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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
    ...3 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2013 or 1 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-34720 TELENAV...

  • Page 3
    ...mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to...

  • Page 4
    ... ISSUER PURCHASES OF EQUITY SECURITIES SELECTED FINANCIAL DATA MANAGEMENT'S DISCUSSION AND ANALYSIS 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...

  • Page 5
    ...of the merger, we changed our name to TeleNav, Inc. In November 2012, we changed our name to Telenav, Inc. Our 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...

  • Page 6
    ... advertising and conversion of users from free to premium services. We offer our automotive navigation services to auto manufacturers and original equipment manufacturers, or OEMs, for distribution with their vehicles. Our primary customer to date, Ford Motor Company, or Ford, currently distributes...

  • Page 7
    ...handsets. Google, Inc., or Google, offers free voice-guided turn by turn, mobile navigation software on Android phones, including local search and traffic information. Nokia Corporation, or Nokia, provides a download for its latest version of turn by turn navigation utilizing voice and Nokia Maps on...

  • 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
    ...real time 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...

  • 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
    ... to use and connected navigation services to drivers at a low cost. We currently provide our on-board GPS navigation software for Ford's second-generation SYNCâ„¢ system in vehicles equipped with MyFord Touch and MyLincoln Touch. This product is enhanced by Ford with the delivery of real-time and...

  • 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
    ... 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 select a language and our client software interface...

  • Page 14
    ... 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 bidding and advertising...

  • 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
    ... location services that have similar functionality to ours for free. For example, Google offers free voice-guided turn by turn navigation as part of its release of Google Maps Navigation for mobile devices based on the Android 1.6 and higher operating system platform, and Nokia provides a download...

  • 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
    ... targeted, highly 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...

  • 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
    ... 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, TeleCommunication Systems, or TCS, Intel Corporation, or Intel...

  • 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
    ...business effectively. We rely 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...

  • Page 29
    ... than our historical net profit margins. As we expand into mobile advertising and premium navigation services or other markets for location services, we may be required to adopt new pricing models and may incur cost of revenue substantially different than that which we have experienced historically...

  • 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
    ... of key technologies to support or expand our 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...

  • Page 33
    ...or uncertain economic conditions may negatively affect our business and results of operations. Recent adverse economic conditions 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...

  • Page 34
    ... current or future customers and other business partners; cause delays or stoppages in the 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...

  • Page 35
    ... 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 suitability, copyright and antitrust. Furthermore, the growth and development of electronic storage of personal information...

  • 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
    ... reports that industry or financial analysts publish about us or our business. If one or more of the analysts who may elect to cover us downgrade their evaluations of our stock, the price of our stock could decline. For example, in late July 2011, following our earnings release for the three months...

  • 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
    ... 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 per Share...

  • Page 42
    ...were made pursuant to a stock repurchase plan announced by us on March 18, 2013. Our board of directors authorized us ...be deemed to be incorporated by reference into any filing of Telenav, Inc. under the Securities Act or the Exchange...operations of our enterprise business, which were previously ...

  • 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
    ... ability to generate revenues from advertising and conversion of users from free to premium services. We offer our automotive navigation services to auto manufacturers and OEMs, for distribution with their vehicles. Our primary customer to date, Ford, currently distributes our product as an optional...

  • Page 45
    ... from Sprint will consist primarily of revenue from monthly recurring fees paid by end users for premium services or shared advertising revenue. During fiscal 2013, we also saw declines in the number of paid monthly recurring fee end users at other large wireless carrier customers, AT&T and T-Mobile...

  • Page 46
    ... receive access to our navigation application through bundled offerings. We also offer our applications directly to end users through application stores such as the Apple App Store and the Google Play marketplace. Finally, we have implemented revenue models based on free versions of our services...

  • Page 47
    ... 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 amortization of capitalized software, recognition of deferred development costs on...

  • Page 48
    ... of developed technology that we incur in 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...

  • Page 49
    ... voice and data services, (3) a monthly or annual subscription fee per end user, or (4) based on usage. Our end users who subscribe to our services through application stores pay us a monthly or annual subscription fee. We recognize monthly fees related to our mobile navigation services in the month...

  • 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 or...

  • Page 53
    ...of Contents Fiscal Year Ended 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...

  • Page 54
    ...additional Ford and Lincoln models. In addition, product revenue in fiscal 2013 included $9.2 million of customized engineering revenue received from Ford. Services revenue . Services revenue consists primarily of revenue we derive from our mobile navigation services and mobile advertising. Services...

  • 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 and...

  • Page 56
    ...deferred development costs expensed in connection with revenue from Ford. Our onboard navigation revenue from Ford generally has higher associated third party content costs than our mobile navigation services provided through wireless carriers. Cost of services revenue . Our cost of services revenue...

  • Page 57
    ... 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%, from 83 at...

  • Page 58
    ... 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 may acquire businesses...

  • 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
    ... of Disclosure Controls and Procedures Our management, with the participation of our chief executive officer and our chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2013 . The term "disclosure controls and procedures," as defined...

  • Page 61
    ... in the 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 recognizes that any...

  • Page 62
    ... Inc.'s internal control over financial reporting as of June 30, 2013, based on 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...

  • Page 63
    ... Statement for the 2013 Annual Meeting of Stockholders (to be filed with the Securities and Exchange Commission within 120 days of our June 30, 2013 fiscal year end) under the headings "Security Ownership of Certain Beneficial Owners and Management" and "Equity Compensation Plan Information." ITEM...

  • Page 64
    ...by Reference From Exhibit Number Exhibit Number Description Incorporated by Reference From Form Date Filed 2.1 3.1 3.1.1 3.2 4.1 4.2 10.1 10.2# 10.3# 10.4# 10.4.1# 10.5# 10.5.1# 10.6# 10.6.1# Amended and Restated Asset Purchase Agreement, dated April 16, 2013, by and between Telenav, Inc. and...

  • Page 65
    ...Amendment No. 6 to 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 January 18, 2013. Amendment No. 7 to the Sprint Master Application and Services Agreement, dated as of...

  • 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
    ...Incorporated by Reference From Exhibit Number Date Filed 10.15.6+ 10.15...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 December 22, 2004 to the Data...

  • Page 68
    ...Year Executive Employment Agreement dated June 28, 2010 by and between TeleNav, Inc. and Dariusz Paczuski. Office Lease, dated as of June 28, 2011 and executed on June 30, 2011, by and between TeleNav, Inc. and CA-Sunnyvale Business Center Limited Partnership. Employment Offer Letter dated August 10...

  • Page 69
    ... 12, 2009, as amended, by and between Telenav, Inc. and Ford Motor Company. Amendment No. 13 effective June 17, 2013 to the SYNC Generation 2 OnBoard Navigation Agreement dated October 12, 2009, as amended, by and between Telenav, Inc. and Ford Motor Company. Consulting Agreement effective August 29...

  • Page 70
    ...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.... XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part 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. ... sign this Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange...

  • Page 72
    ...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 Director August 29, 2013 /s/ KEN XIE Ken Xie Director August...

  • 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
    ... the standards of the Public Company Accounting Oversight Board (United States), Telenav, Inc.'s internal control over financial reporting as of June 30, 2013, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway...

  • 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
    ...2013 2012 2011 Revenue: Product Services Total revenue Cost of revenue: Product Services Total cost of revenue Gross profit Operating expenses: Research and development... continuing operations, net of tax Net income Weighted average shares used in computing net income per share: Basic Diluted $ 69,...

  • 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
    ...TELENAV...available-for-sale securities, net of taxes Net income Balance at June 30, 2012 Issuance of common stock upon exercise of stock options and release of restricted stock units Issuance of restricted common stock in connection... (202) - - - 118,193 $ Retained Earnings 38,909 - (8,660) - - - - 42...

  • 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
    ...in personalized mobile navigation. We help on the go people by creating products that (1) provide easily-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...

  • 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
    ... the application development stage, 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...

  • Page 85
    ...TELENAV, INC. Notes to Consolidated Financial Statements-(Continued) In February 2013, the FASB issued amended guidance on how to report...annual periods beginning after December 15, 2013...term liabilities to long term deferred tax assets, but the adoption will not result in a change... average number of ...

  • Page 86
    ...cost and estimated fair value of short-term fixed income securities classified as short-term investments based on stated maturities as of June 30, 2013 (in thousands): Amortized Cost...a period of time sufficient to allow for any anticipated recovery in fair market value. As of June 30, 2013 and 2012 ,...

  • 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
    ... losses we may experience in connection with this case. Accordingly, we are unable at this 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...

  • 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
    ... 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 fiscal 2013, we reduced common...

  • Page 93
    ...annually... exercise price per share Weighted average remaining contractual life (years) Number of shares...2013 73 2,146 (38) (149) 2,032 1,682 2.11 $ 1.98 $ 10,628 8,797 During fiscal 2013, we increased the number of shares available for grant under our stock option and equity incentive plans...

  • Page 94
    ... dividends on our common stock and do not plan to pay cash dividends in the foreseeable future and, therefore, use an expected dividend yield of zero in the valuation model. At June 30, 2013, the total unrecognized stock-based compensation cost related to employee options was $7.5 million , net of...

  • Page 95
    ... Year Ended June 30, 2013 2012 2011 Current income taxes: Federal State Foreign Total current income taxes Deferred income taxes...development credits Section 199 deduction Foreign income taxed at different rates Stock-based compensation expense Tax benefit from California tax ruling Transfer pricing...

  • Page 96
    ...for financial reporting purposes and the amounts used for income ...Capitalized software Acquired ...development credits. We provide for U.S. income taxes on the earnings of foreign subsidiaries unless the subsidiaries' earnings...annual limitation under Internal Revenue Code Section 382. As of June 30, 2013...

  • Page 97
    ...2013, the gross unrecognized tax benefits could decrease (whether by payment, release, or a combination of both) by as much as $800,000 in the next 12 months...combine its location ad targeting technology with our existing advertising solution to create a new mobile local advertising platform. The ...

  • Page 98
    ... 30, 2013, $1.3 million was recorded in prepaid expenses and other current assets in our balance sheet. In connection with the sale, we entered into a transition services agreement, pursuant to which we expect to continue to support certain aspects of the enterprise business while that business is...

  • 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
    Table of Contents Three 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 Mar. 31, 2013 June 30, 2013 (unaudited) Revenue Gross profit Income (loss) from discontinued operations, net of tax ...

  • Page 101
    ... by Reference From Exhibit Number Date Filed 2.1 3.1 3.1.1 3.2 4.1 4.2 10.1 10.2# 10.3# 10.4# 10.4.1# 10.5# 10.5.1# 10.6# 10.6.1# 10.7# 10.8# 10.9# 10.10# 10.10.1# 10.11 Amended and Restated Asset Purchase Agreement, dated April 16, 2013, by and between Telenav, Inc. and FleetCor Technologies...

  • Page 102
    ...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 103
    ..., dated as of March 19, 2008, by and between TeleNav, Inc. and AT&T Mobility LLC. Twelfth Amendment effective as of June 17, 2013 to the License and Service Agreement, dated as of March 19, 2008, by and between TeleNav, Inc. and AT&T Mobility LLC. License Agreement effective as of July 1, 2009, by...

  • Page 104
    ... Reference From Exhibit Number Date Filed 10.16.1†10...Data License Agreement, dated as of December 1, 2002, by and between TeleNav, Inc. and NAVTEQ North America, LLC. Territory License No. 1, dated as of December 1, 2002, by and between Televigation, Inc. and Navigation Technologies Corporation...

  • Page 105
    ...Year Executive Employment Agreement dated June 28, 2010 by and between TeleNav, Inc. and Dariusz Paczuski. Office Lease, dated as of June 28, 2011 and executed on June 30, 2011, by and between TeleNav, Inc. and CA-Sunnyvale Business Center Limited Partnership. Employment Offer Letter dated August 10...

  • Page 106
    ... 12, 2009, as amended, by and between Telenav, Inc. and Ford Motor Company. Amendment No. 13 effective June 17, 2013 to the SYNC Generation 2 OnBoard Navigation Agreement dated October 12, 2009, as amended, by and between Telenav, Inc. and Ford Motor Company. Consulting Agreement effective August 29...

  • Page 107
    ... 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 which directors or executive officers are eligible...

  • 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
    ... 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:___ Manager, Sourcing _____ Date:__ January 25, 2013 _____ By:___ /s/ Michael...

  • 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
    .../2/2011) TeleNav Vehicle Manager -Standard Asset Tracker 10 11 12 13 14 15 15 16 17 18 19 Vehicle Tracker TeleNav Asset/Vehicle Tracker TeleNav Asset/Vehicle Tracker Scout for Apps 3 $[*****]/month/Sprint user (end-user) $[*****]/month/per Sprint User (enduser) $[*****]/month/per Sprint User...

  • Page 113

  • Page 114
    ... fees billed and collected by Sprint from a Sprint User for use of the Telenav Premium services. In the event Company invoices Sprint Users directly or indirectly for such Telenav Premium Services on the platforms set forth in this Section 7.b.i, Company will pay Sprint an amount equal to [*****] of...

  • Page 115
    ... #: [*****] Postal Service Address : Telenav, Inc. Attn: Michael Strambi, CFO 950 De Guigne 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...

  • 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
    ... 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 Manager _____ Date:_ June 17, 2013 _____ By:_ /s/ Michael Strambi _____ Name:_ Michael Strambi...

  • Page 122
    ... THE LICENSE AND SERVICE AGREEMENT THIS AMENDMENT NO. 11 effective as of December 6, 2011 (the "Amendment Eleven Effective Date") by and between TeleNav, Inc., a Delaware corporation with principal offices at 1130 Kifer Rd., Sunnyvale, CA 94086 ("LICENSOR") and AT&T Mobility LLC, a Delaware limited...

  • Page 123
    ...: Executive Director Date: December 12, 2011 TELENAV, INC. /s/ Douglas Miller (Signature) Printed Name: Douglas Miller Title: Chief Financial Officer Date: December 21, 2011 [*****] Certain portions denoted with an asterisk have been omitted and filed separately with the Securities and Exchange...

  • Page 124
    ... THE LICENSE AND SERVICE AGREEMENT THIS AMENDMENT NO. 12 effective as of June 17, 2013 (the "Amendment Twelve Effective Date") by and 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...

  • 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
    ...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 Desktop Manager Data...

  • 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
    1 Scope and Background Ford SYNC Generation 2 Navigation system is an 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 ...

  • 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
    ..., and 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...

  • Page 143
    ...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 on my knowledge...

  • 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
    ... 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 year ended June 30, 2013 (the "Report...

  • Page 146
    ...OF 2002 I, 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...