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TELENAV, INC.
FORM 10-K
(Annual Report)
Filed 08/30/13 for the Period Ending 06/30/13
Address 950 DE GUIGNE DRIVE
SUNNYVALE, CA 94085
Telephone (408) 245-3800
CIK 0001474439
Symbol TNAV
SIC Code 3812 - Search, Detection, Navigation, Guidance, Aeronautical, and Nautical Systems and Instruments
Industry Communications Services
Sector Services
Fiscal Year 06/30
http://www.edgar-online.com
© Copyright 2013, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    TELENAV, INC. FORM 10-K (Annual Report) Filed 08/30/13 for the Period Ending 06/30/13 Address 950 DE GUIGNE DRIVE SUNNYVALE, CA 94085 Telephone (408) 245-3800 CIK 0001474439 Symbol TNAV SIC Code 3812 - Search, Detection, Navigation, Guidance, Aeronautical, and Nautical Systems and Instruments ...

  • Page 2
    ... Commission file number: 001-34720 TELENAV, INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 77-0521800 (I.R.S. Employer Identification Number) 950 De Guigne Drive Sunnyvale, California 94085 (Address of principal...

  • Page 3
    ... $164 million (based on a closing sale price of $7.99 per share as reported for the NASDAQ Global Market on December 31, 2012). For purposes of this calculation, shares of common stock held by officers and directors and shares of common stock held by persons who hold more than 10% of the outstanding...

  • Page 4
    ...OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE CONTROLS AND PROCEDURES OTHER INFORMATION BUSINESS RISK FACTORS...

  • Page 5
    ... executive offices are located at 950 De Guigne Drive, Sunnyvale, California 94085, and our telephone number is (408) 245-3800. Our website address is www.telenav.com. The information on, or that can be accessed through, our website is not part of this Form 10-K. We file or furnish periodic reports...

  • Page 6
    ... as related to connected cars and mobile advertising. We offer our mobile navigation services to customers in a number of ways. We distribute our services through our wireless carrier partners, including AT&T Mobility LLC, or AT&T, and directly to consumers through mobile application stores and...

  • Page 7
    ...and data applications that leverage location information to provide mobile phone users with location specific and personalized features and functions. Mobile location services that incorporate location information include voice-guided turn by turn navigation, route planning, real time traffic alerts...

  • Page 8
    ...applications and service delivery platform, or SDP, which are tightly integrated with a broad range of mobile phones, mobile phone operating systems, in-car systems, desktop websites, and wireless network protocols. Scout is our flagship voice-guided, real-time, turn by turn, personalized navigation...

  • Page 9
    ... traffic alerts specific to a chosen route; • preplanned routes through our website that can be saved, downloaded to mobile phones and accessed with a one-click routing function; and • address sharing. In addition, we offer Scout for Apps, an HTML5 browser-based voice guided navigation solution...

  • Page 10
    ... and effectively support different mobile phones and integrate with the continually evolving feature sets they include to create a better user experience. Our client software interfaces with our SDP to access updated information and data, routing and other services without using device memory for...

  • Page 11
    ... solutions rather than integrated connected offerings. Our services and products: Scout for Cars We entered the automotive navigation services business in fiscal 2008, initially with Ford, and our first off-board navigation product was launched in Ford's 2010 model year vehicles. Since that time...

  • Page 12
    .... Tracking the performance of ads in applications and user interactions with those ads is difficult and requires significant technological capabilities and know-how. Our competitive strengths Our mobile advertising solution combines the large and growing number of impressions marked with location...

  • Page 13
    ... and in cars. In addition, we have developed a cross platform framework that allows us to extend our navigation service applications across different mobile phone operating systems more efficiently, eliminating the need for costly and time consuming redesign and development. In Canada, end users can...

  • Page 14
    ... in GPS and wireless and connected services and we have a number of personnel with longstanding experience with location services applications and scaling hosted service models. In addition, through our acquisition of ThinkNear and our own internal efforts, we have developed expertise in real time...

  • Page 15
    ... our navigation services to end users through mobile phone application stores, such as Apple's App Store and Google's Google Play. We focus the majority of our marketing efforts on app store optimization, search engine optimization, app store marketing, and supporting our wireless carrier customers...

  • Page 16
    ...&T preferred pricing during the term of our agreement. We provide automotive-grade GPS navigation software to Ford pursuant to an agreement dated October 12, 2009. We are the preferred provider for GPS on-board navigation integrated with Ford's second-generation SYNC platform during the term of the...

  • Page 17
    ... a free voice-guided turn by turn navigation solution on its Windows Mobile and Windows Phone operating systems. In 2012, Apple began offering maps and voice-guided turn by turn directions as part of its operating system release (iOS6). Waze Inc. was recently acquired by Google, and its service will...

  • Page 18
    ...providers of on-board navigation services such as Robert Bosch GmbH, or Bosch, Garmin, TomTom and NNG LLC, or Nav N Go, as well as other competitors such as Google, Microsoft and TCS. We compete in the advertising network services business with mobile platform providers, including Google, Apple, and...

  • Page 19
    ... as a senior product manager at Nextel Communications, a wireless communications company that merged with Sprint. From February 2002 to April 2003, Mr. Wahla served as vice president of business development of Wireless Multimedia Solutions, a privately held wireless software platform company. From...

  • Page 20
    ... to maintain Ford and Delphi as customers our revenue will decline. Delphi's new, connected infotainment system, which integrates white label versions of our Scout for Cars on-board automotive platform, was introduced in model year 2013 vehicles for North America by General Motors, which plans to...

  • Page 21
    ... with customers to provide services and charge ongoing fees outside of the traditional on-board navigation service model. Our map, POI and other content costs for our automobile navigation solutions are higher than those we have historically paid for our mobile phone-based navigation services. If...

  • Page 22
    ...advertisers and ad placements and may not be successful in demonstrating the value of advertising in our navigation services. If we fail to do so, we may be unable to generate a material level of revenue from advertising to offset the costs of providing free navigation. Mobile connected device users...

  • Page 23
    ... relevant ads to consumers on their mobile connected devices. Our targeted advertising is highly dependent on the consumers allowing applications to have access to their location data. Users may elect not to allow data sharing for targeted advertising for a number of reasons, in particular personal...

  • Page 24
    ... system release and Nokia, provides a download for its latest version of Nokia Maps on its smartphones which also provides voiceguided turn by turn navigation functions. Microsoft also provides a free voice-guided turn by turn navigation solution on its Windows Mobile and Windows Phone operating...

  • Page 25
    ...addition, new car buyers may not value navigation solutions built in to their vehicles if they feel that free (brought-in) offerings are adequate and may not purchase our solutions with their new cars. Our primary competitors include location service providers such as Apple, Google, Microsoft, Nokia...

  • Page 26

  • Page 27
    ...general economic conditions. Our wireless carrier customers may change the pricing and other terms by which they offer our mobile navigation services, which could result in increased end user turnover, lower revenue and adverse effects on our business. Our wireless carrier customers have significant...

  • Page 28
    ... on our wireless carrier customers to bill subscribers and collect monthly fees for our mobile navigation services, either directly or through third party service providers. In addition, we rely on our automotive and OEM customers to provide us with reports on the number of vehicles they sell with...

  • Page 29
    ... revenue, affect our costs and impair our ability to manage our business effectively. Our provisioning and reporting system that authenticates end users and tracks the number of end users and their use of our services is a proprietary and customized system that we developed internally. Although we...

  • Page 30
    ... facilities located in the San Francisco Bay Area and the Sacramento, California area and we use a cloud provider for our advertising network services. Depending on the growth rate in the number of our end users and their usage of our services, if we do not timely complete and open additional data...

  • Page 31
    ... our navigation services, the integration of our services platform with a wireless carrier's network and billing systems generally requires several months to complete. Moreover, launch of our navigation services by a wireless carrier typically may be timed to coincide with a new mobile phone launch...

  • Page 32
    ... navigation services. We rely on network infrastructures provided by our wireless carrier customers and mobile phones for the delivery of our mobile navigation services to end users. We generally provide our navigation services from our own servers, which require close integration with the wireless...

  • Page 33
    ... and future uncertainties may directly affect the marketing and distribution of mobile phones and our navigation services by our wireless carrier customers and purchase of our automobile manufacturer customer's new vehicles. As current and future conditions in the domestic and global economies...

  • Page 34
    ... shipment of Telenav enabled or preloaded mobile phones or vehicles, or cause us to modify or suspend the provision of our navigation services; cause us to incur significant expenses in defending claims brought against our customers, other business partners or us; divert management's attention and...

  • Page 35
    ... could restrict the wireless communications industry or further regulate the automobile industry, including laws and regulations regarding lawful interception of personal data, hands free use of mobile phones or navigation services within autos or the control of such use, privacy, taxation, content...

  • Page 36
    ... may use more open source software in the future. Use of open source software may subject our navigation services platform and client applications to general release or require us to re-engineer our navigation services platform and client applications, which may cause harm to our business. From time...

  • Page 37
    ...the sale of our service in the event re-engineering cannot be accomplished on a timely basis or take other remedial action that may divert resources away from our development efforts, any of which could adversely affect our business, operating results and financial condition. Risks related to being...

  • Page 38
    ... of our stock could decline. For example, in late July 2011, following our earnings release for the three months and fiscal year ended June 30, 2011, several financial analysts published research reports lowering their price targets of our stock. After our announcement and the publication of these...

  • Page 39
    ... Paulo, Brazil for our sales, marketing and business development personnel located in those areas. In addition to our headquarters and other offices, we lease data center space in Sunnyvale, Sacramento and Santa Clara, California. We believe our current facilities will be adequate or that additional...

  • Page 40
    ... them in connection with such cases: In 2008, Alltel, AT&T, Sprint and T-Mobile USA, or T-Mobile, each demanded that we indemnify and defend them against patent infringement lawsuits brought by patent holding companies EMSAT Advanced Geo-Location Technology LLC and Location Based Services LLC...

  • Page 41
    ... and growth of our business. Unregistered Sales of Equity Securities and Use of Proceeds. Issuer Purchases of Equity Securities Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs (1) Total Number of Shares Purchased Average Price Paid...

  • Page 42
    ... plan announced... reference into any filing of Telenav, Inc. under ...data for fiscal years ended June 30, 2013, 2012 and 2011 and the balance sheet data as of June 30, 2013 and 2012 from the audited consolidated financial statements included elsewhere in this Form 10-K. The statement of income data...

  • Page 43
    ...Data: (in thousands, except per share data) Fiscal Year Ended June 30, 2013 2012 2011 2010 2009 Revenue Cost of revenue Gross profit Operating expenses: Research and development Sales and marketing General and administrative Restructuring costs... used in computing net income per share applicable to...

  • Page 44
    ... as related to connected cars and mobile advertising. We offer our mobile navigation services to customers in a number of ways. We distribute our services through our wireless carrier partners, including AT&T Mobility, and directly to consumers through mobile application stores and marketplaces...

  • Page 45
    ... liabilities relating to our enterprise business. Our enterprise business enabled companies to better manage operations by using our navigation services platform to track status and the location of mobile workers, vehicles and assets deployed in the field. In connection with the completion of the...

  • Page 46
    ... the number of end users at any time during a month, the average monthly paying end users, the number and timing of end user billing cycles and end user activity. Although our wireless carrier customers generally have sole discretion about how to price our mobile navigation services to their...

  • Page 47
    ...as map, POI, traffic, gas price and weather data and voice recognition technology that we use in providing our navigation services. Our cost of revenue also includes the cost of third party exchange display ad inventoryas well as expenses associated with data center operations, customer support, the...

  • Page 48
    ... providing our navigation services, mobile advertising and premium navigation services. We primarily provide mobile navigation service customer support through a third party provider to whom we provide training and assistance with problem resolution. We use three outsourced, hosted data centers and...

  • Page 49
    ... a 30-day free trial for our service. For end users who purchase our navigation services through application stores we utilize the application store billing process. We provide tiered pricing to certain of our wireless carrier customers based on the number of paying end users in a given month, which...

  • Page 50
    ...based on the number of ad impressions delivered, or clicks, drives or actions by users on mobile advertisements. We derive product revenue from the delivery of customized software and royalties earned from the distribution of this customized software in certain automotive navigation applications. We...

  • Page 51
    ... with time based vesting on a straight-line basis over an employee's requisite service period of each of these awards, net of estimated forfeitures. Our stock-based compensation expense was as follows: Fiscal Year Ended June 30, 2013 2012 (in thousands) 2011 Cost of revenue Research and development...

  • Page 52
    ... in future periods. Our press release filed on Form 8-K on July 25, 2013 previously reported cost of product revenue as $37.0 million and cost of service revenue as $32.1 million for fiscal 2013. The revised numbers are reported below. There was no change to total cost of revenue, gross profit...

  • Page 53
    ... June 30, 2013 Consolidated Statements of Income Data 2013 2012 (in thousands) 2011 Revenue: Product Services Total revenue Cost of revenue: Product Services Total cost of revenue Gross profit Operating expenses: Research and development Sales and marketing General and administrative Restructuring...

  • Page 54
    ... from our on-board automotive navigation solutions provided to Ford, which generally have higher associated content costs and resulting in lower gross margins than our mobile navigation services provided through our wireless carrier customers. However, the higher content costs of product revenue in...

  • Page 55
    ... 2012 . The total number of sales and marketing personnel decreased 18% to 93 at June 30, 2013 from 113 at June 30, 2012 . We expect that our sales and marketing expenses will continue to increase over time in absolute dollars as we add sales personnel to support our advertising business. General...

  • Page 56
    ... margin was due to the increased proportion of revenue contributed from our onboard navigation solutions provided to Ford, which generally have higher associated content costs and resulting lower gross margins than our mobile navigation services provided through our wireless carrier customers. 50

  • Page 57
    ... as a percentage of revenue in fiscal 2012 was primarily due to the costs associated with increased headcount to strengthen and diversify our product offerings, including automotive navigation solutions, premium services and advertising. The total number of sales and marketing personnel increased 36...

  • Page 58
    ... competitors who offer their services for free; our wireless carrier customers were to elect not to market and distribute our mobile navigation services to end users; or our wireless carrier customers were to elect to lower the prices charged to their subscribers for our service. In the future, we...

  • Page 59
    ...substantial payments, our relationships with our customers are negatively impacted, or any of our customer agreements is terminated, our business, operating results and financial condition could be materially harmed. As of June 30, 2013 , any costs in connection with such indemnity demands which are...

  • Page 60
    ... and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. 54

  • Page 61
    ...reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management... to their costs. Because of...

  • Page 62
    ... criteria established in Internal Control- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Telenav, Inc.'s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of...

  • Page 63
    ... Contents ITEM 9B. OTHER INFORMATION Not applicable. PART III. ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Pursuant to General Instruction G(3) of Form 10-K, the information required by this Item 10 relating to our executive officers is included under the caption "Executive...

  • Page 64
    ...Rights Agreement, dated April 14, 2009, between TeleNav, Inc. and certain holders of TeleNav, Inc.'s capital stock named therein. Form of Indemnification Agreement between Registrant and its directors and officers. 1999 Stock Option Plan and forms of agreement thereunder. 2002 Executive Stock Option...

  • Page 65
    ... Real Estate Lease Agreement, dated as of April 28, 2009, by and between TeleNav Shanghai Inc. and Shanghai Dongfang Weijing Culture Development Co. Sprint Master Application and Services Agreement, dated as of January 30, 2009, by and between TeleNav, Inc. and Sprint United Management Company...

  • Page 66
    ...the Sprint Master Application and Services Agreement, dated as of January 30, 2009, as amended, by and between Telenav, Inc. and Sprint United Management Company, effective as of April 15, 2013. License and Service Agreement, dated as of March 19, 2008, by and between TeleNav, Inc. and AT&T Mobility...

  • Page 67
    ... as of November 1, 2012 to the License Agreement, dated as of July 1, 2009, as amended, by and between Telenav, Inc. and TomTom North America, Inc. Data License Agreement, dated as of December 1, 2002, by and between Televigation, Inc. and Navigation Technologies Corporation. Third Amendment dated...

  • Page 68
    ...2011, by and between TeleNav, Inc. and CA-Sunnyvale Business Center Limited Partnership. Employment Offer Letter dated August 10, 2011 from TeleNav, Inc. to Marc Aronson. Form of First Year Executive Employment Agreement. Retention Letter dated March 28, 2012 from TeleNav, Inc. to Michael W. Strambi...

  • Page 69
    ...October 12, 2009, as amended, by and between TeleNav, Inc. and Ford Motor Company. Amendment No. 8 effective January 1, 2012 to the SYNC Generation 2 OnBoard Navigation Agreement dated October 12, 2009, as amended, by and between TeleNav, Inc. and Ford Motor Company. Amendment No. 9 effective May 11...

  • Page 70
    ... XBRL Taxonomy Extension Presentation Linkbase Document Filed herewith Filed herewith Filed herewith Filed herewith Filed herewith Filed herewith # + †~ Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate. Portions of...

  • Page 71
    ... has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TELENAV, INC. Dated: August 29, 2013 By: /s/ Dr. HP J IN Dr. HP Jin Chairman of the Board of Directors, President and Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS...

  • Page 72
    ... (Jason) Chiu Title Date August 29, 2013 Chairman of the Board of Directors, President and Chief Executive Officer (Principal Executive Officer) Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) Director August 29, 2013 August 29, 2013 Director August 29, 2013...

  • Page 73
    Table of Contents FINANCIAL STATEMENTS. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF TELENAV, INC. Page Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Comprehensive Income Consolidated Statements of...

  • Page 74
    ... financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as...

  • Page 75
    Table of Contents TELENAV, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) June 30, 2013 June 30, 2012 Assets Current assets: Cash and cash equivalents Short-term investments Accounts receivable, net of allowances of $241 and $314 at June 30, 2013 and 2012, respectively ...

  • Page 76
    ...TELENAV, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) Fiscal Year Ended June 30, 2013 2012 2011 Revenue: Product Services Total revenue Cost of revenue: Product Services Total cost of revenue Gross profit Operating expenses: Research and development...shares used in...

  • Page 77
    Table of Contents TELENAV, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) Fiscal Year Ended June 30, 2013 2012 2011 Net income Other comprehensive income (loss): Foreign currency translation adjustment, net of tax Unrealized gain (loss) on available-for-sale securities, net ...

  • Page 78
    ...of Contents TELENAV, INC....2012 Issuance of common stock upon exercise of stock options and release of restricted stock units Issuance of restricted common stock in connection...,855 2,740 1,321 (11,846) 7,325 (202) - - - 118,193 $ Retained Earnings 38,909 - (8,660) - - - - 42,574 72,823 - (7,980) - -...

  • Page 79
    ... Contents TELENAV, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Fiscal Year Ended June 30, 2013 2012 2011 Operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Accretion of premium on short-term...

  • Page 80
    ...-accessed, relevant, and personalized information for discovery, traffic, local search, and navigation and (2) are available across multiple platforms and devices, including mobile phones, tablets, computers and cars. We operate in a single segment. Our fiscal year ends on June 30 and in this report...

  • Page 81
    ... free trial for our service. For end users who purchase our mobile navigation services through application stores, we utilize the application store billing process. We provide tiered pricing to certain of our wireless carrier customers based on the number of paying end users in a given month, which...

  • Page 82
    ... to services provided through Sprint Nextel Corporation, or Sprint, comprised 16% , 36% and 41% of revenue for fiscal 2013 , 2012 and 2011 , respectively. No other customer represented 10% of our revenue or 10% of our receivables for any period presented. Our map and points of interest data have...

  • Page 83
    ... TELENAV, INC. Notes to Consolidated Financial Statements-(Continued) As of June 30, 2013 and 2012 , we did not have any Level 3 financial instruments. Property and equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using...

  • Page 84
    ..., and amortizing those costs over the application's estimated useful life which generally ranges from 18 to 24 months, depending on the type of application. We capitalized $0.9 million , $2.4 million and $1.2 million of software development costs during fiscal 2013 , 2012 and 2011 , respectively...

  • Page 85
    ...TELENAV, INC. Notes to Consolidated Financial Statements-(Continued) In February 2013, the FASB issued amended guidance on how to report...reporting periods beginning after December 15, 2012... public companies for annual periods beginning after ...weighted average number of common... units using the treasury...

  • Page 86
    ...term securities: Certificates of deposit Municipal securities Commercial paper Corporate bonds Total short-term investments Cash, cash equivalents and short-term... and short-term investments consisted of the following as of June 30, 2012 (in thousands): Amortized Cost Unrealized Gains Unrealized...

  • Page 87

  • Page 88
    ... 2,750 160,241 3,465 25,092 192,548 193,548 $ $ $ $ $ Accretion of premium on short-term investments totaled $4.4 million and $4.6 million in fiscal 2013 and 2012 , respectively. Where applicable, we use quoted prices in active markets for identical assets to determine fair value of Level...

  • Page 89
    ... 2016. The changes in the carrying amount of goodwill are as follows: June 30, 2013 2012 Balance at beginning of period Goodwill acquired Balance at end of period $ $ 78 14,343 14,421 $ $ - 78 78 6. Commitments and contingencies Our primary facilities located in Sunnyvale, California, and...

  • Page 90
    ... Telenav...time to estimate the effects of this lawsuit on our financial condition, results of operations, or cash flows. On December 31, 2009, Vehicle IP, LLC, or Vehicle IP, filed a patent infringement lawsuit against us, seeking monetary damages, fees and expenses and other relief. Verizon Wireless...

  • Page 91
    ... them in connection with such cases: In 2008, Alltel, AT&T, Sprint and T-Mobile USA, or T-Mobile, each demanded that we indemnify and defend them against patent infringement lawsuits brought by patent holding companies EMSAT Advanced Geo-Location Technology LLC and Location Based Services LLC...

  • Page 92
    ...value of the shares involved. The excess of the cost of shares acquired over the par value is allocated to additional paid-in capital, or APIC, based on an estimated average sales price per issued share with the excess amounts charged to retained earnings. As a result of our stock repurchases during...

  • Page 93
    ... (in thousands except per share amounts): Options outstanding Weighted average exercise price per share Weighted average remaining contractual life (years) Number of shares Aggregate intrinsic value Balance as of June 30, 2012 Granted Exercised Canceled Balance as of June 30, 2013 As of June...

  • Page 94
    ... 2012 2011 Cost of revenue Research and development Selling and marketing General and administrative Total stock-based compensation expense $ $ 149 3,509 2,290 2,699 8,647 $ $ 91 2,509 1,168 1,354 5,122 $ $ 97 1,965 1,003 1,072 4,137 We generally use the Black-Scholes option-pricing model...

  • Page 95
    ... 2012 2011 Tax at federal statutory tax rate State taxes-net of federal benefit Non-deductible expenses Research and development credits Section 199 deduction Foreign income taxed at different rates Stock-based compensation expense Tax benefit from California tax ruling Transfer pricing adjustment...

  • Page 96
    ...and foreign net operating loss carryforwards, unrealized loss on investments, and California research and development credits. We provide for U.S. income taxes on the earnings of foreign subsidiaries unless the subsidiaries' earnings are permanently reinvested outside the U.S. To the extent that the...

  • Page 97
    ... 2012, we completed our acquisition of privately held Local Merchant Services, Inc., or ThinkNear, a California-based hyperlocal mobile advertising company...combine its location ad targeting technology with our existing advertising solution to create a new mobile local advertising platform. The ...

  • Page 98
    ... of $99,000 related to the writeoff of certain assets that were no longer useful to us based upon the changes in our business. Total restructuring charges related to this plan were $1.7 million . As of June 30, 2013, we had paid out $1.4 million of the total $1.5 million in severance and benefits...

  • Page 99
    ...one principal business activity, the provision of personalized navigation services, and there are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Accordingly, we operate in a single reporting segment...

  • Page 100
    ...Months Ended Consolidated statements of income data (in thousands) Sept. 30, 2011 Dec. 31, 2011 Mar. 31, 2012 June 30, 2012 Sept. 30, 2012 Dec. 31, 2012...Ending Balance Trade Receivable Allowances: Year Ended June 30, 2011 Year Ended June 30, 2012 Year Ended June 30, 2013 $ $ $ 246 356 314 $ $ $ ...

  • Page 101
    ...Rights Agreement, dated April 14, 2009, between TeleNav, Inc. and certain holders of TeleNav, Inc.'s capital stock named therein. Form of Indemnification Agreement between Registrant and its directors and officers. 1999 Stock Option Plan and forms of agreement thereunder. 2002 Executive Stock Option...

  • Page 102
    ... Real Estate Lease Agreement, dated as of April 28, 2009, by and between TeleNav Shanghai Inc. and Shanghai Dongfang Weijing Culture Development Co. Sprint Master Application and Services Agreement, dated as of January 30, 2009, by and between TeleNav, Inc. and Sprint United Management Company...

  • Page 103
    ... as of November 1, 2012 to the License Agreement, dated as of July 1, 2009, as amended, by and between Telenav, Inc. and TomTom North America, Inc. Data License Agreement, dated as of December 1, 2002, by and between Televigation, Inc. and Navigation Technologies Corporation. 3 S-1 10.14.3 10...

  • Page 104
    ... of Contents Exhibit Number Description Incorporated by Reference From Form Incorporated by Reference From Exhibit Number Date Filed 10.16.1†10..., 2012 to Territory License No. 8, dated December 1, 2011 to the Data License Agreement, dated as of December 1, 2002, by and between Telenav, Inc...

  • Page 105
    ...2011, by and between TeleNav, Inc. and CA-Sunnyvale Business Center Limited Partnership. Employment Offer Letter dated August 10, 2011 from TeleNav, Inc. to Marc Aronson. Form of First Year Executive Employment Agreement. Retention Letter dated March 28, 2012 from TeleNav, Inc. to Michael W. Strambi...

  • Page 106
    ...Exhibit Number Description Incorporated by Reference From Form Incorporated by Reference From Exhibit Number Date Filed 10....Navigation Agreement dated October 12, 2009, as amended, by and between Telenav, Inc. and Ford Motor Company. Consulting Agreement effective August 29, 2012 between TeleNav...

  • Page 107
    ... by Reference From Form Incorporated by Reference From Exhibit Number Date Filed 101.LAB* 101.PRE* # + †~ XBRL Taxonomy Label Linkbase Document XBRL Taxonomy Extension Presentation Linkbase Document Filed herewith Filed herewith Management contracts or compensation plans or arrangements in...

  • Page 108
    ...and a client application which is downloadable by the Sprint User to an iOS Device (Client Application 19), Server Software 19 and Client Application 19 will be referred to as "Application 19".. B. The Agreement is amended by adding the following to Exhibit A. 13. Application 17 allows customers to...

  • Page 109
    ...unless otherwise stated in this Amendment No. 6. This Amendment No. 6 executed by authorized representatives of Sprint and Supplier incorporates the terms and conditions of the Agreement. TELENAV, INC. SPRINT/UNITED MANAGEMENT COMPANY By:__ /s/ Nicole Bonds _____ Name:_ Nicole Bonds _____ Title:___...

  • Page 110
    ... use of Application 5 Premium Services (regardless of the Sales Channel) including MRC, annual and Pay per day. E. Bundled Pricing for Application 5. Sprint will have the right to distribute Application 5, Product 5d, Sprint Navigation or TeleNav Basic to all Sprint subscribers on the Sprint Network...

  • Page 111
    ...end-user) Blackberry (per month/per user)* TeleNav Unlimited Routes - All Devices Except $[*****]/month/per Sprint User (end-user) Blackberry (per month/per user) Usually in a bundle so depend on bundle pricing $[*****] 10. Minimum Payment for Sales Channel 2. Except for the free trial and service...

  • Page 112
    .../Vehicle Tracker Scout for Apps 3 $[*****]/month/Sprint user (end-user) $[*****]/month/per Sprint User (enduser) $[*****]/month/per Sprint User (enduser) $[*****]/month/per Sprint User (enduser) $[*****]/month/per Sprint User (enduser) $[*****]/month/per Sprint User (enduser) $[*****]/One-Time...

  • Page 113

  • Page 114
    ** Company will continue to support current Sprint Users these Applications for the duration of the term of such Sprint User's service agreement, as applicable. 11. M-Commerce Revenue Share . M-Commerce Services and Solutions -- M-Commerce services and solutions consist of features or functions that...

  • Page 115
    ... Dr. Sunnyvale, CA 94085 c. 11. Additional Reporting: Sprint will use reasonable efforts to make available to Company subscriber level detail for each of the applications billed and charged by Sprint or its subsidiaries including Boost Mobile and Virgin Mobile USA , except for the Bundle Pricing...

  • Page 116
    ... Extension Term"), Sprint will have the right to distribute Application 5, Product 5d, Sprint Navigation or TeleNav Basic on the Sprint Network as part of a Bundled Offering to its customers, and will also have the right to distribute Product 5d to all customers on the Boost Mobile and Virgin Mobile...

  • Page 117
    ... the Agreement. In the event the number of Sprint subscribers permitted to access Application 5 as part of a Bundled Offering, exceeds [*****] in a calendar month during the Bundled Offering Extension Term, for all incremental subscribers for that month Sprint will pay to Supplier an amount to be...

  • Page 118
    .... 8") to the Sprint Master Application and Services Agreement ("Agreement") effective April 15, 2013 ("Amendment No. 8 Effective Date") is between Sprint United Management Company ("Sprint"), and Telenav, Inc., a Delaware corporation ("Supplier"). Except as otherwise indicated, defined terms in this...

  • Page 119
    ... month/per user) TeleNav Unlimited Routes- for the Blackberry (per month/per user) Fleet Application 5a - Telenav Lite.* Application 5(c). Standard* Application 5 Premium Services* Application 5, Product 5d, Sprint Navigation or TeleNav Basic TeleNav Vehicle Manager -Standard Asset Tracker Vehicle...

  • Page 120

  • Page 121
    ... in this Amendment No. 8. This Amendment No. 8 executed by authorized representatives of Sprint and Supplier incorporates the terms and conditions of the Agreement. TELENAV, INC. SPRINT/UNITED MANAGEMENT COMPANY By:___ /s/ Esmeralda Phillips _____ Name:__ Esmeralda Phillips _____ Title:_ Sourcing...

  • Page 122
    ... United States dollars [*****] days after the end of each month in U.S. dollars. LICENSOR will be solely responsible for collecting any applicable sales, use, goods and service, value added, or other similar tax, under applicable law from End Users with respect to MCommerce and remitting the same to...

  • Page 123
    ...discrepancy, in addition to paying promptly for such underpayment. No Further Changes . Except as modified hereby, the Agreement will continue in full force in accordance with its terms. IN WITNESS WHEREOF, AT&T and LICENSOR, intending to be bound by all of the terms and conditions, have caused this...

  • Page 124
    ...between TeleNav, Inc., a Delaware corporation with principal offices at 950 De Guigne Dr., Sunnyvale, CA 94085 ("LICENSOR") and AT&T Mobility LLC, a Delaware limited liability company with principal offices at 1055 Lenox Park Blvd., Atlanta, GA 30319 ("AT&T") amends the License and Service Agreement...

  • Page 125
    ... Title: Director, AT&T Entertainment Apps Date: July 2, 2013 TELENAV, INC. /s/ Michael Strambi (Signature) Printed Name: Michael Strambi Title: Chief Financial Officer Date: July 22, 2013 [*****] Certain portions denoted with an asterisk have been omitted and filed separately with the Securities...

  • Page 126
    ... means the gross price charged to End Users for the Travel Pack Bundle (other than any transport or other telecommunications charges) excluding any credits, sales or use taxes or other governmental charges. Bundle Name Minimum monthly fee paid to Licensor for Travel Pack Bundle AT&T Navigator and AT...

  • Page 127
    ...on behalf of itself and the Ford Related Companies, and TeleNav, Inc. ("Supplier" or "TeleNav"), a Delaware corporation with its principal office at 950 De Guigne Drive, Sunnyvale, CA 94085, on behalf of itself and the TeleNav Related Companies. Capitalized terms not otherwise defined shall have the...

  • Page 128
    ...Pricing and Royalty, re-number Section 11 to Section 10. After Attachment VIII , add Attachment IX , attached hereto and incorporated by reference herein. Except as modified and amended by this Amendment, the terms... of the Amendment Effective Date. FORD MOTOR COMPANY TELENAV, INC. By: /s/ Melissa...

  • Page 129
    Attachment IX Statement of Work For SYNCâ„¢ Generation 2 Navigation Application [*****] Certain portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. ...

  • Page 130
    ... 1 Scope and Background 5 1.1 Lexicon 5 1.2 References 6 2 Project Timelines and Feature Deliverables 3 Developed Software 7 7 [*****] Certain portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been...

  • Page 131
    ... by Ford, pursuant to the terms and conditions of the Software Development Agreement. 1.1 Lexicon Word or Phrase Engineering Spec Microsoft SYNC Human Machine Interface (HMI) Voice User Interface (VUI) Navigation Plug-in Navigation Application Program Interface (Navigation APIs) Navigation Display...

  • Page 132
    2 Project Timelines and Feature Deliverables [*****] 3 [*****] Analysis [*****] 4 Developed Software [*****] [*****] Certain portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect ...

  • Page 133
    ... in-car navigation system designed to use Microsoft SYNC as the kernel and development platform for its infotainment system to support One Ford, One World vision. The objective of this Statement of Work ("SoW") is to outline the schedule for the differences (delta) in Ford's requirements and TeleNav...

  • Page 134
    ...on behalf of itself and the Ford Related Companies, and TeleNav, Inc. ("Supplier" or "TeleNav"), a Delaware corporation with its principal office at 950 De Guigne Drive, Sunnyvale, CA 94085, on behalf of itself and the TeleNav Related Companies. Capitalized terms not otherwise defined shall have the...

  • Page 135
    EXHIBIT EE [*****] [*****] Certain portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 02/28/13 Pg 2 of 2

  • Page 136
    [*****] Certain portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 02/28/13 Pg 3 of 3

  • Page 137
    ...on behalf of itself and the Ford Related Companies, and TeleNav, Inc. ("Supplier" or "TeleNav"), a Delaware corporation with its principal office at 950 De Guigne Drive, Sunnyvale, CA 94085, on behalf of itself and the TeleNav Related Companies. Capitalized terms not otherwise defined shall have the...

  • Page 138
    ...) which will be attributed to the payment of [*****] Map Compilation and Integration Services fees, as applicable, until fully paid" and replace with the following: "Ford will pay TeleNav [*****] per SD Card for Map Compilation and Integration Services fees (as stated in Section 5c of Attachment...

  • Page 139
    ... Ford shall pay Telenav [*****] for such [*****], which Telenav will [*****]. Ford shall pay Telenav [*****] to be used as the [*****] for [*****]. Ford shall pay Telenav [*****] for Ford's [*****] of the Telenav [*****]. Ford shall pay Telenav an [*****] for the [*****] of the Telenav [*****]. Ford...

  • Page 140
    ...by their authorized representatives as of the Amendment Effective Date Total FORD MOTOR COMPANY By: /s/ Melissa Sheahan (Signature) Name: Melissa Sheahan (Printed Name) Title: SYNC Software Buyer Date: 6/24/13 TELENAV, INC. By: /s/ Michael Strambi (Signature) Name: Michael Strambi (Printed Name...

  • Page 141
    Exhibit 21.1 SUBSIDIARIES OF TELENAV, INC. TeleNav Shanghai Inc. (PRC) TeleNav Xi'an Software Limited (PRC) TeleNav Hong Kong, Limited (Hong Kong) TELENAV DO BRASIL SERVIÇOS DE LOCALIZAÇÃO LTDA (Brazil) TeleNav UK Limited (U.K.) Local Merchant Services Inc. (Delaware)

  • Page 142
    ... 1999 Stock Option Plan of Telenav, Inc. of our reports dated August 29, 2013, with respect to the consolidated financial statements and schedule of Telenav, Inc., and the effectiveness of internal control over financial reporting of Telenav, Inc., included in this Annual Report (Form 10-K) for the...

  • Page 143
    ... OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER PURSUANT TO SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a), AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Dr. HP Jin, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Telenav, Inc.; Based...

  • Page 144
    ... CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a), AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Michael Strambi, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Telenav, Inc.; Based on my...

  • Page 145
    .... HP Jin, the president and chief executive officer of Telenav, Inc. (the "Company"), certify for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge, (i) the Annual Report of the Company on Form 10-K for the...

  • Page 146
    ...Michael Strambi, the chief financial officer of Telenav, Inc. (the "Company"), certify for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge, (i) the Annual Report of the Company on Form 10-k for the fiscal...