XML 33 R15.htm IDEA: XBRL DOCUMENT v3.22.0.1
Commitment and Contingencies
 12 Months Ended
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]  
Commitment and Contingencies Commitment and Contingencies
Purchase Obligations
The Company has non-cancelable purchase commitments of $6.7 million as of December 31, 2021, primarily related to software license fees and co-location facilities and services, of which $4.4 million is expected to be paid in 2022, $2.2 million in 2023 and $0.1 million in 2024.
Operating Leases
The Company leases its office facilities in the United States, United Kingdom, Singapore and Australia under non-cancelable agreements that expire at various dates through 2025. As of December 31, 2021 and 2020, deferred rent was $2.6 million and $3.1 million, respectively. Rent expense, including common area maintenance charges, related to these facility leases was $2.9 million, $2.8 million and $3.0 million, for 2021, 2020 and 2019, respectively.
Future minimum lease payments by year under non-cancelable operating leases as of December 31, 2021 are as follows (in thousands):
2022$2,633 
20232,844 
20242,789 
20252,272 
Total future minimum lease payments$10,538 
Contingencies
The Company has agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines, and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by the Company, arising out of that person’s services as the Company’s director or officer or that person’s services provided to any other company or enterprise at the Company’s request. The Company maintains director and officer insurance coverage that may enable the Company to recover a portion of any future amounts paid.
FASB ASC 450-20, Contingencies, sets forth the rules for accounting for uncertain tax positions for taxes not based on income. When a loss contingency exists, the likelihood of the incurrence of the liability can range from probable to remote. The Company believes it is reasonably possible that a loss will result from the sales and use tax assessments in the range of zero to $0.4 million. The Company has not recorded an accrual as of December 31, 2021 and 2020.
Legal Proceedings
The Company, its Chief Executive Officer, its Chief Financial Officer, the members of its Board of Directors and the underwriters that participated in the Company’s IPO are named as defendants in two putative class actions, captioned Douvia v. ON24, Inc., et al., 3:21-cv-08578 (filed November 3, 2021) and Goemer v. ON24, Inc., et al., 3:21-cv-08744 (filed November 10,
2021), that are currently pending in the United States District Court for the Northern District of California. The complaints purport to assert claims on behalf of all persons and entities that purchased, or otherwise acquired, the Company’s common stock issued in connection with the Company’s IPO. The complaints allege that the Company’s registration statement and prospectus contained untrue statements of material fact and/or omitted material facts about ON24’s growth and customer base. Plaintiffs seek, among other things, an award of damages and attorneys’ fees and costs. On February 3, 2022, the Court issued an order consolidating the cases and appointing a lead plaintiff. ON24 believes that the allegations in the lawsuits are without merit. The Company is unable to reasonably estimate a possible loss or range of possible loss, if any, arising from this matter at this early stage. Accordingly, no accrued litigation expense has been recorded in the accompanying consolidated financial statements.
In the ordinary course of business, the Company may be subject from time to time to various proceedings, lawsuits, disputes or claims. Although the Company cannot predict with assurance the outcome of any litigation, the Company does not believe there are currently any actions, other than those described in the prior paragraph, that if resolved unfavorably, would have a material impact on its financial condition, results of operations or cash flows.