UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One):
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
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For the quarterly period ended |
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
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For the transition period from __________ to __________ |
Commission File Number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of Incorporation or Organization) |
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(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
Telephone Number (
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Name of Each Exchange on Which Registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of April 30, 2021,
Gogo Inc.
INDEX
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Page |
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Part I. |
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Item 1. |
2 |
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2 |
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3 |
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Unaudited Condensed Consolidated Statements of Comprehensive Loss |
4 |
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5 |
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Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Deficit) |
6 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
8 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
30 |
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Item 3. |
41 |
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Item 4. |
41 |
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Part II. |
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Item 1. |
42 |
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Item 1A. |
43 |
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Item 2. |
48 |
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Item 3. |
48 |
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Item 4. |
48 |
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Item 5. |
48 |
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Item 6. |
49 |
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50 |
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1
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Gogo Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
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March 31, |
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December 31, |
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2021 |
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2020 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net of allowances of $ |
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Inventories |
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Prepaid expenses and other current assets |
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Total current assets |
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Non-current assets: |
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Property and equipment, net |
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Intangible assets, net |
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Operating lease right-of-use assets |
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Other non-current assets, net of allowances of $ |
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Total non-current assets |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders’ deficit |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued liabilities |
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Deferred revenue |
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Current portion of long-term debt |
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- |
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Total current liabilities |
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Non-current liabilities: |
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Long-term debt |
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Non-current operating lease liabilities |
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Other non-current liabilities |
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Total non-current liabilities |
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Total liabilities |
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Commitments and contingencies (Note 13) |
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Stockholders’ deficit |
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Common stock, par value $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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( |
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( |
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Treasury stock, at cost |
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( |
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( |
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Accumulated deficit |
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( |
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( |
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Total stockholders’ deficit |
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( |
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( |
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Total liabilities and stockholders’ deficit |
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$ |
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$ |
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See the Notes to Unaudited Condensed Consolidated Financial Statements
2
Gogo Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
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For the Three Months |
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Ended March 31, |
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2021 |
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2020 |
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Revenue: |
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Service revenue |
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$ |
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$ |
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Equipment revenue |
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Total revenue |
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Operating expenses: |
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Cost of service revenue (exclusive of items shown below) |
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Cost of equipment revenue (exclusive of items shown below) |
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Engineering, design and development |
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Sales and marketing |
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General and administrative |
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Depreciation and amortization |
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Total operating expenses |
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Operating income |
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Other (income) expense: |
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Interest income |
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( |
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( |
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Interest expense |
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Loss on settlement of convertible notes |
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- |
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Other income |
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( |
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( |
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Total other expense |
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Loss from continuing operations before income taxes |
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( |
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( |
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Income tax provision |
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Net loss from continuing operations |
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( |
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( |
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Net loss from discontinued operations, net of tax |
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( |
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( |
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Net loss |
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$ |
( |
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$ |
( |
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Net loss attributable to common stock per share – basic and diluted: |
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Net loss from continuing operations |
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$ |
( |
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$ |
( |
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Net loss from discontinued operations |
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( |
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( |
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Net loss |
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$ |
( |
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$ |
( |
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Weighted average number of shares—basic and diluted |
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See the Notes to Unaudited Condensed Consolidated Financial Statements
3
Gogo Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Comprehensive Loss
(in thousands)
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For the Three Months |
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Ended March 31, |
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2021 |
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2020 |
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Net loss |
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$ |
( |
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$ |
( |
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Currency translation adjustments, net of tax |
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( |
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Comprehensive loss |
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$ |
( |
) |
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$ |
( |
) |
See the Notes to Unaudited Condensed Consolidated Financial Statements
4
Gogo Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
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For the Three Months |
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Ended March 31, |
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2021 |
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2020 |
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Operating activities from continuing operations: |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to cash provided by operating activities: |
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Depreciation and amortization |
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(Gain) Loss on asset disposals, abandonments and write-downs |
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( |
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Provision for expected credit losses |
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Deferred income taxes |
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Stock-based compensation expense |
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Amortization of deferred financing costs |
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Accretion and amortization of debt discount and premium |
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Loss on settlement of convertible notes |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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Inventories |
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( |
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( |
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Prepaid expenses and other current assets |
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( |
) |
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( |
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Contract assets |
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( |
) |
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( |
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Accounts payable |
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Accrued liabilities |
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( |
) |
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( |
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Deferred revenue |
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Accrued interest |
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Other non-current assets and liabilities |
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( |
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Net cash provided by operating activities from continuing operations |
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Investing activities from continuing operations: |
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Purchases of property and equipment |
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( |
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( |
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Acquisition of intangible assets—capitalized software |
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( |
) |
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( |
) |
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Net cash provided by (used in) investing activities from continuing operations |
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( |
) |
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( |
) |
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Financing activities from continuing operations: |
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Proceeds from credit facility draw |
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- |
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Repurchase of convertible notes |
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- |
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( |
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Payment of debt issuance costs |
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( |
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- |
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Payments on financing leases |
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( |
) |
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- |
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Stock-based compensation activity |
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( |
) |
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( |
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Net cash provided by (used in) financing activities from continuing operations |
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( |
) |
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Cash flows from discontinued operations: |
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Cash provided by (used in) operating activities |
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( |
) |
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Cash used in investing activities |
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( |
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Cash used in financing activities |
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( |
) |
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Net cash used in discontinued operations |
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( |
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( |
) |
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Effect of exchange rate changes on cash |
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Increase in cash, cash equivalents and restricted cash |
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Cash, cash equivalents and restricted cash at beginning of period |
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Cash, cash equivalents and restricted cash at end of period |
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$ |
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$ |
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Cash, cash equivalents and restricted cash at end of period |
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$ |
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$ |
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Less: current restricted cash |
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Less: non-current restricted cash |
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- |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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Supplemental Cash Flow Information: |
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Cash paid for interest |
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$ |
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$ |
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Cash paid for taxes |
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See the Notes to Unaudited Condensed Consolidated Financial Statements
5
Gogo Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Deficit)
(in thousands, except share data)
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For the Three Months Ended March 31, 2021 |
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Accumulated |
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Additional |
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Other |
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Common Stock |
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Paid-In |
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Comprehensive |
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Accumulated |
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Treasury Stock |
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Shares |
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Par Value |
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Capital |
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Loss |
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Deficit |
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Shares |
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Amount |
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Total |
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Balance at January 1, 2021 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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Net loss |
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|
- |
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- |
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- |
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- |
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( |
) |
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|
- |
|
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|
- |
|
|
|
( |
) |
|
Currency translation adjustments, net of tax |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
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|
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|
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- |
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- |
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- |
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Stock-based compensation expense |
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- |
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- |
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- |
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- |
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- |
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- |
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Issuance of common stock upon exercise of stock options |
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- |
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- |
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- |
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- |
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- |
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Issuance of common stock upon vesting of restricted stock units and restricted stock awards |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Tax withholding related to vesting of restricted stock units |
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- |
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- |
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( |
) |
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- |
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- |
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- |
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- |
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( |
) |
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Issuance of common stock in connection with employee stock purchase plan |
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- |
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- |
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- |
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- |
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- |
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Settlement of convertible notes |
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- |
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- |
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- |
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- |
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- |
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|
Impact of the adoption of ASU 2020-06 |
|
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- |
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- |
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( |
) |
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- |
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- |
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- |
|
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( |
) |
|
Balance at March 31, 2021 |
|
|
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
|
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|
$ |
( |
) |
|
$ |
( |
) |
6
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For the Three Months Ended March 31, 2020 |
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Accumulated |
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Additional |
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Other |
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Common Stock |
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Paid-In |
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Comprehensive |
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Accumulated |
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Treasury Stock |
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Shares |
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Par Value |
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Capital |
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Loss |
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Deficit |
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Shares |
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Amount |
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Total |
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Balance at January 1, 2020 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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- |
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$ |
- |
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$ |
( |
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Net loss |
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- |
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- |
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- |
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- |
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( |
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- |
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- |
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( |
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Currency translation adjustments, net of tax |
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- |
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- |
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- |
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( |
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- |
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- |
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- |
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( |
) |
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Stock-based compensation expense |
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- |
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- |
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- |
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- |
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- |
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- |
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Issuance of common stock upon vesting of restricted stock units and restricted stock awards |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Tax withholding related to vesting of restricted stock units |
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- |
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- |
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( |
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- |
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- |
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- |
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- |
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( |
) |
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Issuance of common stock in connection with employee stock purchase plan |
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- |
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- |
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- |
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- |
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- |
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Settlement of prepaid forward shares |
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( |
) |
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( |
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- |
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- |
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