CARE.COM INC, 10-K filed on 3/1/2016
Annual Report
Document and Entity Information Document (USD $)
12 Months Ended
Dec. 26, 2015
Feb. 26, 2016
Jun. 27, 2015
Document and Entity Information [Abstract]
 
 
 
Document Type
10-K 
 
 
Amendment Flag
false 
 
 
Document Period End Date
Dec. 26, 2015 
 
 
Document Fiscal Year Focus
2015 
 
 
Document Fiscal Period Focus
FY 
 
 
Trading Symbol
CRCM 
 
 
Entity Registrant Name
Care.com Inc 
 
 
Entity Central Index Key
0001412270 
 
 
Current Fiscal Year End Date
--12-26 
 
 
Entity Filer Category
Non-accelerated Filer 
 
 
Entity Common Stock, Shares Outstanding
 
32,449,235 
 
Entity Well-known Seasoned Issuer
No 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 0 
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Dec. 26, 2015
Dec. 27, 2014
Current assets:
 
 
Cash and cash equivalents
$ 61,240 
$ 71,881 
Accounts receivable (net of allowance of $125.0 for 2015)
3,107 
2,530 
Unbilled accounts receivable
3,595 
3,541 
Prepaid expenses and other current assets
2,599 
4,936 
Current assets of discontinued operations
439 
3,172 
Total current assets
70,980 
86,060 
Property and equipment, net
6,371 
6,290 
Intangible assets, net
3,389 
7,065 
Goodwill
58,631 
60,635 
Other non-current assets
3,098 
3,072 
Non-current assets of discontinued operations
9,982 
Total assets
142,478 
173,104 
Current liabilities:
 
 
Accounts payable
3,189 
4,323 
Accrued expenses and other current liabilities
12,413 
11,667 
Current contingent acquisition consideration
2,845 
Deferred revenue
13,435 
11,472 
Current liabilities of discontinued operations
17,883 
11,919 
Total current liabilities
46,920 
42,226 
Deferred tax liability
3,166 
2,119 
Other non-current liabilities
4,140 
3,442 
Non-current liabilities of discontinued operations
7,267 
Total liabilities
54,226 
55,054 
Commitments and Contingencies
Stockholders' equity
 
 
Common stock, $0.001 par value; 300,000 shares authorized; 32,276 and 31,615 shares issued and outstanding, respectively
32 
32 
Additional paid-in capital
283,669 
277,583 
Accumulated deficit
(194,854)
(159,859)
Accumulated other comprehensive (loss) income
(595)
294 
Total stockholders' equity
88,252 
118,050 
Total liabilities and stockholders' equity
$ 142,478 
$ 173,104 
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Dec. 26, 2015
Dec. 27, 2014
Statement of Financial Position [Abstract]
 
 
Allowance for accounts receivables
$ 125 
$ 0 
Common stock, par value, in dollars per share
$ 0.001 
$ 0.001 
Common stock, shares authorized
300,000,000 
300,000,000 
Common stock, shares issued
32,276,000 
32,276,000 
Common stock, shares outstanding
31,615,000 
31,615,000 
Preferred stock, par value, in dollars per share
$ 0.001 
$ 0.001 
Preferred stock, shares authorized
5,000,000 
5,000,000 
Preferred stock, shares issued
Preferred stock, shares outstanding
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Income Statement [Abstract]
 
 
 
Revenue
$ 138,681 
$ 110,712 
$ 81,487 
Cost of revenue
26,117 
23,464 
18,844 
Operating expenses:
 
 
 
Selling and marketing
73,521 
73,799 
55,250 
Research and development
19,801 
16,216 
11,816 
General and administrative
30,158 
27,325 
18,841 
Depreciation and amortization
4,503 
4,363 
4,387 
Total operating expenses
127,983 
121,703 
90,294 
Operating loss
(15,419)
(34,455)
(27,651)
Other expense, net
(1,239)
(3,856)
(291)
Loss before income taxes
(16,658)
(38,311)
(27,942)
Provision for income taxes
(1,221)
752 
(354)
Loss from continuing operations
(17,879)
(37,559)
(28,296)
Loss from discontinued operations, net of tax (see note 4)
(17,116)
(42,733)
Net loss
(34,995)
(80,292)
(28,296)
Accretion of preferred stock
(4)
(57)
Net loss attributable to common stockholders
$ (34,995)
$ (80,296)
$ (28,353)
Net loss per share attributable to common stockholders:
 
 
 
Income (loss) from continuing operations, per basic and diluted share
$ (0.56)
$ (1.30)
$ (9.45)
Income (loss) from discontinued operations and disposal of discontinued operations, net of tax, per basic and diluted share
$ (0.53)
$ (1.47)
$ 0.00 
Net loss basic and diluted (in dollars per share)
$ (1.09)
$ (2.77)
$ (9.45)
Weighted-average shares used to compute net loss per share attributable to common stockholders:
 
 
 
Basic and diluted (in shares)
32,001 
28,941 
3,000 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
Net loss
$ (34,995)
$ (80,292)
$ (28,296)
Other comprehensive (loss) income:
 
 
 
Foreign currency translation adjustments
(889)
(1,649)
806 
Comprehensive loss
$ (35,884)
$ (81,941)
$ (27,490)
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Common Stock
Additional Paid-In Capital
Accumulated Deficit
Accumulated Other Comprehensive Income (Loss)
Redeemable convertible preferred stock
Preferred Stock
Beginning balance at Dec. 31, 2012
$ (43,442)
$ 3 
$ 6,628 
$ (51,210)
$ 1,137 
$ 152,194 
Common stock, shares outstanding, beginning balance at Dec. 31, 2012
 
2,882,000 
 
 
 
 
Preferred stock, shares outstanding, beginning balance at Dec. 31, 2012
 
 
 
 
 
21,299,000 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
Exercises of stock options
821 
 
821 
 
 
 
Exercises of stock options, shares
 
315,000 
 
 
 
 
Accretion of issuance costs
 
 
 
 
 
57 
Accretion of issuance costs, value
(57)
 
 
(57)
 
 
Stock-based compensation
1,862 
 
1,862 
 
 
 
Foreign currency translation adjustments
806 
 
 
 
806 
 
Issuance of preferred and common stock in connection with acquisitions
 
 
 
 
 
Net loss
(28,296)
 
 
(28,296)
 
 
Ending balance at Dec. 28, 2013
(68,306)
9,311 
(79,563)
1,943 
152,251 
Preferred stock, shares outstanding, ending balance at Dec. 28, 2013
 
 
 
 
 
21,299,000 
Common stock, shares outstanding, ending balance at Dec. 28, 2013
 
3,197,000 
 
 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
Exercises of stock options
994 
 
994 
 
 
 
Exercises of stock options, shares
 
220,000 
 
 
 
 
Accretion of issuance costs, value
(4)
 
 
(4)
 
 
Stock-based compensation
4,357 
 
4,357 
 
 
 
Foreign currency translation adjustments
(1,649)
 
 
 
(1,649)
 
Exercises of warrants, shares
 
76,000 
 
 
 
 
Reclassification of warrant liability to additional paid-in capital
968 
 
968 
 
 
 
Contingent consideration payable in shares
4,878 
 
4,878 
 
 
 
Contingent consideration paid in preferred stock, shares
 
 
 
 
 
192,000 
Contingent consideration paid in preferred stock
 
 
 
 
 
2,626 
Conversion of preferred stock to common stock upon initial public offering, shares
 
21,491,000 
 
 
 
(21,491,000)
Conversion of preferred stock to common stock upon initial public offering
154,877 
22 
154,855 
 
 
(154,877)
Preferred stock financing, shares
 
6,153,000 
 
 
 
 
Issuance of common stock in connection with initial public offering, net of offering costs
(94,810)
(6)
(94,804)
 
 
 
Issuance of preferred and common stock in connection with acquisitions
5,969 
5,968 
 
 
 
Preferred and Common stock issued in connection with acquisitions, shares
 
478,000 
 
 
 
 
Acceleration of Citrus Lane restricted stock awards(1)
1,448 
 
1,448 
 
 
 
Net loss
(80,292)
 
 
(80,292)
 
 
Ending balance at Dec. 27, 2014
118,050 
32 
277,583 
(159,859)
294 
Preferred stock, shares outstanding, ending balance at Dec. 27, 2014
 
 
 
 
Common stock, shares outstanding, ending balance at Dec. 27, 2014
31,615,000 
31,615,000 
 
 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
Exercises of stock options
575 
 
575 
 
 
 
Exercises of stock options, shares
 
256,000 
 
 
 
 
Stock-based compensation
5,511 
 
5,511 
 
 
 
Foreign currency translation adjustments
(889)
 
 
 
(889)
 
Issuance of preferred and common stock in connection with acquisitions
 
 
 
 
 
Preferred and Common stock issued in connection with acquisitions, shares
 
191,000 
 
 
 
 
Issuance of restricted stock units
 
214,000 
 
 
 
 
Net loss
(34,995)
 
 
(34,995)
 
 
Ending balance at Dec. 26, 2015
$ 88,252 
$ 32 
$ 283,669 
$ (194,854)
$ (595)
$ 0 
Preferred stock, shares outstanding, ending balance at Dec. 26, 2015
 
 
 
 
Common stock, shares outstanding, ending balance at Dec. 26, 2015
31,615,000 
32,276,000 
 
 
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Cash flows from operating activities
 
 
 
Net loss
$ (34,995)
$ (80,292)
$ (28,296)
Loss from discontinued operations, net of tax (see note 4)
(17,116)
(42,733)
Loss from continuing operations
(17,879)
(37,559)
(28,296)
Adjustments to reconcile net loss to net provided by (cash used) in operating activities:
 
 
 
Stock-based compensation
4,926 
3,879 
1,862 
Depreciation and amortization
5,218 
5,128 
6,702 
Deferred taxes
1,094 
(893)
284 
Contingent consideration expense
302 
1,342 
Change in fair value of contingent consideration payable in preferred stock
2,258 
Change in fair value of stock warrants
606 
115 
Foreign currency remeasurement loss
1,275 
Other non-operating expenses
(98)
(89)
Changes in operating assets and liabilities, net of effects from acquisitions:
 
 
 
Accounts receivable
(604)
(946)
(46)
Unbilled accounts receivable
(291)
(1,066)
(458)
Prepaid expenses and other current assets
2,076 
(116)
(439)
Other non-current assets
(22)
353 
(109)
Accounts payable
(588)
1,757 
706 
Accrued expenses and other current liabilities
1,864 
2,087 
2,870 
Deferred revenue
2,280 
3,242 
2,821 
Other non-current liabilities
909 
880 
(15)
Net cash provided by (used in) operating activities by continuing operations
160 
(20,177)
(12,661)
Net cash used in operating activities by discontinued operations
(5,124)
(4,107)
Net cash used in operating activities
(4,964)
(24,284)
(12,661)
Cash flows from investing activities
 
 
 
Purchases of property and equipment
(4,396)
(3,038)
(1,420)
Payments for acquisitions, net of cash acquired
(489)
(398)
Changes in restricted cash balance
(73)
73 
Payments for security deposits
(2,825)
Net cash used in investing activities by continuing operations
(4,323)
(6,425)
(1,818)
Net cash used in investing activities by discontinued operations
(2)
(22,844)
Net cash used in investing activities
(4,325)
(29,269)
(1,818)
Cash flows from financing activities
 
 
 
Net proceeds from issuance of common stock upon initial public offering
96,007 
Proceeds from the issuance of common stock
777 
787 
821 
Payments for deferred offering costs
(1,074)
Payments of contingent consideration previously established in purchase accounting
(1,840)
(2,209)
Net cash (used in) provided by financing activities
(1,063)
94,585 
(253)
Effect of exchange rate changes on cash and cash equivalents
(289)
890 
(85)
Net increase (decrease) in cash and cash equivalents
(10,641)
41,922 
(14,817)
Cash and cash equivalents, beginning of the period
71,881 
29,959 
44,776 
Cash and cash equivalents, end of the period
61,240 
71,881 
29,959 
Cash paid for taxes
 
 
 
Cash paid for taxes
171 
94 
26 
Supplemental disclosure of non-cash investing and financing activities
 
 
 
Unpaid purchases of property and equipment
43 
2,575 
Issuance of preferred and common stock in connection with acquisitions
5,969 
Accretion of preferred stock to redemption value
57 
Conversion of preferred stock to common stock
154,855 
Reclassification of warrant liability to additional paid-in capital
968 
Reclassification of contingent consideration payable in common shares
4,878 
Unpaid deferred offering costs
$ 0 
$ 0 
$ 479 
Organization and Description of Business
Organization and Description of Business
Organization and Description of Business
Care.com, Inc. (the “Company”, “we”, “us”, and “our”), a Delaware corporation, was incorporated on October 27, 2006. We are the world’s largest online marketplace for finding and managing family care. Our consumer matching solutions enable families to connect to caregivers and caregiving services in a reliable and easy way and our payment solutions enable families to pay caregivers electronically online or via their mobile device and to manage their household payroll and tax matters with Care.com HomePay. In addition, we serve employers by providing access to our platform to employer-sponsored families and care-related businesses-such as day care centers, nanny agencies and home care agencies-who wish to market their services to our care-seeking families and recruit our caregiver members.
Certain Significant Risks and Uncertainties
We operate in a dynamic industry and, accordingly, our business is affected by a variety of factors. For example, we believe that negative changes in any of the following areas could have a significant negative effect on our future financial position, results of operations or cash flows: rates of revenue growth; member engagement and usage of our existing and new products; protection of our brand; retention of qualified employees and key personnel; management of our growth; scaling and adaptation of existing technology and network infrastructure; competition in our market; performance of acquisitions and investments; protection of our intellectual property; protection of customers’ information and privacy concerns; security measures related to our website; and access to capital at acceptable terms, among other things.
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries, after elimination of all intercompany balances and transactions. We have prepared the accompanying financial statements in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”).
Fiscal Year-End
For periods prior to fiscal 2013, we operated and reported on a calendar basis fiscal year. Beginning in the third quarter of fiscal 2013, we operate and report using a 52 or 53 week fiscal year ending on the Saturday in December closest and prior to December 31. Accordingly, our fiscal quarters end on the Saturday that falls closest to the last day of the third month of each quarter.
Discontinued Operations
To be reported within discontinued operations, we must dispose of a component or a group of components that represents a strategic shift which will have a major effect on our operations and financial results. We aggregate the results of operations for discontinued operations within a single line item on the income statement. General corporate overhead is not allocated to discontinued operations. We disclose any gain or loss that is recognized upon the disposition of a discontinued operation.
During the fourth quarter of fiscal 2015, we made the decision to shut down the business and had substantially completed our plans for ceasing the operation of the business. The represented a strategic shift that will have a major effect on our operations and financial results. As such, financial results of Citrus Lane have been presented as net loss from discontinued operations on the consolidated statements of operations for the years ended December 26, 2015 and December 27, 2014. Assets and liabilities of Citrus Lane to be disposed of are presented as assets from discontinued operations and liabilities from discontinued operations on the consolidated balance sheet as of December 26, 2015 and December 27, 2014 (see Note 4, “Discontinued Operations”).
Use of Estimates
The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable and revenue allowances, intangible asset valuations, expected future cash flows used to evaluate the recoverability of long-lived assets, the useful lives of long-lived assets including property and equipment and intangible assets, valuation of common and preferred stock and warrants to purchase preferred stock, fair value of stock-based awards, goodwill, income taxes, contingent consideration, and contingencies. We base our estimates of the carrying value of certain assets and liabilities on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, when these carrying values are not readily available from other sources. These estimates are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ from the estimates.
Revenue Recognition
In general, we recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered to the customer, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. We derive our revenue primarily from on-going subscription fees. Revenue from subscription fees is recognized on a daily basis over the subscription term or on a pro-rata basis as the services are delivered. Revenue from background checks, lead generation and advertising is recognized in the period earned. Other service revenues are recognized as the services are performed. Taxes that are collected from customers and remitted to government authorities are presented on a net basis and are excluded from revenue. As it relates to our Citrus Lane business which is presented within discontinued operations, for product sales, these criteria are deemed to have been met when the items are delivered to the end customer. Shipping and handling charges are included in revenue on a gross basis.
Certain of our arrangements provide companies the opportunity to purchase Care.com services on behalf of their employees. These arrangements typically include a subscription to our consumer matching solutions for their employees. These arrangements are accounted for as multiple element arrangements. We have concluded that each element in the arrangement has stand-alone value as the individual services can be sold separately. In addition, there is no right of refund once a service has been delivered. Therefore, we have concluded each element of the arrangement is a separate unit of accounting. In accordance with the authoritative guidance on revenue recognition, we allocate consideration at the inception of an arrangement to each unit of accounting based on the relative selling price method in accordance with the selling price hierarchy. The objective of the hierarchy is to determine the price at which we would transact a sale if the service were sold on a stand-alone basis, and requires the use of: (1) vendor-specific objective evidence (‘‘VSOE’’), if available; (2) third-party evidence (‘‘TPE’’), if VSOE is not available; and (3) best estimate of selling price (‘‘BESP’’), if neither VSOE nor TPE is available. Since VSOE or TPE are not typically available, BESP is generally used to allocate the selling price to each unit of accounting. We determine BESP for units of account by considering multiple factors including, but not limited to, prices we charge for similar offerings, sales volumes, geographies and other factors contemplated in negotiating multiple element transactions.
Deferred Revenue
Deferred revenue primarily consists of payments received in advance of revenue recognition of the services described above, and is recognized as the revenue recognition criteria are met. Our customers pay for most services in advance on a monthly, quarterly or annual basis. Amounts expected to be recognized within the twelve months following the balance sheet date are classified within current liabilities in the accompanying consolidated balance sheets.
Unbilled Receivables
Unbilled receivables consist of amounts earned upon satisfying the revenue recognition criteria in advance of billing. Subscribers to our Care.com HomePay solution are billed quarterly in arrears at the beginning of the subsequent calendar quarter to which the services related.
Cost of Revenue
Cost of revenue primarily consists of expenses that are directly related, or closely correlated, to revenue generation, including matching and payments member variable servicing costs such as personnel costs for customer support, transaction fees related to credit card payments and the cost of background checks run on both families and caregivers. Additionally, cost of revenue includes website hosting fees and amortization expense related to caregiver relationships, proprietary software acquired as part of acquisitions and website intangible assets. As it relates to our Citrus Lane business, which is presented within discontinued operations, we have product fulfillment costs, largely consisting of product, shipping and costs associated with our third-party fulfillment providers.
Concentrations of Credit Risk
Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts receivable. We place our cash and cash equivalents with major financial institutions throughout the world that management assesses to be of high-credit quality in order to limit exposure of each investment. As of December 26, 2015 and December 27, 2014, substantially all of our cash had been invested in money market funds.
Credit risk with respect to accounts receivable is dispersed due to the large number of customers. During the year ended December 26, 2015, one customer accounted for more than 13% of total accounts receivable and no customer accounted for more than 10% of revenue. During the year ended December 27, 2014, one customer accounted for 15% of total accounts receivable and no customer accounted for more than 10% of total revenue. In addition, our credit risk is mitigated by a relatively short collection period. Collateral is not required for accounts receivable. We record our accounts receivable in our consolidated balance sheets at net realizable value. We perform on-going credit evaluations of our customers and maintain allowances for potential credit losses, based on management’s best estimates. Amounts determined to be uncollectible are written off against this reserve. Our allowance for doubtful accounts totaled $0.1 million and $0.0 million as of December 26, 2015 and December 27, 2014, respectively.
Foreign Currency Translation
We determine the functional currency for our foreign subsidiaries by reviewing the currencies in which their respective operating activities occur. Financial information is translated from the functional currency to the U.S. dollar, the reporting currency, for inclusion in our consolidated financial statements. Income, expenses, and cash flows are translated at average exchange rates prevailing during each month of the fiscal year, and assets and liabilities are translated at fiscal period end exchange rates. Foreign exchange transaction gains and losses are included in other expense, net in the accompanying consolidated statements of operations. The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income in the accompanying consolidated balance sheets. For the years ended December 26, 2015, December 27, 2014 and December 28, 2013, we recorded foreign currency transaction losses of approximately $1.3 million, $1.0 million and $0.1 million, respectively, included in other expense, net in the accompanying consolidated statements of operations.
Cash Equivalents
We consider highly liquid investments purchased with an original maturity of 90 days or less at the time of purchase to be cash equivalents. As of December 26, 2015 and December 27, 2014, cash equivalents consisted of money market funds.
Recurring Fair Value Measurement
Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for disclosure of fair value measurements. The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy are defined as follows:
Level 1 inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2 inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.), or inputs that are derived principally from or corroborated by market data by correlation or other means.
Level 3 inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.
Recurring Fair Value Measurements
Assets
Cash equivalents - Cash equivalents include money market mutual funds with original maturities of three months or less. The fair value measurement of these assets is based on quoted market prices in active markets for identical assets and, therefore, these assets are recorded at fair value on a recurring basis and classified as Level 1 in the fair value hierarchy.
Liabilities
Contingent Acquisition Consideration - Contingent acquisition consideration includes the fair value of contingent consideration paid by us in connection with corporate acquisitions based on the likelihood of issuing preferred and common stock and paying cash related to certain revenue and other milestones. We recorded our estimate of the fair value of this contingent consideration based on the evaluation of the likelihood of the achievement of the contractual conditions that would result in the payment of the contingent consideration and weighted probability assumptions of these outcomes. The fair value of the liability was estimated using a discounted cash flow technique with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820.
For contingent consideration payable in preferred stock, we used a valuation of the company based on both an income and market approach to determine the fair value of the preferred stock as of the acquisition date and on an-ongoing basis. Upon the closing of our initial public offering (“IPO”) in January 2014, the contingent consideration payable in preferred stock was automatically converted to the right to receive common stock at the then-applicable conversion rate. Contingent consideration payable in preferred stock was written up to fair value as of the closing date of the IPO and was reclassified to permanent equity.
The cash portion of the contingent consideration liability has been discounted to reflect the time value of money, and therefore, as the milestone date approaches, the fair value of this liability will increase. This increase in fair value was recorded in general and administrative expenses in the accompanying consolidated statements of operations. The preferred stock portion of the contingent consideration represented a liability in accordance with ASC 480-10, Distinguishing Liabilities from Equity, and was marked-to-market each reporting period with changes in market value recognized in other expense, net in the accompanying consolidated statements of operations.
During the year ended December 28, 2013 we reassessed the probability of achievement on the Care Concierge, Inc. contingent acquisition cash payment based on the achievement of certain revenue milestones and the probability of reaching both the 2013 and 2014 milestones, which resulted in $0.6 million of incremental expense. During the year ended December 27, 2014, in connection with our acquisition of Citrus Lane, we recognized acquisition consideration payable in cash and shares totaling $17.5 million. The probability of achievement of this earn-out was assessed at 100%. Current contingent consideration liabilities from the acquisition of Citrus Lane of $16.0 million and $7.8 million were included in current liabilities from discontinued operations as of December 26, 2015 and December 27, 2014, respectively. Non-current contingent consideration liabilities from the acquisition of Citrus Lane of $7.3 were included in non-current liabilities from discontinued operations as of December 27, 2014.
The significant inputs in the Level 3 measurement not supported by market activity included our probability assessments of expected future cash flows related to our acquisition of Breedlove & Associates, LLC, Care Concierge, Inc. and Citrus Lane during the applicable earn-out period, appropriately discounted considering the uncertainties associated with the applicable obligation, and calculated in accordance with the terms of the applicable transaction agreement. As such, the cash portion of the contingent consideration liability has been discounted to reflect the time value of money, and therefore, as the milestone date approaches, the fair value of this liability will increase.
Preferred Stock Warrants - Preferred stock warrants consist of warrants issued in connection with debt financings. The fair value of the warrants was determined using the Black-Scholes option-pricing model. In conjunction with the closing of the IPO, the warrant exercisable for shares of our Series A-1 Preferred Stock was automatically converted into a warrant exercisable for shares of our common stock, resulting in the reclassification of the related convertible preferred stock warrant liability to additional paid-in capital as the warrant met the criteria for equity classification upon its conversion to a warrant for the purchase of common stock. The warrant liability was re-measured to fair value prior to reclassification to additional paid-in capital. As of December 26, 2015, we had no outstanding warrant liability.
The following table presents information about our assets and liabilities, including those from our discontinued operations, measured at fair value on a recurring basis as of December 26, 2015 and December 27, 2014 and indicates the fair value hierarchy of the valuation techniques we utilized to determine such fair value (in thousands):
 
December 26, 2015
 
December 27, 2014
 
Fair Value Measurements Using Input Types
 
 
 
Fair Value Measurements Using Input Types
 
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market mutual funds
$
25,420

 
$

 
$

 
$
25,420

 
$
15,656

 
$

 
$

 
$
15,656

Total assets
$
25,420

 
$

 
$

 
$
25,420

 
$
15,656

 
$

 
$

 
$
15,656

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contingent acquisition consideration (included in current liabilities of discontinued operations)
$
8,163

 
$

 
$
7,878

 
$
16,041

 
$

 
$

 
$
17,952

 
$
17,952

Total liabilities
$
8,163

 
$

 
$
7,878

 
$
16,041

 
$

 
$

 
$
17,952

 
$
17,952


The following table sets forth a summary of changes in the fair value of our contingent acquisition consideration and preferred stock warrants which represent recurring measurements that are classified within Level 3 of the fair value hierarchy wherein fair value is estimated using significant unobservable inputs (in thousands):
 
Fiscal Year Ended
 
December 26, 2015
 
December 27, 2014
 
Contingent Acquisition
Consideration
 
Contingent Acquisition
Consideration
 
Preferred Stock Warrants
 
 
 
 
 
 
Beginning balance
$
17,952

 
$
10,630

 
$
362

Contingent consideration liability recorded in connection with Citrus Lane acquisition

 
14,510

 

Increase in fair value included in earnings
934

 
3,158

 
606

Reclassification to permanent equity

 
(4,878
)
 
(968
)
Contingent acquisition consideration payments
(2,845
)
 
(5,468
)
 

Transfers out of Level 3(1)
(8,163
)
 

 

Ending balance
$
7,878

 
$
17,952

 
$


(1) Transfers out of Level 3 represent contingent payments for which the measurement period had ended and the remaining liability is known as of December 26, 2015.
Non-Recurring Fair Value Measurements
We remeasure the fair value of certain assets and liabilities upon the occurrence of certain events. Such assets are comprised of long-lived assets, including property and equipment, intangible assets and goodwill. No remeasurement of long-lived assets occurred as of December 26, 2015 or December 27, 2014, aside from those detailed below pertaining to goodwill and intangible assets. Other financial instruments not measured or recorded at fair value in the accompanying consolidated balance sheets principally consist of accounts receivable, accounts payable, and accrued liabilities. The estimated fair values of these instruments approximate their carrying values due to their short-term nature.
Business Combinations
We determine and allocate the purchase price of an acquired company to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the business combination date, including identifiable intangible assets, which either arise from a contractual or legal right or are separable from goodwill. We base the fair value of identifiable intangible assets acquired in a business combination on detailed valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired to goodwill. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, cash flows, discount rates, estimated useful lives and probabilities surrounding the achievement of revenue-based milestones, could result in different purchase price allocations and amortization expense in current and future periods. Transaction costs associated with these acquisitions are expensed as incurred through general and administrative costs.
In those circumstances where an acquisition involves a contingent consideration arrangement, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date. We re-measure this liability at each reporting period and record changes in the fair value as a component of operating expenses. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing and amount of revenue estimates or in the timing or likelihood of achieving revenue-based milestones.
Results of operations and cash flows of acquired companies are included in our operating results from the date of acquisition.
Equity Method Investment
During fiscal 2012, we made a 50% investment in Care International Exchange, Inc. (the “Venture”), a venture formed with Magsaysay People Resources Corporation (‘‘Magsaysay’’). The purpose of the Venture is to conduct activities related to a live-in care program with the goal of generating revenue from the placement of foreign-born providers with families, institutions or individuals seeking live-in home care throughout Canada. Our initial investment in the Venture was $50,000. We account for our investment in the Venture using the equity method of accounting based on our voting interest as we have significant influence over the Venture. Accordingly, our share of the income or loss of the Venture is recorded in other income or expense in the accompanying consolidated statements of operations. To date, the operations of the Venture have not been significant.
Goodwill
Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired. We evaluate goodwill for impairment at the reporting unit level (operating segment or one level below an operating segment) annually or more frequently if we believe indicators of impairment exist. In accordance with the guidance, we are permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a two-step goodwill impairment test is performed.
In performing the test, we utilize the two-step approach prescribed under Accounting Standards Codification, or ASC, 350, Intangibles - Goodwill and Other. The first step requires a comparison of the reporting unit against its aggregate carrying value, including goodwill. If the carrying amount exceeds the reporting unit’s carrying value to its fair value. We consider a number of factors to determine the fair value of a reporting unit, including an independent valuation to conduct this test. The valuation is based upon expected future discounted operating cash flows of the reporting unit. We base the discount rate on the weighted average cost of capital, or WACC, of market participants. If the carrying value of a reporting unit exceeds its estimated fair value, we will perform the second step of the goodwill impairment test to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of a reporting unit’s goodwill to its carrying value. The second step requires us to perform a hypothetical purchase allocation as of the measurement date and estimate the fair value of net tangible and intangible assets. The fair value of intangible assets is determined as described below and is subject to significant judgment.
Since the fair value of our reporting units was determined by use of the discounted cash flows, or DCF, and the key assumptions that drive the fair value in this model are the WACC, terminal values, growth rates, and the amount and timing of expected future cash flows, significant judgment is applied in determining fair value. If the current economic environment were to deteriorate, this would likely result in a higher WACC because market participants would require a higher rate of return. In the DCF as the WACC increases, the fair value decreases. The other significant factor in the DCF is our projected financial information (i.e., amount and timing of expected future cash flows and growth rates) and if these assumptions were to be adversely impacted, this could result in a reduction of the fair value of this reporting unit.
We conducted our fiscal 2015 annual impairment test as of September 27, 2015 (the first day of our fourth fiscal quarter). We utilized DCF and market approaches to estimate the fair value of our reporting units as of September 27, 2015 and ultimately used the fair value determined by the DCF in making our impairment test conclusions. We believe we used reasonable estimates and assumptions about future revenue, cost projections, cash flows, market multiples and discount rates as of the measurement date. As a result of completing Step 1, all of the reporting units had fair values exceeding their carrying values, and as such, Step 2 of impairment test was not required for those reporting units.
Additionally, during the third quarter of fiscal 2015, we determined that we should consider the advisability of a sale or wind down of the Citrus Lane business. As a result of this determination, we concluded that indicators of impairment existed in the Citrus Lane business and began an analysis of whether any material impairment charges would be required. We completed step one of our goodwill impairment testing with the assistance of an independent valuation firm and determined that the fair value of this business was lower than its carrying value. As a result of this analysis and our decision during the fourth quarter of 2015 to exit the business, we recorded a goodwill impairment loss of $8.0 million within loss from discontinued operations.
We conducted our fiscal 2014 annual impairment test as of September 28, 2014 (the first day of our fourth fiscal quarter). We utilized DCF and market approaches to estimate the fair value of our reporting units as of September 28, 2014 and ultimately used the fair value determined by the DCF in making our impairment test conclusions. We believe we used reasonable estimates and assumptions about future revenue, cost projections, cash flows, market multiples and discount rates as of the measurement date. Because Citrus Lane was recently acquired and was operating reasonably close to expectations, we performed a qualitative screen for impairment of that reporting unit as is allowed under ASC 350. As a result of completing Step 1, all of the reporting units had fair values exceeding their carrying values, and as such, Step 2 of impairment test was not required for those reporting units.
During the fourth quarter of fiscal 2014, primarily as a result of unexpected changes, both internal and external, we determined that indicators of impairment existed at our Citrus Lane Reporting Unit. The fair value of reporting unit was deemed to be below its carrying value and Step 2 of the goodwill impairment test was performed. Step 2 of the goodwill impairment test requires the completion of a hypothetical purchase price allocation to determine the fair value of the implied goodwill. Upon completion of the Step 2 analysis, we determined that the Citrus Lane goodwill was impaired and recorded a goodwill impairment loss of $33.8 million within loss from discontinued operations.
Amortization and Impairment of Intangible Assets
We amortize our intangible assets that have finite lives over their estimated useful lives. We use a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. Amortization is recorded over the estimated useful lives ranging from one to ten years. We review our intangible assets subject to amortization to determine if any adverse conditions exist, or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. If the carrying value of an asset exceeds its undiscounted cash flows, we will write-down the carrying value of the intangible asset, or asset group, to its fair value in the period identified. In assessing fair value, we must make assumptions regarding estimated future cash flows and discount rates. If these estimates or related assumptions change in the future, we may be required to record impairment charges. We generally calculate fair value as the present value of estimated future cash flows to be generated by the asset using a risk-adjusted discount rate. If the estimate of an intangible asset’s remaining useful life is changed, we will amortize the remaining carrying value of the intangible asset prospectively over the revised remaining useful life.
During the third quarter of fiscal 2015, we determined that we should consider the advisability of a sale or wind down of the Citrus Lane business. As a result of this determination, we concluded that indicators of impairment existed in the Citrus Lane business and began an analysis of whether any material impairment charges would be required. We completed step one of our goodwill impairment testing with the assistance of an independent valuation firm and determined that the fair value of this business was lower than its carrying value. As a result of this analysis and our decision during the fourth quarter of 2015 to exit the business, we recorded an intangible asset impairment of $1.7 million within loss from discontinued operations.
During the fourth quarter of fiscal 2014, in connection with our goodwill impairment analysis, we performed a Step 2 test of recoverability of finite lived intangibles in accordance with ASC 360, indicating that our undiscounted future cash flows would not recover the carrying value of the Citrus Lane proprietary software and trade name intangible assets. We then performed a Step 3 impairment analysis of finite lived intangible assets under ASC 360 and determined that the carrying value of the Citrus Lane proprietary software and trade name exceeded the fair value of those assets as of the end of the fourth quarter and recognized an intangible asset impairment of $2.4 million within loss from discontinued operations.
Software Development Costs
Internal and external software development costs associated with the development of software for internal use are expensed to research and development during the preliminary project stage and capitalized during the application development stage. Costs incurred during application development stage and capitalized totaled $0.4 million and $0.9 million for the fiscal years ended December 26, 2015, and December 27, 2014, respectively. During fiscal year ended December 28, 2013, we believe the substantial majority of our development efforts were either in the preliminary stage of development or were for maintenance of, and minor upgrades and enhancements to internal-use software and, accordingly, application development costs were insignificant.
Property and Equipment
Property and equipment are stated at cost, and are depreciated using the straight-line method over the estimated useful life of the assets or, where applicable and if shorter, over the lease term. The following table presents the detail of property and equipment, net for the periods presented (in thousands):
 
December 26, 2015
 
December 27, 2014
 
 
 
 
Computer equipment
$
2,236

 
$
2,438

Furniture and fixtures
1,611

 
1,707

Software
1,374

 
1,066

Leasehold improvements
3,847

 
3,133

Total
9,068

 
8,344

Less accumulated depreciation
(2,697
)
 
(2,054
)
Property and equipment, net
$
6,371

 
$
6,290

Property and equipment are depreciated over the following estimated useful lives:
 
Estimated Useful Life
Computer equipment
3 - 5 years
Leasehold improvements
Lesser of asset life or lease term
Furniture and fixtures
3 - 5 years
Software
3 - 6 years

Depreciation expense for the years ended December 26, 2015, December 27, 2014 and December 28, 2013 was $1.6 million, $0.9 million and $0.7 million, respectively.
Expenditures for maintenance and repairs are charged to expense as incurred, whereas major betterments are capitalized as additions to property and equipment.
In accordance with ASC 360-10-35-15, Property, Plant and Equipment—Impairment or Disposal of Long-Lived Assets, we review the carrying value of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, then an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or the fair value less costs to sell, and are not depreciated. Assets and liabilities that are part of a disposal group and classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. During the year ended December 26, 2015, we recorded an impairment charge associated with certain capitalized software development costs of $0.1 million. We have not recognized any impairment losses during the years ended December 27, 2014 and December 28, 2013 with respect to property, plant and equipment.
Income Taxes
We account for income taxes in accordance with ASC 740, Income Taxes. ASC 740 is an asset and liability approach that requires recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax basis, and for operating loss and tax credit carryforwards. ASC 740 requires a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
We recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such position are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 26, 2015 and December 27, 2014, we did not have any uncertain tax positions.
Presentation of Taxes in the Consolidated Statements of Operations
We present taxes that are collected from customers and remitted to government authorities on a net basis in the consolidated statements of operations.
Stock-Based Compensation
We account for all stock-based awards to employees and members of our board of directors, to the extent such awards were issued in connection with their services as directors, in accordance with ASC 718, Compensation-Stock Compensation. ASC 718 requires that all share-based payments, including grants of stock options, be recognized in the statement of operations as an operating expense based on their fair value. For stock options issued under the Company’s stock-based compensation plans, the fair value of each option grant is estimated on the date of grant, and an estimated forfeiture rate is used when calculating stock-based compensation expense for the period. For restricted stock units issued under the Company’s stock-based compensation plans, the fair value of each grant is calculated based on the Company’s stock price on the date of grant. In accordance with ASC 718, we recognize the compensation cost of share-based awards on a straight-line basis over the vesting period of the award.
We use the Black-Scholes-Merton option-pricing model to determine the fair value for option awards. In valuing our option awards, we make assumptions about risk-free interest rates, dividend yields, volatility, and weighted-average expected lives, including estimated forfeiture rates. Risk-free interest rates are derived from U.S. Treasury securities as of the option award grant date. Expected dividend yield is based on our historical dividend payments, which have been zero to date. The expected volatility for our common stock is estimated taking the average historic price volatility for a group of similarly situated publicly traded companies based on daily price observations over a period equivalent to the expected term of the stock option grants. These publicly traded companies were selected based on comparable characteristics to us and consist of several companies in the technology industry that are similar in enterprise value, stage of life cycle, risk profile, financial leverage and with historical share price information sufficient to meet the expected life of our stock-based awards. We estimate the weighted-average expected life of the option awards as the average of the option vesting schedule and the term of the award, since we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time share-based awards have been exercisable. The term of the award is estimated using the simplified method, as awards are plain vanilla option awards. Forfeiture rates are estimated using historical actual forfeiture trends as well as our judgment of future forfeitures. These rates are evaluated at least quarterly and any change in compensation expense is recognized in the period of the change. The estimation of option awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period the estimates are revised. Actual results, and future changes in estimates, may differ substantially from management’s current estimates.
Stock-based awards issued to non-employees, are accounted for using the fair value method in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. These stock options are typically granted in exchange for consulting services to be rendered, and vest over periods of up to four years. In accordance with authoritative guidance, the fair value of non-employee stock-based awards is estimated on the date of grant, and subsequently revalued at each reporting period over their vesting period using the Black-Scholes option-pricing model.
Advertising Costs
We expense advertising costs as incurred when the advertisement is run. We incurred advertising expenses from continuing operations of $54.5 million, $57.8 million, and $42.1 million for the years ended December 26, 2015, December 27, 2014 and December 28, 2013, respectively.
Accumulated Other Comprehensive Income
As of December 26, 2015 and December 27, 2014, accumulated other comprehensive income was comprised solely of cumulative foreign currency translation adjustments.
Recently Issued and Adopted Accounting Pronouncements
In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the requirement for entities to separate deferred income tax liabilities and assets into current and non-current amounts in the balance sheet. Rather, it requires that deferred tax assets and liabilities are classified as non-current in the balance sheet. We adopted this standard prospectively for the year-ended December 26, 2015.
In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which amends ASC 350. The amendments provide guidance as to whether a cloud computing arrangement (e.g., software as a service, platform as a service, infrastructure as a service, and other similar arrangements) includes a software license, and based on that determination, how to account for such arrangements. ASU 2015-05 is effective for fiscal years, and interim periods therein, beginning after December 15, 2015 and may be applied on either a prospective or retrospective basis. Early adoption is not permitted. We are currently evaluating the impact the adoption of ASU 2015-05 will have on our financial statements.
In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810)-Amendments to the Consolidation Analysis, which amends the criteria for determining which entities are considered variable interest entities, or VIEs, amends the criteria for determining if a service provider possesses a variable interest in a VIE and ends the deferral granted to investment companies for application of the VIE consolidation model. ASU 2015-02 is effective for annual periods, and interim periods therein, beginning after December 15, 2015. We are currently evaluating the impact the adoption of Topic 810 will have on our financial statements.
In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. ASU 2014-15 requires management to evaluate, at each annual or interim reporting period, whether there are conditions or events that exist that raise substantial doubt about an entity's ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and earlier application is permitted. We are currently evaluating the impact of the adoption of ASU 2014-15, but the adoption is not expected to have a material effect on our consolidated financial statements or disclosures.
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 by one year to December 15, 2017 for interim and annual reporting periods beginning after that date. Early adoption is permitted but not before the original effective date of December 15, 2016. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. The standard permits the use of either the retrospective or cumulative effect transition method. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.
Business Acquisitions
Business Acquisitions
Business Acquisitions
Citrus Lane
On July 17, 2014, we acquired Citrus Lane, a social commerce service selling curated products designed for families for a total consideration of $22.9 million in cash and 0.4 million shares of common stock (valued at $3.8 million). In addition, up to $16.4 million in cash (valued at $14.5 million) and up to an additional 0.1 million shares of common stock (valued at $1.1 million) were payable in the event Citrus Lane achieves certain milestones in 2015 and 2016.
As part of the transaction, we also exchanged both vested and unvested options to purchase Citrus Lane common stock for options to purchase Care.com common stock at an exchange ratio implied by the value of the merger consideration received by the holders of outstanding Citrus Lane shares (valued at $1.0 million). In connection with this acquisition, we incurred approximately $1.8 million in direct acquisition costs which were expensed as incurred and are included in general and administrative expense in our consolidated statements of operations. Of the initial consideration value, $5.0 million was placed in an escrow account to secure indemnification obligations contained in the purchase agreement.
We recorded our estimate of the fair value of this contingent consideration based on the evaluation of the likelihood of the achievement of the contractual conditions that would result in the payment of the contingent consideration and weighted probability assumptions of these outcomes. The fair value of the liability was estimated using a discounted cash flow technique with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820, Fair Value Measurements and Disclosures. The significant inputs in the Level 3 measurement not supported by market activity included our probability assessments of expected future cash flows related to our acquisition of Citrus Lane during the earn-out period, appropriately discounted considering the uncertainties associated with the obligation, and calculated in accordance with the terms of the merger agreement. There were no changes in the probability of the earn-out payment through December 26, 2015. The cash portion of the contingent consideration liability has been discounted to reflect the time value of money, and therefore, as the milestone dates approach, the fair value of this liability will increase. This increase in fair value was recorded in net loss from discontinued operations in the accompanying consolidated statements of operations. The results of operations for Citrus Lane have been included discontinued operations in our consolidated financial statements since the date of acquisition.
Identifiable Intangible Assets
As part of the preliminary purchase price allocation, we determined that Citrus Lane's primary separately identifiable intangible assets were its proprietary software and trade name. We used a hybrid approach to value the proprietary software. This approach incorporates elements of the income and cost approaches, specifically the lost profits and replacement cost methods. We used a relief from royalty method to value the trade name. This method assumes that a willing buyer would pay a royalty for the use of an asset, rather than incurring the costs associated with internally developing an asset of identical utility. The fair value is calculated by taking the present value of avoided after-tax cash flows discounted back to a present value. The baseline data for this analysis was the cash flow estimates used to price the transaction. Cash flows were forecasted for each intangible asset then discounted based on an appropriate discount rate. The 22.5% discount rate applied was benchmarked with reference to the implied rate of return from the transaction model, as well as an estimate of a market participant's weighted-average cost of capital based on the capital asset pricing model.
In estimating the useful life of the acquired assets, we considered ASC 350-30-35, Intangibles-Goodwill and Other, and reviewed the following: the expected use by the combined company of the assets acquired, the expected useful life of another asset (or group of assets) related to the acquired assets, legal, regulatory or other contractual provisions that may limit the useful life of an acquired asset or may enable the extension of the useful life of an acquired asset without substantial cost, the effects of obsolescence, demand, competition and other economic factors, and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.
We amortize these intangible assets over their estimated useful lives using a method that is based on estimated future cash flows, as we believe this will approximate the pattern in which the economic benefits of the assets will be utilized, or where we have concluded that the cash flows were not reliably determinable, on a straight-line basis.
Allocation of Purchase Price
The acquisition was accounted for as a business combination under FASB ASC Topic 805, Business Combinations (“ASC 805”). The purchase price was assigned to the assets acquired and liabilities assumed based on their estimated fair values. A summary of the purchase price allocation for the acquisition of Citrus Lane is as follows (in thousands):
Total purchase consideration
Cash
$
22,881

Fair value of common stock
3,844

Fair value of contingent acquisition consideration
15,600

Fair value of stock options exchanged
1,026

Total purchase price
$
43,351

 
 
Allocation of purchase consideration
Tangible assets
$
2,843

Liabilities assumed
(4,098
)
Identifiable intangible assets
4,600

Deferred tax liabilities
(1,855
)
Goodwill
41,861

Total purchase price
$
43,351


The fair value of the stock options exchanged and recorded as purchase price represents the fair value of the Citrus Lane options converted into options to purchase our common stock attributable to pre-combination services pursuant to ASC 805, Business Combinations. The remainder of the fair value of these options of $1.4 million is being recognized as stock-based compensation expense in net loss from discontinued operations over the remaining vesting period, which is approximately 2.6 years. We estimated fair value of the stock options using a binomial valuation model with the following weighted-average assumptions: risk free rate of 1.8%, expected volatility of 49.4%, expected life of 5.4 years and dividend of 0.0%. The weighted-average fair value of stock options granted was $9.34 per share. We also recorded stock-based compensation expense of approximately $1.4 million related to the acceleration of vesting of certain equity awards assumed as part of the Citrus Lane acquisition within net loss from discontinued operations.
The estimated fair values for specifically identifiable intangible assets acquired were as follows (in thousands):
 
 
 
Weighted-average amortization period
(in years)
Proprietary software
$
3,000

 
7
Trade-names
1,600

 
10
Total purchase price
$
4,600

 
 

The sellers are also entitled to additional contingent consideration (“Earn-Out”) based upon the performance of the business acquired during a two year period spanning from July 17, 2014 through July 17, 2016. This consideration is based on the ability to introduce new product offerings or product options to Citrus Lane customers. In the event the Earn-Out targets are achieved, we are required to make payments of $8.2 million in each of the periods ended September 26, 2015 and September 24, 2016, respectively. The estimated fair value of the contingent consideration was determined to be $15.2 million at the acquisition date and was initially recorded in current and non-current contingent acquisition consideration on our consolidated balance sheet. There is also a component of the contingent consideration payable in common stock, which is based on a fixed number of shares on each of the periods ended September 26, 2015 and September 24, 2016, and has been recorded as permanent equity in purchase accounting using the acquisition date stock price part of our purchase accounting. We determined the future estimated fair value for the contingent consideration by applying a present value calculation of probable earn-out payments using an appropriate discount rate for us. We recorded charges of $0.6 million due to the accretion of changes in the valuation of contingent consideration, reported loss from discontinued operations. In addition, certain former employees of Citrus Lane may receive two annual contingent payments (subject to adjustment) not to exceed $1.4 million (the “Employee Bonus Pool”). A portion of the Employee Bonus Pool, $0.3 million, is based on the achievement of the Earn-Out targets noted earlier as well as the individual remaining employed by Care.com. The remaining $1.1 million is based solely on the individuals remaining employed by Care.com. Each annual payment is payable after the first and second anniversaries, from the date of acquisition, provided the individuals remain employed by Care.com on such dates. In case of separation, the Employee Bonus Pool attributable to the terminated employee is reallocated to the remaining employees. As a result of our decision to discontinue the Citrus Lane business, these benefits were no longer payable, and as such we reversed any unpaid bonuses previously accrued in the fourth quarter of fiscal 2015, which result in a gain of $0.7 million.
The excess of the purchase price over the estimated fair value of the net tangible assets and intangible assets acquired was recorded as goodwill. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the Citrus Lane acquisition. None of the goodwill is expected to be deductible for income tax purposes. Refer to Note 2 - Significant Accounting Policies.
Pro forma Information
The following unaudited pro forma financial information presents the combined results of operations of Care.com and Citrus Lane as if the acquisition had occurred on January 1, 2013, after giving effect to certain pro forma adjustments. The pro forma adjustments reflected herein include only those adjustments that are directly attributable to the Citrus Lane acquisition, factually supportable, and expected to have a continuing impact on us. Actual 2014 impairment charges were excluded from the pro forma results below. The pro forma financial information does not reflect any adjustments for anticipated synergies resulting from the acquisition and is not necessarily indicative of the operating results that would have actually occurred had the transaction been consummated on January 1, 2013.
 
Pro Forma
 
Fiscal Year Ended
 
December 26, 2015

December 27, 2014
 
December 28, 2013
Revenue
$
138.7


$
110.7

 
$
87.2

Net loss
$
(26.3
)

$
(45.8
)
 
$
(35
)

Consmr
On March 3, 2014, we entered into an agreement with Consmr, Inc. (“Consmr”), the developer of a mobile application for ratings and reviews of consumer products, pursuant to which we acquired the right to hire all employees of Consmr for total consideration of $0.6 million. Approximately $0.1 million of the purchase price was held back and is payable in one year subject to the continuing employment of the employees. Such amount is being recognized as compensation expense over the required employment period. The transaction is presented as an acquisition of a business and the consideration transferred, except for the amount held back, was recorded as goodwill.
As a result of this transaction, on March 4, 2014 all former employees of Consmr became employees of Care.com. Pro forma information related to Consmr is not presented as the impact of the acquisition on our consolidated results of operations is not significant.
Discontinued Operations
Discontinued Operations
Discontinued Operations
During the third quarter of fiscal 2015 we made the decision to exit the Citrus Lane business through either a sale or wind-down as it was no longer a strategic priority. In the fourth quarter of fiscal 2015, we made the decision to shut down the business and had substantially completed our plans for exiting the business. As such, financial results of Citrus Lane have been presented as loss from discontinued operations, net of tax on the consolidated statements of operations for the fiscal years ended December 26, 2015 and December 27, 2014. Assets and liabilities of Citrus Lane to be disposed of are presented as assets from discontinued operations and liabilities from discontinued operations on the consolidated balance sheet as of December 26, 2015 and December 27, 2014.
The following table presents financial results of the Citrus Lane business included in loss from discontinued operations, net of tax for the fiscal years ended December 26, 2015 and December 27, 2014 (in thousands):
 
Fiscal Year Ended
 
December 26, 2015
 
December 27, 2014
 
 
 
 
Revenue
$
11,530

 
$
6,001

Cost of revenue
11,849

 
6,882

Operating expenses:
 
 
 
Selling and marketing
2,229

 
2,017

Research and development
904

 
768

General and administrative
2,698

 
2,764

Impairment of goodwill and intangible assets
8,766

 
36,227

Depreciation and amortization
99

 
76

Operating loss
(15,015
)
 
(42,733
)
Other expense, net
(30
)
 

Loss from discontinued operations before income taxes
(15,045
)
 
(42,733
)
Loss on disposal of assets before income taxes
(2,071
)
 

Provision for income tax

 

Loss from discontinued operations
$
(17,116
)
 
$
(42,733
)

For further details on the impairment of goodwill and intangible assets please refer to Note 2 of these Notes to Consolidated Financial Statements.
The major components of current assets and current liabilities of the Citrus Lane business were as follows (in thousands):
 
December 26, 2015
 
December 27, 2014
Assets
 
 
 
Accounts receivable
$
92

 
$
62

Prepaid expenses and other current assets
28

 
484

Inventory
319

 
2,626

Total current assets
439

 
3,172

Property and equipment, net
9

 
32

Intangible assets, net

 
1,900

Goodwill

 
8,050

Total assets
$
448

 
$
13,154

 
 
 
 
Liabilities
 
 
 
Accounts payable
$
435

 
$
1,139

Accrued expenses and other liabilities
1,325

 
1,066

Deferred revenue
82

 
1,874

Current contingent acquisition consideration
16,041

 
7,840

Total current liabilities
17,883

 
11,919

Total non-current liabilities of discontinued operations

 
7,267

Total liabilities
$
17,883

 
$
19,186

Goodwill and Intangible Assets
Goodwill and Intangible Assets
Goodwill and Intangible Assets
The following table presents the change in goodwill for our single reporting unit during the periods presented (in thousands):
Balance as of December 27, 2014
$
60,635

Effect of currency translation
(2,004
)
Balance as of December 26, 2015
$
58,631


The following table presents the detail of intangible assets for the periods presented (dollars in thousands):
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Carrying Value
 
Weighted-Average Remaining Life (Years)
December 26, 2015
 
 
 
 
 
 
 
Indefinite lived intangibles
$
242

 
$

 
$
242

 
N/A
Trademarks and trade names
4,417

 
(4,133
)
 
284

 
3.5
Proprietary software
4,751

 
(3,802
)
 
949

 
1.6
Website
50

 
(44
)
 
6

 
0.6
Training materials
30

 
(30
)
 

 
0.0
Non-compete agreements
130

 
(111
)
 
19

 
1.6
Leasehold interests
170

 
(86
)
 
84

 
3.4
Caregiver relationships
285

 
(285
)
 

 
0.0
Customer relationships
8,782

 
(6,977
)
 
1,805

 
3.1
Total
$
18,857

 
$
(15,468
)
 
$
3,389

 
 
 
 
 
 
 
 
 
 
December 27, 2014
 
 
 
 
 
 
 
Indefinite lived intangibles
$
242

 
$

 
$
242

 
N/A
Trademarks and trade names
4,481

 
(3,377
)
 
1,104

 
2.0
Proprietary software
4,942

 
(3,351
)
 
1,591

 
2.5
Website
50

 
(34
)
 
16

 
1.6
Training materials
30

 
(20
)
 
10

 
1.0
Non-compete agreements
137

 
(94
)
 
43

 
2.0
Leasehold interests
170

 
(61
)
 
109

 
4.4
Caregiver relationships
312

 
(252
)
 
60

 
0.7
Customer relationships
8,857

 
(4,967
)
 
3,890

 
2.9
Total
$
19,221

 
$
(12,156
)
 
$
7,065

 
 

Amortization expense was $3.6 million and $4.2 million for the fiscal years ended December 26, 2015 and December 27, 2014, respectively. Of these amounts $2.9 million and $3.4 million was classified as a component of depreciation and amortization, and $0.7 million and $0.8 million was classified as a component of cost of revenue in the consolidated statements of operations for the fiscal years ended December 26, 2015 and December 27, 2014, respectively.
As of December 26, 2015, the estimated future amortization expense related to current intangible assets for future fiscal years was as follows (in thousands):
2016
$
1,951

2017
547
2018
202
2019
145
2020
96
Thereafter
206

Total
$
3,147

Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities
The following table presents the detail of accrued expenses and other current liabilities for the periods presented (in thousands):
 
December 26, 2015
 
December 27, 2014
 
 
 
 
Payroll and compensation
$
5,167

 
$
1,830

Tax-related expense
801

 
804

Marketing expenses
3,451

 
3,385

Other accrued expenses
2,994

 
5,648

Total accrued expenses and other current liabilities
$
12,413

 
$
11,667

Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
Leases
We have entered into various operating lease agreements, primarily covering certain of our offices throughout the world, with original lease periods expiring between 2015 and 2025. Facilities rent expense under these operating leases was $5.2 million and $3.7 million for the years ended December 26, 2015 and December 27, 2014, respectively. We are responsible for paying our share of the actual operating expenses and real estate taxes under certain of these lease agreements.
Certain of these arrangements have renewal or expansion options, as well as adjustments for market provisions, such as free or escalating base monthly rental payments. We recognize rent expense under such arrangements on a straight-line basis over the initial term of the lease. The difference between the straight-line expense and the cash paid for rent has been recorded as deferred rent in the consolidated balance sheets.
At December 26, 2015, minimum future lease commitments under all non-cancelable operating leases (including rent escalation clauses) were as follows (in millions):
 
Payments Due by Period
 
Total
 
Less than 1 Year
 
1-3 Years
 
4-5 Years
 
Thereafter
Operating lease obligations
$
43.1

 
$
4.3

 
$
9.0

 
$
9.8

 
$
20.0


In July 2014, we entered into a lease agreement pursuant to which we agreed to lease office space to be used for our new headquarters (the “Prime Lease”). The Prime Lease is initially for 36,174 square feet of office space, comprising of the entire sixth floor of the building located at 77 Fourth Avenue, Waltham, Massachusetts, or the Building. The leased premises under the Prime Lease will increase by an additional 36,395 square feet, comprising of the entire fourth floor of the Building, on March 1, 2019 and by an additional 36,174 square feet, comprising of the entire fifth floor of the Building, on April 1, 2019. The term of the Prime Lease commences on August 4, 2014 and expires 120 months from the date base rent payments first become due, which date is the earlier of January 1, 2015 and the date we commence operations in the space. We recorded deferred rent on the consolidated balance sheet. We recognize rent expense on a straight-line basis over the expected lease term. The total cash obligation for the base rent over the term of the Prime Lease will be $34.5 million, and is included in the table above.
Also in July 2014, we entered into two sublease agreements pursuant to which we agreed to lease the entire fourth and fifth floors of the Building. The term of the fourth floor sublease commenced on December 22, 2014 and expires on February 15, 2019, after which the space will be leased by us pursuant to the Prime Lease. The total cash obligation for the base rent over the term of this sublease will be $4.3 million, and is included in the table above. The term of the fifth floor sublease commence on January 1, 2015 and expires on March 30, 2019, after which the space will be leased by us pursuant to the Prime Lease. The lease commencement date for accounting purposes was determined to be August 4, 2014, which represents the date we received access to the fourth and fifth floors. The total cash obligation for the base rent over the term of this sublease will be $4.1 million, and is included in the table above. We have the right to extend the term of the lease agreement for one 10-year period.
We received $2.3 million as tenant improvements allowance under the terms of our new operating lease, which we recorded as deferred rent are amortizing on a straight-line basis over the term of the lease as an offset to rent expense.
In connection with the Prime Leases, we paid $2.8 million in security deposits recorded within other non-current assets on our consolidated balance sheet as of December 26, 2015.
In connection with the execution of the Prime Lease, we entered into an amendment to our lease agreement for our current headquarters pursuant to which that agreement will terminate without penalty on the earlier of (i) ten days after the date we commenced operations under the Prime Lease and (ii) December 31, 2014.
We recognized total rent expense related to the current and new headquarters of approximately $4.2 million, $2.7 million and $1.6 million for the years ended December 26, 2015, December 27, 2014 and December 28, 2013, respectively.
Legal matters
From time to time, we have or may become party to litigation incident to the ordinary course of business. We assess the likelihood of any adverse judgments or outcomes with respect to these matters and determine loss contingency assessments on a gross basis after assessing the probability of incurrence of a loss and whether a loss is reasonably estimable. In addition, we consider other relevant factors that could impact our ability to reasonably estimate a loss. A determination of the amount of reserves required, if any, for these contingencies is made after analyzing each matter. Our reserve may change in the future due to new developments or changes in strategy in handling these matters. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of all pending matters will not have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. Regardless of the outcome, litigation can adversely impact us due to defense and settlement costs, diversion of management resources, and other factors.
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit)
Stockholders’ Equity (Deficit)
Initial Public Offering (IPO)
On January 29, 2014, we closed our IPO in which we sold and issued 6,152,500 shares of common stock, including 802,500 shares of common stock pursuant to the exercise of the underwriters’ option to purchase additional shares, which were sold to the public at a price of $17.00 per share. We received net proceeds of approximately $94.8 million from the IPO, including the exercise of the underwriters’ over-allotment option, net of underwriters’ discounts and commissions, and after deducting offering expenses of approximately $2.4 million.
Upon the closing of the IPO, all shares of our outstanding redeemable convertible preferred stock automatically converted into 21,490,656 shares of common stock and our outstanding warrant to purchase redeemable convertible preferred stock automatically converted into a warrant to purchase 40,697 shares of common stock at $1.72 per share.
Stock-Based Compensation
Stock Option Plans
On November 15, 2006, we adopted our 2006 Stock Incentive Plan (‘‘the 2006 Plan’’), which provides for the issuance of incentive and non-qualified stock options, restricted stock and other stock-based awards to employees and non-employees of the Company. We reserved 4,567,500 shares of common stock for issuance under the 2006 Plan. Options generally vest over four years, with 25% vesting upon the one year anniversary of the date of hire, and the remaining 75% vesting quarterly over the next 3 years. Options granted to consultants or other non-employees generally vest over the expected service period to the Company. The options expire ten years from the date of grant. We issue new shares to satisfy stock option exercises. Only stock options have been issued under the 2006 Plan. No grants have been made under the 2006 Plan since our IPO, and no further awards will be granted under the 2006 Plan. However, the 2006 Plan will continue to govern outstanding awards granted under the 2006 Plan.
During 2010, we granted our Chief Executive Officer (“CEO”) a performance-based option to purchase 150,000 shares, which vests in tranches if defined corporate goals are achieved during fiscal years 2011 through 2014. We recorded a share-based compensation expense related to this award of $0.2 million during the year ended December 28, 2013. No stock-based compensation expense related to this award was recorded in the year ended December 27, 2014, as the performance metrics were not achieved.
On January 23, 2014, we adopted our 2014 Incentive Award Plan (‘‘the 2014 Plan’’), which provides for the issuance of incentive and non-qualified stock options, restricted stock, restricted stock units (“RSUs”) and other stock-based awards to employees, directors and non-employees of the Company and our subsidiaries. We initially reserved 4,112,048 shares of common stock for issuance under the 2014 Plan. The number of shares initially available for issuance will be increased by (i) the number of shares represented by awards outstanding under the 2006 Plan that are forfeited, lapse unexercised or are settled in cash and which following the effective date of the 2014 Plan are not issued under the 2006 Plan and (ii) an annual increase on January 1 of each calendar year beginning in 2015 and ending in 2019, equal to the lesser of (A) 4% of the shares of common stock outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year and (B) an amount as determined by our board of directors. No more than 5,002,935 shares of common stock may be issued upon the exercise of incentive stock options. Options generally vest over four years, with 25% vesting upon the one-year anniversary of the date of hire, and the remaining 75% vesting quarterly over the next 3 years. Options granted to consultants or other non-employees generally vest over the expected service period to the Company. The options expire ten years from the date of grant. To date stock options and RSUs have been issued under the 2014 Plan.
We assumed certain other plans in connection with the Citrus Lane acquisition and no shares are available for future grant under these plans.
Stock-Based Compensation
The following table summarizes stock-based compensation in our accompanying condensed consolidated statements of operations (in thousands):
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
 
 
 
 
 
 
Cost of revenue
$
236

 
$
156

 
$
161

Selling and marketing
813

 
582

 
348

Research and development
760

 
437

 
356

General and administrative
3,116

 
2,704

 
997

Loss from discontinued operations
589

 
1,926

 

   Total stock-based compensation
$
5,514

 
$
5,805

 
$
1,862


Included in loss from discontinued operations for the fiscal year ended December 27, 2014 is approximately $1.4 million related to the acceleration of vesting of certain equity awards assumed as part of the Citrus Lane acquisition.
Pursuant to the 2014 Plan, during fiscal 2015 we granted 1.7 million time-based RSUs to certain employees and directors and 0.3 million performance based RSUs to certain members of senior management. Each recipient of performance based RSUs is eligible to receive up to 100% of the shares granted on the achievement of certain financial targets for fiscal 2015 and which will vest over a four-year period retroactive to either March or April 2015. As we did not meet the performance targets, no expense has been recognized on these awards and they were canceled as of December 26, 2015.
RSUs are not included in issued and outstanding common stock until the shares are vested and released. The fair value of the RSUs is measured based on the market price of the underlying common stock as of the date of grant, reduced by the purchase price of $0.001 per share. The weighted average grant-date fair value per share and the total fair value of vested shares from the RSU grants was $7.78 and $1.7 million, respectively, for the year ended December 26, 2015No RSUs were granted during the years ended December 27, 2014 and December 28, 2013.
During the year ended December 26, 2015no stock options were granted. During the years ended December 27, 2014 and December 28, 2013, we granted 1.6 million and 1.3 million stock options, respectively with weighted-average exercise price per share of $11.15 and $6.05, respectively.
The following table presents the assumptions used to estimate the fair value of options granted during the periods presented:
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
Risk-free interest rate
N/A
 
1.81 - 1.95 %
 
1.23 - 2.00%
Expected term (years)
N/A
 
6.25
 
6.25
Volatility
N/A
 
47.1 - 56.3 %
 
44.6%
Expected dividend yield
N/A
 
 

A summary of stock option activity for the year ended December 26, 2015 was as follows (in thousands for shares and intrinsic value):
 
Stock Options
 
Restricted Stock Units
 
Shares
 
Weighted-Average Remaining Contractual Term (Years)
 
Weighted-Average Exercise Price
 
Aggregate Intrinsic Value
 
Shares
 
Weighted-Average Grant Date Fair Value
Outstanding as of December 27, 2014
4,270

 
7.17
 
$
6.47

 
$
14,373

 

 
$

Granted (1)

 
 
 

 
 
 
1,947

 
7.49

Settled (RSUs)

 
 
 

 
 
 
(214
)
 
7.78

Exercised
(257
)
 
 
 
2.22

 
 
 

 

Canceled and forfeited
(531
)
 
 
 
8.2

 
 
 
(427
)
 
7.6

Outstanding as of December 26, 2015
3,482

 
5.93
 
$
6.52

 
$
8,891

 
1,306

 
$
7.42

Vested and exercisable as of December 26, 2015
2,769

 
5.49
 
5.29

 
8,421

 

 

Vested and expected to vest as of December 26, 2015
3,404

 
5.88
 
$
6.37

 
$
8,860

 
1,056

 
7.42

____________________________
(1) For RSUs, includes both time-based and performance-based restricted stock units
(2) Options and RSUs expected to vest reflect an estimated forfeiture rate
Aggregate intrinsic value represents the difference between the closing stock price of our common stock and the exercise price of outstanding, in-the-money options. Our closing stock price as reported on the New York Stock Exchange as of December 26, 2015 was $7.27. The total intrinsic value of options exercised and RSUs vested was approximately $2.9 million, for the year ended December 26, 2015. The aggregate fair value of the options that vested during the year ended December 26, 2015 was $3.7 million.
As of December 26, 2015, total unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock options and RSUs was approximately $3.3 million and $7.3 million, respectively, which is expected to be recognized over a weighted-average period of 1.6 years and 3.3 years, respectively, to the extent they are probable of vesting. As of December 26, 2015, we had 3,337,574 shares available for grant under the 2014 Plan.
Common Stock
As of December 26, 2015, we had reserved the following shares of common stock for future issuance in connection with the following:
 
December 26, 2015
 
 
Contingent consideration payable in common stock
106,000

Options issued and outstanding
3,481,750

Restricted stock units issued and outstanding
1,305,628

Common stock available for stock-based award grants under incentive award plans
3,337,574

Total
8,230,952

Preferred Stock Warrants
In connection with a debt financing in 2007, we issued Lighthouse Capital Partners a warrant to purchase 40,697 shares of our Series A-1 convertible preferred stock at an exercise price of $1.72 per share, expiring October 2014, which were fully exercisable upon issuance. In conjunction with the closing of our IPO in January 2014, the warrant was automatically converted into a warrant exercisable for 40,697 shares of common stock at a purchase price of $1.72 per share, which resulted in the reclassification of the related convertible preferred stock warrant liability to additional paid-in capital as the warrant met the criteria for equity classification upon conversion to a warrant to purchase common stock. In accordance with ASC 480-10, Distinguishing Liabilities from Equity, the freestanding warrant for our preferred stock was recognized as a liability and recorded at fair value in all periods prior to its conversion into a warrant to purchase common stock. The warrant liability was re-measured to fair value prior to reclassification to additional paid-in capital. The warrant was exercised during the year ended December 27, 2014 using a net exercise method which resulted in the issuance of 38,142 shares of common stock. There were no proceeds received by us related to this transaction.
Common Stock Warrants
In connection with a 2010 Loan and Security Agreement, we issued a warrant to purchase a maximum of 40,000 shares of our common stock at an exercise price of $1.65 per share. The warrant was exercised during the year ended December 27, 2014 using a net exercise method which resulted in the issuance of 37,591 shares of common stock. There were no proceeds received by us related to this transaction.
Net Loss Per Share
Net Loss Per Share
Net Loss Per Share
Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted-average number of common shares outstanding during the period. The holders of our Series A, A-1, B, C, D, D-1 and E redeemable convertible preferred stock did not have contractual obligations to share in or fund our losses. Diluted net loss per share attributable to common shareholders is computed by dividing net loss by the weighted-average number of common shares outstanding during the period and potentially dilutive common stock equivalents, except in cases where the effect of common stock equivalent would be anti-dilutive. Potential common stock equivalents consist of common stock issuable upon exercise of stock options and in 2013 also included common stock issuable upon conversion of our redeemable convertible preferred stock and warrants to purchase our redeemable convertible preferred stock.
The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data):
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
 
 
 
 
 
 
Loss from continuing operations
$
(17,879
)
 
$
(37,559
)
 
$
(28,296
)
Loss from discontinued operations, net of tax (see note 4)
(17,116
)
 
(42,733
)
 

Net loss
(34,995
)
 
(80,292
)
 
(28,296
)
Accretion of preferred stock

 
(4
)
 
(57
)
Net loss attributable to common stockholders
$
(34,995
)
 
$
(80,296
)
 
$
(28,353
)
Net loss per share attributable to common stockholders (Basic and Diluted):
 
 
 
 
 
Loss from continuing operations
$
(0.56
)
 
$
(1.30
)
 
$
(9.45
)
Loss from discontinued operations
(0.53
)
 
(1.47
)
 

Net loss per share
$
(1.09
)
 
$
(2.77
)
 
$
(9.45
)
Weighted-average shares used to compute net loss per share attributable to common stockholders:
 
 
 
 
 
Basic and diluted
32,001

 
28,941

 
3,000


The following equity shares were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented (in thousands):
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
Redeemable convertible preferred stock

 

 
21,299

Stock options
3,482

 
4,270

 
3,439

Restricted stock units
1,306

 

 

Preferred stock warrants

 

 
41

Common stock warrants

 

 
40

Income Taxes
Income Taxes
Income Taxes
The following table presents domestic and foreign components of loss from continuing operations before income taxes for the periods presented (in thousands):
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
United States
$
(13,318
)
 
$
(32,730
)
 
$
(22,182
)
Foreign
(3,340
)
 
(5,581
)
 
(5,760
)
Loss from continuing operations before income taxes
$
(16,658
)
 
$
(38,311
)
 
$
(27,942
)

The following table presents the components of the provision for (benefit from) income taxes for the periods presented (in thousands):
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
 
 
 
 
 
 
Current:
 
 
 
 
 
Federal
$

 
$

 
$

State
94

 
108

 
70

Foreign
33

 
33

 

Total current provision for income taxes
127

 
141

 
70

Deferred:
 
 
 
 
 
Federal
883

 
(757
)
 
626

State
211

 
(136
)
 
49

Foreign

 

 
(391
)
Total deferred tax provision (benefit)
1,094

 
(893
)
 
284

Total provision for (benefit from) income taxes
$
1,221

 
$
(752
)
 
$
354


See Note 4 - Discontinued Operations for the losses from discontinued operations before income taxes and related income taxes reported for the year ended December 26, 2015 and December 27, 2014, respectively. All pre-tax loss presented in discontinued operations were related to U.S. operations.
The following table presents a reconciliation of the statutory federal rate, and our effective tax rate on losses from continuing operations, for the periods presented:
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
 
 
 
 
 
 
U.S. federal taxes at statutory rate
34
 %
 
34
 %
 
34
 %
State income taxes, net of federal benefit
(1
)
 

 
2

Permanent differences
(3
)
 
(3
)
 
(3
)
Foreign rate differential
(1
)
 
(1
)
 
(1
)
Change in valuation allowance - U.S.
(31
)
 
(24
)
 
(28
)
Change in valuation allowance - foreign
(5
)
 
(4
)
 
(5
)
Total
(7
)%
 
2
 %
 
(1
)%

During fiscal 2015 we recorded an income tax expense of $1.2 million, primarily related to amortization of certain goodwill for tax purposes for which there is no corresponding book deduction and certain state taxes based on operating income that are payable without regard to our tax loss carry forwards.
During fiscal 2014 we recorded an income tax benefit of $(0.8) million, primarily related to the reversal of our valuation allowance against the deferred tax liabilities recorded in purchase accounting, partially offset by the income tax expense related to the amortization of goodwill for tax purposes for which there is no corresponding book deduction and certain state taxes based on operating income that are payable without regard to our tax loss carry forwards.
During fiscal 2013 we recorded income tax expense of $0.4 million, primarily related to the amortization of goodwill for tax purposes for which there is no corresponding book deduction and certain state taxes based on operating income that are payable without regard to our tax loss carryforwards, partially offset by foreign deferred tax benefits, related to the expected future realization of German deferred tax assets expected to offset future reversal of deferred tax liabilities of definite lived intangibles established in purchase accounting.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the requirement for entities to separate deferred income tax liabilities and assets into current and non-current amounts in the balance sheet. Rather, it requires that deferred tax assets and liabilities are classified as non-current in the balance sheet. The Company adopted this standard prospectively for the year-ended December 26, 2015 and prior periods were not retrospectively adjusted. The following table presents the significant components of our deferred tax assets and liabilities, including those related to discontinued operations for the periods presented (in thousands):
 
Fiscal Year Ended
 
December 26, 2015
 
December 27, 2014
Deferred tax assets
 
 
 
Net operating loss carryforwards
$
45,881

 
$
40,790

Accrued expenses
3,045

 
1,696

Stock-based compensation
1,922

 
1,618

U.S. definite lived intangibles
5,058

 
3,538

Other temporary differences
1,217

 
33

Total deferred tax assets
57,123

 
47,675

Valuation allowance
(56,304
)
 
(46,619
)
Net deferred tax assets
819

 
1,056

Deferred tax liabilities
 
 
 
Foreign intangibles
(111
)
 
(224
)
U.S. goodwill
(3,166
)
 
(2,072
)
Fixed assets
(708
)
 
(832
)
Total deferred tax liabilities
(3,985
)
 
(3,128
)
Net deferred tax liabilities
$
(3,166
)
 
$
(2,072
)

As of December 26, 2015, we had federal net operating loss carryforwards of $111.3 million and state net operating loss carryforwards of $91.9 million, which may be available to reduce future taxable income. The net operating loss (‘‘NOL’’) will expire at various dates through 2035. Included in the federal and state net operating losses are deductions attributable to excess tax benefits from the exercises of stock compensation of $0.8 million and $0.7 million, respectively. The tax benefits attributable to these deductions are credited directly to additional paid-in capital upon utilization of these deferred tax assets to reduce taxes payable. As of December 26, 2015, we had foreign net operating losses primarily related to our German operations of $8.1 million, our U.K. operations of $3.7 million, and our Australia operations of $0.3 million that have an unlimited carryforward period under German, U.K. and Australia tax law. We also had foreign net operating losses in our Canadian operation of $0.9 million that have a twenty year carryforward.
The NOLs are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code, respectively, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. We have not, as yet, conducted a study to determine if any such changes have occurred that could limit our ability to use the net operating losses and tax credit carryforwards. We will complete a full analysis of the tax attribute carryforwards prior to any utilization.
ASC 740 requires a valuation allowance to reduce the deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all the evidence, both positive and negative, we have recorded a valuation allowance of $56.3 million and $46.6 million at December 26, 2015 and December 27, 2014, respectively, because our management has determined that is it more likely than not that these assets will not be fully realized. The increase of $9.7 million in the overall valuation allowance relates primarily to U.S. and certain foreign operating losses for which we currently provide no tax benefit.
As of December 26, 2015 and December 27, 2014, the Company had no recorded liabilities for uncertain tax positions. Interest and penalty charges, if any, related to uncertain tax positions would be classified as income tax expense in the accompanying consolidated statements of operations. As of December 26, 2015, December 27, 2014 and December 28, 2013 we had no accrued interest or penalties related to uncertain tax positions.
We file U.S. federal income tax returns and returns in various state, local, and foreign jurisdictions. Since we are in a loss carryforward position, the statute of limitations generally remains open for all tax years. Currently, we are not under examination relating to tax returns that have been previously filed.
Our current intentions are to indefinitely reinvest the earnings of our foreign subsidiaries, if any, or to repatriate only when tax-effective. Accordingly, we have not provided for U.S. taxes on the unremitted earnings of our international subsidiaries, which are not significant as of December 26, 2015. In addition, we not believe it is practicable to estimate the amount of income taxes payable on the earnings that are indefinitely reinvested in foreign operations.
Segment and Geographical Information
Segment and Geographical Information
Segment and Geographical Information
We consider operating segments to be components of the Company in which separate financial information is available that is evaluated regularly by our chief operating decision maker in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is the CEO. The CEO reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. Prior to our decision to exit the Citrus Lane business in fiscal 2015, we had determined that we had two operating and reporting segments, CRCM Businesses, Excluding Citrus Lane and Citrus Lane. Subsequent to our decision to exit the Citrus Lane business, we have concluded that we have a single operating and reportable segment comprised of the following product lines (dollars in thousands):
 
Fiscal Year Ended
 
December 26, 2015
 
December 27, 2014
 
December 28, 2013
U.S. Consumer Business
$
115,020

 
$
96,524

 
$
72,415

Other
23,661

 
14,188

 
9,072

Total revenue
$
138,681

 
$
110,712

 
$
81,487


No country outside of the United States provided greater than 10% of our total revenue. Revenue is classified by the major geographic areas in which our customers are located. The following table summarizes total revenue generated by our geographic locations (dollars in thousands):
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
United States
$
129,085

 
$
102,047

 
$
74,800

International
9,596

 
8,665

 
6,687

Total revenue
$
138,681

 
$
110,712

 
$
81,487

 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
United States
93
%
 
92
%
 
92
%
International
7
%
 
8
%
 
8
%
Total revenue
100
%
 
100
%
 
100
%

Our long-lived assets are primarily located in the United States and not allocated to any specific region. Therefore, geographic information is presented only for total revenue.
Related Party Transactions
Related Party Transactions
Related Party Transactions
We entered into a master services agreement in February 2011 with the United Services Automobile Association, who later in 2011 participated as the lead investor in the Series D redeemable convertible preferred stock financing. We did not recognize any significant revenue under the master service agreement in the year ended December 28, 2013. The terms of this agreement were superseded in their entirety by the terms of the alliance agreement referenced in the next paragraph. Therefore, we did not recognize any revenue under this agreement in the years ended December 26, 2015 or December 27, 2014.
In December 2013, we entered into an alliance agreement with USAA Alliance Services, LLC, or USAA Alliance, an affiliate of USAA, pursuant to which USAA Alliance agreed to promote our services to USAA members and we agreed to offer our services to their members at specified discounts, which vary based on the nature of the services purchased. Under the terms of the alliance agreement, we agreed to pay USAA Alliance specified commissions in connection with the services that are purchased by USAA members under the alliance agreement. Commissions vary based on the nature of the services purchased. Under the alliance agreement, we made payments totaling less than $100,000 in both fiscal 2015 and fiscal 2014. The alliance agreement was terminated during the fourth quarter of fiscal 2015.
Employee Benefit Plans
Employee Benefit Plans
Employee Benefit Plans
We have established a 401(k) tax-deferred savings plan covering all employees who satisfy certain eligibility requirements. The 401(k) plan allows each participant to defer a percentage of their eligible compensation subject to applicable annual limits pursuant to the limits established by the Internal Revenue Service. We may, at our discretion, make contributions in the form of matching contributions or profit sharing contributions. During the year ended December 26, 2015, we contributed a 401(k) match of $0.2 million.
Other Expense, Net
Other Expense, Net
Other Expense, Net
Other expense, net consisted of the following (in thousands):
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
Interest income
72

 
86

 
47

Interest expense
(3
)
 
(43
)
 
(17
)
Other expense, net
(1,308
)
 
(3,899
)
 
(321
)
Total other expense, net
$
(1,239
)
 
$
(3,856
)
 
$
(291
)
Subsequent Events
Subsequent Events
Subsequent Events
We consider events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required. In February 2016, we entered into a settlement agreement with the previous shareholders of Citrus Lane. The settlement agreement relates to our acquisition of Citrus Lane and the merger agreement pursuant to which the acquisition was consummated. Under the terms of the settlement agreement, we have agreed to pay the previous shareholders of Citrus Lane $15.6 million of the $16.4 million of contingent consideration that was otherwise payable to them in the event Citrus Lane achieved certain milestones in 2015 and 2016. In exchange, the former shareholders have agreed to forfeit the $5.0 million in original cash consideration that was being held in an escrow account, as well as the 0.5 million shares of common stock (valued at $5.5 million as of the original closing date) offered as part of the deal consideration.
Quarterly Financial Information (Unaudited)
Quarterly Financial Information (Unaudited)
Quarterly Financial Information (Unaudited)

The table below sets forth unaudited selected quarterly financial data for each of the last two fiscal years (dollars in thousands, except per share data).
 
For the Quarter Ended
 
December 26, 2015
 
September 26, 2015
 
June 27,
2015
 
March 28,
2015
Total revenue
$
37,550

 
$
36,179

 
$
32,903

 
$
32,049

Cost of revenue
6,321

 
6,894

 
6,630

 
6,272

Income (Loss) from continuing operations
3,683

 
(6,364
)
 
(5,404
)
 
(9,794
)
Loss from discontinued operations, net of tax
(2,084
)
 
(10,985
)
 
(1,831
)
 
(2,216
)
Net income (loss)
1,599

 
(17,349
)
 
(7,235
)
 
(12,010
)
 
 
 
 
 
 
 
 
Net loss per share (Basic):
 
 
 
 
 
 
 
Income (Loss) from continuing operations
$
0.11

 
$
(0.20
)
 
$
(0.17
)
 
$
(0.31
)
Loss from discontinued operations
(0.06
)
 
(0.34
)
 
(0.06
)
 
(0.07
)
Net income (loss) per share
$
0.05

 
$
(0.54
)
 
$
(0.23
)
 
$
(0.38
)
 
 
 
 
 
 
 
 
Net loss per share (Diluted):
 
 
 
 
 
 
 
Income (Loss) from continuing operations
$
0.11

 
$
(0.20
)
 
$
(0.17
)
 
$
(0.31
)
Loss from discontinued operations
(0.06
)
 
(0.34
)
 
(0.06
)
 
(0.07
)
Net income (loss) per share*
$
0.05

 
$
(0.54
)
 
$
(0.23
)
 
$
(0.38
)
 
 
 
 
 
 
 
 
* Note the diluted share total used in the calculation of net income (loss) per share in Q4 FY’15 was 33,094
 
 
 
For the Quarter Ended
 
December 27, 2014
 
September 27, 2014
 
June 28,
2014
 
March 29,
2014
Total revenue
$
30,001

 
$
29,604

 
$
25,836

 
$
25,271

Cost of revenue
5,869

 
6,111

 
5,713

 
5,771

Loss from continuing operations
(1,530
)
 
(10,610
)
 
(9,875
)
 
(15,544
)
Loss from discontinued operations, net of tax
(38,890
)
 
(3,843
)
 

 

Net loss
(40,420
)
 
(14,453
)
 
(9,875
)
 
(15,544
)
Net loss attributable to common stockholders
(40,420
)
 
(14,453
)
 
(9,875
)
 
(15,548
)
 
 
 
 
 
 
 
 
Net loss per share attributable to common stockholders (Basic and Diluted):
 
 
 
 
 
 
 
Loss from continuing operations
$
(0.05
)
 
$
(0.34
)
 
$
(0.32
)
 
$
(0.71
)
Loss from discontinued operations
(1.23
)
 
(0.12
)
 

 

Net loss per share
$
(1.28
)
 
$
(0.46
)
 
$
(0.32
)
 
$
(0.71
)

Information in any one quarterly period should not be considered indicative of annual results due to the effects of seasonality on our business.
Summary of Significant Accounting Policies (Policies)
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries, after elimination of all intercompany balances and transactions. We have prepared the accompanying financial statements in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”).
Fiscal Year-End
For periods prior to fiscal 2013, we operated and reported on a calendar basis fiscal year. Beginning in the third quarter of fiscal 2013, we operate and report using a 52 or 53 week fiscal year ending on the Saturday in December closest and prior to December 31. Accordingly, our fiscal quarters end on the Saturday that falls closest to the last day of the third month of each quarter.
Discontinued Operations
To be reported within discontinued operations, we must dispose of a component or a group of components that represents a strategic shift which will have a major effect on our operations and financial results. We aggregate the results of operations for discontinued operations within a single line item on the income statement. General corporate overhead is not allocated to discontinued operations. We disclose any gain or loss that is recognized upon the disposition of a discontinued operation.
During the fourth quarter of fiscal 2015, we made the decision to shut down the business and had substantially completed our plans for ceasing the operation of the business. The represented a strategic shift that will have a major effect on our operations and financial results. As such, financial results of Citrus Lane have been presented as net loss from discontinued operations on the consolidated statements of operations for the years ended December 26, 2015 and December 27, 2014. Assets and liabilities of Citrus Lane to be disposed of are presented as assets from discontinued operations and liabilities from discontinued operations on the consolidated balance sheet as of December 26, 2015 and December 27, 2014 (see Note 4, “Discontinued Operations”).
Use of Estimates
The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable and revenue allowances, intangible asset valuations, expected future cash flows used to evaluate the recoverability of long-lived assets, the useful lives of long-lived assets including property and equipment and intangible assets, valuation of common and preferred stock and warrants to purchase preferred stock, fair value of stock-based awards, goodwill, income taxes, contingent consideration, and contingencies. We base our estimates of the carrying value of certain assets and liabilities on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, when these carrying values are not readily available from other sources. These estimates are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ from the estimates.
Revenue Recognition
In general, we recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered to the customer, (iii) the fee is fixed or determinable, and (iv) collectability is reasonably assured. We derive our revenue primarily from on-going subscription fees. Revenue from subscription fees is recognized on a daily basis over the subscription term or on a pro-rata basis as the services are delivered. Revenue from background checks, lead generation and advertising is recognized in the period earned. Other service revenues are recognized as the services are performed. Taxes that are collected from customers and remitted to government authorities are presented on a net basis and are excluded from revenue. As it relates to our Citrus Lane business which is presented within discontinued operations, for product sales, these criteria are deemed to have been met when the items are delivered to the end customer. Shipping and handling charges are included in revenue on a gross basis.
Certain of our arrangements provide companies the opportunity to purchase Care.com services on behalf of their employees. These arrangements typically include a subscription to our consumer matching solutions for their employees. These arrangements are accounted for as multiple element arrangements. We have concluded that each element in the arrangement has stand-alone value as the individual services can be sold separately. In addition, there is no right of refund once a service has been delivered. Therefore, we have concluded each element of the arrangement is a separate unit of accounting. In accordance with the authoritative guidance on revenue recognition, we allocate consideration at the inception of an arrangement to each unit of accounting based on the relative selling price method in accordance with the selling price hierarchy. The objective of the hierarchy is to determine the price at which we would transact a sale if the service were sold on a stand-alone basis, and requires the use of: (1) vendor-specific objective evidence (‘‘VSOE’’), if available; (2) third-party evidence (‘‘TPE’’), if VSOE is not available; and (3) best estimate of selling price (‘‘BESP’’), if neither VSOE nor TPE is available. Since VSOE or TPE are not typically available, BESP is generally used to allocate the selling price to each unit of accounting. We determine BESP for units of account by considering multiple factors including, but not limited to, prices we charge for similar offerings, sales volumes, geographies and other factors contemplated in negotiating multiple element transactions.
Deferred Revenue
Deferred revenue primarily consists of payments received in advance of revenue recognition of the services described above, and is recognized as the revenue recognition criteria are met. Our customers pay for most services in advance on a monthly, quarterly or annual basis. Amounts expected to be recognized within the twelve months following the balance sheet date are classified within current liabilities in the accompanying consolidated balance sheets.
Unbilled Receivables
Unbilled receivables consist of amounts earned upon satisfying the revenue recognition criteria in advance of billing. Subscribers to our Care.com HomePay solution are billed quarterly in arrears at the beginning of the subsequent calendar quarter to which the services related.
Cost of Revenue
Cost of revenue primarily consists of expenses that are directly related, or closely correlated, to revenue generation, including matching and payments member variable servicing costs such as personnel costs for customer support, transaction fees related to credit card payments and the cost of background checks run on both families and caregivers. Additionally, cost of revenue includes website hosting fees and amortization expense related to caregiver relationships, proprietary software acquired as part of acquisitions and website intangible assets. As it relates to our Citrus Lane business, which is presented within discontinued operations, we have product fulfillment costs, largely consisting of product, shipping and costs associated with our third-party fulfillment providers.
Concentrations of Credit Risk
Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts receivable. We place our cash and cash equivalents with major financial institutions throughout the world that management assesses to be of high-credit quality in order to limit exposure of each investment. As of December 26, 2015 and December 27, 2014, substantially all of our cash had been invested in money market funds.
Credit risk with respect to accounts receivable is dispersed due to the large number of customers. During the year ended December 26, 2015, one customer accounted for more than 13% of total accounts receivable and no customer accounted for more than 10% of revenue. During the year ended December 27, 2014, one customer accounted for 15% of total accounts receivable and no customer accounted for more than 10% of total revenue. In addition, our credit risk is mitigated by a relatively short collection period. Collateral is not required for accounts receivable. We record our accounts receivable in our consolidated balance sheets at net realizable value. We perform on-going credit evaluations of our customers and maintain allowances for potential credit losses, based on management’s best estimates. Amounts determined to be uncollectible are written off against this reserve.
Foreign Currency Translation
We determine the functional currency for our foreign subsidiaries by reviewing the currencies in which their respective operating activities occur. Financial information is translated from the functional currency to the U.S. dollar, the reporting currency, for inclusion in our consolidated financial statements. Income, expenses, and cash flows are translated at average exchange rates prevailing during each month of the fiscal year, and assets and liabilities are translated at fiscal period end exchange rates. Foreign exchange transaction gains and losses are included in other expense, net in the accompanying consolidated statements of operations. The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income in the accompanying consolidated balance sheets.
Cash Equivalents
We consider highly liquid investments purchased with an original maturity of 90 days or less at the time of purchase to be cash equivalents.
Recurring Fair Value Measurement
Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for disclosure of fair value measurements. The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy are defined as follows:
Level 1 inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2 inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.), or inputs that are derived principally from or corroborated by market data by correlation or other means.
Level 3 inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.
Recurring Fair Value Measurements
Assets
Cash equivalents - Cash equivalents include money market mutual funds with original maturities of three months or less. The fair value measurement of these assets is based on quoted market prices in active markets for identical assets and, therefore, these assets are recorded at fair value on a recurring basis and classified as Level 1 in the fair value hierarchy.
Liabilities
Contingent Acquisition Consideration - Contingent acquisition consideration includes the fair value of contingent consideration paid by us in connection with corporate acquisitions based on the likelihood of issuing preferred and common stock and paying cash related to certain revenue and other milestones. We recorded our estimate of the fair value of this contingent consideration based on the evaluation of the likelihood of the achievement of the contractual conditions that would result in the payment of the contingent consideration and weighted probability assumptions of these outcomes. The fair value of the liability was estimated using a discounted cash flow technique with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820.
For contingent consideration payable in preferred stock, we used a valuation of the company based on both an income and market approach to determine the fair value of the preferred stock as of the acquisition date and on an-ongoing basis. Upon the closing of our initial public offering (“IPO”) in January 2014, the contingent consideration payable in preferred stock was automatically converted to the right to receive common stock at the then-applicable conversion rate. Contingent consideration payable in preferred stock was written up to fair value as of the closing date of the IPO and was reclassified to permanent equity.
The cash portion of the contingent consideration liability has been discounted to reflect the time value of money, and therefore, as the milestone date approaches, the fair value of this liability will increase. This increase in fair value was recorded in general and administrative expenses in the accompanying consolidated statements of operations. The preferred stock portion of the contingent consideration represented a liability in accordance with ASC 480-10, Distinguishing Liabilities from Equity, and was marked-to-market each reporting period with changes in market value recognized in other expense, net in the accompanying consolidated statements of operations.
During the year ended December 28, 2013 we reassessed the probability of achievement on the Care Concierge, Inc. contingent acquisition cash payment based on the achievement of certain revenue milestones and the probability of reaching both the 2013 and 2014 milestones, which resulted in $0.6 million of incremental expense. During the year ended December 27, 2014, in connection with our acquisition of Citrus Lane, we recognized acquisition consideration payable in cash and shares totaling $17.5 million. The probability of achievement of this earn-out was assessed at 100%. Current contingent consideration liabilities from the acquisition of Citrus Lane of $16.0 million and $7.8 million were included in current liabilities from discontinued operations as of December 26, 2015 and December 27, 2014, respectively. Non-current contingent consideration liabilities from the acquisition of Citrus Lane of $7.3 were included in non-current liabilities from discontinued operations as of December 27, 2014.
The significant inputs in the Level 3 measurement not supported by market activity included our probability assessments of expected future cash flows related to our acquisition of Breedlove & Associates, LLC, Care Concierge, Inc. and Citrus Lane during the applicable earn-out period, appropriately discounted considering the uncertainties associated with the applicable obligation, and calculated in accordance with the terms of the applicable transaction agreement. As such, the cash portion of the contingent consideration liability has been discounted to reflect the time value of money, and therefore, as the milestone date approaches, the fair value of this liability will increase.
Preferred Stock Warrants - Preferred stock warrants consist of warrants issued in connection with debt financings. The fair value of the warrants was determined using the Black-Scholes option-pricing model. In conjunction with the closing of the IPO, the warrant exercisable for shares of our Series A-1 Preferred Stock was automatically converted into a warrant exercisable for shares of our common stock, resulting in the reclassification of the related convertible preferred stock warrant liability to additional paid-in capital as the warrant met the criteria for equity classification upon its conversion to a warrant for the purchase of common stock. The warrant liability was re-measured to fair value prior to reclassification to additional paid-in capital. As of December 26, 2015, we had no outstanding warrant liability.
Non-Recurring Fair Value Measurements
We remeasure the fair value of certain assets and liabilities upon the occurrence of certain events. Such assets are comprised of long-lived assets, including property and equipment, intangible assets and goodwill. No remeasurement of long-lived assets occurred as of December 26, 2015 or December 27, 2014, aside from those detailed below pertaining to goodwill and intangible assets. Other financial instruments not measured or recorded at fair value in the accompanying consolidated balance sheets principally consist of accounts receivable, accounts payable, and accrued liabilities. The estimated fair values of these instruments approximate their carrying values due to their short-term nature.
Business Combinations
We determine and allocate the purchase price of an acquired company to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the business combination date, including identifiable intangible assets, which either arise from a contractual or legal right or are separable from goodwill. We base the fair value of identifiable intangible assets acquired in a business combination on detailed valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. We allocate any excess purchase price over the fair value of the net tangible and identifiable intangible assets acquired to goodwill. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, cash flows, discount rates, estimated useful lives and probabilities surrounding the achievement of revenue-based milestones, could result in different purchase price allocations and amortization expense in current and future periods. Transaction costs associated with these acquisitions are expensed as incurred through general and administrative costs.
In those circumstances where an acquisition involves a contingent consideration arrangement, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date. We re-measure this liability at each reporting period and record changes in the fair value as a component of operating expenses. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing and amount of revenue estimates or in the timing or likelihood of achieving revenue-based milestones.
Results of operations and cash flows of acquired companies are included in our operating results from the date of acquisition.
Equity Method Investment
During fiscal 2012, we made a 50% investment in Care International Exchange, Inc. (the “Venture”), a venture formed with Magsaysay People Resources Corporation (‘‘Magsaysay’’). The purpose of the Venture is to conduct activities related to a live-in care program with the goal of generating revenue from the placement of foreign-born providers with families, institutions or individuals seeking live-in home care throughout Canada. Our initial investment in the Venture was $50,000. We account for our investment in the Venture using the equity method of accounting based on our voting interest as we have significant influence over the Venture. Accordingly, our share of the income or loss of the Venture is recorded in other income or expense in the accompanying consolidated statements of operations. To date, the operations of the Venture have not been significant.
Goodwill
Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired. We evaluate goodwill for impairment at the reporting unit level (operating segment or one level below an operating segment) annually or more frequently if we believe indicators of impairment exist. In accordance with the guidance, we are permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a two-step goodwill impairment test is performed.
In performing the test, we utilize the two-step approach prescribed under Accounting Standards Codification, or ASC, 350, Intangibles - Goodwill and Other. The first step requires a comparison of the reporting unit against its aggregate carrying value, including goodwill. If the carrying amount exceeds the reporting unit’s carrying value to its fair value. We consider a number of factors to determine the fair value of a reporting unit, including an independent valuation to conduct this test. The valuation is based upon expected future discounted operating cash flows of the reporting unit. We base the discount rate on the weighted average cost of capital, or WACC, of market participants. If the carrying value of a reporting unit exceeds its estimated fair value, we will perform the second step of the goodwill impairment test to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of a reporting unit’s goodwill to its carrying value. The second step requires us to perform a hypothetical purchase allocation as of the measurement date and estimate the fair value of net tangible and intangible assets. The fair value of intangible assets is determined as described below and is subject to significant judgment.
Since the fair value of our reporting units was determined by use of the discounted cash flows, or DCF, and the key assumptions that drive the fair value in this model are the WACC, terminal values, growth rates, and the amount and timing of expected future cash flows, significant judgment is applied in determining fair value. If the current economic environment were to deteriorate, this would likely result in a higher WACC because market participants would require a higher rate of return. In the DCF as the WACC increases, the fair value decreases. The other significant factor in the DCF is our projected financial information (i.e., amount and timing of expected future cash flows and growth rates) and if these assumptions were to be adversely impacted, this could result in a reduction of the fair value of this reporting unit.
We conducted our fiscal 2015 annual impairment test as of September 27, 2015 (the first day of our fourth fiscal quarter). We utilized DCF and market approaches to estimate the fair value of our reporting units as of September 27, 2015 and ultimately used the fair value determined by the DCF in making our impairment test conclusions. We believe we used reasonable estimates and assumptions about future revenue, cost projections, cash flows, market multiples and discount rates as of the measurement date. As a result of completing Step 1, all of the reporting units had fair values exceeding their carrying values, and as such, Step 2 of impairment test was not required for those reporting units.
Additionally, during the third quarter of fiscal 2015, we determined that we should consider the advisability of a sale or wind down of the Citrus Lane business. As a result of this determination, we concluded that indicators of impairment existed in the Citrus Lane business and began an analysis of whether any material impairment charges would be required. We completed step one of our goodwill impairment testing with the assistance of an independent valuation firm and determined that the fair value of this business was lower than its carrying value. As a result of this analysis and our decision during the fourth quarter of 2015 to exit the business, we recorded a goodwill impairment loss of $8.0 million within loss from discontinued operations.
We conducted our fiscal 2014 annual impairment test as of September 28, 2014 (the first day of our fourth fiscal quarter). We utilized DCF and market approaches to estimate the fair value of our reporting units as of September 28, 2014 and ultimately used the fair value determined by the DCF in making our impairment test conclusions. We believe we used reasonable estimates and assumptions about future revenue, cost projections, cash flows, market multiples and discount rates as of the measurement date. Because Citrus Lane was recently acquired and was operating reasonably close to expectations, we performed a qualitative screen for impairment of that reporting unit as is allowed under ASC 350. As a result of completing Step 1, all of the reporting units had fair values exceeding their carrying values, and as such, Step 2 of impairment test was not required for those reporting units.
During the fourth quarter of fiscal 2014, primarily as a result of unexpected changes, both internal and external, we determined that indicators of impairment existed at our Citrus Lane Reporting Unit. The fair value of reporting unit was deemed to be below its carrying value and Step 2 of the goodwill impairment test was performed. Step 2 of the goodwill impairment test requires the completion of a hypothetical purchase price allocation to determine the fair value of the implied goodwill. Upon completion of the Step 2 analysis, we determined that the Citrus Lane goodwill was impaired and recorded a goodwill impairment loss of $33.8 million within loss from discontinued operations.
Amortization and Impairment of Intangible Assets
We amortize our intangible assets that have finite lives over their estimated useful lives. We use a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. Amortization is recorded over the estimated useful lives ranging from one to ten years. We review our intangible assets subject to amortization to determine if any adverse conditions exist, or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. If the carrying value of an asset exceeds its undiscounted cash flows, we will write-down the carrying value of the intangible asset, or asset group, to its fair value in the period identified. In assessing fair value, we must make assumptions regarding estimated future cash flows and discount rates. If these estimates or related assumptions change in the future, we may be required to record impairment charges. We generally calculate fair value as the present value of estimated future cash flows to be generated by the asset using a risk-adjusted discount rate. If the estimate of an intangible asset’s remaining useful life is changed, we will amortize the remaining carrying value of the intangible asset prospectively over the revised remaining useful life.
During the third quarter of fiscal 2015, we determined that we should consider the advisability of a sale or wind down of the Citrus Lane business. As a result of this determination, we concluded that indicators of impairment existed in the Citrus Lane business and began an analysis of whether any material impairment charges would be required. We completed step one of our goodwill impairment testing with the assistance of an independent valuation firm and determined that the fair value of this business was lower than its carrying value. As a result of this analysis and our decision during the fourth quarter of 2015 to exit the business, we recorded an intangible asset impairment of $1.7 million within loss from discontinued operations.
During the fourth quarter of fiscal 2014, in connection with our goodwill impairment analysis, we performed a Step 2 test of recoverability of finite lived intangibles in accordance with ASC 360, indicating that our undiscounted future cash flows would not recover the carrying value of the Citrus Lane proprietary software and trade name intangible assets. We then performed a Step 3 impairment analysis of finite lived intangible assets under ASC 360 and determined that the carrying value of the Citrus Lane proprietary software and trade name exceeded the fair value of those assets as of the end of the fourth quarter and recognized an intangible asset impairment of $2.4 million within loss from discontinued operations.
Software Development Costs
Internal and external software development costs associated with the development of software for internal use are expensed to research and development during the preliminary project stage and capitalized during the application development stage. Costs incurred during application development stage and capitalized totaled $0.4 million and $0.9 million for the fiscal years ended December 26, 2015, and December 27, 2014, respectively. During fiscal year ended December 28, 2013, we believe the substantial majority of our development efforts were either in the preliminary stage of development or were for maintenance of, and minor upgrades and enhancements to internal-use software and, accordingly, application development costs were insignificant.
Property and Equipment
Property and equipment are stated at cost, and are depreciated using the straight-line method over the estimated useful life of the assets or, where applicable and if shorter, over the lease term.
Expenditures for maintenance and repairs are charged to expense as incurred, whereas major betterments are capitalized as additions to property and equipment.
In accordance with ASC 360-10-35-15, Property, Plant and Equipment—Impairment or Disposal of Long-Lived Assets, we review the carrying value of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, then an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or the fair value less costs to sell, and are not depreciated. Assets and liabilities that are part of a disposal group and classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.
Income Taxes
We account for income taxes in accordance with ASC 740, Income Taxes. ASC 740 is an asset and liability approach that requires recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax basis, and for operating loss and tax credit carryforwards. ASC 740 requires a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
We recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such position are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. At December 26, 2015 and December 27, 2014, we did not have any uncertain tax positions.
Presentation of Taxes in the Consolidated Statements of Operations
We present taxes that are collected from customers and remitted to government authorities on a net basis in the consolidated statements of operations.
Stock-Based Compensation
We account for all stock-based awards to employees and members of our board of directors, to the extent such awards were issued in connection with their services as directors, in accordance with ASC 718, Compensation-Stock Compensation. ASC 718 requires that all share-based payments, including grants of stock options, be recognized in the statement of operations as an operating expense based on their fair value. For stock options issued under the Company’s stock-based compensation plans, the fair value of each option grant is estimated on the date of grant, and an estimated forfeiture rate is used when calculating stock-based compensation expense for the period. For restricted stock units issued under the Company’s stock-based compensation plans, the fair value of each grant is calculated based on the Company’s stock price on the date of grant. In accordance with ASC 718, we recognize the compensation cost of share-based awards on a straight-line basis over the vesting period of the award.
We use the Black-Scholes-Merton option-pricing model to determine the fair value for option awards. In valuing our option awards, we make assumptions about risk-free interest rates, dividend yields, volatility, and weighted-average expected lives, including estimated forfeiture rates. Risk-free interest rates are derived from U.S. Treasury securities as of the option award grant date. Expected dividend yield is based on our historical dividend payments, which have been zero to date. The expected volatility for our common stock is estimated taking the average historic price volatility for a group of similarly situated publicly traded companies based on daily price observations over a period equivalent to the expected term of the stock option grants. These publicly traded companies were selected based on comparable characteristics to us and consist of several companies in the technology industry that are similar in enterprise value, stage of life cycle, risk profile, financial leverage and with historical share price information sufficient to meet the expected life of our stock-based awards. We estimate the weighted-average expected life of the option awards as the average of the option vesting schedule and the term of the award, since we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time share-based awards have been exercisable. The term of the award is estimated using the simplified method, as awards are plain vanilla option awards. Forfeiture rates are estimated using historical actual forfeiture trends as well as our judgment of future forfeitures. These rates are evaluated at least quarterly and any change in compensation expense is recognized in the period of the change. The estimation of option awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period the estimates are revised. Actual results, and future changes in estimates, may differ substantially from management’s current estimates.
Stock-based awards issued to non-employees, are accounted for using the fair value method in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. These stock options are typically granted in exchange for consulting services to be rendered, and vest over periods of up to four years. In accordance with authoritative guidance, the fair value of non-employee stock-based awards is estimated on the date of grant, and subsequently revalued at each reporting period over their vesting period using the Black-Scholes option-pricing model.
Advertising Costs
We expense advertising costs as incurred when the advertisement is run.
Accumulated Other Comprehensive Income
As of December 26, 2015 and December 27, 2014, accumulated other comprehensive income was comprised solely of cumulative foreign currency translation adjustments.
Recently Issued and Adopted Accounting Pronouncements
In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the requirement for entities to separate deferred income tax liabilities and assets into current and non-current amounts in the balance sheet. Rather, it requires that deferred tax assets and liabilities are classified as non-current in the balance sheet. We adopted this standard prospectively for the year-ended December 26, 2015.
In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which amends ASC 350. The amendments provide guidance as to whether a cloud computing arrangement (e.g., software as a service, platform as a service, infrastructure as a service, and other similar arrangements) includes a software license, and based on that determination, how to account for such arrangements. ASU 2015-05 is effective for fiscal years, and interim periods therein, beginning after December 15, 2015 and may be applied on either a prospective or retrospective basis. Early adoption is not permitted. We are currently evaluating the impact the adoption of ASU 2015-05 will have on our financial statements.
In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810)-Amendments to the Consolidation Analysis, which amends the criteria for determining which entities are considered variable interest entities, or VIEs, amends the criteria for determining if a service provider possesses a variable interest in a VIE and ends the deferral granted to investment companies for application of the VIE consolidation model. ASU 2015-02 is effective for annual periods, and interim periods therein, beginning after December 15, 2015. We are currently evaluating the impact the adoption of Topic 810 will have on our financial statements.
In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. ASU 2014-15 requires management to evaluate, at each annual or interim reporting period, whether there are conditions or events that exist that raise substantial doubt about an entity's ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and earlier application is permitted. We are currently evaluating the impact of the adoption of ASU 2014-15, but the adoption is not expected to have a material effect on our consolidated financial statements or disclosures.
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 by one year to December 15, 2017 for interim and annual reporting periods beginning after that date. Early adoption is permitted but not before the original effective date of December 15, 2016. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. The standard permits the use of either the retrospective or cumulative effect transition method. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.
Summary of Significant Accounting Policies (Tables)
The following table presents information about our assets and liabilities, including those from our discontinued operations, measured at fair value on a recurring basis as of December 26, 2015 and December 27, 2014 and indicates the fair value hierarchy of the valuation techniques we utilized to determine such fair value (in thousands):
 
December 26, 2015
 
December 27, 2014
 
Fair Value Measurements Using Input Types
 
 
 
Fair Value Measurements Using Input Types
 
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market mutual funds
$
25,420

 
$

 
$

 
$
25,420

 
$
15,656

 
$

 
$

 
$
15,656

Total assets
$
25,420

 
$

 
$

 
$
25,420

 
$
15,656

 
$

 
$

 
$
15,656

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contingent acquisition consideration (included in current liabilities of discontinued operations)
$
8,163

 
$

 
$
7,878

 
$
16,041

 
$

 
$

 
$
17,952

 
$
17,952

Total liabilities
$
8,163

 
$

 
$
7,878

 
$
16,041

 
$

 
$

 
$
17,952

 
$
17,952

The following table sets forth a summary of changes in the fair value of our contingent acquisition consideration and preferred stock warrants which represent recurring measurements that are classified within Level 3 of the fair value hierarchy wherein fair value is estimated using significant unobservable inputs (in thousands):
 
Fiscal Year Ended
 
December 26, 2015
 
December 27, 2014
 
Contingent Acquisition
Consideration
 
Contingent Acquisition
Consideration
 
Preferred Stock Warrants
 
 
 
 
 
 
Beginning balance
$
17,952

 
$
10,630

 
$
362

Contingent consideration liability recorded in connection with Citrus Lane acquisition

 
14,510

 

Increase in fair value included in earnings
934

 
3,158

 
606

Reclassification to permanent equity

 
(4,878
)
 
(968
)
Contingent acquisition consideration payments
(2,845
)
 
(5,468
)
 

Transfers out of Level 3(1)
(8,163
)
 

 

Ending balance
$
7,878

 
$
17,952

 
$


(1) Transfers out of Level 3 represent contingent payments for which the measurement period had ended and the remaining liability is known as of December 26, 2015.
The following table presents the detail of property and equipment, net for the periods presented (in thousands):
 
December 26, 2015
 
December 27, 2014
 
 
 
 
Computer equipment
$
2,236

 
$
2,438

Furniture and fixtures
1,611

 
1,707

Software
1,374

 
1,066

Leasehold improvements
3,847

 
3,133

Total
9,068

 
8,344

Less accumulated depreciation
(2,697
)
 
(2,054
)
Property and equipment, net
$
6,371

 
$
6,290

Property and equipment are depreciated over the following estimated useful lives:
 
Estimated Useful Life
Computer equipment
3 - 5 years
Leasehold improvements
Lesser of asset life or lease term
Furniture and fixtures
3 - 5 years
Software
3 - 6 years
Business Acquisitions (Tables)
A summary of the purchase price allocation for the acquisition of Citrus Lane is as follows (in thousands):
Total purchase consideration
Cash
$
22,881

Fair value of common stock
3,844

Fair value of contingent acquisition consideration
15,600

Fair value of stock options exchanged
1,026

Total purchase price
$
43,351

 
 
Allocation of purchase consideration
Tangible assets
$
2,843

Liabilities assumed
(4,098
)
Identifiable intangible assets
4,600

Deferred tax liabilities
(1,855
)
Goodwill
41,861

Total purchase price
$
43,351

The estimated fair values for specifically identifiable intangible assets acquired were as follows (in thousands):
 
 
 
Weighted-average amortization period
(in years)
Proprietary software
$
3,000

 
7
Trade-names
1,600

 
10
Total purchase price
$
4,600

 
 
The pro forma financial information does not reflect any adjustments for anticipated synergies resulting from the acquisition and is not necessarily indicative of the operating results that would have actually occurred had the transaction been consummated on January 1, 2013.
 
Pro Forma
 
Fiscal Year Ended
 
December 26, 2015

December 27, 2014
 
December 28, 2013
Revenue
$
138.7


$
110.7

 
$
87.2

Net loss
$
(26.3
)

$
(45.8
)
 
$
(35
)
Discontinued Operations (Tables)
Disposal Groups, Including Discontinued Operations
The major components of current assets and current liabilities of the Citrus Lane business were as follows (in thousands):
 
December 26, 2015
 
December 27, 2014
Assets
 
 
 
Accounts receivable
$
92

 
$
62

Prepaid expenses and other current assets
28

 
484

Inventory
319

 
2,626

Total current assets
439

 
3,172

Property and equipment, net
9

 
32

Intangible assets, net

 
1,900

Goodwill

 
8,050

Total assets
$
448

 
$
13,154

 
 
 
 
Liabilities
 
 
 
Accounts payable
$
435

 
$
1,139

Accrued expenses and other liabilities
1,325

 
1,066

Deferred revenue
82

 
1,874

Current contingent acquisition consideration
16,041

 
7,840

Total current liabilities
17,883

 
11,919

Total non-current liabilities of discontinued operations

 
7,267

Total liabilities
$
17,883

 
$
19,186

The following table presents financial results of the Citrus Lane business included in loss from discontinued operations, net of tax for the fiscal years ended December 26, 2015 and December 27, 2014 (in thousands):
 
Fiscal Year Ended
 
December 26, 2015
 
December 27, 2014
 
 
 
 
Revenue
$
11,530

 
$
6,001

Cost of revenue
11,849

 
6,882

Operating expenses:
 
 
 
Selling and marketing
2,229

 
2,017

Research and development
904

 
768

General and administrative
2,698

 
2,764

Impairment of goodwill and intangible assets
8,766

 
36,227

Depreciation and amortization
99

 
76

Operating loss
(15,015
)
 
(42,733
)
Other expense, net
(30
)
 

Loss from discontinued operations before income taxes
(15,045
)
 
(42,733
)
Loss on disposal of assets before income taxes
(2,071
)
 

Provision for income tax

 

Loss from discontinued operations
$
(17,116
)
 
$
(42,733
)
Goodwill and Intangible Assets (Tables)
The following table presents the change in goodwill for our single reporting unit during the periods presented (in thousands):
Balance as of December 27, 2014
$
60,635

Effect of currency translation
(2,004
)
Balance as of December 26, 2015
$
58,631

The following table presents the detail of intangible assets for the periods presented (dollars in thousands):
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Carrying Value
 
Weighted-Average Remaining Life (Years)
December 26, 2015
 
 
 
 
 
 
 
Indefinite lived intangibles
$
242

 
$

 
$
242

 
N/A
Trademarks and trade names
4,417

 
(4,133
)
 
284

 
3.5
Proprietary software
4,751

 
(3,802
)
 
949

 
1.6
Website
50

 
(44
)
 
6

 
0.6
Training materials
30

 
(30
)
 

 
0.0
Non-compete agreements
130

 
(111
)
 
19

 
1.6
Leasehold interests
170

 
(86
)
 
84

 
3.4
Caregiver relationships
285

 
(285
)
 

 
0.0
Customer relationships
8,782

 
(6,977
)
 
1,805

 
3.1
Total
$
18,857

 
$
(15,468
)
 
$
3,389

 
 
 
 
 
 
 
 
 
 
December 27, 2014
 
 
 
 
 
 
 
Indefinite lived intangibles
$
242

 
$

 
$
242

 
N/A
Trademarks and trade names
4,481

 
(3,377
)
 
1,104

 
2.0
Proprietary software
4,942

 
(3,351
)
 
1,591

 
2.5
Website
50

 
(34
)
 
16

 
1.6
Training materials
30

 
(20
)
 
10

 
1.0
Non-compete agreements
137

 
(94
)
 
43

 
2.0
Leasehold interests
170

 
(61
)
 
109

 
4.4
Caregiver relationships
312

 
(252
)
 
60

 
0.7
Customer relationships
8,857

 
(4,967
)
 
3,890

 
2.9
Total
$
19,221

 
$
(12,156
)
 
$
7,065

 
 
The following table presents the detail of intangible assets for the periods presented (dollars in thousands):
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Carrying Value
 
Weighted-Average Remaining Life (Years)
December 26, 2015
 
 
 
 
 
 
 
Indefinite lived intangibles
$
242

 
$

 
$
242

 
N/A
Trademarks and trade names
4,417

 
(4,133
)
 
284

 
3.5
Proprietary software
4,751

 
(3,802
)
 
949

 
1.6
Website
50

 
(44
)
 
6

 
0.6
Training materials
30

 
(30
)
 

 
0.0
Non-compete agreements
130

 
(111
)
 
19

 
1.6
Leasehold interests
170

 
(86
)
 
84

 
3.4
Caregiver relationships
285

 
(285
)
 

 
0.0
Customer relationships
8,782

 
(6,977
)
 
1,805

 
3.1
Total
$
18,857

 
$
(15,468
)
 
$
3,389

 
 
 
 
 
 
 
 
 
 
December 27, 2014
 
 
 
 
 
 
 
Indefinite lived intangibles
$
242

 
$

 
$
242

 
N/A
Trademarks and trade names
4,481

 
(3,377
)
 
1,104

 
2.0
Proprietary software
4,942

 
(3,351
)
 
1,591

 
2.5
Website
50

 
(34
)
 
16

 
1.6
Training materials
30

 
(20
)
 
10

 
1.0
Non-compete agreements
137

 
(94
)
 
43

 
2.0
Leasehold interests
170

 
(61
)
 
109

 
4.4
Caregiver relationships
312

 
(252
)
 
60

 
0.7
Customer relationships
8,857

 
(4,967
)
 
3,890

 
2.9
Total
$
19,221

 
$
(12,156
)
 
$
7,065

 
 
As of December 26, 2015, the estimated future amortization expense related to current intangible assets for future fiscal years was as follows (in thousands):
2016
$
1,951

2017
547
2018
202
2019
145
2020
96
Thereafter
206

Total
$
3,147

Accrued Expenses and Other Current Liabilities (Tables)
Schedule of Accrued Liabilities
The following table presents the detail of accrued expenses and other current liabilities for the periods presented (in thousands):
 
December 26, 2015
 
December 27, 2014
 
 
 
 
Payroll and compensation
$
5,167

 
$
1,830

Tax-related expense
801

 
804

Marketing expenses
3,451

 
3,385

Other accrued expenses
2,994

 
5,648

Total accrued expenses and other current liabilities
$
12,413

 
$
11,667

Commitments and Contingencies (Tables)
Schedule of Future Minimum Lease Commitments for Operating Leases
At December 26, 2015, minimum future lease commitments under all non-cancelable operating leases (including rent escalation clauses) were as follows (in millions):
 
Payments Due by Period
 
Total
 
Less than 1 Year
 
1-3 Years
 
4-5 Years
 
Thereafter
Operating lease obligations
$
43.1

 
$
4.3

 
$
9.0

 
$
9.8

 
$
20.0

Stockholders' Equity (Deficit) (Tables)
The following table summarizes stock-based compensation in our accompanying condensed consolidated statements of operations (in thousands):
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
 
 
 
 
 
 
Cost of revenue
$
236

 
$
156

 
$
161

Selling and marketing
813

 
582

 
348

Research and development
760

 
437

 
356

General and administrative
3,116

 
2,704

 
997

Loss from discontinued operations
589

 
1,926

 

   Total stock-based compensation
$
5,514

 
$
5,805

 
$
1,862

The following table presents the assumptions used to estimate the fair value of options granted during the periods presented:
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
Risk-free interest rate
N/A
 
1.81 - 1.95 %
 
1.23 - 2.00%
Expected term (years)
N/A
 
6.25
 
6.25
Volatility
N/A
 
47.1 - 56.3 %
 
44.6%
Expected dividend yield
N/A
 
 
A summary of stock option activity for the year ended December 26, 2015 was as follows (in thousands for shares and intrinsic value):
 
Stock Options
 
Restricted Stock Units
 
Shares
 
Weighted-Average Remaining Contractual Term (Years)
 
Weighted-Average Exercise Price
 
Aggregate Intrinsic Value
 
Shares
 
Weighted-Average Grant Date Fair Value
Outstanding as of December 27, 2014
4,270

 
7.17
 
$
6.47

 
$
14,373

 

 
$

Granted (1)

 
 
 

 
 
 
1,947

 
7.49

Settled (RSUs)

 
 
 

 
 
 
(214
)
 
7.78

Exercised
(257
)
 
 
 
2.22

 
 
 

 

Canceled and forfeited
(531
)
 
 
 
8.2

 
 
 
(427
)
 
7.6

Outstanding as of December 26, 2015
3,482

 
5.93
 
$
6.52

 
$
8,891

 
1,306

 
$
7.42

Vested and exercisable as of December 26, 2015
2,769

 
5.49
 
5.29

 
8,421

 

 

Vested and expected to vest as of December 26, 2015
3,404

 
5.88
 
$
6.37

 
$
8,860

 
1,056

 
7.42

____________________________
(1) For RSUs, includes both time-based and performance-based restricted stock units
(2) Options and RSUs expected to vest reflect an estimated forfeiture rate
As of December 26, 2015, we had reserved the following shares of common stock for future issuance in connection with the following:
 
December 26, 2015
 
 
Contingent consideration payable in common stock
106,000

Options issued and outstanding
3,481,750

Restricted stock units issued and outstanding
1,305,628

Common stock available for stock-based award grants under incentive award plans
3,337,574

Total
8,230,952

Net Loss Per Share (Tables)
The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data):
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
 
 
 
 
 
 
Loss from continuing operations
$
(17,879
)
 
$
(37,559
)
 
$
(28,296
)
Loss from discontinued operations, net of tax (see note 4)
(17,116
)
 
(42,733
)
 

Net loss
(34,995
)
 
(80,292
)
 
(28,296
)
Accretion of preferred stock

 
(4
)
 
(57
)
Net loss attributable to common stockholders
$
(34,995
)
 
$
(80,296
)
 
$
(28,353
)
Net loss per share attributable to common stockholders (Basic and Diluted):
 
 
 
 
 
Loss from continuing operations
$
(0.56
)
 
$
(1.30
)
 
$
(9.45
)
Loss from discontinued operations
(0.53
)
 
(1.47
)
 

Net loss per share
$
(1.09
)
 
$
(2.77
)
 
$
(9.45
)
Weighted-average shares used to compute net loss per share attributable to common stockholders:
 
 
 
 
 
Basic and diluted
32,001

 
28,941

 
3,000

The following equity shares were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented (in thousands):
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
Redeemable convertible preferred stock

 

 
21,299

Stock options
3,482

 
4,270

 
3,439

Restricted stock units
1,306

 

 

Preferred stock warrants

 

 
41

Common stock warrants

 

 
40

Income Taxes (Tables)
The following table presents domestic and foreign components of loss from continuing operations before income taxes for the periods presented (in thousands):
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
United States
$
(13,318
)
 
$
(32,730
)
 
$
(22,182
)
Foreign
(3,340
)
 
(5,581
)
 
(5,760
)
Loss from continuing operations before income taxes
$
(16,658
)
 
$
(38,311
)
 
$
(27,942
)
The following table presents the components of the provision for (benefit from) income taxes for the periods presented (in thousands):
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
 
 
 
 
 
 
Current:
 
 
 
 
 
Federal
$

 
$

 
$

State
94

 
108

 
70

Foreign
33

 
33

 

Total current provision for income taxes
127

 
141

 
70

Deferred:
 
 
 
 
 
Federal
883

 
(757
)
 
626

State
211

 
(136
)
 
49

Foreign

 

 
(391
)
Total deferred tax provision (benefit)
1,094

 
(893
)
 
284

Total provision for (benefit from) income taxes
$
1,221

 
$
(752
)
 
$
354

The following table presents a reconciliation of the statutory federal rate, and our effective tax rate on losses from continuing operations, for the periods presented:
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
 
 
 
 
 
 
U.S. federal taxes at statutory rate
34
 %
 
34
 %
 
34
 %
State income taxes, net of federal benefit
(1
)
 

 
2

Permanent differences
(3
)
 
(3
)
 
(3
)
Foreign rate differential
(1
)
 
(1
)
 
(1
)
Change in valuation allowance - U.S.
(31
)
 
(24
)
 
(28
)
Change in valuation allowance - foreign
(5
)
 
(4
)
 
(5
)
Total
(7
)%
 
2
 %
 
(1
)%
The following table presents the significant components of our deferred tax assets and liabilities, including those related to discontinued operations for the periods presented (in thousands):
 
Fiscal Year Ended
 
December 26, 2015
 
December 27, 2014
Deferred tax assets
 
 
 
Net operating loss carryforwards
$
45,881

 
$
40,790

Accrued expenses
3,045

 
1,696

Stock-based compensation
1,922

 
1,618

U.S. definite lived intangibles
5,058

 
3,538

Other temporary differences
1,217

 
33

Total deferred tax assets
57,123

 
47,675

Valuation allowance
(56,304
)
 
(46,619
)
Net deferred tax assets
819

 
1,056

Deferred tax liabilities
 
 
 
Foreign intangibles
(111
)
 
(224
)
U.S. goodwill
(3,166
)
 
(2,072
)
Fixed assets
(708
)
 
(832
)
Total deferred tax liabilities
(3,985
)
 
(3,128
)
Net deferred tax liabilities
$
(3,166
)
 
$
(2,072
)
Segment and Geographical Information (Tables)
Subsequent to our decision to exit the Citrus Lane business, we have concluded that we have a single operating and reportable segment comprised of the following product lines (dollars in thousands):
 
Fiscal Year Ended
 
December 26, 2015
 
December 27, 2014
 
December 28, 2013
U.S. Consumer Business
$
115,020

 
$
96,524

 
$
72,415

Other
23,661

 
14,188

 
9,072

Total revenue
$
138,681

 
$
110,712

 
$
81,487


The following table summarizes total revenue generated by our geographic locations (dollars in thousands):
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
United States
$
129,085

 
$
102,047

 
$
74,800

International
9,596

 
8,665

 
6,687

Total revenue
$
138,681

 
$
110,712

 
$
81,487

 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
United States
93
%
 
92
%
 
92
%
International
7
%
 
8
%
 
8
%
Total revenue
100
%
 
100
%
 
100
%
Other Expense, Net (Tables)
Schedule of Other Expense, Net
Other expense, net consisted of the following (in thousands):
 
Fiscal Year Ended
 
December 26,
2015
 
December 27,
2014
 
December 28,
2013
Interest income
72

 
86

 
47

Interest expense
(3
)
 
(43
)
 
(17
)
Other expense, net
(1,308
)
 
(3,899
)
 
(321
)
Total other expense, net
$
(1,239
)
 
$
(3,856
)
 
$
(291
)
Quarterly Financial Information (Unaudited) (Tables)
Schedule of Quarterly Financial Information
The table below sets forth unaudited selected quarterly financial data for each of the last two fiscal years (dollars in thousands, except per share data).
 
For the Quarter Ended
 
December 26, 2015
 
September 26, 2015
 
June 27,
2015
 
March 28,
2015
Total revenue
$
37,550

 
$
36,179

 
$
32,903

 
$
32,049

Cost of revenue
6,321

 
6,894

 
6,630

 
6,272

Income (Loss) from continuing operations
3,683

 
(6,364
)
 
(5,404
)
 
(9,794
)
Loss from discontinued operations, net of tax
(2,084
)
 
(10,985
)
 
(1,831
)
 
(2,216
)
Net income (loss)
1,599

 
(17,349
)
 
(7,235
)
 
(12,010
)
 
 
 
 
 
 
 
 
Net loss per share (Basic):
 
 
 
 
 
 
 
Income (Loss) from continuing operations
$
0.11

 
$
(0.20
)
 
$
(0.17
)
 
$
(0.31
)
Loss from discontinued operations
(0.06
)
 
(0.34
)
 
(0.06
)
 
(0.07
)
Net income (loss) per share
$
0.05

 
$
(0.54
)
 
$
(0.23
)
 
$
(0.38
)
 
 
 
 
 
 
 
 
Net loss per share (Diluted):
 
 
 
 
 
 
 
Income (Loss) from continuing operations
$
0.11

 
$
(0.20
)
 
$
(0.17
)
 
$
(0.31
)
Loss from discontinued operations
(0.06
)
 
(0.34
)
 
(0.06
)
 
(0.07
)
Net income (loss) per share*
$
0.05

 
$
(0.54
)
 
$
(0.23
)
 
$
(0.38
)
 
 
 
 
 
 
 
 
* Note the diluted share total used in the calculation of net income (loss) per share in Q4 FY’15 was 33,094
 
 
 
For the Quarter Ended
 
December 27, 2014
 
September 27, 2014
 
June 28,
2014
 
March 29,
2014
Total revenue
$
30,001

 
$
29,604

 
$
25,836

 
$
25,271

Cost of revenue
5,869

 
6,111

 
5,713

 
5,771

Loss from continuing operations
(1,530
)
 
(10,610
)
 
(9,875
)
 
(15,544
)
Loss from discontinued operations, net of tax
(38,890
)
 
(3,843
)
 

 

Net loss
(40,420
)
 
(14,453
)
 
(9,875
)
 
(15,544
)
Net loss attributable to common stockholders
(40,420
)
 
(14,453
)
 
(9,875
)
 
(15,548
)
 
 
 
 
 
 
 
 
Net loss per share attributable to common stockholders (Basic and Diluted):
 
 
 
 
 
 
 
Loss from continuing operations
$
(0.05
)
 
$
(0.34
)
 
$
(0.32
)
 
$
(0.71
)
Loss from discontinued operations
(1.23
)
 
(0.12
)
 

 

Net loss per share
$
(1.28
)
 
$
(0.46
)
 
$
(0.32
)
 
$
(0.71
)
Summary of Significant Accounting Policies - Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 26, 2015
Dec. 27, 2014
Assets:
 
 
Total assets
$ 25,420 
$ 15,656 
Liabilities:
 
 
Total liabilities
16,041 
 
Level 1
 
 
Assets:
 
 
Total assets
25,420 
15,656 
Liabilities:
 
 
Total liabilities
8,163 
Level 2
 
 
Assets:
 
 
Total assets
Liabilities:
 
 
Total liabilities
Level 3
 
 
Assets:
 
 
Total assets
Liabilities:
 
 
Total liabilities
7,878 
17,952 
Contingent acquisition consideration
 
 
Liabilities:
 
 
Contingent acquisition consideration (included in current liabilities of discontinued operations)
16,041 
17,952 
Contingent acquisition consideration |
Level 1
 
 
Liabilities:
 
 
Contingent acquisition consideration (included in current liabilities of discontinued operations)
8,163 
Contingent acquisition consideration |
Level 2
 
 
Liabilities:
 
 
Contingent acquisition consideration (included in current liabilities of discontinued operations)
Contingent acquisition consideration |
Level 3
 
 
Liabilities:
 
 
Contingent acquisition consideration (included in current liabilities of discontinued operations)
7,878 
17,952 
Money market funds
 
 
Assets:
 
 
Money market mutual funds
25,420 
15,656 
Money market funds |
Level 1
 
 
Assets:
 
 
Money market mutual funds
25,420 
15,656 
Money market funds |
Level 2
 
 
Assets:
 
 
Money market mutual funds
Money market funds |
Level 3
 
 
Assets:
 
 
Money market mutual funds
$ 0 
$ 0 
Summary of Significant Accounting Policies - Fair Value of Contingent Consideration and Preferred Stock Warrants - Recurring Measurements Classified as Level 3 (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Contingent Acquisition Consideration
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation
 
 
Beginning balance
$ 17,952 
$ 10,630 
Contingent consideration liability recorded in connection with Citrus Lane acquisition
14,510 
Increase in fair value included in earnings
934 
3,158 
Reclassification to permanent equity
(4,878)
Contingent acquisition consideration payments
(2,845)
(5,468)
Transfers out of Level 3(1)
8,163 
Ending balance
7,878 
17,952 
Preferred stock warrants
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation
 
 
Beginning balance
 
362 
Contingent consideration liability recorded in connection with Citrus Lane acquisition
 
Increase in fair value included in earnings
 
606 
Reclassification to permanent equity
 
(968)
Contingent acquisition consideration payments
 
Transfers out of Level 3(1)
 
Ending balance
 
$ 0 
Summary of Significant Accounting Policies - Property and Equipment (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 26, 2015
Computer equipment
Dec. 27, 2014
Computer equipment
Dec. 26, 2015
Furniture and fixtures
Dec. 27, 2014
Furniture and fixtures
Dec. 26, 2015
Software
Dec. 27, 2014
Software
Dec. 26, 2015
Leasehold improvements
Dec. 27, 2014
Leasehold improvements
Dec. 26, 2015
Minimum
Computer equipment
Dec. 26, 2015
Minimum
Furniture and fixtures
Dec. 26, 2015
Minimum
Software
Dec. 26, 2015
Maximum
Computer equipment
Dec. 26, 2015
Maximum
Furniture and fixtures
Dec. 26, 2015
Maximum
Software
Property, Plant and Equipment [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, gross
$ 9,068 
$ 8,344 
$ 2,236 
$ 2,438 
$ 1,611 
$ 1,707 
$ 1,374 
$ 1,066 
$ 3,847 
$ 3,133 
 
 
 
 
 
 
Less accumulated depreciation
(2,697)
(2,054)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property and equipment, net
$ 6,371 
$ 6,290 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Estimated Useful Life
 
 
 
 
 
 
 
 
 
 
3 years 
3 years 
3 years 
5 years 
5 years 
6 years 
Summary of Significant Accounting Policies - Additional Information (Details) (USD $)
12 Months Ended 0 Months Ended 3 Months Ended 12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Dec. 26, 2015
Minimum
Dec. 26, 2015
Maximum
Dec. 31, 2012
Care International Exchange, Inc.
Jul. 17, 2014
Citrus Lane Inc
Dec. 26, 2015
Citrus Lane Inc
Dec. 27, 2014
Citrus Lane Inc
Dec. 26, 2015
Citrus Lane Inc
Dec. 27, 2014
Citrus Lane Inc
Dec. 28, 2013
Care Concierge, Inc.
Dec. 26, 2015
Credit Concentration Risk
customer
Dec. 27, 2014
Credit Concentration Risk
customer
Dec. 26, 2015
Customer Concentration Risk
customer
Dec. 27, 2014
Customer Concentration Risk
customer
Entity Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fiscal period duration
 
 
 
364 days 
371 days 
 
 
 
 
 
 
 
 
 
 
 
Number of customers
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of total accounts receivables
100.00% 
100.00% 
100.00% 
 
 
 
 
 
 
 
 
 
13.00% 
15.00% 
 
 
Allowance for accounts receivables
$ 125,000 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction (loss) arising during period, net of tax
1,300,000 
1,000,000 
100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contingent consideration expense
302,000 
1,342,000 
 
 
 
600,000 
 
 
 
17,500,000 
600,000 
 
 
 
 
Potential earn out payment, percentage
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
Current liabilities of discontinued operations
17,883,000 
11,919,000 
 
 
 
 
 
16,000,000 
7,800,000 
16,000,000 
7,800,000 
 
 
 
 
 
Non-current liabilities of discontinued operations
7,267,000 
 
 
 
 
 
 
7.3 
 
7.3 
 
 
 
 
 
Ownership percentage
 
 
 
 
 
50.00% 
 
 
 
 
 
 
 
 
 
 
Equity method investments, initial investment
 
 
 
 
 
50,000 
 
 
 
 
 
 
 
 
 
 
Goodwill, impairment loss
 
 
 
 
 
 
 
8,000,000 
33,800,000 
 
 
 
 
 
 
 
Impairment of intangible assets (excluding goodwill)
 
 
 
 
 
 
 
1,700,000 
2,400,000 
 
 
 
 
 
 
 
Estimated useful lives, intangible assets
 
 
 
1 year 
10 years 
 
 
 
 
 
 
 
 
 
 
 
Depreciation
1,600,000 
900,000 
700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capitalized computer software, impairments
100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capitalized computer software, additions
400,000 
900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advertising expense
$ 54,500,000 
$ 57,800,000 
$ 42,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisitions - Additional Information (Details) (USD $)
12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 3 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Jul. 17, 2014
Citrus Lane Inc
Dec. 26, 2015
Citrus Lane Inc
Dec. 27, 2014
Citrus Lane Inc
Jul. 17, 2014
Citrus Lane Inc
Jul. 17, 2014
Citrus Lane Inc
Earn Out Payment
Jul. 17, 2014
Citrus Lane Inc
Earn Out Payment
Jul. 17, 2014
Citrus Lane Inc
Based Solely on Individual
Mar. 3, 2014
Consumr
Jul. 17, 2014
Employee Stock Option
Citrus Lane Inc
Dec. 26, 2015
Citrus Lane Inc
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash consideration
 
 
 
$ 22,900,000 
 
 
 
 
 
 
 
 
 
Equity consideration, shares
 
 
 
400,000.0 
 
 
 
 
 
 
 
 
 
Equity consideration, value
 
 
 
 
 
 
3,800,000 
 
 
 
 
 
 
Cash consideration, contingent amount
 
 
 
16,400,000 
 
 
 
 
 
 
 
 
 
Cash consideration, contingent amount, fair value
 
 
 
 
 
 
14,500,000 
 
 
 
 
 
 
Equity consideration, contingent amount, shares
 
 
 
100,000.0 
 
 
 
 
 
 
 
 
 
Equity consideration, contingent amount, value
 
 
 
1,100,000 
 
 
 
 
 
 
 
 
 
Fair value of common stock or stock options exchanged
 
 
 
1,000,000 
 
 
 
 
 
 
 
1,026,000 
 
Acquisition costs
 
 
 
 
 
 
1,800,000 
 
 
 
 
 
 
Escrow deposit
 
 
 
 
 
 
5,000,000 
 
 
 
 
 
 
Intangible asset cash flow forecast, discount rate
 
 
 
22.50% 
 
 
 
 
 
 
 
 
 
Goodwill
58,631,000 
60,635,000 
 
 
 
 
41,861,000 
 
 
 
 
 
 
Fair value of options
 
 
 
1,400,000 
 
 
 
 
 
 
 
 
 
Period for recognition
 
 
 
 
 
 
 
 
 
 
1 year 
2 years 7 months 6 days 
 
Risk-free interest rate
 
 
 
1.80% 
 
 
 
 
 
 
 
 
 
Volatility
 
 
 
 
 
 
 
 
 
 
 
49.40% 
 
Expected term (years)
 
6 years 3 months 
6 years 3 months 
 
 
 
 
 
 
 
 
5 years 4 months 24 days 
 
Expected dividend yield
 
0.00% 
0.00% 
 
 
 
 
 
 
 
 
0.00% 
 
Weighted average grant date fair value
 
 
 
 
 
 
 
 
 
 
 
$ 9.34 
 
Share-based compensation expense, acceleration of vesting
 
 
 
1,400,000 
1,400,000 
 
 
 
 
 
 
 
 
Potential periodic earn out payments
 
 
 
 
 
 
 
8,200,000 
 
 
 
 
 
Fair value of contingent consideration
 
 
 
 
 
 
15,200,000 
 
 
 
 
 
 
Contingent consideration expense
302,000 
1,342,000 
600,000 
 
17,500,000 
 
 
 
 
 
 
 
Employee bonus pool
 
 
 
 
 
 
1,400,000 
 
300,000 
1,100,000 
 
 
 
Discontinued operation, gain on unpaid accrued bonuses
 
 
 
 
 
 
 
 
 
 
 
 
700,000 
Consideration transferred
 
 
 
15,600,000 
 
 
 
 
 
 
600,000 
 
 
Purchase price held back
 
 
 
 
 
 
 
 
 
 
100,000 
 
 
Identifiable intangible assets
 
 
 
 
 
 
$ 4,600,000 
 
 
 
 
 
 
Business Acquisitions - Purchase Price Allocation - Citrus Lane (Details) (USD $)
0 Months Ended 0 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Jul. 17, 2014
Citrus Lane Inc
Jul. 17, 2014
Citrus Lane Inc
Jul. 17, 2014
Citrus Lane Inc
Common Stock
Jul. 17, 2014
Employee Stock Option
Citrus Lane Inc
Business Acquisition [Line Items]
 
 
 
 
 
 
Cash
 
 
$ 22,900,000 
 
 
 
Fair value of common stock or stock options exchanged
 
 
1,000,000 
 
3,844,000 
1,026,000 
Fair value of contingent acquisition consideration
 
 
15,600,000 
 
 
 
Purchase price
 
 
 
43,351,000 
 
 
Tangible assets
 
 
 
2,843,000 
 
 
Liabilities assumed
 
 
 
(4,098,000)
 
 
Identifiable intangible assets
 
 
 
4,600,000 
 
 
Deferred tax liabilities
 
 
 
(1,855,000)
 
 
Goodwill
$ 58,631,000 
$ 60,635,000 
 
$ 41,861,000 
 
 
Business Acquisitions - Identifiable Intangible Assets Acquired - Citrus Lane (Details) (Citrus Lane Inc, USD $)
In Thousands, unless otherwise specified
0 Months Ended
Jul. 17, 2014
Jul. 17, 2014
Business Acquisition [Line Items]
 
 
Identifiable intangible assets acquired
$ 4,600 
$ 4,600 
Proprietary Software
 
 
Business Acquisition [Line Items]
 
 
Identifiable intangible assets acquired
 
3,000 
Weighted-average amortization period (in years)
7 years 
 
Trade Names
 
 
Business Acquisition [Line Items]
 
 
Identifiable intangible assets acquired
 
$ 1,600 
Weighted-average amortization period (in years)
10 years 
 
Business Acquisitions - Pro Forma Financial Information - Citrus Lane (Details) (Citrus Lane Inc, USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Citrus Lane Inc
 
 
 
Business Acquisition [Line Items]
 
 
 
Revenue
$ 138.7 
$ 110.7 
$ 87.2 
Net loss
$ (26.3)
$ (45.8)
$ (35.0)
Discontinued Operations - Income Statement Disclosure (Details) (Citrus Lane, USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Citrus Lane
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
Revenue
$ 11,530 
$ 6,001 
Cost of revenue
11,849 
6,882 
Operating expenses:
 
 
Selling and marketing
2,229 
2,017 
Research and development
904 
768 
General and administrative
2,698 
2,764 
Impairment of goodwill and intangible assets
8,766 
36,227 
Depreciation and amortization
99 
76 
Operating loss
(15,015)
(42,733)
Other expense, net
30 
Loss from discontinued operations before income taxes
(15,045)
(42,733)
Loss on disposal of assets before income taxes
(2,071)
Provision for income tax
Operating loss
$ (17,116)
$ (42,733)
Discontinued Operations - Balance Sheet Disclosure (Details) (USD $)
Dec. 26, 2015
Dec. 27, 2014
Assets
 
 
Total current assets
$ 439,000 
$ 3,172,000 
Liabilities
 
 
Current contingent acquisition consideration
2,845,000 
Total current liabilities
17,883,000 
11,919,000 
Total non-current liabilities of discontinued operations
7,267,000 
Citrus Lane
 
 
Assets
 
 
Accounts receivable
92,000 
62,000 
Prepaid expenses and other current assets
28,000 
484,000 
Inventory
319,000 
2,626,000 
Total current assets
439,000 
3,172,000 
Property and equipment, net
9,000 
32,000 
Total current assets
1,900,000 
Goodwill
8,050,000 
Total assets
448,000 
13,154,000 
Liabilities
 
 
Accounts payable
435,000 
1,139,000 
Accrued expenses and other liabilities
1,325,000 
1,066,000 
Deferred revenue
82,000 
1,874,000 
Current contingent acquisition consideration
16,041,000 
7,840,000 
Total current liabilities
17,883,000 
11,919,000 
Total non-current liabilities of discontinued operations
7,267,000 
Total liabilities
$ 17,883,000 
$ 19,186,000 
Goodwill and Intangible Assets - Change in Goodwill (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Goodwill
 
December 27, 2014
$ 60,635 
Effect of currency translation
2,004 
December 26, 2015
$ 58,631 
Goodwill and Intangible Assets - Intangible Assets (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
Indefinite lived intangibles
$ 242 
$ 242 
Finite-Lived Intangible Assets [Line Items]
 
 
Accumulated Amortization
(15,468)
(12,156)
Net Carrying Value
3,147 
 
Total Gross Carrying Value
18,857 
19,221 
Total Accumulated Amortization
(15,468)
(12,156)
Total Net Carrying Value
3,389 
7,065 
Trademarks and trade names
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Value
4,417 
4,481 
Accumulated Amortization
(4,133)
(3,377)
Net Carrying Value
284 
1,104 
Total Accumulated Amortization
(4,133)
(3,377)
Weighted-Average Remaining Life (Years)
3 years 6 months 
2 years 
Proprietary software
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Value
4,751 
4,942 
Accumulated Amortization
(3,802)
(3,351)
Net Carrying Value
949 
1,591 
Total Accumulated Amortization
(3,802)
(3,351)
Weighted-Average Remaining Life (Years)
1 year 7 months 6 days 
2 years 6 months 
Website
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Value
50 
50 
Accumulated Amortization
(44)
(34)
Net Carrying Value
16 
Total Accumulated Amortization
(44)
(34)
Weighted-Average Remaining Life (Years)
7 months 6 days 
1 year 7 months 6 days 
Training materials
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Value
30 
30 
Accumulated Amortization
(30)
(20)
Net Carrying Value
10 
Total Accumulated Amortization
(30)
(20)
Weighted-Average Remaining Life (Years)
 
1 year 
Non-compete agreements
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Value
130 
137 
Accumulated Amortization
(111)
(94)
Net Carrying Value
19 
43 
Total Accumulated Amortization
(111)
(94)
Weighted-Average Remaining Life (Years)
1 year 7 months 6 days 
2 years 
Leasehold interests
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Value
170 
170 
Accumulated Amortization
(86)
(61)
Net Carrying Value
84 
109 
Total Accumulated Amortization
(86)
(61)
Weighted-Average Remaining Life (Years)
3 years 4 months 24 days 
4 years 4 months 24 days 
Caregiver relationships
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Value
285 
312 
Accumulated Amortization
(285)
(252)
Net Carrying Value
60 
Total Accumulated Amortization
(285)
(252)
Weighted-Average Remaining Life (Years)
 
8 months 12 days 
Customer relationships
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Value
8,782 
8,857 
Accumulated Amortization
(6,977)
(4,967)
Net Carrying Value
1,805 
3,890 
Total Accumulated Amortization
$ (6,977)
$ (4,967)
Weighted-Average Remaining Life (Years)
3 years 1 month 6 days 
2 years 10 months 24 days 
Goodwill and Intangible Assets - Intangible Assets - Future Amortization (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 26, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
 
2016
$ 1,951 
2017
547 
2018
202 
2019
145 
2020
96 
Thereafter
206 
Net Carrying Value
$ 3,147 
Goodwill and Intangible Assets - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Finite-Lived Intangible Assets [Line Items]
 
 
Amortization of intangible assets
$ 3.6 
$ 4.2 
Depreciation and Amortization
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Amortization of intangible assets
2.9 
3.4 
Cost of revenue
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Amortization of intangible assets
$ 0.7 
$ 0.8 
Accrued Expenses and Other Current Liabilities - Additional Information (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 26, 2015
Dec. 27, 2014
Payables and Accruals [Abstract]
 
 
Payroll and compensation
$ 5,167 
$ 1,830 
Tax-related expense
801 
804 
Marketing expenses
3,451 
3,385 
Other accrued expenses
2,994 
5,648 
Accrued expenses and other current liabilities
$ 12,413 
$ 11,667 
Commitments and Contingencies - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended
Jul. 31, 2014
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Jul. 31, 2014
Aug. 4, 2014
Prime Lease
Jul. 31, 2014
Prime Lease
Dec. 26, 2015
Prime Lease
Jul. 31, 2014
Prime Lease
Jul. 31, 2014
Prime Lease, Sixth Floor
sqft
Jul. 31, 2014
Prime Lease, Fourth Floor
sqft
Jul. 31, 2014
Prime Lease, Fifth Floor
sqft
Capital Leased Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Facilities rent expense under operating leases
 
$ 5.2 
$ 3.7 
 
 
 
 
 
 
 
 
 
Area of real estate property
 
 
 
 
 
 
 
 
 
36,174 
36,395 
36,174 
Lease term (in months)
 
 
 
 
 
120 months 
 
 
 
 
 
 
Capital lease obligations
 
 
 
 
 
 
 
 
34.5 
 
4.3 
4.1 
Number of sublease agreements
 
 
 
 
 
 
 
 
 
 
 
Number of optional lease extensions
 
 
 
 
 
 
 
 
 
 
 
Term of optional lease extension
10 years 
 
 
 
 
 
 
 
 
 
 
 
Tenant reimbursement allowance
 
 
 
 
 
 
2.3 
 
 
 
 
 
Payments for deposits
 
 
 
 
 
 
 
2.8 
 
 
 
 
Lease termination clause period (in days)
 
 
 
 
 
10 days 
 
 
 
 
 
 
Rent expense
 
$ 4.2 
$ 2.7 
$ 1.6 
 
 
 
 
 
 
 
 
Commitments and Contingencies - Operating Lease Obligations (Details) (USD $)
Dec. 26, 2015
Commitments and Contingencies Disclosure [Abstract]
 
Total
$ 43,094,000 
Less than 1 Year
4,296,000 
1-3 Years
8,959,000 
4-5 Years
9,830,000 
Thereafter
$ 20,009,000 
Stockholders' Equity (Deficit) - Additional Information (Details) (USD $)
0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended
Jan. 29, 2014
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Jan. 29, 2014
Common Stock
Jan. 29, 2014
Preferred Stock
Jan. 29, 2014
Common Stock
Dec. 26, 2015
Lighthouse Capital Partners
Convertible Preferred stock series A-1
Dec. 26, 2015
Lighthouse Capital Partners
Common Stock
Dec. 26, 2015
Loan and Security Agreement, 2010
Common Stock
Jan. 29, 2014
Additional Paid-In Capital
Dec. 27, 2014
Additional Paid-In Capital
Sep. 26, 2015
Performance-Based Restricted Stock Units
Dec. 26, 2015
Performance-Based Restricted Stock Units
Dec. 26, 2015
Restricted Stock Units (RSUs)
Dec. 27, 2014
Restricted Stock Units (RSUs)
Dec. 28, 2013
Restricted Stock Units (RSUs)
Sep. 26, 2015
Restricted Stock Units (RSUs)
Jan. 23, 2014
Employee Stock Option
Nov. 15, 2006
Employee Stock Option
Dec. 26, 2015
Employee Stock Option
Dec. 27, 2014
Employee Stock Option
Dec. 28, 2013
Employee Stock Option
Sep. 26, 2015
Employee Stock Option And Restricted Stock Units
Dec. 26, 2015
Employees And Directors
Time-Based Restricted Stock Units
Nov. 15, 2006
2006 plan
Nov. 15, 2006
2006 plan
Employee Stock Option
Dec. 27, 2014
2006 plan
Chief Executive Officer
Employee Stock Option
Jan. 23, 2014
2014 Plan
Dec. 26, 2015
2014 Plan
Jan. 23, 2014
2014 Plan
Employee Stock Option
Jul. 17, 2014
Citrus Lane Inc
Dec. 26, 2015
Citrus Lane Inc
Dec. 26, 2015
Maximum
2014 Plan
Employee Stock Option
Nov. 15, 2006
Share-based Compensation Award, Tranche One
2006 plan
Nov. 15, 2006
Share-based Compensation Award, Tranche One
2006 plan
Employee Stock Option
Jan. 23, 2014
Share-based Compensation Award, Tranche One
2014 Plan
Jan. 23, 2014
Share-based Compensation Award, Tranche One
2014 Plan
Employee Stock Option
Nov. 15, 2006
Share-based Compensation Award, Tranche Two
2006 plan
Jan. 23, 2014
Share-based Compensation Award, Tranche Two
2006 plan
Employee Stock Option
Nov. 15, 2006
Share-based Compensation Award, Tranche Two
2006 plan
Employee Stock Option
Jan. 23, 2014
Share-based Compensation Award, Tranche Two
2014 Plan
Employee Stock Option
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of common stock
 
 
 
 
6,152,500 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of common stock sold, underwriters Issued
 
 
 
 
802,500 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share price (usd per share)
 
$ 7.27 
 
 
$ 17.00 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net proceeds from issuance of common stock upon initial public offering
 
 
$ 94,810,000 
 
 
 
 
 
 
 
$ 94,800,000 
$ 94,804,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Offering expenses
2,400,000 
1,074,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Convertible preferred stock warrants
 
 
 
 
 
21,490,656 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Series A-1 convertible preferred stock
 
 
 
 
 
 
40,697 
40,697 
40,697 
40,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercise price
 
 
 
 
 
 
$ 1.72 
$ 1.72 
$ 1.72 
$ 1.65 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock issued under Plan
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,567,500 
 
 
 
4,112,048 
 
 
5,002,935 
 
 
 
 
 
 
 
 
Award vesting rights, percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25.00% 
 
25.00% 
 
 
75.00% 
75.00% 
Award vesting period
 
 
 
 
 
 
 
 
 
 
 
 
4 years 
 
 
 
 
 
 
 
 
 
 
 
 
4 years 
 
 
4 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase price (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 0.001 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Award requisite service period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 year 
 
1 year 
 
3 years 
3 years 
 
 
Payment award, expiration period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10 years 
10 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grants in period (shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,600,000 
1,300,000 
 
 
 
 
150,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock outstanding, converted basis, percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.00% 
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
 
4,926,000 
3,879,000 
1,862,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation expense, acceleration of vesting
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,400,000 
1,400,000 
 
 
 
 
 
 
 
 
 
Equity instruments other than options, grants in period
 
 
 
 
 
 
 
 
 
 
 
 
 
300,000 
1,947,000 
 
 
 
 
 
 
 
1,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average grant date fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 7.78 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested in period, fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grants in period, weighted average exercise price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 0.00 
$ 11.15 
$ 6.05 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intrinsic value of options exercised and RSUs vested
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The aggregate fair value of the options vested
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized compensation cost
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 7,300,000 
 
 
 
 
$ 3,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized compensation cost, period for recognition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 years 3 months 18 days 
 
 
 
 
 
1 year 7 months 6 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total shares of common stock reserved for future issuance
 
8,230,952 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,337,574 
 
 
 
 
 
 
 
 
 
 
 
 
Stock issued, warrant exercises
 
 
 
 
 
 
 
38,142 
 
37,591 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity (Deficit) - Summary of Stock-based Compensation in Accompanying Consolidated Statements (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation
$ 5,514 
$ 5,805 
$ 1,862 
Cost of revenue
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation
236 
156 
161 
Selling and marketing
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation
813 
582 
348 
Research and development
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation
760 
437 
356 
General and administrative
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation
3,116 
2,704 
997 
Loss from discontinued operations
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation
$ 589 
$ 1,926 
$ 0 
Stockholders' Equity (Deficit) - Stock Options, Valuation Assumption (Details)
12 Months Ended
Dec. 27, 2014
Dec. 28, 2013
Equity [Abstract]
 
 
Risk-free interest rate, minimum
1.85% 
1.23% 
Risk-free interest rate, maximum
1.95% 
2.00% 
Expected term (years)
6 years 3 months 
6 years 3 months 
Volatility, minimum
47.10% 
44.60% 
Volatility, maximum
56.30% 
 
Expected dividend yield
0.00% 
0.00% 
Stockholders' Equity (Deficit) - Summary of Stock Activity (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Employee Stock Option
 
 
 
Stock Options, Number of Shares
 
 
 
Outstanding at December 27, 2014 (shares)
4,270,000 
 
 
Granted (shares)
1,600,000 
1,300,000 
Exercised (shares)
(257,000)
 
 
Canceled and forfeited (shares)
(531,000)
 
 
Outstanding at December 26, 2015 (shares)
3,482,000 
4,270,000 
 
Options vested and exercisable at end of period (shares)
2,769,000 
 
 
Options vested and expected to vest at end of period (shares)
3,404,000 
 
 
Stock Options, Additional Disclosures
 
 
 
Options outstanding, weighted average remaining contractual term
5 years 11 months 5 days 
7 years 2 months 1 day 
 
Options vested and exercisable at end of period, Weighted Average Remaining Contractual Term
5 years 5 months 25 days 
 
 
Options vested and expected to vest at end of period, Weighted Average Remaining Contractual Term
5 years 10 months 17 days 
 
 
Stock Options, Weighted-Average Exercise Price (usd per share)
 
 
 
Outstanding at December 27, 2014 (usd per share)
$ 6.47 
 
 
Granted (usd per share)
$ 0.00 
$ 11.15 
$ 6.05 
Exercised (usd per share)
$ 2.22 
 
 
Canceled and forfeited (usd per share)
$ 8.20 
 
 
Outstanding at December 26, 2015 (usd per share)
$ 6.52 
$ 6.47 
 
Options vested and exercisable, weighted average exercise price (usd per share)
$ 5.29 
 
 
Options vested and expected to vest, weighted average exercise price (usd per share)
$ 6.37 
 
 
Stock Options, Aggregate Intrinsic Value
 
 
 
Options, outstanding, aggregate intrinsic value
$ 8,891 
$ 14,373 
 
Options vested and exercisable at end of period, Aggregate Intrinsic Value
8,421 
 
 
Options vested and expected to vest at end of period, Aggregate Intrinsic Value
$ 8,860 
 
 
Restricted Stock Units, Weighted Average Grant Date Fair Value (usd per share)
 
 
 
Antidilutive securities (shares)
1,306,000 
 
 
Restricted Stock Units (RSUs)
 
 
 
Restricted Stock Units, Number of Shares
 
 
 
Outstanding at December 27, 2014 (shares)
 
 
Granted (shares)
1,947,000 
Settled (RSUs) (shares)
(214,000)
 
 
Canceled and forfeited (usd per share)
(427,000)
 
 
Outstanding at December 26, 2015 (shares)
1,305,628 
 
Vested and expected to vest at end of period (shares)
1,056,000 
 
 
Restricted Stock Units, Weighted Average Grant Date Fair Value (usd per share)
 
 
 
Outstanding at December 27, 2014 (usd per share)
$ 0.00 
 
 
Granted (usd per share)
$ 7.49 
 
 
Settled (RSUs) (usd per share)
$ 7.78 
 
 
Canceled and forfeited (usd per share)
$ 7.60 
 
 
Outstanding at December 26, 2015 (usd per share)
$ 7.42 
$ 0.00 
 
Vested and expected to vest at the end of period (usd per share)
$ 7.42 
 
 
Stockholders' Equity (Deficit) - Shares Reserved for Issuance (Details)
Dec. 26, 2015
Dec. 27, 2014
Class of Stock [Line Items]
 
 
Total shares of common stock reserved for future issuance
8,230,952 
 
Employee Stock Option
 
 
Class of Stock [Line Items]
 
 
Options issued and outstanding
3,482,000 
4,270,000 
Restricted Stock Units (RSUs)
 
 
Class of Stock [Line Items]
 
 
Restricted stock units issued and outstanding
1,305,628 
Contingent acquisition consideration |
Convertible Common Stock, Series E
 
 
Class of Stock [Line Items]
 
 
Total shares of common stock reserved for future issuance
106,000 
 
Net Loss Per Share - Calculation of Basic and Diluted Net Loss Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 26, 2015
Sep. 26, 2015
Jun. 27, 2015
Mar. 28, 2015
Dec. 27, 2014
Sep. 27, 2014
Jun. 28, 2014
Mar. 29, 2014
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Earnings Per Share [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loss from continuing operations
 
 
 
 
 
 
 
 
$ (17,879)
$ (37,559)
$ (28,296)
Loss from discontinued operations, net of tax (see note 4)
 
 
 
 
 
 
 
 
(17,116)
(42,733)
Net loss
 
 
 
 
(40,420)
(14,453)
(9,875)
(15,544)
(34,995)
(80,292)
(28,296)
Accretion of preferred stock
 
 
 
 
 
 
 
 
(4)
(57)
Net loss attributable to common stockholders
$ 1,599 
$ (17,349)
$ (7,235)
$ (12,010)
$ (40,420)
$ (14,453)
$ (9,875)
$ (15,548)
$ (34,995)
$ (80,296)
$ (28,353)
Net loss per share attributable to common stockholders:
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations, per basic and diluted share
 
 
 
 
$ (0.05)
$ (0.34)
$ (0.32)
$ (0.71)
$ (0.56)
$ (1.30)
$ (9.45)
Income (loss) from discontinued operations and disposal of discontinued operations, net of tax, per basic and diluted share
 
 
 
 
$ (1.23)
$ (0.12)
$ 0.00 
$ 0.00 
$ (0.53)
$ (1.47)
$ 0.00 
Basic and diluted (in dollars per share)
 
 
 
 
$ (1.28)
$ (0.46)
$ (0.32)
$ (0.71)
$ (1.09)
$ (2.77)
$ (9.45)
Weighted-average shares used to compute net loss per share attributable to common stockholders:
 
 
 
 
 
 
 
 
 
 
 
Basic and diluted (in shares)
 
 
 
 
 
 
 
 
32,001 
28,941 
3,000 
Net Loss Per Share - Antidilutive Securities (Details)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Redeemable convertible preferred stock
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive securities (shares)
21,299 
Stock options
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive securities (shares)
3,482 
4,270 
3,439 
Restricted Stock Units (RSUs)
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive securities (shares)
1,306 
Preferred stock warrants |
Preferred Stock
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive securities (shares)
41 
Preferred stock warrants |
Common Stock
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive securities (shares)
40 
Income Taxes - Schedule of Income before Income Tax, Domestic and Foreign (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract]
 
 
 
United States
$ (13,318)
$ (32,730)
$ (22,182)
Foreign
(3,340)
(5,581)
(5,760)
Loss before income taxes
$ (16,658)
$ (38,311)
$ (27,942)
Income Taxes - Components of Income Tax Expense (Benefit) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Current:
 
 
 
Federal
$ 0 
$ 0 
$ 0 
State
94 
108 
70 
Foreign
33 
33 
Total current provision for income taxes
127 
141 
70 
Deferred:
 
 
 
Federal
883 
(757)
626 
State
211 
(136)
49 
Foreign
(391)
Total deferred tax provision (benefit)
1,094 
(893)
284 
Total provision for (benefit from) income taxes
$ 1,221 
$ (752)
$ 354 
Income Taxes - Reconciliation of the Statutory Federal Rate and Effective Tax Rate (Details)
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Income Tax Disclosure [Abstract]
 
 
 
U.S. federal taxes at statutory rate
34.00% 
34.00% 
34.00% 
State income taxes, net of federal benefit
(1.00%)
0.00% 
2.00% 
Permanent differences
(3.00%)
(3.00%)
(3.00%)
Foreign rate differential
(1.00%)
(1.00%)
(1.00%)
Change in valuation allowance - U.S.
(31.00%)
(24.00%)
(28.00%)
Change in valuation allowance - foreign
(5.00%)
(4.00%)
(5.00%)
Total
(7.00%)
2.00% 
(1.00%)
Income Taxes - Additional Information (Details) (USD $)
12 Months Ended 12 Months Ended 12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Dec. 26, 2015
Federal
Dec. 26, 2015
State
Dec. 28, 2013
Germany
Foreign Tax Authority
Dec. 26, 2015
Germany
Foreign Tax Authority
Dec. 26, 2015
United Kingdom
Foreign Tax Authority
Dec. 26, 2015
Australia
Foreign Tax Authority
Dec. 26, 2015
Canada
Foreign Tax Authority
Dec. 27, 2014
Citrus Lane
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Deferred taxes, expense (benefit)
 
 
 
$ (1,200,000)
 
$ (400,000)
 
 
 
 
$ (800,000)
Operating loss carryforwards
 
 
 
111,300,000 
91,900,000 
 
8,100,000 
3,700,000 
300,000 
900,000 
 
Excess tax benefits from the exercises of stock compensation
 
 
 
800,000 
700,000 
 
 
 
 
 
 
Valuation allowance
56,300,000 
46,600,000 
 
 
 
 
 
 
 
 
 
Increase in valuation allowance
9,700,000 
 
 
 
 
 
 
 
 
 
 
Liability for uncertain tax positions
 
 
 
 
 
 
 
 
 
Penalties and interest accrued
$ 0 
$ 0 
$ 0 
 
 
 
 
 
 
 
 
Income Taxes - Significant Components of Deferred Tax Assets and Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 26, 2015
Dec. 27, 2014
Deferred tax assets
 
 
Net operating loss carryforwards
$ 45,881 
$ 40,790 
Accrued expenses
3,045 
1,696 
Stock-based compensation
1,922 
1,618 
U.S. definite lived intangibles
5,058 
3,538 
Other temporary differences
1,217 
33 
Total deferred tax assets
57,123 
47,675 
Valuation allowance
(56,304)
(46,619)
Net deferred tax assets
819 
1,056 
Deferred tax liabilities
 
 
Foreign intangibles
(111)
(224)
U.S. goodwill
(3,166)
(2,072)
Fixed assets
(708)
(832)
Total deferred tax liabilities
(3,985)
(3,128)
Net deferred tax liabilities
$ (3,166)
$ (2,072)
Segment and Geographical Information - Revenue by Product Lines (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 26, 2015
Sep. 26, 2015
Jun. 27, 2015
Mar. 28, 2015
Dec. 27, 2014
Sep. 27, 2014
Jun. 28, 2014
Mar. 29, 2014
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$ 37,550 
$ 36,179 
$ 32,903 
$ 32,049 
$ 30,001 
$ 29,604 
$ 25,836 
$ 25,271 
$ 138,681 
$ 110,712 
$ 81,487 
U.S. Consumer Business
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
 
 
 
 
 
 
 
115,020 
96,524 
72,415 
Other
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
 
 
 
 
 
 
 
$ 23,661 
$ 14,188 
$ 9,072 
Segment and Geographical Information - Revenue by Geographic Location (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 26, 2015
Sep. 26, 2015
Jun. 27, 2015
Mar. 28, 2015
Dec. 27, 2014
Sep. 27, 2014
Jun. 28, 2014
Mar. 29, 2014
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$ 37,550 
$ 36,179 
$ 32,903 
$ 32,049 
$ 30,001 
$ 29,604 
$ 25,836 
$ 25,271 
$ 138,681 
$ 110,712 
$ 81,487 
Percentage of total revenue
 
 
 
 
 
 
 
 
100.00% 
100.00% 
100.00% 
United States
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
 
 
 
 
 
 
 
129,085 
102,047 
74,800 
United States |
Geographic Concentration |
Revenue
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Percentage of total revenue
 
 
 
 
 
 
 
 
93.00% 
92.00% 
92.00% 
International
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
 
 
 
 
 
 
 
$ 9,596 
$ 8,665 
$ 6,687 
International |
Geographic Concentration |
Revenue
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Percentage of total revenue
 
 
 
 
 
 
 
 
7.00% 
8.00% 
8.00% 
Segment and Geographical Information - Additional Information (Details)
12 Months Ended
Dec. 26, 2015
segment
Dec. 27, 2014
segment
Segment Reporting [Abstract]
 
 
Number of operating segments
Number of reportable segments
Related Party Transactions (Details) (USAA Alliance, USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 26, 2015
Dec. 27, 2014
USAA Alliance
 
 
Related Party Transaction [Line Items]
 
 
Commissions paid (less than)
$ 100 
$ 100 
Employee Benefit Plans - Additional Details (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Compensation and Retirement Disclosure [Abstract]
 
Employer matching contribution, amount
$ 0.2 
Other Expense, Net (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Other Income and Expenses [Abstract]
 
 
 
Interest income
$ 72 
$ 86 
$ 47 
Interest expense
(3)
(43)
(17)
Other expense, net
(1,308)
(3,899)
(321)
Total other expense, net
$ (1,239)
$ (3,856)
$ (291)
Subsequent Events - Additional Information (Details) (USD $)
Share data in Millions, unless otherwise specified
12 Months Ended 0 Months Ended 12 Months Ended 1 Months Ended
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Jul. 17, 2014
Citrus Lane Inc
Dec. 27, 2014
Citrus Lane Inc
Feb. 29, 2016
Citrus Lane Inc
Subsequent Event
Feb. 29, 2016
Maximum
Citrus Lane Inc
Subsequent Event
Subsequent Event [Line Items]
 
 
 
 
 
 
 
Contingent consideration expense
$ 0 
$ 302,000 
$ 1,342,000 
$ 600,000 
$ 17,500,000 
$ 15,600,000 
$ 16,400,000 
Adjustments to consideration transferred, forfeited cash
 
 
 
 
 
5,000,000 
 
Adjustments to consideration transferred, shares
 
 
 
 
 
0.5 
 
Adjustments to consideration transferred, value
 
 
 
 
 
$ 5,500,000 
 
Quarterly Financial Information (Unaudited) - Additional Information (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 26, 2015
Sep. 26, 2015
Jun. 27, 2015
Mar. 28, 2015
Dec. 27, 2014
Sep. 27, 2014
Jun. 28, 2014
Mar. 29, 2014
Dec. 26, 2015
Dec. 27, 2014
Dec. 28, 2013
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Total revenue
$ 37,550 
$ 36,179 
$ 32,903 
$ 32,049 
$ 30,001 
$ 29,604 
$ 25,836 
$ 25,271 
$ 138,681 
$ 110,712 
$ 81,487 
Cost of revenue
6,321 
6,894 
6,630 
6,272 
5,869 
6,111 
5,713 
5,771 
26,117 
23,464 
18,844 
Income (Loss) from continuing operations
3,683 
(6,364)
(5,404)
(9,794)
(1,530)
(10,610)
(9,875)
(15,544)
(15,419)
(34,455)
(27,651)
Loss from discontinued operations, net of tax
(2,084)
(10,985)
(1,831)
(2,216)
(38,890)
(3,843)
 
 
 
Net loss
 
 
 
 
(40,420)
(14,453)
(9,875)
(15,544)
(34,995)
(80,292)
(28,296)
Net income (loss)
$ 1,599 
$ (17,349)
$ (7,235)
$ (12,010)
$ (40,420)
$ (14,453)
$ (9,875)
$ (15,548)
$ (34,995)
$ (80,296)
$ (28,353)
Weighted average number of shares outstanding, diluted
33,094 
 
 
 
 
 
 
 
 
 
 
Net loss per share attributable to common stockholders (Basic)
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations (in dollars per share)
$ 0.11 
$ (0.20)
$ (0.17)
$ (0.31)
 
 
 
 
 
 
 
Loss from discontinued operations net of tax (in dollars per share)
$ (0.06)
$ (0.34)
$ (0.06)
$ (0.07)
 
 
 
 
 
 
 
Basic (in dollars per share)
$ 0.05 
$ (0.54)
$ (0.23)
$ (0.38)
 
 
 
 
 
 
 
Net loss per share attributable to common stockholders (Diluted)
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations, diluted (in dollars per share)
$ 0 
$ (0.20)
$ (0.17)
$ (0.31)
 
 
 
 
 
 
 
Loss from discontinued operations, diluted (in dollars per share)
$ (0.06)
$ (0.34)
$ (0.06)
$ (0.07)
 
 
 
 
 
 
 
Diluted, (in dollars per share)
$ 0.05 
$ (0.54)
$ (0.23)
$ (0.38)
 
 
 
 
 
 
 
Net Ioss per share attributable to common stockholders (Basic and DIluted)
 
 
 
 
 
 
 
 
 
 
 
Loss from continuing operations, per basic and diluted share
 
 
 
 
$ (0.05)
$ (0.34)
$ (0.32)
$ (0.71)
$ (0.56)
$ (1.30)
$ (9.45)
Loss from discontinued operations and disposal of discontinued operations, net of tax, per basic and diluted share
 
 
 
 
$ (1.23)
$ (0.12)
$ 0.00 
$ 0.00 
$ (0.53)
$ (1.47)
$ 0.00 
Basic and diluted (in dollars per share)
 
 
 
 
$ (1.28)
$ (0.46)
$ (0.32)
$ (0.71)
$ (1.09)
$ (2.77)
$ (9.45)