UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to .
Commission File Number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
(Address of principal executive offices and zip code)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
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Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 6, 2020, there were approximately
Benefitfocus, Inc.
Form 10-Q
For the Quarterly Period Ended September 30, 2020
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION |
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3 |
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Unaudited Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019 |
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
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PART II. OTHER INFORMATION |
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36 |
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
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2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Benefitfocus, Inc.
Unaudited Consolidated Balance Sheets
(in thousands, except share and per share data)
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As of September 30, 2020 |
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As of December 31, 2019 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Accounts receivable, net |
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Contract, prepaid and other current assets |
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Total current assets |
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Property and equipment, net |
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Financing lease right-of-use assets |
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Operating lease right-of-use assets |
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Intangible assets, net |
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Goodwill |
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Deferred contract costs and other non-current assets |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders' deficit |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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Accrued compensation and benefits |
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Deferred revenue, current portion |
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Lease liabilities and financing obligations, current portion |
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Total current liabilities |
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Deferred revenue, net of current portion |
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Convertible senior notes |
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Lease liabilities and financing obligations, net current portion |
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Other non-current liabilities |
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Total liabilities |
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Commitments and contingencies |
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Redeemable preferred stock: |
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Series A preferred stock, par value $ authorized, at September 30, 2020 and December 31, 2019, respectively, liquidation preference $ |
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Stockholders' deficit: |
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Common stock, par value $ at September 30, 2020 and December 31, 2019, respectively |
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Additional paid-in capital |
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Accumulated deficit |
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Total stockholders' deficit |
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Total liabilities, redeemable preferred stock and stockholders' deficit |
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$ |
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$ |
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The accompanying notes are an integral part of the Unaudited Consolidated Financial Statements.
3
Benefitfocus, Inc.
Unaudited Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share data)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2020 |
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2019 |
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2020 |
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2019 |
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Revenue |
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$ |
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$ |
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$ |
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$ |
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Cost of revenue |
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Gross profit |
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Operating expenses: |
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Sales and marketing |
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Research and development |
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General and administrative |
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Restructuring costs |
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Total operating expenses |
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Income (loss) from operations |
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Other income (expense): |
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Interest income |
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Interest expense |
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Gain on repurchase of convertible senior notes |
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Other income (expense) |
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Total other expense, net |
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Loss before income taxes |
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Income tax expense |
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Net loss |
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Preferred dividends |
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Net loss available to common stockholders |
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$ |
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$ |
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$ |
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Comprehensive loss |
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$ |
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$ |
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$ |
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$ |
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Net loss per common share: |
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Basic and diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted-average common shares outstanding: |
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Basic and diluted |
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The accompanying notes are an integral part of the Unaudited Consolidated Financial Statements.
4
Benefitfocus, Inc.
Unaudited Consolidated Statements of Changes in Stockholders’ Deficit
(in thousands, except share and per share data)
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Common Stock, |
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Additional |
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Total |
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$0.001 Par Value |
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Paid-in |
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Accumulated |
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Stockholders' |
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Shares |
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Par Value |
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Capital |
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Deficit |
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Deficit |
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Balance, December 31, 2019 |
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$ |
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$ |
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$ |
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$ |
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Cumulative effect adjustment from adoption of credit standard |
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Exercise of stock options |
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Issuance of common stock upon vesting of restricted stock units |
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Stock-based compensation expense |
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Common stock repurchased |
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Net loss |
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( |
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Balance, March 31, 2020 |
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$ |
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$ |
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$ |
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$ |
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Exercise of stock options |
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Issuance of common stock upon vesting of restricted stock units |
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Issuance of common stock under Employee Stock Purchase Plan, or ESPP |
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Stock-based compensation expense |
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Common stock repurchased |
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( |
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Preferred dividends |
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( |
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Net loss |
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( |
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Balance, June 30, 2020 |
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$ |
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$ |
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$ |
( |
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$ |
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Exercise of stock options |
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Issuance of common stock upon vesting of restricted stock units |
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Cancellation of convertible senior note capped call hedge |
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Equity component of repurchased convertible senior notes |
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( |
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Stock-based compensation expense |
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Preferred dividends |
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( |
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Net loss |
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( |
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Balance, September 30, 2020 |
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$ |
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$ |
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$ |
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$ |
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Common Stock, |
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Additional |
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Total |
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$0.001 Par Value |
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Paid-in |
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Accumulated |
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Stockholders' |
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Shares |
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Par Value |
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Capital |
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Deficit |
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Deficit |
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Balance, December 31, 2018 |
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$ |
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$ |
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$ |
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$ |
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Cumulative effect adjustment from adoption of lease standard |
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Exercise of stock options |
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Issuance of common stock upon vesting of restricted stock units |
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Stock-based compensation expense |
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Net loss |
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( |
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( |
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Balance, March 31, 2019 |
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$ |
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$ |
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$ |
( |
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$ |
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Exercise of stock options |
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Issuance of common stock upon vesting of restricted stock units |
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Stock-based compensation expense |
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Net loss |
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( |
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( |
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Balance, June 30, 2019 |
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$ |
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$ |
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$ |
( |
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$ |
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Issuance of common stock upon vesting of restricted stock units |
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Issuance of common stock under ESPP |
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Stock-based compensation expense |
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5
Net loss |
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( |
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( |
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Balance, September 30, 2019 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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The accompanying notes are an integral part of the Unaudited Consolidated Financial Statements.
6
Benefitfocus, Inc.
Unaudited Consolidated Statements of Cash Flows
(in thousands)
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Nine Months Ended September 30, |
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2020 |
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2019 |
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Cash flows from operating activities |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: |
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Depreciation and amortization |
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Stock-based compensation expense |
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Accretion of interest on convertible senior notes |
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Interest accrual on finance lease liabilities |
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Rent expense less than payments |
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( |
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( |
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Non-cash interest income for short-term investments |
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Gain on extinguishment of debt |
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( |
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Provision for doubtful accounts |
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Changes in operating assets and liabilities: |
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Accounts receivable, net |
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( |
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Accrued interest on short-term investments |
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( |
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Contract, prepaid and other current assets |
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