LifeLock 2013 Annual Report Download - page 70

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We provide proactive identity theft protection services to our consumer subscribers, whom we refer to as our members, on an annual or monthly
subscription basis. We also provide fraud and risk solutions to our enterprise customers.
We were incorporated in Delaware on April 12, 2005 and are headquartered in Tempe, Arizona. On March 14, 2012, we acquired ID Analytics and its
wholly owned subsidiary IDA Inc., each of which is incorporated in Delaware.
In October 2012, we completed our IPO in which we issued and sold 15,500,000 shares of common stock at a public offering price of $9.00 per share.
We received net proceeds of $125,663 after deducting the underwriting discount of $9,765 and other offering expenses of $4,072. Upon the closing of our
IPO, all of our outstanding convertible redeemable preferred stock automatically converted into an aggregate of 51,320,437 shares of common stock. Our
common stock is listed on the New York Stock Exchange under the symbol “LOCK.”
On December 11, 2013, we acquired mobile wallet innovator Lemon for approximately $42 ,369 in cash, net of cash acquired, and introduced our new
LifeLock Wallet mobile application. The LifeLock Wallet mobile application allows consumers to replicate and store a digital copy of their personal wallet
contents on their smart device for records backup, as well as transaction monitoring and mobile use of items such as credit, identification, ATM, insurance,
and loyalty cards. The LifeLock Wallet mobile application also offers our members one-touch access to our identity theft protection services.
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The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United
States of America (U.S. GAAP).
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The consolidated financial statements include our accounts and those of our wholly and indirectly owned subsidiaries. We eliminate all intercompany
balances and transactions, including intercompany profits, and unrealized gains and losses in consolidation.
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The preparation of financial statements in conformity with U.S. GAAP requires us to make certain estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience, current business factors, and
various other assumptions that we believe are necessary to consider to form a basis for making judgments about the carrying values of assets and liabilities,
the recorded amounts of revenue and expenses, and the disclosure of contingent assets and liabilities.
We are subject to uncertainties such as the impact of future events; economic, environmental, and political factors; and changes in our business
environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of o ur consolidated
financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as our operating environment
changes. We make changes in estimates when circumstances warrant. We reflect such changes in estimates and refinements in estimation methodologies in
reported results of operations. If material, we disclose the effects of changes in estimates in the notes to the consolidated financial statements. Significant
estimates and assumptions affect the following: the allocation of the purchase price associated with acquisitions; the carrying value of long-lived assets; the
amortization period of long-lived assets; the carrying value, capitalization, and amortization of software and website development costs; the carrying value of
goodwill and other intangible assets; the amortization period of intangible assets; the provision for income taxes and related deferred tax accounts; certain
accrued expenses; contingencies, litigation, and related legal accruals; and the value attributed to employee stock options and other stock-based awards.
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We have two operating segments, which are also our reporting units: consumer and enterprise. These operating segments are components for which
separate financial information is available and for which operating results are evaluated on a regular basis by the chief operating decision maker in deciding
how to allocate resources and in assessing the performance of the segments.
In our consumer segment, we offer proactive identity theft protection services to our members on an annual or monthly subscription basis. In our
enterprise segment, we offer fraud and risk solutions to our enterprise customers.
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