CASTLIGHT HEALTH, INC., 10-K filed on 3/1/2019
Annual Report
v3.10.0.1
Document and Entity Information - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2018
Feb. 25, 2019
Jun. 30, 2018
Class of Stock [Line Items]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Dec. 31, 2018    
Document Fiscal Year Focus 2018    
Document Fiscal Period Focus FY    
Trading Symbol CSLT    
Entity Registrant Name CASTLIGHT HEALTH, INC.    
Entity Central Index Key 0001433714    
Current Fiscal Year End Date --12-31    
Entity Well-known Seasoned Issuer No    
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Filer Category Accelerated Filer    
Entity Public Float     $ 515.5
Entity Emerging Growth Company true    
Entity Ex Transition Period true    
Entity Shell Company false    
Entity Small Business false    
Class A      
Class of Stock [Line Items]      
Entity Common Stock, Shares Outstanding   37,173,783  
Class B      
Class of Stock [Line Items]      
Entity Common Stock, Shares Outstanding   106,350,417  
v3.10.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Current assets:    
Cash and cash equivalents $ 66,005 $ 61,319 [1],[2]
Marketable securities 11,327 32,025 [2]
Accounts receivable and other, net 26,816 21,933
Prepaid expenses and other current assets 3,680 3,991 [2]
Total current assets 107,828 119,268 [2]
Property and equipment, net 3,963 5,263 [2]
Restricted cash, non-current 1,325 1,325 [1],[2]
Deferred commissions 20,142 27,512 [2]
Deferred professional service costs 10,133 12,480 [2]
Intangible assets, net 16,209 20,253 [2]
Goodwill 91,785 91,785 [2]
Other assets 2,129 1,997 [2]
Total assets 253,514 279,883 [2]
Current liabilities:    
Accounts payable 9,556 3,907 [2]
Accrued expenses and other current liabilities 15,454 13,178 [2]
Accrued compensation 5,975 13,941 [2]
Deferred revenue 20,193 25,985
Total current liabilities 51,178 57,011 [2]
Deferred revenue, non-current 1,030 4,457
Debt, non-current 3,254 4,958 [2]
Other liabilities, non-current 3,381 1,900 [2]
Total liabilities 58,843 68,326 [2]
Commitments and contingencies [2]
Stockholders’ equity (deficit):    
Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of December 31, 2018 and 2017; no shares issued and outstanding as of December 31, 2018 and 2017 0 0 [2]
Additional paid-in capital 609,697 586,900 [2]
Accumulated other comprehensive income 0 (22) [2]
Accumulated deficit (415,040) (375,334)
Total stockholders’ equity (deficit) 194,671 211,557 [2]
Total liabilities, convertible preferred stock and stockholders’ equity (deficit) 253,514 279,883 [2]
Class A    
Stockholders’ equity (deficit):    
Common stock value issued 4 5 [2]
Class B    
Stockholders’ equity (deficit):    
Common stock value issued $ 10 $ 8 [2]
[1] Prior-period information has been adjusted for the adoption of ASC 606. See Note 2–Summary of Significant Accounting Policies for a summary of adjustments.
[2] Prior-period information has been adjusted for the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (“ASC 606”). See Note 2–Summary of Significant Accounting Policies for a summary of adjustments.
v3.10.0.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Dec. 31, 2018
Dec. 31, 2017
Preferred Stock    
Par value (in USD per share) $ 0.0001 $ 0.0001
Shares authorized (in shares) 10,000,000 10,000,000
Shares issued (in shares) 0 0
Shares outstanding (in shares) 0 0
Class A    
Common Stock    
Par value (in USD per share) $ 0.0001 $ 0.0001
Shares authorized (in shares) 200,000,000 200,000,000
Shares issued (in shares) 37,576,324 52,853,400
Shares outstanding (in shares) 37,576,324 52,853,400
Class B    
Common Stock    
Par value (in USD per share) $ 0.0001 $ 0.0001
Shares authorized (in shares) 800,000,000 800,000,000
Shares issued (in shares) 104,350,881 81,685,875
Shares outstanding (in shares) 104,350,881 81,685,875
v3.10.0.1
Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
[1]
Dec. 31, 2016
[1]
Revenue:      
Total revenue $ 156,404 $ 132,020 $ 98,708
Cost of revenue:      
Cost of professional services and other 60,189 46,652 31,866
Gross profit 96,215 85,368 66,842
Operating expenses:      
Sales and marketing 49,134 59,767 [2] 58,641 [2]
Research and development 61,355 54,502 [2] 40,460 [2]
General and administrative 25,620 28,825 [2] 26,859 [2]
Total operating expenses 136,109 143,094 125,960
Operating loss (39,894) (57,726) (59,118)
Other income, net 188 618 432
Loss before income tax benefit (39,706) (57,108) (58,686)
Income tax benefit 0 (5,206) 0
Net loss $ (39,706) $ (51,902) [3] $ (58,686) [3]
Net loss per share, basic and diluted (in usd per share) $ (0.29) $ (0.41) $ (0.58)
Weighted-average shares used to compute basic and diluted net loss per share (in shares) 137,686 125,534 100,798
Subscription and Circulation      
Revenue:      
Total revenue $ 143,901 $ 121,368 $ 91,943
Cost of revenue:      
Cost of professional services and other 34,691 28,410 [2] 16,463 [2]
Professional Services And Other      
Revenue:      
Total revenue 12,503 10,652 6,765
Cost of revenue:      
Cost of professional services and other $ 25,498 $ 18,242 [2] $ 15,403 [2]
[1] Prior-period information has been adjusted for the adoption of ASC 606. See Note 2–Summary of Significant Accounting Policies for a summary of adjustments.
[2] Includes stock-based compensation expense as follows: Cost of subscription $1,017, $888, $506. Cost of professional services $1,177, $1,081, $1,205 Sales and marketing $3,770 , $9,665, $8,843. Research and development $7,214, $7,415 , $5,959. General and administrative $4,954, $4,954 , $4,743.
[3] Prior-period information has been adjusted for the adoption of ASC 606. See Note 2–Summary of Significant Accounting Policies for a summary of adjustments.
v3.10.0.1
Consolidated Statements of Operations (Parenthetical) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
[1]
Dec. 31, 2017
[2]
Dec. 31, 2016
[2]
Subscription and Circulation      
Allocated share-based compensation expense $ 1,017 $ 888 $ 506
Professional Services And Other      
Allocated share-based compensation expense 1,177 1,081 1,205
Sales and marketing      
Allocated share-based compensation expense 3,770 9,665 8,843
Research and development      
Allocated share-based compensation expense 7,214 7,415 5,959
General and administrative      
Allocated share-based compensation expense $ 4,954 $ 4,954 $ 4,743
[1] Includes stock-based compensation expense as follows: Cost of subscription $1,017, $888, $506. Cost of professional services $1,177, $1,081, $1,205 Sales and marketing $3,770 , $9,665, $8,843. Research and development $7,214, $7,415 , $5,959. General and administrative $4,954, $4,954 , $4,743.
[2] Prior-period information has been adjusted for the adoption of ASC 606. See Note 2–Summary of Significant Accounting Policies for a summary of adjustments.
v3.10.0.1
Consolidated Statements of Comprehensive Loss - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Consolidated Statement of Comprehensive Loss:      
Net loss $ (39,706) $ (51,902) [1],[2] $ (58,686) [1],[2]
Other comprehensive (loss) income:      
Net change in unrealized (loss) gain on available-for-sale marketable securities 22 (22) [3] 79 [3]
Other comprehensive (loss) income 22 (22) [3] 79 [3]
Comprehensive loss $ (39,684) $ (51,924) [3] $ (58,607) [3]
[1] Prior-period information has been adjusted for the adoption of ASC 606. See Note 2–Summary of Significant Accounting Policies for a summary of adjustments.
[2] Prior-period information has been adjusted for the adoption of ASC 606. See Note 2–Summary of Significant Accounting Policies for a summary of adjustments.
[3] Prior-period information has been adjusted for the adoption of ASC 606. See Note 2–Summary of Significant Accounting Policies for a summary of adjustments.
v3.10.0.1
Consolidated Statement of Stockholders' Equity - USD ($)
$ in Thousands
Total
Common Stock
Additional Paid-In Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2015 [1]   95,618,092      
Beginning balance at Dec. 31, 2015 $ 118,354 $ 10 $ 415,519 $ (79) $ (297,096)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Vesting of restricted stock units (in shares)   1,984,407      
Vesting of restricted stock units 0   0    
Exercise of stock options, net (in shares)   1,945,766      
Exercise of stock options, net 2,829 $ 0 2,829    
Stock-based compensation 22,012   22,012    
Issuance of common stock and warrants to SAP net (in shares)   4,762,658      
Issuance of common stock and warrants to SAP, net 17,236   17,236    
Comprehensive income (loss) (58,607) [2]     79 (58,686)
Ending balance (in shares) at Dec. 31, 2016 [3]   104,310,923      
Ending balance at Dec. 31, 2016 134,528 $ 10 457,596 0 (323,078)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Vesting of restricted stock units (in shares)   3,956,495      
Vesting of restricted stock units 0        
Exercise of stock options, net (in shares)   1,217,808      
Exercise of stock options, net 2,356 $ 1 2,355    
Stock-based compensation 24,578   24,578    
Comprehensive income (loss) $ (51,924) [2]     (22) (51,902)
Issuance of common stock related to acquisition, net (in shares) 25,054,049        
Issuance of common stock related to acquisition, net amount $ 100,290 $ 2 100,288    
SAP warrant modification 1,729   1,729    
Ending balance (in shares) at Dec. 31, 2017   134,539,275      
Ending balance at Dec. 31, 2017 211,557 [4] $ 13 586,900 (22) (375,334)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Vesting of restricted stock units (in shares)   4,131,967      
Vesting of restricted stock units 0        
Exercise of stock options, net (in shares)   3,255,963      
Exercise of stock options, net 4,480 $ 1 4,479    
Stock-based compensation 18,318   18,318    
Comprehensive income (loss) (39,684)     22 (39,706)
Ending balance (in shares) at Dec. 31, 2018   141,927,205      
Ending balance at Dec. 31, 2018 $ 194,671 $ 14 $ 609,697 $ 0 $ (415,040)
[1] Prior-period information has been adjusted for the adoption of ASC 606. See Note 2 – Summary of Significant Accounting Policies for a summary of adjustments.
[2] Prior-period information has been adjusted for the adoption of ASC 606. See Note 2–Summary of Significant Accounting Policies for a summary of adjustments.
[3] Prior-period information has been adjusted for the adoption of ASU 2016-09. See Note 2 – Summary of Significant Accounting Policies for a summary of adjustments.
[4] Prior-period information has been adjusted for the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (“ASC 606”). See Note 2–Summary of Significant Accounting Policies for a summary of adjustments.
v3.10.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Operating activities:      
Net loss $ (39,706) $ (51,902) [1],[2] $ (58,686) [1],[2]
Adjustments to reconcile net loss to net cash used in operating activities:      
Depreciation and amortization 6,858 6,613 [2] 3,168 [2]
Stock-based compensation 18,132 24,003 [2] 21,256 [2]
Amortization and impairment of deferred commissions 13,105 10,026 [2] 5,882 [2]
Amortization and impairment of professional service costs 5,268 4,225 [2] 2,795 [2]
Release of deferred tax valuation allowance due to business combination 0 (5,206) [2] 0 [2]
Lease exit and related charges 2,634 0 [2] 0 [2]
Change in fair value of contingent consideration liability 0 (671) [2] 0 [2]
Accretion and amortization of marketable securities (516) (83) [2] 481 [2]
Expense related to expiration of SAP warrant 0 1,132 [2] 0 [2]
Gain on sale of investment in related party 0 (1,375) [2] 0 [2]
Changes in operating assets and liabilities:      
Accounts receivable and other, net (4,883) (2,799) [2] (2,278) [2]
Deferred commissions (5,735) (9,888) [2] (8,947) [2]
Deferred professional service costs (2,735) (4,181) [2] (4,734) [2]
Prepaid expenses and other assets 178 1,645 [2] 448 [2]
Accounts payable 5,744 764 [2] (1,035) [2]
Accrued expenses and other liabilities 290 3,493 [2] 1,743 [2]
Deferred revenue (9,219) (1,943) [2] 4,970 [2]
Accrued compensation (7,966) 2,690 [2] (2,034) [2]
Net cash used in operating activities (18,551) (23,457) [2] (36,971) [2]
Investing activities:      
Proceeds from sale of investment in related party 0 5,500 [2] 0 [2]
Purchase of property and equipment, net (2,014) (2,544) [2] (1,702) [2]
Purchase of marketable securities (31,974) (62,658) [2] (98,184) [2]
Maturities of marketable securities 53,210 96,576 [2] 146,508 [2]
Business combination, net of cash acquired 0 (2,264) [2] 0 [2]
Net cash provided by investing activities 19,222 34,610 [2] 46,622 [2]
Financing activities:      
Proceeds from the exercise of stock options 4,480 2,356 [2] 2,829 [2]
Proceeds from the issuance of common stock and warrants to SAP 0 0 [2] 17,358 [2]
Principal payments on long-term debt (465) 0 [2] 0 [2]
Payments of issuance costs related to equity 0 (731) [2] (122) [2]
Net cash provided by financing activities 4,015 1,625 [2] 20,065 [2]
Net increase in cash, cash equivalents and restricted cash 4,686 12,778 [2] 29,716 [2]
Cash, cash equivalents and restricted cash at beginning of period [2] 62,644 49,866 20,150
Cash, cash equivalents and restricted cash at end of period 67,330 62,644 [2] 49,866 [2]
Total cash, cash equivalents and restricted cash [2] 62,644 49,866 20,150
Supplemental cash flow information:      
Cash paid during the year for interest 215 117 [2] 0 [2]
Non-cash purchase consideration related to acquisition of Jiff 0 101,692 [2] 0 [2]
Purchase of property and equipment, accrued but not paid $ 93 $ 188 [2] $ 20 [2]
[1] Prior-period information has been adjusted for the adoption of ASC 606. See Note 2–Summary of Significant Accounting Policies for a summary of adjustments.
[2] Prior-period information has been adjusted for the adoption of ASC 606. See Note 2–Summary of Significant Accounting Policies for a summary of adjustments.
v3.10.0.1
Organization and Description of Business
12 Months Ended
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Description of Business
Organization and Description of Business

Description of Business

Castlight Health, Inc. (“Castlight” or “the Company”) offers a comprehensive software-as-a-service platform that simplifies health benefits navigation for millions of employees. The Castlight platform matches employees to the best resources their employers make available to them, whether they are healthy, actively seeking medical care, or managing a condition, and motivates them to take the best steps for their health. Castlight helps employers generate more value from their benefits investments by helping to improve outcomes, lower health care costs, and increase benefits satisfaction. On April 3, 2017, the Company expanded into wellbeing through its acquisition of Jiff, Inc. (“Jiff”). Jiff's results of operations have been included in the Company’s Consolidated Statements of Operations beginning April 3, 2017. See Note 5Business Combinations for more information on the Jiff acquisition. The Company was incorporated in the State of Delaware in January 2008. The Company's principal executive offices are located in San Francisco, California.
v3.10.0.1
Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2018
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation
The consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). In the opinion of management, the information herein reflects all adjustments, consisting only of normal recurring adjustments, except as otherwise noted, considered necessary for a fair statement of results of operations, financial position and cash flows. The consolidated financial statements include the results of Castlight and its wholly owned U.S. subsidiaries.
Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASC 606”) using the full retrospective method. As a result, the Company recorded a credit of $32.7 million to Accumulated deficit as of January 1, 2016 to reflect the cumulative effect of the adoption. Amounts and disclosures set forth in this Form 10-K have been updated to comply with this new standard, as indicated by the "as adjusted" footnote.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires the Company to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. These estimates include, but are not limited to the determination of:

The fair value of assets acquired and liabilities assumed for business combinations;
The amortization period for deferred commissions and deferred professional services costs;
Variable consideration included in the transaction price of the Company’s contracts with customers;
The standalone selling price of the performance obligations in the Company’s contracts with customers; and
Assumptions used in the valuation of certain equity awards.

Actual results could differ from those estimates, and such differences could be material to the Company’s consolidated financial position and results of operations.

Segment Information
The Company's chief operating decision maker, its CEO, reviews the financial information presented on a consolidated basis for purposes of allocating resources and evaluating the Company's financial performance. Accordingly, the Company has determined that it operates in a single reportable segment, cloud-based products.

Revenue Recognition
Revenues are derived primarily from contracts with customers for subscription services and professional services. Revenues are recognized when control of these services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Revenues do not include sales taxes.
    
We determine revenue recognition through the following steps:

Identification of the contract, or contracts, with a customer;
Identification of the performance obligations in the contract;
Determination of the transaction price;
Allocation of the transaction price to the performance obligations in the contract; and
Recognition of revenue when, or as, the Company satisfies a performance obligation.
Subscription Revenue. Subscription revenue recognition commences on the date that the Company’s subscription services are made available to the customer, which the Company considers to be the launch date, and subscription revenue is generally recognized over the contract term. Subscription contracts are generally three years in length and certain contracts include termination provisions.
Some of the Company’s subscription contracts include performance incentives that are generally based on engagement. Additionally, some of the Company’s subscription contracts include audit provisions. The Company considers fees related to performance incentives and audit provisions to be variable consideration. The Company estimates variable consideration at the most likely amount to which it expects to be entitled. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance as well as other information available to the Company. The Company reassesses its estimates related to variable consideration each reporting period and records adjustments when appropriate.
Professional Services and Other Revenue. Professional services and other revenue is primarily comprised of implementation services and communication services related to the Company's subscription service. Nearly all of the Company's professional services are sold on a fixed-fee basis.

The Company determined its implementation services are not capable of being distinct. Accordingly, the Company recognizes implementation services revenue in the same manner as the subscription service, beginning on the launch date. The Company determined its communication services are distinct and the associated revenue is recognized over time from the commencement of the communication services through the end of the contractual term.
Professional services and other revenue also includes revenue from products sold through the Company’s online marketplace and add-on subscription services made available from other ecosystem partners. These revenues are recognized on a net basis primarily because the Company acts as an agent in these contracts.

Contracts with Multiple Performance Obligations. Most of the Company’s contracts have multiple performance obligations consisting of subscription services and professional services, including implementation services and communication services. For arrangements with multiple performance obligations, the Company evaluates whether the individual performance obligations are distinct. If the performance obligations are distinct, revenue is recognized for the respective performance obligation separately. If one or more of the performance obligations are not distinct, the performance obligations that are not distinct are combined with the Company's subscription service, and revenue for the combined performance obligation is recognized over the term of the subscription service commencing on the launch date.

The Company has concluded that its subscription services and its communication services are distinct. Conversely, the Company has concluded that its implementation services are not distinct, primarily because these services are not capable of being distinct as the customer cannot benefit from the implementation services on their own. Accordingly, the Company considers the separate performance obligations in its multiple performance obligation contracts to be communication services and a combined performance obligation comprised of subscription services and implementation services.

The transaction price for arrangements with multiple performance obligations is allocated to the separate performance obligations based on their standalone selling price. The Company determines standalone selling prices based on its overall pricing objectives taking into consideration market conditions and other factors, including the value of the contracts, the subscription services sold, and customer demographics.
Contract Balances

The Company records a contract asset when revenue is recognized prior to invoicing. Contract assets are presented within accounts receivable and other in the accompanying consolidated balance sheet. A contract liability represents deferred revenue.

Deferred revenue consists of professional services and cloud-based subscription services that have been billed in advance of revenue being recognized. The Company invoices its customers for its cloud-based subscription services based on the terms of the contract, which can be annual, quarterly or monthly installments. Deferred revenue that is anticipated to be recognized during the succeeding 12-month period is recorded as current deferred revenue, and the remaining portion is recorded as non-current.

Costs of Revenue

Cost of revenue consists of the cost of subscription revenue and cost of professional services and other revenue.

Cost of subscription revenue primarily consists of data fees, employee-related expenses (including salaries, benefits and stock-based compensation) related to hosting costs of its cloud-based subscription service, cost of subcontractors, expenses for service delivery (which includes call center support), allocated overhead, the costs of data center capacity, amortization of internal-use software and depreciation of certain owned computer equipment and software.

Cost of professional services and other revenue consists primarily of employee-related expenses associated with these services, the cost of subcontractors and travel costs. The time and costs of the Company's customer implementations vary based on the source and condition of the data the Company receive from third parties, the configurations that the Company agrees to provide and the size of the customer.

Cash and Cash Equivalents

Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less from the date of purchase. The Company's cash and cash equivalents generally consist of investments in money market mutual funds, U.S treasury securities and U.S. agency obligations. Cash and cash equivalents are stated at fair value.

Marketable Securities

The Company's marketable securities consist of U.S. agency obligations and U.S. treasury securities, with maturities at the time of purchase of greater than three months. Marketable securities with remaining maturities in excess of one year are classified as non-current. The Company classifies its marketable securities as available-for-sale at the time of purchase based on its intent and are recorded at their estimated fair value. Unrealized gains and losses for available-for-sale securities are recorded in other comprehensive loss. The Company evaluates its investments to assess whether those with unrealized loss positions are other than temporarily impaired. The Company consider impairments to be other than temporary if they are related to deterioration in credit risk or if it is likely it will sell the securities before the recovery of their cost basis. Realized gains and losses and declines in value judged to be other than temporary are determined based on the specific identification method and are reported in other income, net in the consolidated statements of operations.

Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable are recorded when invoiced and at the invoiced amount, net of allowances for doubtful accounts. When accounts receivable are recorded, the related revenue may not commence until a later date depending on the nature of the services invoiced. The allowance for doubtful accounts is based on the Company's assessment of the collectability of accounts. The Company regularly reviews the adequacy of the allowance for doubtful accounts by considering the age of each outstanding invoice and the collection history of each customer to determine whether a specific allowance is appropriate. Accounts receivable deemed uncollectable are charged against the allowance for doubtful accounts when identified. For all periods presented, the allowance for doubtful accounts was not significant.

Deferred Commissions
Deferred commissions are the incremental costs that are incurred to obtain contracts with customers and consist primarily of sales commissions paid to the Company's sales force and channel partners. The commissions for initial contracts are deferred and amortized on a straight-line basis over a period of benefit that the Company has determined typically to be five years. The Company determined the period of benefit by taking into consideration the expected life of its subscription contracts, the expected life of the technology underlying its subscription services and other factors. The commissions for renewal contracts are deferred and then amortized on a straight-line basis over the related contractual renewal period. The deferred commission amounts are recoverable through the Company’s future revenues. Amortization of deferred commissions is included in sales and marketing expense in the accompanying consolidated statements of operations. All costs deferred are reviewed for impairment periodically.

Deferred Professional Service Costs
    
Deferred professional services costs are the direct costs incurred to fulfill subscription contracts that occur prior to the launch of the Company’s subscription services. Professional service costs, which primarily consist of employee related expenses attributable to launch activities, are deferred and then amortized on a straight-line basis over a period of benefit that the Company has determined typically to be five years for the same reasons as described in the deferred commissions disclosure above. Deferred professional service costs are recoverable through future revenues. Amortization of deferred professional service costs is included in cost of professional services and other revenue in the accompanying consolidated statements of operations. All costs deferred are reviewed for impairment periodically.

Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective asset as follows (in years):
Software
  
3
-
5
Computer equipment
  
3
Furniture and equipment
  
5
-
7
Leasehold improvements
  
Shorter of the lease term or the estimated useful lives of the improvements
Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in the consolidated statement of operations for the period realized.

Internal-Use Software

For the Company's development costs related to its cloud-based subscription service, the Company capitalizes costs incurred during the application development stage. Costs related to preliminary project and post-implementation stages are expensed as incurred. Capitalized software development costs are included as part of property and equipment and are amortized on a straight-line basis over the technology's estimated useful life, which is generally three years. The amortization expense is recorded as a component of cost of subscription revenue and was $0.8 million, $1.0 million, and $0.9 million for the years ended December 31, 2018, 2017, and 2016, respectively.

The Company did not capitalize any software development costs during the years ended December 31, 2018 and December 31, 2017.
Restricted Cash
Restricted cash consists of letters of credit related to the Company's leased office space.
Business Acquisitions
The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users and acquired technology, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.
Goodwill
The Company reviews goodwill for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. The Company has elected to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the Company’s single reporting unit is less than its carrying amount. Based on the qualitative assessment, if it is determined that it is more likely than not that its fair value is less than its carrying amount, the fair value of the Company's single reporting unit is compared to its carrying value. Any excess of the goodwill carrying amount over the fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value. As of December 31, 2018, no impairment of goodwill has been identified.
Intangible Assets
Acquired finite-lived intangible assets are amortized over their estimated useful lives. The Company evaluates the recoverability of its intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. The Company has not recorded any such impairment charges.

Stock-based Compensation
All stock-based compensation to employees is measured based on the grant-date fair value of the awards and recognized in the Company's consolidated statements of operations over the period during which the employee is required to perform services in exchange for the award (generally the vesting period of the award). The options assumed and awarded in connection with the acquisition of Jiff were valued using the Monte Carlo simulation model. The Company estimates the fair value of all other stock options granted using the Black-Scholes option valuation model. For restricted stock units, fair value is based on the closing price of the Company's Class B common stock on the grant date. Compensation expense is recognized over the vesting period of the applicable award using the straight-line method. For awards with performance based and service vesting conditions, compensation cost is recognized over the requisite service period if it is probable that the performance condition will be satisfied based on the accelerated attribution method.

Income Taxes
The Company accounts for income taxes using the liability method, under which deferred tax assets and liabilities are determined based on the future tax consequences attributable to differences between the financial reporting carrying amounts of existing assets and liabilities and their respective tax bases and tax credit and net operating loss carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates that are expected to be in effect when the differences are expected to reverse.
The Company assesses the likelihood that deferred tax assets will be recovered from future taxable income, and a valuation allowance is established when necessary to reduce deferred tax assets to the amounts more likely than not expected to be realized.
The Company recognizes and measures uncertain tax positions using a two-step approach. The first step is to evaluate the tax position taken or expected to be taken by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Significant judgment is required to evaluate uncertain tax positions. The Company evaluates its uncertain tax positions on a regular basis. The Company's evaluations are based on a number of factors, including changes in facts and circumstances, changes in tax law, correspondence with tax authorities during the course of audit and effective settlement of audit issues.

Warranties and Indemnification
The Company's cloud-based subscription service is generally warranted to be performed in a professional manner and in a manner that will comply with the terms of the customer agreements.

The Company's arrangements generally include certain provisions for indemnifying customers against liabilities if there is a breach of a customer’s data or if the Company's service infringes a third party’s intellectual property rights. To date, the Company has not incurred any material costs as a result of such indemnifications and have not accrued any liabilities related to such obligations in the financial statements. The Company has entered into service-level agreements with certain customers warranting, among other things, defined levels of performance and response times and permitting those customers to receive credits for prepaid amounts related to subscription services in the event that the Company fails to meet those levels. To date, the Company has not experienced any significant failures to meet defined levels of performance and response times as a result of those agreements.

The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by the Company, arising out of that person’s services as its director or officer or that person’s services provided to any other company or enterprise at the Company's request. The Company maintains director and officer insurance coverage that would generally enable the Company to recover a portion of any future amounts paid. The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.

Advertising Expenses
Advertising is expensed as incurred. Advertising expense was $0.3 million, $0.3 million and $0.6 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Concentrations of Risk and Significant Customers
The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable. Although the Company deposits its cash with multiple financial institutions, its deposits, at times, may exceed federally insured limits.
The Company serves its customers and users from outsourced data center facilities located in the United States. The Company has internal procedures to restore all of its production customer facing services in the event of disasters at the certain facilities. Procedures utilizing currently deployed hardware, software and services at certain of the Company's disaster recovery locations allow its cloud-based service to be restored within 24 hours during the implementation of the procedures to restore services.
Significant customers are direct customers or channel partners that represent more than 10% of the total revenue for the most recent period presented or more than 10% of accounts receivable balance as of the most recent balance sheet date. No single direct customer accounted for more than 10% of total revenue for the year ended December 31, 2018. However, one direct customer accounted for approximately 13% of accounts receivable as of December 31, 2018 Castlight had one channel partner that represented approximately 11% of total revenue for the year ended December 31, 2018, and approximately 18% of accounts receivable as of December 31, 2018.
Recently Adopted Accounting Pronouncements
Revenue Recognition
In May 2014 the Financial Accounting Standards Board (“FASB”) issued ASC 606. ASC 606 supersedes the revenue recognition requirements in ASC 605, Revenue Recognition, and requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the considerations to which the entity expects to be entitled to in exchange for those goods or services. ASC 606 also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which requires the deferral of incremental costs of obtaining and fulfilling a contract with a customer.
    
The key changes from adopting the new standard are:

Prior to the adoption of the new standard, the Company recognized revenue of the combined professional services and subscription deliverable over the contractual term of the subscription contract. For certain contracts, this included periods that were cancelable due to termination provisions. Under the new standard, the Company recognizes revenue for the combined professional services and subscription performance obligation over the non-cancelable term of the arrangement.  Additionally, prior to the adoption of the new standard, revenue related to variable fees was deferred until the fees became fixed or determinable.  Under the new standard, the Company estimates variable consideration at the most likely amount to which the Company expects to be entitled. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.
 
Prior to the adoption of the new standard, the Company capitalized costs that were both incremental and direct to obtain subscription contracts and amortized those costs over the non-cancelable portion of contracts. Under the new standard, the Company capitalizes all incremental costs to obtain subscription contracts and then amortizes those costs on a systematic basis that is consistent with the transfer to the customer of the goods or services to which those assets relate, which the Company has determined to be five years for initial subscription contracts or the contractual period for renewal subscription contracts.
Prior to the adoption of the new standard, the Company expensed costs to fulfill subscription contracts when they were incurred. Under the new standard, the Company recognizes as assets certain costs incurred to fulfill subscription contracts. Additionally, under the new standard, these costs are amortized on a systematic basis over a period that is consistent with the transfer to the customer of the goods or services to which those assets relate, which the Company has determined to be five years.
Select consolidated balance sheet line items, which reflect the adoption of ASC 606 are as follows (in thousands):
 
 
As of December 31, 2017
 
 
Previously Reported
 
Adjustments(1)
 
As Adjusted
Assets
 
 
 
 
 
 
Accounts receivable and other, net
$
20,761

 
$
1,172

 
$
21,933

 
Deferred commissions(2)
10,583

 
16,929

 
27,512

 
Deferred professional service costs

 
12,480

 
12,480

Liabilities and stockholders' equity
 
 
 
 
 
 
Deferred revenue
29,410

 
(3,425
)
 
25,985

 
Deferred revenue, non-current
6,686

 
(2,229
)
 
4,457

 
Accumulated deficit
(411,569
)
 
36,235

 
(375,334
)
(1) 
Reflects the cumulative impact of adopting ASC 606.
(2) 
Prior to the adoption of ASC 606, Deferred commissions, current and non-current, were presented separately. Upon the adoption of ASC 606, the consolidated balance sheet as of December 31, 2017 was reclassified to conform to the current period presentation.
Select consolidated statement of operations line items, which reflect the adoption of ASC 606 are as follows (in thousands, except per share amounts):
 
 
Year Ended December 31, 2017
 
Year Ended December 31, 2016
 
 
Previously Reported
 
Adjustments
 
As Adjusted
 
Previously Reported
 
Adjustments
 
As Adjusted
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
Subscription
$
120,496

 
$
872

 
$
121,368

 
$
95,016

 
$
(3,073
)
 
$
91,943

 
Professional services and other
10,933

 
(281
)
 
10,652

 
6,684

 
81

 
6,765

Cost of revenue:
 
 
 
 
 
 
 
 
 
 
 
 
Cost of professional services and other
18,774

 
(532
)
 
18,242

 
18,098

 
(2,695
)
 
15,403

Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Sales and marketing
62,313

 
(2,546
)
 
59,767

 
58,800

 
(159
)
 
58,641

Operating loss
(61,395
)
 
3,669

 
(57,726
)
 
(58,980
)
 
(138
)
 
(59,118
)
Net loss
(55,571
)
 
3,669

 
(51,902
)
 
(58,548
)
 
(138
)
 
(58,686
)
Net loss per share, basic and diluted
(0.44
)
 
0.03

 
(0.41
)
 
(0.58
)
 

 
(0.58
)

    
Select consolidated statement of cash flows line items, which reflect the adoption of ASC 606 are as follows (in thousands):
 
 
 
Year Ended December 31, 2017
 
Year Ended December 31, 2016
 
 
 
Previously Reported
 
Adjustments
 
As Adjusted
 
Previously Reported
 
Adjustments
 
As Adjusted
Operating activities:
 
 
 
 
 
 
 
 
 
 
 
Net loss
$
(55,571
)
 
$
3,669

 
$
(51,902
)
 
$
(58,548
)
 
$
(138
)
 
$
(58,686
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
Stock-based compensation
24,578

 
(575
)
 
24,003

 
22,012

 
(756
)
 
21,256

 
Amortization of deferred commissions
12,453

 
(2,427
)
 
10,026

 
5,070

 
812

 
5,882

 
Amortization of deferred professional costs

 
4,225

 
4,225

 

 
2,795

 
2,795

 
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Accounts receivable
(2,522
)
 
(277
)
 
(2,799
)
 
(2,055
)
 
(223
)
 
(2,278
)
 
 
Deferred commissions
(9,768
)
 
(120
)
 
(9,888
)
 
(7,977
)
 
(970
)
 
(8,947
)
 
 
Deferred professional service costs

 
(4,181
)
 
(4,181
)
 

 
(4,734
)
 
(4,734
)
 
Deferred revenue
(1,629
)
 
(314
)
 
(1,943
)
 
1,756

 
3,214

 
4,970


Stock-based Compensation
In March 2016, the FASB issued ASU 2016-09, “Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting.” The guidance changed how companies account for certain aspects of share-based payments to employees. The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The Company adopted this guidance on January 1, 2017, using a modified retrospective approach, and accordingly recorded a cumulative-effect adjustment charge of approximately $0.4 million to the beginning accumulated deficit for the impact of electing to account for forfeitures as they occur. The adoption of this standard did not have any impact to the Statement of Operations or the Statement of Cash Flows. The Company is subject to full valuation allowance and thus has not utilized any excess tax benefits or realized any cash tax benefit related to stock compensation expense. The adoption of this standard did not have any material impact to the Company’s results of operations for the year ended December 31, 2017.
Financial Instruments
In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which amends various aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The Company adopted ASU 2016-01 as of January 1, 2018 using the modified retrospective method for its marketable equity securities, which currently consist of money market mutual funds. The Company currently does not have any non-marketable equity securities. The adoption of ASU 2016-01 did not have a significant impact on the Company’s financial position or results of operations.
Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), and subsequent amendments have been issued since then. The guidance will require lessees to put all leases that have a term of more than one year on their balance sheets, whether operating or financing, while continuing to recognize the expenses on their income statements in a manner similar to current practice. The guidance states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-of-use ("ROU") asset for the right to use the underlying asset for the lease term. The Company will adopt this ASU beginning January 1, 2019 and has elected to not restate comparative periods and intends to elect certain other available practical expedients upon adoption. The Company is evaluating the full effect the adoption will have on its financial condition, results of operations, and disclosures and is finalizing the accounting, transition and disclosure requirements of the adoption. The Company expects all of its operating leases and contractual obligations, as disclosed in Note 13-Commitments and Contingencies, will be subject to the new standard. The Company expects the primary impact to be the inclusion of ROU assets and lease liabilities on the consolidated balance sheet. Additionally, the Company does not expect that the adoption will have a material impact on the consolidated statement of operations, consolidated statement of stockholders’ equity or consolidated statement of cash flows.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (“ASU 2016-13”) and subsequent amendments have been issued since then. The standard changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The Company will recognize an allowance for credit losses on available-for-sale securities rather than deductions in amortized cost. The standard is effective for fiscal years and interim periods beginning after December 15, 2019. Early adoption is permitted for all periods beginning after December 15, 2018. The adoption of this standard is not expected to have a significant impact on the Company’s financial statements.

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”). The provisions in ASU 2018-02 allow for a reclassification from accumulated other comprehensive income to retained earnings to eliminate the stranded tax effects resulting from the change in federal corporate income tax rate in the Tax Cuts and Jobs Act enacted in December 2017. The Company is required to adopt ASU 2018-02 on January 1, 2019. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. The adoption of ASU 2018-02 is not expected to have a significant impact on the Company’s financial position or results of operations.

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software
(“ASU 2018-15”), which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance will be effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company is currently evaluating the impacts that adoption of this ASU will have on its financial statements.
v3.10.0.1
Revenue, Deferred Revenue, Contract Balances and Performance Obligations
12 Months Ended
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]  
Revenue, Deferred Revenue, Contract Balances and Performance Obligations
Revenue, Deferred Revenue, Contract Balances and Performance Obligations

The Company sells to customers based in the United States through direct sales and indirect channels. Indirect channel revenue represented approximately 12% of the Company’s total revenue for the year ended December 31, 2018.

Deferred revenue as of December 31, 2018 and December 31, 2017 was $21.2 million and $30.4 million, respectively. Contract assets as of December 31, 2018 and December 31, 2017 were $1.0 million and $1.2 million, respectively.

$28.1 million and $26.4 million of revenue was recognized during the year ended December 31, 2018 and 2017, respectively, that was included in the deferred revenue balances at the beginning of the respective periods.

The Company recorded favorable cumulative catch-up adjustments to revenue arising from changes in estimates of transaction price of $1.1 million during the year ended December 31, 2018.

The aggregate balance of remaining performance obligations from non-cancelable contracts with customers as of December 31, 2018 was $156.8 million. The Company expects to recognize approximately 70% of this balance over the next 12 months, with the remaining balance recognized thereafter. Remaining performance obligations are defined as deferred revenue and amounts yet to be billed for the non-cancelable portion of contracts.
Deferred Costs

Changes in the balance of total deferred commissions and total deferred professional service costs for the year ended December 31, 2018 are as follows (in thousands):
 
December 31, 2017
 
 
 
Expense recognized
 
December 31, 2018
 
 
Additions
 
 
As adjusted (1)
 
 
 
 
 
 
Deferred commissions
$
27,512

 
$
5,735

 
$
(13,105
)
 
$
20,142

Deferred professional service costs
12,480

 
2,921

 
(5,268
)
 
10,133

Total deferred commissions and professional service costs
$
39,992

 
$
8,656

 
$
(18,373
)
 
$
30,275

(1) 
Prior-period information has been adjusted for the adoption of ASC 606. See Note 2Summary of Significant Accounting Policies for a summary of adjustments.

    These costs are reviewed for impairment periodically. Impairment charges, included in expense recognized above, were $1.9 million for the year ended December 31, 2018. No impairment charges were recorded for the year ended December 31, 2017.
v3.10.0.1
Deferred Costs
12 Months Ended
Dec. 31, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Deferred Costs
Revenue, Deferred Revenue, Contract Balances and Performance Obligations

The Company sells to customers based in the United States through direct sales and indirect channels. Indirect channel revenue represented approximately 12% of the Company’s total revenue for the year ended December 31, 2018.

Deferred revenue as of December 31, 2018 and December 31, 2017 was $21.2 million and $30.4 million, respectively. Contract assets as of December 31, 2018 and December 31, 2017 were $1.0 million and $1.2 million, respectively.

$28.1 million and $26.4 million of revenue was recognized during the year ended December 31, 2018 and 2017, respectively, that was included in the deferred revenue balances at the beginning of the respective periods.

The Company recorded favorable cumulative catch-up adjustments to revenue arising from changes in estimates of transaction price of $1.1 million during the year ended December 31, 2018.

The aggregate balance of remaining performance obligations from non-cancelable contracts with customers as of December 31, 2018 was $156.8 million. The Company expects to recognize approximately 70% of this balance over the next 12 months, with the remaining balance recognized thereafter. Remaining performance obligations are defined as deferred revenue and amounts yet to be billed for the non-cancelable portion of contracts.
Deferred Costs

Changes in the balance of total deferred commissions and total deferred professional service costs for the year ended December 31, 2018 are as follows (in thousands):
 
December 31, 2017
 
 
 
Expense recognized
 
December 31, 2018
 
 
Additions
 
 
As adjusted (1)
 
 
 
 
 
 
Deferred commissions
$
27,512

 
$
5,735

 
$
(13,105
)
 
$
20,142

Deferred professional service costs
12,480

 
2,921

 
(5,268
)
 
10,133

Total deferred commissions and professional service costs
$
39,992

 
$
8,656

 
$
(18,373
)
 
$
30,275

(1) 
Prior-period information has been adjusted for the adoption of ASC 606. See Note 2Summary of Significant Accounting Policies for a summary of adjustments.

    These costs are reviewed for impairment periodically. Impairment charges, included in expense recognized above, were $1.9 million for the year ended December 31, 2018. No impairment charges were recorded for the year ended December 31, 2017.
v3.10.0.1
Business Combinations
12 Months Ended
Dec. 31, 2018
Business Combinations [Abstract]  
Business Combinations
Business Combinations
    
On April 3, 2017, the Company completed its acquisition of Jiff. Jiff provided an enterprise health benefits platform that served as a central hub for employee wellbeing and employee benefit programs and its acquisition by the Company formed the basis for Wellbeing Navigator. The acquisition enabled the Company to develop a product offering that provides the full spectrum of wellbeing, healthcare decision support and an engagement hub all in one complete package. The Company acquired Jiff for approximately 27,000,000 shares and options.

At the closing on April 3, 2017, Venrock, a holder of more than 5% of the Company’s capital stock, acquired a total of 3,965,979 shares of the Company’s Class B common stock in exchange for its shares of Jiff capital stock. Venrock will also receive its pro rata share of any additional contingent consideration further described below. Bryan Roberts, the Chairman of the Company’s Board of Directors, is a Partner at Venrock. Accordingly, this was a related party transaction.

The Company’s Board appointed a Special Committee (comprised solely of disinterested directors) to which it delegated the full and exclusive power, authority and discretion of the Castlight Board to evaluate, assess, and approve the Jiff transaction on its behalf, including retaining a financial advisor for an opinion on the fairness of the financial conditions of the transaction. The transaction was approved solely by the Special Committee which concluded that the transaction terms were fair to Castlight, and the transaction was in the best interests of Castlight and its stockholders.

As part of the merger, certain stockholders and option holders were to receive an aggregate of 1,000,000 shares of the Company’s Class B common stock or options if the Jiff business achieved at least $25 million in revenue in 2017 and an aggregate of 3,000,000 shares of Class B common stock or options if the Jiff business achieved at least $25 million in net new bookings during 2017 (“the milestones”). As of December 31, 2017, the Company evaluated and determined that both the milestones were not met. Additionally, all options for Jiff common stock held by Jiff employees who became employees of the combined company were converted into options to purchase the Company’s Class B common stock.

The following table summarizes the components of the purchase consideration transferred based on the closing price of the Company’s stock as of the acquisition date (in thousands):
 
 
Fair value
Fair value of Company Class B common stock (25,054,049 shares at $3.65 per share)
 
$
91,447

Fair value of contingent consideration
 
671

Fair value of assumed Jiff options attributable to pre-combination services
 
9,574

Transaction costs paid on behalf of Jiff
 
4,498

  Total purchase price consideration
 
$
106,190


    
For the Jiff options assumed as part of the acquisition, the Company applied the ratio of pre-combination service provided, on a grant-by-grant basis, to the total service period and applied this ratio to the acquisition date fair value of the Jiff awards.

The Company determined that the contingent consideration shares associated with the milestones are one unit of account, and the Company classified the contingent consideration as a liability as the arrangement can be settled in a variable number of shares and is not considered fixed-for-fixed. Based on the probability of completing the milestones and changes in the fair value of the Company’s common stock, the Company used a Monte Carlo simulation model to determine the fair value of the contingent consideration liability which was $0.7 million at the date of acquisition. As of December 31, 2017, the Company reversed the contingent consideration liability as the milestones were not met. As a result, $0.7 million of income was recorded in general and administrative expenses for the year ended December 31, 2017.

The Company has accounted for this acquisition as a business combination. The method requires, among other things, that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date.     

The final allocation of purchase consideration to assets acquired and liabilities assumed is reflected below. There were no changes to amounts previously recorded as assets or liabilities that resulted in a corresponding adjustment to goodwill.

The fair values of the assets acquired and liabilities assumed by major class in the acquisition of Jiff were recognized as follows (in thousands):
Cash
$
2,234

Current assets
5,159

Other assets
1,971

Acquired intangible assets
23,900

Goodwill
91,785

    Total assets acquired
125,049

Deferred revenue
(1,857
)
Other current liabilities
(6,192
)
Debt
(5,578
)
Non-current liabilities
(5,232
)
Total net assets acquired
$
106,190



The fair values assigned to tangible assets acquired, liabilities assumed and identifiable intangible assets are based on management’s estimates and assumptions. The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. The goodwill balance is primarily attributed to the cross-selling opportunities, cost synergies, and a knowledgeable and experienced workforce which play an important role in the integration of the acquired customers and technology. The goodwill balance is not deductible for U.S. income tax purposes.

The following table sets forth the fair value components of identifiable acquired intangible assets (in thousands) and their estimated useful lives (in years):
 
 
Fair Value
 
Useful Life
Customer relationships
 
$
10,900

 
10
Developed technology
 
10,600

 
5
Backlog
 
1,500

 
3
Other acquired intangible assets
 
900

 
1
-
3
Total identifiable intangible assets
 
$
23,900

 
 
 
 

   
Customer relationships represent the fair value of projected cash flows that will be derived from the sale of products to Jiff's existing customers based on existing, in-process, and future versions of the underlying technology. Developed technology represents Jiff’s benefits platform. The Company used the relief from royalty method to value the developed technology. To determine the net cash flow that a market participant would expect to realize from licensing the Company's technology, the Company estimated a net royalty rate, which excludes any expenses that would be incurred to maintain the current functionality of the technology.

The Company has included the financial results of Jiff in the consolidated statements of operations from the date of acquisition. For the year ended December 31, 2017, $10.0 million of revenue, adjusted for the adoption of ASC 606, attributable to Jiff was included in the consolidated results of operations, and the associated operating income was immaterial. The Company incurred $3.1 million of acquisition-related costs for the year ended December 31, 2017 that were recognized in general and administrative expenses.

The unaudited pro forma financial information in the table below summarizes the combined results of operations for the Company and Jiff as if the companies were combined as of the beginning of 2016. The historical consolidated financial statements have been adjusted in the pro forma combined financial statements to give effect to pro forma events that are directly attributable to the business combination and factually supportable. The unaudited pro forma financial information presented includes the business combination accounting effects resulting from the acquisition, including amortization charges from acquired intangible assets, stock-based compensation, and acquisition-related costs. In addition, the pro forma combined financial statements give effect to the adoption of ASC 606 in 2018.

The unaudited pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisitions had taken place at the beginning of 2016 (in thousands):
 
Year Ended December 31,
 
2017
 
2016
Total revenue
$
135,588

 
$
104,295

Net loss
$
(57,398
)
 
$
(89,586
)


The pro forma revenue and net loss reflects material, nonrecurring adjustments, such as the tax benefit of $5.2 million recorded in 2017 that resulted from the acquisition, non-recurring acquisition-related compensation expense and non-recurring deferred revenue fair value adjustments.
v3.10.0.1
Goodwill and Intangible Assets
12 Months Ended
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets
Goodwill and Intangible Assets

Goodwill

Currently, all of the Company’s goodwill relates to the acquisition of Jiff. The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill.

The changes in the carrying amount of goodwill were as follows (in thousands):
 
As of December 31,
 
2018
 
2017
Balance, beginning of year (1)
$
91,785

 
$

Acquisition of Jiff

 
91,398

Measurement period adjustments for Jiff acquisition

 
387

Balance, end of year (2)
$
91,785

 
$
91,785

(1)
The Company had no goodwill prior to the acquisition of Jiff.
(2)
The Company had no accumulated goodwill impairment charges as of December 31, 2018 or 2017.

Intangible assets, net
    
The following tables set forth the fair value components of identifiable acquired intangible assets (dollars in thousands)(1):
 
As of December 31, 2018
 
Useful Life
 
Gross
 
Accumulated Amortization
 
Net
Customer relationships
10
 
$
10,900

 
$
(1,908
)
 
$
8,992

Developed technology
5
 
10,600

 
(3,710
)
 
6,890

Backlog
3
 
1,500

 
(1,256
)
 
244

Other acquired intangible assets
1
-
3
 
900

 
(817
)
 
83

Total identifiable intangible assets
 
 
 
 
$
23,900

 
$
(7,691
)
 
$
16,209


 
As of December 31, 2017
 
Useful Life
 
Gross
 
Accumulated Amortization
 
Net
Customer relationships
10
 
$
10,900

 
$
(818
)
 
$
10,082

Developed technology
5
 
10,600

 
(1,590
)
 
9,010

Backlog
3
 
1,500

 
(664
)
 
836

Other acquired intangible assets
1
-
3
 
900

 
(575
)
 
325

Total identifiable intangible assets
 
 
 
 
$
23,900

 
$
(3,647
)
 
$
20,253

(1)
The Company had no intangible assets prior to the acquisition of Jiff.

Amortization expense from acquired intangible assets for the years ended December 31, 2018 and 2017 were $4.0 million and $3.6 million and is included in cost of subscription, general and administrative, and sales and marketing expenses.

Estimated amortization expense for acquired intangible assets for the following five years and thereafter is as follows (in thousands):
2019
$
3,505

2020
3,242

2021
3,210

2022
1,620

2023
1,090

Thereafter
3,542

Total estimated amortization expense
$
16,209

v3.10.0.1
Marketable Securities
12 Months Ended
Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]  
Marketable Securities
Marketable Securities
As of December 31, 2018 and December 31, 2017, respectively, marketable securities consisted of the following (in thousands):
 
December 31, 2018
 
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Value
U.S. treasury securities
$
7,980

 
$

 
$

 
$
7,980

U.S. agency obligations
18,158

 

 

 
18,158

Money market mutual funds
7,115

 

 

 
7,115

 
33,253

 

 

 
33,253

Included in cash and cash equivalents
21,926

 

 

 
21,926

Included in marketable securities
$
11,327

 
$

 
$

 
$
11,327


 
December 31, 2017
 
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Value
U.S. treasury securities
$
31,047

 
$

 
$
(22
)
 
$
31,025

U.S. agency obligations
19,366

 

 

 
19,366

Money market mutual funds
6,115

 

 

 
6,115

 
56,528

 

 
(22
)
 
56,506

Included in cash and cash equivalents
24,481

 

 

 
24,481

Included in marketable securities
$
32,047

 
$

 
$
(22
)
 
$
32,025

v3.10.0.1
Fair Value Measurements
12 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements
The Company measures its financial assets and liabilities at fair value at each reporting period using a fair value hierarchy that requires that the Company maximizes the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:
Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2—Include other inputs that are directly or indirectly observable in the marketplace.
Level 3—Unobservable inputs that are supported by little or no market activity.
 
The fair value of marketable securities included in the Level 2 category is based on observable inputs, such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. These values were obtained from a third-party pricing service and were evaluated using pricing models that vary by asset class and may incorporate available trade, bid and other market information and price quotes from well-established third-party pricing vendors and broker-dealers.

There have been no changes in valuation techniques in the periods presented. There were no significant transfers between fair value measurement levels for the years ended December 31, 2018 and 2017. The following tables present information about the Company's assets that are measured at fair value on a recurring basis using the above input categories (in thousands):
 
December 31, 2018
 
Level 1
 
Level 2
 
Total
Cash equivalents:
 
 
 
 
 
Money market mutual funds
$
7,115

 
$

 
$
7,115

U.S. agency obligations

 
14,811

 
14,811

Marketable securities:
 
 
 
 
 
U.S. agency obligations

 
3,347

 
3,347

U.S. treasury securities

 
7,980

 
7,980

 
$
7,115


$
26,138


$
33,253

 
 
December 31, 2017
 
Level 1
 
Level 2
 
Total
Cash equivalents:
 
 
 
 
 
Money market mutual funds
$
6,115

 
$

 
$
6,115

U.S. agency obligations

 
18,366

 
18,366

Marketable securities:
 
 
 
 
 
U.S. agency obligations

 
1,000

 
1,000

U.S. treasury securities

 
31,025

 
31,025

 
$
6,115


$
50,391


$
56,506


Gross unrealized gains and losses for cash equivalents and marketable securities as of December 31, 2018 and December 31, 2017 were not material. The Company does not believe the unrealized losses represent other-than-temporary impairments based on its evaluation of available evidence as of December 31, 2018.
There were no realized gains or losses for the years ended December 31, 2018 and 2017. As of December 31, 2018 and December 31, 2017, all of the Company's marketable securities mature within one year.
v3.10.0.1
Property and Equipment
12 Months Ended
Dec. 31, 2018
Property, Plant and Equipment [Abstract]  
Property and Equipment
Property and Equipment
Property and equipment consisted of the following (in thousands):
 
As of December 31,
 
2018
 
2017
Leasehold improvements
$
3,102

 
$
2,915

Computer equipment
6,860

 
6,165

Software
1,097

 
1,149

Internal-use software
2,925

 
2,925

Furniture and equipment
1,018

 
1,293

Total
15,002

 
14,447

Accumulated depreciation
(11,039
)
 
(9,184
)
Property and equipment, net
$
3,963

 
$
5,263


Depreciation and amortization expense for the years ended December 31, 2018, 2017 and 2016 was $2.8 million, $3.0 million and $3.2 million, respectively. Depreciation is recorded on a straight-line basis.
v3.10.0.1
Debt
12 Months Ended
Dec. 31, 2018
Debt Disclosure [Abstract]  
Debt
Debt

Term Loan

In connection with the Company’s acquisition of Jiff, on April 3, 2017, the Company, Jiff and Silicon Valley Bank (“Bank”) agreed to refinance the existing term loan facility owed by Jiff to the Bank (the “Loan Agreement”) for approximately $5.6 million (the “Term Loan”). The Term Loan required interest-only payments for the period May 2017 through September 2018, followed by 36 monthly payments of principal and interest. Obligations under the Term Loan accrue interest at a floating per annum rate equal to the greater of (A) the prime rate as published in the money rates section of The Wall Street Journal (“Prime Rate”) minus 1% or (B) 0%. Interest on the Term Loan is payable monthly. The maturity date of the Term Loan is September 1, 2021.

In addition to principal and interest payments, the Company is also required to pay $0.5 million as final payment on the earlier of maturity, termination or prepayment of the Term Loan. The Company accrues for the final payment over the life of the Term Loan using the effective interest method.

The future maturities of the Term Loan by year as of December 31, 2018 are as follows (in thousands):
2019
$
1,859

2020
1,859

2021(1)
1,395

Total future maturities of debt
$
5,113

Less current maturities(2)
(1,859
)
Debt, non-current
$
3,254


(1)  
Excludes the $0.5 million required to be paid as final payment on the earlier of maturity, termination or prepayment of the Term Loan.
(2)
Classified within accrued expenses and other current liabilities on the consolidated balance sheet as of December 31, 2018.


Revolving Line of Credit    

The Loan Agreement also provides for an up to $25 million revolving credit facility (the “Revolving Line”). Borrowings under the Revolving Line accrue interest at a floating per annum rate equal to the Prime Rate plus one-half of one percent (0.50%) and are payable monthly. The Company may request borrowings under the Revolving Line prior to April 3, 2019, on which date the Revolving Line terminates. As of December 31, 2018, no borrowings have been made under the Revolving Line.

In relation to the Loan Agreement, the Company is subject to certain financial and reporting covenants and are secured by a security interest in the assets of the Company, excluding intellectual property and certain other exceptions. As of December 31, 2018, none of the financial covenants, which require the Company to maintain a certain minimum liquidity ratio, are applicable. The Company was in compliance with all reporting covenants in the Loan Agreement related to the outstanding principal balance as of December 31, 2018.
v3.10.0.1
Related Party Transactions and Variable Interest Entity
12 Months Ended
Dec. 31, 2018
Related Party Transactions [Abstract]  
Related Party Transactions and Variable Interest Entity
Related Party Transactions and Variable Interest Entity

In 2015, the Company made a preferred stock investment of $4.1 million and entered into a strategic alliance with Lyra Health ("Lyra"), a related party at the time of the investment. In the fourth quarter of 2017, the Company sold its investment in Lyra to a group of buyers that included related parties.

Lyra was considered a related party to the Company because two of the Company’s directors, Dr. Roberts and Mr. Ebersman, served on the Lyra board of directors and Mr. Ebersman is the Lyra chief executive officer. Prior to the sale of the investment in Lyra, the Company evaluated all its transactions with Lyra and determined that Lyra was a variable interest entity (“VIE”) for the Company but that it was not required to consolidate the operations of the VIE.

Because Lyra was a related party and potential buyers were also related parties, the Company formed an independent committee of the Company's board of directors (the "Independent Committee"), comprised solely of disinterested directors, to approve the sale. The Company engaged an independent third-party valuation expert to assist in determining the fair value of the Company's investment in Lyra. Based in part on the valuation performed, the Company negotiated a selling price of $5.5 million, which the Independent Committee approved after concluding that the transaction terms were fair to the Company. In 2017, the sale resulted in a pre-tax gain of $1.4 million which is recorded in other income, net within the consolidated statements of operations.
v3.10.0.1
Current Liabilities
12 Months Ended
Dec. 31, 2018
Compensation Related Costs [Abstract]  
Current Liabilities
Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
 
As of December 31,
 
2018
 
2017
Customer deposits related to online store
$
5,926

 
$
5,638

Other
9,528

 
7,540

Total
$
15,454

 
$
13,178


Accrued compensation consisted of the following (in thousands):
 
As of December 31,
 
2018
 
2017
Accrued commissions
$
379

 
$
2,481

Accrued bonuses
4,293

 
9,001

Other employee and benefits payable
1,303

 
2,459

Total
$
5,975

 
$
13,941

v3.10.0.1
Commitments and Contingencies
12 Months Ended
Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Commitments and Contingencies
Leases and Contractual Obligations
The Company leases office space under non-cancellable operating leases in San Francisco, California, Sunnyvale, California and Charlotte, North Carolina, with expiration dates in 2022, 2025 and 2020, respectively.
Contractual obligations relate to the Company's service agreements for its data centers and other third-party service providers.

As of December 31, 2018, the future minimum lease payments under non-cancellable operating leases are as follows (in thousands):
 
Operating
Leases (1)
 
Contractual
Obligations
2019
$
6,324

 
$
761

2020
5,953

 
570

2021
5,355

 

2022
3,050

 

2023 and later
1,788

 

 
$
22,470

 
$
1,331


(1) 
Minimum payments have not been reduced by sublease rentals of $7.1 million due in the future under non-cancellable subleases.
The Company's facility lease agreements generally provide for rental payments on a graduated basis and for options to renew, which could increase future minimum lease payments if exercised. The Company recognizes rent expense on a straight-line basis over the lease period and has accrued for rent expense incurred but not paid. Rent expense for the years ended December 31, 2018, 2017 and 2016 was $3.5 million, $4.1 million and $3.3 million, respectively.
    
In March 2018, the Company subleased a portion of its engineering office located in Mountain View, California reducing its total rent obligation by $2.4 million and recognizing a one-time sublease loss of $0.9 million in research and development expense in the accompanying consolidated statement of operations.

During 2018, the Company recognized a lease exit charge of approximately $1.3 million related to the remaining engineering office space in Mountain View, California that the Company no longer utilizes. These charges are recorded in research and development expense in the accompanying consolidated statement of operations.
Legal Matters

During the second quarter of 2015, four purported securities class action lawsuits, which were later consolidated into a single action, were filed in the Superior Court of the State of California, County of San Mateo, against the Company, certain of its current and former directors, executive officers, significant stockholders and underwriters associated with its initial public offering (“IPO”). The lawsuits were brought by purported stockholders of the Company seeking to represent a class consisting of all those who purchased the Company’s stock pursuant or traceable to the Registration Statement and Prospectus issued in connection with its IPO, alleging claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. On March 28, 2016, the parties to the consolidated actions reached a mutually acceptable resolution by way of a mediated cash settlement for an aggregate amount of $9.5 million, and the Court entered final approval of the settlement on October 28, 2016. As a result of the settlement, Castlight recorded a net charge of $2.9 million to general and administrative expense in 2016. This amount represents the portion of settlement that was not covered by insurance and legal fees incurred in 2016 regarding this matter. 

From time to time, the Company may become subject to other legal proceedings, claims or litigation arising in the ordinary course of business. In addition, the Company may receive letters alleging infringement of patents or other intellectual property rights. If an unfavorable outcome were to occur in litigation, the impact could be material to the Company’s business, financial condition, cash flow or results of operations, depending on the specific circumstances of the outcome. The Company accrues for loss contingencies when it is both probable that it will incur the loss and when it can reasonably estimate the amount of the loss or range of loss.
v3.10.0.1
Stock Compensation
12 Months Ended
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock Compensation
Stock Compensation
Employee Equity Plans

     The Company adopted a 2014 Equity Incentive Plan (EIP) that became effective on March 12, 2014 and serves as the successor to the Company's 2008 Stock Incentive Plan. Shares issued under the 2008 Stock Plan were Class A common stock and shares issued under the EIP are Class B common stock. The Company's 2014 EIP authorizes the award of stock options, restricted stock awards (RSAs), stock appreciation rights (SARs), restricted stock units (RSUs), performance awards and stock bonuses. The Company began granting RSUs in the fourth quarter of 2014.

The Company adopted a 2014 Employee Stock Purchase Plan (ESPP) that became effective on March 13, 2014 that enables eligible employees to purchase shares of the Company's Class B common stock at a discount. The Company has not yet established a start date of the initial purchasing period under the ESPP.

Stock-Based Compensation to Employees
All stock-based compensation to employees is measured based on the grant-date fair value of the awards and is generally recognized in the Company's statement of operations over the period during which the employee is required to perform services in exchange for the award (generally the vesting period of the award). Except for the stock options assumed and granted related to the Jiff acquisition, the Company estimates the fair value of stock options granted using the Black-Scholes option-valuation model. For restricted stock units, fair value is based on the closing price of the Company's Class B common stock on the grant date. Compensation cost is generally recognized over the vesting period of the applicable award using the straight-line method. For awards with performance based and service vesting conditions, compensation cost is recognized over the requisite service period if it is probable that the performance condition will be satisfied based on the accelerated attribution method.
The assumptions used in the Black-Scholes option-pricing model were determined as follows:
Volatility. Since the Company does not have enough trading history for its Class B common stock, the expected volatility was derived from the historical stock volatilities of peer group companies within the Company's industry. In evaluating peer companies, the Company considered factors such as nature of business, customer base, service offerings and markets served.
Risk-Free Interest Rate. The risk-free rate that the Company used is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options.
Expected Life. The expected term represents the period that the Company's stock-based awards are expected to be outstanding. The expected term assumptions were determined based on the vesting terms, exercise terms and contractual lives of the options.
Dividend Yield. The Company has never declared or paid any cash dividends and do not plan to pay cash dividends in the foreseeable future, and therefore, the Company uses an expected dividend yield of zero.
Fair Value of Common Stock. The Company has used the market closing price for its Class B common stock as reported on the New York Stock Exchange to determine the fair value of the Company's common stock.
In addition to assumptions used in the Black-Scholes option-pricing model, prior to the adoption of ASU 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” in 2017, the Company estimated a forfeiture rate to calculate the stock-based compensation for its awards based on an analysis of its actual forfeitures. The Company used historical data to estimate pre-vesting option forfeitures and recorded stock-based compensation expense only for those awards that are expected to vest. With the adoption of ASU 2016-09, the Company no longer estimates forfeitures but accounts for forfeitures as they occur.
Except for the stock options assumed and granted related to the Jiff acquisition, the fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions and fair value per share:
 
Year Ended December 31,
 
2018
 
2017
 
2016
Volatility
57%
 
61%
 
45
%
47%
Expected life (in years)
6.06
 
6.02
 
5.31

6.12
Risk-free interest rate
2.72
%
2.74%
 
2.03%
 
0.95
%
1.37%
Dividend yield
—%
 
—%
 
—%
Weighted-average fair value of underlying common stock
$3.69
 
$3.60
 
$3.16

The options assumed and awarded in connection with the acquisition of Jiff were valued using the Monte Carlo simulation model. The relevant assumptions used in the Monte Carlo simulation model are presented in the table below. The Monte Carlo simulation model considers vesting schedules, stated expiration dates and potential early exercises based on market performance in determining the effective holding period for the options.
 
Year Ended December 31,
 
2018
 
2017
 
2016
Volatility
*
 
75%
 
*
Risk-free interest rate
*
 
2.35%
 
*
Dividend yield
*
 
—%
 
*
* The Company has not used the Monte Carlo simulation model prior to or after the acquisition of Jiff. 
Stock Option Activity
The following table summarizes activities for stock options:
 
Options Outstanding
 
Number of
Shares
Outstanding
 
Weighted-
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual
Life (in
years)
 
Aggregate
Intrinsic
Value (in thousands)
Balance at December 31, 2017
10,335,178

 
$
2.83

 
6.16
 
$
19,253

Stock options granted
134,000

 
$
3.69

 
 
 
 
Stock options exercised
(3,255,963
)
 
$
1.38