restrategicagreementswithpublishers;delaysinprojectstoupgradeourownsoftwareplatforminfrastructureandanyresultingdelaysinreleasingnewfeatures;networkorsystemoutages,platformdowntime,softwareapplicationoroperationserrors,softwarebugs,securitybreachesorothersuppliersystemorsupplychainchangesorinterrupt
162、ionsandanyassociatedcredits,warrantyclaimsorotherexpenses;changesinthecompetitivedynamicsofourindustry,includingconsolidationamongcompetitorsorcustomers;marketacceptanceofourcurrentandfuturesolutions;changesinspendingondigitaladvertisingorinformationtechnologyandsoftwarebyourcurrentand/orprospective
163、customers;budgetingcyclesofourcustomers;departuresofemployeesorrestructuringsofourteamsorpersonnel;ourpotentiallylengthysalescycle;ourabilitytocontrolcosts,includingouroperatingexpenses;theamountandtimingofinfrastructurecostsandoperatingexpensesrelatedtothemaintenanceorexpansionofourbusiness,operati
164、onsandinfrastructure;foreigncurrencyexchangeratefluctuations;andgeneraleconomicandpoliticalconditionsinourdomesticandinternationalmarkets,includingpotentialhostilitiesininternationalmarketsandinflationintheUnitedStates.Baseduponallofthefactorsdescribedabove,wehavealimitedabilitytoforecastourfuturere
165、venues,costsandexpenses,andasaresult,ouroperatingresultsmayfromtimetotimefallbelowourestimatesortheexpectationsofpublicmarketanalystsandinvestors.Risks related to our Business and MarketIf the market for digital advertising slows or declines,our business,growth prospects,and financial condition woul
166、d be adversely affected.Thefuturegrowthofourbusinesscouldbeconstrainedbythelevelofacceptanceandexpansionofemergingcloud-basedadvertisingchannels,aswellasthecontinueduseandgrowthofexistingchannels,suchassearchandsocialadvertising.Evenifthesechannelsbecomewidelyadopted,advertisersandagenciesmaynotmake
167、significantinvestmentsinsolutionssuchasoursthathelpthemmanagetheirdigitaladvertisingspendacrosspublisherplatformsandadvertisingchannels.Itisdifficulttopredictcustomeradoptionrates,customerdemandforourplatform,thefuturegrowthrateandsizeoftheadvertisingcloudsolutionsmarketortheentryofcompetitivesoluti
168、ons.Themarketfordigitaladvertisingmaybeadverselyaffectedbyadversemarketconditions,includingtheeconomiceffectsoftheCOVID-19pandemic,whichhascausedsomeadvertisersto,andmaycontinuetoleadadvertisersto,reducetheamountoftheirdigitaladvertisingspend.Thecontinuedexpansionofthemarketforadvertisingcloudsoluti
169、onsdependsonanumberoffactors,includingthecontinuedgrowthofthecloud-basedadvertisingmarket,thegrowthofsocialandmobileasadvertisingchannelsandthecost,performanceandperceivedvalueassociatedwithadvertisingcloudsolutions,aswellastheabilityofcloudcomputingcompaniestoaddresssecurityandprivacyconcerns.Furth
170、er,thecloudcomputingmarketislessdevelopedinmanyjurisdictionsoutsidetheUnitedStates.Ifweorothercloudcomputingprovidersexperiencesecurityincidents,lossofcustomerdata,disruptionsindeliveryorotherproblems,themarketforcloudcomputingasawhole,includingourapplications,maybenegativelyaffected.14We operate in
171、 a rapidly developing and changing industry,which makes it difficult to evaluate our current business and future prospects.Wehaveencounteredandwillcontinuetoencounterrisksanddifficultiesfrequentlyexperiencedbycompaniesinrapidlydevelopingandchangingindustries,includingchallengesinforecastingaccuracy,
172、hiringandretainingqualifiedemployees,determiningappropriateinvestmentsofourlimitedresources,marketacceptanceofourexistingandfuturesolutions,effectivelyintegratingacquiredproducts,competitionfromestablishedcompanieswithgreaterfinancialandtechnicalresources,acquiringandretainingcustomers,managingcusto
173、merdeployments,makingimprovementstoourexistingproductsanddevelopingnewsolutions.Additionally,theeffectsoftheCOVID-19pandemichavemadethesechallengesmorepronounced.Ourcurrentoperationsinfrastructuremayrequirechangesinorderforustoachieveprofitabilityandscaleouroperationsefficiently.Forexample,wemayneed
174、toautomateportionsofoursolutiontodecreaseourcosts,ensureourmarketinginfrastructureisdesignedtodrivehighlyqualifiedleadscosteffectivelyandimplementchangesinoursalesmodeltoimprovethepredictabilityofoursalesandreduceoursalescycle.Inaddition,fromtimetotime,wemayneedtomakeadditionalinvestmentsinproductde
175、velopmenttoaddressmarketdemands,whichmayincreaseouroverallexpensesandreduceourabilitytoachieveprofitability.Ifwefailtoimplementthesechangesinatimelymannerorareunabletoimplementthemduetofactorsbeyondourcontrol,ourbusinessmaysuffer,ourrevenuemaydeclineandwemaynotbeabletoachievegrowthorprofitability.We
176、cannotbeassuredthatwewillbesuccessfulinaddressingtheseandotherchallengeswemayfaceinthefuture.We must develop and introduce enhancements and new features that achieve market acceptance or that keep pace with technological developments to remain competitive in our evolving industry.Weoperateinadynamic
177、marketcharacterizedbyrapidlychangingtechnologiesandindustryandlegalstandards.Theintroductionofnewadvertisingplatformsolutionsbyourcompetitors,themarketacceptanceofsolutionsbasedonneworalternativetechnologies,ortheemergenceofnewindustrystandardscouldrenderourplatformobsolete.Ourabilitytocompetesucces
178、sfully,attractnewcustomersandincreaserevenuesfromexistingcustomersdependsinlargepartonourabilitytoenhanceandimproveourexistingcross-channel,cross-device,enterprisemarketingsoftwareplatformandtocontinuallyintroduceoracquirenewfeaturesthatareindemandbythemarketweserve.Wealsomustupdateoursoftwaretorefl
179、ectchangesinpublishersapplicationprogramminginterfaces,orAPIs,andtermsofuse.Wehaverecentlydeployedournewplatform,MarinOne,andthesuccessofMarinOneoranyotherenhancementornewsolutiondependsonseveralfactors,includingtimelycompletion,adequatequalitytesting,effectivemigrationofexistingcustomerswithminimal
180、disruptionandappropriateintroductionandmarketacceptance.Anynewplatformorfeaturethatwedeveloporacquiremaynotbeintroducedinatimelymanner,maycontaindefects,maybemorecostlytocompetethanweanticipateormaynotachievethebroadmarketacceptancenecessarytogeneratesignificantrevenues.Ifweareunabletocompletetheupg
181、radetooursoftwareplatforminfrastructureeffectivelyorinatimelymanner,ortoanticipateortimelyandsuccessfullydeveloporacquirenewofferingsorfeaturesorenhanceourexistingplatformtomeetcustomerrequirements,ourbusinessandoperatingresultswillbeadverselyaffected.If we are unable to maintain our relationships w
182、ith,and access to,publishers,advertising exchange platforms and other platforms that aggregate the supply of advertising inventory,our business will suffer.Wecurrentlydependonrelationshipswithvariouspublishers,includingAmazon,Apple,Baidu,Bing,Facebook,Google,Instagram,Pinterest,Twitter,VerizonMediaa
183、ndYahoo!.OursubscriptionservicesinterfacewiththesepublishersplatformsthroughAPIs,suchastheGoogleAPIorFacebookAPI.WearesubjecttotherespectiveplatformsstandardAPItermsandconditions,whichgoverntheuseanddistributionofdatafromtheseplatforms.OurbusinesssignificantlydependsonhavingaccesstotheseAPIs,particu
184、larlytheGoogleAPI,whichthesubstantialmajorityofourcustomersuse,oncommerciallyreasonabletermsandourbusinesswouldbeharmedifanyofthesepublishers,advertisingexchangesoraggregatorsofadvertisinginventorydiscontinuesorlimitsaccesstotheirplatforms,modifiestheirtermsofuseorotherpoliciesorplaceadditionalrestr
185、ictionsonusasAPIusers,orchargesAPIlicensefeesforAPIaccess.Moreover,someofthesepublishers,suchasGoogle,marketcompetitivesolutionsfortheirplatforms.BecausetheadvertisinginventorysupplierscontroltheirAPIs,theymaydevelopcompetitiveofferingsthatarenotsubjecttothelimitsimposedonusthroughtheAPItermsandcond
186、itions.Currently,restrictionsintheseAPIagreementslimitourabilitytoimplementcertainfunctionality,requireustoimplementfunctionalityinaparticularmannerorrequireustoimplementcertainrequiredminimumfunctionality,causingustodevotedevelopmentresourcestoimplementcertainfunctionalitythatwewouldnototherwiseinc
187、ludeinoursubscriptionservicesandtoincurcostsforpersonneltoprovideservicestoimplementfunctionalitythatweareprohibitedfromautomating.Publishers,advertisingexchangesandadvertisinginventoryaggregatorsupdatetheirAPItermsofusefromtimetotimeandnewversionsofthesetermscouldimposeadditionalrestrictionsonus.In
188、addition,publishers,advertisingexchangesandadvertisinginventoryaggregatorscontinuallyupdatetheirAPIsandmayupdateormodifyfunctionality,whichrequiresustomodifyoursoftwaretoaccommodatethesechangesandtodevotetechnicalresourcesandpersonneltotheseeffortswhichcouldotherwisebeusedtofocusonotherpriorities.An
189、yoftheseoutcomescouldcausedemandforourproductstodecrease,ourresearchanddevelopmentcoststoincrease,andourresultsofoperationsandfinancialconditiontobeharmed.15Wehavealsoenteredintolong-termstrategicagreementswithcertainleadingsearchpublishers.Underthesestrategicagreements,wereceiveconsiderationbasedon
190、apercentageofthesearchadvertisingspendthatourcustomersmanageonourplatform.ThemajorityofourstrategicagreementrevenueisconcentratedinonerevenueshareagreementwithGoogle.WeenteredintoouroriginalrevenueshareagreementwithGoogleinDecember2018forathree-yeartermthatranfromOctober1,2018untilSeptember30,2021.W
191、eenteredintoanewrevenueshareagreementwithGoogleinSeptember2021forathree-yeartermscheduledtorunfromOctober1,2021untilSeptember30,2024.UndertheseGoogleRevenueShareAgreements,wehavebeeneligibletoreceivefixedandvariablerevenuesharepaymentsbasedonapercentageofthesearchadvertisingspendthatismanagedthrough
192、ourplatform.FortheyearendedDecember31,2021,werecognizedrevenuesof$8.6millionandfortheyearendedDecember31,2020werecognizedrevenuesof$9.1millionfromtheapplicableGoogleRevenueShareAgreement.GooglehastherighttoterminateourcurrentGoogleRevenueShareAgreementincertaincircumstances,andanyterminationoramendm
193、entofthisagreementwouldhaveamaterialadverseeffectonourresultsofoperations.Our growth depends in part on the success of our relationships with advertising agencies and our strategic relationships with third parties.Ourfuturegrowthwilldepend,inpart,onourabilitytoenterintosuccessfulrelationshipswithadv
194、ertisingagencies.Identifyingagenciesandnegotiatinganddocumentingrelationshipswiththemrequiressignificanttimeandresources.Theserelationshipsmaynotresultinadditionalcustomersorenableustogeneratesignificantrevenues.Ourcontractsfortheserelationshipsaretypicallynon-exclusiveanddonotprohibittheagencyfromw
195、orkingwithourcompetitorsorfromofferingcompetingservices.Frequently,theseagenciesdoinfactworkwithourcompetitorsandcompetewithus.Inaddition,weoftenworkwith,orseektoworkwith,high-profilebrandsdirectly.Thismaynotbepossiblewhere,forexample,thosebrandsobtainadvertisingservicesexclusivelyorprimarilyfromadv
196、ertisingagencies.Wegenerallybillagenciesfortheircustomersuseofourplatform,butinmostcasestheagencyscustomerhasnodirectcontractualcommitmenttomakepaymenttous.Furthermore,someoftheseagencycontractsincludeprovisionswherebytheagencyisnotliableformakingpaymenttousforoursubscriptionservicesiftheagencydoesn
197、otreceiveacorrespondingpaymentfromitsclientonwhosebehalfthesubscriptionserviceswererendered.Theseprovisionsmayresultinlongercollectionsperiodsorourinabilitytocollectpaymentforsomeofoursubscriptionservices.Ifweareunsuccessfulinestablishingormaintainingourrelationshipswiththeseagenciesoncommerciallyre
198、asonableterms,oriftheserelationshipsarenotprofitableforus,ourabilitytocompeteinthemarketplaceortogrowourrevenuescouldbeimpairedandouroperatingresultswouldsuffer.Ourfuturegrowthwillalsodepend,inpart,onourabilitytoenter-intoandretainsuccessfulstrategicrelationshipswiththird-parties.Forexample,wearesee
199、kingtoestablishrelationshipswiththird-partiestodevelopintegrationswithcomplementarytechnologyandcontent.Theserelationshipsmaynotresultinadditionalcustomersorenableustogeneratesignificantrevenues.Forexample,weenteredintotheGoogleRevenueShareAgreementwhereweareeligibletoreceivefixedandvariablerevenues
200、harepaymentsbasedonapercentageofthesearchadvertisingspendthatismanagedthroughourplatform.Identifyingpartnersandnegotiatinganddocumentingrelationshipswiththemrequiresignificanttimeandresources.Ourcontractsfortheserelationshipsaretypicallynon-exclusiveanddonotprohibittheotherpartyfromworkingwithourcom
201、petitorsorfromofferingcompetingservices.Ifweareunsuccessfulinestablishingormaintainingourrelationshipswiththesethirdparties,ourabilitytocompeteinthemarketplaceortogrowourrevenuescouldbeimpairedandouroperatingresultswouldsuffer.We may not be able to compete successfully against current and future com
202、petitors.Theoverallmarketforadvertisingcloudsolutionsisrapidlyevolving,highlycompetitive,complex,fragmented,andsubjecttochangingtechnologyandshiftingcustomerneeds.Wefacesignificantcompetitioninthismarketandweexpectcompetitiontointensifyinthefuture.Wecurrentlycompetewithlarge,well-establishedcompanie
203、s,suchasGoogleInc.andAdobeSystemsIncorporated,andprivatelyheldcompanies,suchasKenshooLtd.(orSkai).Wealsocompetewithchannel-specificofferings,in-houseproprietarytools,toolsfrompublishersandcustomsolutions,includingspreadsheets.Increasedcompetitionmayresultinreducedpricingforoursolutions,longersalescy
204、clesoradecreaseofourmarketshare,anyofwhichcouldnegativelyaffectourrevenuesandfutureoperatingresultsandourabilitytogrowourbusiness.Anumberofcompetitivefactorscouldcauseustolosepotentialsalesortoselloursolutionsatlowerpricesoratreducedmargins,including,amongothers:publishersgenerallyoffertheirtoolsfor
205、free,oratareducedprice,astheirprimarycompensationisviathesaleofadvertisingontheirownorsyndicatedwebsites;someofourcompetitors,suchasAdobe,FacebookandGoogle,havegreaterfinancial,marketingandtechnicalresourcesthanwedo,allowingthemtoleveragealargerinstalledcustomerbase,adoptmoreaggressivepricingpolicie
206、s,anddevotegreaterresourcestothedevelopment,promotionandsaleoftheirproductsandservicesthanwecan;16channel-specificcompetitors,suchasKenshooLtd.(Skai)andSmartly.io,maydevotegreaterresourcestothedevelopment,promotionandsaleoftheirchannel-specificproductsandservicesthanwecan;companiesmayenterourmarketb
207、yexpandingtheirplatformsoracquiringacompetitor;andpotentialcustomersmaychoosetodeveloporcontinuetouseinternalsolutionsratherthanpayingforoursolutionsormaychoosetouseacompetitorssolutionthathasdifferentoradditionaltechnicalcapabilities.Wecannotassureyouthatwewillbeabletocompetesuccessfullyagainstcurr
208、entandfuturecompetitors.Ifwecannotcompetesuccessfully,ourbusiness,resultsofoperationsandfinancialconditioncouldbenegativelyimpacted.In2020,U.S.federalandstateandforeigngovernmentsandregulatoryagenciesinitiatedlawsuitsorinvestigationsagainstGoogleandFacebookrelatedtocertainoftheiranticompetitivebusin
209、esspracticesandconductinthedigitaladvertisingandsocialmediaindustriesandwecannotbecertainastohowsuchlawsuitsandinvestigationsmightaffectGoogleorFacebookorotherwiseaffectthedigitaladvertisingindustry.Wearenotapartytoanysuchlawsuitsorinvestigations.Asaparticipantinthedigitaladvertisingindustryandhavin
210、gbusinessrelationshipswithGoogle,certaingovernmentalauthoritiesandGooglehaverequestedustoprovideinformationtotheminconnectionwithsuchlawsuitsandinvestigations,andrespondingtosuchrequestshascausedustoincur,andmaycauseustoincurinthefuturefromtimetotime,professionalfeesandotherexpensesinconnectionwithr
211、espondingtosuchrequests.Our business depends on our customers continued willingness to manage advertising spend on our platform.Inorderforustoimproveouroperatingresults,itisimportantthatourcustomerscontinuetomanagetheiradvertisingspendonourplatform,increasetheirusageandalsopurchaseadditionalsolution
212、sfromus.Inthecaseofourdirectadvertisercustomers,weofferoursolutionsprimarilythroughsubscriptioncontractsandgenerallybillcustomersovertherelatedsubscriptionperiod,whichisgenerallyoneyearorlonger.Duringthetermoftheircontracts,ourdirectadvertisercustomersgenerallyhavenoobligationtomaintainorincreasethe
213、iradvertisingspendonourplatformbeyondaspecifiedminimummonthlyplatformfee,whichistypicallysetatthetimethecontractissignedandisgenerallygreaterthanhalfofthemonthlyamountweanticipatethecustomerwillspend.Ourdirectadvertisercustomersgenerallyhavenorenewalobligationaftertheinitialorthen-currentrenewalsubs
214、criptionperiodexpires,andevenifcustomersrenewcontracts,theymaydecreasetheleveloftheirdigitaladvertisingspendmanagedthroughourplatform,resultinginlowerrevenuesfromthatcustomer.Advertisersthatweservethroughourarrangementswithouradvertisingagenciesgenerallydonothaveanycontractualcommitmenttouseourplatf
215、orm.Ourcustomersusagemaydeclineorfluctuateasaresultofanumberoffactors,including,butnotlimitedto,theirsatisfactionwithourplatformandourcustomersupport,thefrequencyandseverityofoutages,thepricingofour,orcompeting,solutions,theeffectsofglobaleconomicconditionsandreductionsinspendinglevelsorchangesinour
216、customersstrategiesregardingdigitaladvertising.Wemaynotbeabletoaccuratelypredictfutureusagetrends.Ifourcustomersrenewonlessfavorabletermsorreducetheiradvertisingspendonourplatform,ourrevenuesmaygrowmoreslowlythanexpectedordecline.Unfavorable conditions in the market for digital advertising or the gl
217、obal economy or reductions in digital advertising spend could negatively affect our operating results.Potentialrevenuegrowthandprofitabilityofourbusinessdependsondigitaladvertisingspendbyadvertisersinthemarketsweserve.Ouroperatingresultsmayvarybasedonchangesinthemarketfordigitaladvertisingorthegloba
218、leconomy.Totheextentthatweakeconomicconditionscauseourcustomersandpotentialcustomerstofreezeorreducetheiradvertisingbudgets,particularlydigitaladvertising,demandforoursolutionmaybenegativelyaffected.Historically,economicdownturnshaveresultedinoverallreductionsinadvertisingspend.Ifeconomicconditionsd
219、eteriorateortheriseofgeopoliticalinstabilityandmilitaryhostilitiesorglobalhealthemergenciesandpandemicssuchasCOVID-19causeseconomicuncertainty,ourcustomersandpotentialcustomersmayelecttodecreasetheiradvertisingbudgetsordeferorreconsidersoftwareandservicepurchases,whichwouldlimitourabilitytogrowourbu
220、sinessandnegativelyaffectouroperatingresults.Operational RisksOur business depends on retaining and attracting qualified personnel,and turnover may result in operational inefficiencies that could negatively affect our business.Oursuccessdependsuponthecontinuedserviceofourtalentedmanagement,operation
221、alandkeytechnicalemployees,aswellasourabilitytocontinuetoattractadditionalhighlyqualifiedtalent.Wehaveexperiencedemployeeattritionandhaveconductedrestructuringactions.Anychangesinouroperationsandmanagementteamcouldbedisruptivetoouroperations.Anyfuturerestructuringactionsoremployeeattritioncouldhavea
222、nadverseeffectonourbusinessasaresultofoperationalandadministrativeinefficienciesandaddedcosts,decreasesinemployeemoraleandthefailuretomeetoperationaltargetsduetothelossofemployees.Ifkeyemployeesleave,wemaynotbeabletofullyintegratenewpersonnelorreplicatethepriorworkingrelationships,whichcould17advers
223、elyaffectourresultsofoperations,stockpriceandcustomerrelationships,andcouldmakerecruitingforfuturemanagementandotherpositionsmoredifficult.Inaddition,wemustsuccessfullyintegrateanynewseniormanagementandothernewpersonnelwithinourorganizationinordertoachieveouroperatingobjectives,andchangesinotherkeyp
224、ositionsmaytemporarilyaffectourfinancialperformanceandresultsofoperationsasnewemployeesbecomefamiliarwithourbusiness.Wedonotmaintainkeypersonlifeinsurancepoliciesonanyofouremployees.Eachofourexecutiveofficers,keytechnicalpersonnelandotheremployeescouldterminatehisorherrelationshipwithusatanytime.Our
225、businessalsorequiresskilledtechnical,salesandotherpersonnel,whoareinhighdemandandareoftensubjecttocompetingoffers.Ifweexpandintoadditionalgeographicmarkets,wewillrequirepersonnelwithexpertiseinthesenewareas.CompetitionforqualifiedemployeesisparticularlyintenseinourindustryandparticularlyinSanFrancis
226、co,California.Inaddition,wemayconsiderexpandingourboardofdirectorstoaddnewexperienceandexpertisetoourboardandtocomplywithpendingboarddiversityrequirements.Boardcandidatesmaybedifficultandexpensivetorecruitandretainandwemayincurpenaltiesifwefailtocomplywithboarddiversityrequirementsbyapplicabledeadli
227、nes.Aninabilitytoretain,attract,relocateandmotivateemployeesanddirectorsrequiredforourbusinesscoulddelayorpreventtheachievementofourbusinessobjectivesandcouldmateriallyharmourbusinessandourcustomerrelationships.We incur upfront costs associated with onboarding advertisers to our platform and may not
228、 recoup our investment if we do not maintain the advertiser relationship over time.Ouroperatingresultsmaybenegativelyaffectedifweareunabletorecoupourupfrontcostsforonboardingnewadvertiserstoourplatform.Upfrontcostswhenaddingnewadvertisersgenerallyincludesalescommissionsforoursalesforce,expensesassoc
229、iatedwithenteringcustomerdataintoourplatformandotherimplementation-relatedcosts.Becauseourcustomers,includingdirectadvertisersandagencies,arebilledoverthetermofthecontract,ifnewcustomerssigncontractswithshortinitialsubscriptionperiodsanddonotrenewtheirsubscriptions,orotherwisedonotcontinuetouseourpl
230、atformtoalevelthatgeneratesrevenuesinexcessofourupfrontexpenses,ouroperatingresultscouldbenegativelyimpacted.Incasesinwhichtheimplementationprocessisparticularlycomplex,therevenuesresultingfromthecustomerunderourcontractmaynotcovertheupfrontinvestment;therefore,ifasignificantnumberofthesecustomersdo
231、notrenewtheircontracts,itcouldnegativelyaffectouroperatingresults.Inaddition,becausewecapitalizecertainupfrontcoststoobtainandfulfillcontractsunderauthoritativeaccountingguidance,wecouldberequiredtorecordimpairmentexpensefortheseupfrontcostsiftheestimatedrevenueforthesecontractsisnotrealized.Because
232、 we generally bill our customers over the term of the contract,near term decline in new or renewed subscriptions may not be reflected immediately in our operating results.Mostofourrevenuesineachquarterarederivedfromcontractsenteredintowithourcustomersduringpreviousquarters.Consequently,adeclineinnew
233、orrenewedsubscriptionsinanyonequartermaynotbefullyreflectedinourrevenuesforthatquarter.Suchdeclines,however,wouldnegativelyaffectourrevenuesinfutureperiodsandtheeffectofsignificantdownturnsinsalesandmarketacceptanceofoursolutions,andpotentialchangesinourrateofrenewalsorrenewalterms,maynotbefullyrefl
234、ectedinourresultsofoperationsuntilfutureperiods.Inaddition,wemaybeunabletoadjustourcoststructurerapidly,oratall,totakeaccountofreducedrevenues.Oursubscriptionmodelalsomakesitdifficultforustorapidlyincreaseourtotalrevenuesthroughadditionalsalesinanyperiod,asrevenuesfromnewcustomersmustbeearnedoverthe
235、applicablesubscriptiontermbasedonthevalueoftheirmonthlyadvertisingspend.We have been dependent on our customers use of search advertising.Any decrease in the use of search advertising or our inability to further penetrate social and eCommerce advertising channels would harm our business,growth prosp
236、ects,operating results and financial condition.Historically,ourcustomershaveprimarilyusedoursolutionsformanagingtheirsearchadvertising,includingmobilesearchadvertising,andthesubstantialmajorityofourrevenueisderivedfromadvertisersthatuseourplatformtomanagetheirsearchadvertising.Weexpectthatsearchadve
237、rtisingwillcontinuetobetheprimarychannelusedbyourcustomersfortheforeseeablefuture.Shouldourcustomersloseconfidenceinthevalueoreffectivenessofsearchadvertising,orifsearchadvertisinggrowthmoderatesordeclines,thedemandforoursolutionsmaydecline,anditmaynegativelyimpactourrevenues.Inaddition,ourfailureto
238、achievemarketacceptanceofoursolutionforthemanagementofsocialandeCommerceadvertisingspendwouldharmourgrowthprospects,operatingresultsandfinancialcondition.Our sales cycle can be long and unpredictable and require considerable time and expense,which may cause our operating results to fluctuate.Thesale
239、scycleforoursolutions,frominitialcontactwithapotentialleadtocontractexecutionandimplementation,varieswidelybycustomer,butcantakebetweenthreeandninemonths.Someofourcustomersundertakeasignificantevaluationprocessthatfrequentlyinvolvesnotonlyoursolutionsbutalsothoseofourcompetitors,whichhasinthepastres
240、ultedinextendedsalescycles.Oursaleseffortsinvolveeducatingourcustomersabouttheuse,technicalcapabilitiesandbenefitsofourplatform.Inaddition,undercertaincircumstances,wesometimesofferaninitialterm,typicallyofafewmonthsinduration,tonewcustomerswhomayterminatetheirsubscriptionatanytimeduringthisinitialp
241、eriodbeforethefixedtermcontractcommences.Wehavenoassurancethatthesubstantialtimeandmoneyspentonoursaleseffortswillproduceanysales.Ifoursaleseffortsresultinanewcustomer18subscription,thecustomermayterminateitssubscriptionduringtheinitialperiod,afterwehaveincurredtheexpensesassociatedwithenteringthecu
242、stomersdatainourplatformandrelatedtrainingandsupport.Ifsalesexpectedfromacustomerarenotrealizedinthetimeperiodexpectedornotrealizedatall,orifacustomerterminatesduringtheinitialperiod,ourbusiness,operatingresultsandfinancialconditioncouldbeadverselyaffected.Historically,asignificantportionoffieldsale
243、sandprofessionalserviceswereconductedinperson.Currently,asaresultoftheworkandtravelrestrictionsrelatedtotheongoingCOVID-19pandemic,substantiallyallofoursalesandprofessionalservicesactivitiesarebeingconductedremotely.Asofthedateofthisreport,wedonotyetknowtheextentofthenegativeimpactonourabilitytoattr
244、act,serve,retainorupsellcustomers.Our ability to generate revenue depends on our collection of significant amounts of data from various sources.OurabilitytooptimizethedeliveryofInternetadvertisementsforourcustomersdependsonourabilitytosuccessfullyleveragedata,includingdatathatwecollectfromourcustome
245、rsaswellasdataprovidedbypublishersandfromthirdparties.Usingcookiesandsimilartrackingtechnologies,wecollectinformationabouttheinteractionofuserswithouradvertisersandpublisherswebsites.Ourabilitytosuccessfullyleveragesuchdataisdependentuponourcontinuedabilitytoaccessandutilizesuchdata.Ourabilitytoacce
246、ssandusesuchdatacouldberestrictedbyanumberoffactors,includingconsumerchoice,restrictionsimposedbyadvertisersandpublishers,changesintechnology,andnewdevelopmentsinlaws,regulations,andindustrystandards.Forexample,thereleasebyAppleofitsiOS14operatingsystemsinApril2021broughtwithitanumberofnewchanges,in
247、cludingtheneedformobileappuserstoopt-inbeforetheiridentifierforadvertisers,orIDFA,canbeaccessedbyanapp.ApplesIDFAisastringofnumbersandlettersassignedtoAppledeviceswhichadvertisersusetoidentifyappuserstodeliverpersonalizedandtargetedadvertising.AlthoughwedonotrelyheavilyonIDFA,lowopt-inratestograntID
248、FAaccessmayresultinadvertisersrethinkingtheirconversiontrackingstrategy.Anyreducedabilityofadvertiserstoaccuratelytargetandmeasuretheiradvertisingcampaignsmaycausespendfluctuations.Ifconsumerresistancetothecollectionandsharingofthedatausedtodelivertargetedadvertisingcontinuestoincrease,ortheuseandad
249、optionofconsent/DoNotTrackmechanismsincreasesasaresultofindustryregulatoryand/orlegaldevelopments,and/ornewtechnologiesaredevelopedanddeployedthathaveamaterialimpactonourabilitytocollectdata,suchdevelopmentscouldhaveamaterialadverseeffectonourresultsofouroperations.Material defects or errors in our
250、software platform could harm our reputation,result in significant costs to us and impair our ability to sell our subscription services.Thesoftwareapplicationsunderlyingoursubscriptionservicesareinherentlycomplexandmaycontainmaterialdefectsorerrors,whichmaycausedisruptionsinavailability,misallocation
251、ofadvertisingspendorotherperformanceproblems.Anysucherrors,defects,disruptionsinserviceorotherperformanceproblemswithoursoftwareplatform,includingthoseresultingfromnewversionsorupdatestooursoftwareplatformorfromchangesorinterruptionstothirdpartyapplicationsorsystemsthatweinterconnectwith,couldnegati
252、velyimpactourcustomersbusinessesorthesuccessoftheiradvertisingcampaignsandcauseharmtoourreputation.Ifwehaveanyerrors,defects,disruptionsinserviceorotherperformanceproblemswithoursoftwareplatform,customerscouldelectnottoreneworreducetheirusageordelayorwithholdpaymenttous,whichcouldresultinanincreasei
253、nourprovisionfordoubtfulaccountsoranincreaseinthelengthofcollectioncyclesforaccountsreceivable.Errors,defects,disruptionsinserviceorotherperformanceproblemscouldalsoresultincustomersmakingwarrantyorotherclaimsagainstus,ourgivingcreditstoourcustomerstowardfutureadvertisingspendorcostlylitigation.Chan
254、gesorinterruptionstothirdpartyapplicationsorsystemsthatweinterconnectwithcouldcauseustoincursignificanttimeandexpensetoremedysuchissuesordevelopintegrationswithotherthird-partysuppliers.Asaresult,materialdefectsorerrorsinourplatformcouldhaveamaterialadverseimpactonourbusinessandfinancialperformance.
255、Thecostsincurredincorrectinganymaterialdefectsorerrorsinoursoftwareplatformmaybesubstantialandcouldadverselyaffectouroperatingresults.Afterthereleaseofnewversionsofoursoftware,defectsorerrorsmaybeidentifiedfromtimetotimebyourinternalteamandbyourcustomers.Weimplementbugfixesandupgradesaspartofourregu
256、larlyscheduledsystemmaintenance.Ifwedonotcompletethismaintenanceaccordingtoscheduleorifcustomersareotherwisedissatisfiedwiththefrequencyand/ordurationofourmaintenanceservices,customerscouldelectnottorenew,ordelayorwithholdpaymenttous,orcauseustoissuecredits,makerefundsorpaypenalties.We primarily der
257、ive our revenues from a single software platform and any factor adversely affecting subscriptions to our platform could harm our business and operating results.Weprimarilyderiveourrevenuesfromsalesofasinglesoftwareplatform.Assuch,anyfactoradverselyaffectingsubscriptionstoourplatform,includingproduct
258、releasecycles,marketacceptance,productcompetition,performanceandreliability,reputation,pricecompetition,andeconomicandmarketconditions,couldharmourbusinessandoperatingresults.19If mobile connected devices,their operating systems or content distribution channels,including those controlled by our comp
259、etitors,develop in ways that prevent our advertising campaigns from being delivered to their users,our ability to grow our business will be impaired.Oursuccessinthemobilechanneldependsupontheabilityofourtechnologyplatformtointegratewithmobileinventorysuppliersandprovideadvertisingformostmobileconnec
260、teddevices,aswellasthemajoroperatingsystemsthatrunonthemandtheapplicationsthataredownloadedontothem.Forexample,thereleaseofiOS14broughtwithitanumberofnewchanges,includingtheneedforappuserstoopt-inbeforetheiridentifierforadvertisers,orIDFA,canbeaccessedbyanapp(whichwasreleasedApril26,2021).ApplesIDFA
261、isastringofnumbersandlettersassignedtoAppledeviceswhichadvertisersusetoidentifyappuserstodeliverpersonalizedandtargetedadvertising.AlthoughwedonotrelyheavilyonIDFA,lowopt-inratestograntIDFAaccessmayresultinadvertisersrethinkingtheirconversiontrackingstrategy.Anyreducedabilityofadvertiserstoaccuratel
262、ytargetandmeasuretheiradvertisingcampaignsmaycausespendfluctuations.Further,thedesignofmobiledevicesandoperatingsystemsiscontrolledbythirdpartieswithwhomwedonothaveanyformalrelationships.Thesepartiesfrequentlyintroducenewdevices,andfromtimetotimetheymayintroducenewoperatingsystemsormodifyexistingone
263、s.Networkcarriersmayalsoimpacttheabilitytoaccessspecifiedcontentonmobiledevices.Ifoursolutionwereunabletoworkonthesedevicesoroperatingsystems,eitherbecauseoftechnologicalconstraintsorbecauseanoperatingsystemorappdeveloper,devicemakerorcarrierwishedtoimpairourabilitytopurchaseinventoryandprovideadver
264、tisements,ourabilitytogeneraterevenuecouldbesignificantlyharmed.If our security measures are breached or unauthorized access to customer data or our data is otherwise obtained,our solutions may be perceived as not being secure,customers may reduce the use of or stop using our solutions and we may in
265、cur significant liabilities.Intheordinarycourseofourbusiness,wemaintainsensitivedataonournetworks,includingourintellectualpropertyandproprietaryorconfidentialbusinessinformationrelatingtoourbusinessandthatofourcustomersandbusinesspartners.Thesecuremaintenanceofthisinformationiscriticaltoourbusinessa
266、ndreputation.Despitetheimplementationofsecuritymeasures,ourinternalinformationtechnologysystemsandinfrastructure,andthoseofourcurrentandanyfuturethirdpartiesonwhichwerely,arevulnerabletobreakdownorotherdamageorinterruptionfromserviceinterruptions,systemmalfunction,computerviruses,malware,naturaldisa
267、sters,terrorism,war,telecommunicationandelectricalfailures,cyber-attacksorcyber-intrusionsovertheInternet(includingharmfulattachmentstoemails,ransomware,denial-of-serviceattacks,socialengineering,andothermeanstoaffectservicereliabilityandthreatentheconfidentiality,integrity,andavailabilityofinformat
268、ion),bypersonsinsideourorganization,orbypersonswithaccesstosystemsinsideourorganization.Anyoftheforegoingmaycompromiseoursysteminfrastructure,orthatofourthird-partypartnersandothercontractorsandconsultants,orleadtodataleakage.Theriskofasecuritybreachordisruption,particularlythroughcyber-attacksorcyb
269、er-intrusion,includingbycomputerhackers,foreigngovernments,andcyberterrorists,hasgenerallyincreasedasthenumber,intensityandsophisticationofattemptedattacksandintrusionsfromaroundtheworldhaveincreased.Wemaynotbeabletoanticipatealltypesofsecuritythreats,andwemaynotbeabletoimplementpreventivemeasuresef
270、fectiveagainstallsuchsecuritythreats.Thetechniquesusedbycybercriminalschangefrequently,maynotberecognizeduntillaunched,andcanoriginatefromawidevarietyofsources.Inaddition,theprevalentuseofmobiledevicesthataccessconfidentialinformationincreasestheriskofdatasecuritybreaches,whichcouldleadtothelossofco
271、nfidentialinformationorotherintellectualproperty.Becausetechniquesusedtoobtainunauthorizedaccessortosabotagesystemschangefrequentlyandgenerallyarenotrecognizeduntillaunchedagainstatarget,wemaybeunabletoanticipatethesetechniquesortoimplementadequatepreventativemeasures.Thirdpartiesmayalsoattempttofra
272、udulentlyinduceemployeesorcustomersintodisclosingsensitiveinformationsuchasusernames,passwordsorotherinformationinordertogainaccesstoourcustomersdataorourdata,includingintellectualpropertyandotherconfidentialbusinessinformation.Ifanactualorperceivedbreachofoursecurityoccurs,themarketperceptionofthee
273、ffectivenessofoursecuritymeasurescouldbeharmed,wecouldlosepotentialsalesandexistingcustomersorwecouldincurotherliabilities,whichcouldadverselyaffectourbusiness.Thecoststoustomitigatenetworksecurityproblems,bugs,viruses,worms,malicioussoftwareprogramsandsecurityvulnerabilitiescouldbematerial,andaltho
274、ughwehaveimplementedsecuritymeasurestoprotectourdatasecurityandinformationtechnologysystems,oureffortstoaddresstheseproblemsmaynotbesuccessful,andtheseproblemscouldresultinunexpectedinterruptions,delays,cessationofserviceandotherharmtoourbusinessandourcompetitiveposition.Iftheinformationtechnologysy
275、stemsofourthird-partypartnersandothercontractorsandconsultantsbecomesubjecttodisruptionsorsecuritybreaches,wemayhaveinsufficientrecourseagainstsuchthirdpartiesandwemayhavetoexpendsignificantresourcestomitigatetheimpactofsuchanevent,andtodevelopandimplementprotectionstopreventfutureeventsofthisnature
276、fromoccurring.Weandourthird-partyserviceprovidersregularlydefendagainstandrespondtodatasecurityincidents,andwecannotassureyouthatourdataprotectioneffortsandourinvestmentininformationtechnologywillpreventsignificantbreakdowns,dataleakages,breachesinoursystems,orthoseofourthird-partypartnersandotherco
277、ntractorsandconsultants,orothercyberincidentsthatcouldhaveamaterialadverseeffectuponourreputation,business,operations,orfinancialcondition.Ifsuchaneventweretooccurthatcausesinterruptionsinouroperations,orthoseofourthird-partyvendorsandothercontractorsandconsultants,itcouldresultinamaterialdisruption
278、ordelayofourproductdevelopmentprograms.Furthermore,significantdisruptionsofourinternalinformationtechnologysystemsorthoseofourthird-partyvendorsandothercontractorsandconsultants,orsecuritybreachescouldresultintheloss,misappropriation,and/orunauthorizedaccess,use,ordisclosureof,orthepreventionofacces
279、sto,confidentialinformation20(includingtradesecretsorotherintellectualproperty,proprietarybusinessinformation,andpersonalinformation),whichcouldresultinfinancial,legal,business,andreputationalharmtous.Ifanysuchevent,includingacomputersecuritybreach,resultsintheunauthorizedaccess,useorreleaseofperson
280、allyidentifiableinformation,ourreputationcouldbemateriallydamaged.Inaddition,suchabreachmayrequirenotificationtogovernmentalagencies,themediaorindividualspursuanttovariousfederalandstateprivacyandsecuritylaws(andothersimilarnon-U.S.laws),subjectustomandatorycorrectiveaction,andotherwisesubjectustoli
281、abilityunderlawsandregulationsthatprotecttheprivacyandsecurityofpersonalinformation.Forexample,databreachesfrequentlyresultinregulatoryactionsandcommercialandclassactionlitigationbasedonavarietyoflawsandlegalduties,suchastheCCPA,whichprovidesforaprivaterightofactionintheeventofcertaindatasecuritybre
282、aches.Suchactionscouldresultinsignificantlegalandfinancialexposureandreputationaldamagesthatcouldhaveamaterialadverseeffectonourbusiness,resultsofoperations,prospectsandfinancialcondition.Inaddition,ourinsurancemaynotcoverallcostsfromasecurityincidentorbreach.Theassertionofaclaimagainstourinsurancep
283、oliciescouldresultinpremiumincreases,impositionofalargedeductibleorotheradversecircumstances.We primarily use third-party data centers to deliver our services.Any disruption of service at these facilities could harm our business.Wemanageasignificantportionofourservicesandservesubstantiallyallofourcu
284、stomersfromonlyasinglethird-partydatacenterfacility.Whilewecontroltheactualcomputer,networkandstoragesystemsuponwhichourplatformruns,anddeploythemtothedatacenterfacility,wedonotcontroltheoperationofthefacility.Theownerofthefacilityhasnoobligationtorenewtheagreementwithusoncommerciallyreasonableterms
285、,oratall.Ifweareunabletorenewtheagreementoncommerciallyreasonableterms,wemayberequiredtotransfertoanewfacilityorfacilities,andwemayincursignificantcostsandpossibleserviceinterruptioninconnectionwithdoingso.Thefacilityisvulnerabletodamageorserviceinterruptionresultingfromhumanerror,intentionalbadacts
286、,cyberattacks,earthquakes,hurricanes,floods,fires,war,terroristattacks,powerlosses,hardwarefailures,systemsfailures,telecommunicationsfailuresandsimilarevents.Moreover,whilewehaveadisasterrecoveryplaninplace,wedonotmaintaina“hotfailover”instanceofoursoftwareplatformpermittingustoimmediatelyswitchove
287、rintheeventofdamageorserviceinterruptionatourdatacenter.Theoccurrenceofanaturaldisasteroranactofterrorism,anyoutagesorvandalismorothermisconduct,oradecisiontoclosethefacilitywithoutadequatenoticeorotherunanticipatedproblemscouldresultinlengthyinterruptionsinourservices.Anychangesinservicelevelsatthe
288、facilityoranyerrors,defects,disruptionsorotherperformanceproblemsatorrelatedtothefacilitythataffectourservicescouldharmourreputationandmaydamageourcustomersbusinesses.Interruptionsinourservicesmightreduceourrevenues,subjectustopotentialliability,orresultinreducedusageofourplatform.Inaddition,someofo
289、urcustomercontractsrequireustoissuecreditsfordowntimeinexcessofcertainlevelsandinsomeinstancesgiveourcustomerstheabilitytoterminatetheirsubscriptions.Wealsodependonthird-partyInternet-hostingprovidersandcontinuousanduninterruptedaccesstotheInternetthroughthird-partybandwidthproviderstooperateourbusi
290、ness.IfwelosetheservicesofoneormoreofourInternet-hostingorbandwidthprovidersforanyreasonoriftheirservicesaredisrupted,forexampleduetovirusesor“denial-of-service”orotherattacksontheirsystems,orduetohumanerror,intentionalbadacts,powerloss,hardwarefailures,telecommunicationsfailures,fires,wars,terroris
291、tattacks,floods,earthquakes,hurricanes,tornadoesorsimilarevents,wecouldexperiencedisruptioninourabilitytoofferoursolutionsorwecouldberequiredtoretaintheservicesofreplacementproviders,whichcouldincreaseouroperatingcostsandharmourbusinessandreputation.Depending upon the level of our customers usage of
292、 our software platform,we may need to continually improve our hosting infrastructure to avoid service interruptions or slower system performance.Weseektomaintainsufficientexcesscapacityinourinfrastructuretomeettheneedsofallofourcustomers.Wealsoseektomaintainexcesscapacitytofacilitatetherapidprovisio
293、nofnewcustomerdeploymentsandtheexpansionofexistingcustomerdeployments.Forexample,ifwesecurealargecustomeroragroupofcustomersthatrequiresignificantamountsofbandwidthorstorage,wemayneedtoincreasebandwidth,storage,powerorotherelementsofourapplicationarchitectureandourinfrastructure,andourexistingsystem
294、smaynotbeabletoscaleinamannersatisfactorytoourexistingorprospectivecustomers.Theamountofinfrastructureneededtosupportourcustomersisbasedonourestimatesofanticipatedusage.Ifweweretoexperienceunforeseenincreasesinusage,wecouldberequiredtoincreaseourinfrastructureinvestmentsresultinginincreasedcostsorre
295、ducedgrossmargins,andifwedonotaccuratelypredictourinfrastructurecapacityrequirements,ourcustomerscouldexperienceserviceoutagesthatmaysubjectustofinancialpenaltiesandliabilitiesandresultincustomerlosses.Ifourhostinginfrastructurecapacityfailstokeeppacewithsales,customersmayexperienceserviceinterrupti
296、onsorslowersystemperformance,whichcouldharmourreputationandadverselyaffectourrevenuegrowth.Ascustomersuseoursoftwareplatformformorecomplicatedtasks,we21willneedtodevoteresourcestoimproveourapplicationarchitectureandourinfrastructureinordertomaintaintheperformanceofoursoftwareplatform.Wemayneedtoincu
297、radditionalcoststoupgradeorexpandourcomputersystemsandarchitectureifoursystemscannothandlecurrentorhighervolumesofusage.Inaddition,increasingoursystemsandinfrastructureinadvanceofnewcustomerswouldcauseustohaveincreasedcostofrevenues,whichcanadverselyaffectourgrossmarginsuntilweincreaserevenuesthatar
298、espreadovertheincreasedcosts.Our solutions must integrate with our customers enterprise applications and infrastructures.If we cannot efficiently implement our solutions for customers,we may lose customers.Ourcustomershaveavarietyofdifferentdataformats,enterpriseapplicationsandinfrastructureandourpl
299、atformmustsupportourcustomersdataformatsandintegratewithcomplexenterpriseapplicationsandinfrastructures.Ifourplatformdoesnotcurrentlysupportacustomersrequireddataformatorappropriatelyintegratewithacustomersapplicationsandinfrastructure,thenwemaychoosetoconfigureourplatformtodoso,whichwouldincreaseou
300、rexpenses.Additionally,wedonotcontrolourcustomersimplementationschedules.Asaresult,aswehaveexperiencedinthepast,ifourcustomersdonotallocateinternalresourcesnecessarytomeettheirimplementationresponsibilitiesorifwefaceunanticipatedimplementationdifficulties,theimplementationmaybedelayed.Further,inthep
301、ast,ourimplementationcapacityhasattimesconstrainedourabilitytosuccessfullyimplementoursolutionsforourcustomersinatimelymanner,particularlyduringperiodsofhighdemand.Ifthecustomerimplementationprocessisnotexecutedsuccessfullyorifexecutionisdelayed,wecouldincursignificantcosts,customerscouldbecomedissa
302、tisfiedanddecidenottoincreaseusageofourplatform,nottouseourplatformbeyondaninitialperiodpriortotheirtermcommitmentandrevenuerecognitioncouldbedelayed.Inaddition,competitorswithmoreefficientoperatingmodelswithlowerimplementationcostscouldpenetrateourcustomerrelationships.Additionally,largecustomersma
303、yrequestorrequirespecificfeaturesorfunctionsuniquetotheirparticularbusinessprocesses,whichincreaseourupfrontinvestmentinsalesanddeploymenteffortsandtherevenuesresultingfromthecustomersunderourtypicalcontractlengthmaynotcovertheupfrontinvestments.Ifprospectivelargecustomersrequirespecificfeaturesorfu
304、nctionsthatwedonotoffer,thenthemarketforoursolutionwillbemorelimitedandourbusinesscouldsuffer.Inaddition,supportinglargecustomerscouldrequireustodevotesignificantdevelopmentservicesandsupportpersonnelandstrainourpersonnelresourcesandinfrastructure.Ifweareunabletoaddresstheneedsofthesecustomersinatim
305、elyfashionorfurtherdevelopandenhanceoursolution,thesecustomersmaynotrenewtheirsubscriptions,seektoterminatetheirrelationshipwithus,renewonlessfavorableterms,orreducetheiradvertisingspendonourplatform.Ifanyoftheseweretooccur,ourrevenuesmaydeclineandouroperatingresultscouldbeadverselyaffected.If we ar
306、e unable to maintain or expand our sales and marketing capabilities,we may not be able to generate anticipated revenues.Increasingourcustomerbaseandachievingbroadermarketacceptanceofoursoftwareplatformwilldependtoanextentonourabilitytomaintainorexpandoursalesandmarketingoperationsandactivities.Weare
307、substantiallydependentonoursalesforcetoobtainnewcustomersandourmarketingorganizationtogenerateasufficientpipelineofqualifiedsalesleads.Wemayneedtorestructureorexpandoursalesteaminordertomaintainorincreaserevenuesfromnewandexistingcustomersandtofurtherpenetrateourexistingmarkets.Oursolutionsrequireas
308、ophisticatedsalesforcewithspecificsalesskillsandtechnicalknowledge.Competitionforqualifiedsalespersonnelisintense,andwemaynotbeabletoretainourexistingsalespersonnelorattract,integrate,trainorretainsufficienthighlyqualifiedsalespersonnel.In2020,wecommencedthe2020RestructuringPlantoreduceouroperatinge
309、xpensesandaddresstheimpactoftheCOVID-19pandemiconourbusiness,whichresultedinchangestotheleadership,structureandcompositionofoursalesandmarketingteams.Thesechanges,andanyfuturechanges,inoursalesandmarketingteamscouldbedisruptivetoouroperations.Inaddition,wemayneedtoinvestinleadgenerationactivitiestod
310、evelopourpipelineofqualifiedopportunitiesforoursalesforce,whichcouldincreaseourmarketingexpenses.Ifourleadgenerationactivitiesdonotincreaseourpipelineorifoursalesforceisunabletocloseopportunitiesatahighrate,thenwemaynotgenerateanincreaseinrevenues.22Any failure to offer high-quality technical suppor
311、t services may adversely affect our relationships with our customers and harm our financial results.Ourcustomersdependonoursupportorganizationtoresolveanytechnicalissuesrelatingtooursolutions.However,duetotheCOVID-19pandemic,mostofouremployeesworldwidearecurrentlyworkingremotely,includingourcustomer
312、supportorganization.Weimplementedthe2020RestructuringPlantoreduceouroperatingexpensesandaddresstheimpactoftheCOVID-19pandemiconourbusiness,whichresultedinchangestotheleadership,structureandcompositionofourcustomersupportteams.Thesechanges,andanyfuturechanges,inourcustomersupportteamscouldbedisruptiv
313、etoouroperations.Inaddition,oursalesprocessishighlydependentonthequalityofoursolutions,ourbusinessreputationandonstrongrecommendationsfromourexistingcustomers.Anyfailuretomaintainhigh-qualitytechnicalsupport,oramarketperceptionthatwedonotmaintainhigh-qualitysupport,couldharmourreputation,adverselyaf
314、fectourabilitytoselloursolutionstoexistingandprospectivecustomers,andharmourbusiness,operatingresultsandfinancialcondition.Weoffertechnicalsupportserviceswithoursolutionsandmaybeunabletorespondquicklyenoughtoaccommodateshort-termincreasesincustomerdemandforsupportservices.Wealsomaybeunabletomodifyth
315、eformatofoursupportservicestocompetewithchangesinsupportservicesprovidedbycompetitors.Itisdifficulttopredictcustomerdemandfortechnicalsupportservicesandifcustomerdemandincreasessignificantly,wemaybeunabletoprovidesatisfactorysupportservicestoourcustomers.Additionally,increasedcustomerdemandfortheses
316、ervices,withoutcorrespondingrevenues,couldincreasecostsandadverselyaffectouroperatingresults.Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand.Oursuccessandabilitytocompetedependsinpartuponourintellectualproperty.Wepr
317、imarilyrelyonacombinationofcopyright,tradesecretandtrademarklaws,aswellasconfidentialityproceduresandcontractualrestrictionswithouremployees,customers,partnersandotherstoestablishandprotectourintellectualpropertyrights.However,thestepswetaketoprotectourintellectualpropertyrightsmaybeinadequateorwema
318、ybeunabletosecureintellectualpropertyprotectionforallofoursolutions.Inparticular,wehavefiveissuedU.S.patents.Ifweareunabletoprotectourintellectualproperty,ourcompetitorscoulduseourintellectualpropertytomarketproductsandservicessimilartooursandourabilitytocompeteeffectivelywouldbeimpaired.Moreover,ot
319、hersmayindependentlydeveloptechnologiesthatarecompetitivetooursorinfringeourintellectualproperty.Theenforcementofourintellectualpropertyrightsdependsonourlegalactionsagainsttheseinfringersbeingsuccessful,butwecannotbesuretheseactionswillbesuccessful,evenwhenourrightshavebeeninfringed.Inaddition,defe
320、ndingourintellectualpropertyrightsmightentailsignificantexpenseanddiversionofmanagementresources.Anyofourintellectualpropertyrightsmaybechallengedbyothersorinvalidatedthroughadministrativeprocessesorlitigation.Anypatentsissuedinthefuturemaynotprovideuswithcompetitiveadvantagesormaybesuccessfullychal
321、lengedbythirdparties.Furthermore,legalstandardsrelatingtothevalidity,enforceabilityandscopeofprotectionofintellectualpropertyrightsareuncertain.Effectiveprotectionofourintellectualpropertymaynotbeavailabletousineverycountryinwhichoursolutionsareavailable.Thelawsofsomeforeigncountriesmaynotbeasprotec
322、tiveofintellectualpropertyrightsasthoseintheUnitedStates,andmechanismsforenforcementofintellectualpropertyrightsmaybeinadequate.Accordingly,despiteourefforts,wemaybeunabletopreventthirdpartiesfrominfringinguponormisappropriatingourintellectualproperty.Wemightberequiredtospendsignificantresourcestomo
323、nitorandprotectourintellectualpropertyrights,andoureffortstoenforceourintellectualpropertyrightsmaybemetwithdefenses,counterclaimsandcountersuitsattackingthevalidityandenforceabilityofourintellectualpropertyrights.Litigationtoprotectandenforceourintellectualpropertyrightscouldbecostly,time-consuming
324、anddistractingtomanagement,whetherornotitisresolvedinourfavor,andcouldultimatelyresultintheimpairmentorlossofportionsofourintellectualproperty.We could incur substantial costs as a result of any claim of infringement of another partys intellectual property rights.Inrecentyears,therehasbeensignifican
325、tlitigationintheUnitedStatesinvolvingpatentsandotherintellectualpropertyrights.CompaniesintheInternetandtechnologyindustriesareincreasinglybringingandbecomingsubjecttosuitsalleginginfringementofproprietaryrights,particularlypatentrights,andourcompetitorsmayholdpatentsorhavependingpatentapplications,
326、whichcouldberelatedtoourbusiness.Theseriskshavebeenamplifiedbytheincreaseinthirdparties,whichwerefertoasnon-practicingentities,whosesoleprimarybusinessistoassertsuchclaims.Wehavereceivedinthepast,andexpecttoreceiveinthefuture,noticesthatclaimweorourcustomersusingoursolutionshavemisappropriatedormisu
327、sedotherpartiesintellectualpropertyrights.Ifwearesuedbyathirdpartythatclaimsthatourtechnologyinfringesitsrights,thelitigationcouldbeexpensiveandcoulddivertour23managementresources.Wedonotcurrentlyhaveanextensivepatentportfolioofourown,whichmaylimitthedefensesavailabletousinanysuchlitigation.Inadditi
328、on,inmostinstances,wehaveagreedtoindemnifyourcustomersagainstcertainclaimsthatoursubscriptionservicesinfringetheintellectualpropertyrightsofthirdparties.Ourbusinesscouldbeadverselyaffectedbyanysignificantdisputesbetweenusandourcustomersastotheapplicabilityorscopeofourindemnificationobligationstothem
329、.Theresultsofanyintellectualpropertylitigationtowhichwemightbecomeaparty,orforwhichwearerequiredtoprovideindemnification,mayrequireustodooneormoreofthefollowing:ceaseofferingorusingtechnologiesthatincorporatethechallengedintellectualproperty;makesubstantialpaymentsforlegalfees,settlementpaymentsorot
330、hercostsordamages;obtainalicense,whichmaynotbeavailableonreasonableterms,tosellorusetherelevanttechnology;orredesigntechnologytoavoidinfringement.Ifwearerequiredtomakesubstantialpaymentsorundertakeanyoftheotheractionsnotedaboveasaresultofanyintellectualpropertyinfringementclaimsagainstusoranyobligat
331、iontoindemnifyourcustomersforsuchclaims,suchpaymentsorcostscouldhaveamaterialadverseeffectuponourbusinessandfinancialresults.Our use of open source technology could impose limitations on our ability to commercialize our software platform.Weuseopensourcesoftwareinourplatform.Someopensourcesoftwarelic
332、ensesrequireuserswhodistributeopensourcesoftwareaspartoftheirsoftwaretopubliclydiscloseallorpartofthesourcecodetosuchsoftwareand/ormakeavailableanyderivativeworksoftheopensourcecodeonunfavorabletermsoratnocost.ThetermsofvariousopensourcelicenseshavenotbeeninterpretedbytheU.S.courts,andthereisariskth
333、atsuchlicensescouldbeconstruedinamannerthatimposesunanticipatedconditionsorrestrictionsonourabilitytomarketoursoftwareplatform.Whilewemonitorouruseofopensourcesoftwareandtrytoensurethatnoneisusedinamannerthatwouldrequireustodiscloseoursourcecodeorthatwouldotherwisebreachthetermsofanopensourceagreement,suchusecouldinadvertentlyoccurandwemayberequiredtoreleaseourproprietarysourcecode,paydamagesforbr
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