{\rtf1\deflang1033\deflangfe1033\margl720\margr720\margt360\margb360{\stylesheet{\fs20\lang1033\snext0 Normal;} {\s1\sb240\keepn{\*\pn \pnlvl1\pndec\pnprev1\pnstart1\pnsp144}\b\f0\fs30\lang1033 \sbasedon0\snext0 heading 1;} {\s2\sb200\keepn{\*\pn \pnlvl2\pndec\pnprev1\pnstart1\pnsp144{\pntxtb.}}\b\f0\fs26\lang1033 \sbasedon0\snext0 heading 2;} {\s3\sb180\keepn{\*\pn \pnlvl3\pndec\pnprev1\pnstart1\pnsp144{\pntxtb.}}\b\f0\fs22\lang1033 \sbasedon0\snext0 heading 3;} {\s4\sb160\keepn{\*\pn \pnlvl4\pnucltr\pnprev1\pnstart1\pnsp144{\pntxtb.}}\b\f0\fs22\lang1033 \sbasedon0\snext0 heading 4;} {\s5\sb140\keepn{\*\pn \pnlvl5\pncltr\pnprev1\pnstart1\pnsp144}\b\f0\fs20\lang1033 \sbasedon0\snext0 heading 5;} {\s6\tqc\lang1033\sbasedon0\snext6 footer;} {\*\cs16 \additive\super\sbasedon10 footnote reference;} {\*\cs18 \additive\sbasedon10 page number;}} {\fonttbl{\f0\fnil Times New Roman;}{\f1\fnil Courier New}{\f2005\fnil Courier New;}{\f2010\fnil Wingdings;}{\f2020\fnil Webdings;}{\f2\fnil Arial;}{\f3\fnil Arial;}{\f4\fnil LucidaHandwriting;}{\f5\fnil Symbol;}{\f6\fnil Symbol;}{\f7\fnil Ferdsch;}{\f30\fnil Myriad Cn Semibold;}{\f31\fnil Myriad Roman;}{\f50\fnil Courier New;}{\f51\fnil Times New Roman;}{\f52\fnil Arial;}{\f53\fnil Symbol;}{\f54\fnil Wingdings;}{\f55\fnil Wingdings 2;}{\f56\fnil Wingdings 3;}{\f57\fnil Webdings;}{\f58\fnil Arial Narrow;}{\f59\fnil Arial Unicode MS;}{\f60\fnil Cyberbit;}{\f61\fnil Morningstar 1U Light;}{\f62\fnil Calibri;}} {\colortbl;\red0\green0\blue0;\red127\green0\blue0;\red0\green0\blue255;\red127\green127\blue127;\red0\green51\blue153;\red255\green204\blue0;\red255\green255\blue255;\red246\green244\blue236;\red0\green0\blue0;\red5\green99\blue193;\red217\green217\blue217;\red204\green238\blue255;} {\*\bkmkstart filing_1}{\*\bkmkend filing_1}{\*\bkmkstart doc_1_1}{\*\bkmkend doc_1_1}\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\brdrb\brdrs\cf1\f51\fs2\ql \~\par\pard\plain\fi792\cf1\f51\fs2\ql \~\par\pard\plain\cf1\f51\fs34\b\qc UNITED STATES \par\pard\plain\fs16\pard\plain\sa88\cf1\f51\fs34\b\qc SECURITIES AND EXCHANGE COMMISSION\par\pard\plain\sa88\cf1\f51\fs24\b\qc Washington D.C. 20549\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\sa88\cf1\f51\fs34\b\qc FORM\~10\u8209?Q\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\sa88\cf1\f51\fs20\b\ql (Mark One)\par\pard\plain\li528\fi-528\cf1\f51\fs24\b\ql \u9746?QUARTERLY REPORT PURSUANT TO SECTION\~13 OR 15(d)\~OF THE SECURITIES\plain\li528\sa88\cf1\f51\fs24\b\ql EXCHANGE ACT OF 1934\par\pard\plain\sa88\cf1\f51\fs20\b\qc For the quarterly period ended\~June 30, 2018\par\pard\plain\sa88\cf1\f51\fs20\b\qc OR\par\pard\plain\li528\fi-528\cf1\f51\fs24\b\ql \u9744?TRANSITION REPORT PURSUANT TO SECTION\~13 OR 15(d)\~OF THE SECURITIES\plain\li528\sa88\cf1\f51\fs24\b\ql EXCHANGE ACT OF 1934\par\pard\plain\cf1\f51\fs20\b\qc For the Transition Period from\plain\cf1\f51\fs20\b\qc \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\cf1\f51\fs20\b\qc \~ to\~\plain\cf1\f51\fs20\b\qc \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\sa88\cf1\f51\fs20\b\qc \~\~\par\pard\plain\sa88\cf1\f51\fs20\b\qc Commission File Number: 001\u8209?37582\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\sa88\cf1\f51\fs34\b\qc ADESTO TECHNOLOGIES CORPORATION\par\pard\plain\sa88\cf1\f51\fs20\b\qc (Exact name of registrant as specified in its charter)\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par \par\pard\plain {\trowd\cellx5058\cellx5264\cellx10323\trrh270 \pard\plain\intbl\cf1\f51\fs20\b\qc Delaware\cell\pard\plain\intbl\cf1\f51\fs20\qc \~\cell\pard\plain\intbl\cf1\f51\fs20\b\qc 16\u8209?1755067\cell{ {\trowd\cellx5058\cellx5264\cellx10323\trrh270\row}}} {\trowd\cellx5058\cellx5264\cellx10323\trrh396 \pard\plain\intbl\cf1\f51\fs16\b\qc (State or other jurisdiction of\par\pard\plain\intbl\cf1\f51\fs16\b\qc incorporation or organization)\cell\pard\plain\intbl\cf1\f51\fs20\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc (I.R.S. Employer\par\pard\plain\intbl\cf1\f51\fs16\b\qc Identification No.)\cell{ {\trowd\cellx5058\cellx5264\cellx10323\trrh396\row}}}\pard\plain\cf1\f51\fs8\ql \~\par\pard\plain\cf1\f51\fs20\b\qc Adesto Technologies Corporation \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc 3600 Peterson Way \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc Santa Clara, CA 95054 \par\pard\plain\fs16\pard\plain\sa88\cf1\f51\fs20\b\qc (408) 400\u8209?0578\par\pard\plain\sa88\cf1\f51\fs16\b\qc (Address and telephone number of Registrant\u8217?s executive offices)\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\sa88\cf1\f51\fs20\ql Indicate by check mark whether the registrant (1)\~has filed all reports required to be filed by Section\~13 or 15(d)\~of the\plain\cf1\f51\fs20\ql Securities Exchange Act of 1934 during the preceding 12\~months (or for such shorter period that the registrant was required\plain\sa88\cf1\f51\fs20\ql to file such reports), and (2)\~has been subject to such filing requirements for the past 90\~days. \~\~Yes\~\~\u9746?\~\~\~\~No\~\~\u9744?\par\pard\plain\cf1\f51\fs20\ql Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any,\plain\cf1\f51\fs20\ql every Interactive Data File required to be submitted and posted pursuance to Rule\~405 of Regulation S-T (\u167?232.405 of\plain\cf1\f51\fs20\ql this chapter) during the preceding 12\~months (or for such shorter period that the registrant was required to submit and post\plain\sa88\cf1\f51\fs20\ql such files). \~\~Yes\~\~\u9746?\~\~\~\~No\~\~\u9744?\par\pard\plain\cf1\f51\fs20\ql Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a\plain\cf1\f51\fs20\ql smaller reporting company or an emerging growth company. See definition of \u8220?large accelerated filer,\u8221?\plain\cf1\f51\fs20\ql \u8220?accelerated filer\u8221?, \u8220?smaller reporting company,\u8221? and \u8220?emerging growth company\u8221?\plain\sa88\cf1\f51\fs20\ql in Rule\~12b\u8209?2 of the Exchange Act: \par\pard\plain {\trowd\cellx2583\cellx2873\cellx6980\cellx7260\cellx9538\cellx10323\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\cellx2583\cellx2873\cellx6980\cellx7260\cellx9538\cellx10323\trrh66\row}}} {\trowd\cellx2583\cellx2873\cellx6980\cellx7260\cellx9538\cellx10323\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Large\~accelerated\~filer\~\u9744?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql Accelerated\~filer\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\u9746?\cell{ {\trowd\cellx2583\cellx2873\cellx6980\cellx7260\cellx9538\cellx10323\trrh248\row}}} {\trowd\cellx2583\cellx2873\cellx6980\cellx7260\cellx9538\cellx10323\trrh148 \pard\plain\intbl\cf1\f51\fs12\ql \~\cell\pard\plain\intbl\cf1\f51\fs12\ql \~\cell\pard\plain\intbl\cf1\f51\fs12\ql \~\cell\pard\plain\intbl\cf1\f51\fs12\ql \~\cell\pard\plain\intbl\cf1\f51\fs12\ql \~\cell\pard\plain\intbl\cf1\f51\fs12\ql \~\cell{ {\trowd\cellx2583\cellx2873\cellx6980\cellx7260\cellx9538\cellx10323\trrh148\row}}} {\trowd\cellx2583\cellx2873\cellx6980\cellx7260\cellx9538\cellx10323\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Non-accelerated filer\~\~\~\u9744?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql (Do not check if a smaller reporting company)\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql Smaller\~reporting\~company\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\u9744?\cell{ {\trowd\cellx2583\cellx2873\cellx6980\cellx7260\cellx9538\cellx10323\trrh248\row}}} {\trowd\cellx2583\cellx2873\cellx6980\cellx7260\cellx9538\cellx10323\trrh148 \pard\plain\intbl\cf1\f51\fs12\ql \~\cell\pard\plain\intbl\cf1\f51\fs12\ql \~\cell\pard\plain\intbl\cf1\f51\fs12\ql \~\cell\pard\plain\intbl\cf1\f51\fs12\ql \~\cell\pard\plain\intbl\cf1\f51\fs12\ql \~\cell\pard\plain\intbl\cf1\f51\fs12\ql \~\cell{ {\trowd\cellx2583\cellx2873\cellx6980\cellx7260\cellx9538\cellx10323\trrh148\row}}} {\trowd\cellx2583\cellx2873\cellx6980\cellx7260\cellx9538\cellx10323\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql Emerging growth company\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\u9746?\cell{ {\trowd\cellx2583\cellx2873\cellx6980\cellx7260\cellx9538\cellx10323\trrh248\row}}}\pard\plain\cf1\f51\fs8\ql \~\par\pard\plain\cf1\f51\fs20\ql If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition\plain\cf1\f51\fs20\ql period for complying with any new or revised financial accounting standards provided pursuant to Section\~13(a)\~of the\plain\sa88\cf1\f51\fs20\ql Exchange Act. \u9746?\par\pard\plain\cf1\f51\fs20\ql Indicate by check mark whether the registrant is a shell company (as defined in Rule\~12b\u8209?2 of the Exchange Act).\plain\sa88\cf1\f51\fs20\ql \~\~Yes\~\~\u9744?\~\~\~\~No\~\~\u9746?\par\pard\plain\cf1\f51\fs20\ql Indicate the number of shares outstanding of each of the issuer\u8217?s classes of common stock, as of the latest\plain\sa132\cf1\f51\fs20\ql practicable date. \par\pard\plain {\trowd\cellx2399\cellx2910\cellx5102\cellx5323\cellx6813\cellx8936\cellx10323\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\cellx2399\cellx2910\cellx5102\cellx5323\cellx6813\cellx8936\cellx10323\trrh66\row}}} {\trowd\cellx2399\clbrdrb\brdrs\brdrcf1\cellx2910\cellx5102\cellx5323\cellx6813\clbrdrb\brdrs\brdrcf1\cellx8936\cellx10323\trrh198 \pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Class\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Outstanding at July 23, 2018\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\cellx2399\clbrdrb\brdrs\brdrcf1\cellx2910\cellx5102\cellx5323\cellx6813\clbrdrb\brdrs\brdrcf1\cellx8936\cellx10323\trrh198\row}}} {\trowd\cellx5102\cellx5323\cellx10322\trrh248 \pard\plain\intbl\cf1\f51\fs20\qc Common Stock, $0.0001 par value per share\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 29,268,482\~shares\cell{ {\trowd\cellx5102\cellx5323\cellx10322\trrh248\row}}}\pard\plain\cf1\f51\fs2\ql \~\par\pard\plain\cf1\f51\fs8\ql \~\par\pard\plain\brdrb\brdrs\cf1\f51\fs2\ql \~\par\pard\plain\cf1\f51\fs10\ql \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li88\ri88\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\sa264\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION\par\pard\plain\sa264\cf1\f51\fs20\b\qc QUARTERLY REPORT ON FORM\~10\u8209?Q\par\pard\plain\sa264\cf1\f51\fs20\b\qc FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2018{\*\bkmkstart toc_12401628}{\*\bkmkend toc_12401628}\par\pard\plain\sa264\cf1\f51\fs20\b\qc INDEX \par\pard\plain {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh310 \pard\plain\intbl\cf1\f51\fs12\ql \~\cell\pard\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "partifinancialinformation_253689" }{\*\fldrslt\cf3\f51\fs20\qc PART\~I}}\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "partifinancialinformation_253689" }{\*\fldrslt\cf3\f53\fs20\qc :}}\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "partifinancialinformation_253689" }{\*\fldrslt\cf3\f51\fs20\qc FINANCIAL INFORMATION}}\cell\pard\plain\intbl\cf1\f51\fs12\qr \~\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh310\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630 \pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "item1financialstatements_163352_" }{\*\fldrslt\cf3\f51\fs20\ql Item\~1.}}\plain\intbl\li154\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\ul{\field{\*\fldinst HYPERLINK \\l "item1financialstatements_163352_" }{\*\fldrslt\cf3\f51\fs20\ql Condensed Consolidated Financial Statements (unaudited)}}\cell\pard\plain\intbl\cf1\f51\fs20\qr 3\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630 \pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "balancesheets_696188_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Unaudited Condensed Consolidated Balance Sheets as of June 30, 2018 and December\~31, 201}}\plain\intbl\li154\cf1\f51\fs20\ql 7\cell\pard\plain\intbl\cf1\f51\fs20\qr 3\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh878 \pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "statementsofoperations_408652_12" }{\*\fldrslt\cf3\f51\fs20\ql Unaudited Condensed Consolidated Statements of Operations for the three and six months}}\plain\intbl\li154\ul{\field{\*\fldinst HYPERLINK \\l "statementsofoperations_408652_12" }{\*\fldrslt\cf3\f51\fs20\ql ended September 30, 2018 and 201}}\plain\intbl\li154\cf1\f51\fs20\ql 7\cell\pard\plain\intbl\cf1\f51\fs20\qr 4\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh878\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630 \pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "comprehensiveloss_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and six}}\plain\intbl\li154\ul{\field{\*\fldinst HYPERLINK \\l "comprehensiveloss_12401628" }{\*\fldrslt\cf3\f51\fs20\ql months ended June 30, 2018 and 2017}}\cell\pard\plain\intbl\cf1\f51\fs20\qr 5\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630 \pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "cashflows_123653_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June}}\plain\intbl\li154\ul{\field{\*\fldinst HYPERLINK \\l "cashflows_123653_12401628" }{\*\fldrslt\cf3\f51\fs20\ql 30, 2018 and 2017}}\cell\pard\plain\intbl\cf1\f51\fs20\qr 6\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh382 \pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\ul{\field{\*\fldinst HYPERLINK \\l "note1organizationandsummaryofsig" }{\*\fldrslt\cf3\f51\fs20\ql Notes\~to Condensed Consolidated Financial Statements (unaudited)}}\cell\pard\plain\intbl\cf1\f51\fs20\qr 7\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh382\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630 \pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "item2managementsdiscussionandana" }{\*\fldrslt\cf3\f51\fs20\ql Item\~2.}}\plain\intbl\li154\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\ul{\field{\*\fldinst HYPERLINK \\l "item2managementsdiscussionandana" }{\*\fldrslt\cf3\f51\fs20\ql Management\u8217?s Discussion and Analysis of Financial Condition and Results of Operations}}\cell\pard\plain\intbl\cf1\f51\fs20\qr 29\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630 \pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "item3quantitativeandqualitatived" }{\*\fldrslt\cf3\f51\fs20\ql Item\~3.}}\plain\intbl\li154\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\ul{\field{\*\fldinst HYPERLINK \\l "item3quantitativeandqualitatived" }{\*\fldrslt\cf3\f51\fs20\ql Quantitative and Qualitative Disclosures About Market Risk}}\cell\pard\plain\intbl\cf1\f51\fs20\qr 38\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630 \pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "item4controlsandprocedures_55437" }{\*\fldrslt\cf3\f51\fs20\ql Item\~4.}}\plain\intbl\li154\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\ul{\field{\*\fldinst HYPERLINK \\l "item4controlsandprocedures_55437" }{\*\fldrslt\cf3\f51\fs20\ql Controls and Procedures}}\cell\pard\plain\intbl\cf1\f51\fs20\qr 39\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh382 \pard\plain\intbl\sb132\cf1\f51\fs12\ql \~\cell\pard\plain\intbl\sb132\ul{\field{\*\fldinst HYPERLINK \\l "partiiotherinformation_640460_12" }{\*\fldrslt\cf3\f51\fs20\qc PART\~II}}\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "partiiotherinformation_640460_12" }{\*\fldrslt\cf3\f53\fs20\qc :}}\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "partiiotherinformation_640460_12" }{\*\fldrslt\cf3\f51\fs20\qc OTHER INFORMATION}}\cell\pard\plain\intbl\cf1\f51\fs12\qr \~\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh382\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630 \pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "item1legalproceedings_176438_124" }{\*\fldrslt\cf3\f51\fs20\ql Item\~1.}}\plain\intbl\li154\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "item1legalproceedings_176438_124" }{\*\fldrslt\cf3\f51\fs20\ql Legal Proceedings}}\cell\pard\plain\intbl\cf1\f51\fs20\qr 40\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630 \pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "item1ariskfactors_223749_1240162" }{\*\fldrslt\cf3\f51\fs20\ql Item\~1A.}}\plain\intbl\li154\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "item1ariskfactors_223749_1240162" }{\*\fldrslt\cf3\f51\fs20\ql Risk Factors}}\cell\pard\plain\intbl\cf1\f51\fs20\qr 40\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630 \pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "item1bunresolvedstaffcomments_53" }{\*\fldrslt\cf3\f51\fs20\ql Item\~1B.}}\plain\intbl\li154\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "item1bunresolvedstaffcomments_53" }{\*\fldrslt\cf3\f51\fs20\ql Unresolved Staff Comments}}\cell\pard\plain\intbl\cf1\f51\fs20\qr 58\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630 \pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "item2unregisteredsalesofequityan" }{\*\fldrslt\cf3\f51\fs20\ql Item\~2.}}\plain\intbl\li154\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "item2unregisteredsalesofequityan" }{\*\fldrslt\cf3\f51\fs20\ql Unregistered Sales of Equity Securities and Use of Proceeds}}\cell\pard\plain\intbl\cf1\f51\fs20\qr 58\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630 \pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "item3defaultsuponseniorsecuritie" }{\*\fldrslt\cf3\f51\fs20\ql Item\~3.}}\plain\intbl\li154\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "item3defaultsuponseniorsecuritie" }{\*\fldrslt\cf3\f51\fs20\ql Defaults Upon Senior Securities}}\cell\pard\plain\intbl\cf1\f51\fs20\qr 59\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630 \pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "item4minesafetydisclosures_34697" }{\*\fldrslt\cf3\f51\fs20\ql Item\~4.}}\plain\intbl\li154\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "item4minesafetydisclosures_34697" }{\*\fldrslt\cf3\f51\fs20\ql Mine Safety Disclosures}}\cell\pard\plain\intbl\cf1\f51\fs20\qr 59\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630 \pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "item5otherinformation_627510_124" }{\*\fldrslt\cf3\f51\fs20\ql Item\~5.}}\plain\intbl\li154\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "item5otherinformation_627510_124" }{\*\fldrslt\cf3\f51\fs20\ql Other Information}}\cell\pard\plain\intbl\cf1\f51\fs20\qr 59\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630 \pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "item6exhibits_214662_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Item\~6.}}\plain\intbl\li154\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "item6exhibits_214662_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Exhibits}}\cell\pard\plain\intbl\cf1\f51\fs20\qr 59\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630\row}}} {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630 \pard\plain\intbl\li154\sb132\ul{\field{\*\fldinst HYPERLINK \\l "signatures_887593_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Signatures}}\plain\intbl\li154\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr 61\cell{ {\trowd\trqc\clvertalb\cellx1200\clvertalb\cellx9210\clvertalb\cellx9688\trrh630\row}}}\pard\plain\cf1\f51\fs2\ql \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sb528\cf1\f51\fs20\qc \~\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}{\*\bkmkstart part_1_2_1}{\*\bkmkend part_1_2_1}\par\pard\plain\cf1\f51\fs20\b\qc PART\~I: FINANCIAL INFORMATION{\*\bkmkstart partifinancialinformation_253689}{\*\bkmkend partifinancialinformation_253689}{\*\bkmkstart item_1_3_1}{\*\bkmkend item_1_3_1}\par\pard\plain\sa264\cf1\f51\fs20\b\ql Item\~1.Financial Statements{\*\bkmkstart item1financialstatements_163352_}{\*\bkmkend item1financialstatements_163352_}\par\pard\plain\sa264\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc CONDENSED CONSOLIDATED BALANCE SHEETS{\*\bkmkstart balancesheets_696188_12401628}{\*\bkmkend balancesheets_696188_12401628}\par\pard\plain\sa264\cf1\f51\fs20\b\qc (in thousands, except share and per share data) \par\pard\plain {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh25 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh25\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6699\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6939\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8168\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8408\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9556\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc December 31,\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6699\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6939\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8168\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8408\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9556\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6699\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6939\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8168\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8408\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9556\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6699\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6939\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8168\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8408\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9556\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6699\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6939\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8168\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8408\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9556\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc (unaudited)\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc (1)\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6699\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6939\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8168\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8408\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9556\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\b\ql Assets\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\b\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Current assets:\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Cash and cash equivalents\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 7,939\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 30,078\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Accounts receivable, net\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 17,172\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 8,668\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Inventories\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 11,448\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 5,814\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Prepaid expenses\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 1,977\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 993\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Other current assets\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 50\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 52\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li528\cf1\f51\fs18\ql Total current assets\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 38,586\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 45,605\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Property and equipment, net\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 8,236\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 7,183\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Intangible assets, net\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 21,461\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 7,102\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Other non-current assets\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 1,235\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 900\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7379\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8168\clvertalb\cellx8408\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8794\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Goodwill\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 34,374\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 22\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7379\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8168\clvertalb\cellx8408\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8794\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Total assets\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 103,892\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 60,812\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\b\ql Liabilities and Stockholders' Equity\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Current liabilities:\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Accounts payable\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 11,473\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 7,075\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Accrued compensation and benefits\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 2,735\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 2,614\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Accrued expenses and other current liabilities\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 5,537\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 2,359\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Price adjustments and other revenue reserves\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 4,404\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Earn-out liability, current\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 10,037\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Line of credit, current\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 1,500\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7379\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8168\clvertalb\cellx8408\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8794\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Term loan, current\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 926\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7379\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8168\clvertalb\cellx8408\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8794\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li528\cf1\f51\fs18\ql Total current liabilities\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 34,186\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 14,474\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Term loan, non-current\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 29,361\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 10,908\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Other non-current liabilities\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 3,221\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 75\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Deferred rent, non-current\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 2,179\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 2,404\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Deferred tax liability, non-current\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 1,884\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~1\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7379\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8168\clvertalb\cellx8408\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8794\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li792\cf1\f51\fs18\ql Total liabilities\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 70,831\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 27,862\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7379\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8168\clvertalb\cellx8408\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8794\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Commitments and contingencies (See Note 8)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Stockholders' equity:\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh668 \pard\plain\intbl\li264\cf1\f51\fs18\ql Preferred stock, $0.0001 par value, 5,000,000 shares authorized as of June\~30,\~2018\plain\intbl\li264\cf1\f51\fs18\ql and December\~31,\~2017; no shares issued and outstanding as of June\~30,\~2018 and\plain\intbl\li264\cf1\f51\fs18\ql December\~31,\~2017\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh668\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh668 \pard\plain\intbl\li264\cf1\f51\fs18\ql Common stock, $0.0001 par value, 100,000,000 shares authorized; 21,523,025 and\plain\intbl\li264\cf1\f51\fs18\ql 21,291,833 shares issued and outstanding as of June\~30,\~2018 and December\~31,\~2017,\plain\intbl\li264\cf1\f51\fs18\ql respectively\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~2\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~2\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh668\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Additional paid-in capital\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 139,275\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 133,087\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Accumulated other comprehensive loss\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (212)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (295)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clvertalb\cellx7379\clvertalb\cellx8168\clvertalb\cellx8408\clvertalb\cellx8794\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Accumulated deficit\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (106,004)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (99,844)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7379\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8168\clvertalb\cellx8408\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8794\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9556\clvertalb\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Total stockholders' equity\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 33,061\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 32,950\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\cellx6699\clvertalb\cellx6939\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7379\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8168\clvertalb\cellx8408\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8794\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9556\clvertalb\cellx9688\trrh223\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Total liabilities and stockholders\u8217? equity\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 103,892\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 60,812\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6699\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6939\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7379\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8168\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8408\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8794\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}}\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par \par\pard\plain {\trowd\clvertalc\cellx1\cellx360\clvertalc\cellx361\cellx9688\trrh495 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql The condensed consolidated balance sheet as of December\~31, 2017 was derived from the audited consolidated\plain\intbl\cf1\f51\fs20\ql financial statements as of that date.\cell{ {\trowd\clvertalc\cellx1\cellx360\clvertalc\cellx361\cellx9688\trrh495\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\i\qc See accompanying Notes\~to Condensed Consolidated Financial Statements.\par\pard\plain\cf1\f51\fs2\ql \~\par\pard\plain\sb528\cf1\f51\fs20\qc 3\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf10\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS{\*\bkmkstart statementsofoperations_408652_12}{\*\bkmkend statementsofoperations_408652_12} \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (in thousands, except share and per share data) \par\pard\plain\fs16\pard\plain\sa264\cf1\f51\fs20\b\qc (unaudited) \par\pard\plain {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clvertalb\cellx4167\clvertalb\cellx5157\clvertalb\cellx5397\clvertalb\cellx5597\clvertalb\cellx6587\clvertalb\cellx6827\clvertalb\cellx7027\clvertalb\cellx8017\clvertalb\cellx8257\clvertalb\cellx8457\clvertalb\cellx9447\clvertalb\cellx9688\trrh25 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clvertalb\cellx4167\clvertalb\cellx5157\clvertalb\cellx5397\clvertalb\cellx5597\clvertalb\cellx6587\clvertalb\cellx6827\clvertalb\cellx7027\clvertalb\cellx8017\clvertalb\cellx8257\clvertalb\cellx8457\clvertalb\cellx9447\clvertalb\cellx9688\trrh25\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3728\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3968\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6587\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6827\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Three Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Six Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3728\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3968\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6587\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6827\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3728\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6587\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3728\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6587\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3728\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5157\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6587\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8017\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3728\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5157\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6587\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8017\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Revenue, net\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 18,183\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 13,412\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 33,485\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 24,719\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4167\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5157\clvertalb\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5597\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6587\clvertalb\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7027\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8017\clvertalb\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8457\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9447\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Cost of revenue\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 10,419\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 6,689\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 18,541\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 12,442\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4167\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5157\clvertalb\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5597\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6587\clvertalb\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7027\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8017\clvertalb\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8457\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9447\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\li396\cf1\f51\fs20\ql Gross profit\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 7,764\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 6,723\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 14,944\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 12,277\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clvertalb\cellx4167\clvertalb\cellx5157\clvertalb\cellx5397\clvertalb\cellx5597\clvertalb\cellx6587\clvertalb\cellx6827\clvertalb\cellx7027\clvertalb\cellx8017\clvertalb\cellx8257\clvertalb\cellx8457\clvertalb\cellx9447\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Operating expenses:\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clvertalb\cellx4167\clvertalb\cellx5157\clvertalb\cellx5397\clvertalb\cellx5597\clvertalb\cellx6587\clvertalb\cellx6827\clvertalb\cellx7027\clvertalb\cellx8017\clvertalb\cellx8257\clvertalb\cellx8457\clvertalb\cellx9447\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\li396\cf1\f51\fs20\ql Research and development\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,421\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,675\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 8,086\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 7,047\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clvertalb\cellx4167\clvertalb\cellx5157\clvertalb\cellx5397\clvertalb\cellx5597\clvertalb\cellx6587\clvertalb\cellx6827\clvertalb\cellx7027\clvertalb\cellx8017\clvertalb\cellx8257\clvertalb\cellx8457\clvertalb\cellx9447\clvertalb\cellx9688\trrh248 \pard\plain\intbl\li396\cf1\f51\fs20\ql Sales and marketing\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,615\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,911\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 6,367\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5,511\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clvertalb\cellx4167\clvertalb\cellx5157\clvertalb\cellx5397\clvertalb\cellx5597\clvertalb\cellx6587\clvertalb\cellx6827\clvertalb\cellx7027\clvertalb\cellx8017\clvertalb\cellx8257\clvertalb\cellx8457\clvertalb\cellx9447\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\li396\cf1\f51\fs20\ql General and administrative\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,641\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,673\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5,354\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,808\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4167\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5157\clvertalb\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5597\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6587\clvertalb\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7027\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8017\clvertalb\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8457\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9447\clvertalb\cellx9688\trrh248 \pard\plain\intbl\li660\cf1\f51\fs20\ql Total operating expenses\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 11,677\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 8,259\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 19,807\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 16,366\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4167\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5157\clvertalb\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5597\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6587\clvertalb\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7027\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8017\clvertalb\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8457\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9447\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Loss from operations\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (3,913)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (1,536)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (4,863)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (4,089)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clvertalb\cellx4167\clvertalb\cellx5157\clvertalb\cellx5397\clvertalb\cellx5597\clvertalb\cellx6587\clvertalb\cellx6827\clvertalb\cellx7027\clvertalb\cellx8017\clvertalb\cellx8257\clvertalb\cellx8457\clvertalb\cellx9447\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Other income (expense):\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clvertalb\cellx4167\clvertalb\cellx5157\clvertalb\cellx5397\clvertalb\cellx5597\clvertalb\cellx6587\clvertalb\cellx6827\clvertalb\cellx7027\clvertalb\cellx8017\clvertalb\cellx8257\clvertalb\cellx8457\clvertalb\cellx9447\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\li396\cf1\f51\fs20\ql Interest expense, net\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (1,181)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (198)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (1,322)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (411)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4167\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5157\clvertalb\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5597\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6587\clvertalb\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7027\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8017\clvertalb\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8457\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9447\clvertalb\cellx9688\trrh248 \pard\plain\intbl\li396\cf1\f51\fs20\ql Other income (expense), net\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (4)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~9\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 14\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4167\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5157\clvertalb\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5597\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6587\clvertalb\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7027\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8017\clvertalb\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8457\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9447\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\li660\cf1\f51\fs20\ql Total other income (expense), net\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (1,182)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (202)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (1,313)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (397)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clvertalb\cellx4167\clvertalb\cellx5157\clvertalb\cellx5397\clvertalb\cellx5597\clvertalb\cellx6587\clvertalb\cellx6827\clvertalb\cellx7027\clvertalb\cellx8017\clvertalb\cellx8257\clvertalb\cellx8457\clvertalb\cellx9447\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Loss before provision for income taxes\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (5,095)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (1,738)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (6,176)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (4,486)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clvertalb\cellx4167\clvertalb\cellx5157\clvertalb\cellx5397\clvertalb\cellx5597\clvertalb\cellx6587\clvertalb\cellx6827\clvertalb\cellx7027\clvertalb\cellx8017\clvertalb\cellx8257\clvertalb\cellx8457\clvertalb\cellx9447\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Provision for (benefit from) income taxes\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (37)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 13\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (16)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 40\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx4167\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5157\clvertalb\cellx5397\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5597\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6587\clvertalb\cellx6827\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7027\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8017\clvertalb\cellx8257\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8457\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9447\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Net loss\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (5,058)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (1,751)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (6,160)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (4,526)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx4167\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5157\clvertalb\cellx5397\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5597\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6587\clvertalb\cellx6827\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7027\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8017\clvertalb\cellx8257\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8457\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9447\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Net loss per share:\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx4167\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5157\clvertalb\cellx5397\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5597\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6587\clvertalb\cellx6827\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7027\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8017\clvertalb\cellx8257\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8457\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9447\clvertalb\cellx9688\trrh248 \pard\plain\intbl\li396\cf1\f51\fs20\ql Basic and diluted\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (0.24)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (0.11)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (0.29)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (0.28)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx4167\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5157\clvertalb\cellx5397\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5597\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6587\clvertalb\cellx6827\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7027\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8017\clvertalb\cellx8257\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8457\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9447\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh495 \pard\plain\intbl\cf1\f51\fs20\ql Weighted average number of shares used in\plain\intbl\cf1\f51\fs20\ql computing net loss per share:\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3728\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3968\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4167\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5157\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5397\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5597\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6827\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7027\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8017\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8257\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh495\row}}} {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx4167\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5157\clvertalb\cellx5397\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5597\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6587\clvertalb\cellx6827\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7027\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8017\clvertalb\cellx8257\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8457\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9447\clvertalb\cellx9688\trrh248 \pard\plain\intbl\li396\cf1\f51\fs20\ql Basic and diluted\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 21,475,913\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 16,343,248\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 21,423,710\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 15,994,703\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx3728\clvertalb\cellx3968\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx4167\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5157\clvertalb\cellx5397\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5597\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6587\clvertalb\cellx6827\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7027\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8017\clvertalb\cellx8257\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8457\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9447\clvertalb\cellx9688\trrh248\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\i\qc See accompanying Notes\~to Condensed Consolidated Financial Statements.\par\pard\plain\sb528\cf1\f51\fs20\qc 4\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf10\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\qc \~\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION\par\pard\plain\fi792\cf1\f51\fs20\b\qc CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS{\*\bkmkstart comprehensiveloss_12401628}{\*\bkmkend comprehensiveloss_12401628}\par\pard\plain\fi792\cf1\f51\fs20\b\qc (in thousands)\par\pard\plain\fi792\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\fi792\cf1\f51\fs20\qc \~ \par\pard\plain {\trowd\clvertalb\cellx4979\clvertalb\cellx5219\clvertalb\cellx5419\clvertalb\cellx6096\clvertalb\cellx6336\clvertalb\cellx6536\clvertalb\cellx7213\clvertalb\cellx7453\clvertalb\cellx7653\clvertalb\cellx8330\clvertalb\cellx8570\clvertalb\cellx8770\clvertalb\cellx9447\clvertalb\cellx9688\trrh26 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx4979\clvertalb\cellx5219\clvertalb\cellx5419\clvertalb\cellx6096\clvertalb\cellx6336\clvertalb\cellx6536\clvertalb\cellx7213\clvertalb\cellx7453\clvertalb\cellx7653\clvertalb\cellx8330\clvertalb\cellx8570\clvertalb\cellx8770\clvertalb\cellx9447\clvertalb\cellx9688\trrh26\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4979\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5219\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7213\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7453\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Three Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Six Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4979\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5219\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7213\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7453\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4979\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5219\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7213\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7453\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4979\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5219\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7213\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7453\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4979\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5219\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6096\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6336\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7213\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7453\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8330\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8570\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4979\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5219\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6096\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6336\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7213\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7453\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8330\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8570\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4979\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5219\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5419\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6096\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6336\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6536\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7213\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7453\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7653\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8330\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8570\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8770\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Net loss\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (5,058)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (1,751)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (6,160)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (4,526)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4979\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5219\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5419\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6096\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6336\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6536\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7213\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7453\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7653\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8330\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8570\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8770\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4979\clvertalb\cellx5219\clvertalb\cellx5419\clvertalb\cellx6096\clvertalb\cellx6336\clvertalb\cellx6536\clvertalb\cellx7213\clvertalb\cellx7453\clvertalb\cellx7653\clvertalb\cellx8330\clvertalb\cellx8570\clvertalb\cellx8770\clvertalb\cellx9447\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Other comprehensive loss, net of tax:\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx4979\clvertalb\cellx5219\clvertalb\cellx5419\clvertalb\cellx6096\clvertalb\cellx6336\clvertalb\cellx6536\clvertalb\cellx7213\clvertalb\cellx7453\clvertalb\cellx7653\clvertalb\cellx8330\clvertalb\cellx8570\clvertalb\cellx8770\clvertalb\cellx9447\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4979\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5219\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5419\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6096\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6336\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6536\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7213\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7453\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7653\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8330\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8570\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8770\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\li264\cf1\f51\fs20\ql Foreign currency translation adjustment\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 100\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (29)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 83\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (51)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4979\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5219\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5419\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6096\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6336\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6536\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7213\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7453\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7653\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8330\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8570\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8770\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4979\clvertalb\cellx5219\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5419\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6096\clvertalb\cellx6336\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6536\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7213\clvertalb\cellx7453\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7653\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8330\clvertalb\cellx8570\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8770\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9447\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Comprehensive loss\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (4,958)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (1,780)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (6,077)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (4,577)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx4979\clvertalb\cellx5219\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5419\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6096\clvertalb\cellx6336\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6536\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7213\clvertalb\cellx7453\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7653\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8330\clvertalb\cellx8570\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8770\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9447\clvertalb\cellx9688\trrh249\row}}}\pard\plain\fi792\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\qc \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\i\qc See accompanying Notes\~to Condensed Consolidated Financial Statements.\par\pard\plain\sb528\cf1\f51\fs20\qc 5\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf10\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS{\*\bkmkstart cashflows_123653_12401628}{\*\bkmkend cashflows_123653_12401628} \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (in thousands) \par\pard\plain\fs16\pard\plain\sa264\cf1\f51\fs20\b\qc (unaudited) \par\pard\plain {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh66\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7032\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Six Months Ended June 30,\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7032\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7032\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8239\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9446\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7032\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8239\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9446\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Cash flows from operating activities:\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Net loss\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\cf1\f51\fs18\qr (6,160)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\cf1\f51\fs18\qr (4,526)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Adjustments to reconcile net loss to net cash used in operating activities:\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li528\cf1\f51\fs18\ql Stock-based compensation expense\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 1,163\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 1,806\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li528\cf1\f51\fs18\ql Depreciation and amortization\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 1,062\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 644\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li528\cf1\f51\fs18\ql Amortization of intangible assets\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 981\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 618\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li528\cf1\f51\fs18\ql Amortization of debt discount\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 285\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 45\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li528\cf1\f51\fs18\ql Deferred income taxes\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (35)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li528\cf1\f51\fs18\ql Gain on sale of equipment\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (18)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li528\cf1\f51\fs18\ql Changes in assets and liabilities:\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li792\cf1\f51\fs18\ql Accounts receivable\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (8,312)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (2,944)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li792\cf1\f51\fs18\ql Inventories\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (5,634)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 821\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li792\cf1\f51\fs18\ql Prepaid expenses and other current assets\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (109)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (35)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li792\cf1\f51\fs18\ql Other non-current assets\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (134)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li792\cf1\f51\fs18\ql Accounts payable\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 4,423\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 1,707\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li792\cf1\f51\fs18\ql Accrued compensation and benefits\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 121\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 575\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li792\cf1\f51\fs18\ql Accrued expenses and other current liabilities\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 2,388\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (81)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li792\cf1\f51\fs18\ql Price adjustments and other revenue reserves\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 4,404\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li792\cf1\f51\fs18\ql Other non-current liabilities\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (75)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7472\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8239\clvertalb\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8679\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li792\cf1\f51\fs18\ql Deferred rent\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (225)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (208)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7472\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8239\clvertalb\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8679\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li792\cf1\f51\fs18\ql Net cash used in operating activities\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (5,741)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (1,712)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Cash flows from investing activities:\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Acquisition of property and equipment\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (2,104)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (1,659)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Acquisition of S3, net of cash acquired\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (34,616)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Investment in unconsolidated affiliate\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (225)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7472\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8239\clvertalb\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8679\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li792\cf1\f51\fs18\ql Net cash used in investing activities\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (36,945)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (1,659)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7472\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8239\clvertalb\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8679\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Cash flows from financing activities:\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Proceeds from public offering, net of underwriting discounts and commissions\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 18,364\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Proceeds from exercise of stock options and employee stock purchase plan\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 281\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 386\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Tax withholdings related to net share settlement of restricted stock units\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (55)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (62)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Proceeds from revolving line of credit\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 21,457\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Payments on revolving line of credit\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (1,500)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (21,277)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Proceeds from term loan, net of fees\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 33,941\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7472\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8239\clvertalb\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8679\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Payments on term loan\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (12,000)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (3,273)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7472\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8239\clvertalb\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8679\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li792\cf1\f51\fs18\ql Net cash provided by financing activities\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 20,667\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 15,595\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7472\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8239\clvertalb\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8679\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Effect of exchange rates on cash and equivalents\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (120)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (50)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7472\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8239\clvertalb\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8679\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Net increase (decrease) in cash and cash equivalents\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\qr (22,139)\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 12,174\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7472\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8239\clvertalb\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8679\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Cash and cash equivalents - beginning of period\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 30,078\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 19,719\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7472\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8239\clvertalb\cellx8479\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8679\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Cash and cash equivalents - end of period\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 7,939\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 31,893\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Supplemental disclosures of other cash flow information:\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Cash paid for interest expense\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 793\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 389\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\cf1\f51\fs18\ql Supplemental disclosures of non-cash investing and financing information:\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Purchase of property and equipment included in accounts payable\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 258\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 406\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7032\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7472\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8239\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8479\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8679\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh223\row}}} {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223 \pard\plain\intbl\li264\cf1\f51\fs18\ql Fair value of warrants issued in connection with term loan\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr 4,799\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell\pard\plain\intbl\cf1\f51\fs18\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs18\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs18\ql \~\cell{ {\trowd\trqc\clvertalb\cellx7032\clvertalb\cellx7272\clvertalb\cellx7472\clvertalb\cellx8239\clvertalb\cellx8479\clvertalb\cellx8679\clvertalb\cellx9446\clvertalb\cellx9688\trrh223\row}}}\pard\plain\cf1\f51\fs14\ql \~\par\pard\plain\cf1\f51\fs20\i\qc See accompanying Notes\~to Condensed Consolidated Financial Statements.\par\pard\plain\cf1\f51\fs12\ql \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sb528\cf1\f51\fs20\qc 6\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\cf1\f51\fs20\b\ql Note\~1. Organization and Summary of Significant Accounting Policies.{\*\bkmkstart note1organizationandsummaryofsig}{\*\bkmkend note1organizationandsummaryofsig}\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Organization and Nature of Operations.\par\pard\plain\fi792\cf1\f51\fs20\ql Adesto Technologies Corporation (together with its subsidiaries; \u8220?Adesto\u8221?, \u8220?we\u8221?,\plain\cf1\f51\fs20\ql \u8220?our\u8221?, \u8220?us\u8221? or the \u8220?Company\u8221?) was incorporated in the state of California\plain\cf1\f51\fs20\ql in January\~2006 and reincorporated in Delaware in October\~2015. We are a leading provider of application-specific\plain\cf1\f51\fs20\ql and, ultra-low power non-volatile memory (\u8220?NVM\u8221?) products. Our corporate headquarters are located\plain\sa264\cf1\f51\fs20\ql in Santa Clara, California.\par\pard\plain\fi792\cf1\f51\fs20\ql On September\~28, 2012, we purchased certain flash memory product assets from Atmel Corporation and\plain\sa264\cf1\f51\fs20\ql our financial results include the operating results of those assets from the date of acquisition.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Basis of Presentation.\par\pard\plain\fi792\cf1\f51\fs20\ql The accompanying unaudited condensed consolidated financial statements have been prepared in accordance\plain\cf1\f51\fs20\ql with accounting principles generally accepted in the United States of America (\u8220?U.S. GAAP\u8221?) for\plain\cf1\f51\fs20\ql interim financial information and with the instructions to Form\~10\u8209?Q and Article\~10 of Regulation S-X.\plain\cf1\f51\fs20\ql Accordingly, they do not include all of the information and footnotes required by U.S. GAAP to complete annual\plain\cf1\f51\fs20\ql consolidated financial statements. In the opinion of our management, all adjustments (consisting of normal recurring\plain\cf1\f51\fs20\ql adjustments) considered necessary to present fairly the financial position of the Company and its results of\plain\cf1\f51\fs20\ql operations and cash flows for the interim periods presented have been included. Operating results for the six months\plain\cf1\f51\fs20\ql ended June 30, 2018 are not necessarily indicative of the results that may be expected for the\~year ending\plain\sa264\cf1\f51\fs20\ql December\~31, 2018, for any other interim period or for any other future\~year.\par\pard\plain\fi792\cf1\f51\fs20\ql The condensed consolidated balance sheet as of December\~31, 2017 was derived from the audited\plain\cf1\f51\fs20\ql consolidated financial statements as of that date, but does not include all of the disclosures required by U.S. GAAP.\plain\cf1\f51\fs20\ql The accompanying condensed consolidated financial statements should be read in conjunction with the audited\plain\cf1\f51\fs20\ql consolidated financial statements and notes thereto contained in the Company\u8217?s Annual Report on\plain\cf1\f51\fs20\ql Form\~10\u8209?K for the\~year ended December\~31, 2017, filed with the Securities and Exchange Commission on\plain\sa264\cf1\f51\fs20\ql March\~13, 2018.\par\pard\plain\fi792\cf1\f51\fs20\ql The condensed consolidated financial statements include the results of our operations, and the operations of\plain\sa264\cf1\f51\fs20\ql our wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.\par\pard\plain\fi792\cf1\f51\fs20\ql There have been no material changes to our significant accounting policies described in Note\~1,\plain\cf1\f51\fs20\ql Organization and Summary of Significant Accounting Policies, in Notes\~to Consolidated Financial Statements in\plain\cf1\f51\fs20\ql Item\~8 of Part\~II of our Annual Report on Form\~10\u8209?K for the\~year ended December\~31, 2017 that have had a\plain\sa264\cf1\f51\fs20\ql material impact on our condensed consolidated financial statements and related notes, except as described below.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Recent Accounting Pronouncements.\par\pard\plain\fi792\cf1\f51\fs20\ql In June 2018, the Financial Accounting Standards Board (\u8220?FASB\u8221?) issued Accounting\plain\cf1\f51\fs20\ql Standards Update (\u8220?ASU\u8221?) No. 2018-07, Compensation\u8212?Stock Compensation (Topic 718):\plain\cf1\f51\fs20\ql Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 applies to all entities that enter\plain\cf1\f51\fs20\ql into share-based payment transactions for acquiring goods and services from nonemployees. The amendments in\plain\cf1\f51\fs20\ql ASU 2018-07 expand the scope of Topic 718, Compensation - Stock Compensation, to include share-based\plain\cf1\f51\fs20\ql payments transactions to nonemployees. Changes to the accounting for nonemployee awards as a result of ASU\plain\cf1\f51\fs20\ql 2018-07 include: 1) equity-classified nonemployee share-based payment awards are measured at the grant date,\plain\cf1\f51\fs20\ql instead of the previous requirement to remeasure the awards through the performance completion date, 2) for awards\plain\cf1\f51\fs20\ql with performance conditions, compensation cost is recognized when the achievement of the performance condition\plain\cf1\f51\fs20\ql is probable, rather than upon achievement, and 3) the current requirement to reassess the classification (equity or\plain\sa264\cf1\f51\fs20\ql liability) for nonemployee awards upon vesting is eliminated. ASU 2018-07\par\pard\plain\sb528\cf1\f51\fs20\qc 7\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\cf1\f51\fs20\ql clarifies that Topic 718 does not apply to financing transactions or awards granted to customers as part of a contract\plain\cf1\f51\fs20\ql accounted for under Topic 606, Revenue from Contracts with Customers. The amendments in ASU 2018-07 are\plain\cf1\f51\fs20\ql effective for public business entities for fiscal years beginning after December 15, 2018, and interim periods within\plain\cf1\f51\fs20\ql that fiscal year. An entity should only remeasure liability-classified awards that have not been settled by the date of\plain\cf1\f51\fs20\ql adoption and equity-classified awards for which the measurement date has not been established through a\plain\cf1\f51\fs20\ql cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company\plain\sa264\cf1\f51\fs20\ql expects that the adoption will not have a material impact on its consolidated financial statements.\~\par\pard\plain\fi792\cf1\f51\fs20\ql In February\~2018, FASB issued ASU No.\~2018-02,\~Income Statement\u8212?Reporting Comprehensive\plain\cf1\f51\fs20\ql Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This\plain\cf1\f51\fs20\ql ASU allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax\plain\cf1\f51\fs20\ql effects resulting from the Tax Cuts and Jobs Act. This ASU is effective for fiscal years beginning after\plain\cf1\f51\fs20\ql December\~15, 2018 and interim periods within those fiscal years. The Company expects that the adoption will not\plain\sa264\cf1\f51\fs20\ql have a material impact on its consolidated financial statements.\~\par\pard\plain\fi792\cf1\f51\fs20\ql In January\~2017, the FASB issued ASU No.\~2017-04,\~Intangibles\u8212?Goodwill and Other (Topic 350):\plain\cf1\f51\fs20\ql Simplifying the Test for Goodwill Impairment. This ASU eliminates Step 2 from the goodwill impairment test.\plain\cf1\f51\fs20\ql Instead, an entity should recognize an impairment charge for the amount by which the carrying value exceeds the\plain\cf1\f51\fs20\ql reporting unit\u8217?s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. This\plain\cf1\f51\fs20\ql ASU is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December\~15,\plain\cf1\f51\fs20\ql 2019. The Company is currently evaluating the effect of the adoption of this ASU, but anticipates that the adoption\plain\sa264\cf1\f51\fs20\ql will not have a material impact on its consolidated financial statements.\par\pard\plain\fi792\cf1\f51\fs20\ql In June\~2016, the FASB issued ASU No.\~2016-13, Financial Instruments\u8212?Credit Losses (Topic 326):\plain\cf1\f51\fs20\ql Measurement of Credit Losses on Financial Instruments. This ASU requires instruments measured at amortized cost\plain\cf1\f51\fs20\ql to be presented at the net amount expected to be collected. Entities are also required to record allowances for\plain\cf1\f51\fs20\ql available-for-sale debt securities rather than reduce the carrying amount. This ASU is effective for fiscal years\plain\cf1\f51\fs20\ql beginning after December\~15, 2019, including interim periods within those fiscal years. The Company expects that\plain\sa264\cf1\f51\fs20\ql the adoption will not have a material impact on its consolidated financial statements.\par\pard\plain\fi792\cf1\f51\fs20\ql In February\~2016, the FASB issued ASU No.\~2016-02, Leases (Topic 842). The core principle of Topic\plain\cf1\f51\fs20\ql 842 is that a lessee should recognize the assets and liabilities that arise from leases. For operating leases, a lessee is\plain\cf1\f51\fs20\ql required to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease\plain\cf1\f51\fs20\ql payments, in the statement of financial position. This ASU is effective for fiscal years beginning after December\~15,\plain\cf1\f51\fs20\ql 2018, including interim periods within those fiscal years. The Company is evaluating the effect that the adoption of\plain\cf1\f51\fs20\ql this ASU will have on its consolidated financial statements. The Company currently expects that most of its\plain\cf1\f51\fs20\ql operating lease commitments will be subject to the new standard and recognized as right-of-use assets and\plain\cf1\f51\fs20\ql operating lease liabilities upon the\~adoption\~of\~ASU 2016-02, which will increase the total assets and total liabilities\plain\sa264\cf1\f51\fs20\ql that it reports relative to such amounts prior to adoption.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Recently Adopted Accounting Pronouncements.\par\pard\plain\cf1\f51\fs20\i\ql Adoption of ASC 606:\par\pard\plain\sb132\fi792\cf1\f51\fs20\ql In May 2014, the FASB issued an ASU on revenue from contracts with customers, ASU No. 2014-09,\plain\cf1\f51\fs20\ql Revenue from Contracts with Customers (\u8220?Topic 606\u8221?). This standard update outlines a single\plain\cf1\f51\fs20\ql comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The\plain\cf1\f51\fs20\ql guidance is effective for annual reporting periods including interim reporting reports beginning after December 15,\plain\cf1\f51\fs20\ql 2017. Collectively, we refer to Topic 606, its related amendments and Subtopic 340-40 as the \u8220?new\plain\sa264\cf1\f51\fs20\ql standard\u8221?.\par\pard\plain\sb528\cf1\f51\fs20\qc 8\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\fi792\cf1\f51\fs20\qj On January 1, 2018, we adopted the new standard using the modified retrospective method applied to all\plain\cf1\f51\fs20\qj contracts that are not completed contracts at the date of initial application (i.e., January 1, 2018). Results for\plain\cf1\f51\fs20\qj reporting periods after January 1, 2018 are presented under the new standard, while prior period amounts are not\plain\cf1\f51\fs20\qj adjusted and continue to be reported in accordance with our historic accounting. There was no impact on the\plain\cf1\f51\fs20\qj opening accumulated deficit as of January 1, 2018 due to the adoption of the new standard. We reclassified the\plain\cf1\f51\fs20\qj allowance for ship from stock and debits (\u8220?SSDs\u8221?), price protection, rights of return and other\plain\cf1\f51\fs20\qj activities to current liabilities presented as "Price adjustments and other revenue reserves" from the allowance for\plain\sa264\cf1\f51\fs20\qj accounts receivable due to the adoption of the new standard.\par\pard\plain\fi792\cf1\f51\fs20\qj We recorded s cumulative effect adjustment to our January 1, 2018 condensed consolidated balance sheet\plain\cf1\f51\fs20\qj for the impact of the reclassification of the allowance for SSDs, price protection, rights of return and other activities\plain\cf1\f51\fs20\qj to current liabilities presented as \u8220?Price adjustments and other revenue reserves\u8221?. The cumulative effect\plain\cf1\f51\fs20\qj of the changes made to our January 1, 2018 condensed consolidated balance sheet for the adoption of the new\plain\sa264\cf1\f51\fs20\qj revenue standard were as follows (in thousands): \par\pard\plain {\trowd\clvertalb\cellx5462\clvertalb\cellx5702\clvertalb\cellx6013\clvertalb\cellx7065\clvertalb\cellx7305\clvertalb\cellx7780\clvertalb\cellx8457\clvertalb\cellx8697\clvertalb\cellx9008\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx5462\clvertalb\cellx5702\clvertalb\cellx6013\clvertalb\cellx7065\clvertalb\cellx7305\clvertalb\cellx7780\clvertalb\cellx8457\clvertalb\cellx8697\clvertalb\cellx9008\clvertalb\cellx9688\trrh66\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5462\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7066\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7306\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8458\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8698\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Balance as of\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Adjustments\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Balance as of\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5462\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7066\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7306\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8458\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8698\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh198\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5462\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6013\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7065\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7305\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7780\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8457\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8697\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9008\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh396 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc December\~31,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Due to\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc January\plain\intbl\cf1\f51\fs16\b\qc 1,\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5462\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6013\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7065\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7305\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7780\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8457\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8697\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9008\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh396\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5462\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5702\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7066\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7306\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8458\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8698\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh198 \pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc ASC 606\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5462\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5702\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7066\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7306\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8458\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8698\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh198\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5462\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5702\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6013\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7065\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7305\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7780\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8697\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9008\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Accounts receivable, net\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 8,668\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,832\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 12,500\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5462\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5702\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6013\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7065\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7305\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7780\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8457\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8697\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9008\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx5462\clvertalb\cellx5702\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6013\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7065\clvertalb\cellx7305\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7780\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8457\clvertalb\cellx8697\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9008\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Price adjustments and other revenue reserves\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (3,832)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (3,832)\cell{ {\trowd\clvertalb\cellx5462\clvertalb\cellx5702\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6013\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7065\clvertalb\cellx7305\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7780\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8457\clvertalb\cellx8697\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9008\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9688\trrh248\row}}}\pard\plain\sb264\fi792\cf1\f51\fs20\qj In accordance with the new standard requirements, the disclosure of the impact of adoption on select\plain\sa264\cf1\f51\fs20\qj condensed consolidated balance sheet line items was as follows (in thousands): \par\pard\plain {\trowd\clvertalb\cellx6046\clvertalb\cellx6286\clvertalb\cellx6577\clvertalb\cellx7217\clvertalb\cellx7357\clvertalb\cellx7547\clvertalb\cellx8684\clvertalb\cellx8824\clvertalb\cellx9014\clvertalb\cellx9688\trrh25 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx6046\clvertalb\cellx6286\clvertalb\cellx6577\clvertalb\cellx7217\clvertalb\cellx7357\clvertalb\cellx7547\clvertalb\cellx8684\clvertalb\cellx8824\clvertalb\cellx9014\clvertalb\cellx9688\trrh25\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6046\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6286\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc As of June 30, 2018\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6046\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6286\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6046\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6286\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6577\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7217\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7357\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7547\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8684\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8824\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9014\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh396 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc As\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Balances\plain\intbl\cf1\f51\fs16\b\qc without\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Effect of\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6046\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6286\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6577\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7217\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7357\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7547\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8684\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8824\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9014\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh396\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6046\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6286\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7217\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7357\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8684\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8824\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh198 \pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Reported\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc ASC 606\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Change\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6046\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6286\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7217\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7357\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8684\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8824\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh198\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6046\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6286\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6577\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7217\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7357\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7547\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8684\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8824\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9014\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Accounts receivable, net\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 17,172\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 12,768\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (4,404)\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6046\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6286\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6577\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7217\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7357\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7547\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8684\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8824\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9014\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx6046\clvertalb\cellx6286\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6577\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7217\clvertalb\cellx7357\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7547\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8684\clvertalb\cellx8824\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9014\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Price adjustments and other revenue reserves\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,404\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,404\cell{ {\trowd\clvertalb\cellx6046\clvertalb\cellx6286\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6577\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7217\clvertalb\cellx7357\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7547\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8684\clvertalb\cellx8824\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9014\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9688\trrh248\row}}}\pard\plain\sa264\cf1\f51\fs20\b\i\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Revenue Recognition.\par\pard\plain\fi792\cf1\f51\fs20\ql \~Revenue is recognized when control of the promised goods or services is transferred to customers, in an\plain\cf1\f51\fs20\ql amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Sales of\plain\cf1\f51\fs20\ql products with alternative use account for the majority of our revenue and are recognized at a point in time, the\plain\sa264\cf1\f51\fs20\ql timing of such recognition remained the same under Topic 606.\par\pard\plain\fi792\cf1\f51\fs20\ql Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific\plain\cf1\f51\fs20\ql revenue-producing transaction, that are collected by us from a customer and deposited with the relevant government\plain\sa264\cf1\f51\fs20\ql authority, are excluded from revenue. Our revenue arrangements do not contain significant financing components.\par\pard\plain\fi792\cf1\f51\fs20\ql Revenue is recognized over a period of time when it is assessed that performance obligations are satisfied\plain\cf1\f51\fs20\ql over a period rather than at a point in time. When any of the following criteria is fulfilled, revenue is recognized\plain\sa264\cf1\f51\fs20\ql over a period of time: \par\pard\plain {\trowd\clvertalc\cellx720\clvertalc\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalc\cellx720\clvertalc\cellx9688\trrh248\row}}} {\trowd\cellx720\cellx9688\trrh495 \pard\plain\intbl\cf1\f51\fs20\ql (a)\cell\pard\plain\intbl\cf1\f51\fs20\qj The customer simultaneously receives and consumes the benefits provided by the performance as Adesto\plain\intbl\cf1\f51\fs20\qj performs.\cell{ {\trowd\cellx720\cellx9688\trrh495\row}}} {\trowd\clvertalc\cellx720\clvertalc\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalc\cellx720\clvertalc\cellx9688\trrh248\row}}}\pard\plain\sb528\cf1\f51\fs20\qc 9\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~ \par\pard\plain {\trowd\cellx720\cellx9688\trrh495 \pard\plain\intbl\cf1\f51\fs20\ql (b)\cell\pard\plain\intbl\cf1\f51\fs20\qj Adesto\u8217?s performance creates or enhances an asset (for example, work in process) that the customer\plain\intbl\cf1\f51\fs20\qj controls as the asset is created or enhanced.\cell{ {\trowd\cellx720\cellx9688\trrh495\row}}} {\trowd\clvertalc\cellx720\clvertalc\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalc\cellx720\clvertalc\cellx9688\trrh248\row}}} {\trowd\cellx720\cellx9688\trrh495 \pard\plain\intbl\cf1\f51\fs20\ql (c)\cell\pard\plain\intbl\cf1\f51\fs20\qj Adesto\u8217?s performance does not create an asset with an alternative use, and Adesto has an\plain\intbl\cf1\f51\fs20\qj enforceable right to payment for performance completed to date.\cell{ {\trowd\cellx720\cellx9688\trrh495\row}}}\pard\plain\cf1\f51\fs20\qj \~\par\pard\plain\fi792\cf1\f51\fs20\ql If revenue is recognized over a period of time, we would then select an appropriate method for measuring\plain\cf1\f51\fs20\ql progress toward complete satisfaction of the performance obligation, usually costs incurred to date relative to the\plain\cf1\f51\fs20\ql total expected costs to the satisfaction of that performance obligation. Typically, our revenue is recognized at a\plain\sa264\cf1\f51\fs20\ql point in time.\par\pard\plain\fi792\cf1\f51\fs20\ql Sales to certain distributors are made under arrangements which provide the distributors with price\plain\cf1\f51\fs20\ql adjustments, price protection, stock rotation and other allowances under certain circumstances. These adjustments\plain\cf1\f51\fs20\ql and allowances are accounted for as variable consideration. We estimate these amounts based on the expected\plain\cf1\f51\fs20\ql amount to be provided to customers and reduce revenue recognized. We believe that there will not be significant\plain\sa264\cf1\f51\fs20\ql changes to our estimates of variable consideration.\par\pard\plain\fi792\cf1\f51\fs20\ql If a customer pays consideration, or Adesto has a right to an amount of consideration that is unconditional\plain\cf1\f51\fs20\ql before we transfer a good or service to the customer, those amounts are classified as deferred income/ advances\plain\cf1\f51\fs20\ql received from customers which are included in other current liabilities or other long-term liabilities when the\plain\sa264\cf1\f51\fs20\ql payment is made or it is due, whichever is earlier.\par\pard\plain\fi792\cf1\f51\fs20\ql If the arrangement includes variable contingent consideration, we recognize revenue over time if we can\plain\cf1\f51\fs20\ql reasonably measure its progress, or we are capable of providing reliable information that would be required to apply\plain\cf1\f51\fs20\ql an appropriate method of measuring progress. To date, we have not had any arrangements incorporating contingent\plain\sa264\cf1\f51\fs20\ql consideration.\par\pard\plain\cf1\f51\fs20\b\i\qj Practical Expedients and Elections\par\pard\plain\cf1\f51\fs20\qj \~\par\pard\plain\fi792\cf1\f51\fs20\ql Sales commissions are owed and are recorded at the time of sell through of our products to end customers.\plain\sa264\cf1\f51\fs20\ql These costs are recorded within sales and marketing expenses.\par\pard\plain\fi792\cf1\f51\fs20\ql We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original\plain\cf1\f51\fs20\ql expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we\plain\sa264\cf1\f51\fs20\ql have the right to invoice for services performed.\par\pard\plain\fi792\cf1\f51\fs20\ql We have elected to account for shipping and handling costs as fulfillment costs after the customer obtains\plain\sa264\cf1\f51\fs20\ql control of the goods. These costs are recorded in cost of revenue.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Reclassifications.\par\pard\plain\fi792\cf1\f51\fs20\ql Certain reclassifications have been made to prior periods\u8217? condensed consolidated financial\plain\cf1\f51\fs20\ql statements to conform to the current period presentation. These reclassifications did not result in any change in\plain\sa264\cf1\f51\fs20\ql previously reported total assets, stockholders\u8217? equity or net loss.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Use of Estimates.\par\pard\plain\fi792\cf1\f51\fs20\ql The preparation of consolidated financial statements in conformity with U.S. GAAP requires management\plain\cf1\f51\fs20\ql to make estimates, judgments and assumptions that affect the reported amount of assets, liabilities, revenue and\plain\sa264\cf1\f51\fs20\ql expenses\par\pard\plain\sb528\cf1\f51\fs20\qc 10\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\cf1\f51\fs20\ql and related disclosures of contingent assets and liabilities. On an on-going basis, we evaluate those estimates,\plain\cf1\f51\fs20\ql including those related to allowances for doubtful accounts, price adjustments and other revenue reserves, warranty\plain\cf1\f51\fs20\ql accrual, inventory write-downs, valuation of long-lived assets, including property and equipment and identifiable\plain\cf1\f51\fs20\ql intangible assets and goodwill, loss on purchase commitments, valuation of deferred taxes and contingencies. In\plain\cf1\f51\fs20\ql addition, we use assumptions when employing the Black-Scholes option-pricing model to calculate the fair value of\plain\cf1\f51\fs20\ql stock options granted and Monte Carlo simulation techniques to value certain restricted stock units with\plain\cf1\f51\fs20\ql market-based vesting conditions. We base our estimates of the carrying value of certain assets and liabilities on\plain\cf1\f51\fs20\ql historical experience and on various other assumptions that are believed to be reasonable under the circumstances,\plain\cf1\f51\fs20\ql when these carrying values are not readily available from other sources. Actual results could differ from these\plain\sa264\cf1\f51\fs20\ql estimates.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Product Warranty.\par\pard\plain\fi792\cf1\f51\fs20\ql Our products are sold with a limited warranty for a period of one\~year, warranting that the product\plain\cf1\f51\fs20\ql conforms to specifications and is free from material defects in design, materials and workmanship. To date, we have\plain\cf1\f51\fs20\ql had insignificant returns of any defective production parts. During the\~year ended December\~31, 2015, we recorded\plain\cf1\f51\fs20\ql $250,000 for a specific potential warranty claim. During the years ended December\~31, 2017 and 2016, $185,000\plain\cf1\f51\fs20\ql and $41,000, respectively, has been incurred relating to this potential warranty claim and during the year ended\plain\cf1\f51\fs20\ql December 31, 2017 we recorded $27,000 for an additional potential warranty claim. As of June 30, 2018 and\plain\cf1\f51\fs20\ql December\~31, 2017, the warranty accrual was $51,000 and is included in accrued expenses and other current\plain\sa264\cf1\f51\fs20\ql liabilities on the condensed consolidated balance sheets.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Foreign Currency Translation.\par\pard\plain\fi792\cf1\f51\fs20\ql The functional currency of our foreign subsidiaries is the local currency. In consolidation, we translate\plain\cf1\f51\fs20\ql assets and liabilities at exchange rates in effect at the consolidated balance sheet date. We translate revenue and\plain\cf1\f51\fs20\ql expense accounts at the average exchange rates during the period in which the transaction takes place. Net gains\plain\cf1\f51\fs20\ql and losses from foreign currency translation of assets and liabilities were a gain of $100,000 and a loss of $29,000\plain\cf1\f51\fs20\ql for the three months ended June 30, 2018 and 2017, respectively, and a gain of $83,000 and a loss of $51,000 for\plain\cf1\f51\fs20\ql the six months ended June 30, 2018 and 2017, respectively, and are included in the cumulative translation\plain\cf1\f51\fs20\ql adjustment component of accumulated other comprehensive loss, net of tax, a component of stockholders\u8217?\plain\cf1\f51\fs20\ql equity. Net gains and losses arising from transactions denominated in currencies other than the functional currency\plain\cf1\f51\fs20\ql were losses of $2,000 and $5,000 for the three months ended June 30, 2018 and 2017, respectively, and a loss of\plain\cf1\f51\fs20\ql $10,000 and a gain of $8,000 for the six months ended June 30, 2018 and 2017, respectively, and are included in\plain\sa264\cf1\f51\fs20\ql other expense, net in the condensed consolidated statements of operations.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Concentration of Risk.\par\pard\plain\fi792\cf1\f51\fs20\ql Our products are primarily manufactured, assembled and tested by third-party foundries and other\plain\cf1\f51\fs20\ql contractors in Asia and we are heavily dependent on a single foundry in Taiwan for the manufacture of wafers and\plain\cf1\f51\fs20\ql a single contractor in the Philippines for assembly and testing of our products. We do not have long-term\plain\cf1\f51\fs20\ql agreements with either of these suppliers. A significant disruption in the operations of these parties would adversely\plain\cf1\f51\fs20\ql impact the production of our products for a substantial period of time, which could have a material adverse effect\plain\sa264\cf1\f51\fs20\ql on our business, financial condition, operating results and cash flows.\par\pard\plain\fi792\cf1\f51\fs20\ql Financial instruments that potentially subject us to significant concentrations of credit risk consist\plain\cf1\f51\fs20\ql principally of cash and cash equivalents and accounts receivables. We place substantially all of our cash and cash\plain\cf1\f51\fs20\ql equivalents on deposit with a reputable, high credit quality financial institution in the United States of America. We\plain\cf1\f51\fs20\ql believe that the bank that holds substantially all of our cash and cash equivalents is financially sound and,\plain\cf1\f51\fs20\ql accordingly, subject to minimal credit risk. Deposits held with the bank may exceed the amount of insurance\plain\sa264\cf1\f51\fs20\ql provided on such deposits.\par\pard\plain\sb528\cf1\f51\fs20\qc 11\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\fi792\cf1\f51\fs20\ql We generally do not require collateral or other security in support of accounts receivable. We periodically\plain\cf1\f51\fs20\ql review the need for an allowance for doubtful accounts by considering factors such as historical experience, credit\plain\cf1\f51\fs20\ql quality, the age of the accounts receivable balances and current economic conditions that may affect a\plain\cf1\f51\fs20\ql customer\u8217?s ability to pay. As a result of our favorable collection experience and customer concentration,\plain\sa264\cf1\f51\fs20\ql there was no allowance for doubtful accounts as of June 30, 2018 and December\~31, 2017.\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql Customer concentrations as a\~percentage of revenue, net were as follows: \par\pard\plain {\trowd\clvertalb\cellx4933\clvertalb\cellx5173\clvertalb\cellx5739\clvertalb\cellx6100\clvertalb\cellx6756\clvertalb\cellx7112\clvertalb\cellx7252\clvertalb\cellx7899\clvertalb\cellx8255\clvertalb\cellx8902\clvertalb\cellx9258\clvertalb\cellx9502\trrh26 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx4933\clvertalb\cellx5173\clvertalb\cellx5739\clvertalb\cellx6100\clvertalb\cellx6756\clvertalb\cellx7112\clvertalb\cellx7252\clvertalb\cellx7899\clvertalb\cellx8255\clvertalb\cellx8902\clvertalb\cellx9258\clvertalb\cellx9502\trrh26\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4933\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5173\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6757\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7113\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7253\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8904\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9260\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9502\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Three Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Six Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4933\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5173\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6757\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7113\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7253\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8904\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9260\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9502\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4933\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5173\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6757\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7113\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7253\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8904\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9260\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9502\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4933\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5173\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6757\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7113\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7253\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8904\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9260\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9502\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4933\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5173\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5739\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6100\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6756\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7112\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7252\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7899\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8255\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8902\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9258\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9502\trrh199 \pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4933\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5173\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5739\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6100\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6756\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7112\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7252\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7899\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8255\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8902\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9258\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9502\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4933\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5173\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5739\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6100\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6756\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7112\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7252\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7899\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8255\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8902\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9258\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9502\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Customer A\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 26\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 18\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 22\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 18\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4933\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5173\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5739\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6100\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6756\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7112\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7252\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7899\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8255\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8902\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9258\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9502\trrh249\row}}} {\trowd\clvertalb\cellx4933\clvertalb\cellx5173\clvertalb\cellx5739\clvertalb\cellx6100\clvertalb\cellx6756\clvertalb\cellx7112\clvertalb\cellx7252\clvertalb\cellx7899\clvertalb\cellx8255\clvertalb\cellx8902\clvertalb\cellx9258\clvertalb\cellx9502\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Customer B\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr *\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 10\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr *\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 10\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx4933\clvertalb\cellx5173\clvertalb\cellx5739\clvertalb\cellx6100\clvertalb\cellx6756\clvertalb\cellx7112\clvertalb\cellx7252\clvertalb\cellx7899\clvertalb\cellx8255\clvertalb\cellx8902\clvertalb\cellx9258\clvertalb\cellx9502\trrh249\row}}}\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\pard\plain\li396\sa264\fi-396\cf1\f51\fs20\ql *less than 10%\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql Customer concentrations as a\~percentage of gross accounts receivable were as follows: \par\pard\plain {\trowd\clvertalb\cellx6605\clvertalb\cellx6845\clvertalb\cellx7708\clvertalb\cellx8064\clvertalb\cellx8920\clvertalb\cellx9446\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx6605\clvertalb\cellx6845\clvertalb\cellx7708\clvertalb\cellx8064\clvertalb\cellx8920\clvertalb\cellx9446\clvertalb\cellx9688\trrh66\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6605\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6845\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7708\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8064\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9446\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc December\~31,\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6605\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6845\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7708\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8064\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9446\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6605\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6845\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7708\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8064\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8920\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9446\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6605\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6845\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7708\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8064\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8920\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9446\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6605\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6845\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7708\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8064\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8920\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Customer A\cell\pard\plain\intbl\cf1\f51\fs20\qj \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 29\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 31\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\cf1\f51\fs20\qj \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6605\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6845\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7708\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8064\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8920\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9446\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}}\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\pard\plain\li396\sa264\fi-396\cf1\f51\fs20\ql *less than 10%\par\pard\plain\li396\sa264\fi-396\cf1\f51\fs20\ql \~\par\pard\plain\li396\sa264\fi-396\cf1\f51\fs20\b\ql Note 2. Acquisition.\par\pard\plain\cf1\f51\fs20\ql On May\~9, 2018, we acquired 100% of the issued capital of S3 Asic Semiconductors Limited, a private company\plain\cf1\f51\fs20\ql limited by shares and incorporated in Ireland (\u8220?S3\u8221?), pursuant to the Share Purchase Agreement dated\plain\cf1\f51\fs20\ql May\~9, 2018 (the \u8220?Agreement\u8221?). S3 is headquartered in Ireland and its subsidiaries are in the United\plain\cf1\f51\fs20\ql States, Portugal and the Czech Republic. S3 and its subsidiaries are engaged in the business of providing advanced\plain\cf1\f51\fs20\ql mixed signal semiconductor devices and intellectual property to customers in the industrial and communications\plain\cf1\f51\fs20\ql markets. The aggregate consideration was approximately $35.0 million in cash and contingent consideration in the\plain\cf1\f51\fs20\ql form of a $15.0 million earn-out. The earn-out is based on achievement of certain milestones through 2019,\plain\cf1\f51\fs20\ql including minimum total revenue targets, revenue derived from sales of semiconductor devices and new customer\plain\cf1\f51\fs20\ql engagements with minimum value thresholds.\~\par\pard\plain\sa132\fi792\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\ql The assets and liabilities of S3 were recorded in our condensed consolidated balance sheet as of the\plain\cf1\f51\fs20\ql acquisition date, at their respective fair values. Fair value is estimated based on one or a combination of income,\plain\cf1\f51\fs20\ql cost and/or market approaches, as determined based on the nature of the asset or liability, and the level of inputs\plain\cf1\f51\fs20\ql available. With respect to assets and liabilities, the determination of fair value requires management to make\plain\cf1\f51\fs20\ql subjective judgments as to projections of future operating performance, the appropriate discount rate to apply,\plain\cf1\f51\fs20\ql long-term growth rates, etc., which affect the amounts recorded in the purchase price allocation. The excess of the\plain\cf1\f51\fs20\ql consideration transferred over the fair value of the identifiable assets, net of liabilities, is recorded as goodwill,\plain\cf1\f51\fs20\ql which is indicative of the expected continued growth and development of S3. The purchase price allocation that\plain\cf1\f51\fs20\ql follows is based on these estimated fair values of assets acquired and liabilities assumed. We will continue to\plain\cf1\f51\fs20\ql evaluate certain assets, liabilities and tax estimates that are subject to change within the measurement period (up to\plain\sa132\cf1\f51\fs20\ql one year from the acquisition date).\par\pard\plain\sb528\cf1\f51\fs20\qc 12\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql The following table summarizes the fair values of assets acquired and liabilities assumed (in thousands): \par\pard\plain {\trowd\clvertalb\cellx8284\clvertalb\cellx8527\clvertalb\cellx8766\clvertalb\cellx9688\trrh25 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx8284\clvertalb\cellx8527\clvertalb\cellx8766\clvertalb\cellx9688\trrh25\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8527\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Cash\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 267\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8527\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx8284\clvertalb\cellx8527\clvertalb\cellx8766\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Accounts receivable\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 192\cell{ {\trowd\clvertalb\cellx8284\clvertalb\cellx8527\clvertalb\cellx8766\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8527\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Other current assets\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 883\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8527\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx8284\clvertalb\cellx8527\clvertalb\cellx8766\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Property and equipment, net\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 191\cell{ {\trowd\clvertalb\cellx8284\clvertalb\cellx8527\clvertalb\cellx8766\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8527\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Intangible assets\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 15,340\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8527\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx8284\clvertalb\cellx8527\clvertalb\cellx8766\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Goodwill\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 34,352\cell{ {\trowd\clvertalb\cellx8284\clvertalb\cellx8527\clvertalb\cellx8766\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8527\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Accounts payable\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (37)\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8527\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx8284\clvertalb\cellx8527\clvertalb\cellx8766\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Deferred revenue\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (129)\cell{ {\trowd\clvertalb\cellx8284\clvertalb\cellx8527\clvertalb\cellx8766\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8527\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Earn-out liability, current\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (10,218)\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8527\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx8284\clvertalb\cellx8527\clvertalb\cellx8766\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Other current liabilities\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (761)\cell{ {\trowd\clvertalb\cellx8284\clvertalb\cellx8527\clvertalb\cellx8766\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8527\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Deferred tax liability\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (1,918)\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8527\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx8284\clvertalb\cellx8527\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8766\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Earn-out liability, non-current\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (3,279)\cell{ {\trowd\clvertalb\cellx8284\clvertalb\cellx8527\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8766\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8527\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Fair value of net assets acquired\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 34,883\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8527\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\ql Intangible assets reflect the following:\par\pard\plain\cf1\f51\fs20\ql \~ \par\pard\plain {\trowd\clvertalb\cellx6361\clvertalb\cellx6651\clvertalb\cellx6841\clvertalb\cellx8000\clvertalb\cellx8240\clvertalb\cellx9688\trrh25 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx6361\clvertalb\cellx6651\clvertalb\cellx6841\clvertalb\cellx8000\clvertalb\cellx8240\clvertalb\cellx9688\trrh25\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6361\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6651\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6841\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8000\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8240\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6361\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6651\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6841\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8000\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8240\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6361\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6651\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6841\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8000\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8240\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh396 \pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Fair Value\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Useful \par\pard\plain\intbl\fs16\pard\plain\intbl\cf1\f51\fs16\b\qc Life (in Years)\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6361\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6651\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6841\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8000\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8240\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh396\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6361\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6651\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6841\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8000\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8240\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Customer relationships\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 12,880\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 7\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6361\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6651\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6841\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8000\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8240\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx6361\clvertalb\cellx6651\clvertalb\cellx6841\clvertalb\cellx8000\clvertalb\cellx8240\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Contract backlog\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 210\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 0.5\cell{ {\trowd\clvertalb\cellx6361\clvertalb\cellx6651\clvertalb\cellx6841\clvertalb\cellx8000\clvertalb\cellx8240\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6361\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6651\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6841\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8000\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8240\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Developed technology\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,080\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 5\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6361\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6651\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6841\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8000\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8240\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx6361\clvertalb\cellx6651\clvertalb\cellx6841\clvertalb\cellx8000\clvertalb\cellx8240\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Non-compete agreements\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 380\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 2\cell{ {\trowd\clvertalb\cellx6361\clvertalb\cellx6651\clvertalb\cellx6841\clvertalb\cellx8000\clvertalb\cellx8240\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6361\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6651\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6841\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8000\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8240\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Trademarks\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 790\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 12\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6361\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6651\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6841\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8000\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8240\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx6361\clvertalb\cellx6651\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6841\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8000\clvertalb\cellx8240\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Total\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 15,340\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx6361\clvertalb\cellx6651\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6841\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8000\clvertalb\cellx8240\clvertalb\cellx9688\trrh248\row}}}\pard\plain\cf1\f51\fs2\ql \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\ql Note\~3. Balance Sheet Components.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Accounts Receivable, Net.\par\pard\plain\sa264\cf1\f51\fs20\ql Accounts receivable, net consisted of the following (in thousands): \par\pard\plain {\trowd\clvertalb\cellx6785\clvertalb\cellx7025\clvertalb\cellx7369\clvertalb\cellx8153\clvertalb\cellx8393\clvertalb\cellx8919\clvertalb\cellx9688\trrh26 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx6785\clvertalb\cellx7025\clvertalb\cellx7369\clvertalb\cellx8153\clvertalb\cellx8393\clvertalb\cellx8919\clvertalb\cellx9688\trrh26\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6785\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7025\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8153\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8393\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc December\~31,\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6785\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7025\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8153\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8393\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6785\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7025\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8153\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8393\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199 \pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6785\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7025\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8153\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8393\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6785\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7025\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7369\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8153\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8393\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8919\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Accounts receivable\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 17,172\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 12,500\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6785\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7025\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7369\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8153\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8393\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8919\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx6785\clvertalb\cellx7025\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7369\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8153\clvertalb\cellx8393\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8919\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Allowance for SSDs, price protection, rights of return and other activities\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (3,832)\cell{ {\trowd\clvertalb\cellx6785\clvertalb\cellx7025\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7369\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8153\clvertalb\cellx8393\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8919\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6785\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7025\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7369\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8153\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8393\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8919\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Total accounts receivable, net\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 17,172\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 8,668\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6785\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7025\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7369\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8153\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8393\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8919\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}}\pard\plain\sb528\cf1\f51\fs20\qc 13\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\cf1\f51\fs20\ql As of June 30, 2018 we have no allowance for doubtful accounts on any of our accounts receivable.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Inventories.\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql Inventories consisted of the following (in thousands): \par\pard\plain {\trowd\trqc\clvertalb\cellx6824\clvertalb\cellx7064\clvertalb\cellx7408\clvertalb\cellx8169\clvertalb\cellx8409\clvertalb\cellx8935\clvertalb\cellx9688\trrh25 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\trqc\clvertalb\cellx6824\clvertalb\cellx7064\clvertalb\cellx7408\clvertalb\cellx8169\clvertalb\cellx8409\clvertalb\cellx8935\clvertalb\cellx9688\trrh25\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6824\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7064\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8169\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8409\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc December\~31,\~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6824\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7064\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8169\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8409\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh198\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6824\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7064\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8169\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8409\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6824\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7064\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8169\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8409\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh198\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6824\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7064\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8169\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8409\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8935\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\li154\fi-154\cf1\f51\fs20\ql Raw materials\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,383\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,213\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6824\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7064\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7408\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8169\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8409\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8935\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\trqc\clvertalb\cellx6824\clvertalb\cellx7064\clvertalb\cellx7408\clvertalb\cellx8169\clvertalb\cellx8409\clvertalb\cellx8935\clvertalb\cellx9688\trrh248 \pard\plain\intbl\li154\fi-154\cf1\f51\fs20\ql Work-in-process\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 7,063\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,408\cell{ {\trowd\trqc\clvertalb\cellx6824\clvertalb\cellx7064\clvertalb\cellx7408\clvertalb\cellx8169\clvertalb\cellx8409\clvertalb\cellx8935\clvertalb\cellx9688\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6824\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7064\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7408\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8169\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8409\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8935\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\li154\fi-154\cf1\f51\fs20\ql Finished goods\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,002\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,193\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6824\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7064\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7408\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8169\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8409\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8935\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\trqc\clvertalb\cellx6824\clvertalb\cellx7064\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7408\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8169\clvertalb\cellx8409\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8935\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9688\trrh248 \pard\plain\intbl\li154\fi-154\cf1\f51\fs20\ql Total inventories\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 11,448\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5,814\cell{ {\trowd\trqc\clvertalb\cellx6824\clvertalb\cellx7064\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7408\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8169\clvertalb\cellx8409\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8935\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9688\trrh248\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\ql For the three months ended June 30, 2018 and 2017, we realized a benefit of $0.4\~million and $0.2 million,\plain\sa264\cf1\f51\fs20\ql respectively,\~from the sales of previously reserved products.\par\pard\plain\fi792\cf1\f51\fs20\ql For the six months ended June 30, 2018 and 2017, we realized a benefit of $0.8\~million and $0.6 million,\plain\sa264\cf1\f51\fs20\ql respectively,\~from the sales of previously reserved products.\par\pard\plain\fi792\cf1\f51\fs20\ql Inventory write-downs were primarily associated with products built in excess of customer demand which\plain\cf1\f51\fs20\ql resulted in excess inventory levels, legacy products for which no demand exists and lower of cost or net realizable\plain\cf1\f51\fs20\ql value write-downs associated with Conductive Bridging Random Access Memory (\u8220?CBRAM\u8221?)\plain\sa264\cf1\f51\fs20\ql products for which costs exceeded net realizable value.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Property and Equipment, Net.\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql Property and equipment, net consisted of the following (in thousands): \par\pard\plain {\trowd\trqc\clvertalb\cellx4967\clvertalb\cellx5207\clvertalb\cellx5551\clvertalb\cellx6224\clvertalb\cellx6464\clvertalb\cellx6990\clvertalb\cellx7750\trrh25 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\trqc\clvertalb\cellx4967\clvertalb\cellx5207\clvertalb\cellx5551\clvertalb\cellx6224\clvertalb\cellx6464\clvertalb\cellx6990\clvertalb\cellx7750\trrh25\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4967\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5207\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6224\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6464\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7749\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc December\~31,\~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4967\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5207\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6224\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6464\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7749\trrh198\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4967\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5207\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6224\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6464\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7749\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4967\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5207\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6224\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6464\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7749\trrh198\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4967\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5207\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5551\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6224\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6464\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6990\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Machinery and equipment\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 10,900\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 9,457\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4967\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5207\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5551\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6224\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6464\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6990\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\cellx4967\clvertalb\cellx5207\clvertalb\cellx5551\clvertalb\cellx6224\clvertalb\cellx6464\clvertalb\cellx6990\clvertalb\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Leasehold improvements\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,252\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,252\cell{ {\trowd\trqc\clvertalb\cellx4967\clvertalb\cellx5207\clvertalb\cellx5551\clvertalb\cellx6224\clvertalb\cellx6464\clvertalb\cellx6990\clvertalb\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4967\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5207\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5551\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6224\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6464\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6990\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Computer software\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 675\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 675\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4967\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5207\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5551\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6224\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6464\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6990\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\cellx4967\clvertalb\cellx5207\clvertalb\cellx5551\clvertalb\cellx6224\clvertalb\cellx6464\clvertalb\cellx6990\clvertalb\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql TowerJazz license\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 350\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 350\cell{ {\trowd\trqc\clvertalb\cellx4967\clvertalb\cellx5207\clvertalb\cellx5551\clvertalb\cellx6224\clvertalb\cellx6464\clvertalb\cellx6990\clvertalb\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4967\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5207\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5551\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6224\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6464\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6990\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Furniture and fixtures\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 192\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 83\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4967\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5207\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5551\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6224\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6464\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6990\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\cellx4967\clvertalb\cellx5207\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5551\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6224\clvertalb\cellx6464\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6990\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Construction in progress\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,301\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,301\cell{ {\trowd\trqc\clvertalb\cellx4967\clvertalb\cellx5207\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5551\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6224\clvertalb\cellx6464\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6990\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4967\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5207\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5551\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6224\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6464\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6990\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Property and equipment, at cost\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 17,670\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 16,118\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4967\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5207\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5551\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6224\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6464\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6990\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\cellx4967\clvertalb\cellx5207\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5551\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6224\clvertalb\cellx6464\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6990\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Accumulated depreciation and amortization\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (9,434)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (8,935)\cell{ {\trowd\trqc\clvertalb\cellx4967\clvertalb\cellx5207\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5551\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6224\clvertalb\cellx6464\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6990\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4967\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5207\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5551\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6224\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6464\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6990\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Property and equipment, net\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 8,236\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 7,183\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4967\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5207\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5551\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6224\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6464\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6990\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\ql The Company incurs costs for the fabrication of masks used by its foundry partners to manufacture its\plain\cf1\f51\fs20\ql products. Beginning the first fiscal quarter of 2017, the Company capitalizes mask costs that are expected to be\plain\cf1\f51\fs20\ql utilized in production manufacturing as the Company\u8217?s product development process has become more\plain\cf1\f51\fs20\ql predictable and thus supports capitalization of the mask. The capitalized mask costs begin depreciating to cost of\plain\cf1\f51\fs20\ql revenue once the products go into production. Depreciation is computed using the straight-line method over\plain\cf1\f51\fs20\ql a\~three\~year period which is the expected useful life of the mask. Previously mask sets were expensed to research\plain\sa264\cf1\f51\fs20\ql and development.\par\pard\plain\fi792\cf1\f51\fs20\ql Depreciation and amortization expense of property and equipment for the three and six months ended June\plain\sa264\cf1\f51\fs20\ql 30, 2018 was $0.6\~million and $1.1\~million, respectively.\par\pard\plain\sb528\cf1\f51\fs20\qc 14\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\fi792\cf1\f51\fs20\ql Depreciation and amortization expense of property and equipment for the three and six months ended June\plain\sa264\cf1\f51\fs20\ql 30, 2017 was $0.3\~million and $0.6 million, respectively\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Accrued Expenses and Other Current Liabilities.\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql Accrued expenses and other current liabilities consisted of the following (in thousands): \par\pard\plain {\trowd\trqc\clvertalb\cellx4993\clvertalb\cellx5233\clvertalb\cellx5577\clvertalb\cellx6183\clvertalb\cellx6423\clvertalb\cellx6949\clvertalb\cellx7750\trrh25 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\trqc\clvertalb\cellx4993\clvertalb\cellx5233\clvertalb\cellx5577\clvertalb\cellx6183\clvertalb\cellx6423\clvertalb\cellx6949\clvertalb\cellx7750\trrh25\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4993\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5233\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6184\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6424\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc December\~31,\~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4993\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5233\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6184\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6424\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh198\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4993\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5233\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6184\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6424\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4993\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5233\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6184\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6424\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh198\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4993\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5233\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5577\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6183\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6423\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6949\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\li154\fi-154\cf1\f51\fs20\ql Accrued sales commission payable\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 291\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 310\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4993\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5233\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5577\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6183\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6423\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6949\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\cellx4993\clvertalb\cellx5233\clvertalb\cellx5577\clvertalb\cellx6183\clvertalb\cellx6423\clvertalb\cellx6949\clvertalb\cellx7750\trrh248 \pard\plain\intbl\li154\fi-154\cf1\f51\fs20\ql Accrued manufacturing expenses\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 956\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 265\cell{ {\trowd\trqc\clvertalb\cellx4993\clvertalb\cellx5233\clvertalb\cellx5577\clvertalb\cellx6183\clvertalb\cellx6423\clvertalb\cellx6949\clvertalb\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4993\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5233\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5577\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6183\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6423\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6949\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\li154\fi-154\cf1\f51\fs20\ql Deferred rent, current portion\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 439\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 422\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4993\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5233\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5577\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6183\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6423\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6949\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\cellx4993\clvertalb\cellx5233\clvertalb\cellx5577\clvertalb\cellx6183\clvertalb\cellx6423\clvertalb\cellx6949\clvertalb\cellx7750\trrh248 \pard\plain\intbl\li154\fi-154\cf1\f51\fs20\ql Liabilities to certain customers\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 818\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 468\cell{ {\trowd\trqc\clvertalb\cellx4993\clvertalb\cellx5233\clvertalb\cellx5577\clvertalb\cellx6183\clvertalb\cellx6423\clvertalb\cellx6949\clvertalb\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4993\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5233\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5577\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6183\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6423\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6949\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\li154\fi-154\cf1\f51\fs20\ql Accrued professional services\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,029\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 94\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4993\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5233\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5577\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6183\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6423\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6949\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\cellx4993\clvertalb\cellx5233\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5577\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6183\clvertalb\cellx6423\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6949\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7750\trrh248 \pard\plain\intbl\li154\fi-154\cf1\f51\fs20\ql Other accrued liabilities\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,004\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 800\cell{ {\trowd\trqc\clvertalb\cellx4993\clvertalb\cellx5233\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5577\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6183\clvertalb\cellx6423\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6949\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4993\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5233\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5577\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6183\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6423\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6949\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\li154\fi-154\cf1\f51\fs20\ql Total accrued expenses and other current liabilities\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5,537\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,359\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4993\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5233\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5577\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6183\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6423\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6949\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}}\pard\plain\cf1\f51\fs2\ql \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\ql Note\~4. Fair Value Measurements.\par\pard\plain\fi792\cf1\f51\fs20\ql Fair value is defined as the exchange price that would be received from selling an asset or paid to transfer\plain\cf1\f51\fs20\ql a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between\plain\cf1\f51\fs20\ql market participants on the measurement date. We measure financial assets and liabilities at fair value at each\plain\cf1\f51\fs20\ql reporting period using a fair value hierarchy which requires us to maximize the use of observable inputs and\plain\cf1\f51\fs20\ql minimize the use of unobservable inputs when measuring fair value. A financial instrument\u8217?s classification\plain\cf1\f51\fs20\ql within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value\plain\sa264\cf1\f51\fs20\ql measurement. Three levels of inputs may be used to measure fair value:\par\pard\plain\fi792\cf1\f51\fs20\i\ql Level 1.\plain\sa264\cf1\f51\fs20\ql Quoted prices in active markets for identical assets or liabilities.\par\pard\plain\li792\cf1\f51\fs20\i\ql Level 2.\plain\li792\cf1\f51\fs20\ql Quoted prices for similar assets and liabilities in active markets or inputs other than quoted prices\plain\li792\cf1\f51\fs20\ql which are observable for the assets or liabilities, either directly or indirectly through market corroboration,\plain\li792\sa264\cf1\f51\fs20\ql for substantially the full term of the financial instruments.\par\pard\plain\li792\cf1\f51\fs20\i\ql Level\~3.\plain\li792\cf1\f51\fs20\ql Unobservable inputs which are supported by little or no market activity and which are significant\plain\li792\sa264\cf1\f51\fs20\ql to the fair value of the assets or liabilities.\par\pard\plain\sb528\cf1\f51\fs20\qc 15\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql Financial assets measured at fair value on a recurring basis were as follows: \par\pard\plain {\trowd\trqc\clvertalb\cellx3612\clvertalb\cellx3852\clvertalb\cellx4460\clvertalb\cellx5265\clvertalb\cellx5582\clvertalb\cellx6013\clvertalb\cellx6797\clvertalb\cellx7114\clvertalb\cellx7625\clvertalb\cellx8409\clvertalb\cellx8726\clvertalb\cellx9043\clvertalb\cellx9688\trrh26 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\trqc\clvertalb\cellx3612\clvertalb\cellx3852\clvertalb\cellx4460\clvertalb\cellx5265\clvertalb\cellx5582\clvertalb\cellx6013\clvertalb\cellx6797\clvertalb\cellx7114\clvertalb\cellx7625\clvertalb\cellx8409\clvertalb\cellx8726\clvertalb\cellx9043\clvertalb\cellx9688\trrh26\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3612\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3852\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Fair\~Value\~Measurement\~at\~Reporting\~Date\~Using\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3612\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3852\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh199\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3612\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3852\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4460\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5265\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5582\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6797\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7114\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7625\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8409\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8726\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9043\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Significant\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3612\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3852\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4460\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5265\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5582\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6797\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7114\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7625\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8409\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8726\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9043\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3612\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3852\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5266\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5583\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6798\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7115\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8410\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8727\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9044\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Quoted\~Prices\~in\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Other\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Significant\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3612\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3852\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5266\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5583\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6798\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7115\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8410\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8727\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9044\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3612\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3852\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5266\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5583\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6798\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7115\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8410\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8727\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9044\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Active\~Markets\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Observable\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Unobservable\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3612\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3852\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5266\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5583\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6798\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7115\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8410\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8727\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9044\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3612\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3852\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5266\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5583\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6798\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7115\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8410\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8727\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9044\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc for\~Identical\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Inputs\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Inputs\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3612\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3852\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5266\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5583\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6798\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7115\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8410\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8727\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9044\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3612\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3852\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5266\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5583\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6798\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7115\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8410\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8727\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9684\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Assets\~(Level\~1)\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc (Level\~2)\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc (Level\~3)\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Total\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3612\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3852\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5266\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5583\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6798\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7115\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8410\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8727\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9684\trrh199\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3612\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3852\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc (in\~thousands)\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3612\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3852\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh199\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3612\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3852\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4460\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5265\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5582\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6013\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6797\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7114\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7625\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8409\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8726\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9043\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\li154\fi-154\cf1\f51\fs20\b\ql As of June\~30,\~2018\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3612\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3852\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4460\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5265\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5582\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6013\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6797\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7114\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7625\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8409\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8726\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9043\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\trqc\clvertalb\cellx3612\clvertalb\cellx3852\clvertalb\cellx4460\clvertalb\cellx5265\clvertalb\cellx5582\clvertalb\cellx6013\clvertalb\cellx6797\clvertalb\cellx7114\clvertalb\cellx7625\clvertalb\cellx8409\clvertalb\cellx8726\clvertalb\cellx9043\clvertalb\cellx9688\trrh249 \pard\plain\intbl\li154\fi-154\cf1\f51\fs20\ql Assets:\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\trqc\clvertalb\cellx3612\clvertalb\cellx3852\clvertalb\cellx4460\clvertalb\cellx5265\clvertalb\cellx5582\clvertalb\cellx6013\clvertalb\cellx6797\clvertalb\cellx7114\clvertalb\cellx7625\clvertalb\cellx8409\clvertalb\cellx8726\clvertalb\cellx9043\clvertalb\cellx9688\trrh249\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3612\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3852\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4460\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5265\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5582\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6013\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6797\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7114\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7625\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8409\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8726\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9043\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\li418\fi-154\cf1\f51\fs20\ql Money market funds\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5,523\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5,523\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3612\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3852\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4460\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5265\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5582\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6013\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6797\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7114\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7625\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8409\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8726\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9043\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\trqc\clvertalb\cellx3612\clvertalb\cellx3852\clvertalb\cellx4460\clvertalb\cellx5265\clvertalb\cellx5582\clvertalb\cellx6013\clvertalb\cellx6797\clvertalb\cellx7114\clvertalb\cellx7625\clvertalb\cellx8409\clvertalb\cellx8726\clvertalb\cellx9043\clvertalb\cellx9688\trrh249 \pard\plain\intbl\li418\fi-154\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\trqc\clvertalb\cellx3612\clvertalb\cellx3852\clvertalb\cellx4460\clvertalb\cellx5265\clvertalb\cellx5582\clvertalb\cellx6013\clvertalb\cellx6797\clvertalb\cellx7114\clvertalb\cellx7625\clvertalb\cellx8409\clvertalb\cellx8726\clvertalb\cellx9043\clvertalb\cellx9688\trrh249\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3612\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3852\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4460\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5265\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5582\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6013\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6797\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7114\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7625\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8409\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8726\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9043\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\li154\fi-154\cf1\f51\fs20\b\ql As of December 31, 2017\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3612\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3852\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4460\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5265\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5582\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6013\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6797\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7114\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7625\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8409\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8726\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9043\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\trqc\clvertalb\cellx3612\clvertalb\cellx3852\clvertalb\cellx4460\clvertalb\cellx5265\clvertalb\cellx5582\clvertalb\cellx6013\clvertalb\cellx6797\clvertalb\cellx7114\clvertalb\cellx7625\clvertalb\cellx8409\clvertalb\cellx8726\clvertalb\cellx9043\clvertalb\cellx9688\trrh249 \pard\plain\intbl\li154\fi-154\cf1\f51\fs20\ql Assets:\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\trqc\clvertalb\cellx3612\clvertalb\cellx3852\clvertalb\cellx4460\clvertalb\cellx5265\clvertalb\cellx5582\clvertalb\cellx6013\clvertalb\cellx6797\clvertalb\cellx7114\clvertalb\cellx7625\clvertalb\cellx8409\clvertalb\cellx8726\clvertalb\cellx9043\clvertalb\cellx9688\trrh249\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3612\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3852\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4460\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5265\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5582\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6013\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6797\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7114\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7625\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8409\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8726\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9043\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\li418\fi-154\cf1\f51\fs20\ql Money market funds\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 11,501\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 11,501\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3612\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3852\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4460\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5265\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5582\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6013\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6797\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7114\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7625\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8409\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8726\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9043\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\ql As of June 30, 2018 and December\~31, 2017, we had no financial liabilities measured at fair value on a\plain\cf1\f51\fs20\ql recurring basis.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\ql Note\~5. Intangible Assets, net.\par\pard\plain\fi792\cf1\f51\fs20\ql In 2012, in connection with our purchase of the serial flash memory product line assets from Atmel\plain\sa264\cf1\f51\fs20\ql Corporation, we recorded $16.4\~million of intangible assets.\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql In connection with the acquisition of S3 (Note 2), we recorded $15.3 million of intangible assets.\par\pard\plain\sb528\cf1\f51\fs20\qc 16\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql Intangible assets, net were as follows (in thousands): \par\pard\plain {\trowd\trqc\clvertalb\cellx2356\clvertalb\cellx2596\clvertalb\cellx3055\clvertalb\cellx3441\clvertalb\cellx4016\clvertalb\cellx4791\clvertalb\cellx5031\clvertalb\cellx5524\clvertalb\cellx6227\clvertalb\cellx6467\clvertalb\cellx6962\clvertalb\cellx7750\trrh26 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\trqc\clvertalb\cellx2356\clvertalb\cellx2596\clvertalb\cellx3055\clvertalb\cellx3441\clvertalb\cellx4016\clvertalb\cellx4791\clvertalb\cellx5031\clvertalb\cellx5524\clvertalb\cellx6227\clvertalb\cellx6467\clvertalb\cellx6962\clvertalb\cellx7750\trrh26\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2356\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2596\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3055\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3441\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7748\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~2018\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2356\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2596\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3055\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3441\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7748\trrh199\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2356\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2596\clbrdrb\brdrs\brdrcf1\clshdng100\clcfpat7\clcbpat7\cellx3442\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4793\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5033\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6229\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6469\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7748\trrh793 \pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Estimated\plain\intbl\cf1\f51\fs16\b\qc Useful \par\pard\plain\intbl\fs16\pard\plain\intbl\cf1\f51\fs16\b\qc Life (in\plain\intbl\cf1\f51\fs16\b\qc Years) \par\pard\plain\intbl\fs16\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Gross\~Carrying \par\pard\plain\intbl\fs16\pard\plain\intbl\cf1\f51\fs16\b\qc Amount\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Accumulated \par\pard\plain\intbl\fs16\pard\plain\intbl\cf1\f51\fs16\b\qc Amortization\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Net\~Carrying \par\pard\plain\intbl\fs16\pard\plain\intbl\cf1\f51\fs16\b\qc \~Amount\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2356\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2596\clbrdrb\brdrs\brdrcf1\clshdng100\clcfpat7\clcbpat7\cellx3442\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4793\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5033\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6229\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6469\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7748\trrh793\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2356\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2596\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3441\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4016\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4791\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5031\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5524\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6227\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6467\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6962\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Developed technology\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 10\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,282\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,463\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,819\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2356\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2596\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3441\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4016\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4791\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5031\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5524\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6227\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6467\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6962\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\cellx2356\clvertalb\cellx2596\clvertalb\cellx3055\clvertalb\cellx3441\clvertalb\cellx4016\clvertalb\cellx4791\clvertalb\cellx5031\clvertalb\cellx5524\clvertalb\cellx6227\clvertalb\cellx6467\clvertalb\cellx6962\clvertalb\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Developed technology\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 5\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,080\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 31\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,049\cell{ {\trowd\trqc\clvertalb\cellx2356\clvertalb\cellx2596\clvertalb\cellx3055\clvertalb\cellx3441\clvertalb\cellx4016\clvertalb\cellx4791\clvertalb\cellx5031\clvertalb\cellx5524\clvertalb\cellx6227\clvertalb\cellx6467\clvertalb\cellx6962\clvertalb\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2356\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2596\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3441\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4016\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4791\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5031\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5524\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6227\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6467\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6962\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Customer relationships\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 12\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 9,011\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,318\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,693\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2356\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2596\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3441\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4016\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4791\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5031\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5524\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6227\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6467\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6962\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\cellx2356\clvertalb\cellx2596\clvertalb\cellx3055\clvertalb\cellx3441\clvertalb\cellx4016\clvertalb\cellx4791\clvertalb\cellx5031\clvertalb\cellx5524\clvertalb\cellx6227\clvertalb\cellx6467\clvertalb\cellx6962\clvertalb\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Customer relationships\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 7\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 12,880\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 264\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 12,616\cell{ {\trowd\trqc\clvertalb\cellx2356\clvertalb\cellx2596\clvertalb\cellx3055\clvertalb\cellx3441\clvertalb\cellx4016\clvertalb\cellx4791\clvertalb\cellx5031\clvertalb\cellx5524\clvertalb\cellx6227\clvertalb\cellx6467\clvertalb\cellx6962\clvertalb\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2356\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2596\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3441\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4016\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4791\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5031\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5524\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6227\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6467\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6962\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Customer backlog\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 1\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,779\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,779\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2356\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2596\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3441\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4016\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4791\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5031\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5524\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6227\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6467\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6962\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\cellx2356\clvertalb\cellx2596\clvertalb\cellx3055\clvertalb\cellx3441\clvertalb\cellx4016\clvertalb\cellx4791\clvertalb\cellx5031\clvertalb\cellx5524\clvertalb\cellx6227\clvertalb\cellx6467\clvertalb\cellx6962\clvertalb\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Contract backlog\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 0.5\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 210\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 60\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 150\cell{ {\trowd\trqc\clvertalb\cellx2356\clvertalb\cellx2596\clvertalb\cellx3055\clvertalb\cellx3441\clvertalb\cellx4016\clvertalb\cellx4791\clvertalb\cellx5031\clvertalb\cellx5524\clvertalb\cellx6227\clvertalb\cellx6467\clvertalb\cellx6962\clvertalb\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2356\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2596\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3441\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4016\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4791\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5031\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5524\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6227\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6467\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6962\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Non-compete agreement\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 5\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 282\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 282\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2356\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2596\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3441\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4016\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4791\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5031\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5524\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6227\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6467\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6962\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\cellx2356\clvertalb\cellx2596\clvertalb\cellx3055\clvertalb\cellx3441\clvertalb\cellx4016\clvertalb\cellx4791\clvertalb\cellx5031\clvertalb\cellx5524\clvertalb\cellx6227\clvertalb\cellx6467\clvertalb\cellx6962\clvertalb\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Non-compete agreement\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 2\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 380\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 27\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 353\cell{ {\trowd\trqc\clvertalb\cellx2356\clvertalb\cellx2596\clvertalb\cellx3055\clvertalb\cellx3441\clvertalb\cellx4016\clvertalb\cellx4791\clvertalb\cellx5031\clvertalb\cellx5524\clvertalb\cellx6227\clvertalb\cellx6467\clvertalb\cellx6962\clvertalb\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2356\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2596\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3441\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4016\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4791\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5031\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5524\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6227\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6467\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6962\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Trademarks\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 12\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 790\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~9\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 781\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2356\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2596\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3441\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4016\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4791\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5031\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5524\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6227\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6467\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6962\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\cellx2356\clvertalb\cellx2596\clvertalb\cellx3055\clvertalb\cellx3441\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx4016\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx4791\clvertalb\cellx5031\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5524\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6227\clvertalb\cellx6467\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6962\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7750\trrh496 \pard\plain\intbl\cf1\f51\fs20\ql Total intangible assets\plain\intbl\cf1\f51\fs20\ql subject to amortization\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 31,694\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 10,233\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 21,461\cell{ {\trowd\trqc\clvertalb\cellx2356\clvertalb\cellx2596\clvertalb\cellx3055\clvertalb\cellx3441\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx4016\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx4791\clvertalb\cellx5031\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5524\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6227\clvertalb\cellx6467\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6962\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7750\trrh496\row}}}\pard\plain\sa264\fi792\cf1\f51\fs20\ql \~ \par\pard\plain {\trowd\trqc\clvertalb\cellx2402\clvertalb\cellx2642\clvertalb\cellx3415\clvertalb\cellx3555\clvertalb\cellx4130\clvertalb\cellx4913\clvertalb\cellx5153\clvertalb\cellx5646\clvertalb\cellx6302\clvertalb\cellx6542\clvertalb\cellx7037\clvertalb\cellx7824\trrh26 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\trqc\clvertalb\cellx2402\clvertalb\cellx2642\clvertalb\cellx3415\clvertalb\cellx3555\clvertalb\cellx4130\clvertalb\cellx4913\clvertalb\cellx5153\clvertalb\cellx5646\clvertalb\cellx6302\clvertalb\cellx6542\clvertalb\cellx7037\clvertalb\cellx7824\trrh26\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2402\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2642\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3415\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3555\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7823\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc December\~31,\~2017\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2402\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2642\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3415\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3555\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7823\trrh199\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2402\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2642\clbrdrb\brdrs\brdrcf1\clshdng100\clcfpat7\clcbpat7\cellx3415\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3555\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4914\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5154\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6303\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6543\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7822\trrh793 \pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Estimated\plain\intbl\cf1\f51\fs16\b\qc Useful \par\pard\plain\intbl\fs16\pard\plain\intbl\cf1\f51\fs16\b\qc Life (in\plain\intbl\cf1\f51\fs16\b\qc Years) \par\pard\plain\intbl\fs16\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Gross\~Carrying \par\pard\plain\intbl\fs16\pard\plain\intbl\cf1\f51\fs16\b\qc Amount\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Accumulated \par\pard\plain\intbl\fs16\pard\plain\intbl\cf1\f51\fs16\b\qc Amortization\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Net\~Carrying \par\pard\plain\intbl\fs16\pard\plain\intbl\cf1\f51\fs16\b\qc \~Amount\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2402\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2642\clbrdrb\brdrs\brdrcf1\clshdng100\clcfpat7\clcbpat7\cellx3415\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3555\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4914\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5154\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6303\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6543\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7822\trrh793\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2402\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2642\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3415\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3555\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4130\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4913\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5153\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5646\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6302\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6542\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7037\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7824\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Developed technology\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 10\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,282\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,249\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,033\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2402\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2642\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3415\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3555\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4130\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4913\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5153\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5646\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6302\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6542\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7037\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7824\trrh249\row}}} {\trowd\trqc\clvertalb\cellx2402\clvertalb\cellx2642\clvertalb\cellx3415\clvertalb\cellx3555\clvertalb\cellx4130\clvertalb\cellx4913\clvertalb\cellx5153\clvertalb\cellx5646\clvertalb\cellx6302\clvertalb\cellx6542\clvertalb\cellx7037\clvertalb\cellx7824\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Customer relationships\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 12\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 9,011\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,942\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5,069\cell{ {\trowd\trqc\clvertalb\cellx2402\clvertalb\cellx2642\clvertalb\cellx3415\clvertalb\cellx3555\clvertalb\cellx4130\clvertalb\cellx4913\clvertalb\cellx5153\clvertalb\cellx5646\clvertalb\cellx6302\clvertalb\cellx6542\clvertalb\cellx7037\clvertalb\cellx7824\trrh249\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2402\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2642\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3415\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3555\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4130\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4913\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5153\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5646\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6302\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6542\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7037\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7824\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Customer backlog\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 1\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,779\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,779\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2402\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2642\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3415\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3555\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4130\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4913\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5153\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5646\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6302\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6542\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7037\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7824\trrh249\row}}} {\trowd\trqc\clvertalb\cellx2402\clvertalb\cellx2642\clvertalb\cellx3415\clvertalb\cellx3555\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4130\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4913\clvertalb\cellx5153\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5646\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6302\clvertalb\cellx6542\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7037\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7824\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Non-compete agreement\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc 5\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 282\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 282\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell{ {\trowd\trqc\clvertalb\cellx2402\clvertalb\cellx2642\clvertalb\cellx3415\clvertalb\cellx3555\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4130\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4913\clvertalb\cellx5153\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5646\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6302\clvertalb\cellx6542\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7037\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7824\trrh249\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2402\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2642\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3415\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3555\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4130\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4913\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5153\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5646\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6302\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6542\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7037\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7824\trrh496 \pard\plain\intbl\cf1\f51\fs20\ql Total intangible assets\plain\intbl\cf1\f51\fs20\ql subject to amortization\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qc \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 16,354\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 9,252\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 7,102\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2402\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2642\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3415\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3555\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4130\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4913\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5153\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5646\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6302\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6542\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7037\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7824\trrh496\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\ql We recorded amortization expense related to the acquisition-related intangible assets as follows (in\plain\sa264\cf1\f51\fs20\ql thousands): \par\pard\plain {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3257\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3497\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3697\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4183\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4423\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4623\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5407\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5647\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5847\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6284\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6524\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6724\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh26 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3257\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3497\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3697\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4183\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4423\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4623\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5407\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5647\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5847\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6284\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6524\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6724\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh26\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3257\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3497\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5408\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5648\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7510\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Three Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Six Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3257\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3497\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5408\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5648\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7510\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh199\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3257\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3497\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5408\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5648\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7510\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3257\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3497\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5408\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5648\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7510\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh199\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3257\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3497\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4183\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4423\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5407\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5647\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6284\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6524\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3257\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3497\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4183\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4423\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5407\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5647\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6284\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6524\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh199\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3257\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3497\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3697\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4183\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4423\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4623\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5407\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5647\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5847\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6524\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6724\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7508\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Operating expense category:\cell\pard\plain\intbl\cf1\f51\fs20\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\b\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\b\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\b\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\b\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\b\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3257\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3497\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3697\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4183\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4423\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4623\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5407\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5647\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5847\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6524\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6724\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7508\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\cellx3257\clvertalb\cellx3497\clvertalb\cellx3697\clvertalb\cellx4183\clvertalb\cellx4423\clvertalb\cellx4623\clvertalb\cellx5407\clvertalb\cellx5647\clvertalb\cellx5847\clvertalb\cellx6284\clvertalb\cellx6524\clvertalb\cellx6724\clvertalb\cellx7508\clvertalb\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Research and development\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 138\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 121\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 244\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 243\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\cellx3257\clvertalb\cellx3497\clvertalb\cellx3697\clvertalb\cellx4183\clvertalb\cellx4423\clvertalb\cellx4623\clvertalb\cellx5407\clvertalb\cellx5647\clvertalb\cellx5847\clvertalb\cellx6284\clvertalb\cellx6524\clvertalb\cellx6724\clvertalb\cellx7508\clvertalb\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3257\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3497\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3697\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4183\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4423\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4623\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5407\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5647\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5847\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6524\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6724\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7508\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Sales and marketing\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 521\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 188\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 709\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 375\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3257\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3497\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3697\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4183\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4423\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4623\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5407\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5647\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5847\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6524\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6724\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7508\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\cellx3257\clvertalb\cellx3497\clbrdrb\brdrs\brdrcf1\clvertalb\cellx3697\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4183\clvertalb\cellx4423\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4623\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5407\clvertalb\cellx5647\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5847\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6284\clvertalb\cellx6524\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6724\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7508\clvertalb\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql General and administrative\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 28\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 28\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\cellx3257\clvertalb\cellx3497\clbrdrb\brdrs\brdrcf1\clvertalb\cellx3697\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4183\clvertalb\cellx4423\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4623\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5407\clvertalb\cellx5647\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5847\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6284\clvertalb\cellx6524\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6724\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7508\clvertalb\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3257\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3497\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3697\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4183\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4423\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4623\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5407\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5647\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5847\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6524\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6724\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7508\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Total\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 687\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 309\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 981\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 618\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3257\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3497\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3697\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4183\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4423\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4623\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5407\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5647\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5847\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6284\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6524\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6724\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7508\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sb528\cf1\f51\fs20\qc 17\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\fi792\cf1\f51\fs20\ql The estimated future amortization expense of acquisition-related intangible assets subject to amortization\plain\sa264\cf1\f51\fs20\ql after June 30, 2018 is as follows (in thousands): \par\pard\plain {\trowd\trqc\clvertalb\cellx6540\clvertalb\cellx6780\clvertalb\cellx6970\clvertalb\cellx7610\clvertalb\cellx7750\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\trqc\clvertalb\cellx6540\clvertalb\cellx6780\clvertalb\cellx6970\clvertalb\cellx7610\clvertalb\cellx7750\trrh66\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6540\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6780\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6970\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7610\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\b\ql Year Ended December\~31,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6540\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6780\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6970\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7610\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6540\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6780\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6970\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7610\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql 2018 (remaining 6 months)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,895\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6540\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6780\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6970\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7610\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249\row}}} {\trowd\trqc\cellx6540\clvertalb\cellx6780\clvertalb\cellx6970\clvertalb\cellx7610\clvertalb\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql 2019\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f62\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,491\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\cellx6540\clvertalb\cellx6780\clvertalb\cellx6970\clvertalb\cellx7610\clvertalb\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6540\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6780\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6970\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7610\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql 2020\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,368\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6540\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6780\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6970\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7610\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\cellx6540\clvertalb\cellx6780\clvertalb\cellx6970\clvertalb\cellx7610\clvertalb\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql 2021\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,301\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\cellx6540\clvertalb\cellx6780\clvertalb\cellx6970\clvertalb\cellx7610\clvertalb\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6540\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6780\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6970\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7610\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql 2022\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,194\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6540\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6780\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6970\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7610\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\cellx6540\clvertalb\cellx6780\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6970\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7610\clvertalb\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Thereafter\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 6,212\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\cellx6540\clvertalb\cellx6780\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6970\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7610\clvertalb\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6540\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6780\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6970\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7610\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Total\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 21,461\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6540\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6780\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6970\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7610\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249\row}}}\pard\plain\cf1\f51\fs2\ql \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\ql Note\~6. Investment in Unconsolidated Affiliates.\par\pard\plain\fi792\cf1\f51\fs20\ql During 2017 and 2016, we made investments in Semitech Semiconductor Pty. Ltd., an Australian\plain\cf1\f51\fs20\ql corporation (\u8220?Semitech\u8221?), as part of a license and development agreement dated April 16, 2016.\plain\cf1\f51\fs20\ql Semitech has developed Narrowband-Power Line Communications (\u8220?N-PLC\u8221?) products and market\plain\cf1\f51\fs20\ql knowledge in the N-PLC devices space and plans to sell its products into the smart grid, solar, smart lighting and\plain\cf1\f51\fs20\ql industrial space. Investments during 2016 through June 14, 2017 were recorded as notes receivable. On June 15,\plain\cf1\f51\fs20\ql 2017, $0.4 million of notes receivable and accrued interest were converted into 233,335 shares of preferred stock in\plain\cf1\f51\fs20\ql Semitech. In June 2018, we converted $0.5 million of notes receivable and accrued interest into 312,076 shares of\plain\cf1\f51\fs20\ql preferred stock in Semitech. This investment is recorded at cost in other non-current assets on the condensed\plain\cf1\f51\fs20\ql consolidated balance sheets as of June 30, 2018 and December 31, 2017. As of June 30, 2018, we no longer held\plain\cf1\f51\fs20\ql any investments in notes receivable in Semitech. As of December 31, 2017, we held $0.2 million of notes\plain\sa264\cf1\f51\fs20\ql receivable which were classified in other non-current assets on the condensed consolidated balance sheets.\par\pard\plain\sa264\cf1\f51\fs20\b\ql Note\~7. Borrowings.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Western Alliance Bank Term Loan.\par\pard\plain\fi792\cf1\f51\fs20\ql The Company was a party to that certain Business Financing Agreement dated July\~7, 2016 and that certain\plain\cf1\f51\fs20\ql Second Business Financing Modification Agreement, dated September 29, 2017, by and between Western Alliance\plain\cf1\f51\fs20\ql Bank and the Company (\u8220?Credit Facility\u8221?). The Credit Facility provided for (i)\~a term loan of up to\plain\cf1\f51\fs20\ql $18.0 million (the \u8220?Term Loan\u8221?) and (ii)\~a revolving credit line advance (the \u8220?Line of\plain\cf1\f51\fs20\ql Credit\u8221?) in the aggregate amount of the lower of (x)\~$5.0 million and (y)\~80% of certain of the\plain\cf1\f51\fs20\ql Company\u8217?s receivables. The Term Loan bore interest at a rate per annum equal to the greater of the prime\plain\cf1\f51\fs20\ql rate or 3.5%, plus 0.75% and was scheduled to mature in June 2019.\~\~The Line of Credit bore interest at a rate per\plain\cf1\f51\fs20\ql annum equal to the greater of the prime rate or 3.5% plus 0.50%), and was scheduled to mature in July 2018. We\plain\cf1\f51\fs20\ql made interest-only payments on the Term Loan from July 2016 through September 2016 and began making interest\plain\cf1\f51\fs20\ql payments and principal payments in 33 equal monthly installments starting October 2016. Prior to the Amendment,\plain\cf1\f51\fs20\ql the Credit Facility provided that any indebtedness we incurred thereunder was collateralized by substantially all\plain\cf1\f51\fs20\ql assets of the Company and any domestic subsidiaries, subject to certain customary exceptions. We paid a facility fee\plain\cf1\f51\fs20\ql of $150,000 as well as a $25,000 diligence fee upon entry into the Credit Facility and an additional $10,000 on July\plain\cf1\f51\fs20\ql 7, 2017. Additional fees of $25,000 were incurred in connection with the amendment. These fees were recorded as\plain\sa264\cf1\f51\fs20\ql a debt discount and were amortized over the life of the agreement.\par\pard\plain\fi792\cf1\f51\fs20\ql Borrowings of $12.0 million under this facility were repaid in full in May 2018. In connection with the\plain\cf1\f51\fs20\ql repayment of this facility, the remaining unamortized debt discount of $66,000 was recorded as interest expense in\plain\sa264\cf1\f51\fs20\ql the condensed consolidated statements of operations.\~\~\~\par\pard\plain\sb528\cf1\f51\fs20\qc 18\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Cortland Capital Market Services LLC Term Loan.\par\pard\plain\fi792\cf1\f51\fs20\ql One May 8, 2018, we entered into a credit agreement with Cortland Capital Market Services LLC\plain\cf1\f51\fs20\ql (\u8220?Cortland\u8221?) (\u8220?Credit Agreement\u8221?). The Credit Agreement provides for\~a 1\plain\cf1\f51\fs10\ql st\plain\cf1\f51\fs20\ql lien senior\plain\cf1\f51\fs20\ql secured term loan of $35.0 million (\u8220?Term Loan\u8221?). The Term Loan bears interest at a rate per annum\plain\cf1\f51\fs20\ql equal to the sum of the Libor Rate (2.35% on June 30, 2018) plus 8.75% and is payable in consecutive quarterly\plain\cf1\f51\fs20\ql installments starting December 31, 2018. The Term Loan is scheduled to mature May 8, 2022.\~\~The Credit\plain\cf1\f51\fs20\ql Agreement provided that any indebtedness we incurred thereunder was collateralized by substantially all assets of\plain\sa264\cf1\f51\fs20\ql the Company and any domestic subsidiaries, subject to certain customary exceptions.\par\pard\plain\fi792\cf1\f51\fs20\ql The Credit Agreement contains customary representations and warranties and affirmative and negative\plain\cf1\f51\fs20\ql covenants, including maximum consolidated leverage ratios and minimum liquidity. Upon an occurrence of an event\plain\cf1\f51\fs20\ql of default, under the Credit Facility we could be required to pay interest on all outstanding obligations under the\plain\cf1\f51\fs20\ql agreement at a rate of 2% above the otherwise applicable interest rate, and the lender may accelerate our obligations\plain\sa264\cf1\f51\fs20\ql under the agreement.\par\pard\plain\fi792\cf1\f51\fs20\ql In connection with the Credit Agreement, Cortland received a warrant to purchase 850,000 shares of\plain\cf1\f51\fs20\ql common stock at an exercise price of $8.30 and a term of six years. In addition, we paid financing costs of $1.1\plain\cf1\f51\fs20\ql million. The financing costs and the value of the warrant, $4.8 million, were recorded as a debt discount and are\plain\cf1\f51\fs20\ql being amortized over the life of the Credit Agreement. Amortization of debt discount was $0.2 million for the three\plain\sa264\cf1\f51\fs20\ql and six months ended in June 30, 2018.\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql Outstanding borrowings consisted of the following (in thousands): \par\pard\plain {\trowd\trqc\clvertalb\cellx4863\clvertalb\cellx5103\clvertalb\cellx5447\clvertalb\cellx6231\clvertalb\cellx6471\clvertalb\cellx6857\clvertalb\cellx7608\clvertalb\cellx7750\trrh25 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\trqc\clvertalb\cellx4863\clvertalb\cellx5103\clvertalb\cellx5447\clvertalb\cellx6231\clvertalb\cellx6471\clvertalb\cellx6857\clvertalb\cellx7608\clvertalb\cellx7750\trrh25\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4863\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5103\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6231\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6471\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7609\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc December 31,\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4863\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5103\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6231\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6471\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7609\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh198\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4863\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5103\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6231\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6471\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7609\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh198 \pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4863\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5103\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6231\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6471\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7609\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh198\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4863\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5103\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6231\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6471\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6857\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7608\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Term loan, current\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 926\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4863\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5103\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6231\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6471\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6857\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7608\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\cellx4863\clvertalb\cellx5103\clvertalb\cellx5447\clvertalb\cellx6231\clvertalb\cellx6471\clvertalb\cellx6857\clvertalb\cellx7608\clvertalb\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Term loan, non-current\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 29,361\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 10,908\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\cellx4863\clvertalb\cellx5103\clvertalb\cellx5447\clvertalb\cellx6231\clvertalb\cellx6471\clvertalb\cellx6857\clvertalb\cellx7608\clvertalb\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4863\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5103\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5447\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6231\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6471\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6857\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7608\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Line of credit\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,500\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4863\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5103\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5447\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6231\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6471\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6857\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7608\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\cellx4863\clvertalb\cellx5103\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5447\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6231\clvertalb\cellx6471\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6857\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7608\clvertalb\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Total\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 29,361\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 13,334\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\cellx4863\clvertalb\cellx5103\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5447\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6231\clvertalb\cellx6471\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6857\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7608\clvertalb\cellx7750\trrh248\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\ql Future repayments on outstanding borrowings (excluding unamortized discount of $5.6 million as of June\plain\sa264\cf1\f51\fs20\ql 30, 2018) are as follows (in thousands): \par\pard\plain {\trowd\trqc\clvertalb\cellx6490\clvertalb\cellx6730\clvertalb\cellx6970\clvertalb\cellx7610\clvertalb\cellx7750\trrh25 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\trqc\clvertalb\cellx6490\clvertalb\cellx6730\clvertalb\cellx6970\clvertalb\cellx7610\clvertalb\cellx7750\trrh25\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6490\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6730\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6970\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7610\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\b\ql Year Ended December\~31,\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6490\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6730\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6970\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7610\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6490\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6730\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6970\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7610\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql 2018 (remaining 6 months)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 292\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6490\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6730\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6970\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7610\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\cellx6490\clvertalb\cellx6730\clvertalb\cellx6970\clvertalb\cellx7610\clvertalb\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql 2019\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,750\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\cellx6490\clvertalb\cellx6730\clvertalb\cellx6970\clvertalb\cellx7610\clvertalb\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6490\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6730\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6970\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7610\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql 2020\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,750\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6490\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6730\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6970\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7610\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\cellx6490\clvertalb\cellx6730\clvertalb\cellx6970\clvertalb\cellx7610\clvertalb\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql 2021\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,750\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\cellx6490\clvertalb\cellx6730\clvertalb\cellx6970\clvertalb\cellx7610\clvertalb\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6490\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6730\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6970\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7610\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql 2022\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 29,458\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6490\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6730\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6970\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7610\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\cellx6490\clvertalb\cellx6730\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6970\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7610\clvertalb\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 35,000\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\cellx6490\clvertalb\cellx6730\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6970\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7610\clvertalb\cellx7750\trrh248\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\ql Interest expense incurred under our borrowings was $1.2 million and $1.4 million for the three and six\plain\sa264\cf1\f51\fs20\ql months ended June 30, 2018, respectively.\par\pard\plain\fi792\cf1\f51\fs20\ql Interest expense incurred under our borrowings was $0.2\~million and $0.4 million for the three and six\plain\sa264\cf1\f51\fs20\ql months ended June 30, 2017, respectively.\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql \~\par\pard\plain\sb528\cf1\f51\fs20\qc 19\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\ql Note\~8. Segment Information.\par\pard\plain\fi792\cf1\f51\fs20\ql We operate in one business segment, application-specific, ultra-low power NVM products. Our chief\plain\cf1\f51\fs20\ql decision-maker, the President and Chief Executive Officer, evaluates our performance based on company-wide\plain\cf1\f51\fs20\ql consolidated results. Revenue is evaluated based on product category and by geographic region. All of our revenue\plain\sa264\cf1\f51\fs20\ql results from contracts with customers; we have no additional sources of revenue.\par\pard\plain\fi792\cf1\f51\fs20\ql Product revenue from customers is disaggregated based on the geographic region to which the product is\plain\sa264\cf1\f51\fs20\ql delivered. Revenue by geographic region was as follows (in thousands): \par\pard\plain {\trowd\clvertalb\cellx4954\clvertalb\cellx5194\clvertalb\cellx5394\clvertalb\cellx6034\clvertalb\cellx6274\clvertalb\cellx6474\clvertalb\cellx7114\clvertalb\cellx7354\clvertalb\cellx7554\clvertalb\cellx8194\clvertalb\cellx8434\clvertalb\cellx8634\clvertalb\cellx9307\clvertalb\cellx9547\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx4954\clvertalb\cellx5194\clvertalb\cellx5394\clvertalb\cellx6034\clvertalb\cellx6274\clvertalb\cellx6474\clvertalb\cellx7114\clvertalb\cellx7354\clvertalb\cellx7554\clvertalb\cellx8194\clvertalb\cellx8434\clvertalb\cellx8634\clvertalb\cellx9307\clvertalb\cellx9547\clvertalb\cellx9688\trrh66\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4954\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5194\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7114\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7354\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9307\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9547\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f62\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Three Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Six Months Ended\cell\pard\plain\intbl\cf1\f62\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4954\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5194\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7114\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7354\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9307\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9547\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4954\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5194\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7114\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7354\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9307\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9547\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f62\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f62\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4954\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5194\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7114\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7354\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9307\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9547\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4954\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5194\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6034\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6274\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7114\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7354\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8194\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8434\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9307\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9547\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4954\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5194\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6034\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6274\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7114\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7354\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8194\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8434\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9307\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9547\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4954\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5194\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5394\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6034\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6274\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6474\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7114\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7354\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7554\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8194\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8434\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8634\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9307\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9547\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql United States\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5,517\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,713\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 8,219\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5,522\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4954\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5194\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5394\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6034\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6274\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6474\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7114\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7354\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7554\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8194\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8434\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8634\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9307\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9547\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx4954\clvertalb\cellx5194\clvertalb\cellx5394\clvertalb\cellx6034\clvertalb\cellx6274\clvertalb\cellx6474\clvertalb\cellx7114\clvertalb\cellx7354\clvertalb\cellx7554\clvertalb\cellx8194\clvertalb\cellx8434\clvertalb\cellx8634\clvertalb\cellx9307\clvertalb\cellx9547\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Rest of Americas\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 150\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 70\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 285\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 131\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx4954\clvertalb\cellx5194\clvertalb\cellx5394\clvertalb\cellx6034\clvertalb\cellx6274\clvertalb\cellx6474\clvertalb\cellx7114\clvertalb\cellx7354\clvertalb\cellx7554\clvertalb\cellx8194\clvertalb\cellx8434\clvertalb\cellx8634\clvertalb\cellx9307\clvertalb\cellx9547\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4954\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5194\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5394\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6034\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6274\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6474\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7114\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7354\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7554\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8194\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8434\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8634\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9307\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9547\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Europe\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,335\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,142\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 6,621\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,010\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4954\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5194\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5394\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6034\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6274\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6474\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7114\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7354\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7554\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8194\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8434\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8634\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9307\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9547\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx4954\clvertalb\cellx5194\clvertalb\cellx5394\clvertalb\cellx6034\clvertalb\cellx6274\clvertalb\cellx6474\clvertalb\cellx7114\clvertalb\cellx7354\clvertalb\cellx7554\clvertalb\cellx8194\clvertalb\cellx8434\clvertalb\cellx8634\clvertalb\cellx9307\clvertalb\cellx9547\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Asia Pacific\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 9,088\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 8,340\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 18,213\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 14,811\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx4954\clvertalb\cellx5194\clvertalb\cellx5394\clvertalb\cellx6034\clvertalb\cellx6274\clvertalb\cellx6474\clvertalb\cellx7114\clvertalb\cellx7354\clvertalb\cellx7554\clvertalb\cellx8194\clvertalb\cellx8434\clvertalb\cellx8634\clvertalb\cellx9307\clvertalb\cellx9547\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4954\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5194\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5394\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6034\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6274\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6474\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7114\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7354\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7554\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8194\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8434\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8634\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9307\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9547\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Rest of world\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 93\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 147\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 147\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 245\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4954\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5194\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5394\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6034\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6274\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6474\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7114\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7354\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7554\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8194\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8434\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8634\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9307\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9547\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx4954\clvertalb\cellx5194\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5394\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6034\clvertalb\cellx6274\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6474\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7114\clvertalb\cellx7354\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7554\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8194\clvertalb\cellx8434\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8634\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9307\clvertalb\cellx9547\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Total\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 18,183\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 13,412\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 33,485\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 24,719\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx4954\clvertalb\cellx5194\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5394\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6034\clvertalb\cellx6274\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6474\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7114\clvertalb\cellx7354\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7554\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8194\clvertalb\cellx8434\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8634\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9307\clvertalb\cellx9547\clvertalb\cellx9688\trrh248\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\ql Long-lived assets are attributed to the geographic region were they are located. Long-lived assets by\plain\sa264\cf1\f51\fs20\ql geographic region were as follows (in thousands):\par\pard\plain\cf1\f51\fs20\ql \~ \par\pard\plain {\trowd\trqc\clvertalb\cellx5143\clvertalb\cellx5383\clvertalb\cellx5727\clvertalb\cellx6338\clvertalb\cellx6578\clvertalb\cellx6964\clvertalb\cellx7750\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\trqc\clvertalb\cellx5143\clvertalb\cellx5383\clvertalb\cellx5727\clvertalb\cellx6338\clvertalb\cellx6578\clvertalb\cellx6964\clvertalb\cellx7750\trrh66\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5143\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5383\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6338\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6578\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7748\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc December 31,\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5143\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5383\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6338\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6578\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7748\trrh199\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5143\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5383\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6338\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6578\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7748\trrh199 \pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5143\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5383\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6338\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6578\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7748\trrh199\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5143\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5383\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5727\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6338\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6578\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6964\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql United States\cell\pard\plain\intbl\cf1\f62\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5,021\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5,424\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5143\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5383\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5727\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6338\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6578\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6964\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\cellx5143\clvertalb\cellx5383\clvertalb\cellx5727\clvertalb\cellx6338\clvertalb\cellx6578\clvertalb\cellx6964\clvertalb\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Asia Pacific\cell\pard\plain\intbl\cf1\f62\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,341\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,759\cell{ {\trowd\trqc\clvertalb\cellx5143\clvertalb\cellx5383\clvertalb\cellx5727\clvertalb\cellx6338\clvertalb\cellx6578\clvertalb\cellx6964\clvertalb\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5143\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5383\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5727\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6338\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6578\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6964\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Europe\cell\pard\plain\intbl\cf1\f62\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 874\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5143\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5383\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5727\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6338\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6578\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6964\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh249\row}}} {\trowd\trqc\clvertalb\cellx5143\clvertalb\cellx5383\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5727\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6338\clvertalb\cellx6578\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6964\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7750\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Total property and equipment, net\cell\pard\plain\intbl\cf1\f62\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 8,236\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 7,183\cell{ {\trowd\trqc\clvertalb\cellx5143\clvertalb\cellx5383\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5727\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6338\clvertalb\cellx6578\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6964\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7750\trrh249\row}}}\pard\plain\cf1\f51\fs2\ql \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\ql Note\~9. Commitments and Contingencies.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Operating Leases.\par\pard\plain\fi792\cf1\f51\fs20\ql The Company leases office facilities under various non-cancelable operating lease agreements. Certain\plain\cf1\f51\fs20\ql lease agreements contain free or escalating rent payment provisions. The Company recognizes rent expense under\plain\cf1\f51\fs20\ql such leases on a straight-line basis over the term of the lease with the difference between the expense and the\plain\cf1\f51\fs20\ql payments recorded as deferred rent on the consolidated balance sheets. Any reimbursements by the landlord for\plain\cf1\f51\fs20\ql tenant improvements are considered lease incentives, the balance of which is recorded as a lease incentive obligation\plain\cf1\f51\fs20\ql within deferred rent on the consolidated balance sheets, and amortized as a reduction of rent expense over the life\plain\sa264\cf1\f51\fs20\ql of the lease. Lease renewal periods are considered on a lease-by-lease basis in determining the lease term.\par\pard\plain\fi792\cf1\f51\fs20\ql On November\~2, 2015, the Company entered into a lease with Peterson Ridge LLC pursuant to which the\plain\cf1\f51\fs20\ql Company leased a new headquarters facility, consisting of an aggregate of approximately 34,000 square feet of\plain\cf1\f51\fs20\ql space in Santa Clara, California. The initial term of the lease commenced on November\~2, 2015 and is scheduled to\plain\cf1\f51\fs20\ql end on July\~31, 2023 and may be extended, at the Company\u8217?s option, for an additional five-year period\plain\sa264\cf1\f51\fs20\ql following the initial lease term.\par\pard\plain\sb528\cf1\f51\fs20\qc 20\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\fi792\cf1\f51\fs20\ql Pursuant to the lease,\~monthly base rental payments due under the lease were approximately $93,000\plain\cf1\f51\fs20\ql per\~month between August\~1, 2016 and February\~27, 2017, with annual increases of approximately 3% thereafter.\plain\cf1\f51\fs20\ql The Company must also pay for certain other operating costs under the lease, including operating expenses, taxes,\plain\cf1\f51\fs20\ql assessments, insurance, utilities, securities and property management fees. Peterson Ridge LLC is obligated to\plain\cf1\f51\fs20\ql reimburse the Company for up to approximately $2.5 million of the Company\u8217?s out-of-pocket costs\plain\cf1\f51\fs20\ql associated with any tenant improvements, as defined in the lease. The Company was reimbursed for this amount\plain\cf1\f51\fs20\ql during the\~year ended December\~31, 2016. As of June 30, 2018 and December 31, 2017, the Company recorded a\plain\cf1\f51\fs20\ql lease incentive obligation of $1.8 million and $2.0 million, respectively, in deferred rent on the condensed\plain\sa264\cf1\f51\fs20\ql consolidated balance sheets.\par\pard\plain\fi792\cf1\f51\fs20\ql Rent expense under operating leases was $0.5 million and $0.8 million for the three and six months ended\plain\sa264\cf1\f51\fs20\ql June 30, 2018, respectively.\par\pard\plain\fi792\cf1\f51\fs20\ql Rent expense under operating leases was $0.3 million and $0.5 million\~for the three and six months ended\plain\sa264\cf1\f51\fs20\ql June 30, 2017, respectively \par\pard\plain {\trowd\trqc\clvertalb\cellx3271\clvertalb\cellx3411\clvertalb\cellx3633\clvertalb\cellx4172\clvertalb\cellx4312\clvertalb\cellx4512\clvertalb\cellx4961\clvertalb\cellx5101\clvertalb\cellx5301\clvertalb\cellx5841\clvertalb\cellx5981\clvertalb\cellx6178\clvertalb\cellx6718\clvertalb\cellx6858\clvertalb\cellx7058\clvertalb\cellx7598\clvertalb\cellx7738\clvertalb\cellx7938\clvertalb\cellx8478\clvertalb\cellx8618\clvertalb\cellx9026\clvertalb\cellx9544\clvertalb\cellx9688\trrh25 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql 3\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\trqc\clvertalb\cellx3271\clvertalb\cellx3411\clvertalb\cellx3633\clvertalb\cellx4172\clvertalb\cellx4312\clvertalb\cellx4512\clvertalb\cellx4961\clvertalb\cellx5101\clvertalb\cellx5301\clvertalb\cellx5841\clvertalb\cellx5981\clvertalb\cellx6178\clvertalb\cellx6718\clvertalb\cellx6858\clvertalb\cellx7058\clvertalb\cellx7598\clvertalb\cellx7738\clvertalb\cellx7938\clvertalb\cellx8478\clvertalb\cellx8618\clvertalb\cellx9026\clvertalb\cellx9544\clvertalb\cellx9688\trrh25\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3271\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3411\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4173\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4313\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4962\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5102\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5842\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5982\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6719\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6859\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7599\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7739\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8479\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8619\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9545\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Total\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2019\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2020\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2021\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2022\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Thereafter\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3271\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3411\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4173\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4313\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4962\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5102\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5842\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5982\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6719\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6859\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7599\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7739\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8479\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8619\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9545\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3271\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3411\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9547\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc (in thousands)\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3271\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3411\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9547\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3271\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3411\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3633\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4172\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4312\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4512\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4961\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5101\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5301\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5841\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5981\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6178\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6718\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6858\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7058\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7598\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7738\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7938\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8478\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8618\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9026\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9544\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Operating leases\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 8,033\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 960\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,742\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,746\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,467\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,325\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 793\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3271\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3411\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3633\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4172\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4312\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4512\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4961\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5101\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5301\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5841\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5981\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6178\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6718\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6858\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7058\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7598\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7738\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7938\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8478\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8618\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9026\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9544\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Purchase Commitments.\par\pard\plain\fi792\cf1\f51\fs20\ql As of June 30, 2018, we had purchase commitments with our third-party foundries of $3.4 million due\plain\cf1\f51\fs20\ql within one\~year, $0.2 million for a licensing and development agreement, and $0.4 million in conjunction with an\plain\sa264\cf1\f51\fs20\ql agreement with TowerJazz Panasonic Semiconductor Company.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Litigation.\par\pard\plain\fi792\cf1\f51\fs20\ql We may be subject to legal proceedings, claims and litigation, including intellectual property litigation,\plain\cf1\f51\fs20\ql arising in the ordinary course of business. Such matters are subject to many uncertainties and outcomes and are not\plain\cf1\f51\fs20\ql predictable with assurance. We accrue amounts that we believe are adequate to address any liabilities related to\plain\cf1\f51\fs20\ql legal proceedings and other loss contingencies that we believe will result in a probable loss that is reasonably\plain\sa264\cf1\f51\fs20\ql estimable.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Indemnification.\par\pard\plain\fi792\cf1\f51\fs20\ql During the normal course of business, we may make certain indemnities, commitments and guarantees\plain\cf1\f51\fs20\ql which may include intellectual property indemnities to certain of our customers in connection with the sales of our\plain\cf1\f51\fs20\ql products and indemnities for liabilities associated with the infringement of other parties\u8217? technology based\plain\cf1\f51\fs20\ql upon our products. Our exposure under these indemnification provisions is generally limited to the total amount\plain\cf1\f51\fs20\ql paid by a customer under the agreement. However, certain agreements include indemnification provisions that could\plain\cf1\f51\fs20\ql potentially expose us to losses in excess of the amount received under the agreement. In addition, we indemnify our\plain\sa264\cf1\f51\fs20\ql officers, directors and certain key employees while they are serving in good faith in such capacities.\par\pard\plain\fi792\cf1\f51\fs20\ql We have not recorded any liability for these indemnities, commitments and guarantees in the accompanying\plain\cf1\f51\fs20\ql condensed consolidated balance sheets. Where necessary, we accrue for losses for any known contingent liabilities,\plain\cf1\f51\fs20\ql including those that may arise from indemnification provisions, when future payment is probable.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sb528\cf1\f51\fs20\qc 21\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\sa264\cf1\f51\fs20\b\ql Note\~10. Common Stock, Common Stock Warrants and Stock Option Plan.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Common Stock.\par\pard\plain\fi792\cf1\f51\fs20\ql We are authorized to issue 100,000,000\~shares of common stock with $0.0001 par value per share as of\plain\cf1\f51\fs20\ql June 30, 2018 and December\~31, 2017. Each holder of common stock is entitled to one vote per share. As of June\plain\cf1\f51\fs20\ql 30, 2018, no dividends have been declared by the Board of Directors, however, the holders of common stock are\plain\sa264\cf1\f51\fs20\ql also entitled to receive dividends, when and if declared by our Board of Directors.\par\pard\plain\fi792\cf1\f51\fs20\ql We completed a follow-on offering of our common stock in June\~2017. We sold 5,000,000 shares,\plain\cf1\f51\fs20\ql including 625,000 shares upon exercise of the underwriters\u8217? option to purchase additional shares. The shares\plain\cf1\f51\fs20\ql were sold at a public offering price of $4.00 per share for net proceeds of $18.4 million to us, after deducting\plain\sa264\cf1\f51\fs20\ql underwriting discounts, commissions and offering expenses.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Common Stock Reserved for Future Issuance.\par\pard\plain\fi792\cf1\f51\fs20\ql As of June 30, 2018 and December\~31, 2017, we had reserved shares of common stock for future issuances\plain\sa264\cf1\f51\fs20\ql as follows: \par\pard\plain {\trowd\trqc\clvertalb\cellx5450\clvertalb\cellx5690\clvertalb\cellx6580\clvertalb\cellx6820\clvertalb\cellx7750\trrh25 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\trqc\clvertalb\cellx5450\clvertalb\cellx5690\clvertalb\cellx6580\clvertalb\cellx6820\clvertalb\cellx7750\trrh25\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5450\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5690\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6580\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6820\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh396 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc December\plain\intbl\cf1\f51\fs16\b\qc 31,\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5450\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5690\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6580\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6820\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh396\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5450\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5690\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6580\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6820\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5450\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5690\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6580\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6820\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7750\trrh198\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5450\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5690\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6580\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6820\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Warrants to purchase common stock\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,239,423\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 389,423\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5450\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5690\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6580\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6820\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\cellx5450\clvertalb\cellx5690\clvertalb\cellx6580\clvertalb\cellx6820\clvertalb\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Stock option plan:\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\trqc\clvertalb\cellx5450\clvertalb\cellx5690\clvertalb\cellx6580\clvertalb\cellx6820\clvertalb\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5450\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5690\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6580\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6820\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Options outstanding\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,717,644\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,560,453\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5450\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5690\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6580\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6820\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\cellx5450\clvertalb\cellx5690\clvertalb\cellx6580\clvertalb\cellx6820\clvertalb\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Restricted stock units outstanding\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 913,781\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 509,894\cell{ {\trowd\trqc\clvertalb\cellx5450\clvertalb\cellx5690\clvertalb\cellx6580\clvertalb\cellx6820\clvertalb\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5450\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5690\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6580\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6820\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Shares available for future grants/RSU grants\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 666,020\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 580,827\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5450\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5690\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6580\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6820\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\cellx5450\clvertalb\cellx5690\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6580\clvertalb\cellx6820\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Shares available for ESPP\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 432,699\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 275,587\cell{ {\trowd\trqc\clvertalb\cellx5450\clvertalb\cellx5690\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6580\clvertalb\cellx6820\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7750\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5450\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5690\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6580\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6820\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Total\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,969,567\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,316,184\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5450\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5690\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6580\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6820\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7750\trrh248\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Common Stock Warrants.\par\pard\plain\fi792\cf1\f51\fs20\ql In connection with the Credit Agreement (Note 7), the Company issued Cortland a warrant to purchase\plain\cf1\f51\fs20\ql 850,000 shares of common stock at an exercise price of $8.30 per share with a term of six years. The grant date\plain\cf1\f51\fs20\ql fair value of the warrant was approximately $4.8 million which was recorded as a debt discount and is being\plain\cf1\f51\fs20\ql amortized over the life of the Credit Agreement. The fair value of the warrant was determined using the\plain\cf1\f51\fs20\ql Black-Scholes Model based on the following assumptions: common stock price on date of grant of $8.70, dividend\plain\sa264\cf1\f51\fs20\ql yield of 0%, volatility of 69.73%, a risk-free interest rate 2.87% and a term of 6 years.\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql The following common stock warrants were outstanding as of June 30, 2018: \par\pard\plain {\trowd\clvertalb\cellx4750\clvertalb\cellx5038\clvertalb\cellx5564\clvertalb\cellx6604\clvertalb\cellx6892\clvertalb\cellx8048\clvertalb\cellx8336\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx4750\clvertalb\cellx5038\clvertalb\cellx5564\clvertalb\cellx6604\clvertalb\cellx6892\clvertalb\cellx8048\clvertalb\cellx8336\clvertalb\cellx9688\trrh66\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4750\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5038\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5564\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6604\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6892\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8048\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8336\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh273 \pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f62\fs22\ql \~\cell\pard\plain\intbl\cf1\f62\fs22\ql \~\cell\pard\plain\intbl\cf1\f62\fs22\ql \~\cell\pard\plain\intbl\cf1\f62\fs22\ql \~\cell\pard\plain\intbl\cf1\f62\fs22\ql \~\cell\pard\plain\intbl\cf1\f62\fs22\ql \~\cell\pard\plain\intbl\cf1\f62\fs22\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4750\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5038\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5564\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6604\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6892\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8048\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8336\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh273\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4750\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5038\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5564\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6604\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6892\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8048\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8336\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\b\qc Total amount of securities issuable\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4750\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5038\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5564\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6604\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6892\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8048\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8336\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4750\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5038\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6605\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6893\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8049\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8337\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\b\qc under the outstanding warrants\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Exercise\~Price\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Issuance\~Date\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~Expiration\~Date\cell{ {\trowd\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4750\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5038\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6605\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6893\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8049\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8337\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4750\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5038\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5564\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6604\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6892\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8048\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8336\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\ri66\cf1\f51\fs20\qr 74,141\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 30.35\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2012-2013\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2019\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4750\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5038\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5564\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6604\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6892\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8048\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8336\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4750\clvertalb\cellx5038\clvertalb\cellx5564\clvertalb\cellx6604\clvertalb\cellx6892\clvertalb\cellx8048\clvertalb\cellx8336\clvertalb\cellx9688\trrh249 \pard\plain\intbl\ri66\cf1\f51\fs20\qr 315,282\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2.38\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2014-2015\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2022-2024\cell{ {\trowd\clvertalb\cellx4750\clvertalb\cellx5038\clvertalb\cellx5564\clvertalb\cellx6604\clvertalb\cellx6892\clvertalb\cellx8048\clvertalb\cellx8336\clvertalb\cellx9688\trrh249\row}}} {\trowd\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4750\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5038\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5564\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6604\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6892\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8048\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8336\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\ri66\cf1\f51\fs20\qr 850,000\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 8.30\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2018\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2024\cell{ {\trowd\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4750\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5038\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5564\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6604\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6892\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8048\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8336\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx4750\clvertalb\cellx5038\clvertalb\cellx5564\clvertalb\cellx6604\clvertalb\cellx6892\clvertalb\cellx8048\clvertalb\cellx8336\clvertalb\cellx9688\trrh249 \pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,239,423\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 8.11\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx4750\clvertalb\cellx5038\clvertalb\cellx5564\clvertalb\cellx6604\clvertalb\cellx6892\clvertalb\cellx8048\clvertalb\cellx8336\clvertalb\cellx9688\trrh249\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\ql Common stock warrants are exercisable at the option of the holder any time after the date of issuance into\plain\cf1\f51\fs20\ql shares of our common stock. During 2017, common stock warrants with an aggregate 7,378 shares of issuable\plain\sa264\cf1\f51\fs20\ql common\par\pard\plain\sb528\cf1\f51\fs20\qc 22\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\cf1\f51\fs20\ql stock expired and common stock warrants with an aggregate 14,713 shares of issuable common stock were cashless\plain\sa264\cf1\f51\fs20\ql exercised resulting in the issuance of 10,223 shares of common stock.\par\pard\plain\sa264\cf1\f51\fs20\b\ql Employee Benefit Plans.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql 2007 Equity Incentive Plan.\par\pard\plain\fi792\cf1\f51\fs20\ql In 2007, our Board of Directors and shareholders approved the 2007 Equity Incentive Plan (the\plain\cf1\f51\fs20\ql \u8220?2007 Plan\u8221?) under which 272,727 shares of common stock were reserved and available for the\plain\cf1\f51\fs20\ql issuance of stock options and restricted stock to eligible participants. The 2007 Plan was subsequently amended to\plain\cf1\f51\fs20\ql increase the number of shares of common stock reserved for issuance under the 2007 Plan to 787,878 and during\plain\cf1\f51\fs20\ql the\~year ended December\~31, 2015, the number of shares reserved for issuance under the 2007 Plan was increased to\plain\cf1\f51\fs20\ql 2,651,515. Options and restricted stock awards were granted at a price per share not less than the 85% of the fair\plain\cf1\f51\fs20\ql value at the date of grant or award, respectively. Restricted stock awarded to persons controlling more than 10% of\plain\cf1\f51\fs20\ql our stock were granted at a price per share not less than the 100% of the fair value at the date of the award.\plain\cf1\f51\fs20\ql Options that were granted to new employees generally vest over a four-year period with 25% vesting at the end of\plain\cf1\f51\fs20\ql one\~year and the remaining to vest\~monthly thereafter, while options that were granted to existing employees\plain\cf1\f51\fs20\ql generally vest over a four-year period. Options granted generally are exercisable up to 10\~years from the date of\plain\cf1\f51\fs20\ql grant. As of October\~26, 2015, no shares were available for grant under the 2007 Plan and all outstanding options\plain\cf1\f51\fs20\ql would continue to be governed and remain outstanding in accordance with their existing terms. In addition, any\plain\cf1\f51\fs20\ql shares subject to outstanding awards under the 2007 Plan that are issuable upon the exercise of options that expire\plain\cf1\f51\fs20\ql or become unexercisable for any reason without having been exercised in full will be available for future grant and\plain\sa264\cf1\f51\fs20\ql issuance under the 2015 Plan (as defined below).\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql 2015 Equity Incentive Plan.\par\pard\plain\fi792\cf1\f51\fs20\ql In September\~2015, our Board of Directors adopted, and in October\~2015 our stockholders approved, our\plain\cf1\f51\fs20\ql 2015 Equity Incentive Plan. The 2015 Equity Incentive Plan became effective on the date immediately prior to the\plain\cf1\f51\fs20\ql date of our IPO. As a result, 1,813,272 shares of common stock previously reserved but unissued under the 2007\plain\cf1\f51\fs20\ql Plan on the effective date of the 2015 Equity Incentive Plan became reserved for issuance under our 2015 Equity\plain\cf1\f51\fs20\ql Incentive Plan, and we ceased granting awards under our 2007 Plan. The number of shares reserved for issuance\plain\cf1\f51\fs20\ql under our 2015 Equity Incentive Plan will increase automatically on the first day of January\~of each of 2016\plain\cf1\f51\fs20\ql through 2025 by the number of shares equal to 4% of the total outstanding shares of our common stock as of the\plain\cf1\f51\fs20\ql immediately preceding December\~31. However, our Board of Directors may reduce the amount of the increase in\plain\sa264\cf1\f51\fs20\ql any particular\~year.\par\pard\plain\fi792\cf1\f51\fs20\ql Our 2015 Equity Incentive Plan authorizes the award of stock options, restricted stock awards, stock\plain\cf1\f51\fs20\ql appreciation rights, restricted stock units (\u8220?RSUs\u8221?), performance awards and stock bonuses. No person\plain\cf1\f51\fs20\ql will be eligible to receive more than 2,000,000 shares in any calendar\~year under our 2015 Equity Incentive Plan\plain\cf1\f51\fs20\ql other than a new employee of ours, who will be eligible to receive no more than 4,000,000 shares under the plan in\plain\cf1\f51\fs20\ql the calendar\~year in which the employee commences employment. The aggregate number of shares of our common\plain\cf1\f51\fs20\ql stock that may be subject to awards granted to any one non-employee director pursuant to the 2015 Equity\plain\cf1\f51\fs20\ql Incentive Plan in any calendar\~year shall not exceed 300,000. Our 2015 Equity Incentive Plan provides that no more\plain\sa264\cf1\f51\fs20\ql than 25,000,000 shares will be issued as incentive stock options.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql 2015 Employee Stock Purchase Plan\par\pard\plain\fi792\cf1\f51\fs20\ql In September\~2015, our Board of Directors adopted, and in October\~2015 our stockholders approved, our\plain\cf1\f51\fs20\ql 2015 Employee Stock Purchase Plan (\u8220?ESPP\u8221?). The 2015 Employee Stock Purchase Plan became\plain\cf1\f51\fs20\ql effective on the date of our IPO. We reserved 150,000 shares of our common stock for issuance under our 2015\plain\cf1\f51\fs20\ql Employee Stock Purchase Plan. The number of shares reserved for issuance under our 2015 Employee Stock\plain\cf1\f51\fs20\ql Purchase Plan will increase automatically on the first day of January\~following the first offering date by the number\plain\sa264\cf1\f51\fs20\ql of shares equal to 1% of the total outstanding shares\par\pard\plain\sb528\cf1\f51\fs20\qc 23\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\cf1\f51\fs20\ql of our common stock as of the immediately preceding December\~31 (rounded to the nearest whole share). However,\plain\cf1\f51\fs20\ql our Board of Directors may reduce the amount of the increase in any particular\~year. The aggregate number of\plain\cf1\f51\fs20\ql shares issued over the term of our 2015 Employee Stock Purchase Plan will not exceed 2,250,000 shares of our\plain\sa264\cf1\f51\fs20\ql common stock.\par\pard\plain\fi792\cf1\f51\fs20\ql Under our 2015 Employee Stock Purchase Plan, eligible employees will be able to acquire shares of our\plain\cf1\f51\fs20\ql common stock by accumulating funds through payroll deductions. Eligible employees will be able to select a rate of\plain\cf1\f51\fs20\ql payroll deduction up to 15% of their base cash compensation. The purchase price for shares of our common stock\plain\cf1\f51\fs20\ql purchased under our 2015 Employee Stock Purchase Plan will be 85% of the lesser of the fair market value of our\plain\cf1\f51\fs20\ql common stock on (i)\~the first trading day of the applicable offering period and (ii)\~the last trading day of each\plain\cf1\f51\fs20\ql purchase period in the applicable offering period. Except for the first offering period, each offering period will run\plain\cf1\f51\fs20\ql for no more than six\~months, with purchases occurring every six\~months. The first offering period began upon the\plain\cf1\f51\fs20\ql effective date of our IPO and was originally set to end on June\~30, 2016. On May\~25, 2016, the Board of Directors\plain\cf1\f51\fs20\ql extended the initial offering period to July\~31, 2016. Subsequent purchase periods will be 6\~months in duration\plain\cf1\f51\fs20\ql beginning on August\~1, 2016. On July\~29, 2016, we issued 68,392 shares of common stock in conjunction with the\plain\cf1\f51\fs20\ql end date of the initial purchase window. During 2017, we issued 110,711 shares of common stock pursuant to the\plain\cf1\f51\fs20\ql ESPP. On January 31, 2018 we issued 55,806 shares of common stock in conjunction with the end date of the latest\plain\sa264\cf1\f51\fs20\ql purchase window.\par\pard\plain\fi792\cf1\f51\fs20\ql No participant will have the right to purchase shares of our common stock in an amount that has a fair\plain\cf1\f51\fs20\ql market value greater than $25,000, determined as of the first day of the applicable purchase period, for each\plain\cf1\f51\fs20\ql calendar\~year in which that right is outstanding. In addition, no participant will be permitted to purchase more than\plain\sa264\cf1\f51\fs20\ql 2,500 shares during any one purchase period or a lesser amount as determined by our compensation committee.\par\pard\plain\fi792\cf1\f51\fs20\ql Our 2015 Employee Stock Purchase Plan will continue until the earlier to occur of its termination by our\plain\cf1\f51\fs20\ql Board of Directors, the issuance of all shares reserved for issuance under it or the tenth anniversary of its effective\plain\sa264\cf1\f51\fs20\ql date.\par\pard\plain\fi792\cf1\f51\fs20\ql A summary of stock option and RSUs (including performance-based RSU) activity under the 2007 Plan\plain\sa264\cf1\f51\fs20\ql and the 2015 Equity Incentive Plan is as follows: \par\pard\plain {\trowd\clvertalb\cellx4930\clvertalb\cellx5170\clvertalb\cellx6060\clvertalb\cellx6300\clvertalb\cellx6714\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh26 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx4930\clvertalb\cellx5170\clvertalb\cellx6060\clvertalb\cellx6300\clvertalb\cellx6714\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh26\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4930\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5170\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Stock\~Options\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4930\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5170\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4930\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5170\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6060\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6300\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6714\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7267\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7507\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8515\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8755\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9145\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Weighted-\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4930\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5170\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6060\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6300\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6714\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7267\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7507\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8515\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8755\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9145\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4930\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5170\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6060\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6300\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8516\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8756\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9146\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Weighted-\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Average\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4930\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5170\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6060\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6300\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8516\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8756\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9146\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4930\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5170\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6060\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6300\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8516\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8756\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Average\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Remaining\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Aggregate\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4930\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5170\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6060\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6300\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8516\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8756\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4930\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5170\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6060\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6300\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8516\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8756\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Exercise\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Contractual\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Intrinsic\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4930\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5170\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6060\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6300\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8516\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8756\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4930\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5170\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6060\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6300\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8516\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8756\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Shares\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Price\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Term\~(Years)\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Value\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4930\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5170\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6060\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6300\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8516\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8756\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4930\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5170\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc (aggregate\~intrinsic\~value\~in\~thousands)\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4930\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5170\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4930\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5170\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6060\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6300\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6714\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Outstanding as of December\~31,\~2015\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 796,356\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2.49\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 6.5\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,157\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4930\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5170\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6060\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6300\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6714\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4930\clvertalb\cellx5170\clvertalb\cellx6060\clvertalb\cellx6300\clvertalb\cellx6714\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Granted\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 230,200\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3.38\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\clvertalb\cellx4930\clvertalb\cellx5170\clvertalb\cellx6060\clvertalb\cellx6300\clvertalb\cellx6714\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4930\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5170\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6060\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6300\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6714\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Exercised\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (13,112)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1.80\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4930\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5170\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6060\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6300\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6714\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4930\clvertalb\cellx5170\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6060\clvertalb\cellx6300\clvertalb\cellx6714\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Canceled\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (21,549)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3.73\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\clvertalb\cellx4930\clvertalb\cellx5170\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6060\clvertalb\cellx6300\clvertalb\cellx6714\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4930\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5170\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6060\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6300\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6714\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Outstanding as of December\~31,\~2016\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 991,895\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2.68\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 6.3\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 161\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4930\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5170\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6060\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6300\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6714\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4930\clvertalb\cellx5170\clvertalb\cellx6060\clvertalb\cellx6300\clvertalb\cellx6714\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Granted\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 835,480\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4.30\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\clvertalb\cellx4930\clvertalb\cellx5170\clvertalb\cellx6060\clvertalb\cellx6300\clvertalb\cellx6714\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4930\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5170\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6060\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6300\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6714\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Exercised\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (230,123)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1.92\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4930\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5170\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6060\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6300\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6714\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4930\clvertalb\cellx5170\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6060\clvertalb\cellx6300\clvertalb\cellx6714\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Canceled\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (36,799)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4.16\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\clvertalb\cellx4930\clvertalb\cellx5170\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6060\clvertalb\cellx6300\clvertalb\cellx6714\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4930\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5170\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6060\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6300\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6714\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Outstanding as of December\~31,\~2017\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,560,453\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3.63\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 7.6\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,632\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4930\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5170\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6060\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6300\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6714\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4930\clvertalb\cellx5170\clvertalb\cellx6060\clvertalb\cellx6300\clvertalb\cellx6714\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Granted\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 288,915\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 8.28\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\clvertalb\cellx4930\clvertalb\cellx5170\clvertalb\cellx6060\clvertalb\cellx6300\clvertalb\cellx6714\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4930\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5170\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6060\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6300\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6714\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Exercised\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (85,750)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2.57\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4930\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5170\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6060\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6300\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6714\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4930\clvertalb\cellx5170\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6060\clvertalb\cellx6300\clvertalb\cellx6714\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Canceled\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (45,974)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3.07\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\clvertalb\cellx4930\clvertalb\cellx5170\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6060\clvertalb\cellx6300\clvertalb\cellx6714\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4930\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5170\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6060\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6300\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6714\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Outstanding as of\~\~June\~30,\~2018\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,717,644\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4.48\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 7.8\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 6,841\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4930\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5170\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6060\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6300\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6714\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4930\clvertalb\cellx5170\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6060\clvertalb\cellx6300\clvertalb\cellx6714\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Options vested and expected to vest as of June\~30,\~2018\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,631,709\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4.40\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 7.8\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 6,629\cell{ {\trowd\clvertalb\cellx4930\clvertalb\cellx5170\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6060\clvertalb\cellx6300\clvertalb\cellx6714\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4930\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5170\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6060\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6300\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6714\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Options vested and exercisable as of June\~30,\~2018\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 830,839\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3.24\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 6.6\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,356\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4930\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5170\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6060\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6300\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6714\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}}\pard\plain\cf1\f51\fs20\ql \~ \par\pard\plain\pard\plain\sb528\cf1\f51\fs20\qc 24\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~ \par\pard\plain {\trowd\clvertalb\cellx4702\clvertalb\cellx4942\clvertalb\cellx5815\clvertalb\cellx6055\clvertalb\cellx6483\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh26 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx4702\clvertalb\cellx4942\clvertalb\cellx5815\clvertalb\cellx6055\clvertalb\cellx6483\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh26\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4942\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Restricted\~Stock\~Units\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4942\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4942\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5815\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6055\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6483\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7267\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7507\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8515\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8755\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9145\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Weighted-\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4942\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5815\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6055\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6483\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7267\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7507\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8515\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8755\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9145\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4942\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5815\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6055\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8516\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8756\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9146\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Weighted-\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Average\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4942\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5815\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6055\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8516\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8756\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9146\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4942\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5815\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6055\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8516\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8756\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Average\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Remaining\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Aggregate\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4942\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5815\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6055\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8516\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8756\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4942\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5815\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6055\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8516\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8756\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Grant\~Date\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Contractual\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Intrinsic\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4942\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5815\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6055\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8516\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8756\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4942\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5815\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6055\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8516\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8756\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Shares\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Fair\~Value\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Term\~(Years)\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Value\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4942\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5815\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6055\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7508\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8516\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8756\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4942\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc (aggregate\~intrinsic\~value\~in\~thousands)\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4702\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4942\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4702\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4942\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5815\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6483\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Outstanding as of December\~31,\~2015\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 874,508\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5.95\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1.8\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 6,742\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4702\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4942\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5815\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6483\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4702\clvertalb\cellx4942\clvertalb\cellx5815\clvertalb\cellx6055\clvertalb\cellx6483\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Granted\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 69,414\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4.82\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell{ {\trowd\clvertalb\cellx4702\clvertalb\cellx4942\clvertalb\cellx5815\clvertalb\cellx6055\clvertalb\cellx6483\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4702\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4942\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5815\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6483\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Released\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (438,086)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5.95\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4702\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4942\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5815\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6483\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4702\clvertalb\cellx4942\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5815\clvertalb\cellx6055\clvertalb\cellx6483\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Forfeited/expired\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (14,882)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5.70\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell{ {\trowd\clvertalb\cellx4702\clvertalb\cellx4942\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5815\clvertalb\cellx6055\clvertalb\cellx6483\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4702\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4942\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5815\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6483\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Outstanding as of December\~31,\~2016\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 490,954\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5.80\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 0.5\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 908\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4702\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4942\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5815\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6483\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4702\clvertalb\cellx4942\clvertalb\cellx5815\clvertalb\cellx6055\clvertalb\cellx6483\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Granted\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 541,513\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2.88\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell{ {\trowd\clvertalb\cellx4702\clvertalb\cellx4942\clvertalb\cellx5815\clvertalb\cellx6055\clvertalb\cellx6483\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4702\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4942\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5815\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6483\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Released\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (497,009)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5.64\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4702\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4942\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5815\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6483\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4702\clvertalb\cellx4942\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5815\clvertalb\cellx6055\clvertalb\cellx6483\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Forfeited/expired\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (25,564)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5.98\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell{ {\trowd\clvertalb\cellx4702\clvertalb\cellx4942\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5815\clvertalb\cellx6055\clvertalb\cellx6483\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4702\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4942\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5815\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6483\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Outstanding as of December\~31,\~2017\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 509,894\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2.84\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1.4\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,288\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4702\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4942\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5815\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6483\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4702\clvertalb\cellx4942\clvertalb\cellx5815\clvertalb\cellx6055\clvertalb\cellx6483\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Granted\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 523,539\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 7.84\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\clvertalb\cellx4702\clvertalb\cellx4942\clvertalb\cellx5815\clvertalb\cellx6055\clvertalb\cellx6483\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4702\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4942\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5815\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6483\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Released\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (119,652)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3.05\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4702\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4942\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5815\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6483\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4702\clvertalb\cellx4942\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5815\clvertalb\cellx6055\clvertalb\cellx6483\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Forfeited/expired\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell{ {\trowd\clvertalb\cellx4702\clvertalb\cellx4942\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5815\clvertalb\cellx6055\clvertalb\cellx6483\clvertalb\cellx7267\clvertalb\cellx7507\clvertalb\cellx8515\clvertalb\cellx8755\clvertalb\cellx9145\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4702\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4942\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5815\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6483\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Outstanding as of June\~30,\~2018\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 913,781\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5.67\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1.6\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 7,674\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4702\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4942\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5815\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6055\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6483\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7267\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7507\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8515\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8755\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9145\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}}\pard\plain\fi792\cf1\f51\fs2\ql \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\ql Note\~11. Stock-based Compensation.\par\pard\plain\fi792\cf1\f51\fs20\ql We record stock-based compensation based on fair value as of the grant date using the Black-Scholes\plain\cf1\f51\fs20\ql option-pricing model for stock options granted and Monte Carlo simulation techniques for certain RSUs with\plain\cf1\f51\fs20\ql performance-based vesting conditions. We recognize such costs as compensation expense on a straight-line basis\plain\cf1\f51\fs20\ql over the employee\u8217?s requisite service period, which is generally four\~years. Our valuation assumptions for\plain\sa264\cf1\f51\fs20\ql stock options are as follows:\par\pard\plain\fi792\cf1\f51\fs20\i\ql Fair value of common stock.\plain\cf1\f51\fs20\ql Prior to our IPO in October\~2015, we estimated the fair value of our common\plain\cf1\f51\fs20\ql stock using various valuation methodologies, including valuation analyses performed by third-party valuation firms.\plain\sa264\cf1\f51\fs20\ql After the IPO, we used the publicly quoted price as the fair value of our common stock.\par\pard\plain\fi792\cf1\f51\fs20\i\ql Risk-free interest rate.\plain\cf1\f51\fs20\ql We base the risk-free interest rate used in the Black-Scholes option-pricing model\plain\cf1\f51\fs20\ql on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent expected term of the options\plain\sa264\cf1\f51\fs20\ql for each option group.\par\pard\plain\fi792\cf1\f51\fs20\i\ql Expected term.\plain\cf1\f51\fs20\ql The expected term represents the period that our stock-based awards are expected to be\plain\cf1\f51\fs20\ql outstanding. The expected term assumption is based on the simplified method in which the expected term is equal\plain\cf1\f51\fs20\ql to the average of the stock-based award\u8217?s weighted-average vesting period and its contractual term. We\plain\sa264\cf1\f51\fs20\ql expect to continue using the simplified method until sufficient information about historical behavior is available.\par\pard\plain\fi792\cf1\f51\fs20\i\ql Volatility.\plain\sa264\cf1\f51\fs20\ql We determine volatility based on the historical stock volatility of our publicly traded stock.\par\pard\plain\fi792\cf1\f51\fs20\i\ql Dividend yield.\plain\cf1\f51\fs20\ql We have never declared or paid any cash dividend and do not currently plan to pay a cash\plain\sa264\cf1\f51\fs20\ql dividend in the foreseeable future. Consequently, we used an expected dividend yield of zero.\par\pard\plain\sb528\cf1\f51\fs20\qc 25\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\fi792\cf1\f51\fs20\ql The following table summarizes the weighted-average assumptions used in the Black-Scholes\plain\sa264\cf1\f51\fs20\ql option-pricing model to determine fair value of stock options: \par\pard\plain {\trowd\clvertalb\cellx4884\clvertalb\cellx5124\clvertalb\cellx5908\clvertalb\cellx6264\clvertalb\cellx7048\clvertalb\cellx7404\clvertalb\cellx8188\clvertalb\cellx8544\clvertalb\cellx9328\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx4884\clvertalb\cellx5124\clvertalb\cellx5908\clvertalb\cellx6264\clvertalb\cellx7048\clvertalb\cellx7404\clvertalb\cellx8188\clvertalb\cellx8544\clvertalb\cellx9328\clvertalb\cellx9688\trrh66\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4884\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5124\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7049\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7405\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9330\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Three Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Six Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4884\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5124\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7049\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7405\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9330\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4884\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5124\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7049\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7405\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9330\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4884\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5124\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7049\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7405\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9330\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4884\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5124\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5908\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6264\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7048\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7404\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8188\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8544\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9328\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4884\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5124\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5908\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6264\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7048\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7404\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8188\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8544\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9328\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4884\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5124\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5908\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6264\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7048\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7404\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8188\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8544\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9328\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Volatility\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 69\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 85\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 69\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 86\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4884\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5124\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5908\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6264\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7048\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7404\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8188\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8544\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9328\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4884\clvertalb\cellx5124\clvertalb\cellx5908\clvertalb\cellx6264\clvertalb\cellx7048\clvertalb\cellx7404\clvertalb\cellx8188\clvertalb\cellx8544\clvertalb\cellx9328\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Expected dividend yield\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx4884\clvertalb\cellx5124\clvertalb\cellx5908\clvertalb\cellx6264\clvertalb\cellx7048\clvertalb\cellx7404\clvertalb\cellx8188\clvertalb\cellx8544\clvertalb\cellx9328\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4884\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5124\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5908\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6264\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7048\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7404\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8188\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8544\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9328\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Risk-free rate\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2.89\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2.07\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2.86\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2.15\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4884\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5124\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5908\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6264\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7048\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7404\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8188\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8544\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9328\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx4884\clvertalb\cellx5124\clvertalb\cellx5908\clvertalb\cellx6264\clvertalb\cellx7048\clvertalb\cellx7404\clvertalb\cellx8188\clvertalb\cellx8544\clvertalb\cellx9328\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Expected term (in years)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~6\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~6\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~6\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~6\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx4884\clvertalb\cellx5124\clvertalb\cellx5908\clvertalb\cellx6264\clvertalb\cellx7048\clvertalb\cellx7404\clvertalb\cellx8188\clvertalb\cellx8544\clvertalb\cellx9328\clvertalb\cellx9688\trrh249\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\ql The weighted-average grant date fair value of the options granted under the 2015 Equity Incentive Plan as\plain\cf1\f51\fs20\ql calculated using the Black-Scholes option-pricing model was $5.40 and $5.28 per share for the three and six\plain\sa264\cf1\f51\fs20\ql months ended June 30, 2018, respectively.\par\pard\plain\fi792\cf1\f51\fs20\ql On April\~1, 2017, our compensation committee granted 204,220 RSUs that do not begin vesting unless\plain\cf1\f51\fs20\ql certain performance goals are met. All performance goals must be met in order for the shares to begin vesting.\plain\cf1\f51\fs20\ql Vesting would begin on the one-year anniversary of the grant date. These performance goals relate to a) the price\plain\cf1\f51\fs20\ql performance of our common stock one\~year from the grant date as compared to a threshold established by our\plain\cf1\f51\fs20\ql compensation committee and b) revenue, gross profit and EBITDA performance relative to plan targets for fiscal\plain\cf1\f51\fs20\ql 2017 established by our compensation committee. As a result of these performance-based vesting conditions we\plain\cf1\f51\fs20\ql valued these RSUs using Monte Carlo simulation techniques to establish a fair value per share of $0.81 at the time\plain\sa264\cf1\f51\fs20\ql of grant.\par\pard\plain\fi792\cf1\f51\fs20\ql On April\~1, 2018, our compensation committee granted 102,283 RSUs that do not begin vesting unless\plain\cf1\f51\fs20\ql certain performance goals are met. Vesting will not begin unless the stock performance goals are met and the\plain\cf1\f51\fs20\ql number of shares eligible to begin vesting are based on Adesto\u8217?s share performance as compared to the\plain\cf1\f51\fs20\ql Russell 2000 stock index which is the performance threshold established by the compensation committee. The\plain\cf1\f51\fs20\ql evaluation period for the stock performance is from April 2, 2018 through March 31, 2019. Vesting would begin on\plain\cf1\f51\fs20\ql the one-year anniversary of the grant date with 20% of the shares vesting immediately and the remaining 80% of\plain\cf1\f51\fs20\ql the shares vesting over the next eight quarters. As a result of these performance-based vesting conditions we valued\plain\cf1\f51\fs20\ql these RSUs using Monte Carlo simulation techniques to establish a fair value per share of $4.92 at the time of\plain\sa264\cf1\f51\fs20\ql grant.\par\pard\plain\fi792\cf1\f51\fs20\ql The following table presents the effects of stock-based compensation for stock options, RSUs (including\plain\sa264\cf1\f51\fs20\ql performance-based RSUs), and ESPP purchase rights (in thousands): \par\pard\plain {\trowd\clvertalb\cellx5742\clvertalb\cellx5982\clvertalb\cellx6182\clvertalb\cellx6657\clvertalb\cellx6897\clvertalb\cellx7097\clvertalb\cellx7487\clvertalb\cellx7727\clvertalb\cellx7927\clvertalb\cellx8467\clvertalb\cellx8707\clvertalb\cellx8907\clvertalb\cellx9447\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx5742\clvertalb\cellx5982\clvertalb\cellx6182\clvertalb\cellx6657\clvertalb\cellx6897\clvertalb\cellx7097\clvertalb\cellx7487\clvertalb\cellx7727\clvertalb\cellx7927\clvertalb\cellx8467\clvertalb\cellx8707\clvertalb\cellx8907\clvertalb\cellx9447\clvertalb\cellx9688\trrh66\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5742\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5982\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7487\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7727\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh397 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Three Months\plain\intbl\cf1\f51\fs16\b\qc Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Six Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5742\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5982\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7487\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7727\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh397\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5742\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5982\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7487\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7727\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5742\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5982\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7487\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7727\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5742\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5982\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6657\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6897\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7487\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7727\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8467\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8707\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5742\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5982\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6657\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6897\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7487\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7727\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8467\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8707\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5742\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5982\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6182\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6657\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6897\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7097\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7487\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7727\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7927\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8467\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8707\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8907\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Cost of revenue\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 48\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 30\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 73\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 51\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5742\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5982\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6182\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6657\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6897\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7097\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7487\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7727\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7927\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8467\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8707\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8907\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx5742\clvertalb\cellx5982\clvertalb\cellx6182\clvertalb\cellx6657\clvertalb\cellx6897\clvertalb\cellx7097\clvertalb\cellx7487\clvertalb\cellx7727\clvertalb\cellx7927\clvertalb\cellx8467\clvertalb\cellx8707\clvertalb\cellx8907\clvertalb\cellx9447\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Research and development\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 247\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 309\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 430\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 564\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx5742\clvertalb\cellx5982\clvertalb\cellx6182\clvertalb\cellx6657\clvertalb\cellx6897\clvertalb\cellx7097\clvertalb\cellx7487\clvertalb\cellx7727\clvertalb\cellx7927\clvertalb\cellx8467\clvertalb\cellx8707\clvertalb\cellx8907\clvertalb\cellx9447\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5742\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5982\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6182\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6657\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6897\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7097\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7487\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7727\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7927\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8467\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8707\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8907\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Sales and marketing\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 172\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 215\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 276\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 382\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5742\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5982\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6182\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6657\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6897\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7097\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7487\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7727\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7927\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8467\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8707\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8907\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx5742\clvertalb\cellx5982\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6182\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6657\clvertalb\cellx6897\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7097\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7487\clvertalb\cellx7727\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7927\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8467\clvertalb\cellx8707\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8907\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9447\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql General and administrative\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 253\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 428\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 384\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 809\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx5742\clvertalb\cellx5982\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6182\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6657\clvertalb\cellx6897\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7097\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7487\clvertalb\cellx7727\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7927\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8467\clvertalb\cellx8707\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8907\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9447\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5742\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5982\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6182\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6657\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6897\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7097\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7487\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7727\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7927\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8467\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8707\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8907\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Total\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 720\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 982\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,163\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,806\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5742\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5982\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6182\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6657\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6897\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7097\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7487\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7727\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7927\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8467\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8707\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8907\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\ql Stock-based compensation expense capitalized to inventories was not material during the three and six\plain\sa264\cf1\f51\fs20\ql months ended June 30, 2018 and 2017.\par\pard\plain\fi792\cf1\f51\fs20\ql We did not realize any income tax benefit from stock option exercises in any of the periods presented due\plain\sa264\cf1\f51\fs20\ql to recurring losses and valuation allowances.\par\pard\plain\sb528\cf1\f51\fs20\qc 26\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\fi792\cf1\f51\fs20\ql As of June 30, 2018, the total unrecognized compensation cost related to stock options, net of estimated\plain\cf1\f51\fs20\ql forfeitures, was approximately $2.8 million, and this amount is expected to be recognized over a weighted-average\plain\sa264\cf1\f51\fs20\ql period of approximately 2.9\~years.\par\pard\plain\fi792\cf1\f51\fs20\ql As of June 30, 2018, the total unrecognized compensation cost related to RSUs (including\plain\cf1\f51\fs20\ql performance-based RSUs) and ESPP purchase rights was $4.2 million and $22,000, respectively, and these amounts\plain\cf1\f51\fs20\ql are expected to be recognized over 2.7\~years and 0.1\~years, respectively.\par\pard\plain\fi792\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\ql Note\~12. Income Taxes.\par\pard\plain\fi792\cf1\f51\fs20\ql We recorded a benefit from and provision for income tax of $37,000 and $13,000, respectively, for the\plain\cf1\f51\fs20\ql three months ended June 30, 2018 and 2017, respectively, and a benefit from and provision for income tax of\plain\cf1\f51\fs20\ql $16,000 and $40,000, respectively, for the six months ended June 30, 2018 and 2017, respectively. The income tax\plain\cf1\f51\fs20\ql provision is comprised of estimates of current and deferred taxes in domestic and foreign jurisdictions. The income\plain\cf1\f51\fs20\ql tax provision reflects tax expense associated with foreign taxes, state income tax, uncertain tax positions and tax\plain\cf1\f51\fs20\ql expense related to the recording of a deferred tax liability that results from the amortization for income tax purposes\plain\cf1\f51\fs20\ql of acquisition-related goodwill. The decrease in the tax provision between 2018 and 2017\~is primarily due to a\plain\sa264\cf1\f51\fs20\ql deferred tax benefit associated with our foreign deferred tax liability.\par\pard\plain\fi792\cf1\f51\fs20\ql In December 2017, the Tax Cuts and Jobs Act (the \u8220?2017 Tax Act\u8221?) was enacted. The 2017\plain\cf1\f51\fs20\ql Tax Act includes a number of changes to existing U.S. tax laws that impact us, most notably a reduction of the\plain\sa264\cf1\f51\fs20\ql U.S. corporate income tax rate from 35 percent to 21 percent for tax years beginning after December\~31, 2017.\par\pard\plain\fi792\cf1\f51\fs20\ql On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the\plain\cf1\f51\fs20\ql application of U.S. GAAP in situations when a registrant does not have the necessary information available,\plain\cf1\f51\fs20\ql prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income\plain\cf1\f51\fs20\ql tax effects of the 2017 Tax Act. In accordance with SAB 118, we have determined that the provisional amount\plain\cf1\f51\fs20\ql related to the mandatory deemed repatriation of deferred foreign income was $0.2 million based on cumulative\plain\cf1\f51\fs20\ql foreign earnings of $0.8 million. Additional work is necessary to do a more detailed analysis of historical foreign\plain\cf1\f51\fs20\ql earnings as well as potential correlative adjustments. We are continuing to gather additional information to more\plain\cf1\f51\fs20\ql precisely compute the amount of deferred foreign income to be included in U.S. taxable income. Any subsequent\plain\sa264\cf1\f51\fs20\ql adjustment to these amounts will be recorded in the quarter of 2018 when the analysis is complete.\par\pard\plain\fi792\cf1\f51\fs20\ql In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed\plain\cf1\f51\fs20\ql income ("GILTI") provisions of the 2017 Tax Act. The GILTI provisions impose a tax on foreign income in excess\plain\cf1\f51\fs20\ql of a deemed return on tangible assets of foreign corporations. The guidance indicates that either accounting for\plain\cf1\f51\fs20\ql deferred taxes related to GILTI inclusions or to treat any taxes on GILTI inclusions as period cost are both\plain\cf1\f51\fs20\ql acceptable methods subject to an accounting policy election. Effective January 1, 2018, we elected to treat any\plain\cf1\f51\fs20\ql potential GILTI inclusions as a period cost as we are not projecting any material impact from GILTI inclusions and\plain\sa264\cf1\f51\fs20\ql any deferred taxes related to any inclusion would be immaterial.\par\pard\plain\fi792\cf1\f51\fs20\ql As of June 30, 2018, our deferred tax assets are fully offset by a valuation allowance except in those\plain\cf1\f51\fs20\ql jurisdictions where it is determined that a valuation allowance is not required. Accounting for income taxes provides\plain\cf1\f51\fs20\ql for the recognition of deferred tax assets if realization of such assets is more likely than not. Based on the weight of\plain\cf1\f51\fs20\ql available evidence, which includes historical operating performance, reported cumulative net losses since inception\plain\cf1\f51\fs20\ql and difficulty in accurately forecasting our future results, we provided a full valuation allowance against our net\plain\cf1\f51\fs20\ql U.S. deferred tax assets. We reassess the need for our valuation allowance on a quarterly basis. If it is later\plain\cf1\f51\fs20\ql determined that a portion or all of the valuation allowance is not required, it generally will be a benefit to the\plain\sa264\cf1\f51\fs20\ql income tax provision in the period that such determination is made.\par\pard\plain\sb528\cf1\f51\fs20\qc 27\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\b\qc ADESTO TECHNOLOGIES CORPORATION \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc NOTES\~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc (unaudited)\par\pard\plain\cf1\f51\fs20\qc \~\par\pard\plain\fi792\cf1\f51\fs20\ql We evaluate tax positions for recognition using a more-likely-than-not recognition threshold, and those\plain\cf1\f51\fs20\ql tax positions eligible for recognition are measured as the largest amount of tax benefit that is greater than 50%\plain\cf1\f51\fs20\ql likely of being realized upon the effective settlement with a taxing authority that has full knowledge of all relevant\plain\cf1\f51\fs20\ql information. We believe that we have provided adequate reserves for our income tax uncertainties in all open tax\plain\cf1\f51\fs20\ql years. We do not anticipate a material change in the total amount or composition of its unrecognized tax benefits\plain\sa264\cf1\f51\fs20\ql within 12 months of June 30, 2018.\par\pard\plain\fi792\cf1\f51\fs20\ql We file federal, state and foreign income tax returns in jurisdictions with varying statutes of limitations.\plain\cf1\f51\fs20\ql Due to our net operating loss and credit carryforwards, our income tax returns generally remain subject to\plain\sa264\cf1\f51\fs20\ql examination by federal, state and international authorities.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\ql Note\~13. Net Loss Per Share.\par\pard\plain\fi792\cf1\f51\fs20\ql The following outstanding common stock equivalents were excluded from the computation of diluted net\plain\sa264\cf1\f51\fs20\ql loss per share for the periods presented because including them would have been antidilutive: \par\pard\plain {\trowd\clvertalb\cellx5028\clvertalb\cellx5268\clvertalb\cellx6158\clvertalb\cellx6398\clvertalb\cellx7288\clvertalb\cellx7428\clvertalb\cellx8318\clvertalb\cellx8558\clvertalb\cellx9448\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx5028\clvertalb\cellx5268\clvertalb\cellx6158\clvertalb\cellx6398\clvertalb\cellx7288\clvertalb\cellx7428\clvertalb\cellx8318\clvertalb\cellx8558\clvertalb\cellx9448\clvertalb\cellx9688\trrh66\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5028\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7288\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7428\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9448\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Three Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Six Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5028\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5268\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7288\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7428\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9448\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5028\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5268\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7288\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7428\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9448\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5028\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5268\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7288\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7428\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9448\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5028\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5268\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6158\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6398\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7288\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7428\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8318\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8558\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9448\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5028\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5268\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6158\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6398\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7288\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7428\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8318\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8558\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9448\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5028\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5268\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6158\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6398\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7288\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7428\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8318\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8558\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9448\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\li264\cf1\f51\fs20\ql Stock options\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,717,644\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,623,371\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,717,644\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,623,371\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5028\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5268\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6158\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6398\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7288\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7428\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8318\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8558\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9448\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx5028\clvertalb\cellx5268\clvertalb\cellx6158\clvertalb\cellx6398\clvertalb\cellx7288\clvertalb\cellx7428\clvertalb\cellx8318\clvertalb\cellx8558\clvertalb\cellx9448\clvertalb\cellx9688\trrh249 \pard\plain\intbl\li264\cf1\f51\fs20\ql Restricted stock units\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 913,781\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 404,136\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 913,781\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 404,136\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx5028\clvertalb\cellx5268\clvertalb\cellx6158\clvertalb\cellx6398\clvertalb\cellx7288\clvertalb\cellx7428\clvertalb\cellx8318\clvertalb\cellx8558\clvertalb\cellx9448\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5028\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5268\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6158\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6398\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7288\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7428\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8318\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8558\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9448\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\li264\cf1\f51\fs20\ql Common stock warrants\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,239,423\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 765,685\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,239,423\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 765,685\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5028\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5268\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6158\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6398\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7288\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7428\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8318\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8558\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9448\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx5028\clvertalb\cellx5268\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6158\clvertalb\cellx6398\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7288\clvertalb\cellx7428\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8318\clvertalb\cellx8558\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9448\clvertalb\cellx9688\trrh249 \pard\plain\intbl\li264\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,870,848\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,793,192\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,870,848\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,793,192\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx5028\clvertalb\cellx5268\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6158\clvertalb\cellx6398\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7288\clvertalb\cellx7428\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8318\clvertalb\cellx8558\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9448\clvertalb\cellx9688\trrh249\row}}}\pard\plain\fi792\cf1\f51\fs2\ql \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\ql Note\~14. Related Party Transactions.\par\pard\plain\fi792\cf1\f51\fs20\ql The Company purchases certain wafers from Altis Semiconductor S.N.C., which was acquired by X-FAB\plain\cf1\f51\fs20\ql Silicon Foundries, a stockholder of the Company, in 2016. We made no payments to X-Fab Silicon Foundries\plain\cf1\f51\fs20\ql during the\~three and six months ended June 30, 2018 and 2017. As of June 30, 2018 and December\~31, 2017, there\plain\cf1\f51\fs20\ql were no invoices included within accounts payable on the condensed consolidated balance sheets.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\ql Note\~15. Subsequent Events.\par\pard\plain\fi792\cf1\f51\fs19\ql We completed a follow-on offering of our common stock in July 2018. We sold 7,705,000 shares, including\plain\cf1\f51\fs19\ql 1,005,000 shares upon exercise of the underwriters\u8217? option to purchase additional shares. The shares were sold at a\plain\cf1\f51\fs19\ql public offering price of $6.00 per share for net proceeds of approximately $43.0 million to us, after deducting\plain\cf1\f51\fs19\ql underwriting discounts, commissions and offering expenses\plain\sa264\cf1\f51\fs20\ql .\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sb528\cf1\f51\fs20\qc 28\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}{\*\bkmkstart item_1_3_2}{\*\bkmkend item_1_3_2}\par\pard\plain\cf1\f51\fs20\b\ql Item\~2. Management\u8217?s Discussion and Analysis of Financial Condition and Results of Operations{\*\bkmkstart item2managementsdiscussionandana}{\*\bkmkend item2managementsdiscussionandana}\par\pard\plain\sa264\cf1\f51\fs20\b\ql Forward-looking statements and factors that may affect future results\par\pard\plain\fi792\cf1\f51\fs20\i\ql The discussion below contains forward-looking statements, which are subject to safe harbors under the\plain\cf1\f51\fs20\i\ql Securities Act of 1933, as amended (the \u8220?Securities Act\u8221?) and the Exchange Act of 1934, as amended\plain\cf1\f51\fs20\i\ql (the \u8220?Exchange Act\u8221?). Forward-looking statements generally relate to future events or to our future\plain\cf1\f51\fs20\i\ql financial or operating performance. You can generally identify forward-looking statements because they contain\plain\cf1\f51\fs20\i\ql words such as \u8220?may,\u8221? \u8220?might,\u8221? \u8220?will,\u8221? \u8220?should,\u8221?\plain\cf1\f51\fs20\i\ql \u8220?expects,\u8221? \u8220?plans,\u8221? \u8220?anticipates,\u8221? \u8220?could,\u8221?\plain\cf1\f51\fs20\i\ql \u8220?intend,\u8221? \u8220?target,\u8221? \u8220?projects,\u8221? \u8220?contemplates,\u8221?\plain\cf1\f51\fs20\i\ql \u8220?believes,\u8221? \u8220?estimates,\u8221? \u8220?predicts,\u8221? \u8220?potential\u8221? or\plain\cf1\f51\fs20\i\ql \u8220?continue\u8221? or the negative of these terms or other similar expressions that concern our expectations,\plain\cf1\f51\fs20\i\ql strategy, plans or intentions. We have based these forward-looking statements primarily on our current\plain\cf1\f51\fs20\i\ql expectations and projections about future events and trends that we believe may affect our business, financial\plain\cf1\f51\fs20\i\ql condition, results of operations and prospects. Except as required by law, we do not undertake any obligation to\plain\cf1\f51\fs20\i\ql update these forward-looking statements to reflect events occurring or circumstances arising after the date of this\plain\cf1\f51\fs20\i\ql report. You should not rely upon forward-looking statements as predictions of future events. We cannot assure you\plain\cf1\f51\fs20\i\ql that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur,\plain\cf1\f51\fs20\i\ql and actual results, events or circumstances could differ materially from those projected in the forward-looking\plain\cf1\f51\fs20\i\ql statements. These forward-looking statements involve risks and uncertainties, and our actual results, performance,\plain\cf1\f51\fs20\i\ql or achievements could differ materially from those expressed or implied by the forward-looking statements on the\plain\cf1\f51\fs20\i\ql basis of several factors, including those that we discuss in Risk Factors, set forth in Part\~II, Item\~1A, of this\plain\sa264\cf1\f51\fs20\i\ql Quarterly Report on Form\~10\u8209?Q. We encourage you to read that section carefully.\par\pard\plain\fi792\cf1\f51\fs20\i\ql The following is a discussion and analysis of our financial condition and results of operations and should\plain\cf1\f51\fs20\i\ql be read together with our condensed consolidated financial statements and related notes to condensed consolidated\plain\cf1\f51\fs20\i\ql financial statements included elsewhere in this Quarterly Report on Form\~10\u8209?Q and our audited consolidated\plain\cf1\f51\fs20\i\ql financial statements and related notes to audited consolidated financial statements included in our Annual Report\plain\cf1\f51\fs20\i\ql on Form\~10\u8209?K for the\~year ended December\~31, 2017. In this Quarterly Report, unless otherwise specified or\plain\cf1\f51\fs20\i\ql the context otherwise requires, \u8220?Adesto,\u8221? \u8220?we,\u8221? \u8220?us,\u8221? and\plain\sa264\cf1\f51\fs20\i\ql \u8220?our\u8221? refer to Adesto Technologies Corporation and its consolidated subsidiaries.\par\pard\plain\sa264\cf1\f51\fs20\b\ql Overview\par\pard\plain\fi792\cf1\f51\fs20\ql We are a leading provider of innovative, application-specific semiconductors that provide the key building\plain\cf1\f51\fs20\ql blocks of Internet of Things, or IoT, edge devices operating on networks worldwide. Our broad portfolio of\plain\cf1\f51\fs20\ql semiconductor and embedded technologies are optimized for connected IoT devices used in industrial, consumer,\plain\cf1\f51\fs20\ql communications and medical applications. Through expert design, systems expertise and proprietary intellectual\plain\cf1\f51\fs20\ql property, we enable our customers to differentiate their systems where it matters most for IoT: longer battery life,\plain\cf1\f51\fs20\ql greater reliability, integrated intelligence and lower cost. Our product portfolio includes analog, digital and\plain\cf1\f51\fs20\ql non-volatile memory, or NVM, technologies delivered in the form of standard products, application-specific\plain\sa264\cf1\f51\fs20\ql integrated circuits, or ASICs, and intellectual property, or IP, cores.\par\pard\plain\fi792\cf1\f51\fs20\ql Our revenue is primarily derived from the sale of our NVM products, specifically our serial flash memory\plain\cf1\f51\fs20\ql products, which represented substantially all of our revenue for the six months ended June 30, 2018. In recent years,\plain\cf1\f51\fs20\ql we have invested in developing and commercializing new flash memory products that are well suited for\plain\cf1\f51\fs20\ql low-power, high-growth applications. In 2013, we introduced the first of our next-generation DataFlash and Fusion\plain\cf1\f51\fs20\ql Serial Flash products. Revenue from our next-generation NVM products were $16.2 million and $13.3 million for\plain\cf1\f51\fs20\ql the three months ended June 30, 2018 and 2017, respectively. With acquisition of S3 Asic Semiconductors Limited\plain\cf1\f51\fs20\ql in May 2018, we expanded our product offering and began selling analog, mixed-signal and radio frequency ASICs\plain\cf1\f51\fs20\ql and IP blocks, and managing the supply of high-quality devices to our customers.\~\~During the three month ended\plain\cf1\f51\fs20\ql June 30, 2018, S3 revenues were approximately $2 million.\~\~Additionally, we are continuing to focus on developing\plain\cf1\f51\fs20\ql products based on Conductive Bridging RAM, or CBRAM. We believe products based on this technology have the\plain\cf1\f51\fs20\ql potential to contribute to our long-term growth and thus we continue to invest our resources into developing and\plain\cf1\f51\fs20\ql enhancing our families of CBRAM-based products, although revenue associated with these products has not been\plain\sa264\cf1\f51\fs20\ql material to date.\par\pard\plain\sb528\cf1\f51\fs20\qc 29\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\fi792\cf1\f51\fs20\ql For the six months ended June 30, 2018, our products were sold to more than 500 end customers. In\plain\cf1\f51\fs20\ql general, we work directly with our customers to have our NVM devices designed into and qualified for their\plain\cf1\f51\fs20\ql products. Although we maintain direct sales, support and development relationships with our customers, once our\plain\cf1\f51\fs20\ql products are designed into a customer\u8217?s product, we sell a majority of our products to those customers\plain\cf1\f51\fs20\ql through distributors. We generated 73% and 72% of our revenue from distributors in each of the six months ended\plain\cf1\f51\fs20\ql June 30, 2018 and 2017, respectively. Sales to three distributors generated approximately 36% and 38% of our\plain\cf1\f51\fs20\ql revenue during the six months ended June 30, 2018 and 2017, respectively. Additionally, we derived approximately\plain\cf1\f51\fs20\ql 75% and 78% of our revenue internationally during the six months ended June 30, 2018 and 2017, respectively, the\plain\cf1\f51\fs20\ql majority of which was recognized in the Asia Pacific, or APAC, region. Revenue by geography is recognized based\plain\sa264\cf1\f51\fs20\ql on the region to which our products are sold, and not to where the end products are shipped.\par\pard\plain\fi792\cf1\f51\fs20\ql We employ a fabless manufacturing strategy and use market-leading suppliers for all phases of the\plain\cf1\f51\fs20\ql manufacturing process, including wafer fabrication, assembly, testing and packaging. This strategy significantly\plain\sa264\cf1\f51\fs20\ql reduces the capital investment that would otherwise by required to operate manufacturing facilities of our own.\par\pard\plain\sa264\cf1\f51\fs20\b\ql Recent Developments\par\pard\plain\sa264\cf1\f51\fs20\i\ql Proposed Acquisition of Echelon Corporation\par\pard\plain\fi792\cf1\f51\fs20\ql On June 28, 2018, we entered into an agreement and plan of merger with Echelon Corporation, under\plain\cf1\f51\fs20\ql which we agreed to acquire Echelon through a merger of a wholly owned subsidiary of ours with Echelon.\plain\cf1\f51\fs20\ql Following the merger, Echelon will be our wholly owned subsidiary. Under the merger agreement, at the closing of\plain\cf1\f51\fs20\ql the proposed acquisition all outstanding equity securities of Echelon will be converted into the right to receive an\plain\cf1\f51\fs20\ql aggregate amount of approximately $44.1 million in cash. The Echelon acquisition is expected to close in the third\plain\cf1\f51\fs20\ql quarter of 2018, subject to satisfaction of customary closing conditions, including approval by holders of a majority\plain\sa264\cf1\f51\fs20\ql of Echelon's outstanding common stock.\par\pard\plain\sa264\cf1\f51\fs20\i\ql Follow-On Offering\par\pard\plain\fi792\cf1\f51\fs20\ql We completed a follow-on offering of our common stock in July 2018. We sold 7,705,000 shares,\plain\cf1\f51\fs20\ql including 1,005,000 shares upon exercise of the underwriters\u8217? option to purchase additional shares. The\plain\cf1\f51\fs20\ql shares were sold at a public offering price of $6.00 per share for net proceeds of approximately $43.0 million to us,\plain\cf1\f51\fs20\ql after deducting underwriting discounts, commissions and offering expenses.\par\pard\plain\sa264\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\ql Factors Affecting Our Performance\par\pard\plain\fi792\cf1\f51\fs20\b\i\ql Product adoption in new markets and applications\plain\cf1\f51\fs20\ql . We optimize our products to meet the technical\plain\cf1\f51\fs20\ql requirements of the emerging IoT market. The growth in the IoT market is dependent on many factors, most of\plain\cf1\f51\fs20\ql which are outside of our control. Should the IoT market not develop or develop more slowly, our financial results\plain\sa264\cf1\f51\fs20\ql could be adversely affected.\par\pard\plain\fi792\cf1\f51\fs20\b\i\ql Ability to attract and retain customers that make large orders\plain\cf1\f51\fs20\ql .\~In 2017, our products were sold to more\plain\cf1\f51\fs20\ql than 500 end customers, of which approximately 50 generated more than half our revenue. One end customer\plain\cf1\f51\fs20\ql accounted for 10% or more of our revenue in 2016. No end customer accounted for 10% or more of our revenue in\plain\cf1\f51\fs20\ql 2017 or the first six months of 2018. While we expect the composition of our customers to change over time, our\plain\cf1\f51\fs20\ql business and operating results will depend on our ability to continually target new and retain existing customers that\plain\sa264\cf1\f51\fs20\ql make large orders, particularly those in growth markets which are less dependent on macroeconomic conditions.\par\pard\plain\fi792\cf1\f51\fs20\b\i\ql Design wins with new and existing customers\plain\cf1\f51\fs20\ql .\~We believe our solutions significantly improve the\plain\cf1\f51\fs20\ql performance and potentially lower the system cost of our customers\u8217? designs, particularly if we are part of\plain\cf1\f51\fs20\ql the early design phase. Accordingly, we work closely with our customers and targeted prospects to understand their\plain\cf1\f51\fs20\ql product roadmaps and strategies. We consider design wins to be critical to our future success. We define a design\plain\cf1\f51\fs20\ql win as the successful completion of the evaluation stage, where a customer has tested our product, verified that our\plain\cf1\f51\fs20\ql product meets its requirements and qualified our NVM device for their products. The number of our design wins\plain\sa264\cf1\f51\fs20\ql has grown from 135 in\par\pard\plain\sb528\cf1\f51\fs20\qc 30\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\ql 2015 to 296 in 2016 and to 417 in 2017. The revenue that we generate, if any, from each design win can vary\plain\cf1\f51\fs20\ql significantly. Our long-term sales expectations are based on forecasts from customers, internal estimates of\plain\cf1\f51\fs20\ql customer demand factoring in expected time to market for end customer products incorporating our solutions and\plain\cf1\f51\fs20\ql associated revenue potential and internal estimates of overall demand based on historical trends. We had 285 new\plain\sa264\cf1\f51\fs20\ql design wins during the first six\~months of 2018.\par\pard\plain\fi792\cf1\f51\fs20\b\i\ql Pricing, product cost and gross margins of our products\plain\cf1\f51\fs20\ql .\~Our gross margin has been and will continue to\plain\cf1\f51\fs20\ql be affected by a variety of factors, including the timing of changes in pricing, shipment volumes, new product\plain\cf1\f51\fs20\ql introductions, changes in product mixes, changes in our purchase price of fabricated wafers and assembly and test\plain\cf1\f51\fs20\ql service costs, manufacturing yields and inventory write downs, if any. In general, newly introduced products and\plain\cf1\f51\fs20\ql products with higher performance and more features tend to be priced higher than older, more mature products.\plain\cf1\f51\fs20\ql Average selling prices in the semiconductor industry typically decline as products mature. Consistent with this\plain\cf1\f51\fs20\ql historical trend, we expect that the average selling prices of our products will decline as they mature. In the normal\plain\cf1\f51\fs20\ql course of business, we will seek to offset the effect of declining average selling prices on existing products by\plain\cf1\f51\fs20\ql reducing manufacturing costs and introducing new and higher value-added products. More recently, certain of our\plain\cf1\f51\fs20\ql suppliers have increased costs although such increase did not have a material impact on our results of operations for\plain\cf1\f51\fs20\ql the six months ended June 30, 2018. If we are unable to maintain overall average selling prices or offset any\plain\sa264\cf1\f51\fs20\ql declines in average selling prices with realized savings on product costs, our gross margin will decline.\par\pard\plain\fi792\cf1\f51\fs20\b\i\ql Investment in growth\plain\cf1\f51\fs20\ql . We have invested, and intend to continue to invest, in expanding our operations,\plain\cf1\f51\fs20\ql increasing our headcount, developing our products and differentiated technologies to support our growth and\plain\cf1\f51\fs20\ql expanding our infrastructure. We expect our total operating expenses to increase in the foreseeable future to meet\plain\cf1\f51\fs20\ql our growth objectives. We plan to continue to invest in our sales and support operations throughout the world, with\plain\cf1\f51\fs20\ql a particular focus in adding additional sales and field applications personnel to further broaden our support and\plain\cf1\f51\fs20\ql coverage of our existing customer base, in addition to developing new customer relationships and generating design\plain\cf1\f51\fs20\ql wins. We also intend to continue to invest additional resources in research and development to support the\plain\cf1\f51\fs20\ql development of our products and differentiated technologies. Any investments we make in our sales and marketing\plain\cf1\f51\fs20\ql organization or research and development will occur in advance of experiencing any benefits from such investments,\plain\cf1\f51\fs20\ql and the return on these investments may be lower than we expect. In addition, as we invest in expanding our\plain\cf1\f51\fs20\ql operations internationally, our business and results will become further subject to the risks and challenges of\plain\cf1\f51\fs20\ql international operations, including higher operating expenses and the impact of legal and regulatory developments\plain\sa264\cf1\f51\fs20\ql outside the United States.\par\pard\plain\sa264\cf1\f51\fs20\b\ql Components of Our Results of Operations\par\pard\plain\li528\sa264\cf1\f51\fs20\b\i\ql Revenue\par\pard\plain\fi792\cf1\f51\fs20\ql During the first six months of 2018 we derived more than 90% of our revenue through the sale of our\plain\cf1\f51\fs20\ql NVM products to OEMs and ODMs, primarily through distributors. We generated 73% and 72% of our revenue\plain\cf1\f51\fs20\ql from distributors in each of the six months ended June 30, 2018 and 2017, respectively. We derived approximately\plain\cf1\f51\fs20\ql 6% of our revenue from the operations of S3 during the first six months of 2018. Revenue is recognized when\plain\cf1\f51\fs20\ql control of the promised goods or services is transferred to customers, in an amount that reflects the consideration\plain\cf1\f51\fs20\ql we expect to be entitled to in exchange for those goods or services. We sell the majority of our products to\plain\cf1\f51\fs20\ql distributors and generally recognize revenue when we ship the product directly to the distributors since title and risk\plain\sa264\cf1\f51\fs20\ql of loss transfers at that time.\par\pard\plain\fi792\cf1\f51\fs20\ql Because our distributors market and sell their products worldwide, our revenue by geographic location is\plain\cf1\f51\fs20\ql not necessarily indicative of where our customers\u8217? product sales and design win activity occur, but rather of\plain\sa264\cf1\f51\fs20\ql where their manufacturing operations occur.\par\pard\plain\li528\sa264\cf1\f51\fs20\b\i\ql Cost of Revenue and Gross Margin\par\pard\plain\fi792\cf1\f51\fs20\ql Cost of revenue primarily consists of costs paid to our third-party manufacturers for wafer fabrication,\plain\cf1\f51\fs20\ql assembly and testing of our NVM products, write-downs of inventory for excess and obsolete inventories including\plain\cf1\f51\fs20\ql write-downs of inventory for products based on CBRAM technology and accruals for future losses on CBRAM\plain\cf1\f51\fs20\ql wafer purchase commitments to the extent our costs exceed the market price for such products. To a lesser extent,\plain\sa264\cf1\f51\fs20\ql cost of revenue also\par\pard\plain\sb528\cf1\f51\fs20\qc 31\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\ql includes depreciation of test equipment and expenses relating to manufacturing support activities, including\plain\cf1\f51\fs20\ql personnel-related costs, logistics and quality assurance and shipping. Cost of revenue for S3 is driven primarily by\plain\sa264\cf1\f51\fs20\ql personnel-related costs.\par\pard\plain\fi792\cf1\f51\fs20\ql Our gross margin has been and will continue to be affected by a variety of factors, including the timing of\plain\cf1\f51\fs20\ql changes in pricing, shipment volumes, new product introductions, changes in product mix, changes in our purchase\plain\cf1\f51\fs20\ql price of fabricated wafers and assembly and test service costs, manufacturing yields and inventory write downs, if\plain\sa264\cf1\f51\fs20\ql any. We expect our gross margin to fluctuate over time depending on the factors described above.\par\pard\plain\li528\sa264\cf1\f51\fs20\b\i\ql Operating Expenses\par\pard\plain\fi792\cf1\f51\fs20\ql Our operating expenses consist of research and development, sales and marketing and general and\plain\cf1\f51\fs20\ql administrative expense. Personnel-related costs, including salaries, benefits, bonuses and stock-based compensation,\plain\cf1\f51\fs20\ql are the most significant component of each of our operating expense categories. In addition, in the near term we\plain\cf1\f51\fs20\ql expect to hire additional personnel, primarily in our selling and marketing functions, and increase research and\plain\cf1\f51\fs20\ql development expenditures, such as prototype wafers, associated with the implementation of our CBRAM technology\plain\cf1\f51\fs20\ql in a manufacturing facility in Asia. Accordingly, we expect our operating expenses to increase in absolute dollars as\plain\sa264\cf1\f51\fs20\ql we invest in these initiatives.\par\pard\plain\fi792\cf1\f51\fs20\i\ql Research and Development\plain\cf1\f51\fs20\ql .\~Our research and development expenses consist primarily of personnel-related\plain\cf1\f51\fs20\ql costs for the design and development of our products and technologies. Additional research and development\plain\cf1\f51\fs20\ql expenses include product prototype costs, mask costs and other materials costs, external test and characterization\plain\cf1\f51\fs20\ql expenses, depreciation, amortization of design tool software licenses, amortization of acquisition-related intangible\plain\cf1\f51\fs20\ql assets and allocated overhead expenses. We also incur costs related to outsourced research and development\plain\cf1\f51\fs20\ql activities and joint venture activities. We expect research and development expenses to increase in absolute dollars\plain\cf1\f51\fs20\ql for the foreseeable future as we continue to improve our product features, increase our portfolio of solutions and\plain\sa264\cf1\f51\fs20\ql implement our CBRAM manufacturing technology in a new manufacturing facility.\par\pard\plain\fi792\cf1\f51\fs20\i\ql Sales and Marketing.\plain\cf1\f51\fs20\ql Sales and marketing expenses consist primarily of personnel-related costs for our\plain\cf1\f51\fs20\ql sales, business development, marketing, and applications engineering activities, third-party sales representative\plain\cf1\f51\fs20\ql commissions, promotional and other marketing expenses, amortization of acquisition-related intangible assets and\plain\cf1\f51\fs20\ql travel expenses. We expect sales and marketing expenses to increase in absolute dollars for the foreseeable future as\plain\sa264\cf1\f51\fs20\ql we continue to expand our direct sales teams and increase our marketing activities.\par\pard\plain\fi792\cf1\f51\fs20\i\ql General and Administrative\plain\cf1\f51\fs20\ql .\~General and administrative expenses consist primarily of personnel-related\plain\cf1\f51\fs20\ql costs, consulting expenses and professional fees. Professional fees principally consist of legal, audit, tax and\plain\cf1\f51\fs20\ql accounting services. We expect general and administrative expenses to increase in absolute dollars for the\plain\cf1\f51\fs20\ql foreseeable future as we hire additional personnel, make improvements to our infrastructure and incur significant\plain\cf1\f51\fs20\ql additional costs for the compliance requirements of operating as a public company, including higher legal, insurance\plain\sa264\cf1\f51\fs20\ql and accounting expenses.\par\pard\plain\li528\sa264\cf1\f51\fs20\b\i\ql Other Income (Expense), Net\par\pard\plain\fi792\cf1\f51\fs20\ql Other income (expense), net is comprised of interest income (expense) and other income (expense). Interest\plain\cf1\f51\fs20\ql expense consists of interest on our outstanding debt. Other expense, net consists primarily of the change in fair\plain\cf1\f51\fs20\ql value of our preferred stock warrant liability and foreign exchange gains or losses. Our foreign currency exchange\plain\cf1\f51\fs20\ql gains and losses relate to transactions and asset and liability balances denominated in currencies other than the U.S.\plain\cf1\f51\fs20\ql dollar. We expect our foreign currency gains and losses to continue to fluctuate in the future due to changes in\plain\sa264\cf1\f51\fs20\ql foreign currency exchange rates.\par\pard\plain\fi792\cf1\f51\fs20\ql Prior to our IPO of common stock in October 2015, we classified our preferred stock warrants as a liability\plain\cf1\f51\fs20\ql on our consolidated balance sheets and recorded changes in fair value at each balance sheet date with the\plain\cf1\f51\fs20\ql corresponding change recorded as other income (expense). We recorded a final adjustment to the fair value of the\plain\cf1\f51\fs20\ql warrants as of the closing of our initial public offering on October\~30, 2015 and the warrants will no longer be\plain\sa264\cf1\f51\fs20\ql subject to fair value accounting thereafter due to their conversion into warrants to purchase common stock.\par\pard\plain\sb528\cf1\f51\fs20\qc 32\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\li528\sa264\cf1\f51\fs20\b\i\ql Provision for (benefit from) Income Taxes\par\pard\plain\fi792\cf1\f51\fs20\ql Provision for (benefit from) income taxes consists primarily of U.S. federal and state income taxes in the\plain\cf1\f51\fs20\ql United States and income taxes in certain foreign jurisdictions in which we conduct business. We have a full\plain\cf1\f51\fs20\ql valuation allowance for deferred tax assets, including net operating loss carryforwards, and tax credits related\plain\cf1\f51\fs20\ql primarily to research and development. We expect to maintain this full valuation allowance for the foreseeable\plain\sa264\cf1\f51\fs20\ql future.\par\pard\plain\cf1\f51\fs20\b\ql Comparison of the Three and Six months ended June 30, 2018 and 2017 (in thousands, except\~percentage\plain\sa264\cf1\f51\fs20\b\ql data):\par\pard\plain\li528\sa264\cf1\f51\fs20\b\i\ql Revenue \par\pard\plain {\trowd\clvertalb\cellx2175\clvertalb\cellx2415\clvertalb\cellx2605\clvertalb\cellx3245\clvertalb\cellx3485\clvertalb\cellx3675\clvertalb\cellx4315\clvertalb\cellx4555\clvertalb\cellx5095\clvertalb\cellx5335\clvertalb\cellx5575\clvertalb\cellx5931\clvertalb\cellx6171\clvertalb\cellx6361\clvertalb\cellx7001\clvertalb\cellx7241\clvertalb\cellx7431\clvertalb\cellx8071\clvertalb\cellx8311\clvertalb\cellx8851\clvertalb\cellx9091\clvertalb\cellx9331\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx2175\clvertalb\cellx2415\clvertalb\cellx2605\clvertalb\cellx3245\clvertalb\cellx3485\clvertalb\cellx3675\clvertalb\cellx4315\clvertalb\cellx4555\clvertalb\cellx5095\clvertalb\cellx5335\clvertalb\cellx5575\clvertalb\cellx5931\clvertalb\cellx6171\clvertalb\cellx6361\clvertalb\cellx7001\clvertalb\cellx7241\clvertalb\cellx7431\clvertalb\cellx8071\clvertalb\cellx8311\clvertalb\cellx8851\clvertalb\cellx9091\clvertalb\cellx9331\clvertalb\cellx9688\trrh66\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2175\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2415\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2605\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4315\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4555\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5095\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5335\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5575\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5931\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6171\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6361\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8071\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8311\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8851\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9091\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9331\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Three Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Six Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2175\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2415\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2605\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4315\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4555\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5095\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5335\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5575\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5931\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6171\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6361\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8071\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8311\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8851\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9091\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9331\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2175\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2415\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2605\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4315\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4555\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5575\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5931\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6171\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6361\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8071\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8311\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9331\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Change\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Change\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2175\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2415\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2605\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4315\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4555\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5575\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5931\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6171\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6361\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8071\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8311\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9331\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2175\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2415\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2605\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3245\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3485\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3675\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4315\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4555\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5095\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5335\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5575\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5931\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6171\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6361\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7001\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7241\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7431\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8071\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8311\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8851\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9091\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9331\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc $\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc %\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc $\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc %\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2175\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2415\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2605\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3245\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3485\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3675\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4315\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4555\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5095\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5335\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5575\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5931\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6171\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6361\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7001\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7241\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7431\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8071\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8311\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8851\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9091\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9331\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2175\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2415\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2605\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3245\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3485\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3675\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4315\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4555\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5095\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5335\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5575\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5931\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6171\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6361\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7001\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7241\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7431\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8071\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8311\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8851\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9091\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9331\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Revenue, net\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 18,183\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 13,412\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,771\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 36\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 33,485\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 24,719\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 8,766\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 35\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2175\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2415\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2605\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3245\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3485\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3675\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4315\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4555\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5095\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5335\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5575\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5931\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6171\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6361\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7001\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7241\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7431\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8071\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8311\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8851\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9091\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9331\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}}\pard\plain\cf1\f51\fs20\ql \~ \par\pard\plain {\trowd\trqc\clvertalb\cellx6030\clvertalb\cellx6270\clvertalb\cellx6837\clvertalb\cellx7193\clvertalb\cellx7760\clvertalb\cellx8116\clvertalb\cellx8594\clvertalb\cellx8950\clvertalb\cellx9428\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\trqc\clvertalb\cellx6030\clvertalb\cellx6270\clvertalb\cellx6837\clvertalb\cellx7193\clvertalb\cellx7760\clvertalb\cellx8116\clvertalb\cellx8594\clvertalb\cellx8950\clvertalb\cellx9428\clvertalb\cellx9688\trrh66\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6030\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6270\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7761\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8117\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9429\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh396 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Three Months\plain\intbl\cf1\f51\fs16\b\qc Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Six Months\plain\intbl\cf1\f51\fs16\b\qc Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6030\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6270\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7761\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8117\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9429\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh396\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6030\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6270\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7761\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8117\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9429\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6030\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6270\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7761\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8117\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9429\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6030\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6270\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6837\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7193\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7760\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8116\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8594\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8950\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9428\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6030\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6270\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6837\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7193\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7760\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8116\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8594\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8950\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9428\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6030\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6270\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6837\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7193\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7760\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8116\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8594\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8950\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9428\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Revenue by geography:\cell\pard\plain\intbl\cf1\f51\fs20\qc \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6030\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6270\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6837\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7193\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7760\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8116\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8594\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8950\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9428\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\trqc\clvertalb\cellx6030\clvertalb\cellx6270\clvertalb\cellx6837\clvertalb\cellx7193\clvertalb\cellx7760\clvertalb\cellx8116\clvertalb\cellx8594\clvertalb\cellx8950\clvertalb\cellx9428\clvertalb\cellx9688\trrh248 \pard\plain\intbl\li264\cf1\f51\fs20\ql United States\cell\pard\plain\intbl\cf1\f51\fs20\qc \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 30\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 20\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 25\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 22\cell\pard\plain\intbl\cf1\f51\fs20\ql %\cell{ {\trowd\trqc\clvertalb\cellx6030\clvertalb\cellx6270\clvertalb\cellx6837\clvertalb\cellx7193\clvertalb\cellx7760\clvertalb\cellx8116\clvertalb\cellx8594\clvertalb\cellx8950\clvertalb\cellx9428\clvertalb\cellx9688\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6030\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6270\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6837\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7193\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7760\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8116\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8594\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8950\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9428\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\li264\cf1\f51\fs20\ql Europe\cell\pard\plain\intbl\cf1\f51\fs20\qc \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 18\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 16\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 20\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 16\cell\pard\plain\intbl\cf1\f51\fs20\ql %\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6030\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6270\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6837\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7193\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7760\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8116\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8594\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8950\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9428\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\trqc\clvertalb\cellx6030\clvertalb\cellx6270\clvertalb\cellx6837\clvertalb\cellx7193\clvertalb\cellx7760\clvertalb\cellx8116\clvertalb\cellx8594\clvertalb\cellx8950\clvertalb\cellx9428\clvertalb\cellx9688\trrh248 \pard\plain\intbl\li264\cf1\f51\fs20\ql Asia Pacific\cell\pard\plain\intbl\cf1\f51\fs20\qc \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 50\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 62\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 54\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 60\cell\pard\plain\intbl\cf1\f51\fs20\ql %\cell{ {\trowd\trqc\clvertalb\cellx6030\clvertalb\cellx6270\clvertalb\cellx6837\clvertalb\cellx7193\clvertalb\cellx7760\clvertalb\cellx8116\clvertalb\cellx8594\clvertalb\cellx8950\clvertalb\cellx9428\clvertalb\cellx9688\trrh248\row}}} {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6030\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6270\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6837\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7193\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7760\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8116\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8594\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8950\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9428\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\li264\cf1\f51\fs20\ql Rest of world\cell\pard\plain\intbl\cf1\f51\fs20\qc \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~2\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~2\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~1\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~2\cell\pard\plain\intbl\cf1\f51\fs20\ql %\cell{ {\trowd\trqc\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6030\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6270\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6837\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7193\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7760\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8116\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8594\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8950\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9428\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\ql Revenue increased by $4.8 million, or 36%, during the three months ended June 30, 2018 as compared to\plain\cf1\f51\fs20\ql the three months ended June 30, 2017. This increase was due primarily to higher sales of standard memory products\plain\cf1\f51\fs20\ql to Tier 1 OEM customers and the contribution of revenues of approximately $2.0 million from S3 during the\plain\cf1\f51\fs20\ql quarter. These increases were partially offset by slower than expected sales for our DataFlash-L products, which are\plain\cf1\f51\fs20\ql designed for smart home application markets and carry relatively higher gross margin than our other memory\plain\sa264\cf1\f51\fs20\ql products.\par\pard\plain\fi792\cf1\f51\fs20\ql Revenue increased by $8.8 million, or 35%, during the six months ended June 30, 2018 as compared to the\plain\cf1\f51\fs20\ql six months ended June 30, 2017. This increase was due primarily to an increase in unit shipments from our\plain\cf1\f51\fs20\ql FusionFlash, Standard Flash and DataFlash products along with the contribution of revenue of approximately $2.0\plain\cf1\f51\fs20\ql million from S3 during the quarter. These increases were partially offset by slower than expected sales from our\plain\sa264\cf1\f51\fs20\ql DataFlash-L products.\par\pard\plain\li528\sa264\cf1\f51\fs20\b\i\ql Cost of Revenue and Gross Margin \par\pard\plain {\trowd\clvertalb\cellx1587\clvertalb\cellx1827\clvertalb\cellx2027\clvertalb\cellx2667\clvertalb\cellx2923\clvertalb\cellx3123\clvertalb\cellx3663\clvertalb\cellx4019\clvertalb\cellx4209\clvertalb\cellx4749\clvertalb\cellx4989\clvertalb\cellx5294\clvertalb\cellx5650\clvertalb\cellx5850\clvertalb\cellx6490\clvertalb\cellx6746\clvertalb\cellx6946\clvertalb\cellx7586\clvertalb\cellx7942\clvertalb\cellx8132\clvertalb\cellx8672\clvertalb\cellx8912\clvertalb\cellx9187\clvertalb\cellx9443\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx1587\clvertalb\cellx1827\clvertalb\cellx2027\clvertalb\cellx2667\clvertalb\cellx2923\clvertalb\cellx3123\clvertalb\cellx3663\clvertalb\cellx4019\clvertalb\cellx4209\clvertalb\cellx4749\clvertalb\cellx4989\clvertalb\cellx5294\clvertalb\cellx5650\clvertalb\cellx5850\clvertalb\cellx6490\clvertalb\cellx6746\clvertalb\cellx6946\clvertalb\cellx7586\clvertalb\cellx7942\clvertalb\cellx8132\clvertalb\cellx8672\clvertalb\cellx8912\clvertalb\cellx9187\clvertalb\cellx9443\clvertalb\cellx9688\trrh66\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1587\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1827\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3663\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4019\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4209\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4749\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4989\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5294\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5650\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7586\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7942\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8132\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8672\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8912\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9187\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9443\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Three Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Six Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1587\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1827\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3663\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4019\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4209\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4749\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4989\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5294\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5650\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7586\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7942\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8132\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8672\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8912\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9187\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9443\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1587\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3663\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4019\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5294\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5650\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7586\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7942\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9187\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9443\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Change\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Change\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1587\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3663\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4019\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5294\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5650\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7586\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7942\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9187\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9443\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1587\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2667\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2923\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3663\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4019\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4749\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4989\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5294\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5650\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6490\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6746\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7586\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7942\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8672\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8912\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9187\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9443\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc $\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc %\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc $\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc %\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1587\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1827\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2667\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2923\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3663\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4019\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4749\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4989\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5294\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5650\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6490\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6746\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7586\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7942\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8672\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8912\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9187\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9443\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh198\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1827\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2027\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2667\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2923\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3123\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3663\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4019\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4209\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4749\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4989\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5294\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5650\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5850\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6490\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6746\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6946\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7586\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7942\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8132\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8672\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8912\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9187\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9443\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Cost of revenue\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 10,419\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 6,689\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,730\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 56\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 18,541\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 12,442\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 6,099\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 49\cell\pard\plain\intbl\cf1\f51\fs20\ql %\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1827\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2027\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2667\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2923\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3123\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3663\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4019\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4209\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4749\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4989\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5294\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5650\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5850\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6490\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6746\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6946\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7586\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7942\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8132\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8672\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8912\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9187\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9443\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}} {\trowd\clvertalb\cellx1587\clvertalb\cellx1827\clvertalb\cellx2027\clvertalb\cellx2667\clvertalb\cellx2923\clvertalb\cellx3123\clvertalb\cellx3663\clvertalb\cellx4019\clvertalb\cellx4209\clvertalb\cellx4749\clvertalb\cellx4989\clvertalb\cellx5294\clvertalb\cellx5650\clvertalb\cellx5850\clvertalb\cellx6490\clvertalb\cellx6746\clvertalb\cellx6946\clvertalb\cellx7586\clvertalb\cellx7942\clvertalb\cellx8132\clvertalb\cellx8672\clvertalb\cellx8912\clvertalb\cellx9187\clvertalb\cellx9443\clvertalb\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Gross Profit\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 7,764\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 6,723\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,041\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 15\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 14,944\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 12,277\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,667\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 22\cell\pard\plain\intbl\cf1\f51\fs20\ql %\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx1587\clvertalb\cellx1827\clvertalb\cellx2027\clvertalb\cellx2667\clvertalb\cellx2923\clvertalb\cellx3123\clvertalb\cellx3663\clvertalb\cellx4019\clvertalb\cellx4209\clvertalb\cellx4749\clvertalb\cellx4989\clvertalb\cellx5294\clvertalb\cellx5650\clvertalb\cellx5850\clvertalb\cellx6490\clvertalb\cellx6746\clvertalb\cellx6946\clvertalb\cellx7586\clvertalb\cellx7942\clvertalb\cellx8132\clvertalb\cellx8672\clvertalb\cellx8912\clvertalb\cellx9187\clvertalb\cellx9443\clvertalb\cellx9688\trrh248\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1827\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2027\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2667\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2923\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3123\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3663\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4019\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4209\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4749\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4989\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5294\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5650\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5850\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6490\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6746\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6946\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7586\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7942\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8132\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8672\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8912\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9187\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9443\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Gross Margin\cell\pard\plain\intbl\cf1\f62\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 43\cell\pard\plain\intbl\cf1\f51\fs20\ql %\plain\intbl\cf1\f62\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 50\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f62\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f62\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 45\cell\pard\plain\intbl\cf1\f51\fs20\ql %\plain\intbl\cf1\f62\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 50\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f62\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f62\fs20\ql \~\cell\pard\plain\intbl\cf1\f62\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1587\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1827\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2027\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2667\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2923\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3123\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3663\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4019\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4209\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4749\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4989\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5294\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5650\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5850\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6490\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6746\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6946\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7586\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7942\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8132\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8672\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8912\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9187\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9443\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh248\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\ql Cost of revenue increased by $3.7 million, or 56%, during the three months ended June 30, 2017 as\plain\cf1\f51\fs20\ql compared to the three months ended June 30, 2016. This increase was due primarily to increased unit shipments\plain\sa264\cf1\f51\fs20\ql along with incremental cost of revenue incurred as a result of our May 2018 acquisition of S3.\par\pard\plain\fi792\cf1\f51\fs20\ql Cost of revenue increased by $6.1\~million, or 49%, during the six months ended June 30, 2018 as\plain\cf1\f51\fs20\ql compared to the six months ended June 30, 2017. This increase was due primarily to a 34% increase in unit\plain\sa264\cf1\f51\fs20\ql shipments along with incremental cost of revenue incurred as a result of our May 2018 acquisition of S3.\par\pard\plain\sb528\cf1\f51\fs20\qc 33\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\fi792\cf1\f51\fs20\ql Our gross margin percentage decreased from 50% to 43% for the three months ended June 30, 2018 and\plain\cf1\f51\fs20\ql from 50% to 45% for the six months ended June 30, 2018 primarily due to product mix impacts as we generated a\plain\cf1\f51\fs20\ql higher proportion of our revenues from sales to Tier 1 OEM customers of Standard Flash memory products which\plain\sa264\cf1\f51\fs20\ql generally carry lower gross margins than our other memory products.\par\pard\plain\fi792\cf1\f51\fs20\ql Gross profit increased by $1.0 million during the three months ended June 30, 2018 as compared to the\plain\cf1\f51\fs20\ql three months ended June 30, 2017 due primarily to an increase in unit shipments along with gross profit generated\plain\sa264\cf1\f51\fs20\ql from our S3 business.\par\pard\plain\fi792\cf1\f51\fs20\ql Gross profit increased by $2.7 million during the six months ended June 30, 2018 as compared to the six\plain\cf1\f51\fs20\ql months ended June 30, 2017 due primarily to an increase in unit shipments along with gross profit generated from\plain\sa264\cf1\f51\fs20\ql our S3 business.\par\pard\plain\li528\sa264\cf1\f51\fs20\b\i\ql Operating Expenses \par\pard\plain {\trowd\clvertalb\cellx1800\clvertalb\cellx2040\clvertalb\cellx2240\clvertalb\cellx2880\clvertalb\cellx3120\clvertalb\cellx3320\clvertalb\cellx3860\clvertalb\cellx4099\clvertalb\cellx4289\clvertalb\cellx4829\clvertalb\cellx5069\clvertalb\cellx5413\clvertalb\cellx5769\clvertalb\cellx5969\clvertalb\cellx6609\clvertalb\cellx6849\clvertalb\cellx7049\clvertalb\cellx7689\clvertalb\cellx7929\clvertalb\cellx8119\clvertalb\cellx8659\clvertalb\cellx8899\clvertalb\cellx9189\clvertalb\cellx9445\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx1800\clvertalb\cellx2040\clvertalb\cellx2240\clvertalb\cellx2880\clvertalb\cellx3120\clvertalb\cellx3320\clvertalb\cellx3860\clvertalb\cellx4099\clvertalb\cellx4289\clvertalb\cellx4829\clvertalb\cellx5069\clvertalb\cellx5413\clvertalb\cellx5769\clvertalb\cellx5969\clvertalb\cellx6609\clvertalb\cellx6849\clvertalb\cellx7049\clvertalb\cellx7689\clvertalb\cellx7929\clvertalb\cellx8119\clvertalb\cellx8659\clvertalb\cellx8899\clvertalb\cellx9189\clvertalb\cellx9445\clvertalb\cellx9688\trrh66\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1800\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2040\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3860\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4099\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5413\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5769\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7689\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7929\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9189\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9445\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Three Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Six months ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1800\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2040\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3860\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4099\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5413\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5769\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7689\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7929\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9189\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9445\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1800\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2040\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3860\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4099\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5413\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5769\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7689\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7929\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9189\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9445\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Change\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Change\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1800\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2040\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3860\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4099\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5413\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5769\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7689\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7929\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9189\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9445\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1800\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2040\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2880\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3120\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3860\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4099\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4829\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5069\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5413\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5769\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6609\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6849\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7689\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7929\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8659\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8899\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9189\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9445\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc $\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc %\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc $\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc %\~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1800\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2040\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2880\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3120\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3860\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4099\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4829\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5069\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5413\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5769\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6609\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6849\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7689\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7929\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8659\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8899\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9189\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9445\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1800\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2040\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2240\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2880\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3120\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3320\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3860\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4099\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4289\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4829\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5069\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5413\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5769\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5969\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6609\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6849\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7049\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7689\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7929\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8119\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8659\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8899\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9189\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9445\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Operating expenses:\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1800\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2040\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2240\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2880\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3120\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3320\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3860\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4099\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4289\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4829\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5069\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5413\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5769\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5969\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6609\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6849\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7049\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7689\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7929\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8119\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8659\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8899\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9189\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9445\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx1800\clvertalb\cellx2040\clvertalb\cellx2240\clvertalb\cellx2880\clvertalb\cellx3120\clvertalb\cellx3320\clvertalb\cellx3860\clvertalb\cellx4099\clvertalb\cellx4289\clvertalb\cellx4829\clvertalb\cellx5069\clvertalb\cellx5413\clvertalb\cellx5769\clvertalb\cellx5969\clvertalb\cellx6609\clvertalb\cellx6849\clvertalb\cellx7049\clvertalb\cellx7689\clvertalb\cellx7929\clvertalb\cellx8119\clvertalb\cellx8659\clvertalb\cellx8899\clvertalb\cellx9189\clvertalb\cellx9445\clvertalb\cellx9688\trrh496 \pard\plain\intbl\li264\cf1\f51\fs20\ql Research and\plain\intbl\li264\cf1\f51\fs20\ql development\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,421\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,675\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 746\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 20\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 8,086\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 7,047\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,039\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 15\cell\pard\plain\intbl\cf1\f51\fs20\ql %\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx1800\clvertalb\cellx2040\clvertalb\cellx2240\clvertalb\cellx2880\clvertalb\cellx3120\clvertalb\cellx3320\clvertalb\cellx3860\clvertalb\cellx4099\clvertalb\cellx4289\clvertalb\cellx4829\clvertalb\cellx5069\clvertalb\cellx5413\clvertalb\cellx5769\clvertalb\cellx5969\clvertalb\cellx6609\clvertalb\cellx6849\clvertalb\cellx7049\clvertalb\cellx7689\clvertalb\cellx7929\clvertalb\cellx8119\clvertalb\cellx8659\clvertalb\cellx8899\clvertalb\cellx9189\clvertalb\cellx9445\clvertalb\cellx9688\trrh496\row}}} 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\pard\plain\intbl\li264\cf1\f51\fs20\ql Sales and\plain\intbl\li264\cf1\f51\fs20\ql marketing\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,615\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,911\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 704\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 24\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 6,367\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5,511\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 856\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 16\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ 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\~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,641\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,673\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,968\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 118\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 5,354\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,808\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,546\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 41\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ 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\pard\plain\intbl\li528\cf1\f51\fs20\ql Total operating\plain\intbl\li528\cf1\f51\fs20\ql expenses\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 11,677\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 8,259\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,418\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 41\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 19,807\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 16,366\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,441\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 21\cell\pard\plain\intbl\cf1\f51\fs20\ql %\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ 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\~\par\pard\plain\fi792\cf1\f51\fs20\i\ql Research and Development\plain\cf1\f51\fs20\ql .\~Research and development expense increased by $0.7\~million, or 20%, during\plain\cf1\f51\fs20\ql the three months ended June 30, 2018 as compared to the three months ended June 30, 2017. This increase was due\plain\cf1\f51\fs20\ql primarily to a $0.1 million increase in rental and facilities costs, a $0.2 million increase in depreciation and\plain\sa264\cf1\f51\fs20\ql amortization expense, and a $0.4 million increase in materials and outside services\par\pard\plain\fi792\cf1\f51\fs20\i\ql Research and Development\plain\cf1\f51\fs20\ql .\~Research and development expense increased by $1.0\~million, or 15%, during\plain\cf1\f51\fs20\ql the six months ended June 30, 2018 as compared to the six months ended June 30, 2017. This increase was due\plain\cf1\f51\fs20\ql primarily to a $0.1 million increase in rental and facilities costs, a $0.2 million increase in personnel-related costs,\plain\cf1\f51\fs20\ql a $0.3 million increase in depreciation and amortization expense, and a $0.4 million increase in materials and\plain\sa264\cf1\f51\fs20\ql outside services.\par\pard\plain\fi792\cf1\f51\fs20\i\ql Sales and Marketing\plain\cf1\f51\fs20\ql . Sales and marketing expense increased by $0.7 million, or 24% for the three months\plain\cf1\f51\fs20\ql ended June 30, 2018 as compared to the three months ended June 30, 2017. This increase was due primarily to a\plain\cf1\f51\fs20\ql $0.3 million increase in personnel-related costs, a $0.3 million increase in depreciation and amortization expense,\plain\sa264\cf1\f51\fs20\ql and a $0.1 million increase in rental and facilities costs.\par\pard\plain\fi792\cf1\f51\fs20\i\ql Sales and Marketing\plain\cf1\f51\fs20\ql . Sales and marketing expense increased by $0.9 million, or 16% for the six months\plain\cf1\f51\fs20\ql ended June 30, 2018 as compared to the six months ended June 30, 2017. This increase was due primarily to a $0.2\plain\cf1\f51\fs20\ql million increase in personnel-related costs, a $0.3 million increase in depreciation and amortization expense, a $0.2\plain\cf1\f51\fs20\ql million increase in materials and outside services, and a $0.1 million increase in marketing and trade show\plain\sa264\cf1\f51\fs20\ql expenses.\par\pard\plain\fi792\cf1\f51\fs20\i\ql General and Administrative\plain\cf1\f51\fs20\ql . General and administrative expenses increased by $2.0 million, or 118%,\plain\cf1\f51\fs20\ql during the three months ended June 30, 2018 as compared to the three months ended June 30, 2017. This increase\plain\sa264\cf1\f51\fs20\ql was due primarily to acquisition costs related to both the S3 acquisition and our proposed acquisition of Echelon.\par\pard\plain\fi792\cf1\f51\fs20\i\ql General and Administrative\plain\cf1\f51\fs20\ql . General and administrative expenses increased by $1.5 million, or 41%, during\plain\cf1\f51\fs20\ql the six months ended June 30, 2018 as compared to the six months ended June 30, 2017. This increase was due\plain\cf1\f51\fs20\ql primarily to acquisition costs related to both the S3 acquisition and our proposed acquisition of Echelon, partially\plain\sa264\cf1\f51\fs20\ql offset by a $0.5 million decrease in personnel-related costs.\par\pard\plain\sb528\cf1\f51\fs20\qc 34\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\li528\sa264\cf1\f51\fs20\b\i\ql Other Income (Expense), Net \par\pard\plain {\trowd\clvertalb\cellx2133\clvertalb\cellx2373\clvertalb\cellx2573\clvertalb\cellx3246\clvertalb\cellx3486\clvertalb\cellx3686\clvertalb\cellx4209\clvertalb\cellx4449\clvertalb\cellx4639\clvertalb\cellx5029\clvertalb\cellx5180\clvertalb\cellx5603\clvertalb\cellx5959\clvertalb\cellx6159\clvertalb\cellx6832\clvertalb\cellx7072\clvertalb\cellx7272\clvertalb\cellx7795\clvertalb\cellx8035\clvertalb\cellx8225\clvertalb\cellx8615\clvertalb\cellx8766\clvertalb\cellx9189\clvertalb\cellx9445\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx2133\clvertalb\cellx2373\clvertalb\cellx2573\clvertalb\cellx3246\clvertalb\cellx3486\clvertalb\cellx3686\clvertalb\cellx4209\clvertalb\cellx4449\clvertalb\cellx4639\clvertalb\cellx5029\clvertalb\cellx5180\clvertalb\cellx5603\clvertalb\cellx5959\clvertalb\cellx6159\clvertalb\cellx6832\clvertalb\cellx7072\clvertalb\cellx7272\clvertalb\cellx7795\clvertalb\cellx8035\clvertalb\cellx8225\clvertalb\cellx8615\clvertalb\cellx8766\clvertalb\cellx9189\clvertalb\cellx9445\clvertalb\cellx9688\trrh66\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2133\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2373\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4209\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4449\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4639\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5029\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5180\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5603\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5959\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7795\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8035\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8225\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8615\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8766\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9189\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9445\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Three Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Six months ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2133\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2373\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4209\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4449\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4639\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5029\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5180\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5603\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5959\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7795\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8035\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8225\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8615\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8766\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9189\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9445\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2133\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2373\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4209\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4449\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5603\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5959\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7795\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8035\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9189\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9445\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Change\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Change\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2133\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2373\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4209\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4449\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5603\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5959\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7795\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8035\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9189\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9445\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2133\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2373\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3246\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3486\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4209\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4449\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5029\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5180\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5603\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5959\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6832\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7072\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7795\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8035\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8615\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8766\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9189\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9445\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc $\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc %\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc $\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc %\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2133\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2373\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3246\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3486\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4209\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4449\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5029\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5180\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5603\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5959\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6832\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7072\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7795\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8035\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8615\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8766\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9189\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9445\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2133\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2373\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2573\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3246\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3486\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3686\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4209\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4449\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4639\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5029\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5180\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5603\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5959\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6159\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6832\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7072\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7795\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8035\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8225\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8615\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9189\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9445\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Interest expense, net\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (1,181)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (198)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 983\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 496\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (1,322)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (411)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 911\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 222\cell\pard\plain\intbl\cf1\f51\fs20\ql %\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2133\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2373\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2573\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3246\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3486\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3686\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4209\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4449\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4639\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5029\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5180\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5603\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5959\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6159\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6832\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7072\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7795\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8035\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8225\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8615\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9189\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9445\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx2133\clvertalb\cellx2373\clbrdrb\brdrs\brdrcf1\clvertalb\cellx2573\clbrdrb\brdrs\brdrcf1\clvertalb\cellx3246\clvertalb\cellx3486\clbrdrb\brdrs\brdrcf1\clvertalb\cellx3686\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4209\clvertalb\cellx4449\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4639\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5029\clvertalb\cellx5180\clvertalb\cellx5603\clvertalb\cellx5959\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6159\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6832\clvertalb\cellx7072\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7795\clvertalb\cellx8035\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8225\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8615\clvertalb\cellx8766\clvertalb\cellx9189\clvertalb\cellx9445\clvertalb\cellx9688\trrh496 \pard\plain\intbl\cf1\f51\fs20\ql Other income (expense),\plain\intbl\cf1\f51\fs20\ql net\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (4)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (3)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (75)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~9\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 14\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (5)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (36)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx2133\clvertalb\cellx2373\clbrdrb\brdrs\brdrcf1\clvertalb\cellx2573\clbrdrb\brdrs\brdrcf1\clvertalb\cellx3246\clvertalb\cellx3486\clbrdrb\brdrs\brdrcf1\clvertalb\cellx3686\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4209\clvertalb\cellx4449\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4639\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5029\clvertalb\cellx5180\clvertalb\cellx5603\clvertalb\cellx5959\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6159\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6832\clvertalb\cellx7072\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7272\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7795\clvertalb\cellx8035\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8225\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8615\clvertalb\cellx8766\clvertalb\cellx9189\clvertalb\cellx9445\clvertalb\cellx9688\trrh496\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2133\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2373\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2573\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3246\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3486\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3686\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4209\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4449\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4639\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5029\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5180\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5603\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5959\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6159\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6832\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7072\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7795\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8035\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8225\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8615\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9189\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9445\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh496 \pard\plain\intbl\li264\cf1\f51\fs20\ql Total other income\plain\intbl\li264\cf1\f51\fs20\ql (expense), net\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (1,182)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (202)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 980\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 485\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (1,313)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (397)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 916\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 231\cell\pard\plain\intbl\cf1\f51\fs20\ql %\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2133\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2373\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2573\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3246\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3486\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3686\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4209\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4449\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4639\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5029\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5180\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5603\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5959\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6159\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6832\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7072\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7272\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7795\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8035\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8225\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8615\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8766\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9189\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9445\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh496\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\ql Interest expense, net increased by approximately $1.0 million during the three months ended June 30, 2018\plain\cf1\f51\fs20\ql as compared to the three months ended June 30, 2017, primarily due to interest of $0.7 million and amortization of\plain\cf1\f51\fs20\ql debt discount $0.2 million as we increased our level of indebtedness during the three months ended June 30, 2018\plain\sa264\cf1\f51\fs20\ql in connection with the S3 acquisition.\par\pard\plain\fi792\cf1\f51\fs20\ql Interest expense, net increased by approximately $0.9 million during the six months ended June 30, 2018 as\plain\cf1\f51\fs20\ql compared to the six months ended June 30, 2017, primarily due to interest of $0.7 million and amortization of debt\plain\cf1\f51\fs20\ql discount $0.2 million as we increased our level of indebtedness during the three months ended June 30, 2018 in\plain\sa264\cf1\f51\fs20\ql connection with the S3 acquisition.\par\pard\plain\fi792\cf1\f51\fs20\ql Other income (expense), net decreased by approximately $3,000 during the three months ended June 30,\plain\cf1\f51\fs20\ql 2018 as compared to the three months ended June 30, 2017 due primarily to a decrease in foreign currency\plain\sa264\cf1\f51\fs20\ql transaction charges.\par\pard\plain\fi792\cf1\f51\fs20\ql Other income (expense), net decreased by approximately $5,000 during the six months ended June 30, 2018\plain\cf1\f51\fs20\ql as compared to the six months ended June 30, 2017 due primarily to a decrease in foreign currency transaction\plain\sa264\cf1\f51\fs20\ql charges.\par\pard\plain\li528\sa264\cf1\f51\fs20\b\i\ql Provision for (benefit from) Income Taxes \par\pard\plain {\trowd\clvertalb\cellx2778\clvertalb\cellx3018\clvertalb\cellx3218\clvertalb\cellx3676\clvertalb\cellx3916\clvertalb\cellx4115\clvertalb\cellx4517\clvertalb\cellx4657\clvertalb\cellx4847\clvertalb\cellx5270\clvertalb\cellx5471\clvertalb\cellx5994\clvertalb\cellx6350\clvertalb\cellx6550\clvertalb\cellx6973\clvertalb\cellx7213\clvertalb\cellx7413\clvertalb\cellx7759\clvertalb\cellx7899\clvertalb\cellx8089\clvertalb\cellx8512\clvertalb\cellx8663\clvertalb\cellx9186\clvertalb\cellx9442\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx2778\clvertalb\cellx3018\clvertalb\cellx3218\clvertalb\cellx3676\clvertalb\cellx3916\clvertalb\cellx4115\clvertalb\cellx4517\clvertalb\cellx4657\clvertalb\cellx4847\clvertalb\cellx5270\clvertalb\cellx5471\clvertalb\cellx5994\clvertalb\cellx6350\clvertalb\cellx6550\clvertalb\cellx6973\clvertalb\cellx7213\clvertalb\cellx7413\clvertalb\cellx7759\clvertalb\cellx7899\clvertalb\cellx8089\clvertalb\cellx8512\clvertalb\cellx8663\clvertalb\cellx9186\clvertalb\cellx9442\clvertalb\cellx9688\trrh66\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2778\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3018\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4519\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4659\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4849\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5272\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5473\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5996\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6352\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7761\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7901\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8091\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8514\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8665\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9188\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9444\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh397 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Three Months\plain\intbl\cf1\f51\fs16\b\qc Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Six Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2778\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3018\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4519\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4659\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4849\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5272\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5473\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5996\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6352\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7761\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7901\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8091\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8514\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8665\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9188\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9444\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh397\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2778\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3018\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4519\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4659\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4849\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5996\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6352\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7761\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7901\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9188\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9444\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Change\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Change\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2778\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3018\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4519\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4659\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4849\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5996\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6352\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7761\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7901\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9188\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9444\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2778\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3018\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3676\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3916\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4518\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4658\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5271\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5472\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5995\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6351\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6974\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7214\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7760\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7900\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8513\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8664\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9187\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9443\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~$\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc %\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~$\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc %\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2778\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3018\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3676\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3916\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4518\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4658\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5271\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5472\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx5995\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6351\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6974\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7214\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7760\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7900\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8513\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8664\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9187\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9443\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2778\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3018\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3218\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3676\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3916\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4115\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4517\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4657\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4847\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5270\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5471\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5994\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6350\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6550\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6973\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7213\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7413\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7759\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7899\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8089\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8512\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8663\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9186\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9442\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh496 \pard\plain\intbl\cf1\f51\fs20\ql Provision for (benefit from)\plain\intbl\cf1\f51\fs20\ql income taxes\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (37)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 13\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (50)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (385)\cell\pard\plain\intbl\cf1\f51\fs20\ql %\~\~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (16)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 40\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (56)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (140)\cell\pard\plain\intbl\cf1\f51\fs20\ql %\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2778\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3018\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3218\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3676\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3916\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4115\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4517\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4657\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4847\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5270\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5471\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5994\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6350\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6550\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6973\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7213\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7413\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7759\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7899\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8089\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8512\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8663\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9186\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9442\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh496\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\ql Provision for income taxes decreased by $50,000 during the three months ended June 30, 2018 as\plain\cf1\f51\fs20\ql compared to the three months ended June 30, 2017. The decrease was due primarily to a reduction in tax expense\plain\sa264\cf1\f51\fs20\ql related to our foreign subsidiaries as well as a reduction in benefits related to deferred taxes in the United States.\par\pard\plain\fi792\cf1\f51\fs20\ql Provision for income taxes decreased by $56,000 during the six months ended June 30, 2018 as compared\plain\cf1\f51\fs20\ql to the six months ended June 30, 2017. The decrease was due primarily to a reduction in tax expense related to our\plain\sa264\cf1\f51\fs20\ql foreign subsidiaries as well as a reduction in benefits related to deferred taxes in the United States.\par\pard\plain\sa264\cf1\f51\fs20\b\ql Liquidity and Capital Resources\par\pard\plain\fi792\cf1\f51\fs20\ql Our principal source of liquidity as of June 30, 2018 consisted of cash and cash equivalents of $7.9\~million.\plain\cf1\f51\fs20\ql Our outstanding borrowings under our new credit facility as of June 30, 2018 were $35.0\~million. Substantially all\plain\sa264\cf1\f51\fs20\ql of our cash and cash equivalents are held in the United States.\~\par\pard\plain\fi792\cf1\f51\fs20\ql After giving effect to our receipt of net proceeds of approximately $43.0 million from our July 2018\plain\cf1\f51\fs20\ql follow-on offering of our common stock in July 2018, we believe our existing cash and cash equivalents will be\plain\cf1\f51\fs20\ql sufficient to meet our anticipated cash needs, including payment of the merger consideration in connection with our\plain\cf1\f51\fs20\ql proposed acquisition of Echelon, over the next 12\~months. Our future capital requirements will depend on many\plain\cf1\f51\fs20\ql factors, including our growth rate, the timing and extent of our spending to support research and development\plain\cf1\f51\fs20\ql activities, the timing and cost of establishing additional sales and marketing capabilities, the introduction of new and\plain\cf1\f51\fs20\ql enhanced products and our costs to implement new manufacturing technologies. In the event that additional\plain\sa264\cf1\f51\fs20\ql financing is required from outside sources, we\par\pard\plain\sb528\cf1\f51\fs20\qc 35\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\ql may not be able to raise it on terms acceptable to us or at all. Any additional debt financing obtained by us in the\plain\cf1\f51\fs20\ql future could also involve restrictive covenants relating to our capital-raising activities and other financial and\plain\cf1\f51\fs20\ql operational matters, which may make it more difficult for us to obtain additional capital and to pursue business\plain\cf1\f51\fs20\ql opportunities, including potential acquisitions. Additionally, if we raise additional funds through further issuances of\plain\cf1\f51\fs20\ql equity, convertible debt securities or other securities convertible into equity, our existing stockholders could suffer\plain\cf1\f51\fs20\ql significant dilution in their\~percentage ownership of our company, and any new equity securities we issue could\plain\cf1\f51\fs20\ql have rights, preferences and privileges senior to those of holders of our common stock. If we are unable to obtain\plain\cf1\f51\fs20\ql adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or\plain\sa264\cf1\f51\fs20\ql support our business and to respond to business challenges could be significantly limited.\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql The following table summarizes our cash flows for the periods indicated: \par\pard\plain {\trowd\clvertalb\cellx7116\clvertalb\cellx7356\clvertalb\cellx7556\clvertalb\cellx8329\clvertalb\cellx8569\clvertalb\cellx8769\clvertalb\cellx9447\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx7116\clvertalb\cellx7356\clvertalb\cellx7556\clvertalb\cellx8329\clvertalb\cellx8569\clvertalb\cellx8769\clvertalb\cellx9447\clvertalb\cellx9688\trrh66\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7116\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7356\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Six Months Ended\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7116\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7356\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7116\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7356\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc June\~30,\~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7116\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7356\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7116\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7356\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8329\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8569\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199 \pard\plain\intbl\cf1\f51\fs16\b\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 2017\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7116\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7356\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8329\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8569\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9447\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9688\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7116\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7356\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8329\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8569\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8769\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Cash flows used in operating activities\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (5,741)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\cf1\f51\fs20\qr (1,712)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7116\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7356\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8329\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8569\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8769\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx7116\clvertalb\cellx7356\clvertalb\cellx7556\clvertalb\cellx8329\clvertalb\cellx8569\clvertalb\cellx8769\clvertalb\cellx9447\clvertalb\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Cash flows used in investing activities\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (36,945)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\qr (1,659)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\cellx7116\clvertalb\cellx7356\clvertalb\cellx7556\clvertalb\cellx8329\clvertalb\cellx8569\clvertalb\cellx8769\clvertalb\cellx9447\clvertalb\cellx9688\trrh249\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7116\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7356\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8329\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8569\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8769\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Cash flows provided by financing activities\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 20,667\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 15,595\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7116\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7356\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7556\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8329\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8569\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8769\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9447\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Cash Flows from Operating Activities\par\pard\plain\fi792\cf1\f51\fs20\ql Our primary source of cash from operating activities has been from cash collections from our customers.\plain\cf1\f51\fs20\ql We expect cash inflows from operating activities to be affected by increases in sales and timing of collections. Our\plain\cf1\f51\fs20\ql primary uses of cash from operating activities have been for personnel costs, investments in research and\plain\cf1\f51\fs20\ql development and sales and marketing, and procurement of inventory. Net cash used in operating activities for the\plain\cf1\f51\fs20\ql periods presented consisted of net losses adjusted for certain noncash items and changes in working capital. Within\plain\cf1\f51\fs20\ql changes in working capital, changes in accounts receivable, inventory and accounts payable generally account for\plain\cf1\f51\fs20\ql the largest adjustments, as we typically use more cash to fund accounts receivable and build inventory as our\plain\cf1\f51\fs20\ql business grows. Increases in accounts payable typically provides more cash as we do more business with our\plain\sa264\cf1\f51\fs20\ql contract foundries and other third parties, depending on the timing of payments.\par\pard\plain\fi792\cf1\f51\fs20\ql During the six months ended June 30, 2018, cash used in operating activities was approximately $5.7\plain\cf1\f51\fs20\ql million and was due primarily to a net loss of $6.2 million, partially offset by non-cash charges of $1.2\~million\plain\cf1\f51\fs20\ql related to stock-based compensation expense, $1.1 million related to depreciation and amortization, $1.0 million\plain\cf1\f51\fs20\ql related to the amortization of intangible assets, and an increase in our net assets and liabilities of $3.0 million. The\plain\cf1\f51\fs20\ql increase in net assets and liabilities is due primarily to an increase in accounts receivable of $8.3 million, an\plain\cf1\f51\fs20\ql increase in inventories of $5.6 million, an increase in prepaid expenses and other current assets of $0.1 million, a\plain\cf1\f51\fs20\ql decrease in deferred rent of $0.2 million, partially offset by an increase in price adjustments and other revenue\plain\cf1\f51\fs20\ql reserves of $4.4 million and an increase in accounts payable, accrued compensation and other accrued expenses of\plain\sa264\cf1\f51\fs20\ql $6.9 million.{\*\bkmkstart _aeioulastrenderedpagebreakaeiou}{\*\bkmkend _aeioulastrenderedpagebreakaeiou}\par\pard\plain\fi792\cf1\f51\fs20\ql During the six months ended June 30, 2017, cash used in operating activities was approximately $1.7\plain\cf1\f51\fs20\ql million and was due primarily to a net loss of $4.5 million, partially offset by non-cash charges of $1.8\~million\plain\cf1\f51\fs20\ql related to stock-based compensation expense, $0.6 million related to depreciation and amortization, $0.6 million\plain\cf1\f51\fs20\ql related to amortization of intangible assets, and an increase in our net assets and liabilities of $0.3 million. The\plain\cf1\f51\fs20\ql increase in assets and liabilities is due primarily to an increase in accounts receivable of $2.9 million, partially\plain\cf1\f51\fs20\ql offset by an increase in accounts payable and accrued compensation of $2.3 million, a decrease in deferred rent of\plain\sa264\cf1\f51\fs20\ql $0.2 million and an increase in prepaid expenses and other assets of $0.2 million.\par\pard\plain\li528\sa264\cf1\f51\fs20\b\i\ql Cash Flows from Investing Activities\par\pard\plain\fi792\cf1\f51\fs20\ql During the six months ended June 30, 2018, cash used in investing activities was $36.9 million and was\plain\cf1\f51\fs20\ql due to our purchase of all the assets of S3 for $34.6 million, purchases of property and equipment of $2.1 million\plain\sa264\cf1\f51\fs20\ql and an investment in the notes receivable of Semitech for $0.2 million.\par\pard\plain\sb528\cf1\f51\fs20\qc 36\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\fi792\cf1\f51\fs20\ql During the six months ended June 30, 2017, cash used in investing activities was $1.6 million and was due\plain\cf1\f51\fs20\ql primarily to purchases of equipment and investments in leasehold improvements related to our headquarters facility\plain\sa264\cf1\f51\fs20\ql in Santa Clara.\par\pard\plain\li528\sa264\cf1\f51\fs20\b\i\ql Cash Flows from Financing Activities\par\pard\plain\fi528\cf1\f51\fs20\ql During the six months ended June 30, 2018, cash provided by financing activities was $20.7 million and was\plain\cf1\f51\fs20\ql due primarily to proceeds from a term loan, net of fees, of $33.9 million and proceeds from the exercise of stock\plain\cf1\f51\fs20\ql options and our employee stock purchase plan of $0.3 million offset in part by repayment of our line of credit and\plain\sa264\cf1\f51\fs20\ql term loan with Western Alliance Bank of $13.5 million.\par\pard\plain\fi528\cf1\f51\fs20\ql During the six months ended June 30, 2017, cash provided by financing activities was $15.6 million and was\plain\cf1\f51\fs20\ql due primarily to proceeds from a follow-on offering of our common stock of $18.4 million, net of fees, proceeds\plain\cf1\f51\fs20\ql from exercise of stock options and our employee stock purchase plan of $0.4 million, and by net proceeds from our\plain\sa264\cf1\f51\fs20\ql line of credit of $0.2 million. These proceeds were offset in part by repayments on our term loan of $3.3 million.\par\pard\plain\sa264\cf1\f51\fs20\b\ql Off Balance Sheet Arrangements\par\pard\plain\fi792\cf1\f51\fs20\ql During the periods presented, we did not have any relationships with unconsolidated entities or financial\plain\cf1\f51\fs20\ql partnerships, such as entities often referred to as structured finance or special purpose entities, which would have\plain\cf1\f51\fs20\ql been established for the purpose of facilitating off balance sheet arrangements or other contractually narrow or\plain\sa264\cf1\f51\fs20\ql limited purpose.\par\pard\plain\sa264\cf1\f51\fs20\b\ql Credit Facility\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Western Alliance Bank Term Loan.\par\pard\plain\fi792\cf1\f51\fs20\ql The Company was a party to that certain Business Financing Agreement dated July\~7, 2016 and that certain\plain\cf1\f51\fs20\ql Second Business Financing Modification Agreement, dated September 29, 2017, by and between Western Alliance\plain\cf1\f51\fs20\ql Bank and the Company (\u8220?Credit Facility\u8221?). The Credit Facility provided for (i)\~a term loan of up to\plain\cf1\f51\fs20\ql $18.0 million (the \u8220?Term Loan\u8221?) and (ii)\~a revolving credit line advance (the \u8220?Line of\plain\cf1\f51\fs20\ql Credit\u8221?) in the aggregate amount of the lower of (x)\~$5.0 million and (y)\~80% of certain of the\plain\cf1\f51\fs20\ql Company\u8217?s receivables. The Term Loan bore interest at a rate per annum equal to the greater of the prime\plain\cf1\f51\fs20\ql rate or 3.5%, plus 0.75% and was scheduled to mature in June 2019.\~\~The Line of Credit bore interest at a rate per\plain\cf1\f51\fs20\ql annum equal to the greater of the prime rate or 3.5% plus 0.50%), and was scheduled to mature in July 2018. We\plain\cf1\f51\fs20\ql made interest-only payments on the Term Loan from July 2016 through September 2016 and began making interest\plain\cf1\f51\fs20\ql payments and principal payments in 33 equal monthly installments starting October 2016. Prior to the Amendment,\plain\cf1\f51\fs20\ql the Credit Facility provided that any indebtedness we incurred thereunder was collateralized by substantially all\plain\cf1\f51\fs20\ql assets of the Company and any domestic subsidiaries, subject to certain customary exceptions. We paid a facility fee\plain\cf1\f51\fs20\ql of $150,000 as well as a $25,000 diligence fee upon entry into the Credit Facility and an additional $10,000 on July\plain\cf1\f51\fs20\ql 7, 2017. Additional fees of $25,000 were incurred in connection with the amendment. These fees were recorded as\plain\sa264\cf1\f51\fs20\ql a debt discount and were amortized over the life of the agreement.\par\pard\plain\fi792\cf1\f51\fs20\ql Borrowings of $12.0 million under this facility were repaid in full in May 2018. In connection with the\plain\cf1\f51\fs20\ql repayment of this facility, the remaining unamortized debt discount of $66,000 was recorded as interest expense in\plain\sa264\cf1\f51\fs20\ql the condensed consolidated statements of operations.\~\~\~\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Cortland Capital Market Services LLC Term Loan.\par\pard\plain\fi792\cf1\f51\fs20\ql One May 8, 2018, we entered into a credit agreement with Cortland Capital Market Services LLC\plain\cf1\f51\fs20\ql (\u8220?Cortland\u8221?) (\u8220?Credit Agreement\u8221?). The Credit Agreement provides for\~a 1\plain\cf1\f51\fs10\ql st\plain\cf1\f51\fs20\ql lien senior\plain\cf1\f51\fs20\ql secured term loan of $35.0 million (\u8220?Term Loan\u8221?). The Term Loan bears interest at a rate per annum\plain\cf1\f51\fs20\ql equal to the sum of the Libor Rate plus 8.75% (2.34% on June 30, 2018) and is payable in consecutive quarterly\plain\cf1\f51\fs20\ql installments starting December 31, 2018. The Term Loan is scheduled to mature May 8, 2022.\~\~The Credit\plain\cf1\f51\fs20\ql Agreement provided that any indebtedness we incurred thereunder was collateralized by substantially all assets of\plain\sa264\cf1\f51\fs20\ql the Company and any domestic subsidiaries, subject to certain customary exceptions.\par\pard\plain\sb528\cf1\f51\fs20\qc 37\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\fi792\cf1\f51\fs20\ql The Credit Agreement contains customary representations and warranties and affirmative and negative\plain\cf1\f51\fs20\ql covenants, including maximum consolidated leverage ratios and minimum liquidity. Upon an occurrence of an event\plain\cf1\f51\fs20\ql of default, under the Credit Facility we could be required to pay interest on all outstanding obligations under the\plain\cf1\f51\fs20\ql agreement at a rate of 2% above the otherwise applicable interest rate, and the lender may accelerate our obligations\plain\sa264\cf1\f51\fs20\ql under the agreement. As of June 30, 2018, we were in compliance with all financial covenants and restrictions.\par\pard\plain\fi792\cf1\f51\fs20\ql In connection with the Credit Agreement, Cortland received a warrant to purchase 850,000 shares of\plain\cf1\f51\fs20\ql common stock at an exercise price of $8.30 and a term of six years. In addition, we paid financing costs of $1.1\plain\cf1\f51\fs20\ql million. The financing costs and the value of the warrant, $4.8 million, were recorded as a debt discount and are\plain\cf1\f51\fs20\ql being amortized over the life of the agreement. Amortization of debt discount was $0.2 million for the six months\plain\sa264\cf1\f51\fs20\ql ended in June 30, 2018.\par\pard\plain\sa264\cf1\f51\fs20\b\ql Contractual Obligations and Commitments\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql The following is a summary of our contractual obligations and commitments as of June 30, 2018: \par\pard\plain {\trowd\clvertalb\cellx1959\clvertalb\cellx2199\clvertalb\cellx2421\clvertalb\cellx3061\clvertalb\cellx3301\clvertalb\cellx3898\clvertalb\cellx4592\clvertalb\cellx4832\clvertalb\cellx5478\clvertalb\cellx6262\clvertalb\cellx6502\clvertalb\cellx7148\clvertalb\cellx7932\clvertalb\cellx8172\clvertalb\cellx8854\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx1959\clvertalb\cellx2199\clvertalb\cellx2421\clvertalb\cellx3061\clvertalb\cellx3301\clvertalb\cellx3898\clvertalb\cellx4592\clvertalb\cellx4832\clvertalb\cellx5478\clvertalb\cellx6262\clvertalb\cellx6502\clvertalb\cellx7148\clvertalb\cellx7932\clvertalb\cellx8172\clvertalb\cellx8854\clvertalb\cellx9688\trrh66\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1959\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2199\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2421\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3061\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3301\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\qc \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Payments\~due\~by\~period\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1959\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2199\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2421\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3061\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3301\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh199\row}}} {\trowd\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1959\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2199\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3061\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3301\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4592\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4832\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6263\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6503\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7934\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8174\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199 \pard\plain\intbl\cf1\f51\fs16\b\ql Contractual Obligations\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Total\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Less\~than\~1\~year\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 1\~\u8211?\~3\~Years\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc 4\~\u8211?\~5\~Years\cell\pard\plain\intbl\cf1\f51\fs16\b\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc More\~than\~5\~Years\cell{ {\trowd\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1959\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2199\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3061\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx3301\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4592\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx4832\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6263\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx6503\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx7934\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8174\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9686\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1959\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2199\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh199 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc (in\~thousands)\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1959\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2199\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx9687\trrh199\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1959\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2199\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2421\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3061\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3301\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3898\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4592\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4832\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5478\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6262\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6502\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7148\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7932\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8172\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8854\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249 \pard\plain\intbl\cf1\f51\fs20\ql Operating leases (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 8,033\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,844\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,342\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 2,733\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 114\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1959\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2199\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2421\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3061\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3301\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3898\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4592\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4832\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5478\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6262\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6502\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7148\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7932\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8172\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8854\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh249\row}}} {\trowd\clvertalb\cellx1959\clvertalb\cellx2199\clvertalb\cellx2421\clvertalb\cellx3061\clvertalb\cellx3301\clvertalb\cellx3898\clvertalb\cellx4592\clvertalb\cellx4832\clvertalb\cellx5478\clvertalb\cellx6262\clvertalb\cellx6502\clvertalb\cellx7148\clvertalb\cellx7932\clvertalb\cellx8172\clvertalb\cellx8854\clvertalb\cellx9688\trrh496 \pard\plain\intbl\cf1\f51\fs20\ql Inventory-related\plain\intbl\cf1\f51\fs20\ql commitments (2)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,394\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,394\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell{ {\trowd\clvertalb\cellx1959\clvertalb\cellx2199\clvertalb\cellx2421\clvertalb\cellx3061\clvertalb\cellx3301\clvertalb\cellx3898\clvertalb\cellx4592\clvertalb\cellx4832\clvertalb\cellx5478\clvertalb\cellx6262\clvertalb\cellx6502\clvertalb\cellx7148\clvertalb\cellx7932\clvertalb\cellx8172\clvertalb\cellx8854\clvertalb\cellx9688\trrh496\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1959\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2199\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2421\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3061\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3301\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3898\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4592\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4832\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5478\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6262\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6502\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7148\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7932\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8172\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8854\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh496 \pard\plain\intbl\cf1\f51\fs20\ql Financing\plain\intbl\cf1\f51\fs20\ql arrangements (3)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 35,000\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 1,167\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 3,500\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 30,333\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1959\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2199\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2421\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3061\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3301\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3898\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4592\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4832\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5478\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6262\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6502\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7148\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7932\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8172\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8854\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh496\row}}} {\trowd\clvertalb\cellx1959\clvertalb\cellx2199\clvertalb\cellx2421\clvertalb\cellx3061\clvertalb\cellx3301\clvertalb\cellx3898\clvertalb\cellx4592\clvertalb\cellx4832\clvertalb\cellx5478\clvertalb\cellx6262\clvertalb\cellx6502\clvertalb\cellx7148\clvertalb\cellx7932\clvertalb\cellx8172\clvertalb\cellx8854\clvertalb\cellx9688\trrh744 \pard\plain\intbl\cf1\f51\fs20\ql Joint Development and\plain\intbl\cf1\f51\fs20\ql Manufacturing\plain\intbl\cf1\f51\fs20\ql Agreement (4)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 400\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 400\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell{ {\trowd\clvertalb\cellx1959\clvertalb\cellx2199\clvertalb\cellx2421\clvertalb\cellx3061\clvertalb\cellx3301\clvertalb\cellx3898\clvertalb\cellx4592\clvertalb\cellx4832\clvertalb\cellx5478\clvertalb\cellx6262\clvertalb\cellx6502\clvertalb\cellx7148\clvertalb\cellx7932\clvertalb\cellx8172\clvertalb\cellx8854\clvertalb\cellx9688\trrh744\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1959\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2199\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2421\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3061\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3301\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3898\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4592\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4832\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5478\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6262\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6502\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7148\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7932\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8172\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8854\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh744 \pard\plain\intbl\cf1\f51\fs20\ql Licensing and\plain\intbl\cf1\f51\fs20\ql Development\plain\intbl\cf1\f51\fs20\ql Agreement (5)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 175\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 175\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1959\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2199\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2421\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3061\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3301\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3898\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4592\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4832\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5478\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6262\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6502\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7148\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7932\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8172\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8854\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh744\row}}} {\trowd\clvertalb\cellx1959\clvertalb\cellx2199\clbrdrb\brdrs\brdrcf1\clvertalb\cellx2421\clbrdrb\brdrs\brdrcf1\clvertalb\cellx3061\clvertalb\cellx3301\clbrdrb\brdrs\brdrcf1\clvertalb\cellx3898\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4592\clvertalb\cellx4832\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5478\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6262\clvertalb\cellx6502\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7148\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7932\clvertalb\cellx8172\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8854\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9688\trrh496 \pard\plain\intbl\cf1\f51\fs20\ql Acquisition of Echelon\plain\intbl\cf1\f51\fs20\ql Corp. (6)\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,410\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 4,410\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr \~\u8212?\cell{ {\trowd\clvertalb\cellx1959\clvertalb\cellx2199\clbrdrb\brdrs\brdrcf1\clvertalb\cellx2421\clbrdrb\brdrs\brdrcf1\clvertalb\cellx3061\clvertalb\cellx3301\clbrdrb\brdrs\brdrcf1\clvertalb\cellx3898\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4592\clvertalb\cellx4832\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5478\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6262\clvertalb\cellx6502\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7148\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7932\clvertalb\cellx8172\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8854\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9688\trrh496\row}}} {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1959\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2199\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2421\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3061\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3301\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3898\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4592\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4832\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5478\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6262\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6502\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7148\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7932\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8172\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8854\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh496 \pard\plain\intbl\cf1\f51\fs20\ql Total contractual cash\plain\intbl\cf1\f51\fs20\ql obligations\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 51,412\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 11,390\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 6,842\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 33,066\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql $\cell\pard\plain\intbl\ri66\cf1\f51\fs20\qr 114\cell{ {\trowd\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx1959\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2199\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx2421\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3061\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3301\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx3898\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4592\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx4832\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx5478\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6262\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx6502\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7148\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx7932\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8172\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx8854\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat12\clcbpat12\cellx9688\trrh496\row}}}\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par \par\pard\plain {\trowd\clvertalc\cellx1\cellx360\clvertalc\cellx361\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql Operating leases primarily relate to our leases of office space with terms expiring through July\~31, 2023.\cell{ {\trowd\clvertalc\cellx1\cellx360\clvertalc\cellx361\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx1\cellx360\clvertalc\cellx361\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql (2)\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql Represents outstanding purchase orders for wafer commitments that we have placed with our\plain\intbl\cf1\f51\fs20\ql suppliers as of June 30, 2018.\cell{ {\trowd\clvertalc\cellx1\cellx360\clvertalc\cellx361\cellx9688\trrh518\row}}} \par\pard\plain {\trowd\clvertalc\cellx1\cellx360\clvertalc\cellx361\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql (3)\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql Financing arrangements represent debt maturities under our new loan.\cell{ {\trowd\clvertalc\cellx1\cellx360\clvertalc\cellx361\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx1\cellx360\clvertalc\cellx361\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql (4)\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql Represents our commitments under the third amendment of the CBRAM Joint Development and Manufacturing\plain\intbl\cf1\f51\fs20\ql Agreement executed on November 22, 2017 with TowerJazz Panasonic Semiconductor Company.\cell{ {\trowd\clvertalc\cellx1\cellx360\clvertalc\cellx361\cellx9688\trrh518\row}}} \par\pard\plain {\trowd\clvertalc\cellx1\cellx360\clvertalc\cellx361\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql (5)\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql Represents our commitments under the Licensing and Development Agreement executed on April\~21, 2016 with\plain\intbl\cf1\f51\fs20\ql Semitech Semiconductor Pty,\~Ltd. or Semitech.\cell{ {\trowd\clvertalc\cellx1\cellx360\clvertalc\cellx361\cellx9688\trrh518\row}}} \par\pard\plain {\trowd\clvertalc\cellx1\cellx360\clvertalc\cellx361\cellx9688\trrh765 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\sa264\cf1\f51\fs20\ql (6)\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql Represents potential breakup fee if proposed merger between Adesto and Echelon Corporation is not\plain\intbl\sa264\cf1\f51\fs20\ql consummated.\cell{ {\trowd\clvertalc\cellx1\cellx360\clvertalc\cellx361\cellx9688\trrh765\row}}}\pard\plain\fi792\cf1\f51\fs20\ql As of June 30, 2018, we had a liability of $39,000 for uncertain tax positions.\par\pard\plain\fi792\cf1\f51\fs20\ql \~\par\pard\plain\fi792\cf1\f51\fs20\ql In May 2018, we entered into a new $35 million credit facility and terminated of our existing credit\plain\cf1\f51\fs20\ql facility, which included paying off the outstanding term loan thereunder.\par\pard\plain\cf1\f51\fs20\ql \~{\*\bkmkstart item_1_3_3}{\*\bkmkend item_1_3_3}\par\pard\plain\cf1\f51\fs20\b\ql Item\~3.Quantitative and Qualitative Disclosures About Market Risk{\*\bkmkstart item3quantitativeandqualitatived}{\*\bkmkend item3quantitativeandqualitatived}\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql We are exposed to market risks in the ordinary course of our business. These risks primarily include\plain\sa264\cf1\f51\fs20\ql foreign exchange rate and interest rate sensitivities as follows:\par\pard\plain\li528\sa264\cf1\f51\fs20\b\i\ql Foreign Currency Risk\par\pard\plain\fi792\cf1\f51\fs20\ql Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency\plain\sa264\cf1\f51\fs20\ql exchange rates.\par\pard\plain\sb528\cf1\f51\fs20\qc 38\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\fi792\cf1\f51\fs20\ql The majority of our revenue is denominated in U.S. dollars. Our expenses are generally denominated in the\plain\cf1\f51\fs20\ql currencies in which our operations are located, which is primarily in the United States and to a lesser extent in\plain\cf1\f51\fs20\ql Europe, Middle East and Africa, or EMEA, and APAC. Our results of operations and cash flows are, therefore,\plain\cf1\f51\fs20\ql subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the\plain\cf1\f51\fs20\ql future due to changes in foreign exchange rates. The effect of a hypothetical 10% change in foreign currency\plain\cf1\f51\fs20\ql exchanges rates applicable to our business would not have a material impact on our historical consolidated financial\plain\sa264\cf1\f51\fs20\ql statements.\par\pard\plain\fi792\cf1\f51\fs20\ql We have not hedged exposures denominated in foreign currencies or used any other derivative financial\plain\cf1\f51\fs20\ql instruments. Although we transact the substantial majority of our business in U.S. dollars, future fluctuations in the\plain\cf1\f51\fs20\ql value of the U.S. dollar may affect the competitiveness of our products and thus may impact our results of\plain\sa264\cf1\f51\fs20\ql operations and cash flows.\par\pard\plain\li528\sa264\cf1\f51\fs20\b\i\ql Interest Rate Sensitivity\par\pard\plain\fi792\cf1\f51\fs20\ql We had cash and cash equivalents of $7.9 million as of June 30, 2018, consisting of bank deposits and\plain\cf1\f51\fs20\ql money market funds. Such interest-earning instruments carry a degree of interest rate risk. To date, fluctuations in\plain\cf1\f51\fs20\ql interest income have not been significant. We also had total outstanding gross debt of $35 million offset by an\plain\cf1\f51\fs20\ql unamortized debt discount of approximately $5.6 million as of June 30, 2018. The outstanding debt relates to a term\plain\cf1\f51\fs20\ql loan described in section entitled \u8220?Management\u8217?s Discussion and Analysis of Financial Condition and\plain\sa264\cf1\f51\fs20\ql Results of Operations\~\u8211? Credit Facility\u8221?.\par\pard\plain\fi792\cf1\f51\fs20\ql We do not enter into investments for trading or speculative purposes and have not used any derivative\plain\cf1\f51\fs20\ql financial instruments to manage our interest rate risk exposure. We have not been exposed to, nor do we anticipate\plain\cf1\f51\fs20\ql being exposed to, material risks due to changes in interest rates. Our exposure to interest rates relates to the change\plain\cf1\f51\fs20\ql in the amounts of interest we must pay on our variable rate borrowings. A hypothetical 10% increase in our\plain\cf1\f51\fs20\ql borrowing rates would not have a material impact on interest expense on our principal balances as of June 30, 2018.\par\pard\plain\cf1\f51\fs20\ql \~{\*\bkmkstart item_1_3_4}{\*\bkmkend item_1_3_4}\par\pard\plain\cf1\f51\fs20\b\ql Item\~4.Controls and Procedures.{\*\bkmkstart item4controlsandprocedures_55437}{\*\bkmkend item4controlsandprocedures_55437} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1080\clvertalc\cellx1081\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\sa264\cf1\f51\fs20\b\ql (a)\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\sa264\cf1\f51\fs20\b\i\ql Disclosure Controls and Procedures\cell{ {\trowd\clvertalc\cellx720\cellx1080\clvertalc\cellx1081\cellx9688\trrh518\row}}}\pard\plain\fi792\cf1\f51\fs20\ql We maintain \u8220?disclosure controls and procedures,\u8221? as such term is defined in\plain\cf1\f51\fs20\ql Rule\~13a\u8209?15(e)\~under the Securities Exchange Act of 1934 (the \u8220?Exchange Act\u8221?), that are\plain\cf1\f51\fs20\ql designed to ensure that information required to be disclosed by us in reports that we file or submit under the\plain\cf1\f51\fs20\ql Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and\plain\cf1\f51\fs20\ql Exchange Commission rules\~and forms, and that such information is accumulated and communicated to our\plain\cf1\f51\fs20\ql management, including our Chief Executive Officer (\u8220?CEO\u8221?) and Chief Financial Officer\plain\sa264\cf1\f51\fs20\ql (\u8220?CFO\u8221?), as appropriate, to allow timely decisions regarding required disclosure.\par\pard\plain\fi792\cf1\f51\fs20\ql Our management is responsible for establishing and maintaining our disclosure controls and\plain\cf1\f51\fs20\ql procedures.\~Under the supervision and with the participation of our management, including our CEO and CFO, we\plain\cf1\f51\fs20\ql conducted an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2018. Based\plain\cf1\f51\fs20\ql on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of\plain\sa264\cf1\f51\fs20\ql June 30, 2018. \par\pard\plain {\trowd\clvertalc\cellx720\cellx1080\clvertalc\cellx1081\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\sa264\cf1\f51\fs20\b\ql (b)\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\sa264\cf1\f51\fs20\b\i\ql Changes in Internal Control over Financial Reporting\cell{ {\trowd\clvertalc\cellx720\cellx1080\clvertalc\cellx1081\cellx9688\trrh518\row}}}\pard\plain\fi792\cf1\f51\fs20\ql There were no changes in our internal control over financial reporting that occurred during the six months\plain\cf1\f51\fs20\ql ended June 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control\plain\cf1\f51\fs20\ql over financial reporting (as defined in Rules\~13a\u8209?15(f)\~and 15d\u8209?15(f)\~under the Exchange Act). Internal\plain\cf1\f51\fs20\ql control over financial reporting means a process designed to provide reasonable assurance regarding the reliability\plain\cf1\f51\fs20\ql of financial reporting and the preparation of financial statements for external purposes in accordance with generally\plain\cf1\f51\fs20\ql accepted accounting principles.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sb528\cf1\f51\fs20\qc 39\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}{\*\bkmkstart part_1_2_2}{\*\bkmkend part_1_2_2}\par\pard\plain\cf1\f51\fs20\b\qc PART\~II: OTHER INFORMATION{\*\bkmkstart partiiotherinformation_640460_12}{\*\bkmkend partiiotherinformation_640460_12}{\*\bkmkstart item_1_3_5}{\*\bkmkend item_1_3_5}\par\pard\plain\sa264\cf1\f51\fs20\b\ql ITEM\~1.Legal Proceedings{\*\bkmkstart item1legalproceedings_176438_124}{\*\bkmkend item1legalproceedings_176438_124}\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql We are not currently a party to any legal proceedings which, if determined adversely to us, would\plain\cf1\f51\fs20\ql individually or in the aggregate have a material adverse effect on our business, operating results, financial condition\plain\cf1\f51\fs20\ql or cash flows. We may, from time to time, become involved in legal proceedings arising in the ordinary course of\plain\cf1\f51\fs20\ql our business and as our business grows, we may become a party to an increasing number of legal proceedings.\par\pard\plain\cf1\f51\fs20\ql \~{\*\bkmkstart item_1_3_6}{\*\bkmkend item_1_3_6}\par\pard\plain\cf1\f51\fs20\b\ql ITEM\~1A.Risk Factors{\*\bkmkstart item1ariskfactors_223749_1240162}{\*\bkmkend item1ariskfactors_223749_1240162}\par\pard\plain\sa264\fi792\cf1\f51\fs20\i\ql An investment in our common stock involves a high degree of risk. You should carefully consider the risks\plain\cf1\f51\fs20\i\ql and uncertainties described below, together with all of the other information in this Quarterly Report on\plain\cf1\f51\fs20\i\ql Form\~10\u8209?Q, including the section titled \u8220?Management\u8217?s Discussion and Analysis of Financial\plain\cf1\f51\fs20\i\ql Condition and Results of Operations\u8221? and our condensed consolidated financial statements and related notes,\plain\cf1\f51\fs20\i\ql before making a decision to invest in our common stock. Our business, operating results, financial condition, or\plain\cf1\f51\fs20\i\ql prospects could be materially and adversely affected by any of these risks and uncertainties. If any of these risks\plain\cf1\f51\fs20\i\ql actually occurs, the trading price of our common stock could decline and you might lose all or part of your\plain\cf1\f51\fs20\i\ql investment. Our business, operating results, financial performance, or prospects could also be harmed by risks and\plain\sa264\cf1\f51\fs20\i\ql uncertainties not currently known to us or that we currently do not believe are material.\par\pard\plain\sa264\cf1\f51\fs20\b\ql Risks Related to Our Business and Our Industry\par\pard\plain\cf1\f51\fs20\b\i\ql We have a history of losses which may continue in the future, and we cannot be certain that we will achieve or\plain\cf1\f51\fs20\b\i\ql sustain profitability.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql We have incurred net losses since our inception. We incurred net losses of $5.7 million, $11.6 million, and $8.4\plain\cf1\f51\fs20\ql million for the years ended December\~31, 2017, 2016 and 2015, respectively, and $1.1 million during the first three\plain\cf1\f51\fs20\ql months of 2018. As of March\~31, 2018, we had an accumulated deficit of $100.9 million. We expect to incur\plain\cf1\f51\fs20\ql significant expenses related to the continued development and expansion of our business, including in connection\plain\cf1\f51\fs20\ql with our efforts to pursue opportunities in emerging IoT markets, develop and improve upon our products and\plain\cf1\f51\fs20\ql technology, maintain and enhance our research and development and sales and marketing activities and hire\plain\cf1\f51\fs20\ql additional personnel. Further, revenue may not grow or revenue may decline for a number of possible reasons,\plain\cf1\f51\fs20\ql many of which are outside our control, including a decline in demand for our products, increased competition,\plain\cf1\f51\fs20\ql business conditions that adversely affect the semiconductor industry, including reduced demand for products in the\plain\cf1\f51\fs20\ql end markets that we serve, or our failure to capitalize on growth opportunities. If we fail to generate sufficient\plain\cf1\f51\fs20\ql revenue to support our operations, we may not be able to achieve or sustain profitability.\par\pard\plain\fi396\cf1\f51\fs24\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql We rely on third parties to manufacture, package, assemble and test the semiconductor components comprising\plain\cf1\f51\fs20\b\i\ql our products, which exposes us to a number of risks, including reduced control over manufacturing and delivery\plain\cf1\f51\fs20\b\i\ql timing and potential exposure to price fluctuations, which could result in a loss of revenue or reduced\plain\cf1\f51\fs20\b\i\ql profitability.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql As a fabless semiconductor company, we outsource the manufacturing, packaging, assembly and testing of our\plain\cf1\f51\fs20\ql semiconductor components to, and rely on a limited number of, third-party foundries and assembly and testing\plain\cf1\f51\fs20\ql service providers. For example, we use two foundries, United Microelectronics Corporation in Taiwan and XMC in\plain\cf1\f51\fs20\ql Wuhan, China, for the production of our flash memory products and a single foundry, Altis Semiconductor S.N.C.\plain\cf1\f51\fs20\ql in France (acquired by X-FAB Silicon Foundries in 2016), for our Mavriq and Moneta products. Our primary\plain\cf1\f51\fs20\ql assembly and testing contractor is Amkor Technology,\~Inc. in Taiwan, Korea and the Philippines. Our wafer probing\plain\cf1\f51\fs20\ql is performed by King Yuan Electronics Co.,\~Ltd. in Taiwan.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Relying on third-party manufacturing, assembly and testing presents a number of risks, including but not\plain\cf1\f51\fs20\ql limited to:\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql capacity and materials shortages during periods of high demand;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql reduced control over delivery schedules, inventories and quality;\par\pard\plain\sb528\cf1\f51\fs20\qc 40\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql the unavailability of, or potential delays in obtaining access to, key process technologies;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql the inability to achieve required production or test capacity and acceptable yields on a timely basis;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql misappropriation of our intellectual property;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql the third parties\u8217? ability to perform its obligations due to bankruptcy or other financial constraints;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql limited warranties on wafers or products supplied to us; and\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql potential increases in prices.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Any of the foregoing risks may affect our ability to meet customer demand. For example, a former silicon\plain\cf1\f51\fs20\ql wafer supplier suddenly declared bankruptcy in December\~2013 and abruptly shut down its foundry. As a result, we\plain\cf1\f51\fs20\ql were unable to fulfill a portion of our customers\u8217? orders in 2014 while we transitioned wafer production to a\plain\cf1\f51\fs20\ql new foundry. Based on the average selling prices then in effect for those wafers, we estimate that the potential loss\plain\cf1\f51\fs20\ql of revenue exceeded $10.0 million.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql We currently do not have long-term supply contracts with our third-party contract manufacturers for the\plain\cf1\f51\fs20\ql products we sell to generate the bulk of our revenue, our DataFlash and Fusion Serial Flash products, including\plain\cf1\f51\fs20\ql United Microelectronics Corporation and Amkor Technology,\~Inc. Therefore, they are not obligated to perform\plain\cf1\f51\fs20\ql services or supply components to us for any specific period, in any specific quantities, or at any specific price,\plain\cf1\f51\fs20\ql except as may be provided in a particular purchase order. During periods of high demand and tight inventories, our\plain\cf1\f51\fs20\ql third-party foundries and assembly and testing contractors may allocate capacity to the production of other\plain\cf1\f51\fs20\ql companies\u8217? components while reducing deliveries to us, or significantly raise their prices. In particular, they\plain\cf1\f51\fs20\ql may allocate capacity to other customers that are larger and better financed than us or that have long-term\plain\cf1\f51\fs20\ql agreements, decreasing the capacity available to us. Shortages of capacity available to us may be caused by the\plain\cf1\f51\fs20\ql actions of their other, large customers that may be difficult to predict, such as major product launches. If we need\plain\cf1\f51\fs20\ql other foundries or assembly and test contractors because of increased demand, or if we are unable to obtain timely\plain\cf1\f51\fs20\ql and adequate deliveries from our providers, we might not be able to cost-effectively and quickly retain other\plain\cf1\f51\fs20\ql vendors to satisfy our requirements. Because the lead-time needed to establish a relationship with a new third-party\plain\cf1\f51\fs20\ql supplier could be several quarters, there is no readily available alternative source of supply for any specific\plain\cf1\f51\fs20\ql component. In addition, the time and expense to qualify a new foundry could result in additional expense, diversion\plain\cf1\f51\fs20\ql of resources or lost sales, any of which would negatively impact our financial results.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql In the event that we expand production of a component to include a new contract manufacturer, it may take\plain\cf1\f51\fs20\ql approximately 18 to 24 months to allow a transition from our current foundry or assembly services provider to the\plain\cf1\f51\fs20\ql new provider. We may experience difficulty migrating production to a new contract manufacturer and, consequently,\plain\cf1\f51\fs20\ql may experience reduced yields, delays in component deliveries and increased research and development expense.\plain\cf1\f51\fs20\ql The inability by us or our third-party manufacturers to effectively and efficiently transition our technology to their\plain\cf1\f51\fs20\ql infrastructure may adversely affect our operating results and our gross margin. There can be no assurance that we\plain\cf1\f51\fs20\ql will be able to find suitable replacements for our third-party contract manufacturers.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql If any of our current or future foundry partners or assembly and test subcontractors significantly increases the\plain\cf1\f51\fs20\ql costs of wafers or other materials, interrupts or reduces our supply, including for reasons outside of their control, or\plain\cf1\f51\fs20\ql if any of our relationships with our suppliers is terminated, our operating results could be adversely affected. During\plain\cf1\f51\fs20\ql 2017, one of our foundry partners increased the costs of wafers to us. Although such increase did not have a\plain\cf1\f51\fs20\ql material impact on our results of operations for the three months ended March\~31, 2018 and is not expected to have\plain\cf1\f51\fs20\ql a material impact in the near term, there can be no assurances that such additional increases will not have a material\plain\cf1\f51\fs20\ql adverse impact on our future operating results. Such increases could also damage our customer relationships, result\plain\cf1\f51\fs20\ql in lost revenue, cause a loss in market share or damage our reputation\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql We may be unable to match production with customer demand for a variety of reasons including our inability to\plain\cf1\f51\fs20\b\i\ql accurately forecast customer demand or the capacity constraints of contract manufacturers, which could\plain\cf1\f51\fs20\b\i\ql adversely affect our operating results.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql We make planning and spending decisions, including determining production levels, production schedules,\plain\cf1\f51\fs20\ql component procurement commitments, personnel needs and other resource requirements, based on our estimates of\plain\cf1\f51\fs20\ql product demand and customer requirements. Our products are typically purchased pursuant to individual purchase\par\pard\plain\sb528\cf1\f51\fs20\qc 41\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\ql orders. While our customers may provide us with their demand forecasts, they are not contractually committed to\plain\cf1\f51\fs20\ql buy any quantity of products beyond purchase orders. Furthermore, many of our customers may increase, decrease,\plain\cf1\f51\fs20\ql cancel or delay purchase orders already in place without significant penalty. The short-term nature of commitments\plain\cf1\f51\fs20\ql by our customers and the possibility of unexpected changes in demand for their products reduce our ability to\plain\cf1\f51\fs20\ql accurately estimate future customer requirements. On occasion, customers may require rapid increases in production,\plain\cf1\f51\fs20\ql which can strain our resources, necessitate more onerous procurement commitments and reduce our gross margin. If\plain\cf1\f51\fs20\ql we overestimate customer demand, we may purchase products that we may not be able to sell, which could result in\plain\cf1\f51\fs20\ql decreases in our prices or write-downs of unsold inventory. Conversely, if we underestimate customer demand or if\plain\cf1\f51\fs20\ql sufficient manufacturing capacity was unavailable, we would lose sales opportunities and could lose market share or\plain\cf1\f51\fs20\ql damage our customer relationships. The rapid pace of innovation in our industry could also render significant\plain\cf1\f51\fs20\ql portions of our inventory obsolete. Excess or obsolete inventory levels could result in unexpected expenses or\plain\cf1\f51\fs20\ql write-downs of inventory values that could adversely affect our business, operating results and financial condition.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql Our quarterly operating results or other operating metrics may fluctuate significantly, which could cause the\plain\cf1\f51\fs20\b\i\ql trading price of our common stock to decline.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our quarterly operating results and other operating metrics have fluctuated in the past and may continue to\plain\cf1\f51\fs20\ql fluctuate from quarter to quarter. We expect that this trend will continue as a result of a number of factors, many of\plain\cf1\f51\fs20\ql which are outside of our control and may be difficult to predict, including:\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql the receipt, reduction, delay or cancellation of orders by large customers;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql the gain or loss of significant customers and distributors;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql the timing and success of our launch of new or enhanced products and those of our competitors;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql market acceptance of our products and our customers\u8217? products;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql the level of growth or decline in the IoT market;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql the timing and extent of research and development and sales and marketing expenditures;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql the amount and timing of operating expenses related to the maintenance and expansion of our business,\plain\li792\cf1\f51\fs20\ql operations and infrastructure;\~\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql changes in our product mix;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql our ability to reduce the manufacturing costs of our products;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql competitive pressures resulting in lower than expected average selling prices;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql fluctuations in sales by and inventory levels of original equipment manufacturers and original design\plain\li792\cf1\f51\fs20\ql manufacturers, OEMs and ODMs, respectively, who incorporate our products in their products;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql cyclical and seasonal fluctuations in our markets;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql fluctuations in the manufacturing yields of our third-party contract manufacturers;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql events that impact the availability of production capacity at our third-party subcontractors and other\plain\li792\cf1\f51\fs20\ql interruptions in the supply chain including due to geopolitical events, natural disasters, materials shortages,\plain\li792\cf1\f51\fs20\ql bankruptcy or other causes;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql supply constraints for and changes in the cost of the other components incorporated into our\plain\li792\cf1\f51\fs20\ql customers\u8217? products;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql the timing of expenses related to the acquisition and integration of technologies or businesses;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql product rates of return or price concessions in excess of those expected or forecasted;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql costs associated with the repair and replacement of defective products;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql unexpected inventory write-downs or write-offs;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql costs associated with litigation over intellectual property rights and other litigation;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql the length and unpredictability of the purchasing and budgeting cycles of our customers;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql loss of key personnel or the inability to attract qualified engineers; and\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql geopolitical events, such as war, threat of war or terrorist actions, or the occurrence of natural disasters.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Any one of the factors above or the cumulative effect of some of the factors above may result in significant\plain\cf1\f51\fs20\ql fluctuations in our operating results.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sb528\cf1\f51\fs20\qc 42\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\fi396\cf1\f51\fs20\ql The semiconductor industry is highly cyclical and our markets may experience significant cyclical fluctuations\plain\cf1\f51\fs20\ql in demand as a result of changing economic conditions, budgeting and buying patterns of customers and others\plain\cf1\f51\fs20\ql factors. As a result of these and other factors affecting demand for our products and our results of operations in any\plain\cf1\f51\fs20\ql given period, the results of any prior quarterly or annual periods should not be relied upon as indicative of our\plain\cf1\f51\fs20\ql future revenue or operating performance. Fluctuations in our revenue and operating results could also cause our\plain\cf1\f51\fs20\ql stock price to decline.\par\pard\plain\fi396\cf1\f51\fs24\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql We may experience difficulties in realizing the expected benefits of the acquisitions of S3 Semiconductors and, if\plain\cf1\f51\fs20\b\i\ql completed, Echelon Corporation and may continue to incur significant acquisition-related costs and transition\plain\cf1\f51\fs20\b\i\ql costs in connection with these completed or proposed acquisitions.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql We completed the acquisition of S3 on May\~9, 2018. The integration has resulted in and continues to result in\plain\cf1\f51\fs20\ql substantial financial costs and the investment of personnel time and attention and other resources. Similarly, if we\plain\cf1\f51\fs20\ql complete our proposed acquisition of Echelon, we expect to invest significant resources to integrate our two\plain\cf1\f51\fs20\ql companies.\~ The success of each acquisition depends in part on our ability to realize the anticipated business\plain\cf1\f51\fs20\ql opportunities, including certain cost savings and operational efficiencies or synergies, and growth prospects from\plain\cf1\f51\fs20\ql combining the respective companies with Adesto in an efficient and effective manner. We may never realize these\plain\cf1\f51\fs20\ql business opportunities and growth prospects and, in the case of Echelon, we may not complete the acquisition.\~We\plain\cf1\f51\fs20\ql may incur additional costs to maintain employee morale and to retain key employees. Management cannot ensure\plain\cf1\f51\fs20\ql that the elimination of duplicative costs or the realization of other efficiencies will offset the transaction and\plain\cf1\f51\fs20\ql integration costs in the near term or at all.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Additionally, we may encounter difficulties surrounding the integration of these companies following\plain\cf1\f51\fs20\ql acquisition, which could delay or prevent our achievement of the expected benefits from the respective acquisition.\~\plain\cf1\f51\fs20\ql Moreover, risks specific to the acquired businesses and the sectors of the semiconductor market in which they\plain\cf1\f51\fs20\ql compete could also delay or prevent our achievement of the expected benefits from the respective acquisition.\par\pard\plain\fi792\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql The market for semiconductor products is characterized by declines in average selling prices, which we expect to\plain\cf1\f51\fs20\b\i\ql continue, and which could negatively affect our revenue and margins.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our customers expect the average selling price of our products to decrease year-over-year and we expect this\plain\cf1\f51\fs20\ql trend to continue. When such pricing declines occur, we may not be able to mitigate the effects by selling more or\plain\cf1\f51\fs20\ql higher margin units, or by reducing our manufacturing costs. In such circumstances, our operating results could be\plain\cf1\f51\fs20\ql materially and adversely affected. Our flash memory products have experienced declining average selling prices\plain\cf1\f51\fs20\ql over their life cycle. The prices of the products sold by S3 Semiconductors and Echelon have reflected a similar\plain\cf1\f51\fs20\ql pattern. The rate of decline may be affected by a number of factors, including relative supply and demand, the level\plain\cf1\f51\fs20\ql of competition, production costs and technological changes. As a result of the decreasing average selling prices of\plain\cf1\f51\fs20\ql our products following their launch, our ability to increase or maintain our margins depends on our ability to\plain\cf1\f51\fs20\ql introduce new or enhanced products with higher average selling prices and to reduce our per-unit cost of sales and\plain\cf1\f51\fs20\ql our operating costs. We may not be able to reduce our costs as rapidly as companies that operate their own\plain\cf1\f51\fs20\ql manufacturing, assembly and testing facilities, and our costs may even increase because we do not operate our own\plain\cf1\f51\fs20\ql manufacturing, assembly or testing facilities, which could also reduce our gross margins. In addition, our new or\plain\cf1\f51\fs20\ql enhanced products may not be as successful or enjoy as high margins as we expect. If we are unable to offset any\plain\cf1\f51\fs20\ql reductions in average selling prices by introducing new products with higher average selling prices or reducing our\plain\cf1\f51\fs20\ql costs, our revenue and margins will be negatively affected and may decrease.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql The semiconductor market is highly cyclical and has experienced severe downturns in the past, generally as a\plain\cf1\f51\fs20\ql result of wide fluctuations in supply and demand, constant and rapid technological change, continuous new product\plain\cf1\f51\fs20\ql introductions and price erosion. During downturns, periods of intense competition, or the presence of oversupply in\plain\cf1\f51\fs20\ql the industry, the selling prices for our products may decline at a high rate over relatively short time periods as\plain\cf1\f51\fs20\ql compared to historical rates of decline. We are unable to predict selling prices for any future periods and may\plain\cf1\f51\fs20\ql experience unanticipated, sharp declines in selling prices for our products.\par\pard\plain\fi792\cf1\f51\fs24\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql Our prospects for growth depends on the growth and development of the emerging IoT industry, and if the\plain\cf1\f51\fs20\b\i\ql market does not develop as we expect, our business prospects may be harmed.\par\pard\plain\sb528\cf1\f51\fs20\qc 43\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our products are increasingly being utilized in IoT edge devices. The IoT industry is nascent and is\plain\cf1\f51\fs20\ql characterized by rapidly changing technologies, devices and connectivity requirements, evolving industry standards\plain\cf1\f51\fs20\ql and changing customer demands. The continued development of IoT depends in part on significant growth in the\plain\cf1\f51\fs20\ql number of connected devices. Such growth is affected by various factors, including the continued growth in the use\plain\cf1\f51\fs20\ql of mobile operator networks and the Internet to connect an increasing number and variety of devices, price\plain\cf1\f51\fs20\ql reductions for key hardware and software components, innovation of other components of the IoT nodes toward\plain\cf1\f51\fs20\ql low-power formats, and the continued development of IoT standards and protocols. Without these continued\plain\cf1\f51\fs20\ql developments,\~IoT might not gain widespread market acceptance and our business could suffer. Security and privacy\plain\cf1\f51\fs20\ql concerns, evolving business practices and consumer preferences may also slow the growth and development of IoT.\plain\cf1\f51\fs20\ql Because our revenue growth ultimately depends upon the success of IoT, our business may suffer as a result of\plain\cf1\f51\fs20\ql slowing or declining growth in IoT adoption. Even if the IoT industry does develop, we may not be well positioned\plain\cf1\f51\fs20\ql or able to penetrate and capitalize on this new market. As a result of these factors, the future revenue and income\plain\cf1\f51\fs20\ql potential of our business is uncertain.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql The markets for our products are evolving, and changing market conditions, such as the introduction of new\plain\cf1\f51\fs20\b\i\ql technologies or changes in customer preferences, may negatively affect demand for our products. If we fail to\plain\cf1\f51\fs20\b\i\ql properly anticipate or respond to changing market conditions, our business prospects and results of operations\plain\cf1\f51\fs20\b\i\ql will suffer.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql The semiconductor industry is subject to constant and rapid changes in technology, frequent new product\plain\cf1\f51\fs20\ql introductions, short product life cycles, rapid product obsolescence and evolving technical standards. New\plain\cf1\f51\fs20\ql technologies may be introduced that make the current technologies on which our products are based less competitive\plain\cf1\f51\fs20\ql or obsolete or require us to make changes to our technology that could be expensive and time consuming to\plain\cf1\f51\fs20\ql implement. Due to the evolving nature of our markets, our future success depends on our ability to accurately\plain\cf1\f51\fs20\ql anticipate and respond to changes in industry standards, technological requirements, customer and consumer\plain\cf1\f51\fs20\ql preferences and other market conditions. Our technologies could become obsolete sooner than we expect because of\plain\cf1\f51\fs20\ql faster than anticipated, or unanticipated, changes in one or more of the industry standards and technological\plain\cf1\f51\fs20\ql requirements. We may be unable to develop and introduce new or enhanced technologies that satisfy customer\plain\cf1\f51\fs20\ql requirements and achieve market acceptance in a timely manner or at all, succeed in commercializing the\plain\cf1\f51\fs20\ql technologies on which we have focused our research and development expenditures to develop or otherwise made\plain\cf1\f51\fs20\ql significant investments to acquire, and anticipate new industry standards and technological changes. If we fail to\plain\cf1\f51\fs20\ql adapt successfully to technological changes or fail to obtain access to important new technologies, we may be\plain\cf1\f51\fs20\ql unable to retain customers or attract new customers. Any decrease in demand for our products, or the need for\plain\cf1\f51\fs20\ql low-power products in general, due to the emergence of competing technologies, changes in customer preferences\plain\cf1\f51\fs20\ql and requirements or other factors, could adversely affect our business, results of operations and prospects.\par\pard\plain\fi792\cf1\f51\fs24\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql We must continuously develop new and enhanced products, and if we are unable to successfully market our new\plain\cf1\f51\fs20\b\i\ql and enhanced products for which we incur significant expenses to develop, our results of operations and\plain\cf1\f51\fs20\b\i\ql financial condition will be materially adversely affected.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql In order to compete effectively in our markets, we must continually design, develop and introduce new and\plain\cf1\f51\fs20\ql improved products with improved features in a cost-effective manner in response to changing technologies and\plain\cf1\f51\fs20\ql market demand. This requires us to devote substantial financial and other resources to research and development.\plain\cf1\f51\fs20\ql We have developed and are continuing to develop next-generation products, such as our Moneta and EcoXiP\plain\cf1\f51\fs20\ql products, which we expect to be one of the drivers of our future revenue growth. However, we may not succeed in\plain\cf1\f51\fs20\ql developing and marketing these new and enhanced products. We also face the risk that customers may not value or\plain\cf1\f51\fs20\ql be willing to bear the cost of incorporating our new and enhanced products into their products, particularly if they\plain\cf1\f51\fs20\ql believe their customers are satisfied with current solutions. Regardless of the improved features or superior\plain\cf1\f51\fs20\ql performance of our new and enhanced products, customers may be unwilling to adopt our solutions due to design or\plain\cf1\f51\fs20\ql pricing constraints, or because they do not want to rely on a single or limited supply source. Because of the\plain\cf1\f51\fs20\ql extensive time and resources that we invest in developing new and enhanced products, if we are unable to sell\plain\cf1\f51\fs20\ql customers new generations of our products, our revenue could decline and our business, financial condition, results\plain\cf1\f51\fs20\ql of operations and cash flows would be negatively affected. For example, we generated limited revenue from sales of\plain\cf1\f51\fs20\ql our Mavriq products to date. While we expect revenue from our Mavriq products to grow, we may not be able to\plain\cf1\f51\fs20\ql materially increase our revenue from this product family. Similarly, any of our more recently-introduced products\plain\cf1\f51\fs20\ql or product families based on CBRAM or floating gate architecture, such as Moneta\par\pard\plain\sb528\cf1\f51\fs20\qc 44\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\ql and EcoXiP, may not achieve market acceptance and contribute significantly to our revenue. If we are unable to\plain\cf1\f51\fs20\ql successfully develop and market our new and enhanced products that we have incurred significant expenses\plain\cf1\f51\fs20\ql developing, our results of operations and financial condition will be materially and adversely affected.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql Our success and future revenue depend on our ability to secure design wins and on our customers\u8217? ability\plain\cf1\f51\fs20\b\i\ql to successfully sell the products that incorporate our solutions. Securing design wins is a lengthy, expensive and\plain\cf1\f51\fs20\b\i\ql competitive process, and may not result in actual orders and sales, which could cause our revenue to decline.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql We sell to customers that incorporate our products into their products. A design win occurs after a customer\plain\cf1\f51\fs20\ql has tested our product, verified that it meets the customer\u8217?s requirements, qualified our solutions for their\plain\cf1\f51\fs20\ql products and placed an order for the purchase of our products. Our customers may need several months to years to\plain\cf1\f51\fs20\ql test, evaluate and adopt our product and additional time to begin volume production of the product that incorporates\plain\cf1\f51\fs20\ql our solution. Due to this generally lengthy design cycle, we may experience significant delays from the time we\plain\cf1\f51\fs20\ql increase our operating expenses and make investments in our products to the time that we generate revenue from\plain\cf1\f51\fs20\ql sales of these products. Moreover, even if a customer selects our solution, we cannot guarantee that this will result\plain\cf1\f51\fs20\ql in any sales of our products, as the customer may ultimately change or cancel its product plans, or efforts by our\plain\cf1\f51\fs20\ql customer to market and sell its product may not be successful. We may not generate any revenue from design wins\plain\cf1\f51\fs20\ql after incurring the associated costs, which would cause our business and operating results to suffer.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql If a current or prospective customer designs a competitor\u8217?s solution into its product, it becomes\plain\cf1\f51\fs20\ql significantly more difficult for us to sell our solutions to that customer because changing suppliers involves\plain\cf1\f51\fs20\ql significant time, cost, effort and risk for the customer even if our solutions remain compatible with their product\plain\cf1\f51\fs20\ql design. If current or prospective customers do not include our solutions in their products and we fail to achieve a\plain\cf1\f51\fs20\ql sufficient number of design wins, our results of operations and business may be harmed.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql We rely on our relationships with OEMs and ODMs to enhance our solutions and market position, and our\plain\cf1\f51\fs20\b\i\ql failure to continue to develop or maintain such relationships in the future would harm our ability to remain\plain\cf1\f51\fs20\b\i\ql competitive.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql We develop our products for leading OEMs and ODMs that serve a variety of end markets and are developing\plain\cf1\f51\fs20\ql devices for wearables, sensors, Bluetooth 4.0 and other IoT applications. For each application, manufacturers create\plain\cf1\f51\fs20\ql products that incorporate specialized semiconductor technology, which makers of semiconductor products use as the\plain\cf1\f51\fs20\ql basis for their products. These manufacturers set the specifications for many of the key components to be used on\plain\cf1\f51\fs20\ql each generation of their products and, in the case of memory components, generally qualify only a few vendors to\plain\cf1\f51\fs20\ql provide memory components for their products. As each new generation of their products is released, vendors are\plain\cf1\f51\fs20\ql validated in a similar fashion. We must work closely with semiconductor manufacturers to ensure our products\plain\cf1\f51\fs20\ql become qualified for use in their products. As a result, maintaining close relationships with leading product\plain\cf1\f51\fs20\ql manufacturers that are developing devices for wearables, Bluetooth 4.0 and other IoT applications is crucial to the\plain\cf1\f51\fs20\ql long-term success of our business. We could lose these relationships for a variety of reasons, including our failure\plain\cf1\f51\fs20\ql to qualify as a vendor, our failure to demonstrate the value of our new solutions, declines in product quality, or if\plain\cf1\f51\fs20\ql OEMs or ODMs seek to work with vendors with broader product suites, greater production capacity or greater\plain\cf1\f51\fs20\ql financial resources. If our relationships with key industry participants were to deteriorate or if our solutions were\plain\cf1\f51\fs20\ql not qualified by our customers, our market position and revenue could be materially and adversely affected.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql Our business is dependent on selling through distributors.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Sales through distributors accounted for approximately 74% of our revenues in 2017 and 75% during the first\plain\cf1\f51\fs20\ql six months of 2018. We do not have long-term agreements with our distributors, and we and our distributors may\plain\cf1\f51\fs20\ql each terminate our relationship with little or no advance notice.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Any future adverse conditions in the U.S. or global economies or in the U.S. or global credit markets could\plain\cf1\f51\fs20\ql materially impact the operations of our distributors. Any deterioration in the financial condition of our distributors\plain\cf1\f51\fs20\ql or any disruption in the operations of our distributors could adversely impact the flow of our products to our end\plain\cf1\f51\fs20\ql customers and adversely impact our results of operation. In addition, during an industry or economic downturn, it is\plain\cf1\f51\fs20\ql possible there will be an oversupply of products and a decrease in demand for our products from our distributors,\plain\cf1\f51\fs20\ql which could reduce our\par\pard\plain\sb528\cf1\f51\fs20\qc 45\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\ql revenues in a given period. Violations of the Foreign Corrupt Practices Act and similar regulations, or similar laws,\plain\cf1\f51\fs20\ql by our distributors could have a material adverse impact on our business.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql Changes to industry standards and technical requirements relevant to our products and markets could adversely\plain\cf1\f51\fs20\b\i\ql affect our business, results of operations and prospects.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our products are only a part of larger electronic systems. All products incorporated into these systems must\plain\cf1\f51\fs20\ql comply with various industry standards and technical requirements created by regulatory bodies or industry\plain\cf1\f51\fs20\ql participants in order to operate efficiently together. Industry standards and technical requirements in our markets are\plain\cf1\f51\fs20\ql evolving and may change significantly over time. For our products, the industry standards are developed by the\plain\cf1\f51\fs20\ql Joint Electron Device Engineering Council, an industry trade organization. In addition, large industry-leading\plain\cf1\f51\fs20\ql semiconductor and electronics companies play a significant role in developing standards and technical requirements\plain\cf1\f51\fs20\ql for the product ecosystems within which our products can be used. Our customers also may design certain\plain\cf1\f51\fs20\ql specifications and other technical requirements specific to their products and solutions. These technical requirements\plain\cf1\f51\fs20\ql may change as the customer introduces new or enhanced products and solutions.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our ability to compete in the future will depend on our ability to identify and comply with evolving industry\plain\cf1\f51\fs20\ql standards and technical requirements. The emergence of new industry standards and technical requirements could\plain\cf1\f51\fs20\ql render our products incompatible with products developed by other suppliers or make it difficult for our products to\plain\cf1\f51\fs20\ql meet the requirements of certain of our customers in consumer, industrial,\~IoT and other markets. As a result, we\plain\cf1\f51\fs20\ql could be required to invest significant time and effort and to incur significant expense to redesign our products to\plain\cf1\f51\fs20\ql ensure compliance with relevant standards and requirements. If our products are not in compliance with prevailing\plain\cf1\f51\fs20\ql industry standards and technical requirements for a significant period of time, we could miss opportunities to\plain\cf1\f51\fs20\ql achieve crucial design wins, our revenue may decline and we may incur significant expenses to redesign our\plain\cf1\f51\fs20\ql products to meet the relevant standards, which could adversely affect our business, results of operations and\plain\cf1\f51\fs20\ql prospects.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql If sales of our customers\u8217? products decline or if their products do not achieve market acceptance, our\plain\cf1\f51\fs20\b\i\ql business and operating results could be adversely affected.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our revenue depends on our customers\u8217? ability to commercialize their products successfully. The markets\plain\cf1\f51\fs20\ql for our customers\u8217? products are extremely competitive and are characterized by rapid technological change.\plain\cf1\f51\fs20\ql Competition in our customers\u8217? markets is based on a variety of factors including price, performance, product\plain\cf1\f51\fs20\ql quality, marketing and distribution capability, customer support, name recognition and financial strength. As a result\plain\cf1\f51\fs20\ql of rapid technological change, the markets for our customers\u8217? products are characterized by frequent product\plain\cf1\f51\fs20\ql introductions, short product life cycles, fluctuating demand and increasing product capabilities. As a result, our\plain\cf1\f51\fs20\ql customers\u8217? products may not achieve market success or may become obsolete. We cannot assure you that our\plain\cf1\f51\fs20\ql customers will dedicate the resources necessary to promote and commercialize their products, successfully execute\plain\cf1\f51\fs20\ql their business strategies for such products, or be able to manufacture such products in quantities sufficient to meet\plain\cf1\f51\fs20\ql demand or cost-effectively manufacture products at a high volume. Our customers do not have contracts with us\plain\cf1\f51\fs20\ql that require them to manufacture, distribute or sell any products. Moreover, our customers may develop internally,\plain\cf1\f51\fs20\ql or in collaboration with our competitors, technology that they may utilize instead of the technology available to\plain\cf1\f51\fs20\ql them through us. Our customers\u8217? failure to achieve market success for their products, including as a result of\plain\cf1\f51\fs20\ql general declines in our customers\u8217? markets or industries, could negatively affect their willingness to utilize\plain\cf1\f51\fs20\ql our products, which may result in a decrease in our revenue and negatively affect our business and operating\plain\cf1\f51\fs20\ql results.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our revenue also depends on the timely introduction, quality and market acceptance of our customers\u8217?\plain\cf1\f51\fs20\ql products that incorporate our solutions. Our customers\u8217? products are often very complex and subject to\plain\cf1\f51\fs20\ql design complexities that may result in design flaws, as well as potential defects, errors and bugs. We have in the\plain\cf1\f51\fs20\ql past been subject to delays and project cancellations as a result of design flaws in the products developed by our\plain\cf1\f51\fs20\ql customers. For example, in 2014, flaws in one of our customer\u8217?s products that were unrelated to our\plain\cf1\f51\fs20\ql solutions generated negative publicity for our customer and delayed the product\u8217?s release until it could be\plain\cf1\f51\fs20\ql redesigned. In the past, we have also been subject to delays and project cancellations as a result of changing market\plain\cf1\f51\fs20\ql requirements, such as the customer adding a new feature, or because a customer\u8217?s product fails their end\plain\cf1\f51\fs20\ql customer\u8217?s evaluation or field trial. Customer products may also be delayed due to issues with other vendors\plain\cf1\f51\fs20\ql of theirs. We incur significant design and development costs in connection with designing our\par\pard\plain\sb528\cf1\f51\fs20\qc 46\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\ql solutions for customers\u8217? products. If our customers discover design flaws, defects, errors or bugs in their\plain\cf1\f51\fs20\ql products, or if they experience changing market requirements, failed evaluations or field trials, or issues with other\plain\cf1\f51\fs20\ql vendors, they may delay, change or cancel a project. If we have already incurred significant development costs, we\plain\cf1\f51\fs20\ql may not be able to recoup those costs, which in turn would adversely affect our business and financial results.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql We face competition and expect competition to increase in the future. If we fail to compete effectively, our\plain\cf1\f51\fs20\b\i\ql revenue growth and results of operations will be materially and adversely affected.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql The global semiconductor market in general, and the IoT semiconductor market in particular, are highly\plain\cf1\f51\fs20\ql competitive. We expect competition to increase and intensify as other semiconductor companies enter our markets,\plain\cf1\f51\fs20\ql many of which have greater financial and other resources with which to pursue technology development, product\plain\cf1\f51\fs20\ql design, manufacturing, marketing and sales and distribution of their products. Increased competition could result in\plain\cf1\f51\fs20\ql price pressure, reduced profitability and loss of market share, any of which could materially and adversely affect our\plain\cf1\f51\fs20\ql business, revenue and operating results. Currently, our competitors range from large, international companies\plain\cf1\f51\fs20\ql offering a wide range of semiconductor products to companies specializing in other alternative, specialized emerging\plain\cf1\f51\fs20\ql memory technologies. Our primary competitors include GigaDevice Semiconductor, Macronix International Co. Ltd.,\plain\cf1\f51\fs20\ql Microchip Technology Inc., Micron Technology,\~Inc., Cypress Semiconductor Corporation and Winbond Electronics\plain\cf1\f51\fs20\ql Corp. In addition, as the IoT market opportunity grows, we expect new entrants will enter these markets and\plain\cf1\f51\fs20\ql existing competitors, including leading semiconductor companies, may make significant investments to compete\plain\cf1\f51\fs20\ql more effectively against our products. These competitors could develop technologies or architectures that make our\plain\cf1\f51\fs20\ql products or technologies obsolete.\par\pard\plain\fi396\cf1\f51\fs24\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our ability to compete successfully depends on factors both within and outside of our control, including:\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql the functionality and performance of our products and those of our competitors;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql our relationships with our customers and other industry participants;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql prices of our products and prices of our competitors\u8217? products;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql our ability to develop innovative products;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql our ability to retain high-level talent, including our management team and engineers; and\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql the actions of our competitors, including merger and acquisition activity, launches of new products and\plain\li792\cf1\f51\fs20\ql other actions that could change the competitive landscape.\par\pard\plain\li792\fi-396\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Competition could result in pricing pressure, reduced revenue and profitability and loss of market share, any of\plain\cf1\f51\fs20\ql which could materially and adversely affect our business, results of operations and prospects. In the event of a\plain\cf1\f51\fs20\ql market downturn, competition in the markets in which we operate may intensify as our customers reduce their\plain\cf1\f51\fs20\ql purchase orders. Our competitors that are significantly larger and have greater financial, technical, marketing,\plain\cf1\f51\fs20\ql distribution, customer support and other resources or more established market recognition than us may be better\plain\cf1\f51\fs20\ql positioned to accept lower prices and withstand adverse economic or market conditions.\par\pard\plain\fi396\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql Our customers require our products and our third-party contractors to undergo a lengthy and expensive\plain\cf1\f51\fs20\b\i\ql qualification process. If we are unsuccessful or delayed in qualifying any of our products with a customer, our\plain\cf1\f51\fs20\b\i\ql business and operating results would suffer.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Prior to selecting and purchasing our products, our customers typically require that our products undergo\plain\cf1\f51\fs20\ql extensive qualification processes, which involve testing of our products in the customers\u8217? systems, as well as\plain\cf1\f51\fs20\ql testing for reliability. This qualification process may continue for several months or years. However, obtaining the\plain\cf1\f51\fs20\ql requisite qualifications for a product does not assure any sales of the product. Even after successful qualification\plain\cf1\f51\fs20\ql and sales of a product to a customer, a subsequent revision in our third-party contractors\u8217? manufacturing\plain\cf1\f51\fs20\ql process or our selection of a new contract manufacturer may require a new qualification process, which may result\plain\cf1\f51\fs20\ql in delays and excess or obsolete inventory. After our products are qualified and selected, it can and often does take\plain\cf1\f51\fs20\ql several months or more before the customer commences volume production of systems that incorporate our\plain\cf1\f51\fs20\ql products. Despite these uncertainties, we devote substantial resources, including design, engineering, sales,\plain\cf1\f51\fs20\ql marketing and management efforts, to qualify our products with customers in anticipation of sales. If we are\plain\cf1\f51\fs20\ql unsuccessful or delayed in qualifying any of our products with a customer, sales of those products may be\plain\cf1\f51\fs20\ql precluded or delayed, which may impede our growth and harm our business.\par\pard\plain\sb528\cf1\f51\fs20\qc 47\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql Our costs may increase substantially if our third-party manufacturing contractors do not achieve satisfactory\plain\cf1\f51\fs20\b\i\ql product yields or quality.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql The fabrication process is extremely complicated and small changes in design, specifications or materials can\plain\cf1\f51\fs20\ql result in material decreases in product yields or even the suspension of production. From time to time, the\plain\cf1\f51\fs20\ql third-party foundries that we contract to manufacture our products may experience manufacturing defects and\plain\cf1\f51\fs20\ql reduced manufacturing yields related to errors or problems in their manufacturing processes or the interrelationship\plain\cf1\f51\fs20\ql of their processes with our designs. In some cases, our third-party foundries may not be able to detect these defects\plain\cf1\f51\fs20\ql early in the fabrication process or determine the cause of such defects in a timely manner.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Generally, in pricing our products, we assume that manufacturing yields will continue to improve, even as the\plain\cf1\f51\fs20\ql complexity of our products increases. Once our products are initially qualified with our third-party foundries,\plain\cf1\f51\fs20\ql minimum acceptable yields are established. We are responsible for the costs of the units if the actual yield is above\plain\cf1\f51\fs20\ql the minimum. If actual yields are below the minimum we are not required to purchase the units. Typically,\plain\cf1\f51\fs20\ql minimum acceptable yields for our new products are generally lower at first and gradually improve as we achieve\plain\cf1\f51\fs20\ql full production. Unacceptably low product yields or other product manufacturing problems could substantially\plain\cf1\f51\fs20\ql increase overall production time and costs and adversely impact our operating results. Product yield losses will\plain\cf1\f51\fs20\ql increase our costs and reduce our gross margin. In addition to significantly harming our results of operations and\plain\cf1\f51\fs20\ql cash flow, poor yields may delay shipment of our products and harm our relationships with existing and potential\plain\cf1\f51\fs20\ql customers\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql The complexity of our products may lead to errors, defects and bugs, which could negatively impact our\plain\cf1\f51\fs20\b\i\ql reputation with customers and result in liability.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Products as complex as ours may contain errors, defects and bugs when first introduced to customers or as new\plain\cf1\f51\fs20\ql versions are released. Our products have in the past experienced such errors, defects and bugs. Delivery of products\plain\cf1\f51\fs20\ql with production defects or reliability, quality or compatibility problems could significantly delay or hinder market\plain\cf1\f51\fs20\ql acceptance of the products or result in a costly recall and could damage our reputation and adversely affect our\plain\cf1\f51\fs20\ql ability to retain existing customers and attract new customers. Errors, defects or bugs could cause problems with the\plain\cf1\f51\fs20\ql functionality of our products, resulting in interruptions, delays or cessation of sales of these products to our\plain\cf1\f51\fs20\ql customers. We may also be required to make significant expenditures of capital and resources to resolve such\plain\cf1\f51\fs20\ql problems. We cannot assure you that problems will not be found in new products, both before and after\plain\cf1\f51\fs20\ql commencement of commercial production, despite testing by us, our suppliers or our customers. Any such problems\plain\cf1\f51\fs20\ql could result in:\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql delays in development, manufacture and roll-out of new products;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql additional development costs;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql loss of, or delays in, market acceptance;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql diversion of technical and other resources from our other development efforts;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql claims for damages by our customers or others against us; and\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql loss of credibility with our current and prospective customers.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\ql Any such event could have a material adverse effect on our business, financial condition and results of operations.\par\pard\plain\cf1\f51\fs24\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql We may experience difficulties in transitioning to new wafer fabrication process technologies or in achieving\plain\cf1\f51\fs20\b\i\ql higher levels of design integration, which may result in reduced manufacturing yields, delays in product\plain\cf1\f51\fs20\b\i\ql deliveries and increased expenses.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs24\ql We aim to use the most advanced manufacturing process technology appropriate for our\plain\cf1\f51\fs24\ql solutions that is available from our third-party foundries. As a result, we periodically evaluate\plain\cf1\f51\fs24\ql the benefits of migrating our solutions to other technologies in order to improve performance and\plain\cf1\f51\fs24\ql reduce costs. These ongoing efforts require us from time to time to modify the manufacturing\plain\cf1\f51\fs24\ql processes for our products and to redesign some products, which in turn may result in delays in\plain\cf1\f51\fs24\ql product deliveries. We may face difficulties, delays and increased expense as we transition our\plain\cf1\f51\fs24\ql products to new processes, and potentially to new foundries. We will depend on our third-party\plain\cf1\f51\fs24\ql foundries as we transition to new\~processes. We cannot assure you that our third-party foundries\plain\cf1\f51\fs24\ql will be able to effectively manage such transitions or that\par\pard\plain\sb528\cf1\f51\fs20\qc 48\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs24\ql we will be able to maintain our relationship with our third-party foundries or develop\plain\cf1\f51\fs24\ql relationships with new third-party foundries. If we or any of our third-party foundries\plain\cf1\f51\fs24\ql experience significant delays in transitioning to new processes or fail to efficiently implement\plain\cf1\f51\fs24\ql transitions, we could experience reduced manufacturing yields, delays in product deliveries and\plain\cf1\f51\fs24\ql increased expenses, any of which could harm our relationships with our customers and our\plain\cf1\f51\fs24\ql operating results.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql As smaller line width geometry manufacturing processes become more prevalent, we intend to move our future\plain\cf1\f51\fs20\ql products to increasingly smaller geometries in order to reduce costs while integrating greater levels of functionality\plain\cf1\f51\fs20\ql into our products. This transition will require us and our third-party foundries to migrate to new designs and\plain\cf1\f51\fs20\ql manufacturing processes for smaller geometry products. We may not be able to achieve smaller geometries with\plain\cf1\f51\fs20\ql higher levels of design integration or to deliver new integrated products on a timely basis. We periodically evaluate\plain\cf1\f51\fs20\ql the benefits, on a product-by-product basis, of migrating to smaller geometry process technologies to reduce our\plain\cf1\f51\fs20\ql costs and increase performance. We are dependent on our relationships with our third-party foundries to transition\plain\cf1\f51\fs20\ql to smaller geometry processes successfully. We cannot assure you that our third-party foundries will be able to\plain\cf1\f51\fs20\ql effectively manage any such transition. If we or our third-party foundries experience significant delays in any such\plain\cf1\f51\fs20\ql transition or fail to implement a transition, our business, financial condition and results of operations could be\plain\cf1\f51\fs20\ql materially harmed.\par\pard\plain\fi792\cf1\f51\fs24\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql If we fail to retain qualified finance personnel and strengthen our financial reporting systems and infrastructure,\plain\cf1\f51\fs20\b\i\ql we may not be able to timely and accurately report our financial results or comply with the requirements of\plain\cf1\f51\fs20\b\i\ql being a public company, including compliance with the Sarbanes-Oxley Act and SEC reporting requirements.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our ability to timely and accurately report our financial results or comply with the requirements of being a\plain\cf1\f51\fs20\ql public company depends on our maintaining adequate numbers of accounting and finance staff with technical\plain\cf1\f51\fs20\ql accounting, SEC reporting and Sarbanes-Oxley Act compliance expertise. Any inability to recruit or retain qualified\plain\cf1\f51\fs20\ql accounting and finance staff would have an adverse impact on our ability to accurately and timely prepare our\plain\cf1\f51\fs20\ql financial statements. We may be unable to hire qualified professionals with requisite technical and public company\plain\cf1\f51\fs20\ql experience when and as needed. In addition, new employees will require time and training to learn our business and\plain\cf1\f51\fs20\ql operating processes and procedures. If our finance and accounting organization is unable for any reason to meet the\plain\cf1\f51\fs20\ql demands of being a public company, the quality and timeliness of our financial reporting may suffer, which could\plain\cf1\f51\fs20\ql result in the identification of material weaknesses in our internal controls. Any consequences resulting from\plain\cf1\f51\fs20\ql inaccuracies or delays in our reported financial statements could cause the trading price of our common stock to\plain\cf1\f51\fs20\ql decline and could harm our business, operating results and financial condition.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql If we fail to strengthen our financial reporting systems, infrastructure and internal control over financial\plain\cf1\f51\fs20\ql reporting to meet the demands placed upon us as a public company, including the requirements of the\plain\cf1\f51\fs20\ql Sarbanes-Oxley Act, we may be unable to report our financial results timely and accurately and prevent fraud. We\plain\cf1\f51\fs20\ql expect to incur significant expense and devote substantial management effort toward ensuring compliance with\plain\cf1\f51\fs20\ql Section\~404.\par\pard\plain\fi792\cf1\f51\fs24\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql A breach of our security systems may damage our reputation and adversely affect our business.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our security systems are designed to protect our customers\u8217?, suppliers\u8217? and employees\u8217?\plain\cf1\f51\fs20\ql confidential information, as well as maintain the physical security of our facilities. We also rely on a number of\plain\cf1\f51\fs20\ql third-party \u8220?cloud-based\u8221? service providers of corporate infrastructure services relating to, among\plain\cf1\f51\fs20\ql other things, human resources, electronic communication services and some finance functions, and we are, of\plain\cf1\f51\fs20\ql necessity, dependent on the security systems of these providers. Any security breaches or other unauthorized access\plain\cf1\f51\fs20\ql by third parties to the systems of our cloud-based service providers or the existence of computer viruses in their\plain\cf1\f51\fs20\ql data or software could expose us to a risk of information loss and misappropriation of confidential information.\plain\cf1\f51\fs20\ql Accidental or willful security breaches or other unauthorized access by third parties to our information systems or\plain\cf1\f51\fs20\ql facilities, or the existence of computer viruses in our data or software, could expose us to a risk of information loss\plain\cf1\f51\fs20\ql and misappropriation of proprietary and confidential information belonging to us, our customers or our suppliers.\plain\cf1\f51\fs20\ql Any theft or misuse of this information could result in, among other things, unfavorable publicity, damage to our\plain\cf1\f51\fs20\ql reputation, difficulty in marketing our products, allegations by our customers that we have not performed our\plain\cf1\f51\fs20\ql contractual obligations, litigation by affected parties and possible financial obligations for liabilities and damages\plain\cf1\f51\fs20\ql related to the theft or misuse of this information, any of which could have a material adverse effect on our business,\plain\cf1\f51\fs20\ql financial condition, our reputation, and our relationships with our customers and partners. Since the techniques used\plain\cf1\f51\fs20\ql to obtain unauthorized access or to sabotage systems change frequently and are often\par\pard\plain\sb528\cf1\f51\fs20\qc 49\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\ql not recognized until launched against a target, we may be unable to anticipate these techniques or to implement\plain\cf1\f51\fs20\ql adequate preventative measures.\par\pard\plain\fi792\cf1\f51\fs24\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql Failure to protect our intellectual property could substantially harm our business.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our success and ability to compete depend in part upon our ability to protect our intellectual property. We rely\plain\cf1\f51\fs20\ql on a combination of intellectual property rights, including patents, mask work protection, copyrights, trademarks,\plain\cf1\f51\fs20\ql trade secrets and know-how, in the United States and other jurisdictions. The steps we take to protect our\plain\cf1\f51\fs20\ql intellectual property rights may not be adequate, particularly in foreign jurisdictions such as China. Any patents we\plain\cf1\f51\fs20\ql hold may not adequately protect our intellectual property rights or our products against competitors, and third\plain\cf1\f51\fs20\ql parties may challenge the scope, validity or enforceability of our issued patents. In addition, other parties may\plain\cf1\f51\fs20\ql independently develop similar or competing technologies designed around any patents or patent applications that we\plain\cf1\f51\fs20\ql hold. Some of our products and technologies are not covered by any patent or patent application, as we do not\plain\cf1\f51\fs20\ql believe patent protection of these products and technologies is critical to our business strategy at this time. A failure\plain\cf1\f51\fs20\ql to timely seek patent protection on products or technologies generally precludes us from seeking future patent\plain\cf1\f51\fs20\ql protection on these products or technologies.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql In addition to patents, we also rely on contractual protections with our customers, suppliers, distributors,\plain\cf1\f51\fs20\ql employees and consultants, and we implement security measures designed to protect our trade secrets and\plain\cf1\f51\fs20\ql know-how. However, we cannot assure you that these contractual protections and security measures will not be\plain\cf1\f51\fs20\ql breached, that we will have adequate remedies for any such breach or that our customers, suppliers, distributors,\plain\cf1\f51\fs20\ql employees or consultants will not assert rights to intellectual property or damages arising out of such contracts.\par\pard\plain\fi792\cf1\f51\fs24\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql We may initiate claims against third parties to protect our intellectual property rights if we are unable to resolve\plain\cf1\f51\fs20\ql matters satisfactorily through negotiation. Litigation brought to protect and enforce our intellectual property rights\plain\cf1\f51\fs20\ql could be costly, time-consuming and distracting to management. It could also result in the impairment or loss of\plain\cf1\f51\fs20\ql portions of our intellectual property, as an adverse decision could limit our ability to assert our intellectual property\plain\cf1\f51\fs20\ql rights, limit the value of our technology or otherwise negatively impact our business, financial condition and results\plain\cf1\f51\fs20\ql of operations. Additionally, any enforcement of our patents or other intellectual property may provoke third parties\plain\cf1\f51\fs20\ql to assert counterclaims against us. Our failure to secure, protect and enforce our intellectual property rights could\plain\cf1\f51\fs20\ql materially harm our business.\par\pard\plain\fi396\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql We may face claims of intellectual property infringement, which could be time-consuming, costly to defend or\plain\cf1\f51\fs20\b\i\ql settle, result in the loss of significant rights, harm our relationships with our customers and distributors, or\plain\cf1\f51\fs20\b\i\ql otherwise materially adversely affect our business, financial condition and results of operations\plain\cf1\f51\fs20\b\ql .\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql The semiconductor industry is characterized by companies that hold patents and other intellectual property\plain\cf1\f51\fs20\ql rights and that vigorously pursue, protect and enforce intellectual property rights. These companies include patent\plain\cf1\f51\fs20\ql holding companies or other adverse patent owners who have no relevant product revenue and against whom our\plain\cf1\f51\fs20\ql own patents may provide little or no deterrence. From time to time, third parties may assert against us and our\plain\cf1\f51\fs20\ql customers\u8217? patent and other intellectual property rights to technologies that are important to our business.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Claims that our products, processes or technology infringe third-party intellectual property rights, regardless of\plain\cf1\f51\fs20\ql their merit or resolution, could be costly to defend or settle and could divert the efforts and attention of our\plain\cf1\f51\fs20\ql management and technical personnel. We may also be obligated to indemnify our customers or business partners in\plain\cf1\f51\fs20\ql connection with any such litigation, which could result in increased costs. Infringement claims also could harm our\plain\cf1\f51\fs20\ql relationships with our customers or distributors and might deter future customers from doing business with us. If\plain\cf1\f51\fs20\ql any such proceedings result in an adverse outcome, we could be required to:\par\pard\plain\fi396\cf1\f51\fs24\ql \~ \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql cease the manufacture, use or sale of the infringing products, processes or technology;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql pay substantial damages for infringement;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh495 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql expend significant resources to develop non-infringing products, processes or technology,\plain\intbl\cf1\f51\fs20\ql which may not be successful;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh495\row}}}\pard\plain\sb528\cf1\f51\fs20\qc 50\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql license technology from the third-party claiming infringement, which license may not be available on\plain\intbl\cf1\f51\fs20\ql commercially reasonable terms, or at all;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql cross-license our technology to a competitor to resolve an infringement claim, which could\plain\intbl\cf1\f51\fs20\ql weaken our ability to compete with that competitor; or\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh495 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql pay substantial damages to our customers to discontinue their use of or to replace\plain\intbl\cf1\f51\fs20\ql infringing technology sold to them with non-infringing technology, if available.\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh495\row}}}\pard\plain\sa264\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Any of the foregoing results could have a material adverse effect on our business, financial condition and\plain\cf1\f51\fs20\ql results of operations. Furthermore, our exposure to the foregoing risks may also be increased as a result of\plain\cf1\f51\fs20\ql acquisitions of other companies or technologies. For example, we may have a lower level of visibility into the\plain\cf1\f51\fs20\ql development process with respect to intellectual property or the care taken to safeguard against infringement risks\plain\cf1\f51\fs20\ql with respect to the acquired company or technology. In addition, third parties may make infringement and similar or\plain\cf1\f51\fs20\ql related claims after we have acquired technology that had not been asserted prior to the acquisition.\par\pard\plain\fi396\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql We rely upon third-party licensed technology to develop our products. If licenses of third-party technology are\plain\cf1\f51\fs20\b\i\ql inadequate, our ability to develop and commercialize our products or product enhancements could be negatively\plain\cf1\f51\fs20\b\i\ql impacted.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our products incorporate technology licensed from third parties. In connection with our acquisition of certain\plain\cf1\f51\fs20\ql flash memory assets from Atmel Corporation in 2012, we obtained a perpetual license to Atmel\u8217?s flash\plain\cf1\f51\fs20\ql memory technology. In addition, a component of our CBRAM technology is licensed from Axon Technology Corp.\plain\cf1\f51\fs20\ql While we believe these licenses enable us to develop our products and pursue our current product strategies, these\plain\cf1\f51\fs20\ql licenses may not provide us with the benefits we expect from them. From time to time, we may be required to\plain\cf1\f51\fs20\ql license additional technology from third parties to develop our products or product enhancements. However, these\plain\cf1\f51\fs20\ql third-party licenses may not be available to us on commercially reasonable terms or at all. Our inability to obtain\plain\cf1\f51\fs20\ql third-party licenses necessary to develop products and product enhancements could require us to obtain substitute\plain\cf1\f51\fs20\ql technology at a greater cost or of lower quality or performance standards or delay product development. Any of\plain\cf1\f51\fs20\ql these results may limit our ability to develop new products, which could harm our business, financial condition and\plain\cf1\f51\fs20\ql results of operations.\par\pard\plain\fi792\cf1\f51\fs24\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql We have expanded in the past and expect to continue to expand in the future through acquisitions of, or\plain\cf1\f51\fs20\b\i\ql investments in, other companies, each of which may divert our management\u8217?s attention, result in\plain\cf1\f51\fs20\b\i\ql additional dilution to stockholders or use resources that are necessary to operate our business\plain\cf1\f51\fs20\b\ql .\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql We have grown our business through acquisitions and we expect to continue to evaluate and enter into\plain\cf1\f51\fs20\ql discussions regarding potential strategic transactions. We completed the acquisition of S3 in May\~2018 and\plain\cf1\f51\fs20\ql announced our proposed acquisition of Echelon in June\~2018. These transactions are and any new acquisitions or\plain\cf1\f51\fs20\ql investments could be material to our financial condition and results of operations. The process of integrating\plain\cf1\f51\fs20\ql businesses and technology can create unforeseen operating difficulties and expenditures as could the integration of\plain\cf1\f51\fs20\ql any future acquisitions. Such transactions could create risks for us, including:\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql difficulties in assimilating acquired personnel, operations and technologies or realizing synergies expected\plain\li792\cf1\f51\fs20\ql in connection with an acquisition, particularly with acquisitions of companies with large and widespread\plain\li792\cf1\f51\fs20\ql operations, complex products or that operate in markets in which we historically have had limited\plain\li792\cf1\f51\fs20\ql experience;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql unanticipated costs or liabilities, including possible litigation associated with the acquisition;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql incurrence of acquisition-related costs;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql diversion of management\u8217?s attention from other business concerns;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql use of resources that are needed in other parts of our business; and\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql use of substantial portions of our available cash to consummate an acquisition.\par\pard\plain\li792\fi-396\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our failure to address these risks or other problems encountered in connection with our past or future\plain\cf1\f51\fs20\ql acquisitions and investments could cause us to fail to realize the anticipated benefits of these acquisitions or\plain\cf1\f51\fs20\ql investments, cause us to incur unanticipated liabilities and harm our business generally. Future acquisitions could\plain\sa264\cf1\f51\fs20\ql also result in the use of\par\pard\plain\sb528\cf1\f51\fs20\qc 51\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\ql substantial amounts of our cash and cash equivalents, dilutive issuances of our equity securities, the incurrence of\plain\cf1\f51\fs20\ql debt, contingent liabilities, amortization expenses or the write-off of goodwill, any of which could harm our\plain\cf1\f51\fs20\ql financial condition. We do not have an extensive history of acquiring other companies and managing integrations,\plain\cf1\f51\fs20\ql and the risk of failing to achieve the anticipated benefits and synergies of our acquisition of S3 Semiconductors or\plain\cf1\f51\fs20\ql the proposed acquisition of Echelon may be increased by the risks inherent to managing concurrent integrations.\~\plain\cf1\f51\fs20\ql Also, the anticipated benefits of any acquisitions may not materialize, may be less beneficial, or may develop more\plain\cf1\f51\fs20\ql slowly, than we expect. If we do not receive the benefits anticipated from these acquisitions and investments, or if\plain\cf1\f51\fs20\ql the achievement of these benefits is delayed, our operating results may be adversely affected and our stock price\plain\sa264\cf1\f51\fs20\ql could decline.\par\pard\plain\cf1\f51\fs20\b\i\ql Our success depends on our ability to attract and retain key employees, and our failure to do so could harm our\plain\sa264\cf1\f51\fs20\b\i\ql ability to grow our business and execute our business strategies.\par\pard\plain\fi396\cf1\f51\fs20\ql \~Our success depends on our ability to attract and retain our key employees, including our management team\plain\cf1\f51\fs20\ql and experienced engineers. Competition for personnel in the semiconductor technology field is intense, and the\plain\cf1\f51\fs20\ql availability of suitable and qualified candidates is limited. We compete to attract and retain qualified research and\plain\cf1\f51\fs20\ql development personnel with other semiconductor companies, universities and research institutions, particularly those\plain\cf1\f51\fs20\ql in the San Francisco Bay Area where our headquarters is located. The members of our management and key\plain\cf1\f51\fs20\ql employees are at-will employees. If we lose the services of any key senior management member or employee, we\plain\cf1\f51\fs20\ql may not be able to locate suitable or qualified replacements, and may incur additional expenses to recruit and train\plain\cf1\f51\fs20\ql new personnel, which could severely impact our business and prospects. The loss of the services of one or more of\plain\cf1\f51\fs20\ql our key employees, especially our key engineers, or our inability to attract and retain qualified engineers, could\plain\sa264\cf1\f51\fs20\ql harm our business, financial condition and results of operations.\par\pard\plain\cf1\f51\fs20\b\i\ql We may not be able to effectively manage our growth, and we may need to incur significant expenditures to\plain\cf1\f51\fs20\b\i\ql address the additional operational and control requirements of our growth, either of which could harm our\plain\cf1\f51\fs20\b\i\ql business and operating results.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql We expect to increase headcount and the overall size of our operations to support our growth. To effectively\plain\cf1\f51\fs20\ql manage our growth, we must continue to expand our operational, engineering and financial systems, procedures and\plain\cf1\f51\fs20\ql controls and to improve our accounting and other internal management systems. This may require substantial\plain\cf1\f51\fs20\ql managerial and financial resources, and our efforts in this regard may not be successful. Our current systems,\plain\cf1\f51\fs20\ql procedures and controls may not be adequate to support our future operations. If we fail to adequately manage our\plain\cf1\f51\fs20\ql growth, or to improve our operational, financial and management information systems, or fail to effectively motivate\plain\cf1\f51\fs20\ql or manage our new and future employees, the quality of our products and the management of our operations could\plain\cf1\f51\fs20\ql suffer, which could adversely affect our operating results.\par\pard\plain\fi396\cf1\f51\fs24\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql We have operations outside of the United States and intend to expand our international operations, which\plain\cf1\f51\fs20\b\i\ql exposes us to significant risks.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql With the acquisition of S3 Semiconductors, we expanded our global footprint beyond the limited operations we\plain\cf1\f51\fs20\ql once had in Europe and Asia. We intend to expand our operations in Asia and, if completed, the proposed Echelon\plain\cf1\f51\fs20\ql acquisition would significantly expand our global operations. The success of our business depends, in large part, on\plain\cf1\f51\fs20\ql our ability to operate successfully from geographically disparate locations and to further expand our international\plain\cf1\f51\fs20\ql operations and sales. Operating in international markets requires significant resources and management attention and\plain\cf1\f51\fs20\ql subjects us to regulatory, economic and political risks that are different from those we face in the United States. We\plain\cf1\f51\fs20\ql cannot be sure that further international expansion will be successful. In addition, we face risks in doing business\plain\cf1\f51\fs20\ql internationally that could expose us to reduced demand for our products, lower prices for our products or other\plain\cf1\f51\fs20\ql adverse effects on our operating results. Among the risks we believe are most likely to affect us are:\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql difficulties, inefficiencies and costs associated with staffing and managing foreign operations;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql longer and more difficult customer qualification and credit checks;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql greater difficulty collecting accounts receivable and longer payment cycles;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql the need for various local approvals to operate in some countries;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql difficulties in entering some foreign markets without larger-scale local operations;\par\pard\plain\sb528\cf1\f51\fs20\qc 52\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql compliance with local laws and regulations;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql unexpected changes in regulatory requirements, including the elimination of tax holidays;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql reduced protection for intellectual property rights in some countries;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql adverse tax consequences as a result of repatriating cash generated from foreign operations to the United\plain\li792\cf1\f51\fs20\ql States;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql adverse tax consequences, including potential additional tax exposure if we are deemed to have established\plain\li792\cf1\f51\fs20\ql a permanent establishment outside of the United States;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql adverse tax consequences, including potential additional tax costs, resulting from the new tax legislation\plain\li792\cf1\f51\fs20\ql signed into law on December\~22, 2017, that imposes a minimum domestic tax on the earnings of foreign\plain\li792\cf1\f51\fs20\ql subsidiaries;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql the effectiveness of our policies and procedures designed to ensure compliance with the Foreign Corrupt\plain\li792\cf1\f51\fs20\ql Practices Act of 1977 and similar regulations;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql fluctuations in currency exchange rates, which could increase the prices of our products to customers\plain\li792\cf1\f51\fs20\ql outside of the United States, increase the expenses of our international operations by reducing the\plain\li792\cf1\f51\fs20\ql purchasing power of the U.S. dollar and expose us to foreign currency exchange rate risk if, in the future,\plain\li792\cf1\f51\fs20\ql we denominate our international sales in currencies other than the U.S. dollar;\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql new and different sources of competition; and\par\pard\plain\li792\fi-396\cf1\f53\fs20\ql \plain\li792\cf1\f51\fs6\ql \~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\~\plain\li792\cf1\f51\fs20\ql political and economic instability, and terrorism.\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our failure to manage any of these risks successfully could harm our operations and reduce our revenue.\par\pard\plain\cf1\f51\fs20\b\i\ql Because our business is highly dependent on growth in the electronics manufacturing supply chain in China,\plain\cf1\f51\fs20\b\i\ql any slowdown in this growth could adversely affect our business and operating results.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our business is highly dependent upon the economy and the business environment in China. In particular, our\plain\cf1\f51\fs20\ql growth strategy is based upon the assumption that demand in China for devices that use semiconductors will\plain\cf1\f51\fs20\ql continue to grow. Therefore, any slowdown in the growth of consumer demand in China for products that use\plain\cf1\f51\fs20\ql semiconductors, such as computers, mobile phones or other consumer electronics, could have a serious adverse\plain\cf1\f51\fs20\ql effect on our business. In addition, our business plan assumes that an increasing number of non-Chinese integrated\plain\cf1\f51\fs20\ql device manufacturers, or IDMs, fabless semiconductor companies and systems companies will establish operations\plain\cf1\f51\fs20\ql in China. Any decline in the rate of migration to China of semiconductor design companies or companies that\plain\cf1\f51\fs20\ql require semiconductors as components for their products could adversely affect our business and operating results.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql If significant tariffs or other restrictions are placed on Chinese imports or any related counter-measures are\plain\cf1\f51\fs20\ql taken by China, our revenue and results of operations may be materially harmed. The Trump Administration has\plain\cf1\f51\fs20\ql signaled that it may alter trade agreements and terms between China and the United States, including limiting trade\plain\cf1\f51\fs20\ql with China and/or imposing a tariff on imports from China. In March\~2018, President Trump imposed a 25% tariff\plain\cf1\f51\fs20\ql on steel imports and a 10% tariff on aluminum imports and announced additional tariffs on goods imported from\plain\cf1\f51\fs20\ql China specifically, as well as certain other countries. The materials subject to these tariffs to date do not constitute a\plain\cf1\f51\fs20\ql significant percentage of our raw material costs. However, if retaliatory trade measures taken by China or other\plain\cf1\f51\fs20\ql countries in response to the tariffs cause the cost of our products to increase, we may be required to raise our\plain\cf1\f51\fs20\ql prices, which may result in the loss of customers and harm to our reputation and operating performance.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql In order to comply with environmental laws and regulations, we may need to modify our activities or incur\plain\cf1\f51\fs20\b\i\ql substantial costs, and if we fail to comply with environmental regulations we could be subject to substantial fines\plain\sa264\cf1\f51\fs20\b\i\ql or be required to have our suppliers alter their processes.\par\pard\plain\fi396\cf1\f51\fs20\ql \~The semiconductor industry is subject to a variety of international, federal, state and local governmental\plain\cf1\f51\fs20\ql regulations directed at preventing or mitigating environmental harm, as well as to the storage, discharge, handling,\plain\cf1\f51\fs20\ql generation, disposal and labeling of toxic or other hazardous substances. Failure to comply with environmental\plain\cf1\f51\fs20\ql regulations could subject us to civil or criminal sanctions and property damage or personal injury claims.\plain\cf1\f51\fs20\ql Compliance with current or future environmental laws and regulations could restrict our ability to expand our\plain\cf1\f51\fs20\ql business or require us to modify processes or incur other substantial expenses which could harm our business. In\plain\cf1\f51\fs20\ql response to environmental concerns, some customers and government agencies impose requirements for the\plain\cf1\f51\fs20\ql elimination of hazardous substances, such as lead (which is widely used in soldering connections in the process of\plain\cf1\f51\fs20\ql semiconductor packaging and assembly), from electronic equipment. For example, the European Union, or EU,\plain\cf1\f51\fs20\ql adopted its Restriction on Hazardous Substance\par\pard\plain\sb528\cf1\f51\fs20\qc 53\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\ql Directive which prohibits, with specified exceptions, the sale in the EU market of new electrical and electronic\plain\cf1\f51\fs20\ql equipment containing more than agreed levels of lead or other hazardous materials and China has enacted similar\plain\cf1\f51\fs20\ql regulations. Environmental laws and regulations such as these could become more stringent over time, causing a\plain\cf1\f51\fs20\ql need to redesign technologies, imposing greater compliance costs and increasing risks and penalties associated with\plain\cf1\f51\fs20\ql violations, which could seriously harm our business.\par\pard\plain\fi792\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql The issuance of new accounting standards or future interpretations of existing accounting standards could\plain\sa264\cf1\f51\fs20\b\i\ql adversely affect our operating results.\par\pard\plain\fi396\cf1\f51\fs20\ql \~We prepare our financial statements in accordance with accounting principles generally accepted in the United\plain\cf1\f51\fs20\ql States of America, or GAAP. A change in those principles could have a significant effect on our reported results\plain\cf1\f51\fs20\ql and might affect our reporting of transactions completed before a change is announced. GAAP is issued and subject\plain\cf1\f51\fs20\ql to interpretation by the Financial Accounting Standards Board, the SEC and various other bodies formed to\plain\cf1\f51\fs20\ql promulgate and interpret accounting principles. A change in these principles or interpretations could have a\plain\cf1\f51\fs20\ql significant effect on our reported financial results, and could affect the reporting of transactions completed before\plain\cf1\f51\fs20\ql the announcement of a change. The issuance of new accounting standards or future interpretations of existing\plain\cf1\f51\fs20\ql accounting standards, or changes in our business practices or estimates, could result in future changes in our\plain\cf1\f51\fs20\ql revenue recognition or other accounting policies that could have a material adverse effect on our results of\plain\cf1\f51\fs20\ql operations.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql Some of our facilities and the facilities of our suppliers are located near known earthquake fault zones, and the\plain\cf1\f51\fs20\b\i\ql occurrence of an earthquake or other catastrophic disaster could damage our facilities, which could cause us to\plain\sa264\cf1\f51\fs20\b\i\ql curtail our operations.\par\pard\plain\fi396\cf1\f51\fs20\ql \~Our principal offices, and our contract manufacturers\u8217? and suppliers\u8217? facilities in Asia, are located\plain\cf1\f51\fs20\ql near known earthquake fault zones and, therefore, are vulnerable to damage from earthquakes. We are also\plain\cf1\f51\fs20\ql vulnerable to damage from other types of disasters, such as power loss, fire, floods and similar events. If any such\plain\cf1\f51\fs20\ql disaster were to occur, our ability to operate our business could be seriously impaired. In addition, we may not have\plain\cf1\f51\fs20\ql adequate insurance to cover our losses resulting from disasters or other similar significant business interruptions.\plain\cf1\f51\fs20\ql Any significant losses that are not recoverable under our insurance policies could seriously impair our business and\plain\cf1\f51\fs20\ql financial condition.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Our substantial level of indebtedness could adversely affect our financial condition.\par\pard\plain\fi396\cf1\f51\fs20\ql We have a substantial amount of indebtedness, which will require significant interest payments. After giving\plain\cf1\f51\fs20\ql effect to the term loan we received in May\~2018, we would have had approximately $35 million aggregate principal\plain\cf1\f51\fs20\ql amount of indebtedness outstanding as of March\~31, 2018. \~Our substantial level of indebtedness could have\plain\cf1\f51\fs20\ql important consequences, including the following:\par\pard\plain\fi792\cf1\f51\fs20\ql \~ \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1080\cellx9688\trrh765 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql we must use a substantial portion of our cash flow from operations to pay interest and principal on the\plain\intbl\cf1\f51\fs20\ql term loan, which will reduce funds available to us for other purposes such as working capital, capital\plain\intbl\cf1\f51\fs20\ql expenditures, other general corporate purposes and potential acquisitions;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1080\cellx9688\trrh765\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1080\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql our ability to refinance such indebtedness or to obtain additional financing for working capital, capital\plain\intbl\cf1\f51\fs20\ql expenditures, acquisitions or general corporate purposes may be impaired;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1080\cellx9688\trrh518\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1080\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql we will be exposed to fluctuations in interest rates;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1080\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1080\cellx9688\trrh765 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql our leverage may be greater than that of some of our competitors, which may put us at a\plain\intbl\cf1\f51\fs20\ql competitive disadvantage and reduce our flexibility in responding to current and changing\plain\intbl\cf1\f51\fs20\ql industry and financial market conditions;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1080\cellx9688\trrh765\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1080\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs6\ql \~\plain\intbl\cf1\f51\fs20\ql we may be more vulnerable to the current economic downturn and adverse developments in our\plain\intbl\cf1\f51\fs20\ql business;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1080\cellx9688\trrh518\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1080\cellx9688\trrh990 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs6\ql \~\plain\intbl\cf1\f51\fs20\ql we may be unable to comply with financial and other restrictive covenants in our debt agreements,\plain\intbl\cf1\f51\fs20\ql which could result in an event of default that, if not cured or waived, may result in acceleration of\plain\intbl\cf1\f51\fs20\ql certain of our debt and would have an adverse effect on our business and prospects and could force us\plain\intbl\cf1\f51\fs20\ql into bankruptcy or liquidation; and\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1080\cellx9688\trrh990\row}}}\pard\plain\sb528\cf1\f51\fs20\qc 54\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1080\cellx9688\trrh765 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql in the event of the insolvency, liquidation, reorganization, dissolution or other winding up of our\plain\intbl\cf1\f51\fs20\ql business, if there are not sufficient assets remaining to pay all creditors, then all or a portion of the\plain\intbl\cf1\f51\fs20\ql amounts due on the notes then outstanding would remain unpaid.\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1080\cellx9688\trrh765\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql We may be able to incur substantial additional indebtedness in the future, subject to the restrictions contained in\plain\cf1\f51\fs20\ql our existing credit facility and the terms of any of our other indebtedness.\~ For example, we may incur additional\plain\cf1\f51\fs20\ql debt to fund our business and strategic initiatives, and may utilize additional debt to fund a portion of the purchase\plain\cf1\f51\fs20\ql price for the Echelon acquisition.\~ If we incur additional debt and other obligations, the risks associated with our\plain\cf1\f51\fs20\ql substantial leverage and the ability to service such debt would increase.\par\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our ability to meet expenses, to remain in compliance with our covenants under our debt arrangements and to\plain\cf1\f51\fs20\ql make future principal and interest payments in respect of our debt arrangements depends on, among other things,\plain\cf1\f51\fs20\ql our operating performance, competitive developments and financial market conditions, all of which are significantly\plain\cf1\f51\fs20\ql affected by financial, business, economic and other factors. We are not able to control many of these factors.\plain\cf1\f51\fs20\ql Accordingly, our cash flow may not be sufficient to allow us to pay principal and interest on our debt and meet our\plain\cf1\f51\fs20\ql other obligations.\par\pard\plain\fi792\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql We may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs.\par\pard\plain\fi396\cf1\f51\fs20\ql We have funded our operations since inception through equity financings, our borrowing arrangements, and our\plain\cf1\f51\fs20\ql public offerings in October\~2015 and June\~2017. We have incurred net losses and negative cash flows from\plain\cf1\f51\fs20\ql operating activities since our inception, and we expect we will continue to incur operating and net losses and\plain\cf1\f51\fs20\ql negative cash flows from operations for the foreseeable future. We do not know when or if our operations will\plain\cf1\f51\fs20\ql generate sufficient cash to fund our ongoing operations. In the future, we may require additional capital to fund our\plain\cf1\f51\fs20\ql ongoing operations, respond to business opportunities, challenges, acquisitions or unforeseen circumstances and may\plain\cf1\f51\fs20\ql determine to engage in equity or debt financings or enter into credit facilities, but we may not be able to timely\plain\cf1\f51\fs20\ql secure additional debt or equity financing or raise additional capital in the public market on favorable terms or at\plain\cf1\f51\fs20\ql all.\par\pard\plain\fi396\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Our current credit facility limits our ability to incur indebtedness, and these restrictions are subject to a number\plain\cf1\f51\fs20\ql of qualifications and exceptions subject to the consent of our lender. Any additional debt financing obtained by us\plain\cf1\f51\fs20\ql in the future could also involve restrictive covenants relating to our capital-raising activities and other financial and\plain\cf1\f51\fs20\ql operational matters, which may make it more difficult for us to obtain additional capital and to pursue business\plain\cf1\f51\fs20\ql opportunities, including potential acquisitions.\par\pard\plain\fi396\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql If we raise additional funds through issuances of equity, convertible debt securities or other securities\plain\cf1\f51\fs20\ql convertible into equity, our existing stockholders could suffer significant dilution in their\~percentage ownership of\plain\cf1\f51\fs20\ql our company, and any new equity securities we issue could have rights, preferences and privileges senior to those\plain\cf1\f51\fs20\ql of holders of our common stock. If we are unable to obtain adequate financing or financing on terms satisfactory to\plain\cf1\f51\fs20\ql us, when we require it, our ability to continue to grow or support our business and to respond to business\plain\cf1\f51\fs20\ql challenges could be significantly limited.\par\pard\plain\fi396\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Provisions of our debt agreements may restrict our ability to pursue our business strategies.\par\pard\plain\fi396\cf1\f51\fs20\ql Borrowings under our new $35 million credit facility are collateralized by substantially all of our assets\plain\cf1\f51\fs20\ql excluding our intellectual property. Our credit facility restricts our ability to, among other things:\par\pard\plain\fi396\cf1\f51\fs20\ql \~ \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql dispose of or sell assets;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql consolidate or merge with other entities;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql incur additional indebtedness;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql create liens on our assets;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql pay dividends;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql make investments;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql enter into transactions with affiliates; and\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql redeem subordinated indebtedness.\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}}\pard\plain\li1298\cf1\f51\fs20\ql \~\par\pard\plain\sb528\cf1\f51\fs20\qc 55\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\fi396\cf1\f51\fs20\ql These restrictions are subject to certain exceptions. In addition, our credit facility, requires us to comply with\plain\cf1\f51\fs20\ql certain financial covenants. The operating and financial restrictions and covenants in the credit facility, as well as\plain\cf1\f51\fs20\ql any future financing agreements that we may enter into, may restrict our ability to finance our operations, engage in\plain\cf1\f51\fs20\ql business activities or expand or fully pursue our business strategies. Our ability to comply with these covenants may\plain\cf1\f51\fs20\ql be affected by events beyond our control, and we may not be able to meet those covenants. A breach of any of\plain\cf1\f51\fs20\ql these covenants could result in a default under the credit facility which could cause, among other things (unless\plain\cf1\f51\fs20\ql such default is waived by the lender), all or a portion of the outstanding indebtedness thereunder to become\plain\cf1\f51\fs20\ql immediately due and payable and subject to an increase by 2% of the interest rate charged during the period of the\plain\cf1\f51\fs20\ql unremedied breach. In addition, the lender would be able to sell or lease our assets in satisfaction of our outstanding\plain\cf1\f51\fs20\ql indebtedness.\par\pard\plain\fi396\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql Our ability to use net operating losses to offset future taxable income may be subject to certain limitations.\par\pard\plain\fi396\cf1\f51\fs20\ql In general, under Section\~382 of the U.S. Internal Revenue Code of 1986, as amended, or the Code, a\plain\cf1\f51\fs20\ql corporation that undergoes an \u8220?ownership change\u8221? is subject to limitations on its ability to utilize its\plain\cf1\f51\fs20\ql pre-change net operating losses, or NOLs, to offset future taxable income, and tax credits to offset tax. In addition,\plain\cf1\f51\fs20\ql although we do not expect to undergo an ownership change, we may experience an ownership change in the future,\plain\cf1\f51\fs20\ql and our ability to utilize our NOLs and tax credits could be further limited by Section\~382 of the Code. Future\plain\cf1\f51\fs20\ql changes in our stock ownership, many of which are outside of our control, could result in an ownership change\plain\cf1\f51\fs20\ql under Section\~382 of the Code. Our net operating losses and tax credits could also be impaired under state laws. As\plain\cf1\f51\fs20\ql a result, we might not be able to utilize a material portion of our state NOLs and tax credits.\par\pard\plain\fi396\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql If we are unable to implement and maintain effective internal control over financial reporting in the future,\plain\cf1\f51\fs20\b\i\ql investors may lose confidence in the accuracy and completeness of our financial reports and the market price of\plain\sa264\cf1\f51\fs20\b\i\ql our common stock may be negatively affected.\par\pard\plain\fi396\cf1\f51\fs20\ql As a public company, we are required to maintain internal controls over financial reporting and to report any\plain\cf1\f51\fs20\ql material weaknesses in such internal controls. If and when we no longer meet the definition of an \u8220?emerging\plain\cf1\f51\fs20\ql growth company\u8221? as defined by the JOBS Act, we would be required under Section\~404 of the\plain\cf1\f51\fs20\ql Sarbanes-Oxley Act to evaluate and determine the effectiveness of our internal control over financial reporting and,\plain\cf1\f51\fs20\ql beginning with our annual report for the applicable fiscal\~year, provide a management report on our internal control\plain\cf1\f51\fs20\ql over financial reporting, which must be attested to by our independent registered public accounting firm. If we have\plain\cf1\f51\fs20\ql one or more material weaknesses in our internal control over financial reporting, we may not detect errors on a\plain\cf1\f51\fs20\ql timely basis and our financial statements may be materially misstated. We are in the process of designing and\plain\cf1\f51\fs20\ql implementing our internal control over financial reporting required to comply with this obligation, which process\plain\cf1\f51\fs20\ql will be time consuming, costly and complicated. If we identify material weaknesses in our internal control over\plain\cf1\f51\fs20\ql financial reporting, if we are unable to comply with the requirements of Section\~404 in a timely manner, if we are\plain\cf1\f51\fs20\ql unable to determine that our internal control over financial reporting is effective, or if our independent registered\plain\cf1\f51\fs20\ql public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial\plain\cf1\f51\fs20\ql reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price\plain\cf1\f51\fs20\ql of our common stock could be negatively affected, and we could become subject to investigations by the NASDAQ\plain\cf1\f51\fs20\ql Stock Market, the SEC or other regulatory authorities, which could require additional financial and management\plain\cf1\f51\fs20\ql resources.\par\pard\plain\fi396\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql Regulations related to \u8220?conflict minerals\u8221? may force us to incur additional expenses, may make our\plain\sa264\cf1\f51\fs20\b\i\ql supply chain more complex and may result in damage to our reputation with customers.\par\pard\plain\fi396\cf1\f51\fs20\ql Pursuant to the Dodd-Frank Act, the SEC has adopted requirements for companies that use certain minerals\plain\cf1\f51\fs20\ql and metals, known as conflict minerals, in their products, whether or not these products are manufactured by third\plain\cf1\f51\fs20\ql parties. These requirements will require companies to diligence, disclose and report whether or not such minerals\plain\cf1\f51\fs20\ql originate from the Democratic Republic of Congo and adjoining countries. The implementation of these\plain\cf1\f51\fs20\ql requirements could adversely affect the sourcing, availability and pricing of minerals used in the manufacture of our\plain\cf1\f51\fs20\ql products, and affect our costs and relationships with customers, distributors and suppliers as we must obtain\plain\cf1\f51\fs20\ql additional information from them to ensure our compliance with the disclosure requirement. In addition, we will\plain\cf1\f51\fs20\ql incur additional costs to comply with the disclosure requirements, including costs related to determining the source\plain\cf1\f51\fs20\ql of any of the relevant minerals and metals used in our products. Since our supply chain is complex, we may not be\plain\cf1\f51\fs20\ql able to sufficiently verify the origins for these minerals and\par\pard\plain\sb528\cf1\f51\fs20\qc 56\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\ql metals used in our products through the due diligence procedures that we implement, which may harm our\plain\cf1\f51\fs20\ql reputation. In such event, we may also face difficulties in satisfying customers who require that all of the\plain\cf1\f51\fs20\ql components of our products are certified as conflict mineral free and these customers may discontinue, or materially\plain\cf1\f51\fs20\ql reduce, purchases of our products, which could result in a material adverse effect on our results of operations and\plain\cf1\f51\fs20\ql our financial condition may be adversely affected.\par\pard\plain\fi396\cf1\f51\fs20\ql \~\par\pard\plain\sa264\cf1\f51\fs20\b\ql Risks Related to Ownership of Our Common Stock\par\pard\plain\cf1\f51\fs20\b\i\ql The market price of our common stock has been and will likely continue to be volatile, and you could lose all or\plain\sa264\cf1\f51\fs20\b\i\ql part of your investment.\par\pard\plain\fi396\cf1\f51\fs20\ql The market price of our common stock has been, and will likely continue to be, volatile. Since shares of our\plain\cf1\f51\fs20\ql common stock were sold in our initial public offering in October\~2015 at a price of $5.00 per share, our stock price\plain\cf1\f51\fs20\ql has\~fluctuated significantly. In addition to the factors discussed in this Quarterly Report on Form\~10\u8209?Q, the\plain\cf1\f51\fs20\ql market price of our common stock may fluctuate significantly in response to numerous factors, many of which are\plain\cf1\f51\fs20\ql beyond our control, including:\par\pard\plain\fi396\cf1\f51\fs20\ql \~ \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql overall performance of the equity markets in general, in our industry or in the markets we address;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql our operating performance and the performance of other similar companies;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh765 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql changes in the estimates of our results of operations that we provide to the public, our failure to meet\plain\intbl\cf1\f51\fs20\ql these projected results or changes in recommendations by securities analysts that elect to follow our\plain\intbl\cf1\f51\fs20\ql common stock;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh765\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql announcements of technological innovations, new products or enhancements to products, acquisitions,\plain\intbl\cf1\f51\fs20\ql strategic alliances or significant agreements by us or by our competitors;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql announcements of new business partners, on the termination of existing business partner arrangements\plain\intbl\cf1\f51\fs20\ql or changes to our relationships with such business partners;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql recruitment or departure of key personnel;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql announcements of litigation or claims against us;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql changes in legal requirements relating to our business;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql the economy as a whole, market conditions in our industry, and the industries of our\plain\intbl\cf1\f51\fs20\ql customers and end customers;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql trading activity by our principal stockholders;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql the expiration of contractual lock-up or market standoff agreements; and\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh248 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql sales of shares of our common stock by us or our stockholders.\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh248\row}}}\pard\plain\sa264\fi792\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and\plain\cf1\f51\fs20\ql continue to affect the market prices of equity securities of many technology companies. Stock prices of many\plain\cf1\f51\fs20\ql technology companies have fluctuated in a manner unrelated or disproportionate to the operating performance of\plain\cf1\f51\fs20\ql those companies. In the past, stockholders have filed securities class action litigation following periods of market\plain\cf1\f51\fs20\ql volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert\plain\cf1\f51\fs20\ql resources and the attention of management from our business, and adversely affect our business.\par\pard\plain\fi396\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql If securities analysts do not publish research or reports about our business or if they downgrade our stock, the\plain\sa264\cf1\f51\fs20\b\i\ql price of our stock could decline.\par\pard\plain\fi396\cf1\f51\fs20\ql The trading market for our common stock rely in part on the research and reports that industry or financial\plain\cf1\f51\fs20\ql analysts publish about us or our business. We do not control these analysts. If few analysts cover our company, the\plain\cf1\f51\fs20\ql price and trading volume of our stock could suffer. If one or more of the analysts who cover us downgrade our\plain\cf1\f51\fs20\ql stock, or publish unfavorable research about our business, our stock price would likely decline rapidly. If one or\plain\cf1\f51\fs20\ql more of these analysts cease coverage of our company or fail to publish regularly, we could lose visibility in the\plain\cf1\f51\fs20\ql market, which in turn could cause our stock price to decline.\par\pard\plain\fi396\cf1\f51\fs20\ql \~\par\pard\plain\sb528\cf1\f51\fs20\qc 57\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql We do not intend to pay dividends for the foreseeable future.\par\pard\plain\fi396\cf1\f51\fs20\ql We have never declared nor paid cash dividends on our capital stock. We currently intend to retain any future\plain\cf1\f51\fs20\ql earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any\plain\cf1\f51\fs20\ql dividends in the foreseeable future. In addition, our ability to pay cash dividends on our capital stock is restricted\plain\cf1\f51\fs20\ql by the terms of our term loan facility and is likely to be restricted by any future debt financing arrangement. Any\plain\cf1\f51\fs20\ql return to stockholders will therefore be limited to increases in the price of our common stock, if any.\par\pard\plain\fi396\cf1\f51\fs20\ql \~\par\pard\plain\cf1\f51\fs20\b\i\ql Provisions in our amended and restated certificate of incorporation and bylaws or Delaware law might\plain\sa264\cf1\f51\fs20\b\i\ql discourage, delay or prevent a change of control of our company or changes in our management.\par\pard\plain\fi396\cf1\f51\fs20\ql Delaware corporate law and our amended and restated certificate of incorporation and bylaws contain provisions\plain\cf1\f51\fs20\ql that could discourage, delay or prevent a change in control of our company or changes in our board of directors that\plain\cf1\f51\fs20\ql the stockholders of our company may deem advantageous. Among other things, these provisions:\par\pard\plain\fi396\cf1\f51\fs20\ql \~ \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql establish a classified board of directors so that not all members of our board are elected at\plain\intbl\cf1\f51\fs20\ql one time;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql provide that directors may be removed only \u8220?for cause\u8221? and only with the approval of\plain\intbl\cf1\f51\fs20\ql stockholders representing 66 2/3\~percent of our outstanding common stock;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql require super-majority voting to amend some provisions in our amended and restated certificate of\plain\intbl\cf1\f51\fs20\ql incorporation and bylaws;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql authorize the issuance of \u8220?blank check\u8221? preferred stock that our board could issue to\plain\intbl\cf1\f51\fs20\ql increase the number of outstanding shares and to discourage a takeover attempt;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql eliminate the ability of our stockholders to call special meetings of stockholders;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh270\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql prohibit stockholder action by written consent, which means that all stockholder actions\plain\intbl\cf1\f51\fs20\ql will be required to be taken at a meeting of our stockholders;\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql provide that our board of directors is expressly authorized to make, alter or repeal our\plain\intbl\cf1\f51\fs20\ql bylaws; and\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh518\row}}} \par\pard\plain {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh495 \pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f53\fs20\ql \cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql establish advance notice requirements for nominations for election to our board or for\plain\intbl\cf1\f51\fs20\ql proposing matters that can be acted upon by stockholders at stockholder meetings.\cell{ {\trowd\clvertalc\cellx720\cellx1060\clvertalc\cellx1180\cellx9688\trrh495\row}}}\pard\plain\fi792\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current\plain\cf1\f51\fs20\ql management by making it more difficult for stockholders to replace members of our board of directors, which is\plain\cf1\f51\fs20\ql responsible for appointing the members of our management. In addition, we are governed by the provisions of\plain\cf1\f51\fs20\ql Section\~203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from\plain\cf1\f51\fs20\ql engaging in a broad range of business combinations with any \u8220?interested\u8221? stockholder for a period of\plain\cf1\f51\fs20\ql three\~years following the date on which the stockholder became an \u8220?interested\u8221? stockholder. Any delay\plain\cf1\f51\fs20\ql or prevention of a change of control transaction or changes in our management could cause the market price of our\plain\cf1\f51\fs20\ql common stock to decline.\par\pard\plain\cf1\f51\fs20\ql \~{\*\bkmkstart item_1_3_7}{\*\bkmkend item_1_3_7}\par\pard\plain\cf1\f51\fs20\b\ql ITEM\~1B.\~\~\~\~\~\~\~\~\~\~\~\~UNRESOLVED STAFF COMMENTS{\*\bkmkstart item1bunresolvedstaffcomments_53}{\*\bkmkend item1bunresolvedstaffcomments_53}\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql None.\par\pard\plain\cf1\f51\fs20\ql \~{\*\bkmkstart item_1_3_8}{\*\bkmkend item_1_3_8}\par\pard\plain\cf1\f51\fs20\b\ql ITEM\~2.\~\~\~\~\~\~\~\~\~\~\~\~\~\~UNREGISTERED SALES OF EQUITY AND USE OF PROCEEDS{\*\bkmkstart item2unregisteredsalesofequityan}{\*\bkmkend item2unregisteredsalesofequityan}\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql (a)\~Sales of Unregistered Securities\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql None.\par\pard\plain\sa264\cf1\f51\fs20\b\i\ql (b)\~Use of Proceeds from Public Offering of Common Stock\par\pard\plain\fi396\cf1\f51\fs20\ql On October\~30, 2015, we completed our initial public offering in which we sold 5,000,000 shares of common\plain\cf1\f51\fs20\ql stock at a price to the public of $5.00 per share. On November\~4, 2015, we completed the sale of an additional\plain\cf1\f51\fs20\ql 192,184 shares of common stock pursuant to the underwriters\u8217? over-allotment option. The aggregate offering\plain\cf1\f51\fs20\ql price for shares sold by us\par\pard\plain\sb528\cf1\f51\fs20\qc 58\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}\par\pard\plain\cf1\f51\fs20\ql in the offering was approximately $26.0 million. The offer of up to 5,750,000 shares in the initial public offering,\plain\cf1\f51\fs20\ql for a proposed maximum aggregate offering price of $28.75 million, were registered under the Securities Act\plain\cf1\f51\fs20\ql pursuant to a registration statement on Form\~S\u8209?1 (File No.\~333\u8209?206940) that was declared effective by\plain\cf1\f51\fs20\ql the Securities and Exchange Commission on October\~26, 2015.\par\pard\plain\fi396\cf1\f51\fs20\ql \~\par\pard\plain\fi396\cf1\f51\fs20\ql Needham\~& Company, LLC, Oppenheimer\~& Co.\~Inc. and Roth Capital Partners, LLC were the underwriters for\plain\cf1\f51\fs20\ql the offering. Following the sale of 5,192,184 shares in connection with the closing of the initial public offering and\plain\cf1\f51\fs20\ql the sale of the shares subject to the over-allotment option, the offering terminated. We raised approximately $22.1\plain\cf1\f51\fs20\ql million in net proceeds after deducting underwriting discounts and commissions of approximately $1.8 million and\plain\cf1\f51\fs20\ql other offering expenses of approximately $2.0 million. As of June 30, 2018, we had used substantially all of the\plain\cf1\f51\fs20\ql aggregate net proceeds from our initial public offering to fund working capital and general corporate requirements\plain\cf1\f51\fs20\ql in the ordinary course of business. No such payments were made, whether directly or indirectly to our directors or\plain\cf1\f51\fs20\ql officers or their associates, holders of 10% or more of any class of our equity securities or to our affiliates.\par\pard\plain\cf1\f51\fs20\ql \~{\*\bkmkstart item_1_3_9}{\*\bkmkend item_1_3_9}\par\pard\plain\cf1\f51\fs20\b\ql ITEM\~3.DEFAULTS UPON SENIOR SECURITIES{\*\bkmkstart item3defaultsuponseniorsecuritie}{\*\bkmkend item3defaultsuponseniorsecuritie}\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql None.\par\pard\plain\cf1\f51\fs20\ql \~{\*\bkmkstart item_1_3_10}{\*\bkmkend item_1_3_10}\par\pard\plain\cf1\f51\fs20\b\ql ITEM\~4.MINE SAFETY DISCLOSURES{\*\bkmkstart item4minesafetydisclosures_34697}{\*\bkmkend item4minesafetydisclosures_34697}\par\pard\plain\fi792\cf1\f51\fs20\ql Not applicable.\par\pard\plain\cf1\f51\fs20\ql \~{\*\bkmkstart item_1_3_11}{\*\bkmkend item_1_3_11}\par\pard\plain\cf1\f51\fs20\b\ql ITEM\~5.OTHER INFORMATION{\*\bkmkstart item5otherinformation_627510_124}{\*\bkmkend item5otherinformation_627510_124}\par\pard\plain\fi792\cf1\f51\fs20\ql None.\~\par\pard\plain\cf1\f51\fs20\ql \~{\*\bkmkstart item_1_3_12}{\*\bkmkend item_1_3_12}\par\pard\plain\cf1\f51\fs20\b\ql ITEM\~6.Exhibits{\*\bkmkstart item6exhibits_214662_12401628}{\*\bkmkend item6exhibits_214662_12401628} \par\pard\plain {\trowd\clvertalb\cellx766\cellx1060\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx766\cellx1060\clvertalb\cellx9688\trrh66\row}}} {\trowd\clvertalb\cellx766\cellx1060\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9688\trrh360 \pard\plain\intbl\cf1\f51\fs16\b\qc Number\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Description\cell{ {\trowd\clvertalb\cellx766\cellx1060\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9688\trrh360\row}}} {\trowd\cellx766\cellx1060\cellx9688\trrh878 \pard\plain\intbl\sb132\cf1\f51\fs20\qc 2.1\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\ul{\field{\*\fldinst HYPERLINK "http://www.sec.gov/Archives/edgar/data/31347/000119312518208447/d809508dex21.htm" }{\*\fldrslt\cf3\f51\fs20\ql Agreement and Plan of Merger among the Company, Circuit Acquisition Corporation and Echelon}}\plain\intbl\ul{\field{\*\fldinst HYPERLINK "http://www.sec.gov/Archives/edgar/data/31347/000119312518208447/d809508dex21.htm" }{\*\fldrslt\cf3\f51\fs20\ql Corporation, dated June 28, 2018 (incorporated by reference to Exhibit 2.1 to the Form 8-K filed by}}\plain\intbl\ul{\field{\*\fldinst HYPERLINK "http://www.sec.gov/Archives/edgar/data/31347/000119312518208447/d809508dex21.htm" }{\*\fldrslt\cf3\f51\fs20\ql Echelon Corporation with the Securities and Exchange Commission on June 29, 2018).*}}\cell{ {\trowd\cellx766\cellx1060\cellx9688\trrh878\row}}} {\trowd\cellx766\cellx1060\cellx9688\trrh878 \pard\plain\intbl\sb132\cf1\f51\fs20\qc 10.1\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\ul{\field{\*\fldinst HYPERLINK \\l "doc_1_2" }{\*\fldrslt\cf3\f51\fs20\ql Credit Agreement dated as of May 8, 2018 by and among the Registrant, the lenders from time to time}}\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "doc_1_2" }{\*\fldrslt\cf3\f51\fs20\ql party thereto, Cortland Capital Market Service LLC, as administrative agent for the lenders, and}}\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "doc_1_2" }{\*\fldrslt\cf3\f51\fs20\ql Obsidian Agency Services, Inc., as collateral agent for the secured parties.}}\cell{ {\trowd\cellx766\cellx1060\cellx9688\trrh878\row}}} {\trowd\cellx766\cellx1060\cellx9688\trrh1125 \pard\plain\intbl\sb132\cf1\f51\fs20\qc 10.2\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\ul{\field{\*\fldinst HYPERLINK \\l "doc_1_3" }{\*\fldrslt\cf3\f51\fs20\ql Warrant Purchase Agreement, dated May 8, 2018, by and among each of the Registrant and the lender}}\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "doc_1_3" }{\*\fldrslt\cf3\f51\fs20\ql parties to the Credit Agreement dated as of May 8, 2018 by and among the Registrant, the lenders}}\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "doc_1_3" }{\*\fldrslt\cf3\f51\fs20\ql from time to time party thereto, Cortland Capital Market Service LLC, as administrative agent for the}}\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "doc_1_3" }{\*\fldrslt\cf3\f51\fs20\ql lenders, and Obsidian Agency Services, Inc., as collateral agent for the secured parties.}}\cell{ {\trowd\cellx766\cellx1060\cellx9688\trrh1125\row}}} {\trowd\cellx766\cellx1060\cellx9688\trrh878 \pard\plain\intbl\sb132\cf1\f51\fs20\qc 31.1\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\ul{\field{\*\fldinst HYPERLINK \\l "doc_1_4" }{\*\fldrslt\cf3\f51\fs20\ql Certification of Chief Executive Officer pursuant to Securities Exchange Act}}\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "doc_1_4" }{\*\fldrslt\cf3\f51\fs20\ql Rules\~13a\u8209?14(c)\~and 15d\u8209?14(a), as adopted pursuant to Section\~302 of the Sarbanes-Oxley}}\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "doc_1_4" }{\*\fldrslt\cf3\f51\fs20\ql Act of 2002.}}\cell{ {\trowd\cellx766\cellx1060\cellx9688\trrh878\row}}} {\trowd\cellx766\cellx1060\cellx9688\trrh630 \pard\plain\intbl\sb132\cf1\f51\fs20\qc 31.2\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\ul{\field{\*\fldinst HYPERLINK \\l "doc_1_5" }{\*\fldrslt\cf3\f51\fs20\ql Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules\~13a\u8209?14(c)\~and}}\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "doc_1_5" }{\*\fldrslt\cf3\f51\fs20\ql 15d\u8209?14(a)-, as adopted pursuant to Section\~302 of the Sarbanes-Oxley Act of 2002.}}\cell{ {\trowd\cellx766\cellx1060\cellx9688\trrh630\row}}} {\trowd\cellx766\cellx1060\cellx9688\trrh630 \pard\plain\intbl\sb132\cf1\f51\fs20\qc 32.1+\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\ul{\field{\*\fldinst HYPERLINK \\l "doc_1_6" }{\*\fldrslt\cf3\f51\fs20\ql Certification of Chief Executive Officer pursuant to 18 U.S.C. Section\~1350, as adopted pursuant to}}\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "doc_1_6" }{\*\fldrslt\cf3\f51\fs20\ql Section\~906 of the Sarbanes-Oxley Act of 2002.}}\cell{ {\trowd\cellx766\cellx1060\cellx9688\trrh630\row}}} {\trowd\cellx766\cellx1060\cellx9688\trrh630 \pard\plain\intbl\sb132\cf1\f51\fs20\qc 32.2+\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\ul{\field{\*\fldinst HYPERLINK \\l "doc_1_7" }{\*\fldrslt\cf3\f51\fs20\ql Certification of Chief Financial Officer pursuant to 18 U.S.C. Section\~1350, as adopted pursuant to}}\plain\intbl\ul{\field{\*\fldinst HYPERLINK \\l "doc_1_7" }{\*\fldrslt\cf3\f51\fs20\ql Section\~906 of the Sarbanes-Oxley Act of 2002.}}\cell{ {\trowd\cellx766\cellx1060\cellx9688\trrh630\row}}} {\trowd\cellx766\cellx1060\cellx9688\trrh382 \pard\plain\intbl\sb132\cf1\f51\fs20\qc 101.INS\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql XBRL Instance Document\cell{ {\trowd\cellx766\cellx1060\cellx9688\trrh382\row}}}\pard\plain\sb528\cf1\f51\fs20\qc 59\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}} \par\pard\plain {\trowd\clvertalb\cellx839\cellx1129\clvertalb\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\clvertalb\cellx839\cellx1129\clvertalb\cellx9688\trrh66\row}}} {\trowd\clvertalb\cellx839\cellx1129\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9688\trrh360 \pard\plain\intbl\cf1\f51\fs16\b\qc Number\cell\pard\plain\intbl\cf1\f51\fs16\b\qc \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Description\cell{ {\trowd\clvertalb\cellx839\cellx1129\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9688\trrh360\row}}} {\trowd\cellx839\cellx1129\cellx9688\trrh382 \pard\plain\intbl\sb132\cf1\f51\fs20\qc 101.SCH\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql XBRL Taxonomy Extension Schema Document\cell{ {\trowd\cellx839\cellx1129\cellx9688\trrh382\row}}} {\trowd\cellx839\cellx1129\cellx9688\trrh382 \pard\plain\intbl\sb132\cf1\f51\fs20\qc 101.CAL\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql XBRL Taxonomy Extension Calculation Linkbase Document\cell{ {\trowd\cellx839\cellx1129\cellx9688\trrh382\row}}} {\trowd\clvertalc\cellx839\cellx1129\clvertalc\cellx9688\trrh382 \pard\plain\intbl\sb132\cf1\f51\fs20\qc 101.DEF\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql XBRL Taxonomy Extension Definition Linkbase Document\cell{ {\trowd\clvertalc\cellx839\cellx1129\clvertalc\cellx9688\trrh382\row}}} {\trowd\cellx839\cellx1129\cellx9688\trrh382 \pard\plain\intbl\sb132\cf1\f51\fs20\qc 101.LAB\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql XBRL Taxonomy Extension Label Linkbase Document\cell{ {\trowd\cellx839\cellx1129\cellx9688\trrh382\row}}} {\trowd\cellx839\cellx1129\cellx9688\trrh382 \pard\plain\intbl\sb132\cf1\f51\fs20\qc 101.PRE\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\sb132\cf1\f51\fs20\ql XBRL Taxonomy Extension Presentation Linkbase Document\cell{ {\trowd\cellx839\cellx1129\cellx9688\trrh382\row}}}\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\pard\plain\li528\fi-528\cf1\f51\fs20\ql * \~Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Adesto Technologies\plain\li528\cf1\f51\fs20\ql Corporation hereby undertakes to furnish supplementally copies of any of the omitted schedules and exhibits\plain\li528\sa264\cf1\f51\fs20\ql upon request by the U.S. Securities and Exchange Commission.\par\pard\plain\li528\fi-528\cf1\f51\fs20\ql +This certification shall not be deemed \u8220?filed\u8221? for purposes of Section\~18 of the Securities Exchange\plain\li528\cf1\f51\fs20\ql Act of 1934, as amended, or Exchange Act, or otherwise subject to the liability of that Section, nor shall it be\plain\li528\cf1\f51\fs20\ql deemed incorporated by reference into any filing under the Securities Act of 1933, as amended or the\plain\li528\sa264\cf1\f51\fs20\ql Exchange Act of 1934.\par\pard\plain\sb528\cf1\f51\fs20\qc 60\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li220\ri220\cf1\f51\fs20\ql \~ \page\pard\plain\sa660\ul{\field{\*\fldinst HYPERLINK \\l "toc_12401628" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}{\*\bkmkstart part_1_2_3}{\*\bkmkend part_1_2_3}\par\pard\plain\cf1\f51\fs20\b\qc SIGNATURES{\*\bkmkstart signatures_887593_12401628}{\*\bkmkend signatures_887593_12401628}\par\pard\plain\sa264\fi792\cf1\f51\fs20\ql Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this\plain\sa264\cf1\f51\fs20\ql report to be signed on its behalf by the undersigned thereunto duly authorized. \par\pard\plain {\trowd\cellx4879\cellx5293\cellx9688\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\cellx4879\cellx5293\cellx9688\trrh66\row}}} {\trowd\cellx4879\cellx5293\cellx9688\trrh410 \pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\cf1\f51\fs20\ql Adesto Technologies Corporation\cell{ {\trowd\cellx4879\cellx5293\cellx9688\trrh410\row}}} {\trowd\clvertalc\cellx4879\clvertalc\cellx5293\clvertalc\cellx9688\trrh297 \pard\plain\intbl\cf1\f51\fs24\ql \~\cell\pard\plain\intbl\cf1\f51\fs24\ql \~\cell\pard\plain\intbl\cf1\f51\fs24\ql \~\cell{ {\trowd\clvertalc\cellx4879\clvertalc\cellx5293\clvertalc\cellx9688\trrh297\row}}} {\trowd\cellx4879\cellx5293\clbrdrb\brdrs\brdrcf1\cellx9688\trrh248 \pard\plain\intbl\cf1\f51\fs20\ql Dated: August 9, 2018\cell\pard\plain\intbl\cf1\f51\fs20\qc By:\cell\pard\plain\intbl\cf1\f51\fs20\qc /s/ Ron Shelton\cell{ {\trowd\cellx4879\cellx5293\clbrdrb\brdrs\brdrcf1\cellx9688\trrh248\row}}} {\trowd\cellx4879\cellx5293\clbrdrt\brdrs\brdrcf1\cellx9688\trrh611 \pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\cf1\f51\fs16\b\qc Ron Shelton \par\pard\plain\intbl\fs16\pard\plain\intbl\cf1\f51\fs16\b\qc Chief Financial Officer \par\pard\plain\intbl\fs16\pard\plain\intbl\cf1\f51\fs16\b\qc (Principal Financial and Accounting Officer)\cell{ {\trowd\cellx4879\cellx5293\clbrdrt\brdrs\brdrcf1\cellx9688\trrh611\row}}}\pard\plain\cf1\f51\fs18\ql \~\par\pard\plain\sb528\cf1\f51\fs20\qc 61\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par \page{\*\bkmkstart doc_1_2}{\*\bkmkend doc_1_2}\par\pard\plain\sa264\cf1\f51\fs22\b\qr Exhibit 10.1\par\pard\plain\brdrb\brdrs\cf1\f51\fs22\ql \~\par\pard\plain\cf1\f51\fs22\qc \~\par\pard\plain\sa264\cf1\f51\fs22\b\qc CREDIT AGREEMENT\par\pard\plain\sa264\cf1\f51\fs22\qc dated as of\par\pard\plain\sa264\cf1\f51\fs22\b\qc May\~8, 2018,\par\pard\plain\sa264\cf1\f51\fs22\qc among\par\pard\plain\cf1\f51\fs22\b\qc ADESTO TECHNOLOGIES CORPORATION,\par\pard\plain\sa264\cf1\f51\fs22\qc \~as Borrower,\par\pard\plain\sa264\cf1\f51\fs22\b\qc THE LENDERS PARTY HERETO,\par\pard\plain\cf1\f51\fs22\b\qc CORTLAND CAPITAL MARKET SERVICES LLC,\par\pard\plain\sa264\cf1\f51\fs22\qc \~as Administrative Agent,\par\pard\plain\sa264\cf1\f51\fs22\qc and\par\pard\plain\cf1\f51\fs22\b\qc OBSIDIAN AGENCY SERVICES, INC.,\par\pard\plain\cf1\f51\fs22\qc as Collateral Agent\par\pard\plain\cf1\f51\fs22\qc \~\par\pard\plain\brdrb\brdrs\cf1\f51\fs22\ql \~\par\pard\plain\cf1\f51\fs22\ql \~\par\pard\plain\sa264\cf1\f51\fs20\qj \~\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\sa264\cf1\f51\fs22\li635\qj \~\par\pard\plain\sa264\cf1\f51\fs22\qc Table of Contents \par\pard\plain {\trowd\cellx1660\cellx9520\cellx10164\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh66\row}}} {\trowd\cellx9520\clbrdrb\brdrs\brdrcf1\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qc Page\cell{ {\trowd\cellx9520\clbrdrb\brdrs\brdrcf1\cellx10164\trrh272\row}}} {\trowd\cellx9520\clbrdrt\brdrs\brdrcf1\cellx10164\trrh289 \pard\plain\intbl\cf1\f51\fs22\qj ARTICLE I DEFINITIONS\cell\pard\plain\intbl\cf1\f51\fs22\qr 1\cell{ {\trowd\cellx9520\clbrdrt\brdrs\brdrcf1\cellx10164\trrh289\row}}} {\trowd\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qr \~\cell{ {\trowd\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 1.01.\cell\pard\plain\intbl\cf1\f51\fs22\qj Defined Terms\cell\pard\plain\intbl\cf1\f51\fs22\qr 1\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 1.02.\cell\pard\plain\intbl\cf1\f51\fs22\qj Terms Generally\cell\pard\plain\intbl\cf1\f51\fs22\qr 25\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 1.03.\cell\pard\plain\intbl\cf1\f51\fs22\qj Irish Terms.:\cell\pard\plain\intbl\cf1\f51\fs22\qr 25\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 1.04.\cell\pard\plain\intbl\cf1\f51\fs22\qj Independence of Covenants.\cell\pard\plain\intbl\cf1\f51\fs22\qr 26\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 1.05.\cell\pard\plain\intbl\cf1\f51\fs22\qj Construction\cell\pard\plain\intbl\cf1\f51\fs22\qr 26\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 1.06.\cell\pard\plain\intbl\cf1\f51\fs22\qj Pro Forma Compliance\cell\pard\plain\intbl\cf1\f51\fs22\qr 26\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 1.07.\cell\pard\plain\intbl\cf1\f51\fs22\qj Currency\cell\pard\plain\intbl\cf1\f51\fs22\qr 26\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qr \~\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj ARTICLE II THE CREDITS\cell\pard\plain\intbl\cf1\f51\fs22\qr 27\cell{ {\trowd\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qr \~\cell{ {\trowd\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.01.\cell\pard\plain\intbl\cf1\f51\fs22\qj Commitments\cell\pard\plain\intbl\cf1\f51\fs22\qr 27\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.02.\cell\pard\plain\intbl\cf1\f51\fs22\qj Loans; Notice of Borrowing\cell\pard\plain\intbl\cf1\f51\fs22\qr 27\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.03.\cell\pard\plain\intbl\cf1\f51\fs22\qj Disbursement of Funds\cell\pard\plain\intbl\cf1\f51\fs22\qr 27\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.04.\cell\pard\plain\intbl\cf1\f51\fs22\qj Evidence of Debt; Repayment of Loans\cell\pard\plain\intbl\cf1\f51\fs22\qr 27\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.05.\cell\pard\plain\intbl\cf1\f51\fs22\qj Fees\cell\pard\plain\intbl\cf1\f51\fs22\qr 28\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.06.\cell\pard\plain\intbl\cf1\f51\fs22\qj Interest on Loans\cell\pard\plain\intbl\cf1\f51\fs22\qr 29\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.07.\cell\pard\plain\intbl\cf1\f51\fs22\qj Default Interest\cell\pard\plain\intbl\cf1\f51\fs22\qr 29\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.08.\cell\pard\plain\intbl\cf1\f51\fs22\qj Termination of Commitments\cell\pard\plain\intbl\cf1\f51\fs22\qr 30\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.09.\cell\pard\plain\intbl\cf1\f51\fs22\qj Repayment of Loans\cell\pard\plain\intbl\cf1\f51\fs22\qr 30\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.10.\cell\pard\plain\intbl\cf1\f51\fs22\qj Mandatory Prepayments\cell\pard\plain\intbl\cf1\f51\fs22\qr 31\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.11.\cell\pard\plain\intbl\cf1\f51\fs22\qj Reserve Requirements; Change in Circumstances\cell\pard\plain\intbl\cf1\f51\fs22\qr 33\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.12.\cell\pard\plain\intbl\cf1\f51\fs22\qj Indemnity\cell\pard\plain\intbl\cf1\f51\fs22\qr 34\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.13.\cell\pard\plain\intbl\cf1\f51\fs22\qj Pro Rata Treatment\cell\pard\plain\intbl\cf1\f51\fs22\qr 34\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.14.\cell\pard\plain\intbl\cf1\f51\fs22\qj Ratable Sharing\cell\pard\plain\intbl\cf1\f51\fs22\qr 34\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.15.\cell\pard\plain\intbl\cf1\f51\fs22\qj Payments\cell\pard\plain\intbl\cf1\f51\fs22\qr 35\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.16.\cell\pard\plain\intbl\cf1\f51\fs22\qj Taxes\cell\pard\plain\intbl\cf1\f51\fs22\qr 35\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.17.\cell\pard\plain\intbl\cf1\f51\fs22\qj Assignment of Loans Under Certain Circumstances; Duty to Mitigate\cell\pard\plain\intbl\cf1\f51\fs22\qr 38\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.18.\cell\pard\plain\intbl\cf1\f51\fs22\qj [Reserved].\cell\pard\plain\intbl\cf1\f51\fs22\qr 39\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.19.\cell\pard\plain\intbl\cf1\f51\fs22\qj Original Issue Discount\cell\pard\plain\intbl\cf1\f51\fs22\qr 39\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 2.20.\cell\pard\plain\intbl\cf1\f51\fs22\qj Investment Unit\cell\pard\plain\intbl\cf1\f51\fs22\qr 39\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qr \~\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj ARTICLE III REPRESENTATIONS AND WARRANTIES\cell\pard\plain\intbl\cf1\f51\fs22\qr 40\cell{ {\trowd\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qr \~\cell{ {\trowd\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.01.\cell\pard\plain\intbl\cf1\f51\fs22\qj Organization; Powers\cell\pard\plain\intbl\cf1\f51\fs22\qr 40\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.02.\cell\pard\plain\intbl\cf1\f51\fs22\qj Authorization\cell\pard\plain\intbl\cf1\f51\fs22\qr 40\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.03.\cell\pard\plain\intbl\cf1\f51\fs22\qj Enforceability\cell\pard\plain\intbl\cf1\f51\fs22\qr 40\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.04.\cell\pard\plain\intbl\cf1\f51\fs22\qj Governmental Approvals\cell\pard\plain\intbl\cf1\f51\fs22\qr 40\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.05.\cell\pard\plain\intbl\cf1\f51\fs22\qj Financial Statements\cell\pard\plain\intbl\cf1\f51\fs22\qr 41\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.06.\cell\pard\plain\intbl\cf1\f51\fs22\qj Title to Properties; Possession Under Leases\cell\pard\plain\intbl\cf1\f51\fs22\qr 41\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.07.\cell\pard\plain\intbl\cf1\f51\fs22\qj Subsidiaries\cell\pard\plain\intbl\cf1\f51\fs22\qr 42\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.08.\cell\pard\plain\intbl\cf1\f51\fs22\qj Litigation; Compliance with Laws\cell\pard\plain\intbl\cf1\f51\fs22\qr 43\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.09.\cell\pard\plain\intbl\cf1\f51\fs22\qj Contractual Obligations\cell\pard\plain\intbl\cf1\f51\fs22\qr 43\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.10.\cell\pard\plain\intbl\cf1\f51\fs22\qj Federal Reserve Regulations\cell\pard\plain\intbl\cf1\f51\fs22\qr 43\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9520\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.11.\cell\pard\plain\intbl\cf1\f51\fs22\qj Government Regulation\cell\pard\plain\intbl\cf1\f51\fs22\qr 44\cell{ {\trowd\cellx1660\cellx9520\cellx10164\trrh272\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sb528\cf1\f51\fs24\qc i\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\sa264\cf1\f51\fs22\li635\qj \~\par\pard\plain\cf1\f51\fs22\qc Table of Contents\par\pard\plain\sa264\cf1\f51\fs22\qc (continued) \par\pard\plain {\trowd\cellx1660\cellx9419\cellx10164\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh66\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.12.\cell\pard\plain\intbl\cf1\f51\fs22\qj Use of Proceeds\cell\pard\plain\intbl\cf1\f51\fs22\qr 44\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.13.\cell\pard\plain\intbl\cf1\f51\fs22\qj Tax Returns; Passive Foreign Investment Company\cell\pard\plain\intbl\cf1\f51\fs22\qr 44\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.14.\cell\pard\plain\intbl\cf1\f51\fs22\qj No Material Misstatements\cell\pard\plain\intbl\cf1\f51\fs22\qr 44\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.15.\cell\pard\plain\intbl\cf1\f51\fs22\qj Employee Benefit Plans\cell\pard\plain\intbl\cf1\f51\fs22\qr 45\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.16.\cell\pard\plain\intbl\cf1\f51\fs22\qj Environmental Matters\cell\pard\plain\intbl\cf1\f51\fs22\qr 45\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.17.\cell\pard\plain\intbl\cf1\f51\fs22\qj Insurance\cell\pard\plain\intbl\cf1\f51\fs22\qr 45\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.18.\cell\pard\plain\intbl\cf1\f51\fs22\qj Security Documents\cell\pard\plain\intbl\cf1\f51\fs22\qr 45\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.19.\cell\pard\plain\intbl\cf1\f51\fs22\qj Location of Real Property and Leased Premises\cell\pard\plain\intbl\cf1\f51\fs22\qr 46\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.20.\cell\pard\plain\intbl\cf1\f51\fs22\qj Labor Matters\cell\pard\plain\intbl\cf1\f51\fs22\qr 46\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.21.\cell\pard\plain\intbl\cf1\f51\fs22\qj Solvency\cell\pard\plain\intbl\cf1\f51\fs22\qr 46\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.22.\cell\pard\plain\intbl\cf1\f51\fs22\qj Transaction Documents\cell\pard\plain\intbl\cf1\f51\fs22\qr 47\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.23.\cell\pard\plain\intbl\cf1\f51\fs22\qj Sanctioned Persons\cell\pard\plain\intbl\cf1\f51\fs22\qr 47\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.24.\cell\pard\plain\intbl\cf1\f51\fs22\qj Financial Advisors\cell\pard\plain\intbl\cf1\f51\fs22\qr 47\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.25.\cell\pard\plain\intbl\cf1\f51\fs22\qj Foreign Assets Control Regulations, Etc\cell\pard\plain\intbl\cf1\f51\fs22\qr 47\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.26.\cell\pard\plain\intbl\cf1\f51\fs22\qj Representations and Warranties\cell\pard\plain\intbl\cf1\f51\fs22\qr 48\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.27.\cell\pard\plain\intbl\cf1\f51\fs22\qj Deposit Accounts; Securities Accounts\cell\pard\plain\intbl\cf1\f51\fs22\qr 48\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.28.\cell\pard\plain\intbl\cf1\f51\fs22\qj Loans to Officers and Directors\cell\pard\plain\intbl\cf1\f51\fs22\qr 48\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.29.\cell\pard\plain\intbl\cf1\f51\fs22\qj Customers\cell\pard\plain\intbl\cf1\f51\fs22\qr 48\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.30.\cell\pard\plain\intbl\cf1\f51\fs22\qj Accounts and Notes Receivable; Accounts and Notes Payable\cell\pard\plain\intbl\cf1\f51\fs22\qr 48\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.31.\cell\pard\plain\intbl\cf1\f51\fs22\qj Internal Controls\cell\pard\plain\intbl\cf1\f51\fs22\qr 48\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 3.32.\cell\pard\plain\intbl\cf1\f51\fs22\qj Intellectual Property; Copyright Matters\cell\pard\plain\intbl\cf1\f51\fs22\qr 48\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qr \~\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj ARTICLE IV CONDITIONS OF LENDING\cell\pard\plain\intbl\cf1\f51\fs22\qr 49\cell{ {\trowd\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qr \~\cell{ {\trowd\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 4.01.\cell\pard\plain\intbl\cf1\f51\fs22\qj Conditions Precedent to Closing\cell\pard\plain\intbl\cf1\f51\fs22\qr 49\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 4.02.\cell\pard\plain\intbl\cf1\f51\fs22\qj Post Closing Obligations\cell\pard\plain\intbl\cf1\f51\fs22\qr 54\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qr \~\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj ARTICLE V AFFIRMATIVE COVENANTS\cell\pard\plain\intbl\cf1\f51\fs22\qr 56\cell{ {\trowd\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qr \~\cell{ {\trowd\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 5.01.\cell\pard\plain\intbl\cf1\f51\fs22\qj Existence; Compliance with Laws; Businesses and Properties\cell\pard\plain\intbl\cf1\f51\fs22\qr 56\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 5.02.\cell\pard\plain\intbl\cf1\f51\fs22\qj Insurance\cell\pard\plain\intbl\cf1\f51\fs22\qr 56\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 5.03.\cell\pard\plain\intbl\cf1\f51\fs22\qj Obligations and Taxes\cell\pard\plain\intbl\cf1\f51\fs22\qr 57\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 5.04.\cell\pard\plain\intbl\cf1\f51\fs22\qj Financial Statements, Reports, etc\cell\pard\plain\intbl\cf1\f51\fs22\qr 57\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 5.05.\cell\pard\plain\intbl\cf1\f51\fs22\qj Litigation and Other Notices\cell\pard\plain\intbl\cf1\f51\fs22\qr 60\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 5.06.\cell\pard\plain\intbl\cf1\f51\fs22\qj Information Regarding Collateral\cell\pard\plain\intbl\cf1\f51\fs22\qr 60\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 5.07.\cell\pard\plain\intbl\cf1\f51\fs22\qj Maintaining Records; Access to Properties and Inspections\cell\pard\plain\intbl\cf1\f51\fs22\qr 61\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 5.08.\cell\pard\plain\intbl\cf1\f51\fs22\qj Use of Proceeds\cell\pard\plain\intbl\cf1\f51\fs22\qr 61\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 5.09.\cell\pard\plain\intbl\cf1\f51\fs22\qj Employee Benefits\cell\pard\plain\intbl\cf1\f51\fs22\qr 61\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 5.10.\cell\pard\plain\intbl\cf1\f51\fs22\qj Compliance with Environmental Laws\cell\pard\plain\intbl\cf1\f51\fs22\qr 61\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 5.11.\cell\pard\plain\intbl\cf1\f51\fs22\qj Preparation of Environmental Reports\cell\pard\plain\intbl\cf1\f51\fs22\qr 61\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 5.12.\cell\pard\plain\intbl\cf1\f51\fs22\qj Further Assurances\cell\pard\plain\intbl\cf1\f51\fs22\qr 62\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 5.13.\cell\pard\plain\intbl\cf1\f51\fs22\qj Change of Control Provisions\cell\pard\plain\intbl\cf1\f51\fs22\qr 63\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 5.14.\cell\pard\plain\intbl\cf1\f51\fs22\qj Intellectual Property\cell\pard\plain\intbl\cf1\f51\fs22\qr 63\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1660\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qr \~\cell{ {\trowd\cellx1660\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj ARTICLE VI NEGATIVE COVENANTS\cell\pard\plain\intbl\cf1\f51\fs22\qr 63\cell{ {\trowd\cellx9419\cellx10164\trrh272\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sb528\cf1\f51\fs24\qc ii\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\sa264\cf1\f51\fs22\li635\qj \~\par\pard\plain\cf1\f51\fs22\qc Table of Contents\par\pard\plain\sa264\cf1\f51\fs22\qc (continued) \par\pard\plain {\trowd\cellx1678\cellx9419\cellx10164\trrh66 \pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell\pard\plain\intbl\cf1\f51\fs2\ql \~\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh66\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 6.01.\cell\pard\plain\intbl\cf1\f51\fs22\qj Indebtedness\cell\pard\plain\intbl\cf1\f51\fs22\qr 64\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 6.02.\cell\pard\plain\intbl\cf1\f51\fs22\qj Liens\cell\pard\plain\intbl\cf1\f51\fs22\qr 65\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 6.03.\cell\pard\plain\intbl\cf1\f51\fs22\qj Sale and Lease\u8209?Back Transactions\cell\pard\plain\intbl\cf1\f51\fs22\qr 68\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 6.04.\cell\pard\plain\intbl\cf1\f51\fs22\qj Investments\cell\pard\plain\intbl\cf1\f51\fs22\qr 68\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 6.05.\cell\pard\plain\intbl\cf1\f51\fs22\qj Consolidations, Dispositions of Assets and Acquisitions\cell\pard\plain\intbl\cf1\f51\fs22\qr 70\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 6.06.\cell\pard\plain\intbl\cf1\f51\fs22\qj Restricted Payments; Restrictive Agreements\cell\pard\plain\intbl\cf1\f51\fs22\qr 72\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 6.07.\cell\pard\plain\intbl\cf1\f51\fs22\qj Transactions with Affiliates\cell\pard\plain\intbl\cf1\f51\fs22\qr 73\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 6.08.\cell\pard\plain\intbl\cf1\f51\fs22\qj Borrower and Subsidiaries\cell\pard\plain\intbl\cf1\f51\fs22\qr 73\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 6.09.\cell\pard\plain\intbl\cf1\f51\fs22\qj Other Indebtedness and Agreements, etc\cell\pard\plain\intbl\cf1\f51\fs22\qr 73\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 6.10.\cell\pard\plain\intbl\cf1\f51\fs22\qj [Reserved]\cell\pard\plain\intbl\cf1\f51\fs22\qr 73\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 6.11.\cell\pard\plain\intbl\cf1\f51\fs22\qj [Reserved]\cell\pard\plain\intbl\cf1\f51\fs22\qr 73\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 6.12.\cell\pard\plain\intbl\cf1\f51\fs22\qj Maximum Consolidated Leverage Ratios\cell\pard\plain\intbl\cf1\f51\fs22\qr 74\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 6.13.\cell\pard\plain\intbl\cf1\f51\fs22\qj Minimum Liquidity\cell\pard\plain\intbl\cf1\f51\fs22\qr 74\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 6.14.\cell\pard\plain\intbl\cf1\f51\fs22\qj Fiscal Year\cell\pard\plain\intbl\cf1\f51\fs22\qr 74\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 6.15.\cell\pard\plain\intbl\cf1\f51\fs22\qj Certain Equity Securities\cell\pard\plain\intbl\cf1\f51\fs22\qr 74\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh544 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 6.16.\cell\pard\plain\intbl\cf1\f51\fs22\qj Amendments or Waivers of Documents Relating to Organizational Documents,\plain\intbl\cf1\f51\fs22\qj Equity Interests and Acquisition Agreement\cell\pard\plain\intbl\cf1\f51\fs22\qr 74\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh544\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qr \~\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj ARTICLE VII EVENTS OF DEFAULT\cell\pard\plain\intbl\cf1\f51\fs22\qr 75\cell{ {\trowd\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qr \~\cell{ {\trowd\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 7.01.\cell\pard\plain\intbl\cf1\f51\fs22\qj Events of Default\cell\pard\plain\intbl\cf1\f51\fs22\qr 75\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qr \~\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql ARTICLE VIII THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT\cell\pard\plain\intbl\cf1\f51\fs22\qr 78\cell{ {\trowd\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql \~\cell\pard\plain\intbl\cf1\f51\fs22\qr \~\cell{ {\trowd\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj ARTICLE IX MISCELLANEOUS\cell\pard\plain\intbl\cf1\f51\fs22\qr 81\cell{ {\trowd\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj \~\cell\pard\plain\intbl\cf1\f51\fs22\qr \~\cell{ {\trowd\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.01.\cell\pard\plain\intbl\cf1\f51\fs22\qj Notices\cell\pard\plain\intbl\cf1\f51\fs22\qr 81\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.02.\cell\pard\plain\intbl\cf1\f51\fs22\qj Survival of Agreement\cell\pard\plain\intbl\cf1\f51\fs22\qr 82\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.03.\cell\pard\plain\intbl\cf1\f51\fs22\qj Binding Effect\cell\pard\plain\intbl\cf1\f51\fs22\qr 82\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.04.\cell\pard\plain\intbl\cf1\f51\fs22\qj Successors and Assigns\cell\pard\plain\intbl\cf1\f51\fs22\qr 82\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.05.\cell\pard\plain\intbl\cf1\f51\fs22\qj Expenses; Indemnity\cell\pard\plain\intbl\cf1\f51\fs22\qr 85\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.06.\cell\pard\plain\intbl\cf1\f51\fs22\qj Right of Setoff\cell\pard\plain\intbl\cf1\f51\fs22\qr 86\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.07.\cell\pard\plain\intbl\cf1\f51\fs22\qj Applicable Law\cell\pard\plain\intbl\cf1\f51\fs22\qr 87\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.08.\cell\pard\plain\intbl\cf1\f51\fs22\qj Waivers; Amendment\cell\pard\plain\intbl\cf1\f51\fs22\qr 87\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.09.\cell\pard\plain\intbl\cf1\f51\fs22\qj Interest Rate Limitation\cell\pard\plain\intbl\cf1\f51\fs22\qr 87\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.10.\cell\pard\plain\intbl\cf1\f51\fs22\qj Entire Agreement\cell\pard\plain\intbl\cf1\f51\fs22\qr 88\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.11.\cell\pard\plain\intbl\cf1\f51\fs22\qj Waiver of Jury Trial\cell\pard\plain\intbl\cf1\f51\fs22\qr 88\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.12.\cell\pard\plain\intbl\cf1\f51\fs22\qj Judgment Currency\cell\pard\plain\intbl\cf1\f51\fs22\qr 88\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.13.\cell\pard\plain\intbl\cf1\f51\fs22\qj Severability\cell\pard\plain\intbl\cf1\f51\fs22\qr 89\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.14.\cell\pard\plain\intbl\cf1\f51\fs22\qj Counterparts\cell\pard\plain\intbl\cf1\f51\fs22\qr 89\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.15.\cell\pard\plain\intbl\cf1\f51\fs22\qj Headings\cell\pard\plain\intbl\cf1\f51\fs22\qr 89\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.16.\cell\pard\plain\intbl\cf1\f51\fs22\qj Jurisdiction; Consent to Service of Process\cell\pard\plain\intbl\cf1\f51\fs22\qr 89\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.17.\cell\pard\plain\intbl\cf1\f51\fs22\qj Confidentiality\cell\pard\plain\intbl\cf1\f51\fs22\qr 89\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}} {\trowd\cellx1678\cellx9419\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\qj SECTION 9.18.\cell\pard\plain\intbl\cf1\f51\fs22\qj USA PATRIOT Act Notice\cell\pard\plain\intbl\cf1\f51\fs22\qr 90\cell{ {\trowd\cellx1678\cellx9419\cellx10164\trrh272\row}}}\pard\plain\cf1\f51\fs20\ql \~\par\pard\plain\sb528\cf1\f51\fs24\qc iii\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\sa264\cf1\f51\fs22\li635\qj \~ \par\pard\plain {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql SCHEDULES\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql \~\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh544 \pard\plain\intbl\cf1\f51\fs22\ql Schedule\plain\intbl\cf1\f51\fs22\ql 1.01(a)\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Subsidiary Guarantors\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh544\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh544 \pard\plain\intbl\cf1\f51\fs22\ql Schedule\plain\intbl\cf1\f51\fs22\ql 1.01(b)\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Existing Debt to Be Repaid\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh544\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql Schedule 2.01\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Lenders and Commitments\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh544 \pard\plain\intbl\cf1\f51\fs22\ql Schedule\plain\intbl\cf1\f51\fs22\ql 3.07(a)\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Capitalization of Borrower and its Subsidiaries\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh544\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh544 \pard\plain\intbl\cf1\f51\fs22\ql Schedule\plain\intbl\cf1\f51\fs22\ql 3.07(b)\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Capital Stock of Borrower, Options, Warrants, etc.\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh544\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql Schedule 3.16\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Environmental Matters\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql Schedule 3.17\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Insurance\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh544 \pard\plain\intbl\cf1\f51\fs22\ql Schedule\plain\intbl\cf1\f51\fs22\ql 3.18(a)\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql UCC Filing Offices\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh544\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh544 \pard\plain\intbl\cf1\f51\fs22\ql Schedule\plain\intbl\cf1\f51\fs22\ql 3.19(a)\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Owned Real Property\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh544\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh545 \pard\plain\intbl\cf1\f51\fs22\ql Schedule\plain\intbl\cf1\f51\fs22\ql 3.19(b)\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Leased Real Property\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh545\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql Schedule 3.24\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Financial Advisors\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql Schedule 3.29\cell\pard\plain\intbl\cf1\f51\fs22\qc \~\cell\pard\plain\intbl\cf1\f51\fs22\ql Major Customers\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql Schedule 3.27\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Deposit Accounts and Securities Accounts\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh545 \pard\plain\intbl\cf1\f51\fs22\ql Schedule\plain\intbl\cf1\f51\fs22\ql 3.30(b)\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Accounts Payable and Notes Payable\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh545\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql Schedule 6.01\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Existing Indebtedness\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql Schedule 6.02\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Existing Liens\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql \~\cell\pard\plain\intbl\cf1\f51\fs22\qc \~\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql EXHIBITS\cell\pard\plain\intbl\cf1\f51\fs22\qc \~\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql \~\cell\pard\plain\intbl\cf1\f51\fs22\qc \~\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql Exhibit A\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Form of Notice of Borrowing\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql Exhibit B\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Form of Solvency Certificate\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql Exhibit C\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Form of Note\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql Exhibit D\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Form of Administrative Questionnaire\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql Exhibit E\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Form of Assignment and Acceptance\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql Exhibit F\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Form of Guarantee and Collateral Agreement\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql Exhibit H\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Form of Warrant\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}} {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272 \pard\plain\intbl\cf1\f51\fs22\ql Exhibit I\cell\pard\plain\intbl\cf1\f51\fs22\qc \u8209?\cell\pard\plain\intbl\cf1\f51\fs22\ql Form of Warrant Agreement\cell{ {\trowd\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx1517\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx2320\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10164\trrh272\row}}}\pard\plain\sa264\cf1\f51\fs22\ql \~\par\pard\plain\sa264\cf1\f51\fs20\qj \~\par\pard\plain\sb528\cf1\f51\fs24\qc iv\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\sa264\cf1\f51\fs22\li635\qj \~\par\pard\plain\sa264\cf1\f51\fs22\b\qc CREDIT AGREEMENT\par\pard\plain\fi792\cf1\f51\fs22\qj This CREDIT AGREEMENT is dated as of May\~8, 2018 and entered into by and among Adesto\plain\cf1\f51\fs22\qj Technologies Corporation, a Delaware corporation (the \u8220?\plain\cf1\f51\fs22\b\i\qj Borrower\plain\cf1\f51\fs22\qj \u8221?), the Lenders (as defined in\plain\cf1\f51\fs22\qj Article I\plain\cf1\f51\fs22\qj ), Cortland Capital Market Services LLC (\u8220?\plain\cf1\f51\fs22\b\i\qj Cortland\plain\cf1\f51\fs22\qj \u8221?), as administrative agent for the\plain\cf1\f51\fs22\qj Lenders (in such capacity, together with its successors and assigns, the \u8220?\plain\cf1\f51\fs22\b\i\qj Administrative Agent\plain\cf1\f51\fs22\qj \u8221?)\plain\cf1\f51\fs22\qj and, Obsidian Agency Services, Inc. (\u8220?\plain\cf1\f51\fs22\b\i\qj Obsidian\plain\cf1\f51\fs22\qj \u8221?), as collateral agent for the Secured Parties (in\plain\cf1\f51\fs22\qj such capacity, together with its successors and assigns, the \u8220?\plain\cf1\f51\fs22\b\i\qj Collateral Agent\plain\sa264\cf1\f51\fs22\qj \u8221?).\par\pard\plain\sa264\cf1\f51\fs22\qc PRELIMINARY STATEMENT\par\pard\plain\fi792\cf1\f51\fs22\qj The Borrower desires that the Lenders extend certain credit facilities to the Borrower (i)\~to finance the\plain\cf1\f51\fs22\qj Acquisition, (ii)\~to effectuate the Existing Debt Refinancing, (iii)\~to pay fees, costs and expenses (including,\plain\cf1\f51\fs22\qj without limitation, attorney\u8217?s fees) incurred in connection with the Transactions (\u8220?\plain\cf1\f51\fs22\b\i\qj Transaction\plain\cf1\f51\fs22\b\i\qj Expenses\plain\cf1\f51\fs22\qj \u8221?) and (iv)\~to finance working capital and other general corporate purposes of the Borrower\plain\sa264\cf1\f51\fs22\qj and its Subsidiaries.\par\pard\plain\sa264\fi792\cf1\f51\fs22\qj The Lenders have agreed to extend term loans to the Borrower for such purposes.\par\pard\plain\fi792\cf1\f51\fs22\qj The Borrower desires to secure all of the Obligations hereunder and under the other Loan Documents\plain\cf1\f51\fs22\qj by granting to the Collateral Agent, for the benefit of the Secured Parties, a first priority Lien on substantially\plain\cf1\f51\fs22\qj all of its real, personal and mixed property, including a pledge of the capital stock of each of its Subsidiaries,\plain\sa264\cf1\f51\fs22\qj as and to the extent provided herein and in the other Loan Documents.\par\pard\plain\fi792\cf1\f51\fs22\qj Certain of the Borrower\u8217?s Subsidiaries have agreed to guarantee the Obligations hereunder and\plain\cf1\f51\fs22\qj under the other Loan Documents and to secure their guaranties by granting to the Collateral Agent, for the\plain\cf1\f51\fs22\qj benefit of the Secured Parties, a first priority Lien on substantially all of their respective real, personal and\plain\cf1\f51\fs22\qj mixed property, including a pledge of the Equity Interests of each of their respective Subsidiaries, as and to the\plain\sa264\cf1\f51\fs22\qj extent provided herein and in the other Loan Documents.\par\pard\plain\fi792\cf1\f51\fs22\qj The Lenders are willing to extend such credit to the Borrower on the terms and subject to the\plain\sa264\cf1\f51\fs22\qj conditions set forth herein.\~ Accordingly, the parties hereto agree as follows:\par\pard\plain\cf1\f51\fs22\qc ARTICLE I\par\pard\plain\cf1\f51\fs22\qc \~\par\pard\plain\sa264\cf1\f51\fs22\b\i\qc Definitions\par\pard\plain\fi792\cf1\f51\fs22\qj SECTION 1.01.\~\~\~\~\~\plain\cf1\f51\fs22\b\i\qj Defined Terms\plain\sa264\cf1\f51\fs22\qj .\par\pard\plain\sa264\fi792\cf1\f51\fs22\qj As used in this Agreement, the following terms shall have the meanings specified below:\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Acquired Entity\plain\cf1\f51\fs22\qj \u8221? shall have the meaning assigned to such term in\plain\cf1\f51\fs22\qj Section\~6.04(xiii)\plain\sa264\cf1\f51\fs22\qj .\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Acquisition\plain\cf1\f51\fs22\qj \u8221? shall mean the purchase of certain Equity Interests of the Target by the\plain\cf1\f51\fs22\qj Borrower and the consummation of the other transactions contemplated by the Transaction Documents, in each\plain\sa264\cf1\f51\fs22\qj case, in accordance with the Transaction Documents.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Acquisition Agreement\plain\cf1\f51\fs22\qj \u8221? shall mean that certain Share Purchase Agreement dated as of\plain\cf1\f51\fs22\qj May 8, 2018 among Borrower and the sellers party thereto, as amended, restated, supplemented or otherwise\plain\sa264\cf1\f51\fs22\qj modified in accordance with the terms thereof and hereof.\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\sa264\cf1\f51\fs22\li635\qj \~\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Acquisition Earnout\plain\cf1\f51\fs22\qj \u8221? \~shall means, with respect to the Acquisition or any Permitted\plain\cf1\f51\fs22\qj Acquisition, all obligations of the Borrower or any Subsidiary thereof to make earn out or other contingency\plain\cf1\f51\fs22\qj payments (including milestone payments, purchase price adjustments or any similar contingent payment\plain\cf1\f51\fs22\qj obligation calculated by reference to the performance of business or assets acquired pursuant to such\plain\cf1\f51\fs22\qj Acquisition or Permitted Acquisition) pursuant to the documentation relating to such Acquisition or Permitted\plain\cf1\f51\fs22\qj Acquisition.\~\~For purposes of determining the aggregate consideration paid for such an Acquisition, the amount\plain\cf1\f51\fs22\qj of any earn out obligations shall be deemed to be the maximum amount of the earn out and other contingency\plain\cf1\f51\fs22\qj payments in respect thereof as specified in the documents relating to such Acquisition or Permitted\plain\sa264\cf1\f51\fs22\qj Acquisition.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Administrative Agent\plain\sa264\cf1\f51\fs22\qj \u8221? shall have the meaning assigned to such term in the Preamble.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Administrative Agent Fees\plain\cf1\f51\fs22\qj \u8221? shall have the meaning assigned to such term in\plain\cf1\f51\fs22\qj Section\~2.05(a)\plain\sa264\cf1\f51\fs22\qj .\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Administrative Questionnaire\plain\cf1\f51\fs22\qj \u8221? shall mean an Administrative Questionnaire in the form\plain\cf1\f51\fs22\qj of\plain\cf1\f51\fs22\qj Exhibit\~D\plain\sa264\cf1\f51\fs22\qj , or such other form as may be supplied from time to time by the Administrative Agent.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Affiliate\plain\cf1\f51\fs22\qj \u8221? shall mean, when used with respect to a specified Person, another Person that\plain\cf1\f51\fs22\qj directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common\plain\cf1\f51\fs22\qj Control with the Person specified;\plain\cf1\f51\fs22\i\qj provided\plain\cf1\f51\fs22\qj , \~\plain\cf1\f51\fs22\i\qj however\plain\cf1\f51\fs22\qj , that, for purposes of\plain\cf1\f51\fs22\qj Section\~6.07\plain\cf1\f51\fs22\qj , the term\plain\cf1\f51\fs22\qj \u8220?Affiliate\u8221? shall also include any Person that directly or indirectly owns 10% or more of any\plain\sa264\cf1\f51\fs22\qj class of Equity Interests of the Person specified or that is an officer or director of the Person specified.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Agents\plain\cf1\f51\fs22\qj \u8221? shall have the meaning assigned to such term in\plain\cf1\f51\fs22\qj Article\~VIII\plain\sa264\cf1\f51\fs22\qj .\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Agreement\plain\sa264\cf1\f51\fs22\qj \u8221? shall mean this Credit Agreement.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Alternate Base Rate\plain\cf1\f51\fs22\qj \u8221? means, for any day, a fluctuating rate of interest per annum equal\plain\sa264\cf1\f51\fs22\qj to the highest of:\par\pard\plain\sa264\fi792\cf1\f51\fs22\qj (i)\~\~\~\~\~\~\~\~\~\~the Prime Rate in effect on such day;\par\pard\plain\sa264\fi792\cf1\f51\fs22\qj (ii)\~\~\~\~\~\~\~\~\~the Federal Funds Effective Rate in effect on such day plus \u189? of 1.0% per annum; and\par\pard\plain\sa264\fi792\cf1\f51\fs22\qj (iii)\~\~\~\~\~\~\~the Libor Rate plus 1%.\par\pard\plain\fi792\cf1\f51\fs22\qj Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective\plain\cf1\f51\fs22\qj Rate or the Libor Rate shall be effective from and including the effective day of such change in the Prime\plain\sa264\cf1\f51\fs22\qj Rate, the Federal Funds Effective Rate or the Libor Rate, respectively.\par\pard\plain\fi792\cf1\f51\fs22\qj The Alternate Base Rate is a reference rate and does not necessarily represent the lowest or best rate\plain\cf1\f51\fs22\qj actually charged to any customer of any Agent or any Lender.\~ Interest calculated pursuant to clause\~(i) above\plain\cf1\f51\fs22\qj will be determined based on a year of 365\~days or 366\~days, as applicable and actual days elapsed.\~ Interest\plain\cf1\f51\fs22\qj calculated pursuant to clauses\~(ii) and (iii)\~above will be determined based on a year of 360\~days and actual\plain\sa264\cf1\f51\fs22\qj days elapsed.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Alternate Base Rate Loans\plain\cf1\f51\fs22\qj \u8221? shall mean any Loan that bears interest at a rate\plain\sa264\cf1\f51\fs22\qj determined by reference to the Alternate Base Rate.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Applicable Prepayment Premium\plain\cf1\f51\fs22\qj \u8221? has the meaning assigned to such term in\plain\sa264\cf1\f51\fs22\qj Section\~2.05(c).\par\pard\plain\sb528\cf1\f51\fs24\qc 2\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\sa264\cf1\f51\fs22\li635\qj \~\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Appointee\plain\cf1\f51\fs22\qj \u8221? shall have the meaning assigned to such term in\plain\cf1\f51\fs22\qj Section\~5.16\plain\sa264\cf1\f51\fs22\qj .\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Asset Sale\plain\cf1\f51\fs22\qj \u8221? shall mean the Disposition by the Borrower or any Subsidiary to any Person\plain\cf1\f51\fs22\qj other than the Borrower or any Subsidiary Guarantor of (i)\~any of the Equity Interests of any of the\plain\cf1\f51\fs22\qj Borrower\u8217?s Subsidiaries, (ii)\~substantially all of the assets of any division or line of business of the\plain\cf1\f51\fs22\qj Borrower or any of its Subsidiaries, or (iii)\~any other assets (whether tangible or intangible) of the Borrower or\plain\cf1\f51\fs22\qj any of its Subsidiaries, including the granting of licenses in respect of Intellectual Property with a term of five\plain\cf1\f51\fs22\qj (5) years or more (other than (a)\~inventory sold in the ordinary course of business, (b)\~Dispositions of accounts\plain\cf1\f51\fs22\qj in the ordinary course of business for purposes of collection, (c) non-exclusive licenses to firmware in\plain\cf1\f51\fs22\qj connection with the sale of products in the ordinary course and licenses granted to persons providing\plain\cf1\f51\fs22\qj manufacturing, packaging or testing services in the ordinary course of business in connection with such\plain\cf1\f51\fs22\qj services, and (d)\~any other assets to the extent that (x)\~the aggregate value of such assets Disposed of in any\plain\cf1\f51\fs22\qj single transaction or related series of transactions is equal to $250,000 or less and (y)\~the aggregate value of\plain\cf1\f51\fs22\qj assets disposed in reliance on the foregoing clause\~(x) does not exceed $500,000 in any fiscal year); provided\plain\cf1\f51\fs22\qj that (1) a Casualty Event, the issuance of Equity Interests of any Loan Party or Subsidiary of a Loan Party\plain\cf1\f51\fs22\qj shall not constitute an Asset Sale, (2) the events set forth in clauses (iv), (vi), (vii), (viii), (ix), (xi), (xii), (xiii),\plain\cf1\f51\fs22\qj (xiv) and (xv) of Section 6.05 shall not constitute an \u8220?Asset Sale\u8221? and shall not be included in\plain\cf1\f51\fs22\qj \u8220?Net Asset Sale Proceeds\u8221? and (3) licenses granted by Adesto Technologies Corporation and its\plain\cf1\f51\fs22\qj Subsidiaries (but excluding S3 Semiconductors and its Subsidiaries and such other Subsidiaries acquired\plain\cf1\f51\fs22\qj pursuant to a Permitted Acquisition following the Closing Date as may be reasonably agreed to by the\plain\cf1\f51\fs22\qj Collateral Agent (such agreement not to be unreasonably withheld)) in respect of Intellectual Property with a\plain\cf1\f51\fs22\qj term of five (5) years or more shall not constitute \u8220?Asset Sales\u8221? and shall not be included in\plain\cf1\f51\fs22\qj \u8220?Net Asset Sale Proceeds\u8221? to the extent the aggregate value or revenue generated in respect\plain\cf1\f51\fs22\qj thereof does not exceed $5,000,000 after the Closing Date and (4) licenses granted by S3 Semiconductors and\plain\cf1\f51\fs22\qj its Subsidiaries (and such other Subsidiaries acquired pursuant to a Permitted Acquisition following the Closing\plain\cf1\f51\fs22\qj Date as may be reasonably agreed to by the Collateral Agent (such agreement not to be unreasonably withheld)\plain\cf1\f51\fs22\qj in respect of Intellectual Property with a term of five (5) years or more shall not constitute \u8220?Asset\plain\sa264\cf1\f51\fs22\qj Sales\u8221? and shall not be included in \u8220?Net Asset Sale Proceeds\u8221?.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Assignment and Acceptance\plain\cf1\f51\fs22\qj \u8221? shall mean an assignment and acceptance entered into by\plain\cf1\f51\fs22\qj a Lender and an assignee, and accepted by the Administrative Agent and the Collateral Agent, in the form of\plain\cf1\f51\fs22\qj Exhibit\~E\plain\sa264\cf1\f51\fs22\qj or such other form as shall be approved by the Administrative Agent and the Collateral Agent.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Bankruptcy Code\plain\cf1\f51\fs22\qj \u8221? shall mean Title 11 of the United States Code entitled\plain\sa264\cf1\f51\fs22\qj \u8220?Bankruptcy\u8221?, as now and hereafter in effect, or any successor statute.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Board\plain\cf1\f51\fs22\qj \u8221? shall mean the Board of Governors of the Federal Reserve System of the United\plain\sa264\cf1\f51\fs22\qj States of America.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Borrower\plain\sa264\cf1\f51\fs22\qj \u8221? shall have the meaning assigned to such term in the Preamble.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Business Day\plain\cf1\f51\fs22\qj \u8221? shall mean any day other than a Saturday, Sunday or day on which\plain\cf1\f51\fs22\qj banks in New York, New York or Los Angeles, California are authorized or required by law to close, and shall\plain\cf1\f51\fs22\qj include any Business Day on which dealings in U.S. Dollars between banks may be carried on in London,\plain\sa264\cf1\f51\fs22\qj England and New York, New York.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Capital Expenditures\plain\cf1\f51\fs22\qj \u8221? shall mean, for any period, (a)\~the additions to property, plant\plain\cf1\f51\fs22\qj and equipment and other capital expenditures of the Borrower and its consolidated Subsidiaries that are (or\plain\cf1\f51\fs22\qj should be) set forth in a consolidated statement of cash flows of the Borrower for such period prepared in\plain\cf1\f51\fs22\qj accordance with GAAP, (b)\~Capital Lease Obligations or Synthetic Lease Obligations incurred by the Borrower\plain\sa264\cf1\f51\fs22\qj and its consolidated Subsidiaries during such period, and (c)\~to the extent not covered by\par\pard\plain\sb528\cf1\f51\fs24\qc 3\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\cf1\f51\fs22\li635\qj \~\par\pard\plain\cf1\f51\fs22\qj clauses\~(a) and (b)\~of this definition, the aggregate of all expenditures by the Borrower and its Subsidiaries\plain\cf1\f51\fs22\qj during that period (x)\~to purchase or develop computer software or systems (whether or not such expenditures\plain\cf1\f51\fs22\qj are capitalized on the consolidated balance sheet of the Borrower and its Subsidiaries in conformity with\plain\cf1\f51\fs22\qj GAAP) or (y)\~to acquire (by purchase or otherwise) the business, property or fixed assets of any Person, or the\plain\cf1\f51\fs22\qj stock or other evidence of beneficial ownership of any Person that, as a result of such acquisition, becomes a\plain\cf1\f51\fs22\qj Subsidiary of the Borrower;\plain\cf1\f51\fs22\i\qj provided\plain\cf1\f51\fs22\qj that Capital Expenditures shall not include (i)\~the Acquisition or any\plain\cf1\f51\fs22\qj Permitted Acquisition, or (ii)\~any such expenditure made to restore, replace or rebuild property to the condition\plain\cf1\f51\fs22\qj of such property immediately prior to any damage, loss, destruction or condemnation of such property, to the\plain\cf1\f51\fs22\qj extent such expenditure is made with insurance proceeds, condemnation awards or damage recovery proceeds\plain\sa264\cf1\f51\fs22\qj relating to any such damage, loss, destruction or condemnation.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Capital Lease Obligations\plain\cf1\f51\fs22\qj \u8221? of any Person shall mean the obligations of such Person to\plain\cf1\f51\fs22\qj pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal\plain\cf1\f51\fs22\qj property, or a combination thereof, which obligations are required to be classified and accounted for as capital\plain\cf1\f51\fs22\qj leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the\plain\sa264\cf1\f51\fs22\qj capitalized amount thereof determined in accordance with GAAP.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Casualty Event\plain\cf1\f51\fs22\qj \u8221? shall mean any event or occurrence described in clauses\~(i)(a) and/or\plain\sa264\cf1\f51\fs22\qj (i)(b)\~of the definition of \u8220?Net Insurance/Condemnation Proceeds\u8221?.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Change in Control\plain\sa264\cf1\f51\fs22\qj \u8221? shall mean the occurrence of any of the following:\par\pard\plain\fi792\cf1\f51\fs22\qj (a)\~\~\~\~\~\~\~\~\~the direct or indirect sale, lease, transfer, conveyance or other disposition, in one or a series of\plain\cf1\f51\fs22\qj related transactions, of all or substantially all of the assets of the Borrower and the Subsidiaries, taken as a\plain\sa264\cf1\f51\fs22\qj whole, to any Person;\par\pard\plain\fi792\cf1\f51\fs22\qj (b)\~\~\~\~\~\~\~\~\~after the Closing Date, any \u8220?person\u8221? or \u8220?group\u8221? (as such terms are\plain\cf1\f51\fs22\qj used in Sections\~13(d) and 14(d)\~of the Exchange Act as in effect on the Closing Date) shall have acquired\plain\cf1\f51\fs22\qj beneficial ownership, directly or indirectly, of Equity Interests of the Borrower (or other Equity Interests\plain\cf1\f51\fs22\qj convertible into such Equity Interests) representing 35% or more of the combined voting power of all Equity\plain\cf1\f51\fs22\qj Interests of the Borrower entitled to vote in the election of members of the Governing Body of the Borrower,\plain\sa264\cf1\f51\fs22\qj other than Equity Interests having such power only by reason of the happening of a contingency; or\par\pard\plain\fi792\cf1\f51\fs22\qj (c)\~\~\~\~\~\~\~\~\~the failure at any time of the Borrower, directly or indirectly, beneficially own and Control\plain\cf1\f51\fs22\qj 100% on a fully diluted basis of the issued and outstanding Equity Interests of Target and each of the\plain\cf1\f51\fs22\qj Borrower\u8217?s other Subsidiaries, in each case, free and clear of any Liens, rights, options, warrants or\plain\cf1\f51\fs22\qj similar agreements or understandings, other than Liens in favor of the Collateral Agent created pursuant to the\plain\sa264\cf1\f51\fs22\qj Security Documents.\par\pard\plain\cf1\f51\fs22\qj As used herein, the term \u8220?beneficially own\u8221? or \u8220?beneficial ownership\u8221? shall have the\plain\sa264\cf1\f51\fs22\qj meaning set forth in the Exchange Act and the rules and regulations promulgated thereunder\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Change in Law\plain\cf1\f51\fs22\qj \u8221? shall mean (a)\~the adoption of any law, rule or regulation after the\plain\cf1\f51\fs22\qj date of this Agreement, (b)\~any change in any law, rule or regulation or in the interpretation or application\plain\cf1\f51\fs22\qj thereof by any Governmental Authority after the date of this Agreement or (c)\~compliance by any Lender (or,\plain\cf1\f51\fs22\qj for purposes of\plain\cf1\f51\fs22\qj Section\~2.11\plain\cf1\f51\fs22\qj , by any lending office of such Lender or by such Lender\u8217?s holding\plain\cf1\f51\fs22\qj company, if any) with any request, guideline or directive (whether or not having the force of law) of any\plain\cf1\f51\fs22\qj Governmental Authority made or issued after the date of this Agreement;\plain\cf1\f51\fs22\i\qj provided\plain\cf1\f51\fs22\qj that notwithstanding\plain\cf1\f51\fs22\qj anything herein to the contrary, (x)\~the Dodd Frank Wall Street Reform and Consumer Protection Act and all\plain\cf1\f51\fs22\qj requests, rules, guidelines or directives issued thereunder or in connection therewith and (y)\~all requests, rules,\plain\sa264\cf1\f51\fs22\qj guidelines\par\pard\plain\sb528\cf1\f51\fs24\qc 4\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\cf1\f51\fs22\li635\qj \~\par\pard\plain\cf1\f51\fs22\qj or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking\plain\cf1\f51\fs22\qj Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in\plain\cf1\f51\fs22\qj each case pursuant to Basel III, shall in each case be deemed to be a \u8220?Change in Law,\u8221?\plain\sa264\cf1\f51\fs22\qj regardless of the day enacted, adopted, issued or implemented.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Charges\plain\cf1\f51\fs22\qj \u8221? shall have the meaning assigned to such term in\plain\cf1\f51\fs22\qj Section\~9.09\plain\sa264\cf1\f51\fs22\qj .\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Closing Date\plain\sa264\cf1\f51\fs22\qj \u8221? shall mean the date on which the Loans are made.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Closing Date Joinders\plain\cf1\f51\fs22\qj \u8221? shall have the meaning assigned to such term in the Guarantee\plain\sa264\cf1\f51\fs22\qj and Collateral Agreement.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Closing Date Projections\plain\cf1\f51\fs22\qj \u8221? shall have the meaning assigned to such term in\plain\cf1\f51\fs22\qj Section\~4.01(e)\plain\sa264\cf1\f51\fs22\qj .\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Code\plain\sa264\cf1\f51\fs22\qj \u8221? shall mean the Internal Revenue Code of 1986, as amended from time to time.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Collateral\plain\cf1\f51\fs22\qj \u8221? shall mean all the real, personal, and mixed property in which Liens are\plain\cf1\f51\fs22\qj purported to be granted pursuant to the Security Documents, including all \u8220?Collateral\u8221? (as defined\plain\sa264\cf1\f51\fs22\qj therein) and Mortgaged Properties.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Collateral Access Agreement\plain\cf1\f51\fs22\qj \u8221? means a landlord waiver, bailee letter, or\plain\cf1\f51\fs22\qj acknowledgement agreement of any lessor, warehouseman, distributor, processor, consignee, or other Person in\plain\cf1\f51\fs22\qj possession of, having a Lien upon, or having rights or interests in any Loan Party\u8217?s books and records,\plain\sa264\cf1\f51\fs22\qj equipment, or Inventory, in each case, in form and substance reasonably satisfactory to the Collateral Agent.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Collateral Agent\plain\sa264\cf1\f51\fs22\qj \u8221? shall have the meaning assigned to such term in the Preamble.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Commitment\plain\cf1\f51\fs22\qj \u8221? shall mean, with respect to each Lender, the commitment of such Lender\plain\cf1\f51\fs22\qj to make Loans hereunder as set forth on\plain\cf1\f51\fs22\qj Schedule\~2.01\plain\cf1\f51\fs22\qj , or in the Assignment and Acceptance pursuant to\plain\cf1\f51\fs22\qj which such Lender assumed its Commitment, as applicable.\~ The initial aggregate amount of the\plain\sa264\cf1\f51\fs22\qj Lenders\u8217? Commitments is $35,000,000.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Commitment Percentage\plain\cf1\f51\fs22\qj \u8221? of any Lender at any time shall mean a fraction (expressed as\plain\cf1\f51\fs22\qj a percentage) the numerator of which is the Commitment of such Lender at such time and the denominator of\plain\sa264\cf1\f51\fs22\qj which is the total Commitments of all Lenders at such time.\par\pard\plain\fi792\cf1\f51\fs22\qj \~\u8220?\plain\cf1\f51\fs22\b\i\qj Consolidated EBITDA\plain\cf1\f51\fs22\qj \u8221? shall mean, for any period, Consolidated Net Income for such\plain\sa264\cf1\f51\fs22\qj period plus\par\pard\plain\li792\fi792\cf1\f51\fs22\qj (a)\~\~\~\~\~\~\~\~\~without duplication and to the extent deducted in determining such Consolidated Net\plain\li792\cf1\f51\fs22\qj Income, the sum of (i)\~Consolidated Interest Expense for such period, (ii)\~consolidated income tax\plain\li792\cf1\f51\fs22\qj expense for such period, (iii)\~all amounts attributable to depreciation and amortization for such period,\plain\li792\cf1\f51\fs22\qj (iv)\~Transaction Expenses, (v)\~unusual, extraordinary and non\u8209?recurring charges or losses for\plain\li792\cf1\f51\fs22\qj such period, \~including with respect to the Acquisition or any Permitted Acquisition, \~provided that the\plain\li792\cf1\f51\fs22\qj amount of any such cash charges or cash losses shall not exceed $250,000 in the aggregate for such\plain\li792\cf1\f51\fs22\qj period, (vi)\~non\u8209?cash charges for such period representing any impairment charge or asset\plain\li792\cf1\f51\fs22\qj write\u8209?off related to intangible assets in accordance with FASB Statement\~142 (to the extent that\plain\li792\cf1\f51\fs22\qj such charges do not represent a write\u8209?down of a right to receive future payment or other\plain\li792\cf1\f51\fs22\qj consideration, and excluding non\u8209?cash items that represent an accrual of or reserve for potential\plain\li792\cf1\f51\fs22\qj cash expenditures in any future period or amortization of a prepaid cash item that was paid in a prior\plain\li792\sa264\cf1\f51\fs22\qj period), (vii)\~reasonable fees and costs arising from any amendments, waivers, consents and\par\pard\plain\sb528\cf1\f51\fs24\qc 5\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\cf1\f51\fs22\li635\qj \~\par\pard\plain\li792\cf1\f51\fs22\qj other agreements entered into in connection with this Agreement and the other Loan Documents after\plain\li792\cf1\f51\fs22\qj the Closing Date, (viii)\~discretionary non\u8209?cash bonus and other non\u8209?cash compensation\plain\li792\cf1\f51\fs22\qj expenses in the form of common Equity Interests for such period, (ix)\~fees, costs and expenses paid\plain\li792\cf1\f51\fs22\qj during such period in connection with Investments permitted by the Loan Documents, including in\plain\li792\cf1\f51\fs22\qj connection with any Permitted Acquisition (to the extent consummated), \~(x)\~fees, costs and expenses\plain\li792\cf1\f51\fs22\qj paid during such period in connection with Investments permitted by the Loan Documents, including in\plain\li792\cf1\f51\fs22\qj connection with any proposed Permitted Acquisition that is not consummated in an aggregate amount\plain\li792\cf1\f51\fs22\qj not to exceed $500,000 for such period, (xi)\~all non cash losses, including non cash adjustments\plain\li792\cf1\f51\fs22\qj resulting from the application of purchase accounting, \~(xii) expenses with respect to liability or\plain\li792\cf1\f51\fs22\qj casualty events or business interruption to the extent covered and reimbursed or advanced during or\plain\li792\cf1\f51\fs22\qj prior to the relevant period by insurance, excluding the amount of any such insurance payments that\plain\li792\cf1\f51\fs22\qj are included in the calculation of Consolidated Net Income, (xiii) restructuring or integration costs or\plain\li792\cf1\f51\fs22\qj charges in an aggregate amount, when taken together with the add-back described in clause (xiv), not\plain\li792\cf1\f51\fs22\qj to exceed $500,000 for such period, (xv) net cost savings, expense reductions and cost-related\plain\li792\cf1\f51\fs22\qj synergies expected from synergies associated with the Acquisition or any Permitted Acquisition that are\plain\li792\cf1\f51\fs22\qj reasonably identifiable and factually supportable and projected by the Borrower in good faith to result\plain\li792\cf1\f51\fs22\qj from actions that have been taken or with respect to which substantial steps have been taken or are\plain\li792\cf1\f51\fs22\qj expected to be taken (in the good faith determination of the Borrower) within twelve (12) months after\plain\li792\cf1\f51\fs22\qj consummation of the Acquisition or such Permitted Acquisition, calculated on a pro forma basis in an\plain\li792\cf1\f51\fs22\qj aggregate amount, when taken together with the add-back described in clause (xiii), not to exceed\plain\li792\cf1\f51\fs22\qj $500,000 for such period, (xvi) any non-cash loss attributed to mark to market movement in the\plain\li792\cf1\f51\fs22\qj valuation of hedging obligations (to the extent the cash impact resulting from such loss shall not have\plain\li792\sa264\cf1\f51\fs22\qj been realized), and (xvii) non-cash foreign exchange translation losses, minus\par\pard\plain\li792\fi792\cf1\f51\fs22\qj (b)\~\~\~\~\~\~\~\~\~without duplication and to the extent included in determining such Consolidated Net\plain\li792\cf1\f51\fs22\qj Income, (i)\~consolidated interest income for such period, (ii)\~all cash payments made during such\plain\li792\cf1\f51\fs22\qj period on account of reserves, restructuring charges and other non\u8209?cash charges added to\plain\li792\cf1\f51\fs22\qj Consolidated Net Income pursuant to clauses\~(a)(v) or (a)(vi)\~above in a previous period, (iii)\~income\plain\li792\cf1\f51\fs22\qj tax credits (to the extent not netted from income tax expenses), (iv)\~any extraordinary or\plain\li792\cf1\f51\fs22\qj non\u8209?recurring gains for such period, (v) any non-cash gain attributed to mark to market\plain\li792\cf1\f51\fs22\qj movement in the valuation of hedging obligations (to the extent the cash impact resulting from such\plain\li792\cf1\f51\fs22\qj gain shall not have been realized), (vi) any non-cash foreign exchange translation gains, and (vii) all\plain\li792\cf1\f51\fs22\qj non cash income or gains, including non cash adjustments resulting from the application of purchase\plain\li792\sa264\cf1\f51\fs22\qj accounting, all determined on a consolidated basis in accordance with GAAP.\par\pard\plain\cf1\f51\fs22\qj For the purposes of calculating Consolidated Revenue or Consolidated EBITDA, as applicable, for any period\plain\cf1\f51\fs22\qj of four consecutive fiscal quarters (each, a \u8220?\plain\cf1\f51\fs22\b\i\qj Reference Period\plain\cf1\f51\fs22\qj \u8221?) pursuant to any determination of\plain\cf1\f51\fs22\qj the Consolidated Revenue Leverage Ratio or Consolidated EBITDA Leverage Ratio, (i) if at any time during\plain\cf1\f51\fs22\qj such Reference Period the Borrower or any Subsidiary shall have made any Material Disposition, the\plain\cf1\f51\fs22\qj Consolidated Revenue or Consolidated EBITDA, as applicable, for such Reference Period shall be reduced by\plain\cf1\f51\fs22\qj an amount equal to the Consolidated Revenue (if positive) or the Consolidated EBITDA (if positive)\plain\cf1\f51\fs22\qj attributable to the property that is the subject of such Material Disposition for such Reference Period or\plain\cf1\f51\fs22\qj increased by an amount equal to the Consolidated Revenue (if negative) or the Consolidated EBITDA (if\plain\cf1\f51\fs22\qj negative) attributable thereto for such Reference Period, in each case determined as if such Material\plain\cf1\f51\fs22\qj Disposition occurred on the first day of such Reference Period, and to the extent the proceeds of such Material\plain\cf1\f51\fs22\qj Disposition are used to repay any Indebtedness, such repayment shall be deemed to have occurred on the first\plain\cf1\f51\fs22\qj day of such Reference Period and interest expenses shall be appropriately reduced to give effect thereto for\plain\cf1\f51\fs22\qj such Reference Period and (ii) if at any time during such Reference Period the Borrower or any Subsidiary\plain\cf1\f51\fs22\qj shall have made consummated a Permitted Acquisition, the Consolidated Revenue or Consolidated EBITDA, as\plain\sa264\cf1\f51\fs22\qj applicable, for such Reference Period shall be increased by an\par\pard\plain\sb528\cf1\f51\fs24\qc 6\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\cf1\f51\fs22\li635\qj \~\par\pard\plain\cf1\f51\fs22\qj amount equal to the Consolidated Revenue (if positive) or the Consolidated EBITDA (if positive) attributable\plain\cf1\f51\fs22\qj to such Permitted Acquisition for such Reference Period or decreased by an amount equal to the Consolidated\plain\cf1\f51\fs22\qj Revenue (if negative) or the Consolidated EBITDA (if negative) attributable thereto for such Reference Period,\plain\cf1\f51\fs22\qj in each case determined as if such Permitted Acquisition on the first day of such Reference Period.\~ As used in\plain\cf1\f51\fs22\qj this definition, \u8220?\plain\cf1\f51\fs22\b\i\qj Material Disposition\plain\cf1\f51\fs22\qj \u8221? shall mean any Disposition of property or series of related\plain\cf1\f51\fs22\qj Dispositions of property that yield gross proceeds to the Borrower or any of its Subsidiaries in excess of\plain\sa264\cf1\f51\fs22\qj $500,000.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Consolidated EBITDA Leverage Ratio\plain\cf1\f51\fs22\qj \u8221? shall mean, on any date, the ratio of Total Debt\plain\cf1\f51\fs22\qj outstanding on such date to Consolidated EBITDA for the period of four consecutive fiscal quarters most\plain\sa264\cf1\f51\fs22\qj recently ended on or prior to such date.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Consolidated Interest Expense\plain\cf1\f51\fs22\qj \u8221? shall mean, for any period, the sum of (a)\~the interest\plain\cf1\f51\fs22\qj expense (including imputed interest expense in respect of Capital Lease Obligations and Synthetic Lease\plain\cf1\f51\fs22\qj Obligations) of the Borrower and its Subsidiaries for such period, determined on a consolidated basis in\plain\cf1\f51\fs22\qj accordance with GAAP, plus (b)\~any interest accrued during such period in respect of Indebtedness of the\plain\cf1\f51\fs22\qj Borrower or any of its Subsidiaries that is required to be capitalized rather than included in consolidated\plain\cf1\f51\fs22\qj interest expense for such period in accordance with GAAP.\~ For purposes of the foregoing, interest expense\plain\cf1\f51\fs22\qj shall be determined after giving effect to any net payments made or received by the Borrower or any of its\plain\sa264\cf1\f51\fs22\qj Subsidiaries with respect to interest rate Hedging Agreements.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Consolidated Net Income\plain\cf1\f51\fs22\qj \u8221? shall mean, for any period, the net income or loss of the\plain\cf1\f51\fs22\qj Borrower and the Subsidiaries for such period determined on a consolidated basis in accordance with GAAP;\plain\cf1\f51\fs22\i\qj provided\plain\cf1\f51\fs22\qj that there shall be excluded (a)\~the income of any Subsidiary to the extent that the declaration or\plain\cf1\f51\fs22\qj payment of dividends or similar distributions by the Subsidiary of that income is not at the time permitted by\plain\cf1\f51\fs22\qj operation of the terms of its charter or any agreement, instrument, judgment, decree, statute, rule or\plain\cf1\f51\fs22\qj governmental regulation applicable to such Subsidiary, (b)\~the income or loss of any Person accrued prior to\plain\cf1\f51\fs22\qj the date it becomes a Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary or the\plain\cf1\f51\fs22\qj date that such Person\u8217?s assets are acquired by the Borrower or any Subsidiary (other than the\plain\cf1\f51\fs22\qj acquisition by the Borrower of the Target), (c)\~the income of any Person attributable to minority interests in\plain\cf1\f51\fs22\qj such Person solely to the extent of the amount of dividends or other distributions actually paid to such\plain\cf1\f51\fs22\qj minority interests, (d)\~any after\u8209?tax gains or losses attributable to Asset Sales, or returned surplus assets\plain\cf1\f51\fs22\qj of any pension plan, and (e)\~the net income or loss for such period shall not include the cumulative effect of a\plain\sa264\cf1\f51\fs22\qj change in accounting principles during such period.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Consolidated Revenue\plain\cf1\f51\fs22\qj \u8221? shall mean, for any period, the total revenue of the Borrower\plain\cf1\f51\fs22\qj and its Subsidiaries on a consolidated basis determined in a manner consistent with GAAP, for such period\plain\cf1\f51\fs22\qj (subject to the last paragraph of the definition of \u8220?Consolidated EBITDA\u8221?);\plain\cf1\f51\fs22\i\qj provided that\plain\cf1\f51\fs22\qj ,\plain\cf1\f51\fs22\qj notwithstanding anything to the contrary contained herein, for each of the fiscal quarters ending on the date set\plain\cf1\f51\fs22\qj forth below, total revenue for such fiscal quarter shall be deemed to be the amount set forth below opposite\plain\sa264\cf1\f51\fs22\qj such fiscal quarter:\par\pard\plain\cf1\f51\fs22\qc \~ \par\pard\plain {\trowd\trqc\clbrdrb\brdrs\brdrcf1\cellx3768\clvertalb\cellx4092\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7981\clvertalb\cellx8131\trrh272 \pard\plain\intbl\li154\fi-154\cf1\f51\fs22\qc Fiscal Quarter\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\~\~\~\cell\pard\plain\intbl\cf1\f51\fs22\qc Total\~Revenue\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\cell{ {\trowd\trqc\clbrdrb\brdrs\brdrcf1\cellx3768\clvertalb\cellx4092\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7981\clvertalb\cellx8131\trrh272\row}}} {\trowd\trqc\clbrdrt\brdrs\brdrcf1\cellx3768\clvertalb\cellx4092\clbrdrt\brdrs\brdrcf1\clvertalb\cellx4784\clbrdrt\brdrs\brdrcf1\cellx7981\clvertalb\cellx8131\trrh289 \pard\plain\intbl\li154\fi-154\cf1\f51\fs22\qj June 30, 2017\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\cell\pard\plain\intbl\cf1\f51\fs22\ql $\cell\pard\plain\intbl\cf1\f51\fs22\qc 16,263,000\~\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\cell{ {\trowd\trqc\clbrdrt\brdrs\brdrcf1\cellx3768\clvertalb\cellx4092\clbrdrt\brdrs\brdrcf1\clvertalb\cellx4784\clbrdrt\brdrs\brdrcf1\cellx7981\clvertalb\cellx8131\trrh289\row}}} {\trowd\trqc\cellx3768\clvertalb\cellx4092\clvertalb\cellx4784\cellx7981\clvertalb\cellx8131\trrh272 \pard\plain\intbl\li154\fi-154\cf1\f51\fs22\qj September 30, 2017\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\cell\pard\plain\intbl\cf1\f51\fs22\ql $\cell\pard\plain\intbl\cf1\f51\fs22\qc 18,586,000\~\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\cell{ {\trowd\trqc\cellx3768\clvertalb\cellx4092\clvertalb\cellx4784\cellx7981\clvertalb\cellx8131\trrh272\row}}} {\trowd\trqc\cellx3768\clvertalb\cellx4092\clvertalb\cellx4784\cellx7981\clvertalb\cellx8131\trrh272 \pard\plain\intbl\li154\fi-154\cf1\f51\fs22\qj December 31, 2017\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\cell\pard\plain\intbl\cf1\f51\fs22\ql $\cell\pard\plain\intbl\cf1\f51\fs22\qc 19,749,000\~\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\cell{ {\trowd\trqc\cellx3768\clvertalb\cellx4092\clvertalb\cellx4784\cellx7981\clvertalb\cellx8131\trrh272\row}}} {\trowd\trqc\cellx3768\clvertalb\cellx4092\clvertalb\cellx4784\cellx7981\clvertalb\cellx8131\trrh272 \pard\plain\intbl\li154\fi-154\cf1\f51\fs22\qj March 31, 2018\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\cell\pard\plain\intbl\cf1\f51\fs22\ql $\cell\pard\plain\intbl\cf1\f51\fs22\qc 17,813,000\~\cell\pard\plain\intbl\cf1\f51\fs22\ql \~\cell{ {\trowd\trqc\cellx3768\clvertalb\cellx4092\clvertalb\cellx4784\cellx7981\clvertalb\cellx8131\trrh272\row}}}\pard\plain\cf1\f51\fs22\qj \~\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Consolidated Revenue Leverage Ratio\plain\cf1\f51\fs22\qj \u8221? shall mean, on any date, the ratio of Total Debt\plain\cf1\f51\fs22\qj outstanding on such date to Consolidated Revenue for the period of four consecutive fiscal quarters ended on\plain\sa264\cf1\f51\fs22\qj such date.\par\pard\plain\sb528\cf1\f51\fs24\qc 7\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\sa264\cf1\f51\fs22\li635\qj \~\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Contingent Obligation\plain\cf1\f51\fs22\qj \u8221?, as applied to any Person, shall mean any direct or indirect\plain\cf1\f51\fs22\qj liability, contingent or otherwise, of that Person (i)\~with respect to any Indebtedness, lease, dividend or other\plain\cf1\f51\fs22\qj obligation of another if the primary purpose or intent thereof by the Person incurring the Contingent Obligation\plain\cf1\f51\fs22\qj is to provide assurance to the obligee of such obligation of another that such obligation of another will be paid\plain\cf1\f51\fs22\qj or discharged, or that any agreements relating thereto will be complied with, or that the holders of such\plain\cf1\f51\fs22\qj obligation will be protected (in whole or in part) against loss in respect thereof, (ii)\~with respect to any\plain\cf1\f51\fs22\qj acceptance, letter of credit or surety bond or similar instrument issued for the account of that Person or as to\plain\cf1\f51\fs22\qj which that Person is otherwise liable for reimbursement of drawings, or (iii)\~under Hedging Agreements.\~\plain\cf1\f51\fs22\qj Contingent Obligations shall include (a)\~the direct or indirect Guarantee, endorsement (otherwise than for\plain\cf1\f51\fs22\qj collection or deposit in the ordinary course of business), co\u8209?making, discounting with recourse or sale\plain\cf1\f51\fs22\qj with recourse by such Person of the obligation of another, (b)\~the obligation to make take or\u8209?pay or\plain\cf1\f51\fs22\qj similar payments if required regardless of non\u8209?performance by any other party or parties to an\plain\cf1\f51\fs22\qj agreement, and (c)\~any liability of such Person for the obligation of another through any agreement (contingent\plain\cf1\f51\fs22\qj or otherwise) (1)\~to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to\plain\cf1\f51\fs22\qj provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock\plain\cf1\f51\fs22\qj purchases, capital contributions or otherwise) or (2)\~to maintain the solvency or any balance sheet item, level\plain\cf1\f51\fs22\qj of income or financial condition of another if, in the case of any agreement described under subclauses\~(1) or\plain\cf1\f51\fs22\qj (2)\~of this sentence, the primary purpose or intent thereof is as described in the preceding sentence and\plain\cf1\f51\fs22\qj Contingent Obligations shall exclude (A) endorsements for collection or deposit in the ordinary course of\plain\cf1\f51\fs22\qj business, (B) customary indemnity obligations in effect on the Closing Date or entered into in connection with\plain\cf1\f51\fs22\qj any Investment or acquisition or disposition of Equity Interests permitted under this Agreement or the other\plain\cf1\f51\fs22\qj Loan Documents, (C) product warranties or other similar contingent obligations given or incurred in the\plain\cf1\f51\fs22\qj ordinary course of business and (D) ordinary course performance guarantees.\~ The amount of any liability in\plain\cf1\f51\fs22\qj respect of a Hedging Agreement shall be the amount determined in respect thereof as of the end of the then\plain\cf1\f51\fs22\qj most recently ended fiscal quarter of such Person, based on the assumption that such Hedging Agreement had\plain\cf1\f51\fs22\qj terminated at the end of such fiscal quarter.\~ In making such determination, if any agreement relating to such\plain\cf1\f51\fs22\qj Hedging Agreement provides for the netting of amounts payable by and to such Person thereunder or if such\plain\cf1\f51\fs22\qj agreement provides for the simultaneous payment of amounts by and to such Person, then in each such case,\plain\cf1\f51\fs22\qj the amount of such obligation shall be the net amount so determined, in each case to the extent that such\plain\cf1\f51\fs22\qj agreement is legally enforceable in Insolvency Proceedings against the applicable counterparty thereof.\~ The\plain\cf1\f51\fs22\qj amount of any other Contingent Obligation shall be equal to the amount of the obligation so guaranteed or\plain\sa264\cf1\f51\fs22\qj otherwise supported or, if less, the amount to which such Contingent Obligation is specifically limited.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Contractual Obligation\plain\cf1\f51\fs22\qj \u8221? shall mean, as applied to any Person, any provision of any\plain\cf1\f51\fs22\qj Equity Interest issued by that Person or of any indenture, mortgage, deed of trust, contract, undertaking,\plain\cf1\f51\fs22\qj agreement or other instrument to which that Person is a party or by which it or any of its properties is bound\plain\sa264\cf1\f51\fs22\qj or subject.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Control\plain\cf1\f51\fs22\qj \u8221? shall mean the possession, directly or indirectly, of the power to direct or\plain\cf1\f51\fs22\qj cause the direction of the management or policies of a Person, whether through the ownership of voting\plain\cf1\f51\fs22\qj securities, by contract or otherwise, and the terms \u8220?\plain\cf1\f51\fs22\b\i\qj Controlling\plain\cf1\f51\fs22\qj \u8221? and \u8220?\plain\cf1\f51\fs22\b\i\qj Controlled\plain\cf1\f51\fs22\qj \u8221?\plain\sa264\cf1\f51\fs22\qj shall have meanings correlative thereto.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Control Agreement\plain\cf1\f51\fs22\qj \u8221? shall mean an agreement, satisfactory in form and substance to the\plain\cf1\f51\fs22\qj Collateral Agent and executed by the financial institution or securities intermediary at which a Deposit Account\plain\cf1\f51\fs22\qj or a Securities Account, as the case may be, is maintained, pursuant to which such financial institution or\plain\cf1\f51\fs22\qj securities intermediary confirms and acknowledges the Collateral Agent\u8217?s security interest in such\plain\cf1\f51\fs22\qj account, and agrees that the financial institution or securities intermediary, as the case may be, will comply\plain\cf1\f51\fs22\qj with instructions or entitlement orders, as applicable, originated by the Collateral Agent as to disposition of\plain\sa264\cf1\f51\fs22\qj funds in such account, without further consent by the Borrower or any Subsidiary; provided, that the Collateral\par\pard\plain\sb528\cf1\f51\fs24\qc 8\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\cf1\f51\fs22\li635\qj \~\par\pard\plain\cf1\f51\fs22\qj Agent shall only deliver instructions or entitlement orders when an Event of Default has occurred and is\plain\sa264\cf1\f51\fs22\qj continuing.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Copyright Act\plain\cf1\f51\fs22\qj \u8221? shall mean Title 17 of the United States Code, including the Copyright\plain\cf1\f51\fs22\qj Act of 1976, and all rules and regulations issued or promulgated thereunder, all as amended and in effect from\plain\sa264\cf1\f51\fs22\qj time to time.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Declined Proceeds\plain\cf1\f51\fs22\qj \u8221? shall have the meaning assigned to such term in\plain\cf1\f51\fs22\qj Section\~2.10(h)\plain\sa264\cf1\f51\fs22\qj .\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Default\plain\cf1\f51\fs22\qj \u8221? shall mean any event or condition which upon notice, lapse of time or both\plain\sa264\cf1\f51\fs22\qj would constitute an Event of Default.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Deposit Account\plain\cf1\f51\fs22\qj \u8221? shall mean a demand, time, savings, passbook or similar account\plain\cf1\f51\fs22\qj maintained with a Person engaged in the business of banking, including savings bank, savings and loan\plain\sa264\cf1\f51\fs22\qj association, credit union or trust of the Borrower or as otherwise defined in the UCC.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Disposition\plain\cf1\f51\fs22\qj \u8221? shall mean with respect to any property, any sale, lease, sublease, sale and\plain\cf1\f51\fs22\qj leaseback, assignment, conveyance, transfer, license or other disposition thereof.\~ The terms\plain\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Dispose\plain\cf1\f51\fs22\qj \u8221? and \u8220?\plain\cf1\f51\fs22\b\i\qj Disposed of\plain\sa264\cf1\f51\fs22\qj \u8221? shall have correlative meanings.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Disqualified Stock\plain\cf1\f51\fs22\qj \u8221? shall mean any Equity Interest that, by its terms (or by the terms of\plain\cf1\f51\fs22\qj any security into which it is convertible or for which it is exchangeable), or upon the happening of any event,\plain\cf1\f51\fs22\qj (a)\~matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is\plain\cf1\f51\fs22\qj mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of\plain\cf1\f51\fs22\qj the holder thereof, in whole or in part, or requires the payment of any cash dividend or any other scheduled\plain\cf1\f51\fs22\qj payment constituting a return of capital, in each case at any time on or prior to the date that is one year and\plain\cf1\f51\fs22\qj one day following the Maturity Date; or (b)\~is convertible into or exchangeable (unless at the sole option of the\plain\cf1\f51\fs22\qj issuer thereof) for (i)\~debt securities or (ii)\~any Equity Interest referred to in clause\~(a) above, in each case at\plain\sa264\cf1\f51\fs22\qj any time on or prior to the date that is one year and one day following the Maturity Date.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Dollars\plain\cf1\f51\fs22\qj \u8221? or \u8220?\plain\cf1\f51\fs22\b\i\qj $\plain\sa264\cf1\f51\fs22\qj \u8221? shall mean lawful money of the United States of America.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Domestic Subsidiary\plain\cf1\f51\fs22\qj \u8221? shall mean any Subsidiary organized under the laws of the United\plain\sa264\cf1\f51\fs22\qj States of America, any State thereof or the District of Columbia.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj ECF Prepayment Date\plain\cf1\f51\fs22\qj \u8221? shall have the meaning specified in\plain\cf1\f51\fs22\qj Section\~2.10(a)\plain\sa264\cf1\f51\fs22\qj .\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Eligible Assignee\plain\cf1\f51\fs22\qj \u8221? shall mean (i)\~any Lender, any Affiliate of any Lender and any\plain\cf1\f51\fs22\qj Related Fund of any Lender; and (ii)\~(a)\~a commercial bank organized under the laws of the United States or\plain\cf1\f51\fs22\qj any state thereof; (b)\~a savings and loan association or savings bank organized under the laws of the United\plain\cf1\f51\fs22\qj States or any state thereof; (c)\~a commercial bank organized under the laws of any other country or a political\plain\cf1\f51\fs22\qj subdivision thereof;\plain\cf1\f51\fs22\i\qj provided\plain\cf1\f51\fs22\qj that (1)\~such bank is acting through a branch or agency located in the United\plain\cf1\f51\fs22\qj States or (2)\~such bank is organized under the laws of a country that is a member of the Organization for\plain\cf1\f51\fs22\qj Economic Cooperation and Development or a political subdivision of such country; and (d)\~any other entity\plain\cf1\f51\fs22\qj that is an \u8220?accredited investor\u8221? (as defined in Regulation D under the Securities Act) that extends\plain\cf1\f51\fs22\qj credit or buys loans as one of its businesses including insurance companies, mutual funds and lease financing\plain\cf1\f51\fs22\qj companies;\plain\cf1\f51\fs22\i\qj provided\plain\sa264\cf1\f51\fs22\qj that none of the Borrower or any Affiliate of the Borrower shall be an Eligible Assignee.\par\pard\plain\sb528\cf1\f51\fs24\qc 9\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\sa264\cf1\f51\fs22\li635\qj \~\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Employee Benefit Plan\plain\cf1\f51\fs22\qj \u8221? shall mean, at any time, an employee benefit plan, as defined\plain\cf1\f51\fs22\qj in Section\~3(3) of ERISA, which the Borrower or any ERISA Affiliate maintains, contributes to or has an\plain\sa264\cf1\f51\fs22\qj obligation to contribute.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Environmental Laws\plain\cf1\f51\fs22\qj \u8221? shall mean all current and future Federal, state, local and foreign\plain\cf1\f51\fs22\qj laws (including common law), treaties, regulations, rules, ordinances, codes, decrees, judgments, directives,\plain\cf1\f51\fs22\qj orders (including consent orders), and agreements in each case, relating to protection of the environment,\plain\cf1\f51\fs22\qj natural resources, human health and safety or the presence, Release of, or exposure to, Hazardous Materials, or\plain\cf1\f51\fs22\qj the generation, manufacture, processing, distribution, use, treatment, storage, transport, recycling or handling of,\plain\sa264\cf1\f51\fs22\qj or the arrangement for such activities with respect to, Hazardous Materials.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Environmental Liability\plain\cf1\f51\fs22\qj \u8221? shall mean all liabilities, obligations, damages, losses, claims,\plain\cf1\f51\fs22\qj actions, suits, judgments, orders, fines, penalties, fees, expenses and costs (including administrative oversight\plain\cf1\f51\fs22\qj costs, natural resource damages and remediation costs), whether contingent or otherwise, arising out of or\plain\cf1\f51\fs22\qj relating to (a)\~compliance or non\u8209?compliance with any Environmental Law, (b)\~the generation, use,\plain\cf1\f51\fs22\qj handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c)\~exposure to any\plain\cf1\f51\fs22\qj Hazardous Materials, (d)\~the Release of any Hazardous Materials or (e)\~any contract, agreement or other\plain\sa264\cf1\f51\fs22\qj consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Equity Interests\plain\cf1\f51\fs22\qj \u8221? shall mean shares of capital stock, partnership interests, membership\plain\cf1\f51\fs22\qj interests in a limited liability company, beneficial interests in a trust or other equity interests in any Person,\plain\cf1\f51\fs22\qj and any option, warrant or other right entitling the holder thereof to purchase or otherwise acquire any such\plain\sa264\cf1\f51\fs22\qj equity interest.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj ERISA\plain\cf1\f51\fs22\qj \u8221? shall mean the Employee Retirement Income Security Act of 1974, as the same\plain\sa264\cf1\f51\fs22\qj may be amended from time to time.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj ERISA Affiliate\plain\cf1\f51\fs22\qj \u8221? shall mean any trade or business (whether or not incorporated) that,\plain\cf1\f51\fs22\qj together with the Borrower, is, or was within the last six preceding plan years, treated as a single employer\plain\cf1\f51\fs22\qj under Section\~414(b) or (c)\~of the Code, or solely for purposes of Section\~302 of ERISA and Section\~412 of the\plain\cf1\f51\fs22\qj Code, is, or was within the last six preceding plan years, treated as a single employer under Section\~414 of the\plain\sa264\cf1\f51\fs22\qj Code.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj ERISA Event\plain\cf1\f51\fs22\qj \u8221? shall mean (a)\~any \u8220?reportable event\u8221?, as defined in\plain\cf1\f51\fs22\qj Section\~4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for\plain\cf1\f51\fs22\qj which the 30\u8209?day notice period is waived), (b)\~any failure by any Plan to satisfy the minimum funding\plain\cf1\f51\fs22\qj standards (within the meaning of Section 412 or 430 of the Code) or Section 302 of ERISA, in each case\plain\cf1\f51\fs22\qj whether or not waived, (c)\~the filing pursuant to Section\~412(c) of the Code or Section\~302(c) of ERISA of an\plain\cf1\f51\fs22\qj application for a waiver of the minimum funding standard with respect to any Plan, (d)\~the incurrence by the\plain\cf1\f51\fs22\qj Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the\plain\cf1\f51\fs22\qj termination of any Plan or the withdrawal or partial withdrawal of the Borrower or any of its ERISA Affiliates\plain\cf1\f51\fs22\qj from any Plan or Multiemployer Plan, (e)\~the receipt by the Borrower or any of its ERISA Affiliates from the\plain\cf1\f51\fs22\qj PBGC or a plan administrator of any notice relating to the intention to terminate any Plan or Plans or to\plain\cf1\f51\fs22\qj appoint a trustee to administer any Plan or the treatment of a Plan amendment as a termination under Section\plain\cf1\f51\fs22\qj 4041 or 4041A of ERISA, (f)\~the imposition of a lien under Section 412 or 430(k) of the Code or Section 303\plain\cf1\f51\fs22\qj or 4068 of ERISA on any property (or rights to property, whether real or personal) of any ERISA Affiliate ,\plain\cf1\f51\fs22\qj (g)\~the receipt by the Borrower or any of its ERISA Affiliates of any notice, or the receipt by any\plain\cf1\f51\fs22\qj Multiemployer Plan from the Borrower or any of its ERISA Affiliates of any notice, concerning the imposition\plain\cf1\f51\fs22\qj of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, within\plain\cf1\f51\fs22\qj the meaning of Title IV of ERISA, (h)\~the occurrence of a \u8220?prohibited transaction\u8221? with respect\plain\cf1\f51\fs22\qj to which the Borrower or any of the Subsidiaries is a \u8220?disqualified person\u8221? (within the meaning\plain\sa264\cf1\f51\fs22\qj of\par\pard\plain\sb528\cf1\f51\fs24\qc 10\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\cf1\f51\fs22\li635\qj \~\par\pard\plain\cf1\f51\fs22\qj Section\~4975 of the Code) or with respect to which the Borrower or any such Subsidiary could otherwise incur\plain\cf1\f51\fs22\qj a material liability, (i)\~the incurrence by the Borrower or any of its ERISA Affiliates of any liability pursuant\plain\cf1\f51\fs22\qj to Section\~4063 or 4064 of ERISA, (j)\~the imposition of liability on the Borrower or any of its ERISA\plain\cf1\f51\fs22\qj Affiliates pursuant to Section\~4062(e) or 4069 of ERISA or by reason of the application of Section\~4212(c) of\plain\cf1\f51\fs22\qj ERISA or (k)\~a Plan is in \u8220?at risk\u8221? status within the meaning of Section 430(i) of the Code, or (l)\plain\cf1\f51\fs22\qj a Multiemployer Plan is in \u8220?endangered status\u8221? or \u8220?critical status\u8221? within the\plain\sa264\cf1\f51\fs22\qj meaning of Section 432(b) of the Code.\par\pard\plain\fi792\cf1\f51\fs22\qj \~\u8220?\plain\cf1\f51\fs22\b\i\qj Events of Default\plain\cf1\f51\fs22\qj \u8221? shall have the meaning assigned to such term in\plain\cf1\f51\fs22\qj Article\~VII\plain\sa264\cf1\f51\fs22\qj .\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Excess Cash Flow\plain\cf1\f51\fs22\qj \u8221? shall mean, without duplication, with respect to any fiscal year (or\plain\cf1\f51\fs22\qj portion thereof) of the Borrower and its Subsidiaries, Consolidated Net Income plus (a)\~depreciation,\plain\cf1\f51\fs22\qj amortization, Consolidated Interest Expense and all other non\u8209?cash charges to the extent deducted in\plain\cf1\f51\fs22\qj determining Consolidated Net Income, minus (b)\~Capital Expenditures during such period (excluding the\plain\cf1\f51\fs22\qj financed portion thereof), minus (c)\~Consolidated Interest Expense paid or accrued (excluding any original\plain\cf1\f51\fs22\qj issue discount, interest paid in kind or amortized debt discount, to the extent included in determining\plain\cf1\f51\fs22\qj Consolidated Interest Expense) and scheduled principal payments paid or payable in respect of Indebtedness\plain\cf1\f51\fs22\qj and voluntary principal payments paid or payable in respect of Loans, minus, (d) the amount of cash\plain\cf1\f51\fs22\qj Investments permitted under Section 6.04(xiii) or (xx), plus or minus (as the case may be) (e)\~extraordinary\plain\cf1\f51\fs22\qj gains or losses which are cash items not included in the calculation of Consolidated Net Income, plus (f)\~taxes\plain\cf1\f51\fs22\qj deducted in determining Consolidated Net Income to the extent not paid for in cash, minus (g)\~any increase in\plain\cf1\f51\fs22\qj the working capital of the Borrower and its Subsidiaries during such period (measured as the excess of such\plain\cf1\f51\fs22\qj working capital at the end of such period over such working capital at the beginning of such period), plus\plain\cf1\f51\fs22\qj (h)\~any decrease in the working capital of the Borrower and its Subsidiaries during such period (measured as\plain\cf1\f51\fs22\qj the excess of such working capital at the beginning of such period over such working capital at the end\plain\sa264\cf1\f51\fs22\qj thereof).\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Excess Cash Flow Percentage\plain\cf1\f51\fs22\qj \u8221? shall mean 50%;\plain\cf1\f51\fs22\i\qj provided\plain\cf1\f51\fs22\qj that, with respect to any\plain\cf1\f51\fs22\qj fiscal year of the Borrower, the Excess Cash Flow Percentage shall be reduced to 25% if (a) no Default or\plain\cf1\f51\fs22\qj Event of Default has occurred and is continuing and (b) (i) \~for Excess Cash Flow prepayments for or prior to\plain\cf1\f51\fs22\qj the fiscal year ending December\~31, 2019, the Consolidated Revenue Leverage Ratio as of the last day of such\plain\cf1\f51\fs22\qj fiscal year is not greater than 0.40 to 1.00 and (ii) for Excess Cash Flow prepayments for any fiscal year\plain\cf1\f51\fs22\qj thereafter, the Consolidated EBITDA Leverage Ratio as of the last day of such fiscal year is not greater than\plain\sa264\cf1\f51\fs22\qj 1.25 to 1.00.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Exchange Act\plain\sa264\cf1\f51\fs22\qj \u8221? shall mean the Securities Exchange Act of 1934, as amended.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Excluded Subsidiary\plain\cf1\f51\fs22\qj \u8221? shall mean, at any date of determination, each Subsidiary of the\plain\cf1\f51\fs22\qj Borrower that has been designated by the Borrower in writing to the Administrative Agent and the Collateral\plain\cf1\f51\fs22\qj Agent as an \u8220?Excluded Subsidiary\u8221? for purposes of this Agreement;\plain\cf1\f51\fs22\i\qj provided\plain\cf1\f51\fs22\qj that, (a)\~no\plain\cf1\f51\fs22\qj Subsidiary that is a Domestic Subsidiary or that is organized under the laws of Ireland may be an Excluded\plain\cf1\f51\fs22\qj Subsidiary, (b)\~no Subsidiary that owns or holds any interests in Material Intellectual Property may be an\plain\cf1\f51\fs22\qj Excluded Subsidiary, (c)\~for purposes of this Agreement, at no time shall (i)\~the total assets of any Excluded\plain\cf1\f51\fs22\qj Subsidiary as of the last day of any four fiscal quarter period exceed 2.5% of the Consolidated Total Assets of\plain\cf1\f51\fs22\qj the Borrower and its Subsidiaries at such date, (ii)\~the total assets of all Excluded Subsidiaries as of the last\plain\cf1\f51\fs22\qj day of any four fiscal quarter period exceed 5.0% of the Consolidated Total Assets of the Borrower and its\plain\cf1\f51\fs22\qj Subsidiaries at such date, (iii)\~the revenues of any Excluded Subsidiary as of the last day of any four fiscal\plain\cf1\f51\fs22\qj quarter period exceed 2.5% of the Consolidated Revenue of the Borrower and its Subsidiaries at such date and\plain\cf1\f51\fs22\qj (iv)\~the revenues of all Excluded Subsidiaries as of the last day of any four fiscal quarter period exceed 5.0%\plain\cf1\f51\fs22\qj of the Consolidated Revenue of the Borrower and its Subsidiaries at such date, (d)\~the Borrower shall not\plain\sa264\cf1\f51\fs22\qj designate any new Excluded Subsidiary if such designation would not comply with the provisions set forth\par\pard\plain\sb528\cf1\f51\fs24\qc 11\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\cf1\f51\fs22\li635\qj \~\par\pard\plain\cf1\f51\fs22\qj in clauses\~(a) through (c)\~above, and (e)\~if any of clauses\~(a) through (c)\~shall not be satisfied at any time, then\plain\cf1\f51\fs22\qj all such Subsidiaries shall be deemed to be non\u8209?Excluded Subsidiaries unless and until the Borrower\plain\cf1\f51\fs22\qj shall redesignate one or more Excluded Subsidiaries as non\u8209?Excluded Subsidiaries, in each case in a\plain\cf1\f51\fs22\qj written notice to the Administrative Agent and Collateral Agent, and, as a result thereof, clauses\~(a) through\plain\cf1\f51\fs22\qj (c)\~shall be satisfied. For purposes of determining whether any Subsidiary is an Excluded Subsidiary, the\plain\cf1\f51\fs22\qj amount of total assets and revenue of any Subsidiary shall exclude charges or other payments attributable to or\plain\cf1\f51\fs22\qj arising from cost-sharing agreements, transfer pricing agreements and any similar intercompany transactions.\plain\cf1\f51\fs22\qj Notwithstanding the foregoing Adesto Technologies France shall constitute an Excluded Subsidiary so long as,\plain\cf1\f51\fs22\qj but for its co-ownership of Patent Number 8847192, such entity would otherwise constitute an Excluded\plain\sa264\cf1\f51\fs22\qj Subsidiary.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Excluded Taxes\plain\cf1\f51\fs22\qj \u8221? shall mean any of the following Taxes imposed on or with respect to\plain\cf1\f51\fs22\qj a Recipient or required to be withheld or deducted from a payment to a Recipient, (a)\~income or franchise\plain\cf1\f51\fs22\qj Taxes or branch profits Taxes, in each case (i) imposed on (or measured by) its net income by the jurisdiction\plain\cf1\f51\fs22\qj under the laws of which such recipient is organized or in which its principal office is located or, in the case of\plain\cf1\f51\fs22\qj any Lender, in which its applicable lending office is located or (ii) that are Other Connection Taxes, (b)\~ in the\plain\cf1\f51\fs22\qj case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under\plain\cf1\f51\fs22\qj Section\~2.17\plain\cf1\f51\fs22\qj ),\plain\cf1\f51\fs22\qj U.S. federal withholding Taxes imposed on amounts payable to such Foreign Lender at the time such Foreign\plain\cf1\f51\fs22\qj Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such\plain\cf1\f51\fs22\qj Foreign Lender\u8217?s failure to comply with\plain\cf1\f51\fs22\qj Section\~2.16(d)\plain\cf1\f51\fs22\qj , except in each case to the extent that such\plain\cf1\f51\fs22\qj Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or\plain\cf1\f51\fs22\qj assignment), to receive additional amounts from the Borrower with respect to such withholding Tax pursuant to\plain\cf1\f51\fs22\qj Section\~2.16\plain\sa264\cf1\f51\fs22\qj and (c)\~U.S. federal withholding Taxes imposed under FATCA.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Existing Debt Refinancing\plain\cf1\f51\fs22\qj \u8221? shall mean the repayment in full of the debt set forth on\plain\cf1\f51\fs22\qj Schedule\~1.01(b)\plain\cf1\f51\fs22\qj and the termination of commitments thereunder and the release of all guarantees and security\plain\sa264\cf1\f51\fs22\qj in respect thereof.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Extraordinary Receipts\plain\cf1\f51\fs22\qj \u8221? shall mean the receipt by the Borrower or any of its\plain\cf1\f51\fs22\qj Subsidiaries of (i)\~any judgments, litigation settlements or indemnity payments to the extent not received as\plain\cf1\f51\fs22\qj reimbursement or compensation for cash losses or payments made by the Borrower or any of its Subsidiaries,\plain\cf1\f51\fs22\qj in each case in an amount that is equal to 100% of such payments and (ii)\~any proceeds from indemnifications\plain\cf1\f51\fs22\qj provided by any Seller (as defined in the Acquisition Agreement) under the Acquisition Agreement to the\plain\cf1\f51\fs22\qj extent not received as reimbursement or compensation for cash losses or payments made by the Borrower or\plain\sa264\cf1\f51\fs22\qj any of its Subsidiaries.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Facilities\plain\cf1\f51\fs22\qj \u8221? shall mean any and all real property (including all buildings, fixtures or other\plain\cf1\f51\fs22\qj improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by the Borrower\plain\sa264\cf1\f51\fs22\qj or any of its Subsidiaries or any of their respective predecessors or Affiliates.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Fair Labor Standards Act\plain\cf1\f51\fs22\qj \u8221? shall mean the Fair Labor Standards Act of 1938, as\plain\sa264\cf1\f51\fs22\qj amended from time to time.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj FATCA\plain\cf1\f51\fs22\qj \u8221? shall mean Sections\~1471 through 1474 of the Code, as of the date of this\plain\cf1\f51\fs22\qj Agreement (or any amended or successor version that is substantively comparable and not materially more\plain\cf1\f51\fs22\qj onerous to comply with), any current or future regulations or official interpretations thereof, any applicable\plain\cf1\f51\fs22\qj agreements entered into pursuant to Section\~1471(b)(1) of the Code, any applicable intergovernmental\plain\cf1\f51\fs22\qj agreements with respect to the implementation of such Sections of the Code, and any fiscal or regulatory\plain\cf1\f51\fs22\qj legislation, rules or official administrative practices to the extent adopted pursuant to any intergovernmental\plain\sa264\cf1\f51\fs22\qj agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.\par\pard\plain\sb528\cf1\f51\fs24\qc 12\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\sa264\cf1\f51\fs22\li635\qj \~\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Federal Funds Effective Rate\plain\cf1\f51\fs22\qj \u8221? shall mean, for any day, the weighted average of the\plain\cf1\f51\fs22\qj rates on overnight Federal funds transactions with members of the Federal Reserve System, as published on the\plain\cf1\f51\fs22\qj next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published\plain\cf1\f51\fs22\qj for any day that is a Business Day, the average of the quotations for the day for such transactions received by\plain\sa264\cf1\f51\fs22\qj the Administrative Agent from three Federal funds brokers of recognized standing selected by it.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Federal Power Act\plain\cf1\f51\fs22\qj \u8221? shall mean the Federal Power Act of 1935, as amended from time\plain\sa264\cf1\f51\fs22\qj to time.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Fee Letter\plain\cf1\f51\fs22\qj \u8221? shall mean any letter agreement entered into between the Borrower and the\plain\sa264\cf1\f51\fs22\qj Administrative Agent pertaining to the Administrative Agent Fees.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Financial Officer\plain\cf1\f51\fs22\qj \u8221? of any Person shall mean the chief financial officer, principal\plain\cf1\f51\fs22\qj accounting officer, treasurer, controller, or in each case, anyone acting in such capacity or any similar capacity\plain\sa264\cf1\f51\fs22\qj of such Person.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Fiscal Quarter\plain\cf1\f51\fs22\qj \u8221? means any of the quarterly accounting periods of Borrower and its\plain\sa264\cf1\f51\fs22\qj Subsidiaries ending on March\~31, June\~30, September\~30 and December\~31 of each year.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Foreign Law Security Documents\plain\cf1\f51\fs22\qj \u8221? shall mean collectively, any local law debenture,\plain\cf1\f51\fs22\qj charge or other security or collateral agreement relating to the assets of any Foreign Subsidiary that is a Loan\plain\cf1\f51\fs22\qj Party (including the Irish Security Documents and each Pledge Agreement) to the extent necessary or useful to\plain\sa264\cf1\f51\fs22\qj grant or perfect the Collateral Agent\u8217?s security interest therein under applicable laws.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Foreign Lender\plain\cf1\f51\fs22\qj \u8221? shall mean any Lender that is organized under the laws of a\plain\cf1\f51\fs22\qj jurisdiction other than that in which the Borrower is located.\~ For purposes of this definition, the United States\plain\sa264\cf1\f51\fs22\qj of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Foreign Subsidiary\plain\sa264\cf1\f51\fs22\qj \u8221? shall mean any Subsidiary that is not a Domestic Subsidiary.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj GAAP\plain\cf1\f51\fs22\qj \u8221? shall mean United States generally accepted accounting principles applied on a\plain\sa264\cf1\f51\fs22\qj consistent basis.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Governing Body\plain\cf1\f51\fs22\qj \u8221? shall mean the board of directors or other body having the power to\plain\cf1\f51\fs22\qj direct or cause the direction of the management and policies of a Person that is a corporation, partnership, trust\plain\sa264\cf1\f51\fs22\qj or limited liability company.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Governmental Authority\plain\cf1\f51\fs22\qj \u8221? \~shall mean any Federal, state, local or foreign court or\plain\cf1\f51\fs22\qj governmental agency, government department, authority, instrumentality, regulatory body, board or\plain\cf1\f51\fs22\qj commission, or in the case of Ireland, any government minister, tribunal or public or statutory person being of\plain\sa264\cf1\f51\fs22\qj a public nature.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Granting Lender\plain\cf1\f51\fs22\qj \u8221? shall have the meaning assigned to such term in\plain\cf1\f51\fs22\qj Section\~9.04(j)\plain\sa264\cf1\f51\fs22\qj .\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Guarantee\plain\cf1\f51\fs22\qj \u8221? of or by any Person shall mean any obligation, contingent or otherwise, of\plain\cf1\f51\fs22\qj such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation\plain\cf1\f51\fs22\qj of any other Person (the \u8220?\plain\cf1\f51\fs22\b\i\qj primary obligor\plain\cf1\f51\fs22\qj \u8221?) in any manner, whether directly or indirectly, and\plain\cf1\f51\fs22\qj including any obligation of such Person, direct or indirect, (a)\~to purchase or pay (or advance or supply funds\plain\cf1\f51\fs22\qj for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply\plain\cf1\f51\fs22\qj funds for the purchase of) any security for the payment of such Indebtedness or other obligation, (b)\~to\plain\cf1\f51\fs22\qj purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or\plain\cf1\f51\fs22\qj other obligation of the payment of such Indebtedness or other obligation or (c)\~to maintain working capital,\plain\sa264\cf1\f51\fs22\qj equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the\par\pard\plain\sb528\cf1\f51\fs24\qc 13\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\cf1\f51\fs22\li635\qj \~\par\pard\plain\cf1\f51\fs22\qj primary obligor to pay such Indebtedness or other obligation;\plain\cf1\f51\fs22\i\qj provided\plain\cf1\f51\fs22\qj , \~\plain\cf1\f51\fs22\i\qj however\plain\cf1\f51\fs22\qj , that the term\plain\cf1\f51\fs22\qj \u8220?Guarantee\u8221? shall not include endorsements of negotiable instruments for collection or deposit in\plain\sa264\cf1\f51\fs22\qj the ordinary course of business.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Guarantee and Collateral Agreement\plain\cf1\f51\fs22\qj \u8221? shall mean the Guarantee and Collateral\plain\cf1\f51\fs22\qj Agreement, in the form of\plain\cf1\f51\fs22\qj Exhibit\~F\plain\cf1\f51\fs22\qj , among the Borrower, the Subsidiaries party thereto and the Collateral\plain\sa264\cf1\f51\fs22\qj Agent for the benefit of the Secured Parties.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Guarantors\plain\sa264\cf1\f51\fs22\qj \u8221? shall mean the Subsidiary Guarantors.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Hazardous Materials\plain\cf1\f51\fs22\qj \u8221? shall mean (a)\~any petroleum products or byproducts and all\plain\cf1\f51\fs22\qj other hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde foam insulation, polychlorinated\plain\cf1\f51\fs22\qj biphenyls, chlorofluorocarbons and all other ozone\u8209?depleting substances and (b)\~any chemical, material,\plain\sa264\cf1\f51\fs22\qj substance or waste that is prohibited, limited or regulated by or pursuant to any Environmental Law.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Hedging Agreement\plain\cf1\f51\fs22\qj \u8221? shall mean any interest rate protection agreement, foreign\plain\cf1\f51\fs22\qj currency exchange agreement, commodity price protection agreement or other interest or currency exchange\plain\sa264\cf1\f51\fs22\qj rate or commodity price hedging arrangement.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj ICC Termination Act\plain\cf1\f51\fs22\qj \u8221? shall mean the ICC Termination Act of 1995, as amended from\plain\sa264\cf1\f51\fs22\qj time to time.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Indebtedness\plain\cf1\f51\fs22\qj \u8221? of any Person shall mean, without duplication, (a)\~all obligations of such\plain\cf1\f51\fs22\qj Person for borrowed money or with respect to deposits or advances of any kind, (b)\~all obligations of such\plain\cf1\f51\fs22\qj Person evidenced by bonds, debentures, notes or similar instruments, (c)\~[reserved], (d)\~all obligations of such\plain\cf1\f51\fs22\qj Person under conditional sale or other title retention agreements relating to property or assets purchased by\plain\cf1\f51\fs22\qj such Person, including any earn\u8209?out obligations, (e)\~all obligations of such Person issued or assumed as\plain\cf1\f51\fs22\qj the deferred purchase price of property or services (excluding trade accounts payable and accrued obligations\plain\cf1\f51\fs22\qj incurred in the ordinary course of business and not more than 180\~days past due), (f)\~all Indebtedness of others\plain\cf1\f51\fs22\qj secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be\plain\cf1\f51\fs22\qj secured by) any Lien on property owned or acquired by such Person, whether or not the obligations secured\plain\cf1\f51\fs22\qj thereby have been assumed (limited to the lesser of (x) fair market value of the property as reasonably\plain\cf1\f51\fs22\qj determined by such Person and (y) the amount of Indebtedness secured by such Lien), (g)\~all Contingent\plain\cf1\f51\fs22\qj Obligations of such Person in respect of Indebtedness of others, (h)\~all Capital Lease Obligations and Synthetic\plain\cf1\f51\fs22\qj Lease Obligations of such Person, (i)\~all obligations of such Person as an account party in respect of letters of\plain\cf1\f51\fs22\qj credit and (j)\~all obligations of such Person in respect of bankers\u8217? acceptances, (k)\~Disqualified Stock,\plain\cf1\f51\fs22\qj and (l)\~all obligations of such Person in respect of any exchange traded or over the counter derivative\plain\cf1\f51\fs22\qj transaction, including any Hedging Agreement, in each case, whether entered into for hedging or speculative\plain\cf1\f51\fs22\qj purposes or otherwise.\~ The amount of any Indebtedness of any Person in respect of a Hedging Agreement\plain\cf1\f51\fs22\qj shall be the amount determined in respect thereof as of the end of the then most recently ended fiscal quarter\plain\cf1\f51\fs22\qj of such Person, based on the assumption that such Hedging Agreement had terminated at the end of such fiscal\plain\cf1\f51\fs22\qj quarter.\~ In making such determination, if any agreement relating to such Hedging Agreement provides for the\plain\cf1\f51\fs22\qj netting of amounts payable by and to such Person thereunder or if any such agreement provides for the\plain\cf1\f51\fs22\qj simultaneous payment of amounts by and to such Person, then in each such case, the amount of such\plain\cf1\f51\fs22\qj obligation shall be the net amount so determined, in each case to the extent that such agreement is legally\plain\cf1\f51\fs22\qj enforceable in Insolvency Proceedings against the applicable counterparty thereof.\~ The Indebtedness of any\plain\cf1\f51\fs22\qj Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general\plain\sa264\cf1\f51\fs22\qj partner or joint venturer.\par\pard\plain\sb528\cf1\f51\fs24\qc 14\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\sa264\cf1\f51\fs22\li635\qj \~\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Indemnified Taxes\plain\cf1\f51\fs22\qj \u8221? shall mean (a)\~Taxes, other than Excluded Taxes, imposed on or\plain\cf1\f51\fs22\qj with respect to any payment made by or on account of any obligation of any Loan Party under any Loan\plain\sa264\cf1\f51\fs22\qj Document and (b)\~to the extent not otherwise described in (a), Other Taxes.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Indemnitee\plain\cf1\f51\fs22\qj \u8221? shall have the meaning assigned to such term in\plain\cf1\f51\fs22\qj Section\~9.05(b)\plain\sa264\cf1\f51\fs22\qj .\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Information\plain\cf1\f51\fs22\qj \u8221? shall have the meaning assigned to such term in\plain\cf1\f51\fs22\qj Section\~9.17\plain\sa264\cf1\f51\fs22\qj .\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Insolvency Proceeding\plain\cf1\f51\fs22\qj \u8221? shall mean (i)\~any case, action or proceeding before any court\plain\cf1\f51\fs22\qj or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership,\plain\cf1\f51\fs22\qj examinership, dissolution, winding\u8209?up or relief of debtors, or (ii)\~any general assignment for the benefit\plain\cf1\f51\fs22\qj of creditors, formal or informal moratorium, composition, marshaling of assets for creditors or other, similar\plain\cf1\f51\fs22\qj arrangement in respect of its creditors generally or any substantial portion of its creditors, in each case,\plain\cf1\f51\fs22\qj undertaken under United States federal or state or non\u8209?United States legal requirements, including the\plain\sa264\cf1\f51\fs22\qj Bankruptcy Code.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Installment\plain\cf1\f51\fs22\qj \u8221? shall have the meaning assigned to such term in\plain\cf1\f51\fs22\qj Section\~2.09\plain\sa264\cf1\f51\fs22\qj .\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Intellectual Property\plain\cf1\f51\fs22\qj \u8221? shall mean all present and future:\~ (a)\~all inventions and\plain\cf1\f51\fs22\qj discoveries (whether patentable or unpatentable and whether or not reduced to practice), all improvements\plain\cf1\f51\fs22\qj thereto, and all patents, patent applications and patent disclosures, together with all reissuances, continuations,\plain\cf1\f51\fs22\qj continuations\u8209?in\u8209?part, revisions, extensions and reexaminations thereof, (b)\~all trademarks, service\plain\cf1\f51\fs22\qj marks, trade dress, logos, trade names and corporate names, together with all translations, adaptations,\plain\cf1\f51\fs22\qj derivations and combinations thereof and including all goodwill associated therewith, (c)\~all copyrightable\plain\cf1\f51\fs22\qj works, all copyrights and all applications, registrations and renewals in connection therewith, (d)\~all broadcast\plain\cf1\f51\fs22\qj rights, (e)\~all mask works and all applications, registrations and renewals in connection therewith, (f)\~all\plain\cf1\f51\fs22\qj know\u8209?how, trade secrets and confidential business information, whether patentable or unpatentable and\plain\cf1\f51\fs22\qj whether or not reduced to practice (including ideas, research and development, know\u8209?how, formulas,\plain\cf1\f51\fs22\qj compositions and manufacturing and production process and techniques, technical data, designs, drawings,\plain\cf1\f51\fs22\qj specifications, customer and supplier lists, pricing and cost information and business and marketing plans and\plain\cf1\f51\fs22\qj proposals), (g)\~all computer software (including data and related documentation), (h)\~all other proprietary rights,\plain\cf1\f51\fs22\qj (i)\~all copies and tangible embodiments thereof (in whatever form or medium) and (j)\~all licenses and\plain\sa264\cf1\f51\fs22\qj agreements in connection therewith.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Interest Payment Date\plain\cf1\f51\fs22\qj \u8221? shall mean the last Business Day of each Fiscal Quarter of the\plain\sa264\cf1\f51\fs22\qj Borrower, commencing with the last Business Day of June\~2018.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Interstate Commerce Act\plain\cf1\f51\fs22\qj \u8221? shall mean the Interstate Commerce Act of 1887, as\plain\sa264\cf1\f51\fs22\qj amended from time to time.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Inventory\plain\sa264\cf1\f51\fs22\qj \u8221? means inventory (as that term is defined in the UCC).\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Investment\plain\cf1\f51\fs22\qj \u8221? shall mean (i)\~any direct or indirect purchase or other acquisition by the\plain\cf1\f51\fs22\qj Borrower or any of its Subsidiaries of, or of a beneficial interest in, any stocks, bonds, notes, debentures or\plain\cf1\f51\fs22\qj other obligations or securities of any other Person; (ii)\~any direct or indirect redemption, retirement, purchase\plain\cf1\f51\fs22\qj or other acquisition for value, by the Borrower or any Subsidiary of the Borrower from any Person, of any\plain\cf1\f51\fs22\qj Equity Interests of such Person; (iii)\~any direct or indirect loan, advance or capital contributions by the\plain\cf1\f51\fs22\qj Borrower or any of its Subsidiaries to any other Person, including all indebtedness and accounts receivable\plain\cf1\f51\fs22\qj from that other Person that are not current assets or did not arise from sales to that other Person in the\plain\cf1\f51\fs22\qj ordinary course of business and (iv)\~all investments consisting of any exchange traded or over the counter\plain\sa264\cf1\f51\fs22\qj derivative transaction, including any Hedging Agreement, whether entered into for hedging or speculative\par\pard\plain\sb528\cf1\f51\fs24\qc 15\par\pard\plain\f0\fs4\par\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par\par\pard\plain\li110\ri110\cf1\f51\fs20\ql \~ \page\par\pard\plain\cf1\f51\fs22\li635\qj \~\par\pard\plain\cf1\f51\fs22\qj purposes or otherwise.\~ The amount of any Investment of the type described in clauses\~(i), (ii)\~and (iii)\~shall be\plain\cf1\f51\fs22\qj the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases\plain\cf1\f51\fs22\qj or decreases in value, or write ups, write downs or write offs with respect to such Investment and after giving\plain\cf1\f51\fs22\qj effect to any return of capital, repayment or dividends or distributions in respect thereof received in cash with\plain\sa264\cf1\f51\fs22\qj respect to such Investment.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Investment Company Act of 1940\plain\cf1\f51\fs22\qj \u8221? shall mean the Investment Company Act of 1940, as\plain\sa264\cf1\f51\fs22\qj amended from time to time.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Irish Companies Act\plain\sa264\cf1\f51\fs22\qj \u8221? means the Companies Act 2014 of Ireland.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Irish Debenture\plain\cf1\f51\fs22\qj \u8221? means the Irish law governed mortgage debenture between S3\plain\sa264\cf1\f51\fs22\qj Semiconductors and the Collateral Agent for the benefit of the Secured Parties.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Irish Security Documents\plain\sa264\cf1\f51\fs22\qj \u8221? means the Irish Debenture and the Irish Share Charge.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Irish Share Charge\plain\cf1\f51\fs22\qj \u8221? means the Irish law governed charge over the shares in S3\plain\sa264\cf1\f51\fs22\qj Semiconductors between the Borrower and the Collateral Agent for the benefit of the Secured Parties.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj IRS\plain\sa264\cf1\f51\fs22\qj \u8221? means United States Internal Revenue Service.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Lenders\plain\cf1\f51\fs22\qj \u8221? shall mean (a)\~the Persons listed on\plain\cf1\f51\fs22\qj Schedule\~2.01\plain\cf1\f51\fs22\qj (other than any such Person\plain\cf1\f51\fs22\qj that has ceased to be a party hereto pursuant to an Assignment and Acceptance) and (b)\~any Person that has\plain\sa264\cf1\f51\fs22\qj become a party hereto pursuant to an Assignment and Acceptance.\par\pard\plain\fi792\cf1\f51\fs22\qj \u8220?\plain\cf1\f51\fs22\b\i\qj Libor Rate\plain\cf1\f51\fs22\qj \u8221? shall mean, for any date of determination, the three\u8209?month London\plain\cf1\f51\fs22\qj Interbank Offered Rate (rounded upward to the nearest 1/16 of one percent) that appears on Bloomberg as of\plain\cf1\f51\fs2