~~(Former name, former address and former fiscal year, if changed since last report)~~

We have incurred net losses of $37.1 million and $28.3 million in 2019 and 2018, respectively, and incurred net ~~loss~~losses of ~~$16.7~~$4.2 million for the three months ended ~~March 31, 2020.~~September 30, 2020, respectively. We have an accumulated deficit of ~~$401.6~~$425.0 million as of ~~March 31,~~September 30, 2020. We anticipate that our costs and expenses will increase in the foreseeable future as we continue to invest in:

•

~~sales and marketing;~~

•sales and marketing;

~~research and development, including new product development;~~

•research and development, including new product development;

~~our technology infrastructure, business processes, and automation;~~

•our technology infrastructure, business processes, and automation;

~~general administration, including legal and accounting expenses related to our growth and continued expenses;~~

•general administration, including legal and accounting expenses related to our growth and continued expenses;

~~expanding into new markets; and~~

•expanding into new markets; and

~~strategic opportunities, including acquisitions, commercial relationships and retail partnerships.~~

•strategic opportunities, including acquisitions, commercial relationships and retail partnerships.

For example, we have incurred and expect to continue to incur expenses developing, improving, integrating, investing, marketing and maintaining our Promotions, Media, Audience and Analytics ~~Cloud~~ platforms and solutions, which include Retailer iQ, Retail Performance Media, ~~and~~ Quotient Analytics, and Coupons.com app and website and we may not succeed in increasing our revenues sufficiently to offset these expenses.

If we are unable to execute our growth strategy and gain efficiencies in our operating costs, our business could be adversely impacted. We cannot be certain that we will be able to attain or maintain profitability on a quarterly or annual basis. If we are unable to effectively manage these risks and difficulties as we encounter them, our business, financial condition and results of operations may suffer.

We may not achieve revenue growth.

We may not be able to achieve revenue growth, and we may not be able to generate sufficient revenues to achieve profitability. In addition, historically the growth rate of our business, and as a result, our revenue growth, has varied from quarter-to-quarter and year-to-year, and we expect that variability to continue. For example, some of our products and services experience seasonal sales and buying patterns mirroring those in the CPG, retail, and ~~e-commerce~~eCommerce markets, including back-to-school and holiday campaigns, where demand increases during the second half of our fiscal year. Our revenues may fluctuate due to changes in marketing budgets of CPGs and retailers and the timing of their marketing spend. Marketing spend by CPGs is considered the most flexible and easiest to cut, for instance, at the end of a quarter or fiscal year if a CPG is facing budget pressures and CPGs can change their spend without notice. As a result we are not always able to anticipate such fluctuations. Decisions by CPGs or retailers to delay or reduce their digital promotion and media spending, or divert spending away from digital promotions, digital media campaigns, or other digital marketing from our platforms, or changes in our fee arrangements with CPGs, retailers and other commercial partners, could also slow our revenue growth or reduce our revenues. For instance, beginning in mid-March of 2020, decisions by CPGs and retailers to mostly pause or delay and in some cases cancel marketing campaigns due to the uncertainty, supply-chain ~~or out-of-stock issues,~~disruption, and consumer purchasing behavior changes caused by the COVID-19 pandemic had an adverse impact on our revenues and revenue ~~growth. While we believe that~~growth for the second quarter of 2020. CPGs and retailers ~~will~~have generally resumed or

rescheduled paused and delayed campaigns for the third and fourth quarter of 2020. We have seen CPGs and retailers resume digital marketing in the second half of ~~2020 there is no guarantee that they will do so. In addition,~~2020. But with certain CPGs still experiencing supply chain disruption and as circumstances change, we may continue to see ~~campaigns~~lower digital marketing levels and postponed or ~~cancelled.~~

cancelled campaigns, particularly if COVID-19 outbreaks worsen in the winter.

Our business is complex and evolving. We may offer new solutions, pricing, service models, process and delivery methods to CPGs and retailers. These new solutions may change the way we generate and/or recognize revenue, which could impact our operating results. If we shift a greater number of our arrangements with CPGs to new models and we are not able to deliver on the results, our revenue growth and revenues could be harmed. In addition, we announced in the first quarter of 2020 that effective second quarter of 2020, we ~~plan to~~would modify the way we process and deliver certain media products to enhance customer experience. As a result of these changes, we ~~will recognize~~have recognized certain revenue on a net basis as compared to the prior recognition on a gross basis and ~~expect that~~ this ~~will cause~~has caused a decrease in our revenue growth and ~~impact~~impacted our revenues.

We believe that our continued revenue growth will depend on our ability to:

•

~~increase our share of CPG marketing spend~~ ~~on promotions and media through our platforms and increase the number of brands that are using our platforms within each CPG;~~

•increase our share of CPG marketing spend on promotions and media through our platforms and increase the number of brands that are using our platforms within each CPG;

~~adapt~~ ~~to changes in marketing goals, strategies and budgets of CPGs and retailers and the timing of their marketing spend;~~

•adapt to changes in marketing goals, strategies and budgets of CPGs and retailers and the timing of their marketing spend;

~~maintain and grow~~ ~~our retailer network through direct and indirect commercial partnerships;~~

•maintain and grow our retailer network through direct and indirect commercial partnerships;

~~maintain and expand our data rights with our retailer network;~~

•maintain and expand our data rights with our retailer network;

~~successfully~~ ~~expand our media solutions into areas such as Retail Performance Media, social influencer marketing, sponsored product search, and programmatic media;~~

•successfully expand our media solutions into areas such as Retail Performance Media, social influencer marketing, sponsored product search, and programmatic media;

~~demonstrate~~ ~~the value of our digital promotions and media solutions through trusted measurement metrics;~~

•demonstrate the value of our digital promotions and media solutions through trusted measurement metrics;

~~respond~~ ~~to changes in the legislative or regulatory environment, including with respect to privacy and data protection, or enforcement by government regulators, including fines, orders, or consent decrees;~~

•respond to changes in the legislative or regulatory environment, including with respect to privacy and data protection, or enforcement by government regulators, including fines, orders, or consent decrees;

~~successfully~~ ~~execute and grow Retail Performance Media programs;~~

•

~~successfully~~ ~~expand our promotions solutions into new areas such as in-lane targeted promotions and loyalty rewards~~•successfully execute and grow Retail Performance Media programs;

•successfully expand our promotions solutions into new areas such as in-lane targeted promotions, national rebates and loyalty rewards programs;

~~successfully~~ ~~execute our digital promotions and digital media solutions into retailers’ in-store and point of sale systems and consumer channels;~~

•successfully execute our digital promotions and digital media solutions into retailers’ in-store and point of sale systems and consumer channels;

~~deploy,~~ ~~execute, and continue to develop Quotient Analytics and our data, measurement, and analytics solutions in support of our digital promotions and media solutions;~~

•deploy, execute, and continue to develop Quotient Analytics and our data, measurement, and analytics solutions in support of our digital promotions and media solutions;

~~launch new products or retail partnerships as planned;~~

•launch new products or retail partnerships as planned;

~~expand~~ ~~the use by consumers of our digital promotions and media offerings and broaden the selection and use of digital promotions, coupon codes and cash-back offers;~~

•expand the use by consumers of our digital promotions and media offerings and broaden the selection and use of digital promotions, national rebates and coupon codes;

~~successfully~~ ~~enter into new markets;~~

•successfully enter into new markets;

~~successfully~~ ~~integrate our newly acquired companies into our business;~~

•successfully integrate our newly acquired companies into our business;

~~manage the~~ ~~shift from desktop to mobile devices;~~

•manage the shift from desktop to mobile devices;

~~manage the~~ ~~transition from digital print coupons to digital paperless coupons;~~

•manage the transition from digital print coupons to digital paperless coupons;

~~innovate~~ ~~our product offerings to retain and grow our consumer base;~~

•innovate our product offerings to retain and grow our consumer base;

~~expand~~ ~~the number, variety, quality, and relevance of digital promotions available on our web, mobile and social channels, as well as those of our CPGs, retailers and network of publishers;~~

•expand the number, variety, quality, and relevance of digital promotions available on our web, mobile and social channels, as well as those of our CPGs, retailers and network of publishers;

~~increase~~ ~~the awareness of our brands, and earn and build our reputation;~~

•increase the awareness of our brands, and earn and build our reputation;

~~hire, integrate, train and retain talented personnel;~~

•hire, integrate, train and retain talented personnel;

~~effectively~~ ~~manage scaling and international expansion of our operations; and~~

•effectively manage scaling and international expansion of our operations; and

~~successfully compete with existing and new competitors.~~

•successfully compete with existing and new competitors.

However, we cannot assure you that we will successfully accomplish any of these actions. Failure to do so could harm our business and cause our operating results to suffer.

If we fail to attract and retain CPGs, retailers and publishers and expand our relationships with them, our revenues and business will be harmed.

The success of our business depends in part on our ability to increase our share of CPG marketing spend on our promotions and media solutions and on our platforms; increase the number of brands that use our solutions and platforms within each CPG; increase adoption and scale of Retailer iQ; and demonstrate the value of our solutions through measurement and data analytics. It also depends on (i) our ability to obtain, maintain, and expand our agreements with our retail partners, (ii) our ability to integrate our platforms and promotions and media solutions into retailers’ in-store and point of sale systems and consumer channels, which depends in part on retailers’ commitment in modifying point of sale systems and other solutions to integrate with our platforms, (iii) our ability to obtain the right to distribute Retailer iQ digital promotions more broadly through our websites and mobile apps and those of our publishers, and (iv) our retail partners’ commitment in promoting our digital marketing solutions to their customers. If we do not create more value than available alternatives, or if CPGs and retailers do not find that offering digital promotions and media on our platforms enables them to reach consumers and sufficiently increase sales with the scale and effectiveness that is compelling to them, CPGs and retailers may not increase their distribution of digital promotions and media on our platforms, or they may decrease them or stop offering them altogether, and new CPGs and retailers may decide not to use our platforms.

For example, if CPGs decide that our platforms do not provide the right solutions for them to connect with consumers, we may not be able to obtain the desired prices for our products and services Likewise, if retailers decide that our Promotions, Media, Audience and Analytics Cloud platforms and solutions are less effective at increasing sales to ~~and loyalty of~~ existing and new consumers, retailers may demand a higher percentage of the total proceeds from each digital campaign or demand minimum guaranteed payments or decline to use our solutions. Furthermore, if retailers do not find that our platforms increase consumer engagement and loyalty, our overall success may be harmed. In addition, we expect to face increased competition, and competitors may accept lower payments from CPGs to attract and acquire new CPGs, or provide retailers and publishers a higher distribution fee than we currently offer to attract and acquire new retailers and publishers. We may also experience attrition in our CPGs, retailers and publishers in the ordinary course of business resulting from several factors, including losses to competitors, changes in CPG budgets, and decisions by CPGs, retailers and publishers to offer digital coupons, loyalty programs and media through their own platforms, apps, websites or other channels without using a third-party platform such as ours or through a competitive third-party network or platform, and failure to maintain distribution agreements with third-party digital promotions networks and platforms. If we are unable to retain and expand our relationships with existing CPGs, retailers and publishers or if we fail to attract new CPGs, retailers and publishers to the extent sufficient to grow our business, or if too many CPGs, retailers and publishers are unwilling to offer digital coupons and media with compelling terms through our platforms, we may not increase the number of high quality coupons and marketing campaigns on our platforms and our revenues, gross margin and operating results will be adversely affected.

Historically, a significant portion of sales and client support services were conducted in person. Currently, as a result of the work and travel restrictions related to the ongoing COVID-19 pandemic, substantially all of our sales and client support services activities are being conducted remotely. As of the date of this report, we ~~do not yet know if~~have no indication of remote working ~~will have~~having a ~~negative impact or the extent of any~~ negative impact on our ability to attract, serve, retain or upsell CPGs and retailers our services.

However, there are no guarantees remote working will not have a negative impact if it continues.

The loss or decrease in spending of any significant customer could materially and adversely affect our results of operations and financial condition.

Our business is exposed to risks related to customer concentration, particularly among CPGs and retailers. The loss or decrease in spending of any of our significant customers or deterioration in our relations with any of them could materially and adversely affect our results of operations and financial condition.

If we are unable to grow or successfully respond to changes in the digital promotions market, our business could be harmed.

As consumer demand for digital promotions has increased, promotion spending has shifted from traditional promotions through traditional offline or analog channels, such as newspapers and direct mail, to digital coupons. However, it is difficult to predict whether the pace of transition from traditional to digital promotions will continue at the same rate and whether the growth of the digital promotions market will continue. Some large retailers do not yet use digital paperless promotions. If a retailer decides not to accept digital paperless promotions or a CPG reduces

its spend in digital promotions, our business could be harmed. For example, we saw a decrease in promotion spending with us by three of our top CPG customers in much of 2019. In order to expand our business, we must appeal to and attract consumers who historically have used traditional promotions to purchase goods or may prefer alternatives to our offerings, such as those of our competitors. If the demand for digital promotions does not continue to grow as we expect, or if we fail

to successfully address this demand, our business will be harmed. For example, the growth of our revenues will require increasing the number of brands that are using our digital promotions solutions within each CPG. If our projections regarding the adoption and usage of Quotient Promotions and Retailer iQ by retailers, CPGs and consumers, do not occur or are slower than expected, our business, financial condition, results of operations and prospects will be harmed. A variety of factors could slow the success of Quotient Promotions and Retailer iQ generally, including insufficient time, resources or funds committed by retailers to the promotion of our platforms and solutions, a retailer’s decision to forego marketing our platforms, our inability to obtain sufficient data rights to maximize the functionality of our platforms and our inability to monetize enhanced platform functionality, and our inability to efficiently integrate our platforms and Retailer iQ with a retailer’s system. Even if we are successful in driving the adoption and usage of our platforms and Retailer iQ by retailers, CPGs and consumers, if Retailer iQ fee arrangements or transaction volumes, or the mix of offers, change or do not meet our projections, our revenues may be harmed. We expect that the market will evolve in ways which may be difficult to predict. For instance, although we expect CPGs to stop spending on the offline free-standing insert (FSI), our expectations regarding the timing of such change or our expectations that CPGs will shift some of their FSI budgets to our solutions or about the timing of such shifts may not be accurate. It is also possible that digital promotion offerings generally could lose favor with CPGs, retailers or consumers. In the event of these or any other changes to the market, our continued success will depend on our ability to successfully adjust our strategy to meet the changing market dynamics. In addition, we will need to continue to grow demand for our digital promotions platform by CPGs, retailers and consumers, including through continued innovation and implementation of new initiatives associated with the digital promotions. For example, if consumer demand for our software-free print solution, ~~cash-back receipt scanning solution,~~ in-lane targeted promotions, national rebates, or our mobile ~~application~~applications does not grow as we expect or decreases, our business may be harmed. If we are unable to grow or successfully respond to changes in the digital promotions market, our business could be harmed and our results of operations could be negatively impacted. For example, some retailers ~~have~~ discontinued the acceptance of paper coupons for a variety of reasons, including to address the fear that COVID-19 may be transmitted through paper. If retailers and consumers refuse to use our solutions involving paper, such as digital print, in-lane targeted offers and ~~receipt-scanning offers and~~national rebates, our business could be harmed. Our revenues may also be harmed if we are unable to manage the transition and the growth of digital paperless coupons is slower than the decline in digital print coupons. Conversely, acceleration of this shift (from, for example, acceptance of digital paperless coupons by new retailers) could lead to unanticipated increases in revenue.

The success and scale of our solutions and platforms depend, in part, on our strategic relationships with retail partners and the level of commitment and support by retailers.

Our Promotions, Media, Audience, and Analytics ~~Cloud~~ platforms and solutions, which include Retail Performance Media (RPM), Retailer iQ, and Quotient Analytics, depend in part to our strategic relationships with retail partners, which provide us with access to retailer data, consumer, web and mobile properties, and scale. If we do not maintain and expand these relationships or add new retailer partners, our business will be harmed.

For example, retailer support and commitment are central to the success and scale of RPM. In turn, RPM fuels the data and insights that drive our other solutions and platforms. Our revenues and growth may be adversely impacted if RPM retailers do not support RPM or if we are unable to add new RPM retail partners. For example, our revenues were harmed in the first and second quarter of 2020 when retailers mostly paused or delayed and in some cases cancelled RPM campaigns in response to supply-chain challenges and out-of-stock product at shelf, consumer purchasing behavior changes, and other issues resulting from the COVID-19 pandemic.

Similarly, if retailers do not commit sufficient time, resources and funds towards the marketing of digital promotions and media on our platforms, the growth and scale of Retailer iQ and its penetration into the consumer market will be adversely affected. The success of Retailer iQ requires integration with a retailer’s point of sales system, loyalty programs and consumer channels. This integration requires time and effort from both the retailer and ourselves; and may also require us to work with a retailer’s third-party service providers, some of whom may be our competitors. In addition, the success of Retailer iQ requires increased consumer adoption which requires significant support from retailers, this support includes marketing of Retailer iQ to consumers, providing technical support to consumers, and retailers satisfaction of increased and complex data privacy regulations to obtain consumer consent.

We may develop products that require integration with a retailer’s systems and the systems of their service providers. The success of these products and our ability to launch them on time as planned similarly depend, in part, on retailer support. Delays by the retailer or their service providers could adversely impact our business. For example, delays in the launch of in-lane targeted promotions and sponsored product search adversely impacted our revenue growth for the second half of 2019. Further delays or lack of support from retailers on these products may negatively impact our revenues, costs of revenues, and recoverability of certain assets.

As our retail partners focus on the unprecedented challenges that COVID-19 has posed, they may not provide the support necessary for our product launches, which could cause delays. For example, our targeted in-lane at checkout and our eCommerce sponsored search products require resources and support from our retail partners and the success of these products ~~could be~~has been adversely impacted by delays in planned launches for this year orand by other lack of support.

We depend in part on data-rights agreements with our retail partners to power a range of products and the termination of such agreements or the failure to obtain additional data rights can severely impact our revenue and growth.

Our Promotions, Media, Audience and Analytics ~~Cloud~~ platforms and solutions, which include Retailer iQ, our targeted promotions and media offerings, and Quotient Analytics, are powered in part by data we obtain from our retail partners. Our access to this data is governed by data-rights agreements with some of our retail partners. These data-rights agreements have complex rules and are required to be renewed periodically. If we fail to secure additional data rights or renew expiring data-rights agreements, if we are found to be in violation of any of our obligations under these agreements, or if retailers lose their data rights, we could lose access to retailer data. Without retailer data, our Promotions, Media, Audience and Analytics ~~Cloud~~ platforms and solutions would be less valuable to our CPG customers, publishers, ad tech and retail partners. In addition, changes to international, federal, state, local and municipal laws, regulations and industry standards that relate to privacy, electronic communications, data protection, intellectual property, ~~e-commerce,~~eCommerce, competition, price discrimination, consumer protection, taxation, and the use of promotions may require us to amend, or alter our practices under, our data rights agreements. If we and our retail partners cannot respond timely to such legal and regulatory changes, or if retailers decide to limit or prohibit use of their data to comply with such changes our revenue and growth would be impaired. For instance, if the California Consumer Privacy Act ~~or CCPA,~~of 2018 (the " CCPA"), is amended to prohibit the “sale” (as defined in the CCPA) of loyalty program data, or if retailers materially restrict our use of purchase and loyalty card data in light of the CCPA or similar laws or regulations, our business will be harmed. See the risk factor below titled “Our business is subject to complex and evolving laws, regulations and industry standards, and unfavorable interpretations of, or changes in, or failure by us to comply with these laws, regulations and industry standards could substantially harm our business and results of operations” for additional information.

Our ability to generate revenue depends on our collection and use of significant amounts of data from various sources, which may be restricted by consumer choice, restrictions imposed by retailers, publishers and browsers or other software developers, changes in technology, and new developments in laws, regulations and industry standards.

Our ability to deliver our Promotions, Media, Audience and Analytics ~~Cloud~~ platforms and solutions depends on our ability to successfully leverage data, including data that we collect from consumers, data we receive from retail partners and third parties, and data from our own operating history. Using cookies, loyalty card numbers both on-line and in-store, device identifiers (including Google AdID and Apple IDFA), and other tracking technologies, we, our retail partners and other data providers collect information about the interactions of consumers with our retail partners’ digital properties and in-store, our own and operated properties, and certain other publisher ~~sites.~~sites and apps. Our ability to successfully leverage such data depends on our continued ability to access and use such data, which can be restricted by a number of factors, including consumer choice, ~~the~~ success ~~of our retail partners~~ in obtaining consumer consent, restrictions imposed by our retail and other data partners or other third parties, publishers and web browser developers or other software developers, changes in technology, including changes in web browser technology, and new developments in, or new interpretations of laws, regulations and industry standards. For example, Apple has recently announced several changes to iOS that will require consumers to opt-in to sharing data with publisher sites and app, which may adversely impact our business. Consumer resistance to the collection and sharing of the data used to deliver targeted advertising, increased visibility of consent or “do not track” mechanism as a result of industry regulatory and/or legal developments, the adoption by consumers of browsers settings or “ad-blocking” software and the development and deployment of new technologies could materially impact our ability to collect data or reduce our ability to deliver relevant promotions or media, which could materially impair the results of our operations. See the risk factor below titled “Our business is subject to complex and evolving laws, regulations

and industry standards, and unfavorable interpretations of, or changes in, or failure by us to comply with these laws, regulations and industry standards could substantially harm our business and results of operations” for additional information.

Unfavorable publicity and negative public perception about our industry or data collection and use could adversely affect our business and operating results.

With the growth of online advertising and ~~e-commerce,~~eCommerce, there is increasing awareness and concern among the general public, privacy advocates, mainstream media, governmental bodies and others regarding marketing, advertising, and privacy matters, particularly as they relate to individual privacy interests. Any unfavorable publicity or negative public perception about our use of data or other data focused industries could affect our business and results of operations, and may lead digital publishers like Facebook to change their business practice, or trigger additional regulatory scrutiny or lawmaking that affects us. For example, in recent years, consumer advocates, mainstream media and elected officials have increasingly and publicly criticized data and marketing companies for their collection, storage and use of personal data. The negative public attention could cause CPGs or our retail partners to discontinue using our targeted advertising solutions. This public scrutiny may also lead to general distrust of data and marketing companies, consumer reluctance to share and permit use of personal data and increased consumer opt-out rates, any of which could negatively influence, change or reduce our current and prospective customers’ demand for our products and services and adversely affect our business and operating results.

We expect a number of factors to cause our operating results to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.

Growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. Historically, our revenue growth has varied from quarter-to-quarter and year-to-year, and we expect that variability to continue. In addition, our operating costs and expenses have fluctuated in the past, and we anticipate that our costs and expenses will increase over time as we continue to invest in growing our business. Our operating results could vary significantly from quarter-to-quarter and year-to-year as a result of these and other factors, many of which are outside of our control, and as a result we have a limited ability to forecast the amount of future revenues and expenses, which may adversely affect our ability to predict financial results accurately. Our ability to forecast our future results of operations is subject to a number of uncertainties, including our ability to effectively plan for and model future growth. We have encountered in the past, and may encounter in the future, risks and uncertainties frequently experienced by growing companies in changing industries. Our results of operations may fall below our estimates or the expectations of public market analysts and investors. Fluctuations in our quarterly operating results may lead analysts to change their long-term models for valuing our common stock, cause us to face short-term liquidity issues, impact our ability to retain or attract key personnel or cause other unanticipated issues, all of which could cause our stock price and the trading price of the convertible senior notes to decline. As a result of the potential variations in our quarterly revenues and operating results, we believe that quarter-to-quarter comparisons of our revenues and operating results may not be meaningful and the results of any one quarter or historical patterns should not be considered indicative of our future sales activity, expenditure levels or performance.

In addition to other factors discussed in this section, factors that may contribute to the variability of our quarterly and annual results include:

•our ability to grow our revenues by increasing our share of CPG spending and the number of brands using our platforms, including Retailer iQ, increasing media spending on our platforms, the timing and extent of CPGs switching from free standing inserts to digital promotions, further integrating with our retailers, adding new CPGs and retailers to our network and growing our current consumer base and expanding into new industry segments such as convenience, specialty/franchise retail, restaurants and entertainment;

•our ability to leverage retailer demands to increase CPG spend on RPM;

•

~~our ability~~ to grow our revenues by increasing our share of CPG spending and the number of brands using our platforms, including Retailer iQ, increasing media spending on our platforms, the timing and extent of CPGs switching from free standing inserts to digital promotions, further integrating with our retailers, adding new CPGs and retailers to our network and growing our current consumer base and expanding into new industry segments such as convenience, specialty/franchise retail, restaurants and entertainment;

•

our ability to ~~leverage retailer demands to increase CPG spend on RPM;~~

~~our ability to~~ grow our revenues will depend on CPGs’ annual marketing budgets which are affected by economic headwinds facing the CPG industry;

•

reduction in demand or volatility in demand for one or more of our products, which may be caused by, among other things: delay or cancellation of marketing campaigns by CPGs and retailers as they focus on manufacturing in-demand products, replenishing out-of-stock items, adjust to changes in consumer purchasing behavior, contend with supply-chain challenges, and other issues arising out of the COVID-19 pandemic;

•reduction in demand or volatility in demand for one or more of our products, which may be caused by, among other things: delay or cancellation of marketing campaigns by CPGs and retailers as they focus on manufacturing in-demand products, replenishing out-of-stock items, adjust to changes in consumer

~~disruption of planned themed marketing campaigns by CPGs and retailers, including campaigns that were adversely impacted by shelter-in-place orders and social distancing due to the COVID-19 pandemic;~~

•

~~reduction in overall media spend by CPGs in reaction to the COVID-19 pandemic, which harmed our media business in March of 2020 and may continue to have an adverse effect through the rest of 2020;~~

•

~~our ability to~~ ~~successfully respond to changes in the digital promotions and media market and continue to grow the market and demand for our platforms;~~

•

~~our ability~~ ~~to grow consumer selection and use of our digital promotion offerings and attract new consumers to our platforms;~~

•

~~the~~ ~~amount and timing of digital promotions and marketing campaigns by CPGs, which are affected by budget cycles, economic conditions, seasonality and other factors;~~

purchasing behavior, contend with supply-chain challenges, and other issues arising out of the COVID-19 pandemic;

•disruption of planned themed marketing campaigns by CPGs and retailers, including campaigns that were adversely impacted by shelter-in-place orders and social distancing due to the COVID-19 pandemic;

~~the~~ ~~impact of global business or macroeconomic conditions, including the resulting effects on the level of coupon and trade promotion spending by CPGs and spending by consumers;~~

•reduction in overall media spend by CPGs in reaction to the COVID-19 pandemic, which primarily harmed our media business starting March of 2020 and into the second quarter of 2020 and despite a return of bookings, could have an adverse effect through the rest of 2020;

~~our~~ ~~ability to grow and maintain our relationships with retailers, including our ability to negotiate favorable data rights agreements with retailers;~~

•our ability to successfully respond to changes in the digital promotions and media market and continue to grow the market and demand for our platforms;

~~the~~ ~~impact of competitors or competitive products and services, and our ability to compete in digital marketing;~~

•our ability to grow consumer selection and use of our digital promotion offerings and attract new consumers to our platforms;

~~our~~ ~~ability to obtain and increase the number of high quality promotions;~~

•the amount and timing of digital promotions and marketing campaigns by CPGs, which are affected by budget cycles, economic conditions, seasonality and other factors;

~~changes~~ in consumer behavior with respect to digital promotions and media and how consumers access digital promotions and media and our ability to develop applications that are widely accepted and generate revenues for CPGs, retailers and us;

•the impact of global business or macroeconomic conditions, including the resulting effects on the level of coupon and trade promotion spending by CPGs and spending by consumers;

~~the~~ ~~costs of investing, maintaining and enhancing our technology infrastructure;~~

•our ability to grow and maintain our relationships with retailers, including our ability to negotiate favorable data rights agreements with retailers;

~~increased legal and compliance costs associated with data protection laws and regulations in various jurisdictions, including the CCPA, which went into effect on January 1, 2020;~~

•the impact of competitors or competitive products and services, and our ability to compete in digital marketing;

~~the costs of developing new products, solutions and enhancements to our platform;~~

•our ability to obtain and increase the number of high quality promotions;

~~whether new products successfully launch on time;~~

•changes in consumer behavior with respect to digital promotions and media and how consumers access digital promotions and media and our ability to develop applications that are widely accepted and generate revenues for CPGs, retailers and us;

~~our~~ ~~ability to manage our growth, including scaling Retailer iQ, developing and growing our Media, Audience and Analytics Cloud platforms;~~

•the costs of investing, maintaining and enhancing our technology infrastructure;

~~the success of our sales and marketing efforts;~~

•increased legal and compliance costs associated with data protection laws and regulations in various jurisdictions, including the CCPA, which went into effect on January 1, 2020;

~~the costs of acquiring new companies;~~

•the costs of developing new products, solutions and enhancements to our platform;

~~the~~ ~~costs of successfully integrating acquired companies and employees into our operations, including costs related to the integration of Elevaate, SavingStar and Ubimo;~~

•whether new products successfully launch on time;

~~changes in the legislative or regulatory environment, including with respect to privacy and data protection, or enforcement by government regulators, including fines, orders, or consent decrees;~~

•our ability to manage our growth, including scaling our solutions, developing and growing our Media, Audience and Analytics Cloud platforms;

~~our ability to deal effectively with fraudulent transactions or customer disputes;~~

•the success of our sales and marketing efforts;

~~our ability to collect payment for services timely, as COVID-19 pandemic may cause liquidity issues for some of our customers;~~

•the costs of acquiring new companies;

~~the attraction and retention of qualified employees and key personnel, which can be affected by changes in U.S. immigration policies;~~

•the costs of successfully integrating acquired companies and employees into our operations, including costs related to the integration of Elevaate and Ubimo;

~~the effectiveness of our internal controls;~~

•changes in the legislative or regulatory environment, including with respect to privacy and data protection, or enforcement by government regulators, including fines, orders, or consent decrees;

~~increased~~ ~~legal, accounting and compliance costs associated with complying with Section 404 of the Sarbanes-Oxley Act (“SOX”);~~

•our ability to deal effectively with fraudulent transactions or customer disputes;

~~changes in accounting rules, tax laws or interpretations thereof; and~~

•our ability to collect payment for services timely, as COVID-19 pandemic may cause liquidity issues for some of our customers;

~~changes in the way we process and deliver our services, which could affect whether revenue is recognized on a net or gross basis.~~

•the attraction and retention of qualified employees and key personnel, which can be affected by changes in U.S. immigration policies;

•the effectiveness of our internal controls;

•increased legal, accounting and compliance costs associated with complying with Section 404 of the Sarbanes-Oxley Act (“SOX”);

•changes in accounting rules, tax laws or interpretations thereof; and

•changes in the way we process and deliver our services, which could affect whether revenue is recognized on a net or gross basis.

The effects of these factors individually or in combination, including the uncertainty created by the COVID-19 pandemic, could cause our quarterly and annual operating results to fluctuate, and affect our ability to forecast those results and our ability to achieve those forecasts. As a result, comparing our operating results on a period-to-period basis may not be meaningful. You should not rely on our past results as an indication of our future

performance. This variability and unpredictability could also result in our failing to meet or exceeding the expectations of our investors or financial analysts for any period. In addition, we may release guidance in our quarterly earnings conference calls, quarterly earnings releases, or otherwise, based on predictions of our management, which are necessarily uncertain in nature. The guidance provided depends on our prediction of CPG marketing budgets which can fluctuate greatly and are beyond our control. Our guidance may vary materially from actual results. If our revenue or operating results, or the rate of growth of our revenue or operating results, fall below or above the expectations of our investors or financial analysts, or below or above any forecasts or guidance we may provide to the market, or if the forecasts we provide to the market are below or

above the expectations of analysts or investors, the price of our common stock could decline or increase substantially. Such a stock price decline or increase could occur even when we have met our own or other publicly stated revenue or earnings forecasts. Our failure to meet our own or other publicly stated revenue or earnings forecasts, or even when we meet our own forecasts but fall short of analyst or investor expectations, could cause our stock price to decline and expose us to costly lawsuits, including securities class action suits. Such litigation against us could impose substantial costs and divert our management’s attention and resources. If we exceed our own or other publicly stated revenue or earnings forecasts, or even when we meet our own forecasts but exceed analyst or investor expectations, our stock price could increase.

The effects of health epidemics, including the ~~recent~~ COVID-19 pandemic, ~~could~~have had, and may continue to have, an adverse impact on our business, operations and the markets and communities in which we and our partners operate.

Our business and operations ~~could~~have been and may continue to be adversely affected by health epidemics, including the recent COVID-19 pandemic, impacting the markets and communities in which we and our partners operate. In December 2019, a novel strain of coronavirus, SARS-CoV-2, causing a disease referred to as COVID-19, was reported to have surfaced in Wuhan, China. Since then, COVID-19 has spread to many countries worldwide, including the United States.

~~The President of the United States has declared the COVID-19 pandemic a national emergency.~~

In response to the COVID-19 pandemic, many state, local and foreign governments have put in place, and others in the future may put in place, quarantines, executive orders, shelter-in-place orders and similar government orders and restrictions in order to control the spread of the disease. Such orders or restrictions, or the perception that such orders or restrictions could occur, have resulted in business closures, work stoppages, slowdowns and delays, work-from-home policies, travel restrictions and cancellation of events, among other effects that could negatively impact productivity and disrupt our operations and those of our partners. Certain jurisdictions have begun lifting such orders or restrictions only to return to these restrictions in the face of increases in new COVID-19 cases. The effects of these indefinite travel restrictions and prolonged alternative working arrangements are unknown, and may negatively impact the productivity of our employee base, and a disproportionately negative impact on our sales and operations functions, which could have an adverse effect on our business, operating results, and financial condition.

In addition, while the potential impact and duration of the COVID-19 pandemic on the global economy and our business in particular is difficult to assess or predict, the pandemic has resulted in, and ~~may continue~~continues to result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity. A recession or market correction resulting from the spread of COVID-19 and its impacts could decrease marketing spend, particularly in media, adversely affecting the demand for our products, our business, and the value of our common stock. While we have seen CPGs historically continue to spend on promotions during economic downturns, there is no guarantee they will continue to do so.

The global pandemic of COVID-19 continues to rapidly evolve, and we will continue to monitor the COVID-19 situation closely. The ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change. We do not yet know the full extent of potential delays or impacts on our business, operations or the global economy as a whole. The COVID-19 pandemic, and the various responses to it, may also have the effect of heightening many of the other risks discussed in this “Risk Factors” section.

If the distribution or other fees that we pay as a percentage of our revenues increase, our gross profit and business will be harmed.

When we deliver promotions or media on a retailer’s receipt, website or mobile app or through its loyalty program, or the website or mobile app of a publisher, or through our Retailer iQ platform, and the consumer takes certain actions, we pay a distribution fee to the retailer or other publisher, which, in some cases may be prepaid or guaranteed prior to being incurred. We also pay fees to retailers for use of their data in our Promotions, Media, Analytics, and Audience platforms and solutions. Such fees have increased as a percentage of our revenues in recent periods. If such fees as a percentage of our revenues continue to increase, our cost of revenues as a percentage of revenues could increase and our operating results would be adversely affected. ~~Additionally, some~~In addition, calculations of such fees are complex and if retailers disagree with our calculations in an audit, it could have an adverse impact on our business.

Some of our agreements with retailers include certain prepaid or guaranteed distribution fees. If the adoption and usage of Retailer iQ, targeted in-lane at checkout offers, and our other platforms and solutions do not meet projections or minimums, these prepaid or guaranteed distribution fees ~~will~~may not be recoverable and any shortfall may be payable by us at the end of the applicable period. For example, during the third quarter of 2016, we recorded a one-time charge associated with certain distribution fees under an arrangement with a retail partner that were deemed unrecoverable. We considered various factors in our assessment including our historical experience with the transaction volumes through the retailer and comparative retailers, ongoing communications with the retailer to increase its marketing efforts to promote the digital platform, as well as the projected revenues, and associated revenue share payments. Accordingly, during the third quarter of 2016, we recognized a loss of $7.4 million related to such distribution fee arrangement.

In 2020, implementation of one of the Company’s solutions with a retailer experienced slower than expected adoption due to a variety of factors, including impacts related to the spread of COVID-19 and the retailer's failure to perform certain obligations under the agreement. In light of these factors, the Company was not able to meet the contractual minimum under such arrangement at the end of the applicable period, which was originally scheduled to end in October 2020. If the contractual minimum and applicable period remain enforceable in light of these factors, the Company may recognize a loss that, depending on a variety of factors, could be as high as the high single digit millions. Accordingly, the Company has accrued $2.0 million related to such guaranteed distribution fee arrangement in other current liabilities as of September 30, 2020.

Our gross margins are dependent on many factors, some of which are not directly controlled by us.

The factors potentially affecting our gross margins include:

•

~~our product mix since we have significant variations in our gross margin among products. Any substantial change in product mix could change our gross margin;~~

•our product mix since we have significant variations in our gross margin among products. Any substantial change in product mix could change our gross margin;

~~growth and expansion of our lower-margin media products, including programmatic ads delivered through third-party ad-tech partners and publishers;~~

•growth and expansion of our lower-margin media products, including programmatic ads delivered through third-party ad-tech partners and publishers;

~~increasing data and traffic acquisition costs for offsite media on non-owned-and-operated properties;~~

•increasing data and traffic acquisition costs for offsite media on non-owned-and-operated properties;

evolving fee arrangements with CPGs, because as we continue to scale customers on our platforms we will continue to experiment with various fee arrangements which might have an impact on our gross margins;

•

evolving fee arrangements with CPGs, because as we continue to scale customers on our platforms we will continue to experiment with various fee arrangements ~~with retailers, because as we expand our product offerings we have also expanded distribution fee arrangements with retailers~~ which might have an impact on our gross margins;

•evolving fee arrangements with retailers, because as we expand our product offerings we have also expanded distribution fee arrangements with retailers which might have an impact on our gross margins;

~~success of our pricing strategies, including strategies that guarantee certain outcomes;~~

•success of our pricing strategies, including strategies that guarantee certain outcomes;

~~success of our investments in technology and automation or through acquisitions to gain cost efficiencies; and~~

•success of our investments in technology and automation or through acquisitions to gain cost efficiencies; and

~~pricing and acceptance of higher-margin new products.~~

•pricing and acceptance of higher-margin new products.

For instance, we have seen pressure on our gross margins, which we principally attribute to the factors described above and we expect this pressure to continue as our growth strategy evolves and our product mix continues to change. Although we expect to gain leverage as our business expands and through automation, there is no guarantee that we will succeed.

If we fail to maintain and expand the use by consumers of digital promotions on our platform, our revenues and business will be harmed.

We must continue to maintain and expand the use by consumers of digital promotions in order to increase the attractiveness of our platforms to CPGs and retailers and to increase revenues and achieve profitability. If consumers do not perceive that we offer a broad selection of relevant and high quality digital promotions, or that the usage of digital promotions is easy and convenient through our platforms, we may not be able to attract or retain consumers on our platforms. If we are unable to maintain and expand the use by consumers of digital promotions on our platforms, including through our national rebates platform, software-free print solution, our retail partners properties, our white label customer relationship management solutions, and Coupons.com and Shopmium mobile applications, or if we do not do so to a greater extent than our competitors, CPGs may find that offering digital promotions on our platforms do not reach consumers with the scale and effectiveness that is compelling to them. Likewise, if retailers find that using our platforms, including Retailer iQ, does not increase sales of the promoted products and consumer loyalty to the retailer to the extent they expect, then the revenues we generate may not increase to the extent we expect or may decrease. Any of these could adversely affect our operating results.

If we are not successful in responding to changes in consumer behavior and do not develop products and solutions that are widely accepted and generate revenues, our results of operations and business could be adversely affected.

The methods by which consumers access digital promotions are varied and evolving. Our platform has been designed to engage consumers at the critical moments when they are choosing the products they will buy and where they will shop. Consumers can select our digital promotions both online through web and mobile and in-store. In order for us to maintain and increase our revenues, we must be a leading provider of digital promotions in each of the forms by which consumers access them. As consumer behavior in accessing digital promotions changes and new distribution channels emerge, if we do not successfully respond and do not develop products or solutions that are widely accepted and generate revenues we may be unable to retain consumers or attract new consumers and as a result, CPGs and retailers, and our business may suffer. As another example, we are seeing a transition from digital print coupons to digital paperless coupons. If we do not manage this transition and digital print transactions decline faster than digital paperless transactions increase, our revenues may be harmed.

Consumer shopping behavior has changed dramatically in response to the COVID-19 ~~pandemic, as~~pandemic. For instance, shoppers ~~began~~continue to ~~self-isolate to stay healthy,~~minimize shopping trips, rely on online grocery shopping, ~~stock-up on supplies in preparation for extended staying at home,~~change buying habits as their lifestyles were impacted by state and ~~change the products they buy.~~local orders and social distancing . If consumers decide not to use our products that involve paper as a result of COVID-19 and do not find our purely digital products compelling, our business could be harmed.

We depend in part on third-party advertising agencies as intermediaries, and if we fail to develop and maintain these relationships, our business may be harmed.

A growing portion of our business is conducted indirectly with third-party advertising agencies acting on behalf of CPGs and retailers. Third-party advertising agencies are instrumental in assisting CPGs and retailers to plan and purchase media and promotions, and each third-party advertising agency generally allocates media and promotion spend from CPGs and retailers across numerous channels. We are still developing relationships with, and do not have exclusive relationships with, third-party advertising agencies and we depend in part on third-party agencies to work with us as they embark on marketing campaigns for CPGs and retailers. While in most cases we have developed relationships directly with CPGs and retailers, we nevertheless depend in part on third-party advertising agencies to present to their CPG and retailer clients the merits of our platform. Inaccurate descriptions of our platform by third-party advertising agencies, over whom we have no control, negative recommendations regarding use of our service offerings or failure to mention our platform at all could hurt our business. In addition, if a third-party advertising agency is disappointed with our platform on a particular campaign or generally, we risk losing the business of the CPG or retailer for whom the campaign was run, and of other CPGs and retailers represented by that agency. Since many third-party advertising agencies are affiliated with other third-party agencies in a larger corporate structure, if we fail to develop and maintain good relations with one third-party advertising agency in such an organization, we may lose business from the affiliated third-party advertising agencies as well.

Our sales could be adversely impacted by industry changes relating to the use of third-party advertising agencies. For example, if CPGs or retailers seek to bring their campaigns in-house rather than using an agency, we would need to develop direct relationships with the CPGs or retailers, which we might not be able to do and which could increase our sales and marketing expenses. Moreover, to the extent that we do not have a direct relationship with CPGs or retailers, the value we provide to CPGs and retailers may be attributed to the third-party advertising agency rather than to us, further limiting our ability to develop long-term relationships directly with CPG and

retailers. CPGs and retailers may move from one third-party advertising agency to another, and we may lose the underlying business. The presence of third-party advertising agencies as intermediaries between us and the CPGs and retailers thus creates a challenge to building our own brand awareness and affinity with the CPGs and retailers that are the ultimate source of our revenues. In addition, third-party advertising agencies conducting business with us may offer their own digital marketing solutions. As such, these third-party advertising agencies are, or may become, our competitors. If they further develop their own capabilities they may be more likely to offer their own solutions to advertisers, and our ability to compete effectively could be significantly compromised and our business, financial condition and operating results could be adversely affected.

Consumers are increasingly using mobile devices to access our content, and if we are unsuccessful in expanding the capabilities of our digital marketing solutions for our mobile platforms to allow us to generate revenues as effectively as our website platforms, our revenues could decline.

Web usage and the consumption of digital content are increasingly shifting from desktop to mobile platforms such as smartphones. The growth of our business depends in part on our ability to drive engagement, activation and shopping behavior for our retailers and CPGs through these mobile channels. Our success on mobile platforms will be dependent on our interoperability with popular mobile operating systems that we do not control, such as Android and iOS, and any changes in such systems that degrade our functionality, ease of convenience or that give preferential treatment to competitive services could adversely affect usage of our services through mobile devices.

Further, to deliver high quality mobile offerings, it is important that our platform integrates with a range of other mobile technologies, systems, networks and standards that we do not control. We may not be successful in developing relationships with key participants in the mobile industry or in developing products that operate effectively with these technologies, systems, networks or standards. If we fail to achieve success with our mobile applications and mobile website, or if we otherwise fail to deliver effective solutions to CPGs and retailers for mobile platforms and other emerging platforms, our ability to monetize these growth opportunities will be constrained, and our business, financial condition and operating results would be adversely affected.

Our success on mobile platforms will also be dependent on our ability to develop features or products that will make our mobile platform attractive to, and drive engagement by, consumers. If we fail to develop such features or products after investing in their development, our ability to monetize these growth opportunities will be constrained, and our business, financial condition and operating results may be adversely affected.

Competition presents an ongoing threat to the success of our business.

We expect competition in digital promotions and media and audiences to continue to increase. The market for digital promotions and media and audiences is competitive, fragmented and rapidly changing. We compete against a variety of companies with respect to different aspects of our business, including:

•

~~offline~~ coupon and discount services, as well as newspapers, magazines and other traditional media companies that provide coupon promotions and discounts on products and services in free standing inserts or other forms, including Valassis Communications, Inc., News America Marketing and Catalina Marketing Corporation;

•offline coupon and discount services, as well as newspapers, magazines and other traditional media companies that provide coupon promotions and discounts on products and services in free standing inserts or other forms, including Valassis Communications, Inc., News America Marketing and Catalina Marketing Corporation;

~~providers~~ of digital promotions such as Valassis’ Redplum.com, Catalina Marketing Corporation’s Cellfire, Inmar/You Technology, News America Marketing’s SmartSource; companies that offer cash back solutions such as iBotta, Inc., News America Marketing’s Checkout 51; and companies providing other e-commerce based services that allow consumers to obtain direct or indirect discounts on purchases; and companies that offer coupon codes such as RetailMeNot, Inc., Groupon, Inc., Exponential Interactive, Inc.’s TechBargains.com, Savings.com, Inc., Honey Science Corporation, which was recently acquired by PayPal Holdings, Inc., and Rakuten, Inc.;

•providers of digital promotions such as Valassis’ Redplum.com, Catalina Marketing Corporation’s Cellfire, Inmar/You Technology, News America Marketing’s SmartSource; companies that offer cash back solutions such as iBotta, Inc., News America Marketing’s Checkout 51; and companies providing other eCommerce based services that allow consumers to obtain direct or indirect discounts on purchases; and companies that offer coupon codes such as RetailMeNot, Inc., Groupon, Inc., Exponential Interactive, Inc.’s TechBargains.com, Savings.com, Inc., Honey Science Corporation, which was acquired by PayPal Holdings, Inc., and Rakuten, Inc.;

~~Internet~~ ~~sites and blogs that are focused on specific communities or interests that offer promotions or discount arrangements related to such communities or interests;~~

•Internet sites and blogs that are focused on specific communities or interests that offer promotions or discount arrangements related to such communities or interests;

~~companies~~ ~~offering online and marketing services to retailers and CPGs, such as MyWebGrocer, Inc. and Flipp Corp.; and~~

•companies offering online and marketing services to retailers and CPGs, such as MyWebGrocer, Inc. and Flipp Corp.; and

~~companies offering digital advertising technology, inventory, data, and services solutions for CPGs and Retailers including: Google, Facebook, The Trade Desk, Oracle, Criteo, Microsoft, and others~~.

•companies offering digital advertising technology, inventory, data, and services solutions for CPGs and Retailers including: Google, Facebook, Pinterest, Adobe, The Trade Desk, Oracle, Criteo, Microsoft, and others.

We believe the principal factors that generally determine a company’s competitive advantage in our market include the following:

•

~~scale~~ ~~and effectiveness of reach in connecting CPGs and retailers to consumers in a digital manner, through web, mobile and other online properties;~~

•scale and effectiveness of reach in connecting CPGs and retailers to consumers in a digital manner, through web, mobile and other online properties;

~~ability to attract consumers to use digital promotions and media delivered by it;~~

•ability to attract consumers to use digital promotions and media delivered by it;

~~platform security, scalability, reliability and availability;~~

•platform security, scalability, reliability and availability;

~~integration~~ ~~with retailer applications, point of sales systems, and consumer channels;~~

•integration with retailer applications, point of sales systems, and consumer channels;

~~access to retailer data;~~

•access to retailer data;

~~measurement that demonstrates the effectiveness of campaigns;~~

•measurement that demonstrates the effectiveness of campaigns;

~~quality of tools, reporting and analytics for planning, development and optimization of promotions;~~

•quality of tools, reporting and analytics for planning, development and optimization of promotions;

~~number of channels by which a company engages with consumers;~~

•number of channels by which a company engages with consumers;

~~integration of products and solutions;~~

•integration of products and solutions;

~~rapid deployment of products and services for customers;~~

•rapid deployment of products and services for customers;

~~breadth,~~ ~~quality and relevance of the Company’s digital promotions and media and audiences;~~

•breadth, quality and relevance of the Company’s digital promotions and media and audiences;

~~ability to~~ ~~deliver high quality and increasing number of digital promotions that are widely available and easy to use in consumers’ preferred form;~~

•ability to deliver high quality and increasing number of digital promotions that are widely available and easy to use in consumers’ preferred form;

~~brand recognition and reputation;~~

•brand recognition and reputation;

~~breadth and expertise of the Company’s sales organization; and~~

•breadth and expertise of the Company’s sales organization; and

~~skill and expertise of the Company’s operations organization.~~

•skill and expertise of the Company’s operations organization.

We are subject to competition from large, well-established companies which have significantly greater financial, marketing and other resources than we do and have offerings that compete with our platform or may choose to offer digital promotions and media and audiences as an add-on to their core business on their own or in partnership with one of our competitors that would directly compete with ours. Many of our larger actual and potential competitors have the resources to significantly change the nature of the digital promotions industry to their advantage, which could materially disadvantage us. For example, Google and Facebook and online retailers such as Amazon have highly trafficked industry platforms which they have leveraged, or could leverage, to distribute digital promotions and media that could negatively affect our business. In addition, these potential competitors may have greater access to first-party data, be able to respond more quickly than we can to new or emerging technologies and changes in consumer habits. These competitors may engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive pricing policies, which may allow them to attract more consumers and, as a result, more CPGs and retailers, or generate revenues more effectively than we do. Our competitors may offer digital promotions or targeted media campaigns that are similar to the digital promotions and targeted media campaigns we offer or that achieve greater market acceptance than those we offer. We are also subject to competition from smaller companies that launch similar or new products and services that we do not offer and that could gain market acceptance.

Our success depends on the effectiveness of our platform in connecting CPGs and retailers with consumers and with attracting consumer use of the digital promotions and media delivered through our platforms. To the extent we fail to provide digital promotions and media for high quality, relevant products, or otherwise fail to successfully reach consumers on their mobile device or elsewhere, consumers may become dissatisfied with our platform and decide not to use our digital promotions or interact with our digital media and elect to use or view the digital promotions and media distributed by one of our competitors. As a result of these factors, our CPGs and retailers may not receive the benefits they expect, and CPGs may use the offerings of one of our competitors, and retailers may elect to handle promotions and media themselves or exclude us from integrating with their in-store and point of sale systems or consumer channels, and our operating results would be adversely affected. Similarly, if retailers elect to use a competitive distribution network or platform, and we do not have, or fail to maintain, an agreement to distribute content through that network or platform, CPGs may elect to provide digital promotions and media directly to that network or platform, instead of through our platform. If retailers and CPGs require our platform to integrate with competitive offerings instead of using our products, we could lose some of our competitive advantage and our business could be harmed.

Our success may also depend on our ability to compete against incumbent competitors that our customers use and we may not be successful in persuading CPGs and their agencies to use our platforms and services.

We also face significant competition for trade promotion and marketing spending. We compete against online and mobile businesses, including those referenced above, and traditional advertising outlets, such as television, radio and print, for trade promotion and marketing spending. In order to grow our revenues and improve our operating results, we must increase our share of CPG spending on digital promotions and media relative to traditional sources and relative to our competitors, many of whom are larger companies that offer more traditional and widely accepted media products.

We also directly and indirectly compete with retailers for consumer traffic. Many retailers market and offer their own digital promotions and media directly to consumers using their own websites, email newsletters and alerts, mobile applications and social media channels. Additionally, some retailers also market and offer their own digital promotions and media directly to consumers using our platform for which we earn no revenue. Our retailers could be more successful than we are at marketing their own digital promotions and media and could decide to terminate their relationship with us.

We may face competition from companies we do not yet know about. If existing or new companies develop, market or offer competitive digital coupon solutions, acquire one of our existing competitors or form a strategic alliance with one of our competitors, our ability to compete effectively could be significantly compromised and our operating results could be harmed. For example, on March 13, 2019, Inmar announced that it completed the acquisition of Kroger’s subsidiary You Technology and entered into a long-term service agreement to provide digital coupon services to the Kroger family of stores. Following this acquisition, Inmar terminated our agreement with You Technology as of December 2019. This adversely affected our ability to distribute digital promotions through You Technology, which generated less than 5% of our ~~revenue.~~

revenue in 2019.

Acquisitions, joint ventures and strategic investments could result in operating difficulties, dilution and other harmful consequences.

We have acquired a number of businesses, and expect to continue to evaluate and consider a wide array of potential strategic transactions, including acquisitions and dispositions of businesses, joint ventures, technologies, services, products and other assets and strategic investments. At any given time, we may be engaged in discussions or negotiations with respect to one or more of these types of transactions. Any of these transactions could be material to our financial condition and results of operations. The process of integrating any acquired business may create unforeseen operating difficulties and expenditures and is itself risky. The areas where we may face difficulties include:

•

~~expected~~ ~~and unexpected costs incurred in identifying and pursuing strategic transactions and performing due diligence regarding potential strategic transactions that may or may not be successful;~~

•expected and unexpected costs incurred in identifying and pursuing strategic transactions and performing due diligence regarding potential strategic transactions that may or may not be successful;

~~failure~~ ~~of an acquired company to achieve anticipated revenue, earnings, cash flows or other desired technological and business goals;~~

•failure of an acquired company to achieve anticipated revenue, earnings, cash flows or other desired technological and business goals;

~~effectiveness~~ of our due diligence review and our ability to evaluate the results of such due diligence, which are dependent upon the accuracy and completeness of statements and disclosures made by the acquired company;

•effectiveness of our due diligence review and our ability to evaluate the results of such due diligence, which are dependent upon the accuracy and completeness of statements and disclosures made by the acquired company;

~~diversion~~ ~~of management time, as well as a shift of focus from operating the businesses to issues related to integration and administration;~~

•diversion of management time, as well as a shift of focus from operating the businesses to issues related to integration and administration;

~~disputes as a result of certain terms and conditions of our transactions, such as payment of contingent consideration, compliance with covenants, or closing adjustments;~~

•disputes as a result of certain terms and conditions of our transactions, such as payment of contingent consideration, compliance with covenants, or closing adjustments;

~~the need to integrate technical operations and security~~ ~~protocols, which may lead to significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our products and services;~~

•the need to integrate technical operations and security protocols, which may lead to significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our products and services;

~~the~~ need to integrate the acquired company’s accounting, management, information, human resource and other administrative systems to permit effective management, and the lack of control if such integration is delayed or not implemented;

•the need to integrate the acquired company’s accounting, management, information, human resource and other administrative systems to permit effective management, and the lack of control if such integration is delayed or not implemented;

•retention of key employees from the acquired company and cultural challenges associated with integrating employees from the acquired company into our organization;

•the need to implement or improve controls, procedures and policies appropriate for a public company at companies that prior to acquisition had lacked such controls, procedures and policies;

•in some cases, the need to transition operations and customers onto our existing platforms;

•

~~retention~~ ~~of key employees from the acquired company and cultural challenges associated with integrating employees from the acquired company into our organization;~~

•in certain instances, the ability to exert control of acquired businesses that include earnout provisions in the agreements relating to such acquisitions or the potential obligation to fund an earnout for, or other obligations related to, a product that has not met expectations;

~~the~~ ~~need to implement or improve controls, procedures and policies appropriate for a public company at companies that prior to acquisition had lacked such controls, procedures and policies;~~

•the need to integrate operations across different geographies, cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries;

in ~~some cases, the need to transition operations and customers onto our existing platforms;~~

•liability for activities of the acquired company before the acquisition, including violations of laws, rules and regulations, commercial disputes, tax liabilities and other known and unknown liabilities;

in certain instances, the ability to exert control of acquired businesses that include earnout provisions in the agreements relating to such acquisitions or the potential obligation to fund an earnout for, or other obligations related to, a product that has not met expectations;

•difficulties valuing intangibles related to acquired businesses, which could lead to write-offs or charges related to acquired assets or goodwill; and

~~the~~ ~~need to integrate operations across different geographies, cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries;~~

•litigation or other claims in connection with the acquired company, including claims from terminated employees, users, former stockholders or other third parties and intellectual property infringement claims.

~~liability~~ ~~for activities of the acquired company before the acquisition, including violations of laws, rules and regulations, commercial disputes, tax liabilities and other known and unknown liabilities;~~

•

~~difficulties valuing intangibles related to acquired businesses, which could lead to write-offs~~ ~~or charges related to acquired assets or goodwill; and~~

•

~~litigation~~ ~~or other claims in connection with the acquired company, including claims from terminated employees, users, former stockholders or other third parties and intellectual property infringement claims.~~

For example, we have acquired businesses whose technologies are new to us and with which we did not have significant experience. We have made and are making investments of resources to support such acquisitions, which will result in ongoing operating expenses and may divert resources and management attention from other areas of our business. We cannot assure you that these investments and the integration of these acquisitions will be successful. If we fail to successfully integrate the companies we acquire, we may not realize the benefits expected from the transaction and our business may be harmed.

Our failure to address these risks or other problems encountered in connection with our past or future acquisitions and investments could cause us to fail to realize the anticipated benefits of any or all of our acquisitions or joint ventures, or we may not realize them in the time frame expected or cause us to incur unanticipated liabilities, and harm our business. Future acquisitions or joint ventures may require us to issue dilutive additional equity securities, spend a substantial portion of our available cash, incur debt or contingent liabilities, amortize expenses related to intangible assets or incur incremental operating expenses or write-offs of goodwill or impaired acquired intangible assets, which could adversely affect our results of operations and harm our business.

If we fail to effectively manage our growth, our business and financial performance may suffer.

We have significantly expanded our operations and anticipate expanding further to pursue our growth strategy. Through acquisitions we have added ~~four~~multiple additional offices within the last two years. Such expansion increases the complexity of our business and places significant demands on our management, operations, technical performance, financial resources and internal control over financial reporting functions. Continued growth could strain our ability to deliver digital promotions and media on our platforms, develop and improve our operational, financial, legal and management controls, and enhance our reporting systems and procedures. Failure to manage our expansion may limit our growth, damage our reputation and negatively affect our financial performance and harm our business.

To effectively manage this growth, we will need to continue to improve our operational, financial and management controls, and our reporting systems and procedures. If we do not effectively manage the growth of our business and operations the scalability of our business and our operating results could suffer.

Our current and planned personnel, systems, procedures and controls may not be adequate to support and effectively manage our future operations. We may not be able to hire, train, retain, motivate and manage required personnel. As we continue to grow, we must effectively integrate, develop and motivate a large number of new employees. We intend to continue to expand our research and development, sales and marketing, and general and administrative organizations, and over time, expand our international operations. To attract top talent, we have had to offer, and believe we will need to continue to offer, highly competitive compensation packages before we can validate the productivity of those employees. If we fail to effectively manage our hiring needs and successfully integrate our new hires, our efficiency and ability to meet our forecasts and our employee morale, productivity and retention could suffer, and our business and operating results could be adversely affected.

Providing our products and services to our CPGs, retailers and consumers is costly and we expect our expenses to continue to increase in the future as we grow our business with existing and new CPGs and retailers and develop new products and services that require enhancements to our technology infrastructure. In addition, our operating expenses, such as our sales, marketing and engineering expenses are expected to continue to grow to support our anticipated future growth. As a result of the requirements of being a public company we incur significant legal, accounting and other expenses. Our expenses may grow faster than our revenues, and our expenses may be

greater than we anticipate. Managing our growth will require significant expenditures and allocation of valuable management resources. If we fail to achieve the necessary level of efficiency in our organization as it grows, our business, operating results and financial condition would be harmed.

Our sales cycle with CPGs and retailers is long and unpredictable and may require us to incur expenses before executing or renewing a customer agreement, which makes it difficult to project when, if at all, we will obtain new CPGs and retailers, or renew customer agreements with existing CPG customers and retail partners, and when we will generate additional revenues.

We market our services and products directly to CPGs and retailers. New CPG and retailer relationships typically take time to obtain and finalize. Existing CPG and retailer relationships may change and take time to re-establish due to market consolidation and personnel changes. A significant time period may pass between selection of our services and products by key decision-makers and the signing of a contract. The length of time between the initial sales call and the realization of a final contract is difficult to predict. As a result, it is difficult to predict when we will obtain new CPGs and retailers and when performance and delivery of services will be initiated with these potential CPGs and retailers. In addition, our customers typically have no obligation to renew their agreements with us after their initial term, and in order for us to maintain or improve our results of operations, it is important that our customers renew their agreements with us when the initial term expires. As part of our sales and renewal cycle, we may incur significant expenses before executing or renewing a definitive agreement with a prospective or existing CPG or retailer and before we are able to generate any revenues from such agreement or renewal. If conditions in the marketplace generally or with a specific prospective CPG or retailer change negatively, it is possible that no definitive agreement will be executed or renewed, and we will be unable to recover any expenses incurred before a definitive agreement is executed or renewed, which would in turn have an adverse effect on our business, financial condition and results of operations.

~~We expect that our~~

Our sales cycles with CPGs and retailers ~~will be unpredictable~~have been prolonged as a result of the uncertainty and restrictions caused by the COVID-19 ~~pandemic; and as CPGs and retailers focus on COVID-19 issues and sales~~pandemic. Sales meetings are conducted remotely due to shelter-in-place orders and work and travel restrictions.

Our business depends on our ability to maintain and scale the network infrastructure necessary to operate our platforms, including our websites, mobile applications and Retailer iQ platform, and any significant disruption in service could result in a loss of CPGs, retailers and consumers.

We deliver digital promotions and media via our platforms, including over our websites and mobile applications, as well as through those of our CPGs and retailers and our publishers and other third parties. Our reputation and ability to acquire, retain and serve CPGs and retailers, as well as consumers who use digital promotions or view media on our platforms are dependent upon the reliable performance of our platforms. As the number of our CPG customers, retailers and consumers and the number of digital promotions, digital media and information shared through our platforms continue to grow, we will need an increasing amount of network capacity and computing power. Our technology infrastructure isand Retailer iQ platform are hosted across two data centers in co-location facilities in California and ~~Nevada. In addition, we use two other co-location facilities in California and Virginia~~ to ~~host our Retailer iQ platform.~~Virginia. We have spent and expect to continue to spend substantial amounts in our data centers and equipment and related network infrastructure to handle the traffic on our platform. The operation of these systems is expensive and complex and could result in operational failures. In the event that the number of transactions or the amount of traffic on our platforms grows more quickly than anticipated, we may be required to incur significant additional costs. In addition, as we scale, we must continually invest in our information technology, and continue to invest in information security, infrastructure and automation. Deployment of new software or processes may adversely affect the performance of our services and harm the customer experience. If we fail to support our platforms or provide a strong customer experience, our ability to retain and attract customers may be harmed. Interruptions in these systems or service disruptions, whether due to system failures, computer viruses, malware, ransomware, denial of service attacks, attempts to degrade or disrupt services, or physical or electronic break-ins, could affect the security or availability of our websites and platform, and prevent CPGs, retailers or consumers from accessing our platform. A substantial portion of our network infrastructure is hosted by third-party providers. Any disruption in these services or any failure of these providers to handle existing or increased traffic could significantly harm our business. Any financial or other difficulties these providers face may adversely affect our business, and we exercise little control over these providers, which increases our vulnerability to problems with the services they provide. If we do not maintain or expand our network infrastructure successfully or if we experience operational failures, we could lose current and potential CPGs, retailers and consumers, which could harm our operating results and financial condition.

We currently have not experienced disruptions to our network or operations as a result of COVID-19 but there are no guarantees there will not be disruptions in the future.

If our websites or those of our publishers fail to rank prominently in unpaid search results from search engines, traffic to our websites could decline and our business would be adversely affected.

Our success depends in part on our ability to attract consumers through unpaid Internet search results on search engines, such as Google. The number of consumers we attract to our websites from search engines is due in large part to how and where our websites rank in unpaid search results. These rankings can be affected by a number of factors, many of which are not in our direct control, and they may change frequently. For example, major search engines frequently modify their ranking algorithms, methodologies or design layouts. As a result, links to our websites may not be prominent enough to drive traffic to our websites or we may receive less favorable placement which could reduce traffic to our website, and we may not know how or otherwise be in a position to influence the results. In some instances, search engine companies may change these rankings in order to promote their own competing products or services or the products or services of one or more of our competitors. Our websites have experienced fluctuations in search result rankings in the past, and we anticipate fluctuations in the future. For example, the search result rankings of our websites have fallen relative to the same time last year. In addition, websites must comply with search engine guidelines and policies. These guidelines and policies are complex and may change at any time. If we fail to follow such guidelines and policies properly, search engines may rank our content lower in search results or could remove our content altogether from their index. Moreover, the use of voice recognition technology, such as Alexa, Google Assistant or Siri, may drive traffic away from search engines, which could reduce traffic to our website. Any reduction in the number of consumers directed to our websites could reduce the effectiveness of our coupon codes for specialty retailers and digital promotions for CPGs and retailers and could adversely impact our business and results of operations. It could also reduce our ability to sell media advertising on our sites, which would negatively impact revenues and harm our business. For example, we have seen a decline in the revenues from specialty retail and expect this trend to continue.

If we fail to continue to obtain and increase the number of high quality promotions through our platform, our revenue growth or our revenues may be harmed.

We generally generate revenues as consumers select, or activate, a digital promotions through our platform. Our business model depends upon the availability of high quality and increasing number of digital promotions. CPGs and retailers have a variety of channels through which to promote their products and services. If CPGs and retailers elect to distribute their digital promotions through other channels or not to promote digital promotions at all, or if our competitors are willing to accept lower prices than we are, our ability to obtain high quality digital promotions available on our platform may be impeded and our business, financial condition and operating results will be adversely affected. If we cannot maintain sufficient digital promotions inventory to offer through our platform, consumers may perceive our service as less relevant, consumer traffic to our websites and those of our publishers will decline and, as a result, CPGs and retailers may decrease their use of our platform to deliver digital coupons and our revenue growth or revenues may be harmed.

Our business relies in part on electronic messaging, including emails and SMS text messages, and any technical, legal or other restrictions on the sending of electronic messages or an inability to timely deliver such communications could harm our business.

Our business is in part dependent upon electronic messaging. We provide emails, mobile alerts and other messages to consumers informing them of the digital coupons on our websites, and we believe these communications help generate a significant portion of our revenues. We also use electronic messaging, in part, as part of the consumer sign-up and verification process. Because electronic messaging services are important to our business, if we are unable to successfully deliver electronic messages to consumers, if there are legal restrictions on delivering these messages to consumers, or if consumers do not or cannot open our messages, our revenues and profitability could be adversely affected. Changes in how webmail applications or other email management tools organize and prioritize email may result in our emails being delivered or routed to a less prominent location in a consumer’s inbox or viewed as “spam” by consumers and may reduce the likelihood of that consumer opening our emails. Actions taken by third parties that block, impose restrictions on or charge for the delivery of electronic messages could also harm our business. From time to time, Internet service providers or other third parties may block bulk email transmissions or otherwise experience technical difficulties that result in our inability to successfully deliver emails or other messages to consumers.

Changes in laws or regulations, or changes in interpretations of existing laws or regulations, including the Telephone Consumer Protection Act, or the TCPA in the United States and laws regarding commercial electronic messaging in other jurisdictions, that would limit our ability to send such communications or impose additional requirements upon us in connection with sending such communications could also adversely impact our business. For example, the Federal Communications Commission amended certain of its regulations under the TCPA in recent years in a manner that could increase our exposure to liability for certain types of telephonic communication with customers, including but not limited to text messages to mobile phones. Under the TCPA, plaintiffs may seek actual monetary loss or statutory damages of $500

per violation, whichever is greater, and courts may treble the damage award for willful or knowing violations. Given the enormous number of communications we send to consumers, a determination that there have been violations of the TCPA or other communications-based statutes could expose us to significant damage awards that could, individually or in the aggregate, materially harm our business. Moreover, even if we prevail, such litigation against us could impose substantial costs and divert our management’s attention and resources.

We also rely on social networking messaging services to send communications. Changes to these social networking services’ terms of use or terms of service that limit promotional communications, restrictions that would limit our ability or our customers’ ability to send communications through their services, disruptions or downtime experienced by these social networking services or reductions in the use of or engagement with social networking services by customers and potential customers could also harm our business.

We rely on a third-party service for the delivery of daily emails and other forms of electronic communication, and delay or errors in the delivery of such emails or other messaging we send may occur and be beyond our control, which could damage our reputation or harm our business, financial condition and operating results. If we were unable to use our current electronic messaging services, alternate services are available; however, we believe our sales could be impacted for some period as we transition to a new provider, and the new provider may be unable to provide equivalent or satisfactory electronic messaging service. Any disruption or restriction on the distribution of our electronic messages, termination or disruption of our relationship with our messaging service providers, including our third-party service that delivers our daily emails, or any increase in our costs associated with our email and other messaging activities could harm our business.

We are dependent on technology systems and electronic communications networks that are supplied and managed by third parties, which could result in our inability to prevent or respond to disruptions in our services.

Our ability to provide services to consumers depends on our ability to communicate with CPGs, retailers and customers through the public Internet and electronic networks that are owned and operated by third parties. Our products and services also depend on the ability of our users to access the public Internet. In addition, in order to provide services promptly, our computer equipment and network servers must be functional 24 hours per day, which requires access to telecommunications facilities managed by third parties and the availability of electricity, which we do not control. A severe disruption of one or more of these networks, including as a result of utility or third-party system interruptions, could impair our ability to process information, which could impede our ability to provide digital promotions and media to consumers, harm our reputation, result in a loss of customers or CPGs and retailers and adversely affect our business and operating results. For example, currently, as a result of work and travel restrictions related to the ongoing COVID-19 pandemic, all of our employees are working remotely and dependent upon their respective internet service providers to be able to access the internet, our systems and systems of our service providers. In other words, our business workflows now rely on availability of residential broadband bandwidth as well as connectivity which is currently under considerable strain. If the residential broadband and internet access break down under strain, our business and operations would be harmed.

If our security measures or information we collect and maintain are compromised or publicly exposed, CPGs, retailers and consumers may curtail or stop using our platforms and we could be subject to claims, penalties and fines.

We collect and maintain data about consumers, including personally identifiable information or personal data, as well as other confidential or proprietary information. Like all businesses that use computer systems and the Internet, our security measures ~~and~~as well as those of companies we may acquire and our third-party service providers and partners, may not detect or prevent all attempts to gain access to our systems, denial-of-service attacks, viruses, malicious software including malware and ransomware, break-ins, phishing attacks, social engineering, human error, security breaches or other attacks and similar disruptions ~~that~~(including those caused by national disasters, terrorism, war and telecommunication and electric failures). Such events may jeopardize the security of

information stored in or transmitted by our systems or solutions or that we or our third-party service providers and partners otherwise maintain, including payment systems, any of which could lead to interruptions, delays, or website shutdowns, causing loss of critical data or the unauthorized disclosure, access to, acquisition of or use of personally identifiable or other confidential information or proprietary data, or subject us to fines or higher transaction fees or limit or result in the termination of our access to certain payment ~~methods~~. methods. The costs to us to mitigate network security problems, bugs, viruses, worms, malicious software programs and other security vulnerabilities could be significant. Due to the COVID-19 pandemic, our employees are temporarily working remotely, which may pose additional data security risks. If we, or our service providers and partners, experience compromises to our security that result in performance or availability problems, the complete shutdown of one or more of our websites and mobile applications, or the misuse, loss or unauthorized access to or disclosure of confidential information, personally identifiable information, or other personal or proprietary data, CPGs, retailers, and consumers may lose trust and confidence in us and decrease their use of our platforms or stop using our platforms entirely. Such compromises to personal or sensitive information or proprietary data could lead to litigation or other adversarial actions by business partners such as retailers or consumers.

Because the techniques used to obtain unauthorized access are often sophisticated and change frequently, neither we nor third-party service providers and partners can guarantee that our systems will not be breached. In addition, consumer information including email addresses, phone numbers, transaction data, and data on consumer usage of our and our retailer partners’ websites and mobile applications could be hacked, hijacked, altered or otherwise claimed or controlled by unauthorized persons. Security breaches can also occur as a result of nontechnical issues, including intentional or inadvertent actions by our employees or by persons with whom we have commercial relationships that lead to exposure of any types of personal, sensitive or proprietary information. Any or all of these issues, or the perception that any of them has occurred, even if inaccurate, could negatively impact our reputation and our ability to attract and retain CPGs and retailers as well as consumers or could reduce the frequency with which our platforms are used, cause existing or potential CPG or retailer customers to cancel their contracts or subject us to third-party lawsuits, regulatory fines or other action or liability, and harm our business and results of operations.

In addition, such a breach may require notification to governmental agencies, supervisory bodies, credit reporting agencies, the media, individuals or other parties pursuant to various foreign, domestic (federal and state) data protection, privacy and security laws, regulations and guidelines, industry standards and contracts, if applicable. Accordingly, a security breach or privacy violation that leads to unauthorized access to, disclosure of, or acquisition of personally identifiable information, could result in fines, increased costs or loss of revenue as a result of: harm to our reputation; additional compliance obligations or enforcement measures under foreign, federal or state laws; and remediation and corrective action we undertake as required by law or as otherwise necessary.

Remediation of any potential cyber security breach may involve significant time, resources, and expenses, which may result in potential regulatory inquiries, litigation or other investigations, and can affect our financial and operational condition.

Failure to deal effectively with fraudulent or other improper transactions could harm our business.

Digital promotions are issued in the form of redeemable coupons, coupon codes with unique ~~identifiers or cash-back rebates.~~identifiers. It is possible that third parties may create counterfeit digital coupons or coupon codes or exceed print or use limits in order to fraudulently or improperly claim discounts or credits for redemption. It is also possible that third parties may fraudulently or improperly claim cash-back rebates causing us to pay out cash that we are not able to get reimbursement from our ~~retailer~~ customers. It is possible that individuals will circumvent our anti-fraud systems using increasingly sophisticated methods or methods that our anti-fraud systems are not able to counteract. Further, we may not detect any of these unauthorized activities in a timely manner. Third parties who succeed in circumventing our anti-fraud systems may sell the fraudulent or fraudulently obtained digital coupons on social networks or claim discounts, credits or cash-back that they are not entitled to, which would damage our brand and relationships with CPGs and harm our business. Legal measures we take or attempt to take against these third parties may be costly and may not be ultimately successful. In addition, our service could be subject to employee fraud or other internal security breaches, and we may be required to reimburse CPGs and retailers for any funds stolen or revenues lost as a result of such breaches. Our CPGs and retailers could also request reimbursement, or stop using ~~digital coupons,~~our services, if they are affected by buyer fraud or other types of fraud. We may incur significant losses from fraud and counterfeit digital ~~coupons.~~coupons and receipts. If our anti-fraud technical and legal measures do not succeed, our business may suffer.

Factors adversely affecting performance marketing programs and our relationships with performance marketing networks and brand partners, or the termination of these relationships, may adversely affect our ability to attract and retain merchants and our coupon codes business.

A portion of our business is based upon consumers using coupon codes from specialty retailers in connection with the purchase of goods or services. The commissions we earn for coupon codes accessed through our platform are tracked by performance marketing networks. Third-party performance marketing networks provide publishers with affiliate tracking links that allow for revenues to be attributed to publishers. When a consumer executes a purchase on a publisher’s website as a result of a performance marketing program, most performance marketing conversion tracking tools credit the most recent link or ad clicked by the consumer prior to that purchase. This practice is generally known as “last-click attribution.” We generate revenues through transactions for which we receive last-click attribution. Risks that may adversely affect our performance marketing programs and our relationships with performance marketing networks include the following, some of which are outside our control:

•

we may not be able to adapt to changes in the way in which CPGs and merchants attribute credit to us in their performance marketing programs, whether it be “first-click attribution” or “multichannel attribution,” which applies weighted values to each of a retailer’s advertisements and tracks how each of those advertisements contributes to a purchase, or otherwise;

•we may not be able to adapt to changes in the way in which CPGs and merchants attribute credit to us in their performance marketing programs, whether it be “first-click attribution” or “multichannel attribution,” which applies weighted values to each of a retailer’s advertisements and tracks how each of those advertisements contributes to a purchase, or otherwise;

we may not receive revenue if consumers make purchases from their mobile devices as many retailers currently do not recognize affiliate tracking links on their mobile-optimized websites or applications, and tracking mechanisms on mobile websites or applications may not function to allow retailers to properly attribute sales to us;

•we may not receive revenue if consumers make purchases from their mobile devices as many retailers currently do not recognize affiliate tracking links on their mobile-optimized websites or applications, and tracking mechanisms on mobile websites or applications may not function to allow retailers to properly attribute sales to us;

we ~~may not generate revenue if consumers use mobile devices for shopping research but make purchases using coupon codes found on our sites in ways where we do not get credit;~~

•we may not generate revenue if consumers use mobile devices for shopping research but make purchases using coupon codes found on our sites in ways where we do not get credit;

~~refund~~ ~~rates for products delivered on merchant sites may be greater than we estimate;~~

•

~~performance~~ marketing networks may not provide accurate and timely reporting on which we rely, we could fail to properly recognize and report revenues and misstate financial reports, projections and budgets and misdirect our advertising, marketing and other operating efforts for a portion of our business;

•refund rates for products delivered on merchant sites may be greater than we estimate;

we ~~primarily rely on a small number of performance marketing networks in non-exclusive arrangements, the loss of which could adversely affect our coupon codes business;~~

•

we ~~primarily rely, in connection with~~•performance marketing networks may not provide accurate and timely reporting on which we rely, we could fail to properly recognize and report revenues and misstate financial reports, projections and budgets and misdirect our advertising, marketing and other operating efforts for a portion of our ~~search engine marketing business, on a small number of brand partners that work with us in non-exclusive arrangements, the loss of which could adversely affect our coupon codes~~ business;

•we primarily rely on a small number of performance marketing networks in non-exclusive arrangements, the loss of which could adversely affect our coupon codes business;

~~industry~~ ~~changes relating to the use of performance marketing networks could adversely impact our commission revenues;~~

•we primarily rely, in connection with our search engine marketing business, on a small number of brand partners that work with us in non-exclusive arrangements, the loss of which could adversely affect our coupon codes business;

~~to the extent~~ performance marketing networks serve as intermediaries between us and merchants, it may create challenges to building our own brand awareness and affinity with merchants, and the termination of our relationship with the performance marketing networks would terminate our ability to receive payments from merchants we service through that network; and

•industry changes relating to the use of performance marketing networks could adversely impact our commission revenues;

~~performance marketing networks may compete with us.~~

•to the extent performance marketing networks serve as intermediaries between us and merchants, it may create challenges to building our own brand awareness and affinity with merchants, and the termination of our relationship with the performance marketing networks would terminate our ability to receive payments from merchants we service through that network;

•performance marketing networks may compete with us; and

•economic uncertainty related to COVID-19 and its impact on consumer spending.

While coupon codes from specialty retailers represent a declining portion of our business, any of these risks could adversely affect our revenues in this area.

Our business is subject to complex and evolving laws, regulations and industry standards, and unfavorable interpretations of, or changes in, or failure by us to comply with these laws, regulations and industry standards could substantially harm our business and results of operations.

We are subject to a variety of foreign, federal, state, local and municipal laws, regulations and industry standards that relate to privacy, electronic communications, data protection, intellectual property, ~~e-commerce,~~eCommerce, competition, price discrimination, consumer protection, taxation, and the use of promotions. Many of these laws, regulations, and standards are still evolving and being tested in courts and industry standards are still developing. Our business, including our ability to operate and expand, could be adversely affected if legislation, regulations or industry standards are adopted, interpreted or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices or the design of our platform. Existing and future laws, regulations and industry standards could restrict our operations, and our ability to retain or increase our CPGs

and retailers and consumers’ use of digital promotions delivered on our platform may be adversely affected and we may not be able to maintain or grow our revenues as anticipated.

For example, the ~~California Consumer Privacy Act of 2018 (“CCPA”)~~CCPA came into effect on January 1, 2020; the CCPA has already been amended ~~once~~ and grants ~~consumers~~California residents new rights with respect to their personal information. The CCPA includes a framework with potentially severe statutory damages and private rights of action. The CCPA requires covered businesses to provide new disclosures to California residents and provide them new ways to opt-out of certain disclosures of personal information. In addition, the CCPA allows for a new cause of action for data breaches. It remains unclear how the CCPA will be interpreted, but as currently written, it may impact our business activities and exemplifies the vulnerability of our business to the evolving regulatory environment related to personal data. As we expand our operations, the CCPA may increase our compliance costs and potential liability, Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent privacy legislation in the U.S. Other states are beginning to propose similar laws.

Compliance with these and any other applicable privacy, data protection, data security, marketing and consumer protection guidelines, laws and regulations is a rigorous and time-intensive process, and we may be required to put in place additional mechanisms to ensure compliance with them. We believe our policies and practices comply in material respects with ~~applicable privacy, data protection, data security, marketing and consumer protection~~these guidelines, laws and regulations. However, if our belief is incorrect, or if these guidelines, laws or regulations or their interpretation change or new legislation or regulations are enacted, we may face significant fines and penalties that could adversely affect our business, financial condition and result of operations. Further, we could be compelled to provide additional disclosures to our consumers, obtain additional consents from our consumers before collecting, using, or disclosing their information or implement new safeguards or business processes to help individuals manage our use of their information, among other changes. We also cannot control our retail partners’ approach or interpretation of CCPA or other privacy regulations, which may impact their willingness or ability to provide us data that our platforms and solutions are dependent upon, or the terms on which they are willing or able to provide it. Changes to our data sources may restrict our ability to maintain or grow our revenues as anticipated.

If the use of third-party cookies or other tracking technology is rejected by Internet users, restricted by third parties outside of our control, or otherwise subject to unfavorable regulation, our performance could decline and we could lose customers and revenue.

We use a number of technologies to collect information used to deliver our solutions. For instance, we use small text files (referred to as "cookies"), placed through an Internet browser on an Internet user's machine which corresponds to a data set that we keep on our servers, to gather important data to help deliver our solution. Certain of our cookies, including those that we predominantly use in delivering our solution through Internet browsers, are known as "third-party" cookies because they are delivered by third parties rather than by us. Our cookies collect ~~anonymous~~ information, such as when an Internet user views an advertisement, clicks on an advertisement, or visits one of our advertisers' websites. In some countries, including countries in the European Economic Area, and certain states within the U.S., such as California, this information may be considered personal information under applicable data protection laws. On mobile devices, we may also obtain location based information about the user's device through our cookies or other tracking technologies. We use these technologies to achieve our customers' campaign goals, to ensure that the same Internet user does not unintentionally see the same media too frequently, to report aggregate information to our customers regarding the performance of their digital promotions and

marketing campaigns, and to detect and prevent fraudulent activity throughout our network. We also use data from cookies to help us decide whether and how much to bid on an opportunity to place an advertisement in a certain Internet location and at a given time in front of a particular Internet user. A lack of data associated with or obtained from third-party cookies may detract from our ability to make decisions about which inventory to purchase for an advertiser's campaign and may adversely affect the effectiveness of our solution and harm our business.

Cookies may ~~easily~~ be deleted or blocked by Internet users. ~~All of the~~The most commonly used Internet browsers (including Chrome, Firefox, Internet Explorer, and Safari) allow Internet users to prevent cookies from being accepted by their browsers. Internet users can also delete cookies from their ~~computers at any time.~~computers. Some Internet users also download "ad blocking" software that prevents cookies from being stored on a user's computer. If more Internet users adopt these settings or delete their cookies more frequently than they currently do, our business could be harmed. In addition, ~~the Safari and Firefox~~certain web browsers may block third-party cookies by default, and other browsers may do so in the future. Unless such default settings in browsers are altered by Internet users to permit the placement of third-party cookies, we would be able to set fewer of our cookies in users’ browsers, which could adversely affect our business. In addition, companies such as Google have publicly disclosed their intention to move away from cookies to another form of

persistent unique identifier, or ID, to identify individual Internet users or Internet-connected devices in the bidding process on advertising exchanges. If companies do not use shared IDs across the entire ecosystem, this could have a negative impact on our ability to find the same ~~anonymous~~ user across different web properties, and reduce the effectiveness of our solution.

In addition, in the European Union, or EU, Directive 2009/136/EC, commonly referred to as the "Cookie Directive," directs EU member states to ensure that collecting information on an Internet user's computer, such as through a cookie, is allowed only if the Internet user has appropriately given his or her prior freely given, specific, informed and unambiguous consent. Similarly, this Directive, which also contains specific rules for the sending of marketing communications, limits the use of marketing texts messages and e-mails. Additionally, an e-Privacy Regulation, which will replace the Cookie Directive with requirements that could be stricter in certain respects, apply directly to activities within the EU without the need to be transposed in each Member State’s Law, and could impose stricter requirements regarding the use of cookies and marketing e-mails and text messages and additional penalties for noncompliance, has been proposed, although at this time it is unclear whether it will be approved as it is currently drafted or when its requirements will be effective. We may experience challenges in obtaining appropriate consent to our use of cookies from consumers or to send marketing communications to consumers within the EU, which may affect our ability to run promotions and our operating results and business in European markets, and we may not be able to develop or implement additional tools that compensate for the lack of data associated with cookies. Moreover, even if we are able to do so, such additional tools may be subject to further regulation, time consuming to develop or costly to obtain, and less effective than our current use of cookies.

Failure to comply with federal, state and ~~international~~foreign privacy, data protection, marketing and consumer protection laws, regulations and industry standards, or the expansion of current or the enactment or adoption of new privacy, data protection, marketing and consumer protection laws, regulations or industry standards, could adversely affect our business.

We and our service providers and partners are subject to a variety of federal, state and foreign laws, regulations and industry standards regarding privacy, data protection, data security, marketing and consumer protection, which address the collection, storing, sharing, using, processing, disclosure and protection of data relating to individuals, as well as the tracking of consumer behavior and other consumer data. We are also subject to laws, regulations and industry standards relating to endorsements and influencer marketing. Many of these laws, regulations and industry standards are changing and may be subject to differing interpretations and are costly to comply with or inconsistent among jurisdictions. For example, the Federal Trade Commission, or the FTC, expects companies like ours to comply with guidelines issued under the Federal Trade Commission Act that govern the collection, use, disclosure, and storage of consumer information, and establish principles relating to notice, consent, access and data integrity and security. The laws and regulations in many foreign countries relating to privacy, data protection, data security, marketing and consumer protection often are more restrictive than in the United States, and may in some cases be interpreted to have a greater scope. Additionally, the laws, regulations and industry standards, both foreign and domestic, relating to privacy, data protection, data security, marketing and consumer protection are dynamic and may be expanded or replaced by new laws, regulations or industry standards.

Various industry standards on privacy and data security have been developed and are expected to continue to develop, which may be adopted by industry participants at any time. We are subject to the terms of our privacy policies, other documentation and obligations to third parties relating to privacy, data protection and data security, including contractual obligations relating to privacy rights, data protection, data use and data security measures. We are also required, under certain regulatory regimes and industry standards, to contractually require our service providers to meet certain privacy and security requirements. Certain of our solutions, including Quotient Promotions, Media, Audience and Analytics ~~Cloud~~ platforms and solutions depend in part on our ability to use data that we obtain in connection with our offerings, and our ability to use this data may be subject to restrictions in our commercial agreements and subject to the privacy policies of the entities that provide us with this data. Our, or our service providers ~~and~~or our partners’, failure to adhere to these third-party restrictions on data use may result in claims, proceedings or actions against us by our business counterparties or other parties, or other liabilities, including loss of business, reputational damage, and remediation costs, which could adversely affect our business.

We strive to comply with applicable laws, policies, contractual and other legal obligations ~~and certain applicable~~as well as industry standards of conduct relating to privacy, data security, data protection, marketing and consumer protection. However, these obligations and standards of conduct often are complex, vague, and difficult to comply with fully, and it is possible that these obligations and standards of conduct may be interpreted and applied in new ways and/or in a manner that is inconsistent with each other or that new laws, regulations or other obligations may be enacted. It is possible that our practices may be argued or held to conflict with applicable laws, policies, contractual

or other legal obligations, or applicable industry standards of conduct relating to privacy, data security, data protection, marketing or consumer protection. Any failure, or perceived failure, by us or parties upon which we rely to comply with our posted privacy policies or ~~with~~ any ~~data-related consent orders, FTC, other regulatory requirements or orders or other~~ federal, state or, as we continue to expand internationally, ~~international~~foreign privacy, data security, data protection, marketing or consumer protection-related laws, regulations, contractual obligations or self-regulatory principles or other industry standards could result in claims, proceedings or actions against us by governmental entities or others, or other liabilities, or could result in a loss of consumers using our digital coupons or loss of CPGs and ~~retailers.~~retailers or harm to our reputation. Any of these circumstances could adversely affect our business. Further, if third parties we work with violate applicable laws, our policies or other privacy-related obligations, such violations may also put our consumers’ information at risk and could in turn have an adverse effect on our business.

~~In addition,~~

Globally, virtually every jurisdiction in which we operate has established its own data security and privacy frameworks with which we must comply. For example, the EUcollection, use, disclosure, transfer or other processing of personal data regarding individuals in the United Kingdom and European Union, is subject to the European Union General Data Protection Regulation (EU) 2016/679, or the GDPR, ~~became effective~~which took effect across all member states of the European Union, or EU, in May ~~2018,~~2018. The GDPR is wide-ranging in scope and ~~includes stringent operational~~imposes numerous requirements on companies that process personal data or personally identifiable information, including requirements relating to obtaining consent of the individuals to whom the personal data relates, establishing a legal basis for ~~processors~~processing personal data, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and ~~controllers~~confidentiality of personal data ~~including payment card information.~~that requires the adoption of administrative, physical and technical safeguards, providing notification of data breaches to appropriate data protection authorities or data subjects, establishing means for data subjects to exercise rights in relation to their personal data and taking certain measures when engaging third-party processors. The GDPR also ~~creates rights~~permits data protection authorities to require destruction of improperly gathered or used personal data and/or impose substantial fines for violations of the GDPR, which can be up to four percent of global revenue or 20 million Euros, whichever is greater, and confers a private right of action on data subjects and ~~authorizes significant penalties~~consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for ~~non-compliance~~damages resulting from GDPR violations. In addition, the GDPR provides that EU member states may make their own further laws and regulations limiting the processing of ~~up to~~personal data.

European data protection laws, including the ~~greater of €20 million or 4% of global annual revenues. The~~ GDPR, ~~imposes restrictions on~~generally restrict the transfer of personal data ~~outside~~from Europe, including the EEA, United Kingdom and Switzerland (collectively, "Europe"), to the United States and most other countries unless the parties to the transfer have implemented specific safeguards to protect the transferred personal data. Although there are legal mechanism to allow for the transfer of personal data from the EEA, Switzerland and United Kingdom to the United States, uncertainty about compliance with such data protection laws remains and such mechanisms may not be available or applicable with respect to the personal data processing activities necessary for our business.One of the ~~EEA. Although we have engaged~~primary safeguards allowing U.S. companies to import personal data from Europe to the United States has been certification to the EU-U.S. Privacy Shield and Swiss-U.S. Privacy Shield frameworks administered by the U.S. Department of Commerce. However, in ~~significant efforts to implement and maintain appropriate mechanisms to transfer data outside~~July 2020, the Court of Justice of the ~~EEA in compliance with~~European Union invalidated the ~~GDPR, if~~EU-U.S. Privacy Shield. The same decision also raised questions about whether one ~~or more~~ of the ~~mechanisms on which we rely is invalidated, we may~~primary alternatives to the EU-U.S. Privacy Shield, namely, the European Commission’s Standard Contractual Clauses, can lawfully be ~~unable – or limited in our ability –~~used to transfer personal data from ~~the EEA~~Europe to the ~~US,~~United States or other countries. At present, there are few if any viable alternatives to the Privacy Shield and the Standard Contractual Clauses, the latter of which is a mechanism upon which we have relied for transfers of personal data from the EU to the United States. The Swiss Federal Data Protection and Information Commissioner similarly announced the use of the Swiss-U.S. Privacy Shield is inadequate for personal data transfers from Switzerland to the U.S.Authorities in the UK may similarly invalidate use of the EU-U.S. Privacy Shield for transfers of personal data from the United Kingdom to the U.S. As such, if we are unable to implement a valid solution for personal data transfers from Europe, we may face increased exposure to regulatory actions, sanctions, and injunctions against processing personal data from Europe, and we may be required to increase our data processing capabilities in Europe at significant expense. Inability to import personal data from Europe may decrease demand for our services as our customers that are subject to European data protection laws seek alternative services that do not involve personal data transfers out of Europe. Additionally, other countries outside of Europe have enacted or are considering enacting similar cross-border data transfer restrictions and laws requiring local data residency, which could increase the cost and complexity of delivering our services and operating our business. In addition, we may experience reluctance or refusal by European consumers, retailers or CPGs to continue to ~~use~~using our solutions, and we may be at risk of enforcement actions taken by a European data protection authority until we ensure that all applicable data transfers to us from ~~the EEA~~Europe are compliant with the ~~GDPR.~~

European data protection laws.

Additionally, the United Kingdom has exited from the EU, commonly referred to as “Brexit,” which could also lead to further legislative and regulatory changes. While the UK Data Protection Act of 2018, that “implements” and complements the GDPR is effective in the United Kingdom, it remains unclear whether transfer of data from the EEA to the United Kingdom will remain lawful under the GDPR following the Brexit transition period ending on December 31, 2020. During the period of “transition” (i.e., until December 31, 2020), EU law will continue to apply in the UK, including the GDPR, and transfers of data from the EU to the United Kingdom are permitted without the need for any “adequacy mechanism.” Unless the EU Commission makes an “adequacy finding” in respect of the United Kingdom before January 1, 2021, from that date the United Kingdom will be a “third country” under the GDPR and transfers of personal data from the EU to the United Kingdom will require an “adequacy mechanism,” such as the Standard Contractual Clauses.

We may incur liabilities, expenses, costs, and other operational losses under the GDPR and applicable EU Member States, Switzerland and ~~the~~ United Kingdom privacy laws in connection with any measures we take to comply with them. Additionally, the ~~California Consumer Privacy Act, or~~ CCPA ~~which became effective on January 1, 2020,~~ creates new individual privacy rights for ~~consumers (as that word is broadly defined in the law)~~California residents and places increased privacy and security obligations on entities handling personal data of ~~consumers or households. The CCPA requires covered companies to provide detailed disclosures to~~ California ~~consumers, provide such consumers new ways to opt-out of certain sales of personal information, and creates a new cause of action for data breaches.~~

residents.

We expect that there will continue to be new proposed laws, regulations and industry standards concerning privacy, data protection and information security in the United States and other jurisdictions, and we cannot yet determine the impact such future laws, regulations and standards may have on our business. For instance, with the increased focus on the use of data for advertising, the anticipation and expectation of future laws, regulations, standards and other obligations could impact us and our existing and potential business partners and delay certain business partnerships or deals until there is greater certainty. In addition, as we expand our data analytics and other data-related product offerings there may be increased scrutiny on our use of data and we may be subject to new and unexpected regulations. Future laws, regulations, standards and other obligations could, for example, impair our ability to collect or use information that we utilize to provide targeted digital promotions and media to consumers, CPGs and retailers, thereby impairing our ability to maintain and grow our total customers and increase revenues. Future restrictions on the collection, use, sharing or disclosure of our users’ data or additional requirements for express or implied consent of users for the use and disclosure of such information could require us to modify our solutions, possibly in a material manner, and could limit our ability to develop or outright prohibit new solutions and features. Any such new laws, regulations, other legal obligations or industry standards, or any changed interpretation of existing laws, regulations or other standards may require us to incur additional costs and restrict our business operations. If our measures fail to comply with current or future laws, regulations, policies, legal obligations or industry standards relating to privacy, data protection, data security, marketing or consumer protection, we may be subject to litigation, regulatory investigations, fines or other liabilities, as well as negative publicity and a potential loss of business. Moreover, if future laws, regulations, other legal obligations or industry standards, or any changed interpretations of the foregoing limit our users’, CPGs’ or retailers’ ability to use and share personally identifiable information or our ability to store, process and share personally identifiable information or other data, demand for our solutions could decrease, our costs could increase, our revenue growth could slow, and our business, financial condition and operating results could be harmed.

Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement and other losses including unauthorized use or disclosure of consumer data.

Our agreements with CPGs, retailers and other third parties may include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement or other liabilities relating to or arising from our products, services or other contractual obligations including those relating to data use and consumer consent. The term of these indemnity provisions generally survives termination or expiration of the applicable agreement. Large indemnity payments could harm our business.

We may not be able to adequately protect our intellectual property rights.

We regard our trademarks, service marks, copyrights, patents, trade dress, trade secrets, proprietary technology, and similar intellectual property as critical to our success.

We strive to protect our intellectual property rights in a number of jurisdictions, a process that is expensive and may not be successful or which we may not pursue in every location. We strive to protect our intellectual property rights by relying on federal, state and common law rights, contractual restrictions as well as rights provided under foreign laws. These laws are subject to change at any time and could further restrict our ability to protect our intellectual property rights.

We also may not be able to acquire or maintain appropriate domain names in all countries in which we do business. Furthermore, regulations governing domain names may not protect our trademarks and similar proprietary rights. We may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon, or diminish the value of our trademarks and other proprietary rights.

We typically enter into confidentiality and invention assignment agreements with our employees and contractors, and confidentiality agreements with parties with whom we conduct business in order to limit access to, and disclosure and use of, our proprietary information. Also, from time to time, we make our intellectual property rights available to others under license agreements. However, these contractual arrangements and the other steps we have taken to protect our intellectual property may not prevent the misappropriation or disclosure of our proprietary information, infringement of our intellectual property rights or deter independent development of similar technologies by others and may not provide an adequate remedy in the event of such misappropriation or infringement. Third parties that license our proprietary rights also may take actions that diminish the value of our proprietary rights or reputation.

Obtaining and maintaining effective intellectual property rights is expensive, including the costs of defending our rights. Even where we have such rights, they may be later found to be unenforceable or have a limited scope of enforceability. We may not be able to discover or determine the extent of any unauthorized use of our proprietary rights. Litigation may be necessary to enforce our intellectual property rights, protect our respective trade secrets or determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business and operating results. If we fail to maintain, protect and enhance our intellectual property rights, our business and operating results may be harmed.

We may be accused of infringing intellectual property rights of third parties.

Other parties may claim that we infringe their proprietary rights. We are, have been subject to, and expect to continue to be subject to, claims and legal proceedings regarding alleged infringement by us of the intellectual property rights of third parties. Such claims, whether or not meritorious, may result in the expenditure of significant financial and managerial resources, injunctions against us, or the payment of damages, including to satisfy indemnification obligations. We may need to obtain licenses from third parties who allege that we have infringed their rights, but such licenses may not be available on terms acceptable to us or at all. In addition, we may not be able to obtain or utilize on terms that are favorable to us, or at all, licenses or other rights with respect to intellectual property we do not own. These risks have been amplified by the increase in third parties whose sole or primary business is to assert such claims.

We may be unable to continue to use the domain names that we use in our business, or prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of our brand or our trademarks or service marks.

We may lose significant brand equity in our “Coupons.com” domain name, our “Quotient.com” domain name, and other valuable domain names. If we lose the ability to use a domain name, whether due to trademark claims, failure to renew an applicable registration, or any other cause, we may be forced to market our products under new domain names, which could cause us substantial harm, or to incur significant expense in order to purchase rights to the domain names in question. In addition, our competitors and others could attempt to capitalize on our brand recognition by using domain names similar to ours. We also may not be able to acquire or maintain appropriate domain names or trademarks in all countries in which we do business. Domain names similar to ours have been registered in the United States and elsewhere. We may be unable to prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of our brand or our trademarks or service marks. Protecting and enforcing our rights in our domain names may require litigation, which could result in substantial costs and diversion of management’s attention and harm our business.

Our business depends on strong brands, and if we are not able to maintain and enhance our brands, or if we receive unfavorable media coverage, our ability to retain and expand our number of CPGs, retailers and consumers will be impaired and our business and operating results will be harmed.

We believe that the brand identity that we have developed has significantly contributed to the success of our business. We also believe that maintaining and enhancing our brands are critical to expanding our base of CPGs, retailers and consumers. Maintaining and enhancing our brands may require us to make substantial investments

and these investments may not be successful. If we fail to promote and maintain our brands, or if we incur excessive expenses in this effort, our business would be harmed. We anticipate that, as our market becomes increasingly competitive, maintaining and enhancing our brands may become increasingly difficult and expensive. Maintaining and enhancing our brands will depend on our ability to continue to provide sufficient quantities of reliable, trustworthy and high quality digital coupons, which we may not do successfully.

Unfavorable publicity or consumer perception of our websites, platforms, practices or service offerings, or the offerings of our CPGs and retailers, could adversely affect our reputation, resulting in difficulties in recruiting, decreased revenues and a negative impact on the number of CPGs and retailers we feature and our user base, the loyalty of our consumers and the number and variety of digital coupons we offer. As a result, our business could be harmed.

Some of our solutions contain open source software, which may pose particular risks to our proprietary software and solutions.

We use open source software in our solutions and will use open source software in the future. From time to time, we may face claims from third parties claiming ownership of, or demanding release of, the open source software and/or derivative works that we developed using such software (which could include our proprietary source code), or otherwise seeking to enforce the terms of the applicable open source license. These claims could result in litigation and could require us to purchase a costly license or cease offering the implicated solutions unless and until we can re-engineer them to avoid infringement. This re-engineering process could require significant additional research and development resources. In addition to risks related to license requirements, use of certain open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or controls on the origin of software. Any of these risks could be difficult to eliminate or manage, and, if not addressed, could have a negative effect on our business and operating results.

We may be required to record a significant charge to earnings if our goodwill or amortizable intangible assets become impaired.

We are required under GAAP to review our amortizable intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is required to be tested for impairment at least annually. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable. The events and circumstances we consider include the business climate, legal factors, operating performance indicators and competition. In the future we may be required to record a significant charge to earnings in our consolidated financial statements during the period in which any impairment of our goodwill or amortizable intangible assets is determined. This could adversely impact our results of operations and harm our business.

If we fail to expand effectively in international markets, our revenues and our business may be harmed.

We currently generate almost all of our revenues from the United States. We also operate to a limited extent in the United Kingdom, France and other countries in Europe. Many CPGs and retailers on our platforms have global operations and we plan to grow our operations and offerings through expansion in existing international markets and by partnering with our CPGs and retailers to enter new geographies that are important to them. Further expansion into international markets will require management attention and resources and we have limited experience entering new geographic markets. Entering new foreign markets will require us to localize our services to conform to a wide variety of local cultures, business practices, laws and policies. The different commercial and Internet infrastructure in other countries may make it more difficult for us to replicate our business model. In some countries, we will compete with local companies that understand the local market better than we do, and we may not benefit from first-to-market advantages. We may not be successful in expanding into particular international markets or in generating revenues from foreign operations. As we expand internationally, we will be subject to risks of doing business internationally, including the following:

•

~~competition~~ ~~with strong local competitors and preference for local providers, or foreign companies entering the same markets;~~

•competition with strong local competitors and preference for local providers, or foreign companies entering the same markets;

~~the cost and resources required to localize our platform;~~

•the cost and resources required to localize our platform;

~~burdens~~ of complying with a wide variety of different laws and regulations, including intellectual property laws and regulation of digital coupons and media, Internet services, privacy and data protection, marketing and consumer protection laws, anti-competition regulations and different liability standards, which may limit or prevent us from offering of our solutions in some jurisdictions or limit our ability to enforce contractual obligations;

•burdens of complying with a wide variety of different laws and regulations, including intellectual property laws and regulation of digital coupons and media, Internet services, privacy and data protection,

•

~~differences in how trade promotion spending is allocated;~~

•

~~differences in the way digital coupons and advertising are delivered and how consumers access and use digital coupons;~~

marketing and consumer protection laws, anti-competition regulations and different liability standards, which may limit or prevent us from offering of our solutions in some jurisdictions or limit our ability to enforce contractual obligations;

•differences in how trade promotion spending is allocated;

~~technology compatibility;~~

•differences in the way digital coupons and advertising are delivered and how consumers access and use digital coupons;

~~difficulties in recruiting and retaining qualified employees and managing foreign operations;~~

•technology compatibility;

~~different employee/employer relationships and the existence of workers’ councils and labor unions;~~

•difficulties in recruiting and retaining qualified employees and managing foreign operations;

~~shorter payment cycles, different accounting practices and greater problems in collecting accounts receivable;~~

•different employee/employer relationships and the existence of workers’ councils and labor unions;

~~higher product return rates;~~

•shorter payment cycles, different accounting practices and greater problems in collecting accounts receivable;

~~seasonal reductions in business activity;~~

•higher product return rates;

~~adverse tax effects and foreign exchange controls making it difficult to repatriate earnings and cash; and~~

•seasonal reductions in business activity;

~~political and economic instability.~~

•adverse tax effects and foreign exchange controls making it difficult to repatriate earnings and cash; and

•political and economic instability.

Changes in the U.S. taxation of international activities may increase our worldwide effective tax rate and harm our financial condition and results of operations. The taxing authorities of the jurisdictions in which we plan to operate may challenge our methodologies for valuing developed technology or intercompany arrangements, including our transfer pricing, or determine that the manner in which we operate our business does not achieve the intended tax consequences, which could increase our worldwide effective tax rate and harm our financial position and results of operations. Significant judgment will be required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there will be many transactions and calculations for which the ultimate tax determination is uncertain. As we expand our business to operate in numerous taxing jurisdictions, the application of tax laws may be subject to diverging and sometimes conflicting interpretations by tax authorities of these jurisdictions. It is not uncommon for taxing authorities in different countries to have conflicting views. In addition, tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could adversely affect our business operations and financial performance. Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us. For example, legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act, or the Tax Act, enacted many significant changes to the U.S. tax laws. Future guidance from the Internal Revenue Service and other tax authorities with respect to the Tax Act may affect us, and certain aspects of the Tax Act could be repealed or modified in future legislation. For example, the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, modified certain provisions of the Tax Act. In addition, it is uncertain if and to what extent various states will conform to the Tax Act, the CARES Act, or any newly enacted federal tax legislation. Changes in corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses under the Tax Act or future reform legislation could have a material impact on the value of our deferred tax assets, could result in significant one-time charges, and could increase our future U.S. income tax expense.

Our planned corporate structure and intercompany arrangements will be implemented in a manner we believe is in compliance with current prevailing tax laws. However, the tax benefits which we intend to eventually derive could be undermined if we are unable to adapt the manner in which we operate our business and due to changing tax laws.

Our failure to manage these risks and challenges successfully could materially and adversely affect our business, financial condition and results of operations.

The loss of one or more key members of our management team, or our failure to attract, integrate and retain other highly qualified personnel in the future, could harm our business.

The loss of key personnel, including key members of management as well as our marketing, sales, product development and technology personnel, could disrupt our operations and have an adverse effect on our ability to grow our business.

As we become a more mature company, we may find our recruiting and retention efforts more challenging. We are seeking to continue to hire a significant number of personnel, including certain key management personnel. We may be limited in our ability to recruit global talent by U.S. immigration laws, including those related to H1-B visas. The demand for H1-B visas to fill highly-skilled IT and computer science jobs is greater than the number of H-1B visas available each ~~year; for the U.S. government’s 2018 fiscal year, the U.S. issued 85,000 H-1B visas out of 199,000 requests.~~year. In addition, the regulatory environment related to immigration under the current presidential administration may increase the likelihood that immigration laws may be modified to further limit the availability of H1-B visas. If a new or revised visa program is implemented, it may impact our ability to recruit, hire and retain qualified skilled personnel, which could adversely impact our business, operating results and financial condition. If we do not succeed in attracting, hiring and integrating qualified personnel, or retaining and motivating existing personnel, we may be unable to grow effectively.

If our estimates or judgements relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Significant assumptions and estimates used in preparing our consolidated financial statements include those related to business combinations, goodwill and intangible assets, treatment of our convertible senior notes, revenue recognition, promotion revenue, media revenue, gross versus net revenue reporting, arrangements with multiple performance obligations, stock-based compensation and provision for income taxes. For example, the recognition of our revenue is governed by certain criteria that determine whether we report revenue either on a gross basis, as a principal, or net basis, as an agent, depending upon the nature of the sales transaction. Historically, our media products revenue has generally been recognized on a gross basis. However, in the first quarter of 2020, we announced that effective second quarter of 2020, we plan to modify the way we process and deliver certain media products to enhance the customer experience. As a result of these changes, we expect that we will recognize certain revenue on a net basis, as compared to the prior recognition on a gross basis, and expect that this will cause a decrease in our revenue growth and impact our revenues. We may have gross reporting for portions of our media products and other revenue in the future as a result of the evolution of our existing business practices, development of new products, acquisitions, or changes in accounting standards or interpretations, that in any case result in transactions with characteristics that dictate gross reporting. It is also possible that revenue reporting for existing businesses may change from gross to net or vice versa as a result of changes in contract terms or transaction mechanics. We may experience significant fluctuations in revenue in future periods depending upon, in part, the nature of our sales and our reporting of such revenue and related accounting treatment, without proportionate correlation to our underlying activity or net income. Any combination of net and gross revenue reporting would require us to make estimates and assumptions about the mix of gross and net-reported transactions based upon the volumes and characteristics of the transactions we think will make up the total mix of revenue in the period covered by the projection. Those estimates and assumptions may be inaccurate when made, or may be rendered inaccurate by subsequent circumstances, such as changing the characteristics of our offerings or particular transactions in response to client demands, market developments, regulatory pressures, acquisitions, and other factors. Even apparently minor changes in transaction terms from those initially envisioned can result in different accounting conclusions from those foreseen. In addition, we may incorrectly extrapolate from revenue recognition treatment of prior transactions to future transactions that we believe are similar, but that ultimately are determined to have different characteristics that dictate different revenue reporting treatment. These factors may make our financial reporting more complex and difficult for investors to understand, may make comparison of our results of operations to prior periods or other companies more difficult, may make it more difficult for us to give accurate guidance, and could increase the potential for reporting errors.

Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our common stock.

Changes to financial accounting standards or the SEC’s rules and regulations may affect our financial statements and cause us to change our business practices.

We prepare our financial statements to conform to U.S. GAAP. These accounting principles are subject to interpretation by the FASB, American Institute of Certified Public Accountants (“AICPA”), the SEC and various

bodies formed to interpret and create appropriate accounting policies. A change in those policies can have a significant effect on our reported results and may affect our reporting of transactions completed before a change is announced. Changes to those rules or the questioning of current practices may adversely affect our reported financial results or the way we conduct our business. For example, in ~~June 2016,~~August 2020, the FASB issued a new standard ~~Topic 326,~~ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which generally requires uscompanies to ~~estimate expected credit losses, measured over~~report our convertible debt instrument as a single liability instrument with no separate accounting for the ~~contractual life~~embedded conversion features. Additionally, this ASU amends the diluted earnings per share calculation for convertible instruments by requiring the use of ~~an asset,~~the if-converted method. The treasury stock method is no longer available. This new standard is effective for fiscal years beginning ~~in our first quarter of fiscal year~~after December 15, 2021. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2020.

We are currently or could be exposed in the future to fluctuations in currency exchange rates and interest rates.

To date, we have generated almost all of our revenues from within the United States. As a result, we currently do not have significant revenues or expenses in our international operations and we do not hedge our foreign currency exchange risk. However, we plan to grow our operations and offerings through expansion in existing international markets and by partnering with our existing CPGs and retailers to enter new geographies that are important to them. For example, we opened a research and development facility in Bangalore, India and acquired Ubimo, which has research and development operations in Tel-Aviv, Israel. As we expand our business outside the United States we will face exposure to adverse movements in currency exchange rates. We will be exposed to foreign exchange rate fluctuations from the conversion of collections and expenses not denominated in U.S. dollars. If the U.S. dollar weakens against foreign currencies, the conversion of these foreign currency denominated transactions will result in increased revenues, operating expenses and net income. Similarly, if the U.S. dollar strengthens against foreign currencies, the conversion of these foreign currency denominated transactions will result in decreased revenues, operating expenses and net income. As exchange rates vary, sales and other operating results, when translated, may differ materially from expectations. Our risks related to currency fluctuations will increase as our international operations become an increasing portion of our business. In addition, we face exposure to fluctuations in interest rates which may impact our investment income unfavorably.

Our use of and reliance on international research and development resources and operations may expose us to unanticipated costs or events.

We have research and development centers in India, France, and Israel. We expect to increase our headcount, development, and operations activity in India. There is no assurance that our reliance upon international research and development resources and operations will enable us to achieve our research and development and operational goals or greater resource efficiency. Further, our international research and development and operations efforts involve significant risks, including:

•

~~difficulty~~ hiring and retaining appropriate personnel due to intense competition for such resources and resulting wage inflation in the cities where our research and development activities and operations are located;

•difficulty hiring and retaining appropriate personnel due to intense competition for such resources and resulting wage inflation in the cities where our research and development activities and operations are located;

~~different~~ labor regulations, especially in the European Union, where labor laws are generally more advantageous to employees as compared to United States, including deemed hourly wage and overtime regulations in these locations;

•different labor regulations, especially in the European Union, where labor laws are generally more advantageous to employees as compared to United States, including deemed hourly wage and overtime regulations in these locations;

~~exposure~~ to liabilities under anti-corruption and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, and similar applicable laws and regulations in other jurisdictions;

•exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, and similar applicable laws and regulations in other jurisdictions;

~~delays~~ and inefficiencies caused by geographical separation of our international research and development activities and operations and other challenges inherent to efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits and compliance programs;

•delays and inefficiencies caused by geographical separation of our international research and development activities and operations and other challenges inherent to efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits and compliance programs;

~~the~~ ~~knowledge transfer related to our technology and resulting exposure to misappropriation of intellectual property or information that is proprietary to us, our customers and other third parties;~~

•the knowledge transfer related to our technology and resulting exposure to misappropriation of intellectual property or information that is proprietary to us, our customers and other third parties;

~~heightened~~ ~~exposure to change in the economic, security and political conditions in the countries where our research and development activities and operations are located;~~

•heightened exposure to change in the economic, security and political conditions in the countries where our research and development activities and operations are located;

~~fluctuations~~ ~~in currency exchange rates and regulatory compliance in the countries where our research and development activities and operations are located; and~~

•fluctuations in currency exchange rates and regulatory compliance in the countries where our research and development activities and operations are located; and

~~interruptions~~ to our operations in the countries where our research and development activities and operations are located as a result of floods and other natural catastrophic events as well as other events beyond our control such as power disruptions or terrorism.

•interruptions to our operations in the countries where our research and development activities and operations are located as a result of floods and other natural catastrophic events as well as other events beyond our control such as power disruptions or terrorism.

Difficulties resulting from the factors above could increase our research and development or operational expenses, delay the introduction of new products, or impact our product quality, the occurrence of any of which could adversely affect our business and operating results.

Our business is subject to interruptions, delays or failures resulting from earthquakes, other natural catastrophic events or terrorism.

Our headquarters is located in Mountain View, California. Our current technology infrastructure is hosted across two data centers in co-location facilities in California and Nevada. In addition, we use two other co-location facilities in California and Virginia to host our Retailer iQ platform. Our services, operations and the data centers from which we provide our services are vulnerable to damage or interruption from earthquakes, fires, floods, public health crises such as pandemics and epidemics, power losses, telecommunications failures, terrorist attacks, acts of war, human errors, break-ins and similar events (such as the COVID-19 pandemic). A significant natural disaster, such as an earthquake, fire or flood, could have a material adverse impact on our business, financial condition and results of operations and our insurance coverage may be insufficient to compensate us for losses that may occur. Acts of terrorism could cause disruptions to the Internet, our business or the economy as a whole. We may not have sufficient protection or recovery plans in certain circumstances, such as natural disasters affecting areas where data centers upon which we rely are located, and our business interruption insurance may be insufficient to compensate us for losses that may occur. Such disruptions could negatively impact our ability to run our websites, which could harm our business.

Our ability to raise capital in the future may be limited, and our failure to raise capital when needed could prevent us from growing.

We may in the future be required to raise additional capital through public or private financing or other arrangements. Such financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could harm our business. Additional equity or equity-linked financing, such as our convertible senior notes, may dilute the interests of our stockholders, and debt financing, if available, may involve restrictive covenants and could reduce our profitability. If we cannot raise funds on acceptable terms, we may not be able to grow our business. In addition, while the potential impact and duration of the COVID-19 pandemic on the global economy and our business in particular may be difficult to assess or predict, the pandemic has resulted in, and may continue to result in, significant disruption of global financial markets, reducing our ability to access capital, which could negatively affect our liquidity in the future.

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.

In general, under Section 382 of the U.S. Internal Revenue Code of 1986, as amended, or the Code, and similar state law provisions, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change net operating losses, or NOLs, to offset post-change taxable income. If we have experienced an ownership change our existing NOLs may be subject to limitations under Section 382 of the Code. Future changes in our stock ownership, some of which are outside of our control, also could result in an ownership change under Section 382 of the Code. Additionally, our NOLs arising in tax years beginning prior to January 1, 2018 are subject to expiration and may expire prior to being utilized. Under the Tax Act, as modified by the CARES Act, NOLs arising in tax years beginning after December 31, 2017, are not subject to expiration and may be carried forward indefinitely, but the deductibility of such NOLs in tax years beginning after December 31, 2020, is limited to 80% of taxable income. It is uncertain if and to what extent various states will conform to the Tax Act or the CARES Act. There is also a risk that our NOLs could otherwise be unavailable to offset future income tax liabilities due to changes in the law, including regulatory changes, such as suspensions on the use of NOLs or other unforeseen reasons. In addition, at the state level, there may be periods during which the use of net operating loss carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. We do not expect this to have a material impact on our financials because we currently maintain a full valuation allowance on our U.S. deferred tax assets. For these reasons, we may not be able to utilize all of our NOLs, even if we attain profitability.

State and foreign laws regulating money transmission could impact our cash-back applications.

Many states and certain foreign jurisdictions impose license and registration obligations on those companies engaged in the business of money transmission, with varying definitions of what constitutes money transmission. If our cash-back applications were to subject us to any applicable state or foreign laws, it could subject us to increased compliance costs and delay our ability to offer this product in certain jurisdictions pending receipt of any necessary licenses or registrations. If we need to make product and operational changes in light of these laws, the growth and adoption of these products may be adversely impacted, and our revenues may be harmed.

Risks Related to Our Convertible Senior Notes

We are leveraged financially, which could adversely affect our ability to adjust our business to respond to competitive pressures and to obtain sufficient funds to satisfy our future growth, business needs and development plans.

In November 2017, we issued $200 million aggregate principal amount of convertible senior notes (the “notes”). Our leveraged capital structure could have negative consequences, including, but not limited to, the following:

•

we ~~may be more vulnerable to economic downturns, less able to withstand competitive pressures and less flexible in responding to changing business and economic conditions;~~

•we may be more vulnerable to economic downturns, less able to withstand competitive pressures and less flexible in responding to changing business and economic conditions;

~~our~~ ~~ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate or other purposes may be limited;~~

•our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate or other purposes may be limited;

a ~~substantial portion of our cash flow from operations in the future may be required for the payment of the principal amount of our existing indebtedness when it becomes due; and~~

•a substantial portion of our cash flow from operations in the future may be required for the payment of the principal amount of our existing indebtedness when it becomes due; and

we ~~may elect to make cash payments upon any conversion of the convertible notes, which would reduce our cash on hand~~

•we may elect to make cash payments upon any conversion of the convertible notes, which would reduce our cash on hand

Our ability to meet our payment obligations under our notes depends on our ability to generate significant cash flow in the future. This, to some extent, is subject to general economic, financial, competitive, legislative, and regulatory factors as well as other factors that are beyond our control. There can be no assurance that our business will generate cash flow from operations, or that additional capital will be available to us, in an amount sufficient to enable us to meet our debt payment obligations and to fund other liquidity needs. If we are unable to generate sufficient cash flow to service our debt obligations, we may need to refinance or restructure our debt, sell assets, reduce or delay capital investments, or seek to raise additional capital. If we were unable to implement one or more of these alternatives, we may be unable to meet our debt payment obligations, which could have a material adverse effect on our business, results of operations, or financial condition.

The conditional conversion feature of the notes, if triggered, may adversely affect our financial condition and operating results.

In the event the conditional conversion feature of the notes is triggered, holders of the notes will be entitled to convert their notes at any time during specified periods at their option. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. If one or more holders elect to convert their notes, (unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share)), we intend to settle a portion or all of our conversion obligation in cash, which could adversely affect our liquidity. In addition, even if holders of notes do not elect to convert their notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

The accounting method for convertible debt securities that may be settled in cash, such as the notes, could have a material effect on our reported financial results.

Under Accounting Standards Codification 470-20, Debt with Conversion and Other Options (“ASC 470-20”), an entity must separately account for the liability and equity components of the convertible debt instruments (such as the notes) that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. The effect of ASC 470-20 on the accounting for the notes is that the equity component is required to be included in the additional paid-in capital section of stockholders’ equity on our consolidated balance sheet at the issuance date and the value of the equity component would be treated as debt discount for purposes of accounting for the debt component of the notes. As a result, we will be required to record a greater amount of non-cash interest expense as a result of the amortization of the discounted carrying value of the notes to their face

amount over the term of the notes. We will report larger net losses (or lower net income) in our financial results because ASC 470-20 will require interest to include both the amortization of the debt discount and the instrument’s nonconvertible coupon interest rate, which could adversely affect our reported or future financial results, the trading price of our common stock and the trading price of the notes.

The Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The effect of which is that the shares issuable upon conversion of such notes are not included in the calculation of diluted earnings per share except to the extent that the conversion value of such notes exceeds their principal amount. Under the treasury stock method, for diluted earnings per share purposes, the transaction is accounted for as if the number of shares of common stock that would be necessary to settle such excess, if we elected to settle such excess in shares, are issued. We cannot be sure that the accounting standards in the future will continue to permit the use of the treasury stock method. If we are unable or otherwise elect not to use the treasury stock method in accounting for the shares issuable upon conversion of the notes, then our diluted earnings per share could be adversely affected.

Conversion of our notes will dilute the ownership interest of existing stockholders and may depress the price of our common stock.

The conversion of some or all of our notes, if such conversion occurs, will dilute the ownership interests of then-existing stockholders to the extent we deliver shares upon conversion of any of the notes. Any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock. In addition, the existence of the notes may encourage short selling by market participants because the conversion of the notes could be used to satisfy short positions, or anticipated conversion of the notes into shares of our common stock could depress the price of our common stock.

Risks Related to Ownership of our Common Stock

The market price of our common stock has been, and is likely to continue to be, subject to wide fluctuations and could subject us to litigation.

The price of our common stock may change in response to variations in our operating results and also may change in response to other factors, including factors specific to technology companies, many of which are beyond our control. As a result, our stock price may experience significant volatility. Among other factors that could affect our stock price are:

•

~~the~~ ~~financial projections that we or analysts may choose to provide to the public, any changes in these projections or our failure for any reason to meet these projections;~~

•the financial projections that we or analysts may choose to provide to the public, any changes in these projections or our failure for any reason to meet these projections;

~~actual~~ ~~or anticipated changes or fluctuations in our results of operations;~~

•actual or anticipated changes or fluctuations in our results of operations;

~~whether our results of operations meet the expectations of securities analysts or investors;~~

•whether our results of operations meet the expectations of securities analysts or investors;

~~addition~~ ~~or loss of significant customers or commercial business partners;~~

•addition or loss of significant customers or commercial business partners;

~~price and volume fluctuations in the overall stock market from time to time;~~

•price and volume fluctuations in the overall stock market from time to time;

~~fluctuations in the trading volume of our shares or the size of our public float;~~

•fluctuations in the trading volume of our shares or the size of our public float;

~~success of competitive products or services;~~

•success of competitive products or services;

~~the public’s response to press releases or other public announcements by us or others, including our filings with the SEC;~~

•the public’s response to press releases or other public announcements by us or others, including our filings with the SEC;

~~disputes or other developments related to proprietary rights, including patents, litigation matters or our ability to obtain intellectual property protection for our technologies;~~

•disputes or other developments related to proprietary rights, including patents, litigation matters or our ability to obtain intellectual property protection for our technologies;

~~announcements relating to litigation;~~

•announcements relating to litigation;

~~speculation about our business in the press or the investment community;~~

•speculation about our business in the press or the investment community;

~~reports, guidance and ratings issued by securities or industry analysts;~~

•reports, guidance and ratings issued by securities or industry analysts;

~~future sales of our common stock by our significant stockholders, officers and directors;~~

•future sales of our common stock by our significant stockholders, officers and directors;

~~changes in our capital structure, such as future issuances of debt or equity securities;~~

•changes in our capital structure, such as future issuances of debt or equity securities;

~~our entry into new markets;~~

•our entry into new markets;

~~regulatory developments in the United States or foreign countries;~~

•regulatory developments in the United States or foreign countries;

~~strategic actions by us or our competitors, such as acquisitions or restructurings; and~~

•strategic actions by us or our competitors, such as acquisitions or restructurings; and

~~changes in accounting principles.~~

•changes in accounting principles.

If any of the foregoing occurs, it could cause our stock price or trading volume to decline. In addition, the stock market in general has experienced substantial price and volume volatility that is often seemingly unrelated to the operating results of any particular companies. Moreover, if the market for technology stocks or the stock market in general experiences uneven investor confidence, the market price of our common stock could decline for reasons unrelated to our business, operating results or financial condition. The market price for our stock might also decline in reaction to events that affect other companies within, or outside, our industry, even if these events do not directly affect us. Some companies that have experienced volatility in the trading price of their stock have been subject of securities litigation. If we are the subject of such litigation, it could result in substantial costs and a diversion of management’s attention and resources.

Substantial future sales of shares by our stockholders could negatively affect our stock price.

Sales of a substantial number of shares of our common stock in the public market could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. We have approximately 89,371,199 shares of common stock outstanding as of December 31, 2019, assuming no exercise of our outstanding options or vesting of our outstanding RSUs.

Our equity incentive plans allow us to issue, among other things, stock options, restricted stock and restricted stock units and we have filed a registration statement under the Securities Act to cover the issuance of shares upon the exercise or vesting of awards granted under those plans.

The concentration of our common stock ownership with our executive officers, directors and owners of 5% or more of our outstanding common stock will limit our ability to influence corporate matters.

Our executive officers, directors and owners of 5% or more of our outstanding common stock together beneficially own approximately ~~43%~~41% of our outstanding common stock, based on the number of shares outstanding as of ~~March 31,~~September 30, 2020. These stockholders therefore have significant influence over management and affairs and over all matters requiring stockholder approval, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets, for the foreseeable future. This concentrated control limits your ability to influence corporate matters and, as a result, we may take actions that our stockholders do not view as beneficial. This ownership could affect the value of your shares of common stock.

Our stock repurchase program could affect the price of our common stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our common stock.

Our Board of Directors previously approved programs for us to repurchase shares of our common stock. In April 2019, our Board of Directors authorized a one-year share repurchase program (“May 2019 Program”) for us to repurchase up to $60.0 million of our common stock from May 2019 through May 2020. In August 2019, our Board of Directors authorized a one-year share repurchase program (the “August 2019 Program”) for us to repurchase up to $50.0 million of our common stock from August 2019 through August 2020. In March 2020, we suspended the August 2019 Program, as a precautionary measure to maximize liquidity and increase available cash on hand during this time of ~~uncertainty. During the three months ended March 31, 2020, we did not repurchase any shares of our common stock.~~ ~~As of March 31, 2020, $50.0 million remained available for repurchase under~~uncertainty and the August 2019 ~~Program.~~ Program expired in August 2020. If our Board of Directors were to authorize a new repurchase program, the existence of such program could cause the price of our common stock to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our common stock. Additionally, repurchases under any stock repurchase program will diminish our cash reserves, which could impact our ability to further develop our technology, access and/or retrofit additional facilities and service our indebtedness. In addition, we may face media or other scrutiny for past and any future stock repurchase programs. There can be no assurance that any stock repurchases will enhance stockholder value because the market price of our common stock may decline below the levels at which we repurchased such shares. Any failure to repurchase shares after we have announced our intention to do so may negatively impact our reputation and investor confidence in us and may negatively impact our stock price. Although our stock repurchase program is intended to enhance long-term stockholder value, short-term stock price fluctuations could reduce the program’s effectiveness.

If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

We are subject to the reporting requirements of the Exchange Act, SOX, and the rules and regulations of the New York Stock Exchange, or the NYSE. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time consuming and costly, and place significant strain on our personnel, systems and resources.

SOX requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers. We are also continuing to improve our internal control over financial reporting. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight. Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will be required to include in our periodic reports we will file with the SEC under Section 404 of SOX. In the event that we are not able to demonstrate compliance with Section 404 of SOX, that our internal control over financial reporting is perceived as inadequate or that we are unable to produce timely or accurate financial statements, investors may lose confidence in our operating results and our stock price could decline.

Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, weaknesses in our disclosure controls or our internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our operating results or cause us to fail to meet our reporting obligations and could result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of management evaluations and independent registered public accounting firm audits of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our common stock. In addition, if we are unable to continue to meet these requirements, our common stock may not be able to remain listed on the NYSE.

Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on our business and operating results, and cause a decline in the price of our common stock.

If securities analysts do not publish research or if securities analysts or other third parties publish inaccurate or unfavorable research about us, the price of our common stock could decline.

The trading market for our common stock will rely in part on the research and reports that securities analysts and other third parties choose to publish about us. We do not control these analysts or other third parties. The price of our common stock could decline if one or more securities analysts downgrade our common stock or if one or more securities analysts or other third parties publish inaccurate or unfavorable research about us or cease publishing reports about us.

We do not intend to pay dividends for the foreseeable future.

We intend to retain all of our earnings for the foreseeable future to finance the operation and expansion of our business and do not anticipate paying cash dividends on our common stock. As a result, you can expect to receive a return on your investment in our common stock only if the market price of the stock increases.

Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable.

Provisions in our certificate of incorporation and by-laws may have the effect of delaying or preventing a change of control or changes in our management. Amongst other things, these provisions:

•

~~authorize the issuance of “blank check” preferred stock that could be issued by our Board of Directors to defend against a takeover attempt;~~

•

establish a classified Board of Directors, as a result of which the successors to the directors whose terms have expired will be elected to serve from the time of election and qualification until the third annual meeting following their election;

•authorize the issuance of “blank check” preferred stock that could be issued by our Board of Directors to defend against a takeover attempt;

~~require that directors only be removed from office for cause and only upon a majority stockholder vote;~~

•establish a classified Board of Directors, as a result of which the successors to the directors whose terms have expired will be elected to serve from the time of election and qualification until the third annual meeting following their election;

~~provide that vacancies on the Board of Directors, including newly created directorships, may be filled only by a majority vote of directors then in office rather than by stockholders;~~

•require that directors only be removed from office for cause and only upon a majority stockholder vote;

~~prevent stockholders from calling special meetings; and~~

•provide that vacancies on the Board of Directors, including newly created directorships, may be filled only by a majority vote of directors then in office rather than by stockholders;

~~prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders.~~

•prevent stockholders from calling special meetings; and

•prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders.

In addition, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder becomes an “interested” stockholder.

~~Item 2.~~

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

In August 2019, the Company’s Board of Directors authorized a one-year share repurchase program for the Company to repurchase up to $50.0 million of its common stock from August 2019 through August 2020. During the three and nine months ended ~~March 31,~~September 30, 2020, the Company did not repurchase any shares of its common ~~stock. As of March 31, 2020, $50.0 million remained available for repurchase under~~stock, and the ~~August 2019 Program. In March 2020, the Company suspended the August 2019 Program, as a precautionary measure to maximize liquidity and increase available cash on hand during this time of uncertainty.~~

program expired in April 2020.

~~Item 3.~~

Item 3. Defaults Upon Senior Securities.

None.

~~Item 4.~~

Item 4. Mine Safety Disclosures.

Not applicable.

~~Item 5.~~

Item 5. Other Information.

~~Not applicable.~~

None.

~~Item 6.~~

Item 6. Exhibits.

Incorporated by Reference

Number

Exhibit Title

Form

File No.

Exhibit

Filing

Date

Filed

Herewith

Number

Exhibit Title

Form

File No.

Exhibit

Filing
Date

Filed
Herewith

3.1

Amended and Restated Certificate of Incorporation of the Registrant, as amended effective October 20, 2015.

10-K

001-36331

3.1

03/11/16

3.1

Amended and Restated Certificate of Incorporation of the Registrant, as amended effective October 20, 2015.

10-K

001-36331

3.1

3/11/2016

3.2

Amended and Restated Bylaws of the Registrant.

8-K

001-36331

3.2

10/06/15

3.2

Amended and Restated Bylaws of the Registrant.

8-K

001-36331

3.2

10/6/2015

4.1

Form of Registrant’s Common Stock Certificate.

S-1/A

333-193692

4.1

02/25/14

4.1

Form of Registrant’s Common Stock Certificate.

S-1/A

333-193692

4.1

2/25/2014

4.2

Eighth Amended and Restated Investors’ Rights Agreement among the Registrant and certain holders of its capital stock, dated June 1, 2011.

S-1

333-193692

4.2

01/31/14

4.2

Eighth Amended and Restated Investors’ Rights Agreement among the Registrant and certain holders of its capital stock, dated June 1, 2011.

S-1

333-193692

4.2

1/31/2014

31.1

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.1

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certificate of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certificate of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.1*

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.INS

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104

Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

104

Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Quotient under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

QUOTIENT TECHNOLOGY INC.

Dated: ~~May~~November 5, 2020

By:

~~By:~~

/s/ Steven Boal

Steven Boal

Chief Executive Officer

(Principal Executive Officer)

Dated: ~~May~~November 5, 2020

By:

~~By:~~

/s/ Pamela Strayer

Pamela Strayer

Chief Financial Officer and Treasurer

(Principal Financial Officer and Principal Accounting Officer)

~~Delaware~~		~~77-0485123~~
Quotient Technology Inc.
(Exact Name of Registrant as Specified in Its Charter)


Delaware		77-0485123
(State or Other Jurisdiction of	~~(I.R.S. Employer~~
Incorporation or Organization)	(I.R.S. Employer Identification No.)

400 Logue Avenue, Mountain View, ~~California~~ CA	94043
(Address of Principal Executive Offices)		(Zip Code)


	(650)	605-4600
(Registrant’s Telephone Number, Including Area Code)
(Former name, former address and former fiscal year, if changed since last report)


PART I FINANCIAL INFORMATION
Item 1 Financial Statements (unaudited):						3 4
Condensed Consolidated Balance Sheets as of ~~March 31,~~September 30, 2020 and December 31, 2019						3 4
Condensed Consolidated Statements of Operations for the ~~Three Months Ended March 31,~~t hree and n ine months ended September 30, 2020 and 2019						4 5
Condensed Consolidated Statements of Comprehensive Loss for the ~~Three Months Ended March 31,~~t hree and n ine months ended September 30, 2020 and 2019						5 6
Condensed Consolidated Statements of Stockholders’ Equity for the ~~Three Months Ended March 31,~~t hree and n ine months ended September 30, 2020 and 2019						6 7
Condensed Consolidated Statements of Cash Flows for the ~~Three Months Ended March 31,~~n ine months ended September 30, 2020 and 2019						7 8
Notes to Condensed Consolidated Financial Statements						8 9
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations						25 29
Item 3 Quantitative and Qualitative Disclosures About Market Risk						34 42
Item 4 Controls and Procedures						35 42
PART II OTHER INFORMATION
Item 1—Legal Proceedings						36 44
Item 1A—Risk Factors						36 44
Item 2—Unregistered Sales of Equity Securities and Use of Proceeds						67 78
Item 3—Defaults Upon Senior Securities						67 78
Item 4—Mine Safety Disclosures						67 78
Item 5—Other Information						67 78
Item 6—Exhibits						68 79
SIGNATURES						69 80


	March 31, 2020			December 31, 2019				September 30, 2020		December 31, 2019
	(unaudited)							(unaudited)
Assets							Assets
Current assets:							Current assets:
Cash and cash equivalents	$	196,798		$	224,764		Cash and cash equivalents	$	209,854	$	224,764
Accounts receivable, net of allowance for credit losses of $2,043 and $2,021 at March 31, 2020 and December 31, 2019, respectively		108,835			125,304
Accounts receivable, net of allowance for credit losses of $2,264 and $2,021 at September 30, 2020 and December 31, 2019, respectively							Accounts receivable, net of allowance for credit losses of $2,264 and $2,021 at September 30, 2020 and December 31, 2019, respectively	122,148		125,304
Prepaid expenses and other current assets		21,878			22,026		Prepaid expenses and other current assets	21,266		22,026
Total current assets		327,511			372,094		Total current assets	353,268		372,094
Property and equipment, net		14,319			13,704		Property and equipment, net	15,628		13,704
Operating lease right-of-use assets							Operating lease right-of-use assets	17,181		7,211
Intangible assets, net		62,511			69,752		Intangible assets, net	52,677		69,752
Goodwill		128,427			128,427		Goodwill	128,427		128,427
Other assets		7,438			7,961		Other assets	1,246		750
Total assets	$	540,206		$	591,938		Total assets	$	568,427	$	591,938
Liabilities and Stockholders’ Equity							Liabilities and Stockholders’ Equity
Current liabilities:							Current liabilities:
Accounts payable	$	13,478		$	19,116		Accounts payable	$	10,765	$	19,116
Accrued compensation and benefits		9,559			15,232		Accrued compensation and benefits	10,474		15,232
Other current liabilities		43,765			50,032		Other current liabilities	63,634		50,032
Deferred revenues		12,086			10,903		Deferred revenues	11,353		10,903
Contingent consideration related to acquisitions		—			27,000		Contingent consideration related to acquisitions	0		27,000
Total current liabilities		78,888			122,283		Total current liabilities	96,226		122,283
Other non-current liabilities		6,765			7,119		Other non-current liabilities	17,926		7,119
Contingent consideration related to acquisitions		9,680			9,220		Contingent consideration related to acquisitions	15,008		9,220
Convertible senior notes, net		168,855			166,157		Convertible senior notes, net	174,360		166,157
Deferred tax liabilities		1,937			1,937		Deferred tax liabilities	1,937		1,937
Total liabilities		266,125			306,716		Total liabilities	305,457		306,716
Commitments and contingencies (Note 14)							Commitments and contingencies (Note 14)
Stockholders’ equity:							Stockholders’ equity:
Preferred stock, $0.00001 par value—10,000,000 shares authorized and 0 shares issued or outstanding at March 31, 2020 and December 31, 2019		—			—
Common stock, $0.00001 par value—250,000,000 shares authorized; 89,845,169 and 89,371,199 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively		1			1
Preferred stock, $0.00001 par value—10,000,000 shares authorized and 0 shares issued or outstanding at September 30, 2020 and December 31, 2019							Preferred stock, $0.00001 par value—10,000,000 shares authorized and 0 shares issued or outstanding at September 30, 2020 and December 31, 2019	0		0
Common stock, $0.00001 par value—250,000,000 shares authorized; 90,799,437 and 89,371,199 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively							Common stock, $0.00001 par value—250,000,000 shares authorized; 90,799,437 and 89,371,199 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively	1		1
Additional paid-in capital		676,877			671,060		Additional paid-in capital	689,013		671,060
Accumulated other comprehensive loss		(1,149	)		(916	)	Accumulated other comprehensive loss	(1,045)		(916)
Accumulated deficit		(401,648	)		(384,923	)	Accumulated deficit	(424,999)		(384,923)
Total stockholders’ equity		274,081			285,222		Total stockholders’ equity	262,970		285,222
Total liabilities and stockholders’ equity	$	540,206		$	591,938		Total liabilities and stockholders’ equity	$	568,427	$	591,938

☒
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended March 31,							Three Months Ended September 30,				Nine Months Ended September 30,
	2020			2019				2020		2019		2020		2019
Revenues	$	98,787		$	98,107		Revenues	$	121,116	$	114,830	$	303,358	$	317,628
Costs and expenses:							Costs and expenses:
Cost of revenues		61,111			56,823		Cost of revenues	73,603		70,458		185,445		191,387
Sales and marketing		25,034			25,523		Sales and marketing	24,555		24,310		73,403		73,703
Research and development		10,593			10,370		Research and development	9,744		9,236		28,958		28,305
General and administrative		15,090			13,623		General and administrative	12,099		17,643		39,457		44,101
Change in fair value of contingent consideration		460			3,062		Change in fair value of contingent consideration	1,562		999		5,788		1,052
Total costs and expenses		112,288			109,401		Total costs and expenses	121,563		122,646		333,051		338,548
Loss from operations		(13,501	)		(11,294	)	Loss from operations	(447)		(7,816)		(29,693)		(20,920)
Interest expense		(3,574	)		(3,439	)	Interest expense	(3,646)		(3,507)		(10,830)		(10,416)
Other income (expense), net		580			1,531		Other income (expense), net	(59)		1,175		708		4,214
Loss before income taxes		(16,495	)		(13,202	)	Loss before income taxes	(4,152)		(10,148)		(39,815)		(27,122)
Provision for income taxes		230			26		Provision for income taxes	66		215		261		375
Net loss	$	(16,725	)	$	(13,228	)	Net loss	$	(4,218)	$	(10,363)	$	(40,076)	$	(27,497)
Net loss per share, basic and diluted	$	(0.19	)	$	(0.14	)	Net loss per share, basic and diluted	$	(0.05)	$	(0.12)	$	(0.44)	$	(0.30)
Weighted-average number of common shares used in computing net loss per share, basic and diluted		89,638			94,263		Weighted-average number of common shares used in computing net loss per share, basic and diluted	90,585		88,789		90,113		91,850


	Three Months Ended March 31,							Three Months Ended September 30,				Nine Months Ended September 30,
	2020			2019				2020		2019		2020		2019
Net loss	$	(16,725	)	$	(13,228	)	Net loss	$	(4,218)	$	(10,363)	$	(40,076)	$	(27,497)
Other comprehensive income (loss):							Other comprehensive income (loss):
Foreign currency translation adjustments		(233	)		30		Foreign currency translation adjustments	115		(87)		(129)		(42)
Comprehensive loss	$	(16,958	)	$	(13,198	)	Comprehensive loss	$	(4,103)	$	(10,450)	$	(40,205)	$	(27,539)

	March 31, 2020
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	104,790		—		—	$	104,790
U.S. Treasury Bills		15,185		—		—		15,185
Total	$	119,975	$	—	$	—	$	119,975
Liabilities:
Contingent consideration related to acquisitions		—		—		9,680		9,680
Total	$	—	$	—	$	9,680	$	9,680

	December 31, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	124,303		—		—	$	124,303
U.S. Treasury Bills		15,120		—		—		15,120
Total	$	139,423	$	—	$	—	$	139,423
Liabilities:
Contingent consideration related to acquisitions		—		—		36,220		36,220
Total	$	—	$	—	$	36,220	$	36,220


	September 30, 2020
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	104,944	0		0		$	104,944
Total	$	104,944	$	0	$	0	$	104,944
Liabilities:
Contingent consideration related to acquisitions	0		0		15,008		15,008
Total	$	0	$	0	$	15,008	$	15,008


	December 31, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	124,303	0		0		$	124,303
U.S. Treasury Bills	15,120		0		0		15,120
Total	$	139,423	$	0	$	0	$	139,423
Liabilities:
Contingent consideration related to acquisitions	0		0		36,220		36,220
Total	$	0	$	0	$	36,220	$	36,220


	Three Months Ended March 31, 2020								Three Months Ended September 30, 2020				Nine Months Ended September 30, 2020
	Ubimo		Elevaate		Ahalogy				Ubimo		Elevaate		Ubimo		Elevaate		Ahalogy
	Level 3		Level 3		Level 3				Level 3		Level 3		Level 3		Level 3		Level 3
Balance at the beginning of period	$	5,686	$	3,534	$	27,000		Balance at the beginning of period	$	10,239	$	3,207	$	5,686	$	3,534	$	27,000
Change in fair value during the period		293		167		—		Change in fair value during the period	4,769		(3,207)		9,322		(3,534)		0
Payments made during the period		—		—		(27,000	)	Payments made during the period	0		0		0		0		(27,000)
Total	$	5,979	$	3,701	$	—		Total	$	15,008	$	0	$	15,008	$	0	$	0


	Three Months Ended March 31, 2019					Three Months Ended September 30, 2019				Nine Months Ended September 30, 2019
	Elevaate		Ahalogy			Elevaate		Ahalogy		Elevaate		Ahalogy
	Level 3		Level 3			Level 3		Level 3		Level 3		Level 3
Balance at the beginning of period	$	6,121	$	22,842	Balance at the beginning of period	$	3,015	$	26,001	$	6,121	$	22,842
Change in fair value during the period		1,012		2,051	Change in fair value during the period	0		999		(3,106)		4,158
Total	$	7,133	$	24,893	Total	$	3,015	$	27,000	$	3,015	$	27,000

	Purchase Consideration		Net Tangible Assets Acquired/ (Liabilities Assumed)			Identifiable Intangible Assets		Goodwill		Goodwill Deductible for Taxes	(1) Acquisition Related Expenses
Ubimo	$	20,740	$	384		$	10,750	$	9,606	Not Deductible	$	579
Elevaate		13,346		(60	)		3,781		9,625	Not Deductible		549
SavingStar		7,485		(1,126	)		2,577		6,034	Not Deductible		556
Ahalogy		36,432		2,196			11,580		22,656	Not Deductible		684
	$	78,003	$	1,394		$	28,688	$	47,921		$	2,368


	March 31, 2020			December 31, 2019				September 30, 2020		December 31, 2019
Software	$	42,060		$	41,876		Software	$	44,122	$	41,876
Computer equipment		26,408			25,773		Computer equipment	23,365		25,773
Leasehold improvements		5,855			5,883		Leasehold improvements	5,867		5,883
Furniture and fixtures		2,451			2,449		Furniture and fixtures	2,476		2,449
Total		76,774			75,981		Total	75,830		75,981
Accumulated depreciation and amortization		(65,130	)		(63,543	)	Accumulated depreciation and amortization	(64,754)		(63,543)
Projects in process		2,675			1,266		Projects in process	4,552		1,266
Total property and equipment, net	$	14,319		$	13,704		Total property and equipment, net	$	15,628	$	13,704

	Ubimo		Estimated Useful Life (in Years)		Elevaate		Estimated Useful Life (in Years)		SavingStar		Estimated Useful Life (in Years)		Ahalogy		Estimated Useful Life (in Years)
Developed technologies	$	7,100		4.0	$	3,307		5.0	$	1,476		3.0	$	3,100		4.0
Customer relationships		3,400		2.0		379		5.0		1,040		3.0		6,210		6.0
Trade names		250		4.0		95		3.0		61		1.5		650		4.0
Vendor relationships		—		—		—		—		—		—		1,620		2.0
Total identifiable intangible assets	$	10,750			$	3,781			$	2,577			$	11,580


	Ubimo		Estimated Useful Life (in Years)	Elevaate		Estimated Useful Life (in Years)	SavingStar		Estimated Useful Life (in Years)	Ahalogy		Estimated Useful Life (in Years)
Developed technologies	$	7,100	4.0	$	3,307	5.0	$	1,476	3.0	$	3,100	4.0
Customer relationships	3,400		2.0	379		5.0	1,040		3.0	6,210		6.0
Trade names	250		4.0	95		3.0	61		1.5	650		4.0
Vendor relationships	—		—	—		—	—		—	1,620		2.0
Total identifiable intangible assets	$	10,750		$	3,781		$	2,577		$	11,580

	March 31, 2020
	Gross		Accumulated Amortization			Net		Weighted Average Amortization Period (Years)
Media service rights	$	34,684	$	(18,426	)	$	16,258		2.0
Promotion service rights		30,548		(12,104	)		18,444		3.4
Developed technologies		27,170		(14,419	)		12,751		3.0
Customer relationships		22,690		(13,266	)		9,424		3.1
Data access rights		10,801		(6,885	)		3,916		2.0
Domain names		5,948		(5,557	)		391		0.6
Trade names		2,823		(1,724	)		1,099		2.0
Vendor relationships		2,510		(2,375	)		135		0.2
Patents		975		(882	)		93		2.6
Registered users		420		(420	)		—		0.0
	$	138,569	$	(76,058	)	$	62,511		2.8

	Total
2020, remaining nine months	$	20,288
2021		21,001
2022		13,419
2023		6,642
2024		809
2025 and beyond		—
Total estimated amortization expense	$	62,159


	Total
2020, remaining three months	$	7,233
2021	22,959
2022	14,739
2023	6,585
2024	809
2025 and beyond	0
Total estimated amortization expense	$	52,325

	March 31,			December 31,
	2020			2019				September 30, 2020		December 31, 2019
Principal	$	200,000		$	200,000		Principal	$	200,000	$	200,000
Unamortized debt discount		(28,665	)		(31,132	)	Unamortized debt discount	(23,623)		(31,132)
Unamortized debt issuance costs		(2,480	)		(2,711	)	Unamortized debt issuance costs	(2,017)		(2,711)
Net carrying amount of the liability component	$	168,855		$	166,157		Net carrying amount of the liability component	$	174,360	$	166,157

				RSUs Outstanding					Options Outstanding
	Shares Available for Grant			Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in thousands)				RSUs Outstanding			Options Outstanding
Balance as of December 31, 2019		6,036,180			5,022,675		$	10.66		8,600,441		$	11.40		5.16	$	8,811
																			Shares Available for Grant	Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2019																		Balance at December 31, 2019	6,036,180	5,022,675	$	10.66	8,600,441	$	11.40	5.16	$	8,811
Increase in shares authorized		3,574,847		—			—		—			—		—		—		Increase in shares authorized	3,574,847	—	—		—	—		—	—
Options granted		(1,150,178	)	—			—			1,150,178		$	8.95	—		—		Options granted	(1,150,178)	—	—		1,150,178	$	8.95	—	—
Options exercised	—			—			—			(58,017	)	$	8.07	—		$	140	Options exercised	—	—	—		(74,307)	$	7.11	—	$	220
Options canceled or expired		387,626		—			—			(387,626	)	$	12.77	—		—		Options canceled or expired	723,824	—	—		(723,824)	$	11.76	—	—
RSUs granted		(1,356,389	)		1,356,389		$	9.04	—			—		—		—		RSUs granted	(3,304,032)	3,304,032	$	8.33	—	—		—	—
RSUs vested	—				(656,922	)	$	11.11	—			—		—		—		RSUs vested	—	(1,767,543)	$	10.57	—	—		—	—
RSUs canceled or expired		319,534			(319,534	)	$	11.14	—			—		—		—		RSUs canceled or expired	789,849	(789,849)	$	10.91	—	—		—	—
RSUs vested and withheld for taxes		240,969		—			—		—			—		—		—		RSUs vested and withheld for taxes	631,186	—	—		—	—		—	—
Balance as of March 31, 2020		8,052,589			5,402,608		$	10.17		9,304,976		$	11.06		5.45	$	1,078
Vested and exercisable as of March 31, 2020										5,344,446		$	12.45		3.65	$	1,078
Balance as of September 30, 2020																		Balance as of September 30, 2020	7,301,676	5,769,315	$	9.32	8,952,488	$	11.09	5.15	$	1,559
Vested and exercisable as of September 30, 2020																		Vested and exercisable as of September 30, 2020					5,871,020	$	12.13	3.74	$	1,526


						Three and Nine
	Three Months Ended March 31,					Months Ended September 30,
	2020		2019			2020	2019
Stock options and ESPP		9,424		7,705	Stock options and ESPP	9,226	8,770
Restricted stock units		5,403		5,875	Restricted stock units	5,769	5,233
Shares related to convertible senior notes		11,521		11,521	Shares related to convertible senior notes	11,521	11,521
		26,348		25,101		26,516	25,524

	Operating Leases
2020, remaining nine months	$	2,840
2021		2,189
2022		1,885
2023		1,877
2024		1,211
2025 and thereafter		556
Total lease payments	$	10,558

Less: Imputed Interest		(1,571	)
Total	$	8,987


	Operating Leases
2020, remaining three months	$	1,011
2021	4,726
2022	3,561
2023	3,469
2024	2,857
2025 and thereafter	9,988
Total lease payments	$	25,612

Less: Imputed Interest	(5,313)
Total	$	20,299


	Three Months Ended March 31,											Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands, except percentages)	2020					2019					(in thousands, except percentages)	2020				2019				2020				2019
Revenues	$	98,787		100.0	%	$	98,107		100.0	%	Revenues	$	121,116	100.0	%	$	114,830	100.0	%	$	303,358	100.0	%	$	317,628	100.0	%
Costs and expenses:											Costs and expenses:
Cost of revenues		61,111		61.9	%		56,823		57.9	%	Cost of revenues	73,603		60.8	%	70,458		61.4	%	185,445		61.1	%	191,387		60.3	%
Sales and marketing		25,034		25.3	%		25,523		26.0	%	Sales and marketing	24,555		20.3	%	24,310		21.2	%	73,403		24.2	%	73,703		23.2	%
Research and development		10,593		10.7	%		10,370		10.6	%	Research and development	9,744		8.0	%	9,236		8.0	%	28,958		9.5	%	28,305		8.9	%
General and administrative		15,090		15.3	%		13,623		13.9	%	General and administrative	12,099		10.0	%	17,643		15.4	%	39,457		13.0	%	44,101		13.9	%
Change in fair value of contingent consideration		460		0.5	%		3,062		3.1	%	Change in fair value of contingent consideration	1,562		1.3	%	999		0.9	%	5,788		1.9	%	1,052		0.3	%
Total cost and expenses		112,288		113.7	%		109,401		111.5	%	Total cost and expenses	121,563		100.4	%	122,646		106.8	%	333,051		109.8	%	338,548		106.6	%
Loss from operations		(13,501	)	(13.7	)%		(11,294	)	(11.5	)%	Loss from operations	(447)		(0.4)	%	(7,816)		(6.8)	%	(29,693)		(9.8)	%	(20,920)		(6.6)	%
Interest expense		(3,574	)	(3.6	)%		(3,439	)	(3.5	)%	Interest expense	(3,646)		(3.0)	%	(3,507)		(3.1)	%	(10,830)		(3.6)	%	(10,416)		(3.3)	%
Other income (expense), net		580		0.6	%		1,531		1.6	%	Other income (expense), net	(59)		—	%	1,175		1.0	%	708		0.2	%	4,214		1.3	%
Loss before income taxes		(16,495	)	(16.7	)%		(13,202	)	(13.4	)%	Loss before income taxes	(4,152)		(3.4)	%	(10,148)		(8.9)	%	(39,815)		(13.1)	%	(27,122)		(8.6)	%
Provision for income taxes		230		0.2	%		26		—	%	Provision for income taxes	66		—	%	215		0.2	%	261		0.1	%	375		0.1	%
Net loss	$	(16,725	)	(16.9	)%	$	(13,228	)	(13.4	)%	Net loss	$	(4,218)	(3.4)	%	$	(10,363)	(9.1)	%	$	(40,076)	(13.2)	%	$	(27,497)	(8.7)	%