Document
 
 
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
 
(Mark One)

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

For the quarterly period ended June 30, 2019

Or

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

For the transition period from _____ to _____

Commission File Number: 001-38498
 
PLURALSIGHT, INC.
(Exact name of registrant as specified in its charter)
 
 
Delaware
 
82-3605465
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification Number)

182 North Union Avenue
Farmington, Utah 84025
(Address of principle executive offices, including zip code)

(801) 784-9007
(Registrant's telephone number, including area code)
 
 
 

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol
 
Name of each exchange on which registered
 
 
 
 
 
Class A Common Stock, $0.0001 par value per share
 
PS
 
Nasdaq Global Select Market
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
 
 
 
Accelerated filer
  
Non-accelerated filer
 
ý
 
 
 
Smaller reporting company
  
 
 
 
 
 
 
Emerging growth company
  
ý
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý
As of July 19, 2019, the registrant had 140,016,129 shares of common stock outstanding, consisting of 101,234,524 shares of Class A common stock, 24,594,749 shares of Class B common stock, and 14,186,856 shares of Class C common stock.

 
 
 




PLURALSIGHT, INC.
TABLE OF CONTENTS
 
 
 
 
 
 
Page
 
 
 
PART I. FINANCIAL INFORMATION
 
 
 
Item 1.
 
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
 
 
 
PART II. OTHER INFORMATION
 
 
 
Item 1.
Item 1A.
Item 2.
Item 6.
 
 
 






SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
As used in this Quarterly Report on Form 10-Q, unless expressly indicated or the context otherwise requires, references to “Pluralsight,” “we,” “us,” “our,” “the Company,” and similar references refer to Pluralsight, Inc. and its consolidated subsidiaries, including Pluralsight Holdings, LLC, or Pluralsight Holdings.
This Quarterly Report on Form 10-Q, including the section titled “Management's Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements, which are subject to a number of risks, uncertainties, and assumptions, generally relate to future events or our future financial or operating performance. In some cases, you can identify these statements by forward-looking words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect,” “could,” “plan,” “potential,” “predict,” “seek,” “should,” “would,” “target,” “project,” “contemplate,” or the negative version of these words and other comparable terminology that concern our expectations, strategy, plans, intentions, or projections. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about: 
our ability to attract new customers and retain and expand our relationships with existing customers;
our ability to expand our course library and develop new platform features;
our future financial performance, including trends in billings, revenue, costs of revenue, gross margin, operating expenses, and free cash flow;
the demand for, and market acceptance of, our platform or for cloud-based technology learning solutions in general;
our ability to compete successfully in competitive markets;
our ability to respond to rapid technological changes;
our expectations and management of future growth;
our ability to enter new markets and manage our expansion efforts, particularly internationally;
our ability to attract and retain key employees and qualified technical and sales personnel;
our ability to improve sales management and execution;
our ability to effectively and efficiently protect our brand;
our ability to timely scale and adapt our infrastructure;
our ability to maintain, protect, and enhance our intellectual property and not infringe upon others’ intellectual property;
our ability to successfully identify, acquire, and integrate companies and assets;
the amount and timing of any payments we make under the fourth amended and restated limited liability company agreement of Pluralsight Holdings, or the Fourth LLC Agreement, and our Tax Receivable Agreement, or TRA, with the members of Pluralsight Holdings;
our use of net proceeds from our convertible note offering in March 2019;
our ability to satisfy our obligations under the convertible senior notes;
our ability to successfully integrate GitPrime, Inc.'s ("GitPrime") operations;
our ability to implement our plans, forecasts and other expectations with respect to GitPrime's business; and
our ability to realize the anticipated benefits of the acquisition of GitPrime, including the possibility that the expected benefits from the acquisition will not be realized within the expected time period.
These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in the section titled “Risk Factors” in our Annual Report on Form 10-K/A as filed with the Securities and Exchange Commission, or the SEC, under the Exchange Act. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements and you should not place undue reliance on our forward-looking statements.

1




The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.
You should read this Quarterly Report on Form 10-Q in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2018 included in our Annual Report on Form 10-K/A.


2


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)
PLURALSIGHT, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(unaudited)
 
 
June 30,
2019
 
December 31,
2018
 
 
 
 
 
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
260,313

 
$
194,306

Short-term investments
 
276,818

 

Accounts receivable, net of allowances of $3,027 and $2,501 as of June 30, 2019 and December 31, 2018, respectively
 
57,625

 
63,436

Deferred contract acquisition costs, net
 
17,079

 

Prepaid expenses and other current assets
 
13,115

 
8,323

Total current assets
 
624,950

 
266,065

Restricted cash
 
27,970

 
16,765

Long-term investments
 
35,654

 

Property and equipment, net
 
49,028

 
31,641

Content library, net
 
7,510

 
7,050

Intangible assets, net
 
25,483

 
1,759

Goodwill
 
261,722

 
123,119

Deferred contract acquisition costs, noncurrent, net
 
3,252

 

Other assets
 
1,367

 
1,064

Total assets
 
$
1,036,936

 
$
447,463

Liabilities and stockholders' equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
8,608

 
$
7,160

Accrued expenses
 
29,332

 
32,047

Accrued author fees
 
11,301

 
10,002

Deferred revenue
 
172,310

 
157,695

Total current liabilities
 
221,551

 
206,904

Deferred revenue, noncurrent
 
13,748

 
14,886

Convertible senior notes, net
 
487,915

 

Facility financing obligations
 
31,668

 
15,777

Other liabilities
 
1,948

 
1,303

Total liabilities
 
756,830

 
238,870

Commitments and contingencies (Note 12)
 

 

Stockholders' equity:
 
 
 
 
Preferred stock, $0.0001 par value per share, 100,000,000 shares authorized, no shares issued and outstanding as of June 30, 2019 and December 31, 2018
 

 

Class A common stock, $0.0001 par value per share, 1,000,000,000 shares authorized, 101,096,472 shares issued and outstanding as of June 30, 2019; 65,191,907 shares issued and outstanding as of December 31, 2018
 
10

 
7

Class B common stock, $0.0001 par value per share, 200,000,000 shares authorized, 24,664,113 shares issued and outstanding as of June 30, 2019; 57,490,881 shares issued and outstanding as of December 31, 2018
 
2

 
6

Class C common stock, $0.0001 par value per share, 50,000,000 shares authorized, 14,186,856 shares issued and outstanding as of June 30, 2019; 14,586,173 shares issued and outstanding as of December 31, 2018
 
1

 
1

Additional paid-in capital
 
599,558

 
456,899

Accumulated other comprehensive income (loss)
 
237

 
(41
)
Accumulated deficit
 
(394,048
)
 
(355,446
)
Total stockholders’ equity attributable to Pluralsight, Inc.
 
205,760

 
101,426

Non-controlling interests
 
74,346

 
107,167

Total stockholders’ equity
 
280,106

 
208,593

Total liabilities and stockholders' equity
 
$
1,036,936

 
$
447,463

The accompanying notes are an integral part of these condensed consolidated financial statements.

3




PLURALSIGHT, INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
 
 
(Restated)
 
 
 
(Restated)
 
 
 
 
 
 
 
 
 
Revenue
 
$
75,862

 
$
53,572

 
$
145,479

 
$
103,216

Cost of revenue
 
17,801

 
15,933

 
34,511

 
30,819

Gross profit
 
58,061

 
37,639

 
110,968

 
72,397

Operating expenses:
 
 
 
 
 
 
 
 
Sales and marketing
 
49,994

 
41,857

 
94,125

 
71,324

Technology and content
 
24,786

 
18,396

 
45,030

 
31,721

General and administrative
 
20,601

 
26,002

 
42,774

 
37,294

Total operating expenses
 
95,381

 
86,255

 
181,929

 
140,339

Loss from operations
 
(37,320
)
 
(48,616
)
 
(70,961
)
 
(67,942
)
Other (expense) income:
 
 
 
 
 
 
 
 
Interest expense
 
(7,697
)
 
(2,424
)
 
(9,721
)
 
(6,134
)
Loss on debt extinguishment
 

 
(4,085
)
 

 
(4,085
)
Other income, net
 
4,040

 
48

 
5,654

 
35

Loss before income taxes
 
(40,977
)
 
(55,077
)
 
(75,028
)
 
(78,126
)
Provision for income taxes
 
(143
)
 
(143
)
 
(297
)
 
(252
)
Net loss
 
$
(41,120
)
 
$
(55,220
)
 
$
(75,325
)
 
$
(78,378
)
Less: Net loss attributable to non-controlling interests
 
(11,740
)
 
(13,910
)
 
(26,690
)
 
(13,910
)
Net loss attributable to Pluralsight, Inc.
 
$
(29,380
)
 
$
(41,310
)
 
$
(48,635
)
 
$
(64,468
)
Less: Accretion of Series A redeemable convertible preferred units
 

 
(156,750
)
 

 
(176,275
)
Net loss attributable to common shares
 
$
(29,380
)
 
$
(198,060
)
 
$
(48,635
)
 
$
(240,743
)
Net loss per share, basic and diluted(1)
 
$
(0.30
)
 
$
(0.20
)
 
$
(0.56
)
 
$
(0.20
)
Weighted-average common shares used in computing basic and diluted net loss per share(1)
 
97,608

 
62,252

 
86,827

 
62,252

________________________
(1)
Net loss per share, basic and diluted and weighted-average common shares used in computing basic and diluted net loss per share for the three and six months ended June 30, 2018 reflect only the activity for the portion of the period following Pluralsight, Inc.'s initial public offering and the Reorganization Transactions described in Note 1—Organization and Description of Business. See Note 17—Net Loss Per Share for additional details.
The accompanying notes are an integral part of these condensed consolidated financial statements.

4




PLURALSIGHT, INC.
Condensed Consolidated Statements of Comprehensive Loss
(in thousands)
(unaudited)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
 
 
(Restated)
 
 
 
(Restated)
 
 
 
 
 
 
 
 
 
Net loss
 
$
(41,120
)
 
$
(55,220
)
 
$
(75,325
)
 
$
(78,378
)
Other comprehensive income (loss):
 
 
 
 
 
 
 
 
Unrealized gains on investments
 
379

 

 
379

 

Foreign currency translation (losses) gains, net
 
(7
)
 
(63
)
 
11

 
(58
)
Comprehensive loss
 
$
(40,748
)
 
$
(55,283
)
 
$
(74,935
)
 
$
(78,436
)
Less: Comprehensive loss attributable to non-controlling interests
 
(11,636
)
 
(13,931
)
 
(26,578
)
 
(13,931
)
Comprehensive loss attributable to Pluralsight, Inc.
 
$
(29,112
)
 
$
(41,352
)
 
$
(48,357
)
 
$
(64,505
)
The accompanying notes are an integral part of these condensed consolidated financial statements.

5




PLURALSIGHT, INC.
Condensed Consolidated Statements of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders' Equity
(in thousands, except share/unit amounts)
(unaudited)
Three Months Ended June 30, 2019
 
Redeemable
Convertible
Preferred Units
 
 
Members’ Capital
 
Class A Common Stock
 
Class B Common Stock
 
Class C Common Stock
 
Additional
Paid-In
Capital
 
Accumulated Other Comprehensive
(Loss) Income
 
Accumulated
Deficit
 
Non-Controlling Interests
 
Total
 
Units
 
Amount
 
 
Units
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at March 31, 2019

 
$

 
 

 
$

 
95,096,979

 
$
10

 
29,071,789

 
$
3

 
14,162,311

 
$
1

 
$
565,189

 
$
(31
)
 
$
(364,668
)
 
$
85,374

 
$
285,878

Effect of exchanges of LLC Units

 

 
 

 

 
4,469,843

 

 
(4,390,283
)
 
(1
)
 
(79,560
)
 

 
9,425

 

 

 
(9,424
)
 

Issuance of common stock under employee stock purchase plans

 

 
 

 

 
621,463

 

 

 

 

 

 
8,257

 

 

 

 
8,257

Vesting of restricted stock units

 

 
 

 

 
655,972

 

 

 

 
104,105

 

 

 

 

 

 

Exercise of common stock options

 

 
 

 

 
252,215

 

 

 

 

 

 
3,753

 

 

 

 
3,753

Forfeiture of unvested LLC Units

 

 
 

 

 

 

 
(17,393
)
 

 

 

 

 

 

 

 

Equity-based compensation

 

 
 

 

 

 

 

 

 

 

 
22,966

 

 

 

 
22,966

Adjustments to non-controlling interests

 

 
 

 

 

 

 

 

 

 

 
(10,032
)
 

 

 
10,032

 

Other comprehensive income

 

 
 

 

 

 

 

 

 

 

 

 
268

 

 
104

 
372

Net loss

 

 
 

 

 

 

 

 

 

 

 

 

 
(29,380
)
 
(11,740
)
 
(41,120
)
Balance at June 30, 2019

 
$

 
 

 
$

 
101,096,472

 
$
10

 
24,664,113

 
$
2

 
14,186,856

 
$
1

 
$
599,558

 
$
237

 
$
(394,048
)
 
$
74,346

 
$
280,106

The accompanying notes are an integral part of these condensed consolidated financial statements.

























6




PLURALSIGHT, INC.
Condensed Consolidated Statements of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders' Equity (Continued)
(in thousands, except share/unit amounts)
(unaudited)
Three Months Ended June 30, 2018
 
 
Redeemable
Convertible
Preferred Units
 
 
Members’ Capital
 
Class A Common Stock
 
Class B Common Stock
 
Class C Common Stock
 
Additional
Paid-In
Capital
 
Accumulated
Other
Comprehensive Income (Loss)
 
Accumulated
Deficit
 
Non-Controlling Interests
 
Total
 
 
Units
 
Amount
 
 
Units
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at March 31, 2018
 
48,447,880

 
$
425,291

 
 
48,407,645

 
$

 

 
$

 

 
$

 

 
$

 
$

 
$
30

 
$
(483,428
)
 
$

 
$
(483,398
)
Activity prior to the Reorganization Transactions:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of warrants to purchase Class A common units
 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

Equity-based compensation, as restated
 

 

 
 

 
18,905

 

 

 

 

 

 

 

 

 

 

 
18,905

Accretion of Series A redeemable convertible preferred units, as restated
 

 
156,750

 
 

 
(18,905
)
 

 

 

 

 

 

 

 

 
(137,845
)
 

 
(156,750
)
Foreign currency translation losses
 

 

 
 

 

 

 

 

 

 

 

 

 
(23
)
 

 

 
(23
)
Net loss, as restated
 

 

 
 

 

 

 

 

 

 

 

 

 

 
(28,625
)
 

 
(28,625
)
Effect of the Reorganization Transactions and initial public offering:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of the Reorganization Transactions
 
(48,447,880
)
 
(582,041
)
 
 
(48,407,645
)
 

 
39,110,660

 
4

 
58,111,572

 
6

 
14,048,138

 
1

 
581,952

 

 

 

 
581,963

Initial public offering, net of offering costs
 

 

 
 

 

 
23,805,000

 
2

 

 

 

 

 
324,677

 

 

 

 
324,679

Allocation of equity to non-controlling interests
 

 

 
 

 

 

 

 

 

 

 

 
(474,007
)
 
(4
)
 
339,782

 
134,229

 

Activity subsequent to the Reorganization Transactions and initial public offering:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Settlement of equity appreciation rights
 

 

 
 

 

 

 

 

 

 

 

 
(325
)
 

 

 

 
(325
)
Equity-based compensation, as restated
 

 

 
 

 

 

 

 

 

 

 

 
10,074

 

 

 

 
10,074

Adjustments to non-controlling interests, as restated
 

 

 
 

 

 

 

 

 

 

 

 
(5,097
)
 

 

 
5,097

 

Foreign currency translation losses
 

 

 
 

 

 

 

 

 

 

 

 

 
(19
)
 

 
(21
)
 
(40
)
Net loss, as restated
 

 

 
 

 

 

 

 

 

 

 

 

 

 
(12,685
)
 
(13,910
)
 
(26,595
)
Balance at June 30, 2018, as restated
 

 
$

 
 

 
$

 
62,915,660

 
$
6

 
58,111,572

 
$
6

 
14,048,138

 
$
1

 
$
437,274

 
$
(16
)
 
$
(322,801
)
 
$
125,395

 
$
239,865

The accompanying notes are an integral part of these condensed consolidated financial statements.



7





PLURALSIGHT, INC.
Condensed Consolidated Statements of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders' Equity (Continued)
(in thousands, except share/unit amounts)
(unaudited)
Six Months Ended June 30, 2019
 
Redeemable
Convertible
Preferred Units
 
 
Members’ Capital
 
Class A Common Stock
 
Class B Common Stock
 
Class C Common Stock
 
Additional
Paid-In
Capital
 
Accumulated Other Comprehensive (Loss) Income
 
Accumulated
Deficit
 
Non-Controlling Interests
 
Total
 
Units
 
Amount
 
 
Units
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2018

 
$

 
 

 
$

 
65,191,907

 
$
7

 
57,490,881

 
$
6

 
14,586,173

 
$
1

 
$
456,899

 
$
(41
)
 
$
(355,446
)
 
$
107,167

 
$
208,593

Impact of the adoption of ASC 606

 

 
 

 

 

 

 

 

 

 

 

 

 
10,033

 
10,601

 
20,634

Effect of exchanges of LLC Units

 

 
 

 

 
33,419,553

 
3

 
(32,809,375
)
 
(4
)
 
(610,178
)
 

 
58,920

 

 

 
(58,919
)
 

Issuance of common stock under employee stock purchase plans

 

 
 

 

 
621,463

 

 

 

 

 

 
8,257

 

 

 

 
8,257

Vesting of restricted stock units

 

 
 

 

 
1,436,581

 

 

 

 
210,861

 

 

 

 

 

 

Exercise of common stock options

 

 
 

 

 
426,968

 

 

 

 

 

 
6,374

 

 

 

 
6,374

Forfeiture of unvested LLC Units

 

 
 

 

 

 

 
(17,393
)
 

 

 

 

 

 

 

 

Equity component of convertible senior notes, net of issuance costs

 

 
 

 

 

 

 

 

 

 

 
137,033

 

 

 

 
137,033

Purchase of capped calls related to issuance of convertible senior notes

 

 
 

 

 

 

 

 

 

 

 
(69,432
)
 

 

 

 
(69,432
)
Equity-based compensation

 

 
 

 

 

 

 

 

 

 

 
43,582

 

 

 

 
43,582

Adjustments to non-controlling interests

 

 
 

 

 

 

 

 

 

 

 
(42,075
)
 

 

 
42,075

 

Other comprehensive income

 

 
 

 

 

 

 

 

 

 

 

 
278

 

 
112

 
390

Net loss

 

 
 

 

 

 

 

 

 

 

 

 

 
(48,635
)
 
(26,690
)
 
(75,325
)
Balance at June 30, 2019

 
$

 
 

 
$

 
101,096,472

 
$
10

 
24,664,113

 
$
2

 
14,186,856

 
$
1

 
$
599,558

 
$
237

 
$
(394,048
)
 
$
74,346

 
$
280,106

The accompanying notes are an integral part of these condensed consolidated financial statements.









8






PLURALSIGHT, INC.
Condensed Consolidated Statements of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders' Equity (Continued)
(in thousands, except share/unit amounts)
(unaudited)
Six Months Ended June 30, 2018
 
 
Redeemable
Convertible
Preferred Units
 
 
Members’ Capital
 
Class A Common Stock
 
Class B Common Stock
 
Class C Common Stock
 
Additional
Paid-In
Capital
 
Accumulated
Other
Comprehensive Income (Loss)
 
Accumulated
Deficit
 
Non-Controlling Interests
 
Total
 
 
Units
 
Amount
 
 
Units
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2017
 
48,447,880

 
$
405,766

 
 
48,407,645

 
$

 

 
$

 

 
$

 

 
$

 
$

 
$
25

 
$
(445,102
)
 
$

 
$
(445,077
)
Activity prior to the Reorganization Transactions:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of warrants to purchase Class A common units
 

 

 
 

 
984

 

 

 

 

 

 

 

 

 

 

 
984

Equity-based compensation, as restated
 

 

 
 

 
22,278

 

 

 

 

 

 

 

 

 

 

 
22,278

Accretion of Series A redeemable convertible preferred units, as restated
 

 
176,275

 
 

 
(23,262
)
 

 

 

 

 

 

 

 

 
(153,013
)
 

 
(176,275
)
Foreign currency translation losses
 

 

 
 

 

 

 

 

 

 

 

 

 
(18
)
 

 

 
(18
)
Net loss, as restated
 

 

 
 

 

 

 

 

 

 

 

 

 

 
(51,783
)
 

 
(51,783
)
Effect of the Reorganization Transactions and initial public offering:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Effect of the Reorganization Transactions
 
(48,447,880
)
 
(582,041
)
 
 
(48,407,645
)
 

 
39,110,660

 
4

 
58,111,572

 
6

 
14,048,138

 
1

 
581,952

 

 

 

 
581,963

Initial public offering, net of offering costs
 

 

 
 

 

 
23,805,000

 
2

 

 

 

 

 
324,677

 

 

 

 
324,679

Allocation of equity to non-controlling interests
 

 

 
 

 

 

 

 

 

 

 

 
(474,007
)
 
(4
)
 
339,782

 
134,229

 

Activity subsequent to the Reorganization Transactions and initial public offering:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Settlement of equity appreciation rights
 

 

 
 

 

 

 

 

 

 

 

 
(325
)
 

 

 

 
(325
)
Equity-based compensation, as restated
 

 

 
 

 

 

 

 

 

 

 

 
10,074

 

 

 

 
10,074

Adjustments to non-controlling interests, as restated
 

 

 
 

 

 

 

 

 

 

 

 
(5,097
)
 

 

 
5,097

 

Foreign currency translation losses
 

 

 
 

 

 

 

 

 

 

 

 

 
(19
)
 

 
(21
)
 
(40
)
Net loss, as restated
 

 

 
 

 

 

 

 

 

 

 

 

 

 
(12,685
)
 
(13,910
)
 
(26,595
)
Balance at June 30, 2018, as restated
 

 
$

 
 

 
$

 
62,915,660

 
$
6

 
58,111,572

 
$
6

 
14,048,138

 
$
1

 
$
437,274

 
$
(16
)
 
$
(322,801
)
 
$
125,395

 
$
239,865

The accompanying notes are an integral part of these condensed consolidated financial statements.

9




PLURALSIGHT, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
 
Six Months Ended June 30,
 
 
2019
 
2018
 
 
 
 
(Restated)
 
 
 
 
 
Operating activities
 
 
 
 
Net loss
 
$
(75,325
)
 
$
(78,378
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
Depreciation of property and equipment
 
4,196

 
4,358

Amortization of acquired intangible assets
 
1,609

 
6,665

Amortization of course creation costs
 
1,190

 
930

Equity-based compensation
 
43,000

 
32,352

Amortization of deferred contract acquisition costs
 
11,311

 

Amortization of debt discount and issuance costs
 
8,294

 
1,215

Investment discount and premium amortization, net
 
(706
)
 

Provision for doubtful accounts
 
22

 
358

Deferred tax benefit
 
21

 
(64
)
Debt extinguishment costs
 

 
4,180

Other
 
257

 

Changes in assets and liabilities, net of acquired assets and liabilities:
 
 
 
 
Accounts receivable
 
7,116

 
1,335

Deferred contract acquisition costs
 
(11,430
)
 

Prepaid expenses and other assets
 
(4,194
)
 
(3,858
)
Accounts payable
 
1,070

 
(588
)
Accrued expenses and other liabilities
 
(2,374
)
 
(2,839
)
Accrued author fees
 
1,299

 
617

Deferred revenue
 
13,003

 
17,500

Net cash used in operating activities
 
(1,641
)
 
(16,217
)
Investing activities
 
 
 
 
Purchases of property and equipment
 
(4,590
)
 
(4,574
)
Purchases of content library
 
(2,441
)
 
(1,504
)
Cash paid for acquisition, net of cash acquired
 
(163,871
)
 

Purchases of investments
 
(317,080
)
 

Proceeds from sales of investments
 
4,967

 

Net cash used in investing activities
 
(483,015
)
 
(6,078
)
Financing activities
 
 
 
 
Proceeds from issuance of convertible senior notes, net of discount and issuance costs
 
616,654

 

Purchase of capped calls related to issuance of convertible senior notes
 
(69,432
)
 

Proceeds from issuance of common stock from employee equity plans
 
14,631

 

Proceeds from initial public offering, net of underwriting discounts and commissions
 

 
332,080

Payments of costs related to initial public offering
 

 
(3,085
)
Borrowings of long-term debt
 

 
20,000

Repayments of long-term debt
 

 
(137,710
)
Payments of debt extinguishment costs
 

 
(2,162
)
Payments of debt issuance costs
 

 
(450
)
Payments to settle equity appreciation rights
 

 
(325
)
Taxes paid related to net share settlement
 

 
(78
)
Other
 
(7