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TABLE OF
CONTENTS
TABLE OF
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Table of
Contents
Filed
Pursuant to Rule 424(b)(5)
Registration Number 333-238876
CALCULATION OF REGISTRATION FEE
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Title of Each Class of
Securities to be Registered
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Amount
to be
Registered(1)
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Proposed
Maximum
Offering Price
Per Share
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Proposed
Maximum
Aggregate
Offering Price
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Amount of
Registration
Fee(2)
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Common Stock, par value
$0.0001 per share
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17,250,000 |
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$9.25 |
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$159,562,500 |
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$20,711 |
|
- (1)
- Includes
15,000,000 shares of common stock to be sold to the
underwriters plus an option to purchase up to an additional
2,250,000 shares of common stock.
- (2)
- Calculated pursuant
to Rule 457(a) under the Securities Act of 1933, as amended
(the "Securities Act"). Payment of the registration fee at the
time of filing of the Registrant's registration statement on
Form S-3, filed with the Securities and Exchange Commission on
June 2, 2020, was deferred pursuant to Rules 456(b)
and 457(r) under the Securities Act and is
paid herewith.
Table of
Contents
Prospectus
Supplement
(To Prospectus dated June 2, 2020)
15,000,000 Shares

Common Stock
We
are offering 15,000,000 shares of our common stock pursuant to this
prospectus supplement. Our common stock is listed on The Nasdaq
Global Select Market under the symbol "GLUU." The last reported
sale price of our common stock on The Nasdaq Global Select Market
on June 3, 2020 was $9.56 per share.
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Per Share |
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Total
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Public offering price
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$ |
9.250 |
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$ |
138,750,000 |
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Underwriting discounts and
commissions(1)
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$ |
0.416 |
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$ |
6,243,750 |
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Proceeds to Glu Mobile Inc., before
expenses
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$ |
8.834 |
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$ |
132,506,250 |
|
- (1)
- See "Underwriting" for a
description of the compensation payable to the
underwriters.
We
have granted the underwriters an option for a period of
30 days to purchase up to 2,250,000 additional shares of our
common stock from us at the public offering price, less
underwriting discounts and commissions.
An
investment in our common stock involves a high degree of risk. You
should carefully consider the information under the heading "Risk
Factors" beginning on page S-14 of this prospectus supplement
and in the documents incorporated by reference into this prospectus
supplement, including our
Quarterly Report on Form 10-Q for the quarter ended
March 31, 2020 filed with the Securities and Exchange
Commission on May 11, 2020, before investing in our
securities.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
determined if this prospectus supplement or the accompanying
prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
The
underwriters expect to deliver the shares of common stock on or
about June 8, 2020.
Joint Book-Running Managers
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Goldman
Sachs & Co. LLC |
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Morgan Stanley |
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UBS
Investment Bank |
Co-Managers
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Cowen |
|
Wedbush Securities |
|
Roth
Capital Partners
|
June 3, 2020
Table of
Contents
TABLE OF CONTENTS
Prospectus Supplement
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Page
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ABOUT THIS PROSPECTUS SUPPLEMENT
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S-1 |
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PROSPECTUS SUPPLEMENT SUMMARY
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S-3 |
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THE OFFERING
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S-12 |
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RISK FACTORS
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S-14 |
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FORWARD-LOOKING STATEMENTS
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S-16 |
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USE OF PROCEEDS
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S-18 |
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DIVIDEND POLICY
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S-19 |
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DILUTION
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S-20 |
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MATERIAL UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES FOR NON-U.S. HOLDERS OF OUR COMMON STOCK
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S-22 |
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UNDERWRITING
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S-28 |
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LEGAL MATTERS
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S-35 |
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EXPERTS
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S-36 |
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WHERE YOU CAN FIND MORE INFORMATION
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S-36 |
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INFORMATION INCORPORATED BY REFERENCE
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S-36 |
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Prospectus
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ABOUT THIS PROSPECTUS
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1 |
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GLU MOBILE INC.
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1 |
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RISK FACTORS
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2 |
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SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS
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3 |
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USE OF PROCEEDS
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4 |
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DESCRIPTION OF COMMON STOCK
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4 |
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PLAN OF DISTRIBUTION
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7 |
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LEGAL MATTERS
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8 |
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EXPERTS
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8 |
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INFORMATION INCORPORATED BY REFERENCE
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9 |
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WHERE YOU CAN FIND ADDITIONAL INFORMATION
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9 |
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S-i
Table of
Contents
ABOUT THIS PROSPECTUS
SUPPLEMENT
On
June 2, 2020, we filed with the Securities and Exchange
Commission, or SEC, a "shelf" registration statement on
Form S-3 utilizing a shelf registration process relating to
the securities described in this prospectus supplement, which
registration statement became automatically effective upon filing.
Under this shelf registration process, we may, from time to time,
sell common stock, of which this offering is a part.
This
document is in two parts. The first part is this prospectus
supplement, including the documents incorporated by reference
herein, which describes the specific terms of this offering and
also adds to and updates the information contained in the
accompanying prospectus and the documents incorporated by
reference. The second part, the accompanying prospectus, including
the documents incorporated by reference therein, provides more
general information, some of which may not apply to this offering.
Generally, when we refer to this prospectus, we are referring to
both parts of this document combined. Before you invest, you should
carefully read this prospectus supplement, the accompanying
prospectus and the information incorporated by reference herein and
therein, as well as the additional information described in this
prospectus supplement under "Where You Can Find More Information".
This prospectus supplement may add, update or change information
contained in the accompanying prospectus. To the extent that any
statement we make in this prospectus supplement is inconsistent
with statements made in the accompanying prospectus or any
documents incorporated by reference therein, the statements made in
this prospectus supplement will be deemed to modify or supersede
those made in the accompanying prospectus and such documents
incorporated by reference therein.
We
are offering to sell, and seeking offers to buy, shares of our
common stock only in jurisdictions where offers and sales are
permitted. The distribution of this prospectus supplement and the
offering of the common stock in certain jurisdictions may be
restricted by law. Persons outside the United States who come into
possession of this prospectus supplement must inform themselves
about, and observe any restrictions relating to, the offering of
the common stock and the distribution of this prospectus supplement
outside the United States. This prospectus supplement does not
constitute, and may not be used in connection with, an offer to
sell, or a solicitation of an offer to buy, any securities offered
by this prospectus supplement by any person in any jurisdiction in
which it is unlawful for such person to make such an offer or
solicitation.
This
prospectus supplement, the accompanying prospectus and the
documents incorporated by reference herein and therein include
trademarks, service marks and trade names owned by us or other
companies. All trademarks, service marks and trade names included
or incorporated by reference into this prospectus supplement or the
accompanying prospectus are the property of their respective
owners.
We
and the underwriters have not authorized anyone to provide you with
information different than that contained or incorporated by
reference in this prospectus supplement, the accompanying
prospectus or any free writing prospectus that we have authorized
for use in connection with this offering. We take no responsibility
for, and can provide no assurance as to the reliability of, any
other information that others may give you. You should assume that
the information appearing in this prospectus supplement, the
accompanying prospectus, the documents incorporated by reference
herein and therein, and in any free writing prospectus that we have
authorized for use in connection with this offering is accurate
only as of the date of those respective documents. Our business,
financial condition, results of operations and prospects may have
changed since those dates. You should read this prospectus
supplement, the accompanying prospectus, the documents incorporated
by reference herein and therein, and any free writing prospectus
that we have authorized for use in connection with this offering in
their entirety before making an investment decision. You should
also read and consider the information in the documents to which we
have
S-1
Table of
Contents
referred you in the
sections of this prospectus supplement titled "Where You Can Find
More Information" and "Incorporation of Information by
Reference".
In
this prospectus supplement, unless the context otherwise requires,
the terms "Glu", "Glu Mobile", the "Company", "we", "us", and "our"
refer to Glu Mobile Inc., a Delaware corporation, and its
consolidated subsidiaries.
S-2
Table of
Contents
PROSPECTUS SUPPLEMENT SUMMARY
This
summary highlights selected information about us, this offering and
information appearing elsewhere in this prospectus supplement, in
the accompanying prospectus and in the documents incorporated by
reference herein and therein. This summary is not complete and does
not contain all the information you should consider before
investing in our common stock pursuant to this prospectus
supplement and the accompanying prospectus. Before making an
investment decision, to fully understand this offering and its
consequences to you, you should carefully read this entire
prospectus supplement, the accompanying prospectus and the
information incorporated by reference herein and therein, including
under the heading "Risk Factors", as well as the consolidated
financial statements and related notes.
Company Overview
Glu
Mobile develops, publishes and markets a portfolio of free-to-play
mobile games designed to appeal to a broad cross section of users
who download and make purchases within our games through
direct-to-consumer digital storefronts, such as the Apple App
Store, Google Play Store, and others. Free-to-play games are games
that a player can download and play for free, but which allow
players to access a variety of additional content and features for
a fee and to engage with various advertisements and offers that
generate revenue for us. We have a portfolio of compelling games
based on our own intellectual property such as Cooking Dash, Covet Fashion, Deer Hunter, Design Home and Diner DASH Adventures, as well as
games based on or significantly incorporating third-party licensed
brands including Disney Sorcerer's
Arena, Kim
Kardashian: Hollywood and
MLB Tap Sports Baseball. We are headquartered in San Francisco, California, with
another U.S. office in Foster City, California, and international
locations in Toronto, Canada and Hyderabad, India.
We
currently publish titles primarily in four genres: lifestyle,
casual, mid-core, and sports and outdoors. We believe these are
genres in which we have already established a leadership position,
are otherwise aligned with our strengths or are conducive to the
establishment of a strong growth game. Across genres, we view our
titles as either growth games or catalog games. Growth games are
titles that we continue to update with additional content and
features and which we expect to grow revenue year over year. We
continue to update some of our catalog titles with additional
content and features, whereas on others we expend little to no
investment in terms of updates and enhancements.
We
established our leadership position in the lifestyle genre through
our acquisition of Crowdstar Inc., or Crowdstar, in November
2016 and its successful Covet
Fashion title, and extended our
leadership with our global release of Design Home in November 2016. We
introduced key updates for Design
Home in 2019 and the first quarter of
2020, including elite events for elder players, improved series
challenges, language localization in German, French and Spanish,
and meta game functionality, and are planning key further updates
for this title, including the introduction of e-commerce
functionality. The casual genre includes our Kim Kardashian: Hollywood title;
we recently extended the term of our license agreement with
Ms. Kardashian West for an additional 3.5 years through
the end of 2023. The casual genre also includes our
Cooking Dash and
Diner DASH franchises,
and our leadership position in this genre was bolstered by our
worldwide launch of Diner DASH
Adventures in June 2019. The mid-core
genre includes our Disney Sorcerer's
Arena title that launched worldwide in
March 2020. Our leadership in the sports and outdoors category
remains strong with our Tap Sports
Baseball and Deer Hunter franchises, and we
furthered our leadership with the launch of MLB Tap Sports Baseball 2020 in
March 2020. MLB Tap Sports Baseball
2020 includes licensed content from Major
League Baseball, or MLB, together with current and former MLB
players pursuant to our continuing agreements with the Major League
Baseball Players Association, and Major League Baseball Players
Alumni Association. MLB Tap Sports
Baseball 2020 is available in more than
100 additional countries (prior versions of the Tap
S-3
Table of
Contents
Sports
Baseball franchise were only available in
the United States, Canada, United Kingdom, Germany and Australia)
and includes new features and content, including authentic major
league stadiums, a skill-based home run derby mode and a new cover
athlete. We expect to add to our portfolio of sports and outdoor
titles through the worldwide release of the next iteration of
our Deer Hunter franchise in the second half of 2020.
We
believe that our games consistently have high production values,
are visually appealing and have engaging core gameplay. These
characteristics have typically helped to drive installs and
awareness of our games and resulted in highly positive consumer
reviews. The majority of our games have been featured on Apple and
Google storefronts when they were commercially released, which we
believe is the result of us being a good partner of Apple and
Google.
We
work closely with our celebrity and brand licensors to engage their
social media audiences and build games that will resonate with
their unique fan bases. For example, our Kim Kardashian: Hollywoodtitle
utilizes transmedia storytelling, leveraging Ms. Kardashian
West's built-in social media fan base to drive installs and
awareness of the game, and then attempting to surprise and delight
those fans with real-world events and other game content based on
her life. Our goal is for the game content to become entwined with
Ms. Kardashian West's persona and social media presence, and
to otherwise enhance interaction with her fans. We also leverage
the strength of well-known brands and licensors to provide users
with more realistic experiences, such as the case with
MLB Tap Sports Baseball 2020
which features all MLB clubs and uniforms, current
and former MLB players and real MLB stadiums, or with our
Disney Sorcerer's Arena title, which includes characters from the Disney and Pixar
universes. We also work to build and nurture social communities in
and around the games themselves, creating a new vehicle for strong,
personal engagement with the brand or celebrity's fan
base.
For
us to continue driving installs and awareness of our games and to
improve monetization and retention of our players, we must ensure
that each of our games has compelling gameplay and a deep meta game
that motivates users to continue to play our games for months or
even years. In addition, we must regularly update our games with
compelling new content, deliver socio-competitive features like
tournaments, contests, player-versus-player gameplay and live
events, and build and nurture communities around our franchises
both in-game and holistically via community features such as
dedicated social channels. We have also made significant
investments in our proprietary analytics and revenue technology
infrastructure. With our enhanced analytics capabilities, we intend
to devote resources towards segmenting and learning more about the
players of each of our franchises and further monetizing our
highest spending and most engaged players. We aim to connect our
analytics and revenue technology infrastructure to multiple
elements of our business — from marketing to
merchandising — in order to improve player retention and
monetization.
We
also plan to continue monitoring the successful aspects of our
games to drive downloads and enhance monetization and retention as
part of our product strategy, whether by optimizing advertising
revenue within each title, securing additional compelling licensing
arrangements, building enhanced and more complex core gameplay,
adding deep meta game features and through enhancing our live
operations. Optimizing advertising revenue within our games
requires us to continue taking advantage of positive trends in the
mobile advertising space, particularly as brands continue to
migrate budgets from web to mobile. Continuing to drive installs
and awareness of our games through licensing efforts requires that
we continue to partner with brands, celebrities and social
influencers that resonate with potential players of our games.
Partnering with desirable licensing partners and renewing our
existing licenses with our most successful partners requires that
we continue to develop successful games based on licensed content
and are able to compete with other mobile gaming companies on
financial and other terms in signing such partners. We also plan to
continue introducing third-party licensed brands, properties and
personalities into our
S-4
Table of
Contents
games as additional
licensed content, for cameo appearances or for limited time events
in order to drive awareness and monetization.
Across
the globe, our industry is evidencing that hit titles generally
remain higher in the top grossing charts for longer. We believe
this is due to the continued specialization and investment of teams
and companies in their hit titles, and the live, social nature of
certain games. Our strategy and the measures we have implemented to
support our business positions us to take advantage of these
trends, as evidenced by the continued strength and year over year
growth of Design Home, Covet
Fashion, and the Tap Sports Baseballfranchise. We
plan to continue to regularly update and otherwise support our
growth games in order to ensure that those games monetize and
retain users for even longer periods of time. In addition, we plan
to continue to invest in our creative leaders and the creative
environments in which they and their teams work to increase our
likelihood of creating significant hit growth games.
Our
company is led by a strong management team with deep experience in
creative game development.
Non-GAAP Financial Measures and Other Supplemental Financial
Information
To
supplement our consolidated financial data presented in accordance
with U.S. generally accepted accounting principles, or GAAP, we use
certain non-GAAP financial measures of financial performance. The
presentation of these non-GAAP financial measures is not intended
to be considered in isolation from, as a substitute for, or
superior to, the financial information prepared and presented in
accordance with GAAP, and may be different from non-GAAP financial
measures used by other companies. In addition, these non-GAAP
measures have limitations in that they do not reflect all of the
amounts associated with our results of operations as determined in
accordance with GAAP. The non-GAAP financial measures we use
include: bookings; adjusted platform commissions; adjusted
royalties; and adjusted other operating expenses. These non-GAAP
financial measures exclude the following items from our
consolidated statements of operations:
- •
- Change in deferred
platform commissions;
- •
- Change in deferred
royalties;
- •
- Amortization of
intangible assets;
- •
- Stock-based
compensation expense;
- •
- Transitional
costs;
- •
- Litigation costs;
and
- •
- Restructuring
costs.
We
may consider whether significant items that arise in the future
should also be excluded in calculating the non-GAAP financial
measures we use.
We
believe that these non-GAAP financial measures, when taken together
with the corresponding GAAP financial measures, provide meaningful
supplemental information regarding our performance by excluding
certain items that may not be indicative of our core business,
operating results or future outlook. Our management uses, and
believes that investors benefit from referring to, these non-GAAP
financial measures in assessing our operating results, as well as
when planning, forecasting and analyzing future periods. These
non-GAAP financial measures also facilitate comparisons of our
performance to prior periods.
S-5
Table of
Contents
The
following table presents our reconciliation of the non-GAAP
financial measures presented for each of the past three years
presented to the most directly comparable
GAAP measures:
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|
Years Ended
December 31,
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|
|
|
|
|
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|
|
|
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|
|
2019 |
|
|
2018 |
|
|
2017(1)
|
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|
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|
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|
|
|
|
(in
thousands) |
|
Non-GAAP Financial Measures
|
|
|
|
|
|
|
|
|
|
|
GAAP Platform Commissions
|
|
$ |
108,161 |
|
$ |
95,385 |
|
$ |
73,751 |
|
Change in Deferred Platform Commissions
|
|
|
3,377 |
|
|
5,416 |
|
|
8,875 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Platform Commissions
|
|
$ |
111,538 |
|
$ |
100,801 |
|
$ |
82,626 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Royalties (Including Impairment of Royalties and Minimum
Guarantees)
|
|
$ |
25,778 |
|
$ |
26,062 |
|
$ |
48,742 |
|
Change in Deferred Royalties
|
|
|
657 |
|
|
834 |
|
|
1,089 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Royalties
|
|
$ |
26,435 |
|
$ |
26,896 |
|
$ |
49,831 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Other Operating Expenses (GAAP Operating
Expenses excluding User Acquisition Costs and Marketing
Expenses)
|
|
$ |
140,662 |
|
$ |
145,664 |
|
$ |
148,447 |
|
Stock-Based Compensation
|
|
|
(17,383 |
) |
|
(24,592 |
) |
|
(15,063 |
) |
Transitional Costs
|
|
|
(1,009 |
) |
|
(1,530 |
) |
|
(4,347 |
) |
Litigation Costs
|
|
|
388 |
|
|
(1,934 |
) |
|
— |
|
Restructuring Costs
|
|
|
— |
|
|
(240 |
) |
|
(6,019 |
) |
|
|
|
|
|
|
|
|
|
|
|
Adjusted Other Operating Expenses
|
|
$ |
122,658 |
|
$ |
117,368 |
|
$ |
123,018 |
|
|
|
|
|
|
|
|
|
|
|
|
Other Supplemental Financial
Information
|
|
|
|
|
|
|
|
|
|
|
User Acquisition Costs and Marketing Expenses
|
|
$ |
117,979 |
|
$ |
95,037 |
|
$ |
88,775 |
|
Hosting Costs
|
|
|
7,173 |
|
|
6,662 |
|
|
7,698 |
|
Depreciation
|
|
|
4,225 |
|
|
3,855 |
|
|
3,195 |
|
Foreign Currency Exchange Losses
|
|
|
159 |
|
|
581 |
|
|
20 |
|
Income Tax Provision / (Benefit)
|
|
|
471 |
|
|
549 |
|
|
(826 |
) |
- (1)
- Effective January 1, 2018, we
adopted Accounting Standards Codification, or ASC, 606,
Revenue from
Contracts with Customers, using a modified retrospective
method. The numbers presented for the year ended December 31,
2017 continue to be reported under ASC 605, Revenue
Recognition.
S-6
Table of
Contents
The
following table presents our reconciliation of the financial
measures presented for each of the six quarterly periods presented
to the most directly comparable GAAP measures:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2020 |
|
|
December 31,
2019 |
|
|
September 30,
2019 |
|
|
June 30,
2019 |
|
|
March 31,
2019 |
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
Non-GAAP Financial Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Platform Commissions
|
|
$ |
28,727 |
|
$ |
30,092 |
|
$ |
28,122 |
|
$ |
24,799 |
|
$ |
25,148 |
|
$ |
24,756 |
|
Change in Deferred Platform Commissions
|
|
|
(232 |
) |
|
(1,346 |
) |
|
3,972 |
|
|
1,860 |
|
|
(1,109 |
) |
|
760 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Platform Commissions
|
|
$ |
28,495 |
|
$ |
28,746 |
|
$ |
32,094 |
|
$ |
26,659 |
|
$ |
24,039 |
|
$ |
25,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Royalties (Including Impairment of Royalties and Minimum
Guarantees)
|
|
$ |
6,381 |
|
$ |
6,285 |
|
$ |
6,643 |
|
$ |
6,245 |
|
$ |
6,605 |
|
$ |
6,784 |
|
Change in Deferred Royalties
|
|
|
1 |
|
|
(410 |
) |
|
592 |
|
|
1,071 |
|
|
(596 |
) |
|
122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Royalties
|
|
$ |
6,382 |
|
$ |
5,875 |
|
$ |
7,235 |
|
$ |
7,316 |
|
$ |
6,009 |
|
$ |
6,906 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Other Operating Expenses (GAAP Operating
Expenses excluding User Acquisition Costs and Marketing
Expenses)
|
|
$ |
43,307 |
|
$ |
37,905 |
|
$ |
34,791 |
|
$ |
29,652 |
|
$ |
38,314 |
|
$ |
38,695 |
|
Stock-Based Compensation
|
|
|
(6,382 |
) |
|
(4,461 |
) |
|
(4,080 |
) |
|
(2,035 |
) |
|
(6,807 |
) |
|
(7,062 |
) |
Transitional Costs
|
|
|
(4 |
) |
|
(1 |
) |
|
(5 |
) |
|
(5 |
) |
|
(998 |
) |
|
(598 |
) |
Litigation Costs
|
|
|
— |
|
|
— |
|
|
— |
|
|
416 |
|
|
(28 |
) |
|
(1,217 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Other Operating Expenses
|
|
$ |
36,921 |
|
$ |
33,443 |
|
$ |
30,706 |
|
$ |
28,028 |
|
$ |
30,481 |
|
$ |
29,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Supplemental Financial
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
User Acquisition Costs and Marketing Expenses
|
|
$ |
35,634 |
|
$ |
24,736 |
|
$ |
40,196 |
|
$ |
30,075 |
|
$ |
22,972 |
|
$ |
23,367 |
|
Hosting Costs
|
|
|
1,866 |
|
|
1,901 |
|
|
1,993 |
|
|
1,762 |
|
|
1,517 |
|
|
1,580 |
|
Depreciation
|
|
|
1,343 |
|
|
1,072 |
|
|
1,065 |
|
|
1,025 |
|
|
1,063 |
|
|
968 |
|
Foreign Currency Exchange (Gains) /
Losses
|
|
|
449 |
|
|
(54 |
) |
|
222 |
|
|
(56 |
) |
|
47 |
|
|
99 |
|
Income Tax Provision / (Benefit)
|
|
|
(1,321 |
) |
|
641 |
|
|
(348 |
) |
|
— |
|
|
178 |
|
|
49 |
|
In
addition to the reasons stated above, we believe it is appropriate
to exclude certain items above for the following
reasons:
Change
in Deferred Platform Commissions and Deferred
Royalties. At the
date we sell certain premium games and micro-transactions, we have
an obligation to provide additional services and incremental
unspecified digital content in the future without an additional
fee. In these cases, we recognize any associated cost of revenue,
including platform commissions and royalties, on a straight-line
basis over the estimated life of the paying user. Internally, our
management excludes the impact of the changes in deferred platform
commissions and deferred royalties related to its
S-7
Table of
Contents
premium and
free-to-play games in its non-GAAP financial measures when
evaluating the company's operating performance, when planning,
forecasting and analyzing future periods, and when assessing the
performance of its management team. We believe that excluding the
impact of the changes in deferred platform commissions and deferred
royalties from its operating results is important to facilitate
comparisons to prior periods and to understand
our operations.
Amortization
of Intangible Assets. When analyzing the operating
performance of an acquired entity or intangible asset, our
management focuses on the total return provided by the investment
(i.e., operating profit generated from the acquired entity as
compared to the purchase price paid) without taking into
consideration any allocations made for accounting purposes. Because
the purchase price for an acquisition necessarily reflects the
accounting value assigned to intangible assets (including acquired
in-process technology and goodwill), when analyzing the operating
performance of an acquisition in subsequent periods, our management
excludes the GAAP impact of acquired intangible assets to its
financial results. We believe that such an approach is useful in
understanding the long-term return provided by an acquisition, and
that investors benefit from a supplemental non-GAAP financial
measure that excludes the accounting expense associated with
acquired intangible assets.
Stock-Based
Compensation Expense. We apply the fair value provisions of
Accounting Standard Codification Topic 718, Compensation-Stock
Compensation, or ASC 718. ASC 718 requires the recognition of
compensation expense, using a fair-value based method, for costs
related to all share-based payments. Our management team excludes
stock-based compensation expense from its short and long-term
operating plans. In contrast, our management team is held
accountable for cash-based compensation and such amounts are
included in its operating plans. Further, when considering the
impact of equity award grants, we place a greater emphasis on
overall stockholder dilution rather than the accounting charges
associated with such grants. We believe it is useful to provide a
non-GAAP financial measure that excludes stock-based compensation
in order to better understand the long-term performance of
its business.
Transitional
Costs. GAAP
requires expenses to be recognized for various types of events
associated with business acquisitions such as legal, accounting and
other deal related expenses. Transitional costs also include
divestiture related expenses and termination of certain game
related contracts. We believe that these transitional costs affect
comparability from period to period and that investors benefit from
a supplemental non-GAAP financial measure that excludes
these expenses.
Litigation
Costs. We incurred
legal costs related to the complaint filed by the former Chief
Executive Officer of Crowdstar in the Superior Court of the State
of California for the County of Santa Clara against us, Time
Warner Inc., Intel Capital Corporation, Middlefield
Ventures Inc., Rachel Lam, and Jose Blanc. We believe that
these legal costs have no direct correlation to the operation of
its ongoing core business and affect comparability from period to
period and, as a result, that investors benefit from a supplemental
non-GAAP financial measure that excludes
these expenses.
Bookings
is a non-GAAP financial measure that is equal to the total revenue
we recognize in a given period, plus the net change in deferred
revenue during the period. We record revenue derived from the sale
of virtual items within our games as deferred revenue and then
recognize that revenue over the estimated average playing period of
paying users. Revenue from advertisements and offers are recognized
at the point in time the advertisements are displayed in the game
or the offer has been completed by the user, as the user
simultaneously receives and consumes the benefits provided from
these services. We believe bookings is a useful indicator of the
sales activity
S-8
Table of
Contents
in a given period and
use bookings to evaluate the results of our operations, generate
future operating plans and assess the performance of our
company.
While
we believe that bookings are useful in evaluating our business,
this information should be considered as supplemental in nature and
is not intended to be considered in isolation of, as a substitute
for, or as superior to, revenue recognized in accordance with GAAP.
In addition, other companies, including companies in our industry,
may calculate bookings differently or not at all, which may reduce
its usefulness as a comparative measure.
The
following table presents a reconciliation of total revenue to total
bookings for each of the three years presented:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
|
2018 |
|
|
2017(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
Reconciliation of Revenue to
Bookings
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ |
411,381 |
|
$ |
366,561 |
|
$ |
286,827 |
|
Change in Deferred Revenue
|
|
|
11,893 |
|
|
17,947 |
|
|
33,705(2) |
|
|
|
|
|
|
|
|
|
|
|
|
Bookings
|
|
$ |
423,274 |
|
$ |
384,508 |
|
$ |
320,532 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- (1)
- Effective January 1, 2018, we
adopted ASC 606, Revenue from Contracts with
Customers,
using a modified retrospective method. The numbers presented for
the year ended December 31, 2017 continue to be reported under
ASC 605, Revenue
Recognition.
- (2)
- Excludes $1.2 million in deferred
revenue related to our acquisition of Crowdstar in November
2016.
The
following table presents a reconciliation of total revenue to total
bookings for the six quarterly periods presented:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2020 |
|
|
December 31,
2019 |
|
|
September 30,
2019 |
|
|
June 30,
2019 |
|
|
March 31,
2019 |
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
Reconciliation of Revenue to
Bookings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ |
107,274 |
|
$ |
112,879 |
|
$ |
107,077 |
|
$ |
95,540 |
|
$ |
95,885 |
|
$ |
95,640 |
|
Change in Deferred Revenue
|
|
|
(803 |
) |
|
(4,487 |
) |
|
13,296 |
|
|
6,380 |
|
|
(3,296 |
) |
|
2,534 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bookings
|
|
$ |
106,471 |
|
$ |
108,392 |
|
$ |
120,373 |
|
$ |
101,920 |
|
$ |
92,589 |
|
$ |
98,174 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S-9
Table of
Contents
The
following table presents our bookings for the periods presented
from our Growth Games and other key titles:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended
December 31, |
|
|
Three Months
Ended March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
|
2018 |
|
|
2017 |
|
|
2020 |
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
Title
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Design Home
|
|
$ |
176,337 |
|
$ |
157,669 |
|
$ |
97,672 |
|
$ |
46,782 |
|
$ |
42,230 |
|
Covet Fashion
|
|
|
66,085 |
|
|
53,428 |
|
|
41,795 |
|
|
17,145 |
|
|
16,772 |
|
Tap Sports Baseball Franchise*
|
|
|
90,879 |
|
|
75,171 |
|
|
47,878 |
|
|
16,201 |
|
|
13,351 |
|
Diner DASH Adventures
|
|
|
25,121 |
|
|
12 |
|
|
— |
|
|
7,492 |
|
|
68 |
|
Disney Sorcerer's Arena
|
|
|
229 |
|
|
— |
|
|
— |
|
|
1,391 |
|
|
8 |
|
Kim Kardashian Hollywood
|
|
|
25,902 |
|
|
34,799 |
|
|
27,348 |
|
|
10,441 |
|
|
8,334 |
|
Cooking Dash
|
|
|
16,997 |
|
|
25,816 |
|
|
26,809 |
|
|
3,115 |
|
|
5,705 |
|
All Other Bookings
|
|
|
21,724 |
|
|
37,613 |
|
|
79,030 |
|
|
3,904 |
|
|
6,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Bookings
|
|
$ |
423,274 |
|
$ |
384,508 |
|
$ |
320,532 |
|
$ |
106,471 |
|
$ |
92,589 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- *
- A new version of
Tap Sports
Baseball is
released every year. The figures shown above include bookings from
current and previously released versions of the Tap Sports Baseball
game.
For
the quarter ended March 31, 2020, in-application purchases and
offers and in-game advertising accounted for 89% and 11% of our
total bookings, respectively, and 62% of our total bookings were
through the iOS platform and 38% were through the Android
platform.
Key Operating Metrics
We
manage our business by tracking various non-financial operating
metrics that give us insight into user behavior in our games. The
three metrics that we use most frequently are Daily Active Users,
or DAU, Monthly Active Users, or MAU, and Average Revenue Per Daily
Active User, or ARPDAU. DAU is the number of individuals who played
a particular smartphone game on a particular day. Our methodology
for calculating DAU, MAU, and ARPDAU may differ from the
methodology used by other companies to calculate similar metrics,
and for a full description of our methodology, please refer to the
description under "Key Operating Metrics" in our Quarterly Report
on Form 10-Q for the quarter ended March 31, 2020 filed
with the SEC on May 11, 2020. We also refer to Average
Bookings Per Daily Active User, or ABPDAU, which is our total
bookings in a given period, divided by the number of days in that
period, divided by the number of DAU during the period. Because
ABPDAU is based on bookings which does not reflect any deferral of
revenue derived from the sale of virtual items within our games, it
may not be comparable with ARPDAU, which is based on revenue, which
reflects deferred revenue as described under "Key Operating
Metrics" in our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2020 filed with the SEC on May 11,
2020.
S-10
Table of
Contents
The
following table presents our DAU and ABPDAU for the three months
ended March 31 for the five years presented:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 |
|
|
2019 |
|
|
2018 |
|
|
2017 |
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate DAU (in millions)(1)
|
|
|
3.0 |
|
|
3.1 |
|
|
3.6 |
|
|
4.1 |
|
|
4.9 |
|
Aggregate ABPDAU
|
|
$ |
0.38 |
|
$ |
0.33 |
|
$ |
0.27 |
|
$ |
0.19 |
|
$ |
0.12 |
|
- (1)
- As of January 1, 2019, we
began calculating DAU using the average of each month during the
period rather than our historical practice of calculating these
metrics based on the last month of the period. For example, DAU for
the three months ended March 31, 2020 is calculated as an
average of aggregate daily DAU for the months of January 2020,
February 2020 and March 2020 calculated for all active smartphone
free-to-play titles during those months across the distribution
platforms for which we calculate the metric. We adopted this new
methodology because we believe that it provides a more accurate
representation of overall DAU for the applicable period and more
closely aligns with the methodology used by other companies in the
gaming industry to calculate similar metrics.
Impact of the COVID-19 Pandemic
The
extent of the impact of the novel strain of coronavirus,
SARS-CoV-2, or COVID-19, on our operational and financial
performance will depend on certain developments, including the
duration and spread of the outbreak, the impact on our employees,
and the effect on the global economy, all of which are uncertain
and cannot be predicted. Although we were able to successfully
launch two new games, MLB Tap Sports
Baseball 2020 and Disney Sorcerer's Arena, in March
2020 and have been publishing updates and running live operations
for our games while our global workforce has been working from
home, we believe that if our employees are required to work from
home for many months, it could ultimately negatively impact game
development. We have also recently seen CPIs (costs per install)
remain below historical averages and an increase in the DAU in many
of our games, but believe that this effect may be temporary and
that the trend of increasing CPIs and declining DAU and MAU may
persist over the longer term. We may experience higher variability
in our bookings and useful life of paying players over the near
term due to the COVID-19 pandemic, and recent trends in bookings,
in-application purchasing behavior and useful life of paying
players may not continue, including following the COVID-19 pandemic
or the lifting of shelter-in-place restrictions or quarantine
orders. In addition, we may experience adverse impacts from changes
in how we and companies worldwide conduct business due to the
COVID-19 pandemic, including restrictions on travel and in-person
meetings. As of the date of this prospectus supplement, the extent
to which COVID-19 may impact our financial condition, results of
operations or guidance is uncertain. The effects of the COVID-19
pandemic may not be fully reflected in our results of operations
and overall financial performance until future periods.
Corporate Information
We
were incorporated in Nevada in May 2001 as Cyent Studios, Inc.
and changed our name to Sorrent, Inc. later that year. In
November 2001, we incorporated a wholly owned subsidiary in
California, and, in December 2001, we merged the Nevada corporation
into this California subsidiary to form Sorrent, Inc., a
California corporation. In May 2005, we changed our name to Glu
Mobile Inc. In November 2006, Glu Mobile Inc.
reincorporated in the state of Delaware. Our principal executive
offices are located at 875 Howard Street, Suite 100, San
Francisco, California 94103, and our telephone number is
(415) 800-6100. Our website address is www.glu.com. The
reference to our website address is included in this prospectus
supplement as an inactive textual reference only. The information
contained on, or that can be accessed through, our website is not
part of, and is not incorporated by reference into, this prospectus
supplement. Investors should not rely on any such information in
deciding whether to purchase our common stock.
S-11
Table of
Contents
THE OFFERING
The
summary below describes the principal terms of this offering of our
common stock. Certain of the terms and conditions described below
are subject to important limitations and exceptions. For a more
detailed description of our common stock, see "Description of
Common Stock" in the accompanying prospectus.
|
|
|
Common stock offered
by us |
|
15,000,000 shares |
Underwriters' option to purchase additional
shares |
|
2,250,000 shares |
Common stock to be outstanding after this
offering |
|
166,584,004 shares |
Use of proceeds |
|
We estimate that the net proceeds from this offering
will be approximately $131.9 million (or approximately
$151.8 million if the underwriters exercise in full their
option to purchase additional shares), after deducting underwriting
discounts and commissions and estimated offering expenses payable
by us. |
|
|
We currently intend to use the net proceeds we
receive from this offering for working capital and other general
corporate purposes, which may include potential acquisitions and
strategic transactions. From time to time, we evaluate potential
acquisitions and strategic transactions of businesses, technologies
or products. However, we have not designated any specific uses and
have no current agreements with respect to any material acquisition
or strategic transaction. See "Use of Proceeds" for a more complete
description of the intended use of proceeds from this
offering. |
Material U.S. federal income tax
consequences |
|
For a summary of certain U.S. federal income tax
consequences relating to the ownership and disposition of the
shares of our common stock, see "Material U.S. Federal Income Tax
Considerations for Non-U.S. Holders of Our Common
Stock." |
Risk factors |
|
You should read the "Risk Factors" section of this
prospectus supplement, the accompanying prospectus and the
documents incorporated by reference for a discussion of factors to
consider carefully before deciding to invest in shares of our
common stock. |
Nasdaq Global Select Market symbol |
|
"GLUU" |
The
number of shares of our common stock to be outstanding immediately
after this offering as shown above is based on 151,584,004 shares
outstanding as of March 31, 2020 and excludes:
- •
- 13,641,374 shares of
common stock issuable upon exercise of outstanding time-based stock
options as of March 31, 2020, with a weighted-average exercise
price of $3.60 per share;
S-12
Table of
Contents
- •
- 4,702,147 shares of
common stock issuable upon exercise of outstanding performance
stock options as of March 31, 2020, with a weighted-average
exercise price of $4.15 per share;
- •
- 6,338,150 shares of
common stock issuable upon the vesting and settlement of restricted
stock units outstanding as of March 31, 2020;
- •
- 4,075,961 shares of
common stock issuable upon the vesting and settlement of
performance-based restricted stock units outstanding as of
March 31, 2020;
- •
- 1,125,000 shares of
common stock issuable upon the exercise of warrants outstanding as
of March 31, 2020, with a weighted-average exercise price of
$4.46 per share;
- •
- 2,392,134 additional
shares of common stock reserved for future issuance under our
Amended and Restated 2007 Equity Incentive Plan as of
March 31, 2020;
- •
- 2,337,298 additional
shares of common stock reserved for future issuance under our
Amended and Restated 2007 Employee Stock Purchase Plan as of
March 31, 2020; and
- •
- 168,185 additional
shares of common stock reserved for future issuance under our 2018
Equity Inducement Plan as of March 31, 2020.
Subsequent
to March 31, 2020, we granted 183,542 restricted stock units,
pursuant to our Amended and Restated 2007 Equity Incentive Plan,
which are not included in the number of shares of common stock
outstanding presented above.
Except
as otherwise indicated, all information in this prospectus
supplement assumes no exercise of the outstanding options or
warrants, no vesting and settlement of restricted stock units as
described above, and no exercise of the underwriters' option to
purchase additional shares of common stock.
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RISK FACTORS
An
investment in our securities involves a high degree of risk. Prior
to making a decision about investing in our securities, you should
carefully consider the risk factors described below together with
all of the risks, uncertainties and assumptions discussed under
Part II, Item 1A, "Risk Factors", in our
Quarterly Report on Form 10-Q for the quarter ended
March 31, 2020, which is incorporated herein by reference,
and may be amended, supplemented or superseded from time to time by
other reports we file with the SEC in the future. If any of the
risks incorporated by reference or set forth below occurs, our
business, operations and financial condition could suffer
significantly. As a result, you could lose some or all of your
investment in our common stock. The risks and uncertainties we have
described are not the only ones we face. Additional risks and
uncertainties not presently known to us or that we currently deem
immaterial may also affect our business, operations and financial
condition, or cause the value of our common stock to decline. The
COVID-19 pandemic (including federal, state and local governmental
responses, broad economic impacts and market disruptions) has
heightened many of the risks discussed in the risk factors
described or incorporated by reference in this prospectus
supplement.
Risks Related to this Offering
Our management will have broad discretion as to the use of the
proceeds from this offering and we may not use the proceeds
effectively.
Our
management will have broad discretion in the application of the net
proceeds from this offering and could spend the proceeds in ways
that do not improve our results of operations or enhance the value
of our common stock. You will be relying on the judgment of our
management concerning these uses and you will not have the
opportunity, as part of your investment decision, to assess whether
the proceeds are being used appropriately. The failure of our
management to apply these funds effectively could result in
unfavorable returns and uncertainty about our prospects, each of
which could cause the price of our common stock to
decline.
Sales of substantial amounts of our common stock in the public
markets, or the perception that such sales might occur, could
reduce the price that our common stock might otherwise attain and
may dilute a stockholder's voting power and ownership interest in
us.
The
market price of shares of our common stock could decline as a
result of substantial sales of our common stock, particularly sales
by our directors and their affiliates, executive officers,
employees and significant stockholders (subject to the lock-up
agreements entered into with the underwriters in connection with
this offering), under our current shelf registration statement,
through a large number of shares of our common stock becoming
available for sale, or the perception in the market that holders of
a large number of shares intend to sell their shares. The lock-up
agreements entered into with the underwriters in connection with
this offering restrict issuances, sales and transfer of our common
stock for 75 days following the date of this prospectus
supplement and are subject to certain customary exceptions,
including, but not limited to, sales of securities pursuant to
written plans entered into prior to the date of the lock-up
agreement that satisfy the requirements of Rule 10b5-1 under
the Securities Exchange Act of 1934, as amended, or the Exchange
Act, and each such plan, a 10b5-1 Plan, under which there could be
up to 580,275 shares sold during the term of the lock-up
agreements, subject to the terms of each individual 10b5-1 Plan. In
addition, Red River Investment Limited, an affiliate of Tencent
Holdings Limited, is free to sell the 21,000,000 shares it acquired
from us in the second quarter of 2015 on the open market, subject
only to our black-out periods and other limitations under our
insider trading policy, the lock-up agreement entered into with the
underwriters in connection with this offering, and applicable
limitations under Rule 144 under the Securities Act of 1933,
as amended, or the Securities Act.
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In
addition, we have a significant number of equity awards
outstanding. If a substantial number of shares of common stock
underlying these equity awards are sold, or if it is perceived that
they will be sold, in the public market, the trading price of our
common stock could decline.
If you purchase shares of our common stock in this offering, you
will suffer immediate dilution of your
investment.
The
public offering price of our common stock in this offering is
substantially higher than the as adjusted net tangible book value
per share of our common stock. Therefore, if you purchase shares of
our common stock in this offering, you will pay a price per share
that substantially exceeds our as adjusted net tangible book value
per share after this offering. Based on the public offering price
of $9.25 per share, you will experience immediate dilution of $7.92
per share, representing the difference between our as adjusted net
tangible book value per share after this offering and the public
offering price. In addition, to the extent outstanding warrants or
stock options are exercised, or outstanding restricted stock units
vest and settle, there will be further dilution to investors in
this offering. In addition, if the underwriters exercise their
option to purchase additional shares in full, or if we issued
additional equity securities, you will experience additional
dilution. See "Dilution" for a more detailed description of the
dilution to investors in the offering.
We may not be able to utilize a significant portion of our net
operating loss or tax credit carryforwards, which could adversely
affect our profitability.
At
December 31, 2019, the Company had net operating loss
carryforwards of $211.3 million and $91.7 million for
federal and state tax purposes, respectively. If not utilized,
these carryforwards will expire at various times between 2023 and
2037. In addition, the Company has research and development tax
credit carryforwards of $14.3 million for federal income tax
purposes and $23.4 million for California tax purposes. If not
utilized, the federal research and development tax credit
carryforwards will begin to expire in 2023. The California state
research credit will carry forward indefinitely. The Company has
approximately $2.9 million of foreign tax credits that will
begin to expire in 2020.
The
Tax Cuts and Jobs Act of 2017, or the 2017 Tax Act, changed both
the federal deferred tax value of the net operating loss
carryforwards and the rules of utilization of federal net operating
loss carryforwards. The 2017 Tax Act lowered the corporate tax rate
from 35% to 21% effective for our 2018 financial year. For net
operating loss carryforwards generated in years prior to 2018,
there is no annual limitation on the utilization and the
carryforward period remains at 20 years; net operating loss
carryforwards generated in years after 2017 will only be available
to offset 80% of future taxable income in any single year but will
not expire. However, the Coronavirus Aid, Relief, and Economic
Security (CARES) Act temporarily repealed the 80% taxable income
limitation for tax years beginning before January 1, 2021; net
operating loss carried forward generated from 2018 or later and
carryforwards to taxable years beginning after December 31,
2020 will be subject to the 80% limitation. Also, under the CARES
Act, net operating losses arising in 2018, 2019 and 2020 can be
carried back 5 years.
In
addition, under Section 382 of the Internal Revenue Code of
1986, as amended, or the Code, our ability to utilize net operating
loss carryforwards or other tax attributes, such as tax credits, in
any taxable year may be limited if we experience an "ownership
change". A Section 382 "ownership change" generally occurs if
one or more stockholders or groups of stockholders who own at least
5% of our stock increase their ownership by more than
50 percentage points over their lowest ownership percentage
within a rolling three-year period. Similar rules may apply under
state tax laws. As a result of prior equity issuances and other
transactions in our stock, in 2012, we have previously experienced
one "ownership change" under Section 382 of the Code and
comparable state tax laws; however, we do not believe that such
ownership change resulted in any material limitations on net
operating loss or tax credit carryforwards. We do not believe we
have experienced any other "ownership changes" since 2012. In
addition, we may also experience ownership changes in the future as
a result of this offering or other future issuances and
transactions of our stock. It is possible that any future ownership
change could have a material effect on the use of our net operating
loss carryforwards or other tax attributes, which could adversely
affect any future profitability.
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FORWARD-LOOKING STATEMENTS
This
prospectus supplement, the accompanying prospectus and the
documents incorporated herein by reference contain "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements contained in or incorporated by
reference in this prospectus supplement, the accompanying
prospectus and the documents incorporated by reference herein other
than statements of historical fact, including statements regarding
our future operating results and financial position, our business
strategy and plans, and our objectives for future operations, are
forward-looking statements. The words "may", "will", "should",
"estimates", "predicts", "potential", "continue", "strategy",
"believes", "anticipates", "plans", "expects", "intends" and
similar expressions are intended to identify forward-looking
statements. Our actual results and the timing of certain events may
differ significantly from the results discussed in the
forward-looking statements. These forward-looking statements are
subject to a number of risks, uncertainties, and assumptions,
including those described in the "Risk Factors" sections
incorporated by reference herein, including our
Annual Report on Form 10-K for the year ended
December 31, 2019 and our
Quarterly Report on Form 10-Q for the quarter ended
March 31, 2020. Moreover, we operate in a very competitive
environment. 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 future events and trends discussed in this
prospectus supplement, the accompanying prospectus and the
documents incorporated by reference herein may not occur and actual
results could differ materially and adversely from those
anticipated or implied in the forward-looking
statements.
These
statements are based on current expectations of future events. Such
statements include, but are not limited to:
- •
- the ongoing COVID-19
pandemic and its impact on our business, the macroeconomy and our
customers;
- •
- our plans to develop
and timely publish new high-quality, engaging games and continue to
enhance our existing games, particularly our most successful
games;
- •
- the success of
competitors;
- •
- the size and growth
potential of the mobile games market, and our ability to continue
to serve that market;
- •
- our ability to
maintain a good relationship with each of Apple and Google, our
main digital storefronts;
- •
- our ability to
execute on our strategy, including introducing new games that meet
our quality standards and our players' expectations;
- •
- our ability to
successfully establish and maintain awareness of our brand and
games and user engagement with our games, including through in-app
purchases;
- •
- the timing of and our
ability to deliver our games at the same time as new mobile devices
are commercially introduced;
- •
- our ability to secure
license agreements to develop, publish and market games based on or
significantly incorporating celebrities, third-party licensed
brands, properties and other content;
- •
- our ability to
continue to utilize a game development engine licensed from Unity
Technologies;
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- •
- our ability to
attract and retain key personnel, namely our management team,
creative leaders and experienced game development personnel;
- •
- our ability to obtain
and maintain intellectual property protection for our games;
- •
- our ability to avoid
infringing upon the intellectual property rights of others;
- •
- regulatory
developments in the United States and various foreign
countries;
- •
- our use of the net
proceeds from this offering; and
- •
- our estimates
regarding expenses, future revenue, capital requirements and needs
for additional financing.
These
forward-looking statements are based on the current beliefs and
expectations of our management and are subject to significant risks
and uncertainties. If underlying assumptions prove inaccurate or
unknown risks or uncertainties materialize, actual results may
differ materially from current expectations and projections.
Factors that might cause such a difference include those discussed
under the section titled "Risk Factors" and elsewhere in this
prospectus supplement, the accompanying prospectus and the
documents incorporated by reference into this prospectus supplement
or the accompanying prospectus. You are cautioned not to place
undue reliance on these forward-looking statements as predictions
of future events, which speak only as of the date made.
All
subsequent written or oral forward-looking statements attributable
to us or any person acting on our behalf are expressly qualified in
their entirety by the cautionary statements contained or referred
to in this section. We do not undertake any obligation to release
publicly any revisions to these forward-looking statements to
reflect events or circumstances after the date of this prospectus
supplement or to reflect the occurrence of unanticipated events,
except as may be required under applicable U.S. securities law. If
we do update one or more forward-looking statements, no inference
should be drawn that we will make additional updates with respect
to those or other forward-looking statements.
In
addition, statements that "we believe" and similar statements
reflect our beliefs and opinions on the relevant subject. These
statements are based upon information available to us as of the
date of this prospectus supplement, and while we believe such
information forms a reasonable basis for such statements, such
information may be limited or incomplete, and our statements should
not be read to indicate that we have conducted an exhaustive
inquiry into, or review of, all potentially available relevant
information. These statements are inherently uncertain and
investors are cautioned not to unduly rely upon these statements as
predictions of future events.
You
should read this prospectus supplement, the accompanying prospectus
and the documents we have filed with the SEC that are incorporated
by reference herein and therein with the understanding that our
actual future results, levels of activity, performance and
achievements may be different from what we expect. We qualify all
of our forward-looking statements by these cautionary
statements.
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USE OF PROCEEDS
We
estimate that we will receive net proceeds of approximately
$131.9 million from the sale of 15,000,000 shares of our
common stock in this offering, or approximately $151.8 million
if the underwriters exercise in full their option to purchase up to
2,250,000 additional shares, after deducting underwriting discounts
and commissions and estimated offering expenses payable by
us.
We
currently intend to use the net proceeds we receive from this
offering for working capital and other general corporate purposes,
which may include potential acquisitions and strategic
transactions. From time to time, we evaluate potential acquisitions
and strategic transactions of businesses, technologies or products.
However, we have not designated any specific uses and have no
current agreements with respect to any material acquisition or
strategic transaction.
Pending
their use as described above, we intend to invest the net proceeds
from this offering in short term and long-term, investment-grade
interest-bearing securities such as money market accounts,
certificates of deposit, commercial paper and guaranteed
obligations of the U.S. government.
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DIVIDEND POLICY
We
have never declared or paid cash dividends on our common stock. We
currently intend to retain all available funds and any future
earnings for use in the operation of our business and do not
anticipate paying any dividends on our common stock in the
foreseeable future. Any future determination to declare dividends
will be made at the discretion of our board of directors and will
depend on our financial condition, operating results, capital
requirements, general business conditions and other factors that
our board of directors may deem relevant.
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DILUTION
If
you invest in our common stock, your interest will be diluted to
the extent of the difference between the public offering price per
share of our common stock and the as adjusted net tangible book
value per share of our common stock immediately after this
offering.
Our
net tangible book value as of March 31, 2020 was
$90.4 million, or $0.60 per share. Net tangible book value per
share is determined by dividing our total tangible assets, less
total liabilities, by the number of shares of our common stock
outstanding as of March 31, 2020. Dilution with respect to net
tangible book value per share represents the difference between the
amount per share paid by purchasers of shares of common stock in
this offering and the as adjusted net tangible book value per share
of our common stock immediately after this offering.
After
giving effect to the receipt of the net proceeds from our sale of
15,000,000 shares of common stock in this offering at the public
offering price of $9.25 per share, and after deducting underwriting
discounts and commissions and estimated offering expenses payable
by us, our as adjusted net tangible book value as of March 31,
2020 would have been approximately $222.3 million, or
$1.33 per share. This represents an immediate increase in net
tangible book value of $0.73 per share to existing
stockholders and immediate dilution of $7.92 per share to
investors purchasing our common stock in this offering.
The
following table illustrates this dilution on a per share
basis:
|
|
|
|
|
|
|
|
Public offering price per share
|
|
|
|
|
$ |
9.25 |
|
Net tangible book value per share as of
March 31, 2020
|
|
$ |
0.60 |
|
|
|
|
Increase in net tangible book value per share
attributable to investors purchasing our common stock in this
offering
|
|
$ |
0.73 |
|
|
|
|
|
|
|
|
|
|
|
|
As adjusted net tangible book value per share as of
March 31, 2020 after this offering
|
|
|
|
|
$ |
1.33 |
|
|
|
|
|
|
|
|
|
Dilution per share to investors purchasing our
common stock in this offering
|
|
|
|
|
$ |
7.92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
the underwriters exercise their option to purchase 2,250,000
additional shares in full at the public offering price of
$9.25 per share, the as adjusted net tangible book value per
share of our common stock after giving effect to this offering
would be $1.43 per share, and the dilution in net tangible
book value per share to investors purchasing common stock in this
offering would be $7.82 per share.
The
table and discussion above are based on 151,584,004 shares
outstanding as of March 31, 2020 and excludes:
- •
- 13,641,374 shares of
common stock issuable upon exercise of outstanding time-based stock
options as of March 31, 2020, with a weighted-average exercise
price of $3.60 per share;
- •
- 4,702,147 shares of
common stock issuable upon exercise of outstanding performance
stock options as of March 31, 2020, with a weighted-average
exercise price of $4.15 per share;
- •
- 6,338,150 shares of
common stock issuable upon the vesting and settlement of time-based
restricted stock units outstanding as of March 31,
2020;
- •
- 4,075,961 shares of
common stock issuable upon the vesting and settlement of
performance-based restricted stock units outstanding as of
March 31, 2020;
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- •
- 1,125,000 shares of
common stock issuable upon the exercise of warrants outstanding as
of March 31, 2020, with a weighted-average exercise price of
$4.46 per share;
- •
- 2,392,134 additional
shares of common stock reserved for future issuance under our
Amended and Restated 2007 Equity Incentive Plan as of
March 31, 2020;
- •
- 2,337,298 additional
shares of common stock reserved for future issuance under our
Amended and Restated 2007 Employee Stock Purchase Plan as of
March 31, 2020; and
- •
- 168,185 additional
shares of common stock reserved for future issuance under our 2018
Equity Inducement Plan as of March 31, 2020.
Subsequent
to March 31, 2020, we granted 183,542 restricted stock units,
pursuant to our Amended and Restated 2007 Equity Incentive Plan,
which are not included in the number of shares of common stock
outstanding as used in the table and discussed above.
To
the extent that outstanding options or warrants have been or may be
exercised, or restricted stock units have vested and settled or may
vest and settle, investors purchasing our common stock in this
offering may experience further dilution. In addition, we may
choose to issue additional common stock, or securities convertible
into or exchangeable for common stock, in the future. The issuance
of these securities could result in further dilution for investors
purchasing our common stock in this offering.
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MATERIAL UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES
FOR NON-U.S. HOLDERS OF OUR COMMON STOCK
This
section summarizes the material U.S. federal income tax
considerations relating to the acquisition, ownership and
disposition of our common stock acquired in this offering by
"non-U.S. holders" (as defined below). This summary does not
provide a complete analysis of all potential U.S. federal income
tax considerations relating thereto. The information provided below
is based upon provisions of the Code, Treasury regulations
promulgated thereunder, administrative rulings and judicial
decisions currently in effect. These authorities may change at any
time, possibly retroactively, or the Internal Revenue Service, or
IRS, might interpret the existing authorities differently. In
either case, the tax considerations of owning or disposing of our
common stock could differ from those described below. As a result,
we cannot assure you that the tax consequences described in this
discussion will not be challenged by the IRS or will be sustained
by a court if challenged by the IRS.
This
summary does not address the tax considerations arising under the
laws of any non-U.S., state or local jurisdiction, or under U.S.
federal gift and estate tax laws, except to the limited extent
provided below. In addition, this discussion does not address tax
considerations applicable to an investor's particular circumstances
or to investors that may be subject to special tax rules,
including, without limitation:
- •
- banks, insurance
companies or other financial institutions;
- •
- partnerships or other
entities treated as partnerships or pass-through entities for U.S.
federal tax purposes (or investors in such entities);
- •
- corporations that
accumulate earnings to avoid U.S. federal income tax;
- •
- corporations
organized outside the United States, any state thereof or the
District of Columbia that are nonetheless treated as U.S. taxpayers
for U.S. federal income tax purposes;
- •
- persons subject to
the alternative minimum tax or the Medicare contribution tax on net
investment income;
- •
- tax-exempt
organizations, government organizations or tax-qualified retirement
plans;
- •
- controlled foreign
corporations or passive foreign investment companies;
- •
- persons who acquired
our common stock as compensation for services;
- •
- dealers in securities
or currencies;
- •
- traders in securities
that elect to use a mark-to-market method of accounting for their
securities holdings;
- •
- persons that own, or
are deemed to own, more than 5% of our capital stock (except to the
extent specifically set forth below);
- •
- certain former
citizens or long-term residents of the United States;
- •
- persons who hold our
common stock as a position in a hedging transaction, "straddle",
"conversion transaction" or other risk reduction
transaction;
- •
- persons who do not
hold our common stock as a capital asset within the meaning of
Section 1221 of the Code (generally, for investment
purposes);
- •
- accrual method
taxpayers subject to special tax accounting rules under
Section 451(b) of the Code; or
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- •
- persons deemed to
sell our common stock under the constructive sale provisions of the
Code.
In
addition, if a partnership or entity classified as a partnership or
other pass-through entity for U.S. federal income tax purposes is a
beneficial owner of our common stock, the tax treatment of a
partner in the partnership or an owner of the entity will depend
upon the status of the partner or other owner and the activities of
the partnership or other entity. Accordingly, this summary does not
address tax considerations applicable to partnerships that hold our
common stock, and partners in such partnerships should consult
their tax advisors.
INVESTORS
CONSIDERING THE PURCHASE OF OUR COMMON STOCK SHOULD CONSULT THEIR
OWN TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL
INCOME AND ESTATE TAX LAWS TO THEIR PARTICULAR SITUATIONS AND THE
CONSEQUENCES OF FOREIGN, STATE OR LOCAL LAWS, AND TAX
TREATIES.
Non-U.S. Holder Defined
For
purposes of this summary, a "non-U.S. holder" is any beneficial
owner of our common stock, other than a partnership (or other
entity treated as a partnership for U.S. federal income tax
purposes regardless of its place of organization or formation),
that for U.S. federal income tax purposes is not:
- •
- an individual who is
a citizen or resident of the United States;
- •
- a corporation, or
other entity taxable as a corporation for U.S. federal income tax
purposes, created or organized under the laws of the United States,
any state therein or the District of Columbia;
- •
- a trust if it
(i) is subject to the primary supervision of a U.S. court and
one of more U.S. persons have authority to control all substantial
decisions of the trust or (ii) has a valid election in effect
under applicable U.S. Treasury regulations to be treated as a U.S.
person; or
- •
- an estate whose
income is subject to U.S. income tax regardless of its
source.
If
you are a non-U.S. citizen who is an individual, you may, in some
cases, be deemed to be a resident alien, as opposed to a
nonresident alien, by virtue of being present in the United States
for at least 31 days in the calendar year and for an aggregate
of at least 183 days during a three-year period ending in the
current calendar year. Generally, for this purpose, all the days
present in the current year, one-third of the days present in the
immediately preceding year, and one-sixth of the days present in
the second preceding year are counted. Resident aliens are subject
to U.S. federal income tax as if they were U.S. citizens. Such an
individual is urged to consult his or her own tax advisor regarding
the U.S. federal income tax consequences of the ownership or
disposition of our common stock.
Dividends
We
do not expect to declare or make any distributions on our common
stock in the foreseeable future. If we do pay dividends on shares
of our common stock, however, such distributions will constitute
dividends for U.S. federal income tax purposes to the extent paid
from our current or accumulated earnings and profits, as determined
under U.S. federal income tax principles. Distributions in excess
of our current and accumulated earnings and profits will constitute
a return of capital that is applied against and reduces, but not
below zero, a non-U.S. holder's adjusted tax basis in shares of our
common stock. Any remaining excess will be treated as
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gain realized on the
sale or other disposition of our common stock. See "— Sale,
Exchange or Other Disposition of Common Stock".
Any
dividend paid to a non-U.S. holder on our common stock that is not
effectively connected with a non-U.S. holder's conduct of a trade
or business in the United States will generally be subject to U.S.
withholding tax at a 30% rate. The withholding tax might apply at a
reduced rate, however, under the terms of an applicable income tax
treaty between the United States and the non-U.S. holder's country
of residence. You should consult your tax advisor regarding your
entitlement to benefits under a relevant income tax treaty.
Generally, in order for the applicable withholding agent to
withhold tax at a lower treaty rate, a non-U.S. holder must certify
its entitlement to treaty benefits. A non-U.S. holder generally can
meet this certification requirement by providing a Form W-8BEN
or Form W-8BEN-E (or any successor of such forms) or
appropriate substitute form to us or the applicable withholding
agent. If the non-U.S. holder holds the stock through a financial
institution or other agent acting on the holder's behalf, the
holder will be required to provide appropriate documentation to the
agent. The holder's agent will then be required to provide
certification to us or the applicable withholding agent, either
directly or through other intermediaries. Each such certification
must be provided to us or our paying agent prior to the payment of
dividends and must be updated periodically. If you are eligible for
a reduced rate of U.S. federal withholding tax under an income tax
treaty and you do not timely file the required certification, you
may obtain a refund or credit of any excess amounts withheld by
filing an appropriate claim for a refund with the IRS in a timely
manner.
Dividends
received by a non-U.S. holder that are effectively connected with a
U.S. trade or business conducted by the non-U.S. holder, and if
required by an applicable income tax treaty between the United
States and the non-U.S. holder's country of residence, are
attributable to a permanent establishment maintained by the
non-U.S. holder in the United States, are not subject to U.S.
withholding tax. To obtain this exemption, a non-U.S. holder must
provide us or our paying agent with an IRS Form W-8ECI
properly certifying such exemption. Such effectively connected
dividends, although not subject to withholding tax, are taxed at
the same graduated rates applicable to U.S. persons, net of certain
deductions and credits. In addition, dividends received by
corporate non-U.S. holders that are effectively connected with a
U.S. trade or business of the corporate non-U.S. holder may also be
subject to a branch profits tax at a rate of 30% or such lower rate
as may be specified by an applicable tax treaty.
See
also the sections below titled "— Foreign Account Tax
Compliance Act" and "— Backup Withholding and Information
Reporting" for additional withholding rules that may apply to
dividends.
Sale, Exchange or Other Disposition of Common Stock
Subject
to the discussions below regarding Backup Withholding and
Information Reporting and the Foreign Account Tax Compliance Act,
non-U.S. holders will generally not be subject to U.S. federal
income tax on any gains realized on the sale, exchange or other
disposition of our common stock unless:
- •
- the gain (i) is
effectively connected with the conduct by the non-U.S. holder of a
U.S. trade or business and (ii) if required by an applicable
income tax treaty between the United States and the non-U.S.
holder's country of residence, is attributable to a permanent
establishment maintained by the non-U.S. holder in the United
States (in which case the special rules described below
apply);
- •
- the non-U.S. holder
is an individual who is present in the United States for
183 days or more in the taxable year of the sale, exchange or
other disposition of our common stock, and certain other
requirements are met (in which case the gain would be subject to a
flat 30% tax, or such reduced rate as may be specified by an
applicable income tax treaty,
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which may be offset by
certain U.S. source capital losses, even though the individual is
not considered a resident of the United States, provided that the
non-U.S. holder has timely filed U.S. federal income tax returns
with respect to such losses); or
- •
- the rules of the
Foreign Investment in Real Property Tax Act, or FIRPTA, treat the
gain as effectively connected with a U.S. trade or
business.
The
FIRPTA rules may apply to a sale, exchange or other disposition of
our common stock if we are, or were within the shorter of the
five-year period preceding the disposition and the non-U.S.
holder's holding period, a "U.S. real property holding
corporation", or USRPHC. In general, we would be a USRPHC if
interests in U.S. real estate comprised (by fair market value) at
least half of the value of our business assets. We do not believe
that we are a USRPHC and we do not anticipate becoming one in the
future. Even if we become a USRPHC, gain realized by a non-U.S.
Holder on a disposition of our common stock will not be subject to
U.S. federal income tax so long as (1) the non-U.S. Holder
owned, directly, indirectly or constructively, no more than five
percent of our common stock at all times within the shorter of
(i) the five year period preceding the disposition or
(ii) the holder's holding period and (2) our common stock
is regularly traded on an established securities market. There can
be no assurance that our common stock will continue to qualify as
regularly traded on an established securities market.
If
any gain from the sale, exchange or other disposition of our common
stock, (i) is effectively connected with a U.S. trade or
business conducted by a non-U.S. holder and (ii) if required
by an applicable income tax treaty between the United States and
the non-U.S. holder's country of residence, is attributable to a
permanent establishment maintained by such non-U.S. holder in the
United States, then the gain generally will be subject to U.S.
federal income tax at the same graduated rates applicable to U.S.
persons, net of certain deductions and credits. If the non-U.S.
holder is a corporation, under certain circumstances, that portion
of its earnings and profits that is effectively connected with its
U.S. trade or business, subject to certain adjustments, generally
would be subject also to a "branch profits tax". The branch profits
tax rate is 30%, although an applicable income tax treaty between
the United States and the non-U.S. holder's country of residence
might provide for a lower rate.
U.S. Federal Estate Tax
The
estates of nonresident alien individuals generally are subject to
U.S. federal estate tax on property with a U.S. situs. Because we
are a U.S. corporation, our common stock will be U.S. situs
property and therefore will be included in the taxable estate of a
nonresident alien decedent, unless an applicable estate tax treaty
between the United States and the decedent's country of residence
provides otherwise. The terms "resident" and "nonresident" are
defined differently for U.S. federal estate tax purposes than for
U.S. federal income tax purposes. Investors are urged to consult
their own tax advisors regarding the U.S. federal estate tax
consequences of the ownership or disposition of our common
stock.
Backup Withholding and Information Reporting
The
Code and the Treasury regulations require those who make specified
payments to report the payments to the IRS. Among the specified
payments are dividends and proceeds paid by brokers to their
customers. The required information returns enable the IRS to
determine whether the recipient properly included the payments in
income. This reporting regime is reinforced by "backup withholding"
rules. These rules require the payors to withhold tax from payments
subject to information reporting if the recipient fails to
cooperate with the reporting regime by failing to provide his
taxpayer identification number to the payor, furnishing an
incorrect identification number, or failing to report interest or
dividends on his returns. The backup withholding tax rate is
currently
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24%. The backup
withholding rules do not apply to payments to corporations, whether
domestic or foreign, provided they establish such
exemption.
Payments
to non-U.S. holders of dividends on common stock generally will not
be subject to backup withholding, and payments of proceeds made to
non-U.S. holders by a broker upon a sale of common stock will not
be subject to information reporting or backup withholding, in each
case so long as the non-U.S. holder certifies its nonresident
status (and we or the applicable withholding agent does not have
actual knowledge or reason to know the holder is a U.S. person or
that the conditions of any other exemption are not, in fact,
satisfied) or otherwise establishes an exemption. The certification
procedures to claim treaty benefits described under
"— Dividends" will generally satisfy the certification
requirements necessary to avoid the backup withholding tax. We must
report annually to the IRS any dividends paid to each non-U.S.
holder and the tax withheld, if any, with respect to these
dividends. Copies of these reports may be made available to tax
authorities in the country where the non-U.S. holder
resides.
Under
the Treasury regulations, the payment of proceeds from the
disposition of shares of our common stock by a non-U.S. holder made
to or through a U.S. office of a broker generally will be subject
to information reporting and backup withholding unless the
beneficial owner certifies, under penalties of perjury, among other
things, its status as a non-U.S. holder (and the broker does not
have actual knowledge or reason to know the holder is a U.S.
person) or otherwise establishes an exemption. The payment of
proceeds from the disposition of shares of our common stock by a
non-U.S. holder made to or through a non-U.S. office of a broker
generally will not be subject to backup withholding and information
reporting, except as noted below. Information reporting, but not
backup withholding, will apply to a payment of proceeds, even if
that payment is made outside of the United States, if you sell our
common stock through a non-U.S. office of a broker that
is:
- •
- a U.S. person
(including a foreign branch or office of such person);
- •
- a "controlled foreign
corporation" for U.S. federal income tax purposes;
- •
- a foreign person 50%
or more of whose gross income from certain periods is effectively
connected with a U.S. trade or business; or
- •
- a foreign partnership
if at any time during its tax year (a) one or more of its
partners are U.S. persons who, in the aggregate, hold more than 50%
of the income or capital interests of the partnership or
(b) the foreign partnership is engaged in a U.S. trade or
business; unless the broker has documentary evidence that the
beneficial owner is a non-U.S. holder and certain other conditions
are satisfied, or the beneficial owner otherwise establishes an
exemption (and the broker has no actual knowledge or reason to know
to the contrary).
Backup
withholding is not an additional tax. Any amounts withheld from a
payment to a holder of common stock under the backup withholding
rules can be credited against any U.S. federal income tax liability
of the holder and may entitle the holder to a refund, provided that
the required information is furnished to the IRS in a timely
manner.
Foreign Account Tax Compliance Act
A
U.S. federal withholding tax of 30% may apply to dividends and the
gross proceeds of a disposition of our common stock paid to a
foreign financial institution (as specifically defined by the
applicable rules) unless such institution enters into an agreement
with the U.S. government to withhold on certain payments and to
collect and provide to the U.S. tax authorities substantial
information regarding U.S. account holders of such institution
(which includes certain equity holders of such institution, as well
as certain account holders that are foreign entities with U.S.
owners). This U.S. federal withholding tax of 30% will also apply
to dividends and the gross proceeds of a disposition of our common
stock paid to a non-financial foreign entity unless such entity
provides
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the withholding agent
with either a certification that it does not have any substantial
direct or indirect U.S. owners or provides information regarding
direct and indirect U.S. owners of the entity. The 30% federal
withholding tax described in this paragraph cannot be reduced under
an income tax treaty with the United States or by providing an IRS
Form W-8BEN or similar documentation. The withholding tax
described above will not apply, however, if the foreign financial
institution or non-financial foreign entity otherwise qualifies for
an exemption from the rules. Under certain circumstances, a
non-U.S. holder might be eligible for refunds or credits of such
taxes. Holders should consult with their own tax advisors regarding
the possible implications of the withholding described herein.
Foreign financial institutions located in jurisdictions that have
an intergovernmental agreement with the United States governing
FATCA may be subject to different rules.
The
Secretary has issued proposed regulations providing that the
withholding provisions under FATCA do not apply with respect to
payment of gross proceeds from a sale or other disposition of our
common stock, which may be relied upon by taxpayers until final
regulations are issued. Prospective investors should consult their
tax advisors regarding this legislation.
EACH
PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN TAX ADVISOR REGARDING
THE PARTICULAR U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX
CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF OUR COMMON
STOCK, INCLUDING THE CONSEQUENCES OF ANY RECENTLY ADOPTED AND
PROPOSED CHANGES IN APPLICABLE LAWS.
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UNDERWRITING
We
and the underwriters named below have entered into an underwriting
agreement with respect to the shares of common stock being offered.
Subject to certain conditions, each underwriter has severally
agreed to purchase the number of shares of common stock indicated
in the following table. Goldman Sachs & Co. LLC,
Morgan Stanley & Co. LLC and UBS
Securities LLC are the representatives of the underwriters.
The underwriters and the representatives are collectively referred
to as the "underwriters" and the "representatives",
respectively.
|
|
|
Name
|
|
Number of
Shares |
Goldman Sachs & Co. LLC
|
|
5,250,000 |
Morgan
Stanley & Co. LLC
|
|
5,250,000 |
UBS Securities LLC
|
|
3,000,000 |
Cowen and Company, LLC
|
|
675,000 |
Wedbush Securities Inc.
|
|
525,000 |
Roth Capital Partners, LLC
|
|
300,000 |
|
|
|
Total
|
|
15,000,000 |
|
|
|
|
|
|
|
|
|
The
underwriters are committed to take and pay for all of the shares of
common stock being offered, if any are taken, other than the shares
of common stock covered by the option described below unless and
until this option is exercised.
The
underwriters have an option to buy up to an additional 2,250,000
shares of common stock. They may exercise that option for
30 days. If any shares of common stock are purchased pursuant
to this option, the underwriters will severally purchase shares in
approximately the same proportion as set forth in the table
above.
The
following table shows the per share and total underwriting
discounts and commissions to be paid to the underwriters by us.
Such amounts are shown assuming both no exercise and full exercise
of the underwriters' option to purchase up to 2,250,000 additional
shares of common stock from us.
|
|
|
|
|
|
|
|
Paid by the Company
|
|
No Exercise |
|
Full Exercise |
|
Per share
|
|
$ |
0.416 |
|
$ |
0.416 |
|
Total
|
|
$ |
6,243,750 |
|
$ |
7,180,313 |
|
Shares
of common stock sold by the underwriters to the public will
initially be offered at the public offering price set forth on the
cover of this prospectus supplement. Any shares of common stock
sold by the underwriters to securities dealers may be sold at a
discount of up to $0.25 per share from the public offering price.
After the initial offering of the shares, the representatives may
change the offering price and the other selling terms. The offering
of the shares of common stock by the underwriters is subject to
receipt and acceptance and subject to the underwriters' right to
reject any order in whole or in part.
We,
our executive officers, directors and a certain stockholder have
agreed with the underwriters not to dispose of or hedge any of our
or their shares of common stock or securities convertible into or
exchangeable for shares of common stock during the period from the
date of this prospectus supplement continuing through the date up
to 75 days after the date of this prospectus supplement.
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The
lock-up agreements are subject to certain exceptions, including for
transfers:
- (i)
- as bona fide gifts, including
charitable distributions, or for bona
fide estate planning purposes;
- (ii)
- in a distribution of
shares of our common stock or any securities convertible into or
exercisable or exchangeable for shares of our common stock to
members, partners or stockholders of the person executing the
lock-up agreement;
- (iii)
- that occur by
operation of law, such as rules of descent and distribution, or
pursuant to a qualified domestic order or in connection with a
divorce settlement;
- (iv)
- to any trust for the
direct or indirect benefit of the person executing the lock-up
agreement or the immediate family of the person executing the
lock-up agreement or if the person executing the lock-up agreement
is a trust, to a trustor or beneficiary of the trust or to the
estate of a beneficiary of such trust, or to a successor trust,
provided that any such transfer shall not involve a disposition for
value;
- (v)
- to us in connection
with the vesting, settlement, or exercise of restricted stock
units, options or other rights to purchase shares of our common
stock (including, in each case, by way of "net" or "cashless"
exercise), including for the payment of exercise price and tax
withholdings or remittance payments due as a result of the vesting,
settlement, or exercise of such restricted stock units, options or
other rights;
- (vi)
- pursuant to a
bona fide third-party
tender offer, merger, consolidation or other similar transaction
involving a "change of control" of our company;
- (vii)
- pursuant to a written
plan entered into prior to the date of the lock-up agreement that
satisfies the requirements of Rule 10b5-1 under the Exchange
Act;
- (viii)
- in connection with
the sale or issuance of or entry into an agreement by us to sell or
issue of shares of common stock or securities convertible into or
exercisable or exchangeable for shares of common stock in
connection with the mergers, acquisitions of securities,
businesses, property, technologies or other assets, joint ventures,
commercial relationships or strategic transactions; provided that,
the aggregate number of shares of common stock that we may sell or
issue or agree to sell or issue pursuant to this clause shall not
exceed 10% of the total number of shares of common stock issued and
outstanding immediately following the completion of the this
offering (determined on a fully-diluted basis and as adjusted for
stock splits, stock dividends and other similar events after the
offering), provided further that we will not register any such
shares of common stock on any registration statement pursuant to
the Securities Act prior to the end of the lock-up period; or
- (ix)
- with the prior
written consent of Goldman Sachs & Co. LLC and
Morgan Stanley & Co. LLC on behalf of the
several Underwriters,
provided, that in the
case of any transfer or distribution pursuant to clauses (i)
through (iv) above, (A) each donee, distributee, trustee
or transferee will execute and deliver to the representatives a
lock-up letter and (B) no filing by any party (donor, donee,
distributor, distributee, trustee, transferor or transferee) under
the Exchange Act, or other public announcement shall be required or
shall be made voluntarily in connection with such transfer or
distribution (other than a filing on a Form 5 made after the
lock-up period).
Our
common stock is listed on The Nasdaq Global Select Market under the
symbol "GLUU".
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If
you purchase shares of common stock offered in this prospectus
supplement, you may be required to pay stamp taxes and other
charges under the laws and practices of the country of purchase, in
addition to the offering price listed on the cover page of this
prospectus supplement.
In
connection with the offering, the underwriters may purchase and
sell shares of our common stock in the open market. These
transactions may include short sales, stabilizing transactions and
purchases to cover positions created by short sales. Short sales
involve the sale by the underwriters of a greater number of shares
than they are required to purchase in the offering, and a short
position represents the amount of such sales that have not been
covered by subsequent purchases. A "covered short position" is a
short position that is not greater than the amount of additional
shares of common stock for which the underwriters' option described
above may be exercised. The underwriters may cover any covered
short position by either exercising their option to purchase
additional shares of common stock or purchasing shares of common
stock in the open market. In determining the source of shares to
cover the covered short position, the underwriters will consider,
among other things, the price of shares available for purchase in
the open market as compared to the price at which they may purchase
additional shares of common stock pursuant to the option described
above. "Naked" short sales are any short sales that create a short
position greater than the amount of additional shares of common
stock for which the option described above may be exercised. The
underwriters must cover any such naked short position by purchasing
shares of common stock in the open market. A naked short position
is more likely to be created if the underwriters are concerned that
there may be downward pressure on the price of shares of common
stock in the open market after pricing that could adversely affect
investors who purchase in the offering. Stabilizing transactions
consist of various bids for or purchases of shares of common stock
made by the underwriters in the open market prior to the completion
of the offering.
The
underwriters may also impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the
underwriting discount received by it because the representatives
have repurchased shares of common stock sold by or for the account
of such underwriter in stabilizing or short covering
transactions.
Purchases
to cover a short position and stabilizing transactions, as well as
other purchases by the underwriters for their own accounts, may
have the effect of preventing or retarding a decline in the market
price of shares of our common stock, and together with the
imposition of the penalty bid, may stabilize, maintain or otherwise
affect the market price of shares of common stock. As a result, the
price of the shares of common stock may be higher than the price
that otherwise might exist in the open market. The underwriters are
not required to engage in these activities and may end any of these
activities at any time. These transactions may be effected on The
Nasdaq Global Select Market, in the over-the-counter market or
otherwise.
In
connection with the offering, certain of the underwriters or
securities dealers may distribute prospectuses by electronic means,
such as e-mail.
We
estimate that our share of the total expenses of the offering,
excluding underwriting discounts and commissions, will be
approximately $590,000.
We
have agreed to indemnify the several underwriters against certain
liabilities, including liabilities under the Securities
Act.
The
underwriters and their respective affiliates are full service
financial institutions engaged in various activities, which may
include sales and trading, commercial and investment banking,
advisory, investment management, investment research, principal
investment, hedging, market making, brokerage and other financial
and non-financial activities and services. Certain of the
underwriters and their respective affiliates have provided, and may
in the future provide, a variety of
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these services to us
and to persons and entities with relationships with us, for which
they received or will receive customary fees and
expenses.
In
the ordinary course of their various business activities, the
underwriters and their respective affiliates, officers, directors
and employees may purchase, sell or hold a broad array of
investments and actively trade securities, derivatives, loans,
commodities, currencies, credit default swaps and other financial
instruments for their own account and for the accounts of their
customers, and such investment and trading activities may involve
or relate to assets, securities or instruments of us (directly, as
collateral securing other obligations or otherwise) or persons and
entities with relationships with us. The underwriters and their
respective affiliates may also communicate independent investment
recommendations, market color or trading ideas or publish or
express independent research views in respect of such assets,
securities or instruments and may at any time hold, or recommend to
clients that they should acquire, long and/or short positions in
such assets, securities and instruments.
European Economic Area and United Kingdom
In
relation to each Member State of the European Economic Area and the
United Kingdom, each a Relevant State, no common shares, or the
Shares, have been offered or will be offered pursuant to the
offering to the public in that Relevant State prior to the
publication of a prospectus in relation to the Shares which has
been approved by the competent authority in that Relevant State or,
where appropriate, approved in another Relevant State and notified
to the competent authority in that Relevant State, all in
accordance with the Prospectus Regulation), except that offers of
Shares may be made to the public in that Relevant State at any time
under the following exemptions under the Prospectus
Regulation:
- (a)
- to any legal entity
which is a qualified investor as defined under the Prospectus
Regulation;
- (b)
- to fewer than 150
natural or legal persons (other than qualified investors as defined
under the Prospectus Regulation), subject to obtaining the prior
consent of the Representatives for any such offer; or
- (c)
- in any other
circumstances falling within Article 1(4) of the Prospectus
Regulation,
provided that no such
offer of Shares shall require the company or any Representative to
publish a prospectus pursuant to Article 3 of the Prospectus
Regulation or supplement a prospectus pursuant to Article 23
of the Prospectus Regulation.
For
the purposes of this provision, the expression an "offer to the
public" in relation to any Shares in any Relevant State means the
communication in any form and by any means of sufficient
information on the terms of the offer and any Shares to be offered
so as to enable an investor to decide to purchase or subscribe for
any Shares, and the expression "Prospectus Regulation" means
Regulation (EU) 2017/1129.
United Kingdom
Each
Underwriter has represented and agreed that:
- (a)
- it has only
communicated or caused to be communicated and will only communicate
or cause to be communicated an invitation or inducement to engage
in investment activity (within the meaning of Section 21 of
the Financial Services and Markets Act 2000 (as amended, the
"FSMA")) received by it in connection with the issue or sale of the
shares in circumstances in which Section 21(1) of the FSMA
does not apply to the company or the selling stockholders;
and
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it has complied and
will comply with all applicable provisions of the FSMA with respect
to anything done by it in relation to the shares in, from or
otherwise involving the United Kingdom.
Canada
The
securities may be sold in Canada only to purchasers purchasing, or
deemed to be purchasing, as principal that are accredited
investors, as defined in National Instrument 45-106 Prospectus
Exemptions or subsection 73.3(1) of the Securities Act
(Ontario), and are permitted clients, as defined in National
Instrument 31-103 Registration Requirements, Exemptions, and
Ongoing Registrant Obligations. Any resale of the securities must
be made in accordance with an exemption form, or in a transaction
not subject to, the prospectus requirements of applicable
securities laws.
Securities
legislation in certain provinces or territories of Canada may
provide a purchaser with remedies for rescission or damages if this
prospectus supplement (including any amendment thereto) contains a
misrepresentation, provided that the remedies for rescission or
damages are exercised by the purchaser within the time limit
prescribed by the securities legislation of the purchaser's
province or territory. The purchaser should refer to any applicable
provisions of the securities legislation of the purchaser's
province or territory for particulars of these rights or consult
with a legal advisor.
Pursuant
to section 3A.3 of National Instrument 33-105
Underwriting Conflicts (NI 33-105), the underwriters are not
required to comply with the disclosure requirements of
NI 33-105 regarding underwriter conflicts of interest in
connection with this offering.
Hong Kong
The
securities may not be offered or sold in Hong Kong by means of any
document other than (i) in circumstances which do not
constitute an offer to the public within the meaning of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.
32 of the Laws of Hong Kong), or the Companies (Winding Up and
Miscellaneous Provisions Ordinance, or which do not constitute an
invitation to the public within the meaning of the Securities and
Futures Ordinance (Cap. 571 of the Laws of Hong Kong), or the
Securities and Futures Ordinance, or (ii) to "professional
investors" as defined in the Securities and Futures Ordinance and
any rules made thereunder, or (iii) in other circumstances
which do not result in the document being a "prospectus" as defined
in the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, and no advertisement, invitation or document relating to
the securities may be issued or may be in the possession of any
person for the purpose of issue (in each case whether in Hong Kong
or elsewhere), which is directed at, or the contents of which are
likely to be accessed or read by, the public in Hong Kong (except
if permitted to do so under the securities laws of Hong Kong) other
than with respect to shares which are or are intended to be
disposed of only to persons outside Hong Kong or only to
"professional investors" in Hong Kong as defined in the Securities
and Futures Ordinance and any rules made thereunder.
Singapore
This
prospectus supplement has not been registered as a prospectus with
the Monetary Authority of Singapore. Accordingly, this prospectus
supplement and any other document or material in connection with
the offer or sale, or invitation for subscription or purchase, of
the shares may not be circulated or distributed, nor may the shares
be offered or sold, or be made the subject of an invitation for
subscription or purchase, whether directly or indirectly, to
persons in Singapore other than (i) to an institutional
investor (as defined under Section 4A of the Securities and
Futures
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Act, Chapter 289
of Singapore, or the SFA) under Section 274 of the SFA,
(ii) to a relevant person (as defined in Section 275(2)
of the SFA) pursuant to Section 275(1) of the SFA, or any
person pursuant to Section 275(1A) of the SFA, and in
accordance with the conditions specified in Section 275 of the
SFA or (iii) otherwise pursuant to, and in accordance with the
conditions of, any other applicable provision of the SFA, in each
case subject to conditions set forth in the SFA.
Where
the shares are subscribed or purchased under Section 275 of
the SFA by a relevant person which is a corporation (which is not
an accredited investor (as defined in Section 4A of the SFA))
the sole business of which is to hold investments and the entire
share capital of which is owned by one or more individuals, each of
whom is an accredited investor, the securities (as defined in
Section 239(1) of the SFA) of that corporation shall not be
transferable for six months after that corporation has acquired the
shares under Section 275 of the SFA except: (1) to an
institutional investor under Section 274 of the SFA or to a
relevant person (as defined in Section 275(2) of the SFA),
(2) where such transfer arises from an offer in that
corporation's securities pursuant to Section 275(1A) of the
SFA, (3) where no consideration is or will be given for the
transfer, (4) where the transfer is by operation of law,
(5) as specified in Section 276(7) of the SFA, or
(6) as specified in Regulation 32 of the Securities and
Futures (Offers of Investments) (Shares and Debentures)
Regulations 2005 of Singapore, or
Regulation 32.
Where
the shares are subscribed or purchased under Section 275 of
the SFA by a relevant person which is a trust (where the trustee is
not an accredited investor (as defined in Section 4A of the
SFA)) whose sole purpose is to hold investments and each
beneficiary of the trust is an accredited investor, the
beneficiaries' rights and interest (howsoever described) in that
trust shall not be transferable for six months after that trust has
acquired the shares under Section 275 of the SFA except:
(1) to an institutional investor under Section 274 of the
SFA or to a relevant person (as defined in Section 275(2) of
the SFA), (2) where such transfer arises from an offer that is
made on terms that such rights or interest are acquired at a
consideration of not less than S$200,000 (or its equivalent in a
foreign currency) for each transaction (whether such amount is to
be paid for in cash or by exchange of securities or other assets),
(3) where no consideration is or will be given for the
transfer, (4) where the transfer is by operation of law,
(5) as specified in Section 276(7) of the SFA, or
(6) as specified in Regulation 32.
Solely
for the purposes of its obligations pursuant to Section 309B
of the SFA, we have determined, and hereby notify all relevant
persons (as defined in the CMP Regulations 2018), that the
shares are "prescribed capital markets products" (as defined in the
CMP Regulations 2018) and Excluded Investment Products (as
defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment
Products and MAS Notice FAA-N16: Notice on Recommendations on
Investment Products).
Japan
The
securities have not been and will not be registered under the
Financial Instruments and Exchange Act of Japan (Act No. 25 of
1948, as amended), or the FIEA. The securities may not be offered
or sold, directly or indirectly, in Japan or to or for the benefit
of any resident of Japan (including any person resident in Japan or
any corporation or other entity organized under the laws of Japan)
or to others for reoffering or resale, directly or indirectly, in
Japan or to or for the benefit of any resident of Japan, except
pursuant to an exemption from the registration requirements of the
FIEA and otherwise in compliance with any relevant laws and
regulations of Japan.
Australia
No
placement document, prospectus, product disclosure statement or
other disclosure document has been lodged with the Australian
Securities and Investments Commission, or ASIC, in
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relation to the
offering. This offering document does not constitute a prospectus,
product disclosure statement or other disclosure document under the
Corporations Act 2001, or the Corporations Act, and does not
purport to include the information required for a prospectus,
product disclosure statement or other disclosure document under the
Corporations Act.
Any
offer in Australia of the shares may only be made to persons, or
the Exempt Investors, who are "sophisticated investors" (within the
meaning of section 708(8) of the Corporations Act),
"professional investors" (within the meaning of
section 708(11) of the Corporations Act) or otherwise pursuant
to one or more exemptions contained in section 708 of the
Corporations Act so that it is lawful to offer the shares without
disclosure to investors under Chapter 6D of the Corporations
Act.
The
shares applied for by Exempt Investors in Australia must not be
offered for sale in Australia in the period of 12 months after
the date of allotment under the offering, except in circumstances
where disclosure to investors under Chapter 6D of the
Corporations Act would not be required pursuant to an exemption
under section 708 of the Corporations Act or otherwise or
where the offer is pursuant to a disclosure document which complies
with Chapter 6D of the Corporations Act. Any person acquiring
shares must observe such Australian on-sale
restrictions.
This
offering document contains general information only and does not
take account of the investment objectives, financial situation or
particular needs of any particular person. It does not contain any
securities recommendations or financial product advice. Before
making an investment decision, investors need to consider whether
the information in this offering document is appropriate to their
needs, objectives and circumstances, and, if necessary, seek expert
advice on those matters.
Dubai International Financial Centre
This
offering document relates to an Exempt Offer in accordance with the
Offered Securities Rules of the Dubai Financial Services Authority,
or the DFSA. This offering document is intended for distribution
only to persons of a type specified in the Offered Securities Rules
of the DFSA. It must not be delivered to, or relied on by, any
other person. The DFSA has no responsibility for reviewing or
verifying any documents in connection with Exempt Offers. The DFSA
has not approved this prospectus supplement nor taken steps to
verify the information set forth in this prospectus supplement and
has no responsibility for the offering document. The securities to
which this offering document relates may be illiquid and/or subject
to restrictions on their resale. Prospective purchasers of the
securities offered should conduct their own due diligence on the
securities. If you do not understand the contents of this offering
document you should consult an authorized financial
advisor.
Switzerland
We
have not and will not register with the Swiss Financial Market
Supervisory Authority, or the FINMA, as a foreign collective
investment scheme pursuant to Article 119 of the Federal Act
on Collective Investment Scheme of 23 June 2006, as amended,
or CISA, and accordingly the securities being offered pursuant to
this prospectus supplement have not and will not be approved, and
may not be licensable, with FINMA. Therefore, the securities have
not been authorized for distribution by FINMA as a foreign
collective investment scheme pursuant to Article 119 CISA and
the securities offered hereby may not be offered to the public (as
this term is defined in Article 3 CISA) in or from
Switzerland. The securities may solely be offered to "qualified
investors", as this term is defined in Article 10 CISA, and in
the circumstances set out in Article 3 of the Ordinance on
Collective Investment Scheme of 22 November 2006, as amended,
or CISO, such that there is no public offer. Investors, however, do
not benefit from protection under CISA or CISO or
supervision
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by FINMA. This
prospectus supplement and any other materials relating to the
securities are strictly personal and confidential to each offeree
and do not constitute an offer to any other person. This prospectus
supplement may only be used by those qualified investors to whom it
has been handed out in connection with the offer described in this
prospectus supplement and may neither directly or indirectly be
distributed or made available to any person or entity other than
its recipients. It may not be used in connection with any other
offer and shall in particular not be copied and/or distributed to
the public in Switzerland or from Switzerland. This prospectus
supplement does not constitute an issue prospectus as that term is
understood pursuant to Article 652a and/or 1156 of the Swiss
Federal Code of Obligations. We have not applied for a listing of
the securities on the SIX Swiss Exchange or any other regulated
securities market in Switzerland, and consequently, the information
presented in this prospectus supplement does not necessarily comply
with the information standards set out in the listing rules of the
SIX Swiss Exchange and corresponding prospectus schemes annexed to
the listing rules of the SIX Swiss Exchange.
Israel
In
the State of Israel this offering document shall not be regarded as
an offer to the public to purchase shares of common stock under the
Israeli Securities Law, 5728 — 1968, which requires a
prospectus to be published and authorized by the Israel Securities
Authority, if it complies with certain provisions of
Section 15 of the Israeli Securities Law, 5728 — 1968,
including, inter alia, if: (i) the offer is made, distributed
or directed to not more than 35 investors, subject to certain
conditions, or the Addressed Investors; or (ii) the offer is
made, distributed or directed to certain qualified investors
defined in the First Addendum of the Israeli Securities Law,
5728 — 1968, subject to certain conditions, or the Qualified
Investors. The Qualified Investors shall not be taken into account
in the count of the Addressed Investors and may be offered to
purchase securities in addition to the 35 Addressed Investors. The
company has not and will not take any action that would require it
to publish a prospectus in accordance with and subject to the
Israeli Securities Law, 5728 — 1968. We have not and will not
distribute this prospectus supplement or make, distribute or direct
an offer to subscribe for our shares of our common stock to any
person within the State of Israel, other than to Qualified
Investors and up to 35 Addressed Investors. Qualified Investors may
have to submit written evidence that they meet the definitions set
out in of the First Addendum to the Israeli Securities Law,
5728 — 1968. In particular, we may request, as a condition to
be offered shares of our common stock, that Qualified Investors
will each represent, warrant and certify to us and/or to anyone
acting on our behalf: (i) that it is an investor falling
within one of the categories listed in the First Addendum to the
Israeli Securities Law, 5728 — 1968; (ii) which of the
categories listed in the First Addendum to the Israeli Securities
Law, 5728 — 1968 regarding Qualified Investors is applicable
to it; (iii) that it will abide by all provisions set forth in
the Israeli Securities Law, 5728 — 1968 and the regulations
promulgated thereunder in connection with the offer to be issued
shares of our common stock; (iv) that the shares of common
stock that it will be issued are, subject to exemptions available
under the Israeli Securities Law, 5728 — 1968: (a) for
its own account; (b) for investment purposes only; and
(c) not issued with a view to resale within the State of
Israel, other than in accordance with the provisions of the Israeli
Securities Law, 5728 — 1968; and (v) that it is willing
to provide further evidence of its Qualified Investor status.
Addressed Investors may have to submit written evidence in respect
of their identity and may have to sign and submit a declaration
containing, inter alia, the Addressed Investor's name, address and
passport number or Israeli identification number.
LEGAL MATTERS
The
validity of the shares of common stock offered hereby will be
passed upon for us by Fenwick & West LLP, San
Francisco, California. Certain legal matters relating to the
offering will be passed upon for the underwriters by
Cooley LLP, Palo Alto, California.
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EXPERTS
The
financial statements and management's assessment of the
effectiveness of internal control over financial reporting (which
is included in Management's Report on Internal Control over
Financial Reporting) incorporated in this Prospectus by reference
to the
Annual Report on Form 10-K for the year ended
December 31, 2019 have been so incorporated in reliance on
the report of PricewaterhouseCoopers LLP, an independent
registered public accounting firm, given on the authority of said
firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE
INFORMATION
We
are subject to the informational requirements of the Exchange Act
and are required to file annual, quarterly and other reports, proxy
statements and other information with the SEC. The SEC maintains an
Internet site (https://www.sec.gov) that contains reports, proxy
and information statements, and various other information about
us.
Information
about us is also available at our website at www.glu.com. However,
the information on, or that can be accessed through, our website is
not a part of this prospectus supplement or the accompanying
prospectus and is not incorporated by reference into this
prospectus supplement (other than those filings with the SEC that
we specifically incorporate by reference into this prospectus
supplement or accompanying prospectus).
Any
statement contained herein or in a document incorporated or deemed
to be incorporated by reference into this document will be deemed
to be modified or superseded for purposes of the document to the
extent that a statement contained in this document or any other
subsequently filed document that is deemed to be incorporated by
reference into this document modifies or supersedes the
statement.
INFORMATION
INCORPORATED BY REFERENCE
The
SEC allows us to "incorporate by reference" information that we
file with the SEC, which means that we can disclose important
information to you by referring you to those other documents. The
information incorporated by reference is an important part of this
prospectus supplement and the accompanying prospectus, and
information we file later with the SEC will automatically update
and supersede this information. We incorporate by reference the
documents listed below and any future filings (other than current
reports furnished under Item 2.02 or Item 7.01 of
Form 8-K and exhibits filed on such form that are related to
such items unless such Form 8-K expressly provides to the
contrary) we make with the SEC under Section 13(a), 13(c), 14,
or 15(d) of the Exchange Act prior to the termination of any
offering of securities made by this prospectus
supplement:
- •
-
our Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, filed with the SEC on February 28,
2020;
- •
- the portions of our
Definitive Proxy Statement on Schedule 14A, filed with the SEC
on April 28, 2020, incorporated by reference in
Part III of the
Annual Report on Form 10-K for the year ended
December 31, 2019;
- •
-
our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2020, filed with the SEC on May 11,
2020;
- •
-
our Current Report on Form 8-K filed with the SEC on
April 28, 2020; and
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Upon
written or oral request, we will provide without charge to each
person, including any beneficial owner, to whom this prospectus
supplement and the accompanying prospectus are delivered, a copy of
any or all of such information that has been incorporated herein by
reference (other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into the
documents that this prospectus supplement and accompanying
prospectus incorporates). Written or oral requests for copies
should be directed at Glu Mobile Inc., Attn: Investor
Relations, 875 Howard Street, Suite 100, San Francisco,
California 94103, telephone (415) 800-6100. See the section of
this prospectus supplement entitled "Where You Can Find More
Information" for information concerning how to read and obtain
copies of materials that we file with the SEC.
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PROSPECTUS

GLU
MOBILE INC.
COMMON STOCK
We
may offer from time to time our common stock in one or more
offerings. When we decide to sell our common stock, we will provide
specific terms of the common stock, including the amount of common
stock offered, in a prospectus supplement. This prospectus and any
applicable prospectus supplement may be used to offer common stock
for the account of persons other than us. We may offer and sell our
common stock to or through one or more underwriters, brokers,
dealers, agents, or directly to purchasers, on a continuous or
delayed basis. See "Plan of Distribution" for a further description
of the manner in which we may dispose of the common stock covered
by this prospectus.
You
should read this prospectus and any prospectus supplement carefully
before you invest. We may not use this prospectus to sell common
stock unless it includes a prospectus supplement describing the
method and terms of the applicable offering. A prospectus
supplement may also add, update or change information contained in
this prospectus. This prospectus is not an offer to sell our common
stock and it is not soliciting an offer to buy our common stock in
any state where the offer or sale is not permitted.
Our
common stock is listed on the Nasdaq Global Select Market under the
symbol "GLUU."
Investing
in our common stock involves risks. See "Risk Factors" beginning on
page 2, as well as the other information contained or
incorporated by reference in this prospectus and the applicable
prospectus supplement.
The
Securities and Exchange Commission and state regulators have not
approved or disapproved of our common stock, or determined if this
prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
The
date of this prospectus is June 2, 2020.
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ABOUT THIS PROSPECTUS
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GLU MOBILE INC.
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RISK FACTORS
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SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS
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USE OF PROCEEDS
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DESCRIPTION OF COMMON STOCK
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PLAN OF DISTRIBUTION
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LEGAL MATTERS
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EXPERTS
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INFORMATION INCORPORATED BY REFERENCE
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WHERE YOU CAN FIND ADDITIONAL INFORMATION
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We are
responsible for the information contained and incorporated by
reference in this prospectus, in any applicable prospectus
supplement, and in any related free writing prospectus we prepare
or authorize. We have not authorized anyone to give you any other
information, and we take no responsibility for, and can provide no
assurance as to the reliability of, any other information that
others may give you. If you are in a jurisdiction where offers to
sell, or solicitations of offers to purchase, the common stock
offered by this document are unlawful, or if you are a person to
whom it is unlawful to direct these types of activities, then the
offer presented in this document does not extend to you. The
information appearing or incorporated by reference in this
prospectus, any applicable prospectus supplement, and any related
free writing prospectus, is accurate only as of the date thereof,
regardless of the time of delivery of this prospectus, any
applicable prospectus supplement, or any related free writing
prospectus, or of any sale of our common stock. Our business,
financial condition, and results of operations may have changed
since those dates. It is important for you to read and consider all
the information contained in this prospectus and in any applicable
prospectus supplement, including the documents incorporated by
reference herein or therein, in making your investment
decision.
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ABOUT THIS PROSPECTUS
This prospectus
is part of an automatic shelf registration statement on
Form S-3 that we filed with the Securities and Exchange
Commission ("SEC") as a "well-known seasoned issuer" as defined in
Rule 405 under the Securities Act of 1933, as amended
("Securities Act"). We may sell common stock described in this
prospectus in one or more offerings. There is no limit on the
aggregate amount of common stock we may offer pursuant to the
registration statement of which this prospectus is a part. This
prospectus provides you with a general description of our common
stock. Each time we offer our common stock, we will provide a
prospectus supplement that will describe the amounts, prices, and
other terms of the common stock. The applicable prospectus
supplement may also add, update, or change information contained in
this prospectus. If there is any inconsistency between the
information in this prospectus and any applicable prospectus
supplement, you should rely on the information in the applicable
prospectus supplement. You should carefully read this prospectus,
any prospectus supplement, information incorporated by reference,
and any related free writing prospectus.
The
registration statement of which this prospectus is a part,
including the exhibits to the registration statement, provides
additional information about us and our common stock. Wherever
references are made in this prospectus to information that will be
included in a prospectus supplement, to the extent permitted by
applicable law, rules, or regulations, we may instead include such
information or add, update, or change the information contained in
this prospectus by means of a post-effective amendment to the
registration statement of which this prospectus is a part, through
filings we make with the SEC that are incorporated by reference
into this prospectus, or by any other method as may then be
permitted under applicable law, rules, or regulations. The
registration statement, including the exhibits to the registration
statement and any post-effective amendment thereto, can be obtained
from the SEC, as described under the heading "Where You Can Find
Additional Information."
GLU MOBILE INC.
Glu Mobile
develops, publishes and markets a portfolio of free-to-play mobile
games designed to appeal to a broad cross section of users who
download and make purchases within our games through
direct-to-consumer digital storefronts, such as the Apple App
Store, Google Play Store, and others. Free-to-play games are games
that a player can download and play for free, but which allow
players to access a variety of additional content and features for
a fee and to engage with various advertisements and offers that
generate revenue for us. We have a portfolio of compelling games
based on our own intellectual property such as Cooking Dash, Covet Fashion, Deer Hunter, Design
Home and Diner
DASH Adventures, as well as games based
on or significantly incorporating third party licensed brands
including Disney Sorcerer's
Arena, Kim
Kardashian: Hollywood and
MLB Tap Sports Baseball. We are headquartered in San Francisco, California, with
another U.S. office in Foster City, California, and international
locations in Toronto, Canada and Hyderabad, India.
We were
incorporated in Nevada in May 2001 as Cyent Studios, Inc. and
changed our name to Sorrent, Inc. later that year. In November
2001, we incorporated a wholly owned subsidiary in California, and,
in December 2001, we merged the Nevada corporation into this
California subsidiary to form Sorrent, Inc., a California
corporation. In May 2005, we changed our name to Glu
Mobile Inc. In November 2006, Glu Mobile Inc.
reincorporated in the state of Delaware. In March 2007, we
completed our initial public offering and our common stock is
traded on the Nasdaq Global Select Market under the symbol "GLUU."
Unless expressly indicated or the context requires otherwise, the
terms "Glu," "Glu Mobile," "company," "we," "us," and "our" in this
prospectus, in any applicable prospectus supplement, or the
documents incorporated by reference refer to Glu Mobile Inc.,
a Delaware corporation, and, where appropriate, its wholly-owned
subsidiaries. The term "Glu" may also refer to our products,
regardless of the manner in which they are accessed. Our principal
executive offices are located at 875 Howard Street, Suite 100,
San Francisco, California 94103, and our telephone
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number is
(415) 800-6100. Our website address is www.glu.com. The
information on or that can be accessed through our website is not
part of this prospectus.
Glu, the Glu
logo, all of our product names and our other registered or common
law trademarks, service marks, or trade names appearing in this
prospectus, the registration statement of which this prospectus is
a part, any applicable prospectus supplement or free writing
prospectus or the documents incorporated by reference are the
property of Glu. Other trademarks, service marks, or trade names
appearing in this prospectus or the documents incorporated by
reference are the property of their respective owners.
RISK FACTORS
Investing in
our common stock involves a high degree of risk. Before making a
decision to invest in our common stock, in addition to the other
information contained in this prospectus, in any applicable
prospectus supplement or free writing prospectus, or incorporated
by reference herein or therein, you should carefully consider the
risks described under "Risk Factors" contained in the applicable
prospectus supplement and any related free writing prospectus, and
discussed under "Risk Factors" contained in our most recent Annual
Report on Form 10-K and in our most recent Quarterly Report on
Form 10-Q, as well as any amendments thereto, which are
incorporated by reference into this prospectus in their entirety,
together with other information included in this prospectus, the
documents incorporated by reference, and any free writing
prospectus that we may authorize for use in connection with a
specific offering. See "Where You Can Find Additional
Information."
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SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus
and any prospectus supplement, including the documents incorporated
by reference herein and therein, contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements contained in or incorporated by reference
in this prospectus and any prospectus supplement other than
statements of historical fact, including statements regarding our
future operating results and financial position, our business
strategy and plans, and our objectives for future operations, are
forward-looking statements. The words "may," "will," "should,"
"estimates," "predicts," "potential," "continue," "strategy,"
"believes," "anticipates," "plans," "expects," "intends" and
similar expressions are intended to identify forward-looking
statements. Our actual results and the timing of certain events may
differ significantly from the results discussed in the
forward-looking statements. These forward-looking statements are
subject to a number of risks, uncertainties, and assumptions,
including those described in the "Risk Factors" sections
incorporated by reference herein. Moreover, we operate in a very
competitive environment. 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 future events and trends
discussed in this prospectus and any prospectus supplement may not
occur and actual results could differ materially and adversely from
those anticipated or implied in the forward-looking
statements.
You should not
rely upon forward-looking statements as predictions of future
events. The events and circumstances reflected in the
forward-looking statements may not be achieved or occur. Although
we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results,
levels of activity, performance, or achievements. Although we
undertake no obligation to revise or update any forward-looking
statements, whether as a result of new information, future events
or otherwise, you are advised to review any additional disclosures
we make in the documents we subsequently file with the SEC that are
incorporated by reference in this prospectus and any prospectus
supplement. See "Where You Can Find Additional
Information."
In addition,
statements that "we believe" and similar statements reflect our
beliefs and opinions on the relevant subject. These statements are
based upon information available to us as of the date of this
prospectus, and while we believe such information forms a
reasonable basis for such statements, such information may be
limited or incomplete, and our statements should not be read to
indicate that we have conducted an exhaustive inquiry into, or
review of, all relevant information. These statements are
inherently uncertain and investors are cautioned not to unduly rely
upon these statements as predictions of future events.
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USE OF PROCEEDS
Unless
otherwise specified in the applicable prospectus supplement and/or
any applicable free writing prospectus, we intend to use the net
proceeds to us from the sale of the common stock offered hereby for
working capital and other general corporate purposes; however, we
do not currently have any specific uses of the net proceeds
planned. Additionally, we may use a portion of the net proceeds to
us for acquisitions of or investments in complementary businesses,
technologies, or other assets. Pending other uses, we intend to
invest the net proceeds to us in investment-grade, interest-bearing
securities such as money market funds, certificates of deposit, or
direct or guaranteed obligations of the U.S. government, or hold as
cash. We cannot predict whether the net proceeds invested will
yield a favorable return. Our management will have broad discretion
in the application of the net proceeds we receive from the sale of
the common stock offered hereby, and investors will be relying on
the judgment of our management regarding the application of the net
proceeds.
DESCRIPTION OF COMMON STOCK
The following
summary of the terms of our common stock is based upon our restated
certificate of incorporation and our amended and restated bylaws.
The summary is not complete, and is qualified by reference to our
restated certificate of incorporation and our amended and restated
bylaws, which are filed as
Exhibit 3.02 on our Form S-1/A filed on February 14, 2007 and
Exhibit 3.01 on our Form 8-K filed on April 28,
2020, respectively, and each are incorporated by reference
herein. We encourage you to read our restated certificate of
incorporation, our amended and restated bylaws and the applicable
provisions of the Delaware General Corporation Law, or DGCL, for
additional information.
General
We have
authorized 250,000,000 shares of common stock, $0.0001 par value
per share, under our restated certificate of
incorporation.
Dividend Rights
Subject to
preferences that may apply to any shares of preferred stock
outstanding at the time, the holders of our common stock are
entitled to receive dividends out of funds legally available if our
board of directors, in its discretion, determines to issue
dividends and then only at the times and in the amounts that our
board of directors may determine.
Voting Rights
Each holder of
our common stock is entitled to one vote for each share of common
stock held on all matters properly submitted to a vote of
stockholders. Cumulative voting for the election of directors is
not provided for in our restated certificate of incorporation,
which means that the holders of a majority of our shares of common
stock voted can elect all of the directors then standing for
election. Our restated certificate of incorporation establishes a
classified board of directors that is divided into three classes
with staggered three-year terms. Only one class of directors will
be elected at each annual meeting of our stockholders, with the
other classes continuing for the remainder of their respective
three-year terms.
We have entered
into a voting and standstill agreement with Tencent Holdings
Limited, through its controlled affiliate, Red River Investment
Limited (collectively, "Tencent"), pursuant to which Tencent has
the right to appoint a member of our board of directors, and has
agreed to certain restrictions on its voting power. In addition,
Tencent and its affiliates are required to cast their collective
voting power "for" the matter being voted upon for certain
specified corporate matters that are recommended by a majority of
the board of directors that includes at least 50% of the Board's
non-executive directors (the "Majority Recommendation") or for any
matter for which the director appointed by Tencent has
voted
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in favor and the board
also recommended a vote in favor. If Tencent holds more than 20% of
the outstanding common stock, it has agreed to vote any excess over
the 20% in accordance with the Majority Recommendation for any
matter.
No Preemptive or Similar Rights
Our common
stock is not entitled to preemptive rights, and is not subject to
conversion, redemption or sinking fund provisions.
Right to Receive Liquidation Distributions
Upon our
liquidation, dissolution or winding-up, the assets legally
available for distribution to our stockholders would be
distributable ratably among the holders of our common stock and any
participating preferred stock outstanding at that time after
payment of liquidation preferences, if any, on any outstanding
shares of our preferred stock and payment of other claims of
creditors.
Registration Rights of One of Our Stockholders
Tencent holds
approximately 21,000,000 shares of our common stock and has
registration rights. Under the registration rights agreement (the
"Registration Rights Agreement"), between us and Tencent, we have
agreed to file registration statements under the Securities Act
within 45 days of any request made by Red River Investment
Limited, and upon such request and subject to minimum size and
other conditions (such as a customary lock-up provision), we will
be required to use all reasonable efforts to have such registration
statement declared effective by the SEC within 120 days after
such request. We are not required to effect more than two such
registrations. Red River Investment Limited also has customary
piggyback rights. We are generally obligated to bear the expenses,
other than underwriting discounts, brokers' discounts and
commissions and Tencent counsel fees, of these
registrations.
Anti-Takeover Provisions
The provisions
of Delaware law, our restated certificate of incorporation, and our
amended and restated bylaws could have the effect of delaying,
deferring, or discouraging another person from acquiring control of
our company. These provisions, which are summarized below, may have
the effect of discouraging takeover bids.
We are subject
to the provisions of Section 203 of the DGCL regulating
corporate takeovers. In general, DGCL Section 203 prohibits a
publicly held Delaware corporation from engaging in a business
combination with an interested stockholder for a period of three
years following the date on which the person became an interested
stockholder unless:
- •
- prior to the date of
the transaction, the board of directors of the corporation approved
either the business combination or the transaction which resulted
in the stockholder becoming an interested stockholder;
- •
- the interested
stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced,
excluding for purposes of determining the voting stock outstanding,
but not the outstanding voting stock owned by the interested
stockholder, (i) shares owned by persons who are directors and
also officers and (ii) shares owned by employee stock plans in
which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer; or
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- •
- at or subsequent to
the date of the transaction, the business combination is approved
by the board of directors of the corporation and authorized at an
annual or special meeting of stockholders, and not by written
consent, by the affirmative vote of at least 66.67% of the
outstanding voting stock that is not owned by the interested
stockholder.
Generally, a
business combination includes a merger, asset or stock sale, or
other transaction or series of transactions together resulting in a
financial benefit to the interested stockholder. An interested
stockholder is a person who, together with affiliates and
associates, owns or, within three years prior to the determination
of interested stockholder status, did own 15% or more of a
corporation's outstanding voting stock. We expect the existence of
this provision to have an anti-takeover effect with respect to
transactions our board of directors does not approve in advance. We
also anticipate that DGCL Section 203 may also discourage
attempts that might result in a premium over the market price for
the shares of common stock held by stockholders.
Restated Certificate of Incorporation and Amended and Restated
Bylaws Provisions
Our restated
certificate of incorporation and our amended and restated bylaws
include a number of provisions that could deter hostile takeovers
or delay or prevent changes in control of our management team,
including the following:
- •
- Board of Directors
Vacancies. Our restated
certificate of incorporation and amended and restated bylaws
authorize only our board of directors to fill vacant directorships,
including newly created seats. In addition, the number of directors
constituting our board of directors is permitted to be set only by
a resolution adopted by a majority vote of our entire board of
directors. These provisions prevent a stockholder from increasing
the size of our board of directors and then gaining control of our
board of directors by filling the resulting vacancies with its own
nominees. This makes it more difficult to change the composition of
our board of directors but promotes continuity of
management.
- •
- Classified
Board. Our restated
certificate of incorporation provides that our board of directors
is classified into three classes of directors. The existence of a
classified board of directors could discourage a third-party from
making a tender offer or otherwise attempting to obtain control of
us as it is more difficult and time consuming for stockholders to
replace a majority of the directors on a classified board of
directors.
- •
- Directors Removed
Only for Cause. Our restated
certificate of incorporation provides that stockholders may remove
directors only for cause.
- •
- Supermajority
Requirements for Amendments of Our Amended and Restated
Bylaws. Our amended and
restated bylaws provide that the affirmative vote of holders of at
least two-thirds of the voting power of the Corporation's
outstanding voting stock then entitled to vote at an election of
directors is required to amend certain provisions of our amended
and restated bylaws, including provisions relating to stockholder
proposals at annual and special meetings of the stockholders, the
size of the board, removal of directors and the Delaware forum
selection provision of our amended and restated bylaws.
- •
- Stockholder
Action; Special Meeting of Stockholders. Our restated certificate of incorporation and our
amended and restated bylaws provide that special meetings of our
stockholders may be called only by a majority of our board of
directors, the chairman of our board of directors, our lead
independent director, our chief executive officer, or our
president, thus prohibiting a stockholder from calling a special
meeting. Our restated certificate of incorporation further provides
that our stockholders may not take action by written consent, but
may only take action at annual or special meetings of our
stockholders. As a result, holders of our capital stock would not
be able to amend our amended and restated bylaws or remove
directors without a meeting
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of our stockholders
called in accordance with our restated certificate of
incorporation. These provisions might delay the ability of our
stockholders to force consideration of a proposal or for
stockholders to take any action, including the removal of
directors.
- •
- Advance Notice
Requirements for Stockholder Proposals and Director
Nominations. Our amended and
restated bylaws provide advance notice procedures for stockholders
seeking to bring business before our annual meeting of stockholders
or to nominate candidates for election as directors at our annual
meeting of stockholders. Our amended and restated bylaws also
specify certain requirements regarding the form and content of a
stockholder's notice. These provisions might preclude our
stockholders from bringing matters before our annual meeting of
stockholders or from making nominations for directors at our annual
meeting of stockholders if the proper procedures are not followed.
We expect that these provisions might also discourage or deter a
potential acquirer from conducting a solicitation of proxies to
elect the acquirer's own slate of directors or otherwise attempting
to obtain control of our company.
- •
- No Cumulative
Voting. The DGCL provides that
stockholders are not entitled to the right to cumulate votes in the
election of directors unless a corporation's certificate of
incorporation provides otherwise. Our restated certificate of
incorporation and amended and restated bylaws do not provide for
cumulative voting.
- •
- Issuance of
Undesignated Preferred Stock. Our board of directors has the authority, without
further action by the stockholders, to issue up to 5,000,000 shares
of undesignated preferred stock with rights and preferences,
including voting rights, designated from time to time by our board
of directors. The existence of authorized but unissued shares of
preferred stock enables our board of directors to render more
difficult or to discourage an attempt to obtain control of us by
means of a merger, tender offer, proxy contest, or other
means.
- •
- Choice of
Forum. Our amended and
restated bylaws provide that the Court of Chancery of the State of
Delaware is the exclusive forum for any derivative action or
proceeding brought on our behalf, any action asserting a breach of
fiduciary duty, any action asserting a claim against us arising
pursuant to the DGCL, our restated certificate of incorporation, or
our amended and restated bylaws, or any action asserting a claim
against us that is governed by the internal affairs doctrine. In
addition, our amended and restated bylaws include a provision
designating the federal district courts of the United States as the
exclusive jurisdiction for any litigation arising under the
Securities Act.
Exchange Listing
Our common
stock is listed on The Nasdaq Global Select Market under the symbol
"GLUU."
Transfer Agent and Registrar
The transfer
agent and registrar for our common stock is American Stock
Transfer & Trust Company, LLC.
PLAN OF DISTRIBUTION
We may offer
and sell our common stock being offered hereby in one or more of
the following ways from time to time:
- •
- through
agents;
- •
- to or through
underwriters;
- •
- on any national
securities exchange or quotation service on which the common stock
may be listed or quoted at the time of sale;
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- •
- in the
over-the-counter market;
- •
- in transactions other
than on these exchanges or systems or in the over-the-counter
market;
- •
- in "at the market
offerings," within the meaning of Rule 415(a)(4) under the
Securities Act, to or through a market maker or into an existing
trading market, on an exchange or otherwise;
- •
- through the writing
or settlement of options or other hedging transactions, whether
through an options exchange or otherwise;
- •
- ordinary brokerage
transactions and transactions in which the broker-dealer solicits
purchasers;
- •
- block trades in which
the broker-dealer will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to
facilitate the transaction;
- •
- purchases by a
broker-dealer as principal and resale by the broker-dealer for its
account;
- •
- an exchange
distribution in accordance with the rules of the applicable
exchange;
- •
- directly by us or by
selling stockholders to purchasers, including through a specific
bidding, auction or other process;
- •
- privately negotiated
transactions;
- •
- a combination of any
of the above methods of sale; and
- •
- through any other
method permitted pursuant to applicable law and described in a
prospectus supplement.
We will
identify the specific plan of distribution, including any
underwriters, dealers, agents, or other purchasers, persons, or
entities and any applicable compensation and/or indemnification,
any over-allotment options by the underwriters, and a brief
description of any passive market making that any underwriter or
any selling group members intend to engage in and any transactions
that any underwriter intends to conduct that stabilizes, maintains
or otherwise affects the market price of the common stock, together
in a prospectus supplement, in an amendment to the registration
statement of which this prospectus is a part, or in other filings
we make with the SEC under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which are incorporated by
reference.
LEGAL MATTERS
Unless
otherwise stated in an applicable prospectus supplement,
Fenwick & West LLP, Mountain View, California, will
provide us with an opinion as to the legality of the common stock
offered under this prospectus. Counsel representing any
underwriters, dealers, agents, will be named in the applicable
prospectus supplement.
EXPERTS
The financial
statements and management's assessment of the effectiveness of
internal control over financial reporting (which is included in
Management's Report on Internal Control over Financial Reporting)
incorporated in this Prospectus by reference to the
Annual Report on Form 10-K for the year ended
December 31, 2019 have been so incorporated in reliance on
the report of PricewaterhouseCoopers LLP, an independent
registered public accounting firm, given on the authority of said
firm as experts in auditing and accounting.
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INFORMATION INCORPORATED BY
REFERENCE
The following
documents filed with the SEC are hereby incorporated by reference
in this prospectus:
- •
-
our Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, filed with the SEC on February 28,
2020;
- •
- the portions of our
Definitive Proxy Statement on Schedule 14A, filed with the SEC
on April 28, 2020, incorporated by reference in
Part III of the
Annual Report on Form 10-K for the fiscal year ended
December 31, 2019;
- •
-
our Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 2020, filed with the SEC on May 11,
2020;
- •
-
our Current Report on Form 8-K filed with the SEC on
April 28, 2020; and
- •
-
the description of our common stock as set forth in our
registration statement on Form 8-A (File No. 001-33368),
filed with the SEC on March 16, 2007, pursuant to
Section 12(b) of the Exchange Act, including any amendments or
reports filed for the purpose of updating such
description.
All reports and
other documents subsequently filed by us pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after
the date of this prospectus and prior to the termination of the
offering of the common stock hereunder shall be deemed to be
incorporated by reference in this prospectus and to be part hereof
from the date of filing of such reports and other
documents.
Notwithstanding
the statements in the preceding paragraphs, no document, report, or
exhibit (or portion of any of the foregoing) or any other
information that we have "furnished" or may in the future "furnish"
to the SEC pursuant to the Exchange Act shall be incorporated by
reference into this prospectus.
We hereby
undertake to provide without charge to each person, including any
beneficial owner, to whom a copy of this prospectus is delivered,
upon written or oral request of any such person, a copy of any or
all of the information that has been or may be incorporated by
reference in this prospectus, other than exhibits to such
documents, unless such exhibits have been specifically incorporated
by reference thereto. Requests for such copies should be directed
to our Investor Relations department, at the following
address:
Glu
Mobile Inc.
875 Howard Street, Suite 100
San Francisco, California 94103
WHERE YOU CAN FIND ADDITIONAL
INFORMATION
We file annual,
quarterly, and special reports and other information with the SEC.
The SEC maintains an Internet web site that contains reports,
proxy, and information statements and other information regarding
registrants like us that file electronically with the SEC. The
address of the site is www.sec.gov. Our Internet address is
www.glu.com and our investor relations website is located at
www.glu.com/investors. We make available free of charge, on or
through our investor relations website, annual reports on
Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K, proxy statements, and amendments to those
reports filed or furnished pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act as soon as reasonably practicable
after we electronically file such material with, or furnish it to,
the SEC. Any internet addresses provided in this prospectus or any
prospectus supplement are for information only and are not intended
to be hyperlinks. In addition, the
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information on or
available through our website is not a part of, and is not
incorporated or deemed to be incorporated by reference in, this
prospectus or any prospectus supplement.
We have not
authorized anyone to provide you with information different from
that contained in this prospectus or any prospectus supplement. The
common stock offered under this prospectus or any prospectus
supplement are offered only in jurisdictions where offers and sales
are permitted. The information contained in this prospectus and any
prospectus supplement is accurate only as of the date of this
prospectus or the prospectus supplement, as the case may be,
regardless of the time of delivery of this prospectus, a prospectus
supplement, or any sale of our common stock.
This prospectus
constitutes a part of a registration statement we filed with the
SEC under the Securities Act. This prospectus does not contain all
of the information set forth in the registration statement, certain
parts of which are omitted in accordance with the rules and
regulations of the SEC. For further information with respect to us
and the offerings made under this prospectus, reference is hereby
made to the registration statement. Statements contained herein
concerning any document filed as an exhibit are not necessarily
complete, and, in each instance, reference is made to the copy of
such document filed as an exhibit to the registration statement.
Each such statement is qualified in its entirety by such
reference.
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15,000,000 Shares

Glu
Mobile Inc.
Common
Stock
Prospectus Supplement
June 3, 2020
Goldman Sachs & Co. LLC
Morgan Stanley
UBS Investment Bank
Cowen
Wedbush Securities
Roth Capital Partners