You need to learn this part at the side of the Condensed Consolidated
Monetary Statements and associated Notes to Condensed Consolidated Monetary
Statements included in Half I. Merchandise 1 of this Quarterly Report on Type 10-Q, and
our Annual Report on Type 10-Okay. Until in any other case said or because the context
in any other case requires, references to "the Firm," "we," "us," "our," "it," and
related references consult with BTRS Holdings Inc., a Delaware company, and its
consolidated subsidiaries. References to the "Merger" have the that means outlined
in Word 1 - Group and Nature of Enterprise in our Notes to Condensed
Consolidated Monetary Statements.

Sure figures, similar to rates of interest and different percentages, on this part
have been rounded for ease of presentation. Share figures included on this
part haven't in all instances been calculated on the premise of such rounded
figures however on the premise of such quantities previous to rounding. Because of this,
proportion quantities on this part might fluctuate barely from these obtained by
performing the identical calculations utilizing the figures in our Condensed Consolidated
Monetary Statements or Notes to Condensed Consolidated Monetary Statements.
Sure different quantities that seem on this part might equally not sum as a consequence of
rounding.

Ahead Wanting Statements

This dialogue accommodates forward-looking statements throughout the that means of
Part 27A of the Securities Act of 1933, as amended and Part 21E of the
Securities Change Act of 1934, as amended (the "Change Act").
Ahead-looking statements are recognized by phrases similar to "imagine," "might,"
"might," "will," "estimate," "proceed," "anticipate," "intend," "search," "plan,"
"count on," "ought to," "would," "doubtlessly," or the unfavorable of those phrases or
related expressions on this Quarterly Report on Type 10-Q. You ought to learn these
statements fastidiously as a result of they talk about future expectations, include
projections of future outcomes of operations or monetary situation, or state
different "forward-looking" info. These statements relate to our future
plans, goals, expectations, intentions, and monetary efficiency and the
assumptions that underlie these statements, and our skill to safe the
required regulatory and stockholder approvals for the Merger and meet the
relevant closing situations of the Merger and the time therefor, if in any respect.
These forward-looking statements are topic to sure dangers and uncertainties
that might trigger a distinction embrace, however are usually not restricted to, these mentioned
underneath the caption "Danger Components" in Half I. Merchandise 1A of our Annual Report on Type
10-Okay and this Quarterly Report on Type 10-Q. Ahead-looking statements are
primarily based on administration's present beliefs and assumptions and primarily based on info
at the moment out there. These statements, like all statements on this Quarterly
Report on Type 10-Q, communicate solely as of their date, and we undertake no obligation
to replace or revise these statements in mild of future developments, besides as
required by legislation.

Enterprise Overview

We're a number one supplier of cloud-based software program and built-in cost
processing options that simplify and automate business-to-business ("B2B")
commerce. For companies around the globe, there's a excessive diploma of value, threat,
and complexity in well timed receiving money and recognizing income; We clear up these
issues by addressing each side of the cost equation, delivering an
order-to-cash platform that spans credit-to-cash utility and assortment,
built-in with an open community connecting the B2B funds ecosystem.

Our answer is on the forefront of the continued digital transformation of
accounts receivable ("AR"), offering mission-critical options that span
credit score decisioning and monitoring, on-line ordering, invoicing, money utility,
and collections. Our Enterprise Funds Community ("BPN") connects B2B patrons and
sellers to a group of banks, FinTechs, and card manufacturers. Billtrust automates
funds from digital lockbox to ultimate posting in an ERP, bridging receivables
with patrons' cost processes so sellers can handle money stream extra
strategically and make it simpler for purchasers to do enterprise with them.

Clients use our software program as a service ("SaaS") platform to transition from
costly paper invoicing and examine acceptance to environment friendly digital billing
and funds, simplifying and accelerating transactions. Our scalable platform
lets our clients maximize straight-through processing of invoicing, funds,
and money utility whereas additionally decreasing headcount. The machine studying
capabilities and guidelines engine inside our SaaS platform repeatedly evolve to
clear up order-to-cash challenges and ship the next price of touchless
transactions. We work with industry-leading safety companions and take proactive
steps to maintain knowledge safe from threats. Collectively our platform reduces the
complexity of B2B commerce for our clients.

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Our safe, proprietary platform affords clients a number of methods to current
invoices (on-line, e mail, AP portal, and print/mail) and obtain funds (credit score
card, automated clearing home ("ACH"), e mail, telephone and paper examine). Our
digital options ("eSolutions") workforce works intently with our clients to
transition their customers from paper invoices and funds to digital, which
leads to accelerated financial savings, quicker realization of money, a decreased
environmental footprint, and a greater person expertise. In flip, we profit from
margin enlargement and incremental income by the monetization of digital
funds. We assist clients prioritize which issues to unravel, usually assess
ROI, optimize the impression of digitization throughout processes, and drive extra worth
for his or her corporations, permitting AR groups to play a extra strategic function in shifting a
enterprise ahead.

We now have expanded our product attain and buyer base over the previous years and
scaled our enterprise operations in latest durations. Our complete revenues have been $146.3
million and $123.5 million for the 9 months ended September 30, 2022 and
2021, respectively. Because of our give attention to product growth and gross sales
and advertising, we've generated internet losses of $65.4 million and $44.7 million
for the 9 months ended September 30, 2022 and 2021, respectively.

Proposed Merger


On September 28, 2022, we entered into an Settlement and Plan of Merger (the
"Merger Settlement") with Bullseye FinCo, Inc., a Delaware company
("Guardian"), and Bullseye Merger Sub, Inc., a Delaware company and a direct,
wholly owned subsidiary of Guardian ("Merger Sub" and, along with Guardian, the
"Buying Events"), pursuant to which Merger Sub will, upon the phrases and
topic to the situations set forth within the Merger Settlement, merge with and into
us, and we'll survive such merger as a wholly-owned subsidiary of Guardian (the
"Merger") Guardian and Merger Sub are every affiliated with the EQT X Fund.

Topic to the phrases and situations set forth within the Merger Settlement, on the
efficient time of the Merger (the "Efficient Time"), every share of our Class 1
widespread inventory, $0.0001 par worth, and Class 2 widespread inventory, $0.0001 par worth
(apart from shares rolled over in accordance with the Merger Settlement, and
shares of our widespread inventory held by us as treasury inventory), issued and excellent
instantly previous to the Efficient Time (apart from dissenting shares) can be
cancelled and instantly transformed into the precise to obtain $9.50 in money,
with out curiosity and fewer any relevant withholding taxes.

The completion of the Merger is topic to a number of situations past our management
that will forestall, delay or in any other case adversely have an effect on its completion in a
materials approach, together with the approval of our stockholders, the expiration or
termination of relevant ready durations and the receipt of relevant
approvals or consents underneath antitrust and competitors legal guidelines and overseas
funding legal guidelines of sure jurisdictions. Assuming the satisfaction of the
remaining excellent situations set forth within the Merger Settlement, the Merger
is at the moment anticipated to shut within the fourth quarter of 2022 or first quarter of
2023. Nevertheless, we can not guarantee completion of the Merger by any specific date,
if in any respect or that, if accomplished, it will likely be accomplished on the phrases set forth in
the Merger Settlement.

If the Merger is consummated, our securities can be de-listed from the Nasdaq
International Choose Market and de-registered underneath the Securities Change Act of 1934
as quickly as practicable following the Efficient Time.

Underneath the phrases of the Merger Settlement, we could also be required to pay Guardian a
termination price of $50.2 million if the Merger Settlement is terminated underneath
sure specified circumstances, together with us terminating the Merger Settlement
to enter right into a definitive written settlement with respect to a superior proposal
that didn't consequence from a breach of the non-solicitation provisions. The Merger
Settlement moreover gives that Guardian pay us a termination price of
$100.5 million underneath sure specified circumstances.

Enterprise Mixture with South Mountain


On October 18, 2020, as amended on December 13, 2020, South Mountain, BT Merger
Sub I, Inc., a Delaware company and a direct, wholly owned subsidiary of
South Mountain ("First Merger Sub"), BT Merger Sub II, LLC, a Delaware restricted
legal responsibility firm and a direct, wholly owned subsidiary of South Mountain
("Second Merger Sub") and Issue Programs, Inc ("Legacy Billtrust"), entered into
a Enterprise Mixture Settlement (the "BCA"), pursuant to which (i) First Merger
Sub was merged with and into Legacy Billtrust (the "First BCA Merger"), with
Legacy Billtrust surviving the First Merger as a completely owned subsidiary of
South Mountain ("Surviving Company") and (ii) the Surviving Company
merged with and into Second Merger Sub (the "Second BCA Merger", and collectively
with the First BCA Merger, the "BCA Mergers"), with Second Merger Sub surviving
the Second Merger as a completely owned subsidiary of South Mountain, (such BCA
Mergers, collectively with the opposite transactions described within the BCA, the
"Enterprise Mixture").

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In reference to the execution of the Enterprise Mixture, on October 18,
2020, South Mountain entered into separate subscription agreements
("Subscription Agreements") with quite a lot of traders ("PIPE Traders"),
pursuant to which the PIPE Traders agreed to buy, and South Mountain offered
to the PIPE Traders, an combination of 20.0 million shares of South Mountain
Class A typical inventory, for a purchase order value of $10.00 per share and at an
combination buy value of $200.0 million, in a personal placement ("PIPE
Financing").

The Enterprise Mixture and PIPE Financing closed on January 12, 2021 (the "BCA
Closing Date"). The Enterprise Mixture was accounted for as a reverse
recapitalization in accordance with the commonly accepted accounting rules
in the USA of America ("U.S. GAAP"). Underneath this methodology of accounting,
South Mountain was handled because the "acquired" firm for monetary reporting
functions. For accounting functions, we have been the accounting acquirer within the
transaction and, consequently, the transaction was handled as a recapitalization
of Billtrust (i.e., a capital transaction involving the issuance of inventory by
South Mountain for the inventory of Legacy Billtrust). Accordingly, the property,
liabilities, and outcomes of operations of Legacy Billtrust grew to become the historic
monetary statements of "New Billtrust," which was renamed BTRS Holdings Inc.,
and South Mountain's property, liabilities, and outcomes of operations have been
consolidated with Legacy Billtrust starting on the BCA Closing Date. All
quantities of BTRS Holdings Inc. mirror the historic quantities of Legacy Billtrust
carried over at guide worth with no step up in foundation to truthful worth. After the
Enterprise Mixture, our Class 1 widespread inventory ("Widespread Inventory") started buying and selling on
the Nasdaq International Choose Market underneath the ticker image "BTRS".

Latest Developments

Acquisition of Order2Cash


On February 14, 2022, we acquired 100% of the excellent shares of Anachron
Beheer BV and subsidiaries, d/b/a Order2Cash ("Order2Cash"), a privately-held
firm headquartered in Amsterdam, the Netherlands. Order2Cash is a European
B2B order-to-cash platform supplier. Their enterprise buyer base, international
interoperability capabilities, and established connections to over 70 B2B and
business-to-government ("B2G") e-invoicing networks broaden the BPN's attain to
ship totally compliant and safe e-invoicing throughout a number of markets. The
acquisition is a part of our strategic plan to proceed increasing our bodily
presence within the European market whereas additionally enhancing our international invoicing and
funds capabilities. Pursuant to the phrases of the acquisition settlement, we paid
$59.5 million, internet of $0.4 million of acquired money.

Impairment of Proper of Use Belongings and Restructuring Fees


In the course of the first quarter of 2022, we accredited a strategic plan to optimize our
construction and prices associated to our leased amenities and print operations. As
a part of the plan, we accredited a proper work from wherever coverage for our
workers as a consequence of excessive curiosity in permitting workers to work remotely and
investments in our working environments and know-how enabling seamless
day-to-day execution and elevated productiveness throughout a distributed workforce.
Moreover, we closed one among our print areas because of the continued decline
in buyer print volumes and efficiencies gained by streamlining our print
operations. The general plan included vacating some or all of a number of of our
leased workplace amenities and one among our leased print operations amenities and
making them out there for sublease. We ceased utilizing all the facility house
outlined within the plan by March 31, 2022. Because of this, through the three months
ended March 31, 2022, we incurred $10.0 million of proper of use ("ROU") asset
impairments and $3.6 million of leasehold enchancment and stuck asset
impairments

Subsequently, we accredited an enlargement of the strategic plan to additional vacate
an extra portion of our leased workplace house. By September 30, 2022, we
ceased utilizing the leased facility house underneath the expanded plan. Because of this,
through the three months ended September 30, 2022, we incurred $3.3 million of
ROU asset impairments and $1.3 million of leasehold enchancment and stuck asset
impairments.

In calculating the impairment quantity, the truthful worth of every asset was
decided utilizing an revenue strategy primarily based on the current worth of future money
flows from precise or estimated sublease revenue. In instances the place a sublease has
not but been entered into, this strategy required the usage of sure estimates,
together with a reduction price, sublease rental charges, interval of emptiness, and
sublease incentives, which have been primarily based partly by native actual property {industry}
knowledge. For these subjective estimates primarily based on unobservable inputs, the truthful
worth of the property have been categorised in Degree 3 of the truthful worth hierarchy
(consult with Word 13 - Truthful Worth Measurements within the Notes to Condensed
Consolidated Monetary Statements). All impairment quantities have been recorded in
impairment and restructuring on the Condensed Consolidated Statements of
Operations.

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Moreover, in accordance with ASC 420, Exit or Disposal Value Obligations, we
acknowledged exit obligation prices associated to closing the print operations
facility, together with one-time worker severance advantages, contract termination
prices, and different prices related to exiting the power. These prices have been
recorded in impairment and restructuring on the Condensed Consolidated
Statements of Operations, and are allotted to our Print section. Complete prices
acknowledged through the 9 months ended September 30, 2022 weren't materials.

Sooner or later if we decide we now not intend to make the most of some or all of our
remaining leased facility house, we could also be required to report further
impairment or restructuring prices.

Affect of COVID-19 and Different Macroeconomic Occasions


Throughout 2021 and 9 months ended September 30, 2022, the COVID-19 pandemic did
not adversely impression us, as evidenced by the continued development in our
subscription and transaction revenues. Our focus stays on investing in our
merchandise and supporting our long-term development, together with international enlargement. Since
the beginning of the pandemic, we've continued to function regardless of the disruption
to a few of our buyer's operations. The pandemic has served to extend
consciousness and urgency round accelerating the digital transformation of accounts
receivable by our platform and choices which has helped keep away from vital
enterprise, bookings, or income disruptions to this point. Moreover, shifts from
in-person shopping for and conventional cost strategies (similar to money or examine) in the direction of
e-commerce and digital funds, and the associated enhance in shopper and B2B
demand for safer cost and supply options, have benefited us because it has
additional ingrained our platform in our clients' crucial day-to-day
order-to-cash operations. In response to the pandemic, we've modified a few of
our enterprise practices, similar to enabling and inspiring our workers to work
from wherever and establishing well being and security protocols in our places of work. We
proceed to observe the state of affairs and will take additional actions as could also be
required by authorities authorities or that we decide are in the very best
pursuits of our workers, clients, and companions.

As well as, the unfold of COVID-19 and its variants has contributed to a worldwide
slowdown of financial exercise, elevated unemployment, provide chain disruptions,
greater charges of inflation, greater rates of interest, elevated volatility in
overseas forex trade charges, and elevated volatility within the international capital
markets, amongst different macroeconomic occasions. We're unable to foretell the impression
the COVID-19 pandemic or different macroeconomic occasions could have on our future
outcomes of operations, liquidity, monetary situation, skill to entry capital
markets, and enterprise practices as a consequence of quite a few uncertainties, together with the
period, severity, and unfold of the virus and its variants, actions that will
be taken by authorities authorities, the impression to our workers, clients, and
companions, extended macroeconomic uncertainty, volatility, and disruption, and
varied different elements past our data or management. We proceed to observe
these conditions and will take additional actions as could also be required by authorities
authorities or that we decide are in the very best pursuits of our workers,
clients, and companions.

Key Components Affecting Our Efficiency


We imagine our efficiency and future development depends upon quite a lot of elements that
current vital alternatives, but in addition pose dangers and challenges, together with
these mentioned beneath and Half I. Merchandise 1A. "Danger Components" in our Annual Report
on Type 10-Okay and this Quarterly Report on Type 10-Q. For added info
associated to key efficiency metrics we use to guage the well being of our
enterprise, determine traits affecting our development, formulate targets and goals,
and make strategic choices, please see the part inside this Quarterly
Report on Type 10-Q titled "Key Efficiency Metrics". We imagine essentially the most
vital elements affecting our outcomes of operations embrace:

Funding in Know-how


Our purpose is to remodel the way in which companies ship and seize funds so as
to be the chief within the order-to-cash course of by digitizing areas together with
credit score decisioning, ordering, invoicing, funds, money utility, and
collections. We proceed to spend money on know-how and the digitizing of our
platforms. Additional, we proceed to spend money on sure inside initiatives
focused at enhancing inside processes and enhancing the effectivity, safety,
and scalability of our platforms. Our funding in know-how is anticipated to
have a optimistic impression on our long-term profitability and operations. We additionally
intend to proceed to guage strategic acquisitions and investments in
companies and applied sciences to drive product and market enlargement. Our future
success depends on our skill to efficiently develop, market, and promote
present and new merchandise.

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Acquisition of New Clients


We attain new clients by our confirmed go-to-market methods, which embrace
digital advertising campaigns, our direct gross sales drive, and partnerships with
monetary establishments and different complementary corporations. Our development relies upon in
half on our skill to amass new clients.

As of September 30, 2022, we had clients throughout all kinds of industries
and geographies, together with distributors of constructing supplies, electrical,
plumbing and know-how gear, healthcare, building, and shopper
merchandise, primarily positioned in North America. We proceed to spend money on our
gross sales, advertising, and go-to-market methods with a purpose to purchase clients in
our goal markets. Our advertising efforts are marketing campaign and content material pushed and
focused relying on the dimensions and {industry} of the client. Advertising and marketing
initiatives give attention to demand technology and embrace promotional exercise and with
an emphasis on on-line digital advertising packages (e.g., webinars, digital
occasions). We imagine there's a long-term alternative to broaden into giant, new
markets with suitable traits.

Our skill to draw new clients depends upon quite a lot of elements, together with
the effectiveness and pricing of our merchandise, our opponents' choices, and
efficiently executing our advertising efforts. Our monetary efficiency relies upon
largely on the general demand for our platforms, and acquisition of recent
clients is anticipated to have a optimistic impression on our long-term profitability
and operations.

Growth of Relationships with Present Clients


Our income development depends upon our clients' utilization of our vary of merchandise. Our
skill to monetize transactions and funds is a vital a part of our
enterprise mannequin. As we clear up clients' issues and change into extra built-in into
their each day companies, we see an elevated alternative to cross-sell to those
present clients. This technique is achieved by driving adoption of an present
answer throughout totally different divisions and/or subsidiaries of an present buyer
after which increasing the scope of service with further options. Our skill
to affect clients to course of extra transactions and funds on our
platforms could have a direct impression on our income.

Our income from present clients is usually dependable as a consequence of each the
pricing construction and the business-critical nature of the capabilities our merchandise
help for purchasers. We broaden inside our present buyer base by promoting
further modules on our platform, including divisions, rising transactions
per buyer by confirmed e-solutions, in addition to by efficient pricing
and packaging our companies. Our skill to extend gross sales to present clients
depends upon quite a lot of elements, together with our clients' satisfaction with our
options, competitors, pricing, and total modifications in our clients' spending
ranges with us.

Key Efficiency Metrics

We monitor the next key metric to assist us consider the well being of our
enterprise, determine traits affecting our development, formulate targets and goals,
and make strategic choices.


Complete Cost Quantity

Complete Cost Quantity (“TPV”) is the greenback worth of buyer cost
transactions that we course of on our platform throughout a specific interval. TPV is
made up of the 2 cost classes:

•TPV – ACH/Wire – funds made through our software program, portals, gateways, and our
Enterprise Funds Community which are processed through ACH or wire transfers.

•TPV – Card – funds by our software program, portals, gateways, and third-party
processors, and contains our cost facilitator (“PayFac”) clients.


To develop funds income from clients, we should ship software program platforms that
each simplify the method of accepting digital funds and streamline the
reconciliation of remittance knowledge. Moreover, as we enhance the digital
supply of invoices, the chance will increase that digitally delivered
invoices can be paid electronically by our clients' finish clients. The extra
clients use our software program platforms, the extra funds transactions they're
more likely to course of by our varied merchandise. TPV gives an vital
indication of the greenback worth of transactions that clients are finishing on
our platform and is useful to traders as an indicator of our skill to
generate income from our clients.

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                                      Three Months Ended                9 Months Ended
                                        September 30,                     September 30,
                                       2022             2021            2022             2021

                                                         (in billions)
        Complete Cost Quantity    $     28.3            $ 21.0      $     76.5           $ 54.9

        TPV - ACH/Wire                18.6              13.5            50.2             35.4
        TPV - Card              $      9.7            $  7.5      $     26.3           $ 19.5


The rise in TPV for the three and 9 months ended September 30, 2022
in comparison with the prior yr durations was primarily because of the addition of recent
clients on our PayFac platform, in addition to a rise in present buyer
transactions on each our card and ACH/Wire platforms (together with an enlargement of
our product platforms for ACH transactions).

Elements of Outcomes of Operations

Revenues

We generate income from the next sources: (1) Subscription, (2)
Transaction, (3) Skilled Companies, and (4) Reimbursable Prices.

Subscription Income


Subscription income primarily consists of contractually agreed upon charges to
present entry to our cloud-based SaaS platform and modules that automate
processes throughout the accounts receivable perform (together with digital bill
presentment, funds options, credit score decisioning and monitoring, money
utility, collections automation, and e-commerce).

Our subscription agreements don't present a buyer with the precise to take
possession of the software program, are usually non-cancellable, and don't include
normal rights of returns. Subscription agreements have an preliminary time period of 1
to a few years and are usually invoiced in annual installments upfront of
every year. After the preliminary time period, subscription agreements renew yearly and
are usually invoiced upfront of every renewal yr. In some instances,
subscriptions could also be billed on a quarterly or month-to-month foundation upfront.
Subscription companies are acknowledged ratably over the contractual time period of the
association, starting on the date the service is made out there to the
buyer.

Transaction Income


Transaction income consists of per-item processing charges charged at contracted
charges primarily based on the variety of envelopes, invoices delivered, funds processed,
or foundation factors on the quantity of bank card funds processed. Our transaction
charges are billed month-to-month primarily based on the quantity of things processed every month, at
the contractual price per merchandise processed. Transaction income is acknowledged at
the identical time because the transactions are processed.

Skilled Companies Income

Skilled companies income consists of implementation companies for brand spanking new
clients, or implementations of recent merchandise for present clients. It additionally
contains individually contracted venture companies offered to clients after
implementation.


Implementation companies are usually offered on a time and supplies foundation and
billed month-to-month primarily based on precise hours incurred. When our implementation companies
are usually not able to being distinct from the associated subscription service, they
are mixed with the subscription service and acknowledged over the time period of the
settlement. In these instances, because the preliminary contract with a buyer contains
each the subscription and implementation charges, and is due to this fact greater than
subscription renewal charges in subsequent years, the contract conveys a 'materials
proper' to the client (i.e., an possibility for the client to resume the contract
at a lower cost in relation to the preliminary contract value). Materials rights are
handled individually and are acknowledged over the interval which the precise is
anticipated to be exercised by a buyer.

Venture companies are thought-about separate and distinct from different merchandise or
companies bought and are acknowledged concurrently the companies are
offered.

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Reimbursable Prices

Reimbursable prices income consists primarily of quantities charged to our
clients for postage on printed and mailed invoices to their finish clients. The
associated revenues are recorded on a gross foundation, with an offsetting quantity
recorded as a value of income.

Value of Revenues

Prices of Subscription, Transaction, and Companies


Value of subscription, transaction, and companies consists primarily of
personnel-related prices, together with stock-based compensation expense, for our
buyer success, skilled companies, file, and cost operations groups,
print operations gear prices, prices straight attributed to processing
clients' transactions (similar to the price of printing and mailing invoices,
excluding postage), bills for processing funds (ACH and bank card),
direct and amortized prices for implementing and integrating our cloud-based
platforms with clients' techniques, cloud internet hosting and associated prices for the
infrastructure straight related to manufacturing platforms, lease and utilities
expense for our leased print operations amenities, and allotted overhead
prices. Value of subscription, transaction, and companies excludes depreciation and
amortization. We count on that value of subscription, transaction, and companies
will enhance in absolute {dollars}, however might fluctuate as a proportion of complete
revenues from interval to interval as we proceed to spend money on rising our enterprise.

Value of Reimbursable Prices


Value of reimbursable prices consists of charges for postage associated prices, primarily
paid to the United States Postal Service or third events related to
printed and mailed bill deliveries for our clients, and are recorded at no
incremental margin on reimbursable prices revenues.

Working Bills

Analysis and Improvement


Analysis and growth expense consists primarily of personnel-related
bills, together with stock-based compensation expense, incurred in growing and
engineering new merchandise or enhancing present merchandise, high quality assurance and
testing of recent and present product know-how, upkeep, and enhancement of
our present know-how and infrastructure, and allotted overhead prices. We
capitalize sure software program growth prices which are attributable to
growing new merchandise and including incremental performance to our platforms,
and amortize such prices over the estimated lifetime of the brand new product or
incremental performance, which is usually 4 years.

In accordance with U.S. GAAP, we expense a considerable portion of analysis and
growth bills as incurred. We count on our analysis and growth
bills to extend in absolute {dollars}, however they might fluctuate as a proportion
of complete revenues from interval to interval as we proceed to broaden our analysis
and growth workforce to develop new merchandise and product enhancements, as properly
as to help our rising infrastructure.

Gross sales and Advertising and marketing


Gross sales and advertising expense consists primarily of personnel-related bills,
together with stock-based compensation expense, gross sales commissions, advertising program
bills, travel-related bills, and prices to market and promote our platforms
by ads, advertising occasions, partnership preparations, direct
buyer acquisition, and allotted overhead prices. Gross sales commissions which are
incremental to acquiring buyer contracts are deferred and amortized on a
straight-line foundation over the estimated interval of the client relationship,
which is estimated to be 4 to 5 years.

Our gross sales and advertising efforts are targeted on rising income from the
acquisition of recent clients, the enlargement of subscription income from
present clients, and from facilitating elevated digital adoption and
ensuing digital processing exercise between our clients and their finish
clients. Gross sales and advertising bills might fluctuate from interval to interval
primarily based on quite a lot of elements, together with modifications within the broader financial
surroundings and our return on this spend.

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Common and Administrative


Common and administrative expense consists of personnel-related bills,
together with stock-based compensation expense, for our govt workforce, expertise
(human sources), finance, procurement, authorized and compliance, and different
administrative groups, facility prices (together with lease and utilities expense for
our leased workplace house, excluding these utilized in our print operations),
contingent consideration from acquisitions acknowledged as compensation expense,
and allotted overhead prices.

To help the expansion in our enterprise, our normal and administrative bills
will enhance over time. We count on to incur further normal and
administrative bills on account of working as a public firm, together with
bills to adjust to the foundations and laws relevant to corporations listed
on a nationwide securities trade, bills associated to compliance, and reporting
obligations pursuant to the foundations and laws of the SEC, in addition to greater
bills for director and officer insurance coverage, investor relations, and
skilled companies. We additionally count on to incur vital prices, bills and
charges for skilled companies and different transaction prices in reference to
the Merger. A cloth portion of those bills are payable by us whether or not or
not the Merger is accomplished. Because of this, we count on that our normal and
administrative bills will enhance in absolute {dollars}, however might fluctuate as
a proportion of complete revenues from interval to interval.

Depreciation and Amortization

Depreciation and amortization expense contains the prices related to
depreciating our owned furnishings and fixtures, pc gear, software program, and
know-how property, in addition to amortization of leasehold enhancements,
capitalized software program, and finite-lived intangible property.

Impairment and Restructuring

Impairment and restructuring expense consists of asset impairments, together with
these associated to ceasing use of leased amenities, prices related to
involuntary termination advantages offered to workers, sure contract
termination prices, and different prices related to exit or disposal actions.

Different Earnings (Expense)

Change in Truthful Worth of Monetary Devices


Change in truthful worth of monetary devices consists of modifications within the truthful
worth of fairness devices that don't meet the factors to be categorised as
fairness and contingent consideration from acquisitions (excluding preparations
acknowledged as compensation expense).

Curiosity Expense and Loss on Extinguishment of Debt


Curiosity expense and loss on extinguishment of debt consists of curiosity on any
excellent debt, amortization of related debt issuance prices, cost of
early termination charges, writing off unamortized debt reductions related to
repaying our excellent debt amenities previous to maturity, and curiosity expense
on finance leases.

Different Non-Working Earnings (Expense)

Different non-operating revenue (expense) consists of curiosity revenue earned on our
money, money equivalents, and marketable securities, overseas trade good points
(losses), and different non-operating revenue (expense).

Earnings Taxes


Earnings taxes consist primarily of revenue taxes associated to federal, state, and
overseas jurisdictions during which we conduct enterprise. We keep a full valuation
allowance on internet deferred tax property for our U.S. federal taxes and sure
overseas and state taxes as we've concluded that it isn't extra possible than not
that the deferred property can be utilized.

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Segments


Our operations are grouped into two reportable segments: (1) Software program and
Funds, and (2) Print. Our Chief Working Determination Maker ("CODM") is the
chief govt officer, who opinions discrete monetary and different info
offered for print companies and software program and cost companies for functions of
allocating sources and evaluating our monetary efficiency. The accounting
insurance policies utilized by the reportable segments are the identical as these utilized in our
Condensed Consolidated Monetary Statements.

•Software program and Funds - The Software program and Funds section primarily operates
utilizing software program and cloud primarily based companies, optimizes digital bill
presentment, digital funds, credit score decisioning, collections automation,
money utility and deduction administration, and e-commerce of B2B clients.

•Print – The Print section is primarily chargeable for printing buyer
invoices and optimizing the period of time and prices related to billing
clients through mail.


We consider section efficiency and allocate sources primarily based on revenues, value
of revenues, and gross revenue. The entire revenues proven within the reportable
segments is income from exterior clients; there isn't any income from
transactions with different working segments. Section bills embrace the direct
bills of every section's operations and exclude gross sales and advertising bills,
analysis and growth bills, normal and administrative bills,
depreciation and amortization, impairment and restructuring expense, stock-based
compensation expense, different revenue (expense), and sure different recognized prices
that we don't allocate to the segments for functions of evaluating their
operational efficiency.

Given the character of our enterprise, the quantity of property doesn’t present
significant perception into our working efficiency. Because of this, we don’t
determine or allocate property by reportable section and complete property are usually not
included in our section monetary info.

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Outcomes of Operations

The next tables set forth choose Condensed Consolidated Statements of
Operations knowledge, and such knowledge as a proportion of complete revenues, for every of
the durations indicated (in hundreds, besides percentages):

                                                     Three Months Ended                                                 9 Months Ended
                                                        September 30,                                                     September 30,
                                            2022                             2021                             2022                             2021
Revenues:
Subscription, transaction, and
companies                         $  42,508            83  %       $  32,732            79  %       $ 120,157            82  %       $  97,440            79  %
Reimbursable prices                   8,854            17              8,625            21             26,112            18             26,085            21
Complete revenues                      51,362           100             41,357           100            146,269           100            123,525           100
Value of revenues:
Value of subscription,
transaction, and companies           11,255            22              9,368            23             32,729            22             27,981           

23

Value of reimbursable prices           8,854            17              8,625            21             26,112            18             26,085           

21

Complete value of revenues,
excluding depreciation and
amortization                        20,109            39             17,993            44             58,841            40             54,066            44
Working bills:
Analysis and growth            15,943            31             13,453            33             46,922            32             35,716            29
Gross sales and advertising                 11,591            23             10,310            25             34,030            23             29,226            24
Common and administrative          19,613            38              9,838            24             49,426            34             32,766           

27

Depreciation and amortization        2,191             4              1,205             3              6,218             4              3,924           

3

Impairment and restructuring         4,636             9                  -             -             18,520            13                  -           

Complete working bills            53,974           105             34,806            84            155,116           106            101,632            82
Loss from operations               (22,721)          (44)           (11,442)          (28)           (67,688)          (46)           (32,173)          (26)
Different revenue (expense):
Change in truthful worth of
monetary devices                  360             1                  -             -                122             -             (9,995)           (8)
Curiosity expense and loss on
extinguishment of debt                 (15)            -                 (2)            -                (22)            -             (2,947)           (2)
Different non-operating revenue             916             2                277             1              1,171             1                521           

Complete different revenue (expense)         1,261             2                275             1              1,271             1            (12,421)          (10)
Loss earlier than revenue taxes           (21,460)          (42)           (11,167)          (27)           (66,417)          (45)           (44,594)          (36)
Earnings tax expense (profit)          (251)            -                 27
            -               (970)           (1)               130             -
Internet loss                         $ (21,209)          (41) %       $ (11,194)          (27) %       $ (65,447)          (45) %       $ (44,724)          (36) %


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Comparability of Outcomes of Operations for the Three Months Ended September 30,
2022 and 2021

Complete Revenues

                                                   Three Months Ended
                                                     September 30,                  Change
                                                   2022           2021         Quantity         %

                                                            (in hundreds)

Subscription and transaction charges $ 39,259 $ 30,376

$ 8,883 29 %

     Companies and different                             3,249         2,356    

893 38

Subscription, transaction, and companies 42,508 32,732

    9,776        30
     Reimbursable prices                             8,854         8,625           229         3
     Complete revenues                            $   51,362      $ 41,357      $ 10,005        24  %


The rise in complete revenues through the three months ended September 30, 2022
in comparison with the prior yr interval was primarily as a consequence of a $9.1 million enhance
in subscription and transaction charges within the Software program and Funds section as a
results of contracting with new clients, present clients buying
further merchandise, the acquisitions of iController BV ("iController") and
Order2Cash, and elevated transaction volumes, primarily from funds. The
development in transaction volumes was primarily associated to the expansion in variable
transactional price income related to card funds on our digital
funds processing platforms. Moreover, complete revenues elevated $0.9
million from companies and different revenues as a consequence of will increase in consulting
engagements supporting the expansion in new and present clients, in addition to
further companies income from the acquisition of Order2Cash.

Value of Revenues

                                                    Three Months Ended
                                                      September 30,                              Change
                                                 2022                2021              Quantity                %

                                                               (in hundreds)
Value of subscription, transaction, and
companies                                     $   11,255          $   9,368          $   1,887                  20  %
Value of reimbursable prices                        8,854              8,625                229                   3
Complete value of revenues, excluding
depreciation and amortization                $   20,109          $  17,993          $   2,116                  12  %


The rise in complete value of revenues through the three months ended September
30, 2022 in comparison with the prior yr interval was primarily as a consequence of (1) a $0.6
million enhance in compensation, advantages, and different personnel-related prices
as a consequence of elevated headcount and (2) a $1.4 million enhance from the acquisitions
of iController and Order2Cash.

Analysis and Improvement

                                            Three Months Ended
                                              September 30,                  Change
                                            2022           2021        Quantity         %

                                                    (in hundreds)
             Analysis and growth   $   15,943      $ 13,453      $ 2,490        19  %


The rise in analysis and growth bills through the three months ended
September 30, 2022 in comparison with the prior yr interval was primarily as a consequence of (1) a
$0.8 million enhance in compensation, advantages, and different personnel-related
prices, and elevated headcount, (2) a $0.3 million enhance in stock-based
compensation expense, (3) a $0.3 million enhance in software program bills straight
associated to product growth actions, and (4) a $0.6 million enhance due
to the acquisitions of iController and Order2Cash.

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Gross sales and Advertising and marketing

                                          Three Months Ended
                                            September 30,                  Change
                                          2022           2021        Quantity         %

                                                  (in hundreds)
              Gross sales and advertising     $   11,591      $ 10,310      $ 1,281        12  %


The rise in gross sales and advertising bills through the three months ended
September 30, 2022 in comparison with the prior yr interval was primarily as a consequence of (1) a
$0.5 million enhance in compensation, advantages, and different personnel-related
prices, and elevated headcount, (2) a $0.4 million enhance in gross sales and
advertising initiatives spend associated to selling our merchandise and product
enhancements, together with consulting {and professional} charges, and (3) a $0.5 million
enhance because of the acquisitions of iController and Order2Cash. These will increase
have been partially offset by a $0.3 million lower in stock-based compensation
expense associated to forfeitures.

Common and Administrative

                                             Three Months Ended
                                               September 30,                  Change
                                             2022           2021        Quantity         %

                                                     (in hundreds)
           Common and administrative    $    19,613      $ 9,838      $ 9,775        99  %


The rise basically and administrative bills through the three months
ended September 30, 2022 in comparison with the prior yr interval was primarily as a consequence of
(1) a $5.8 million enhance in Merger associated prices, primarily consisting of
funding banking, authorized, accounting, and different skilled advisory charges,
submitting charges, regulatory charges, and different associated prices, (2) a $1.0 million
enhance in stock-based compensation expense, (3) a $0.9 million enhance
compensation, advantages, and different personnel-related prices, and elevated
headcount, (4) a $0.7 million enhance in acquisition and integration bills,
and (5) a $1.2 million enhance because of the acquisitions of iController and
Order2Cash.

Depreciation and Amortization

                                               Three Months Ended
                                                  September 30,                  Change
                                                2022            2021        Quantity        %

                                                       (in hundreds)
         Depreciation and amortization    $    2,191          $ 1,205      $  986        82  %


The rise in depreciation and amortization through the three months ended
September 30, 2022 in comparison with the prior yr interval was primarily because of the
amortization of intangible property from the acquisitions of iController and
Order2Cash.

Impairment and Restructuring

                                              Three Months Ended
                                                 September 30,                     Change
                                                2022               2021      Quantity         %

                                                       (in hundreds)
      Impairment and restructuring     $       4,636              $  -     

$ 4,636 100 %



The rise in impairment and restructuring expense through the three months
ended September 30, 2022 in comparison with the prior yr interval was as a consequence of
impairments of working lease ROU property, leasehold enhancements, and stuck
property incurred on account of vacating a number of leased workplace and print
amenities.

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Complete Different Earnings (Expense)

                                              Three Months Ended
                                                September 30,                    Change
                                               2022             2021       Quantity         %

                                                      (in hundreds)
       Complete different revenue (expense)     $     1,261            $ 275      $  986        (359) %


The rise in different revenue (expense) through the three months ended September
30, 2022 in comparison with the prior yr interval was primarily as a consequence of (1) a $0.6
million enhance in curiosity revenue, and (2) a $0.4 million lower within the truthful
worth of the contingent consideration associated to the iController acquisition.

Earnings Tax Expense (Profit)

                                              Three Months Ended
                                                 September 30,                    Change
                                                2022              2021      Quantity         %

                                                      (in hundreds)
       Earnings tax expense (profit)     $      (251)             $ 27     

$ (278) 1030 %



The change from revenue tax expense to revenue tax profit through the three months
ended September 30, 2022 was primarily as a consequence of a lower within the deferred tax
legal responsibility associated to overseas acquisitions and the flexibility to make the most of sure tax
losses sooner or later. Total, our efficient tax price is low as a consequence of our U.S. internet
working loss place. We keep a valuation allowance on our U.S. deferred
taxes.

Comparability of Outcomes of Operations for the 9 Months Ended September 30, 2022
and 2021

Complete Revenues

                                                   9 Months Ended
                                                     September 30,                  Change
                                                  2022           2021          Quantity         %

                                                            (in hundreds)

Subscription and transaction charges $ 110,978 $ 89,631

$ 21,347 24 %

     Companies and different                            9,179          7,809    

1,370 18 %

Subscription, transaction, and companies 120,157 97,440

   22,717        23  %
     Reimbursable prices                           26,112         26,085            27         -  %
     Complete revenues                            $ 146,269      $ 123,525      $ 22,744        18  %


The rise in complete revenues through the 9 months ended September 30, 2022
in comparison with the prior yr interval was primarily as a consequence of (1) a $22.0 million
enhance in subscription and transaction charges within the Software program and Funds
section on account of contracting with new clients, present clients
buying further merchandise, the acquisitions of iController and Order2Cash,
and elevated transaction volumes, primarily from funds. The expansion in
transaction volumes was primarily associated to the expansion in variable
transactional price income related to card funds on our digital
funds processing platforms. Moreover, complete revenues elevated $1.4
million from companies and different revenues as a consequence of will increase in consulting
engagements supporting the expansion in new and present clients, in addition to
further companies income from the acquisition of Order2Cash.

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Value of Revenues

                                                    9 Months Ended
                                                      September 30,                             Change
                                                 2022                2021             Quantity               %

                                                               (in hundreds)
Value of subscription, transaction, and
companies                                     $   32,729          $  27,981          $  4,748                 17  %
Value of reimbursable prices                       26,112             26,085                27                  -  %
Complete value of revenues, excluding
depreciation and amortization                $   58,841          $  54,066          $  4,775                  9  %


The rise in complete value of revenues through the 9 months ended September
30, 2022 in comparison with the prior yr interval was primarily as a consequence of (1) a $1.2
million enhance in compensation, advantages, and different personnel-related prices,
and elevated headcount and (2) a $4.0 million enhance because of the acquisitions
of iController and Order2Cash. These will increase have been partially offset by a $0.4
million lower in print associated prices ensuing from efficiencies in our
operations and decrease print transactional volumes on account of changing
present clients to digital invoicing.

Analysis and Improvement

                                            9 Months Ended
                                              September 30,                 Change
                                           2022           2021         Quantity         %

                                                    (in hundreds)
             Analysis and growth   $  46,922      $ 35,716      $ 11,206        31  %


The rise in analysis and growth bills through the 9 months ended
September 30, 2022 in comparison with the prior yr interval was primarily as a consequence of (1) a
$6.3 million enhance in compensation, advantages, and different personnel-related
prices, and elevated headcount, (2) a $0.9 million enhance in software program bills
straight associated to product growth actions, (3) a $0.7 million enhance
in stock-based compensation expense, (4) a $0.6 million enhance in amortized
software program growth prices, (5) a $0.4 million enhance in integration bills,
and (6) a $2.1 million enhance because of the acquisitions of iController and
Order2Cash.

Gross sales and Advertising and marketing

                                           9 Months Ended
                                             September 30,                 Change
                                          2022           2021        Quantity         %

                                                   (in hundreds)
               Gross sales and advertising     $  34,030      $ 29,226      $ 4,804        16  %


The rise in gross sales and advertising bills through the 9 months ended
September 30, 2022 in comparison with the prior yr interval was primarily as a consequence of (1) a
$2.0 million enhance in compensation, advantages, and different personnel-related
prices, and elevated headcount, (2) a $0.9 million enhance in gross sales and
advertising initiatives spend associated to selling our merchandise and product
enhancements, together with consulting {and professional} charges, (3) a $0.6 million
enhance in journey and leisure bills as a consequence of elevated journey as a
results of loosening COVID-19 restrictions, and (4) a $2.0 million enhance due
to the acquisitions of iController and Order2Cash. These will increase have been
partially offset by a $0.9 million lower in stock-based compensation expense
associated to forfeitures.

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Common and Administrative

                                             9 Months Ended
                                               September 30,                 Change
                                            2022           2021         Quantity         %

                                                     (in hundreds)
           Common and administrative    $  49,426      $ 32,766      $ 16,660        51  %


The rise basically and administrative bills through the 9 months ended
September 30, 2022 in comparison with the prior yr interval was primarily as a consequence of (1) a
$5.8 million enhance in Merger associated prices, primarily consisting of
funding banking, authorized, accounting, and different skilled advisory charges,
submitting charges, regulatory charges, and different associated prices, (2) a $3.5 million
enhance in compensation, advantages, and different personnel-related prices, and
elevated headcount, (3) a $2.3 million enhance in insurance coverage, skilled, and
consulting charges for reporting, compliance, and different associated necessities
supporting public firm working necessities and on account of turning into a
giant accelerated filer for fiscal yr 2022, (4) a $1.6 million enhance in
acquisition and integration prices, (5) a $1.2 million enhance associated to
contingent consideration payable pursuant to the Order2Cash acquisition
settlement, and (6) a $2.6 million enhance because of the acquisitions of
iController and Order2Cash. These will increase have been partially offset by a $0.3
million lower in stock-based compensation expense associated to forfeitures.

Depreciation and Amortization

                                               9 Months Ended
                                                 September 30,                 Change
                                               2022          2021        Quantity         %

                                                       (in hundreds)
          Depreciation and amortization    $    6,218      $ 3,924      $ 2,294        58  %


The rise in depreciation and amortization through the 9 months ended
September 30, 2022 in comparison with the prior yr interval was primarily because of the
amortization of intangible property from the acquisitions of iController and
Order2Cash.

Impairment and Restructuring

                                               9 Months Ended
                                                 September 30,                    Change
                                                2022              2021       Quantity         %

                                                       (in hundreds)
       Impairment and restructuring     $      18,520            $  -     

$ 18,520 100 %



The rise in impairment and restructuring expense through the 9 months
ended September 30, 2022 in comparison with the prior yr interval was primarily as a consequence of
impairments of working lease ROU property, leasehold enhancements, and stuck
property incurred on account of vacating a number of leased workplace and print
amenities.

Complete Different Earnings (Expense)

                                              9 Months Ended
                                                September 30,                  Change
                                             2022          2021          Quantity          %

                                                      (in hundreds)
         Complete different revenue (expense)     $  1,271      $ (12,421)     $ 13,692        (110) %


The lower in different bills through the 9 months ended September 30, 2022
in comparison with the prior yr interval was primarily because of the following one-time
prices recorded within the first quarter of 2021 associated to the Enterprise Mixture:
(1) a $10.0 million truthful worth adjustment from the rise in worth of the
Earnout Shares and, (2) a $2.9 million loss on extinguishment of debt related
with the early cost of all our excellent borrowings. The rest of the
lower was primarily as a consequence of $0.7 million of further curiosity revenue.

                                       54
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Earnings Tax Expense (Profit)

                                              9 Months Ended
                                                September 30,                    Change
                                               2022            2021        Quantity          %

                                                      (in hundreds)
       Earnings tax expense (profit)     $     (970)           $ 130      $

(1,100) (846) %



The change from revenue tax expense to revenue tax profit through the 9 months
ended September 30, 2022 was primarily as a consequence of a lower within the deferred tax
legal responsibility associated to overseas acquisitions and the flexibility to make the most of sure tax
losses sooner or later. Total, our efficient tax price is low as a consequence of our U.S. internet
working loss place. We keep a valuation allowance on our U.S. deferred
taxes.

Liquidity and Capital Assets


Our principal sources of liquidity are money, money equivalents, and money flows
from financing actions together with by a public providing of our fairness
securities. As of September 30, 2022, we had money and money equivalents of $145.9
million. Our major makes use of of liquidity are working bills, capital
expenditures, and buying companies. The acquisitions of iController and
Order2Cash have been each funded completely with money readily available. Pursuant to the Merger
Settlement, whereas the Merger is pending, we're restricted or prohibited from
sure capital expenditures with out the consent of the Guardian. Moreover,
throughout that very same time, we're topic to varied restrictions underneath the Merger
Settlement on elevating further capital, issuing further fairness or debt, and
pursuing sure actions that might use vital quantities of our liquidity,
together with assuming or incurring further debt, repurchasing fairness, paying
dividends, and getting into into sure acquisition and disposition transactions,
amongst different restrictions.

We imagine our present money, money equivalents, and money flows from financing
actions, together with further consideration payable throughout the subsequent yr, if
any, associated to our latest acquisitions, and incremental money outlays for
transaction prices associated to the proposed Merger anticipated to be incurred whether or not
or not the Merger is accomplished, are ample to fulfill our working capital and
capital expenditure necessities for a interval of at the very least 12 months from the
date of this Quarterly Report on Type 10-Q. Nevertheless, our anticipated outcomes are
topic to vital uncertainty and could also be affected by occasions past our
management, together with the prevailing financial, monetary, and {industry} situations,
together with from the COVID-19 pandemic and continued volatility and disruption in
the worldwide monetary markets.


The next desk summarizes our money flows for the durations offered (in
hundreds, besides percentages):

                                                     9 Months Ended
                                                       September 30,                              Change
                                                 2022                2021               Quantity                 %

Internet money utilized in working actions $ (28,367) $ (9,809) $ (18,558)

               (189) %
Internet money utilized in investing actions           (15,703)            (46,647)             30,944                  66
Internet money offered by (utilized in)
financing actions                             (3,144)            282,945            (286,089)               (101)
Impact of trade price modifications on
money, money equivalents, and restricted
money                                               (125)                  -                (125)                  -
Internet enhance (lower) in money, money
equivalents, and restricted money             $  (47,339)         $  226,489          $ (273,828)               (121) %


Working Actions

Money flows from operations have traditionally been unfavorable as we proceed to
spend money on our product options and platform, develop new merchandise, enhance our
gross sales and advertising efforts to signal contracts with new clients, and broaden the
product breadth inside present clients. We don't count on this pattern to vary
on an annual foundation, though we do see quarterly shifts the place money flows from
operations could also be optimistic, primarily related to invoicing and accumulating
subscription charges from clients that are usually payable upfront.

                                       55
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For the 9 months ended September 30, 2022, money utilized in working actions
was $28.4 million in comparison with $9.8 million through the prior yr interval. The
enhance was primarily as a consequence of greater internet loss from continued investments in
gross sales and advertising and product growth, acquisition and integration prices,
and a rise in the usage of money for working capital.

Investing Actions


In the course of the 9 months ended September 30, 2022 money utilized in investing
actions was $15.7 million, which consisted primarily of $59.5 million for the
buy of Order2Cash, internet of acquired money, and was partially offset by $45.2
million of proceeds from the sale of marketable securities and $1.4 million for
purchases of property and gear.

In the course of the 9 months ended September 30, 2021 money utilized in investing
actions was $46.6 million, which consisted primarily of $45.1 million of
purchases of marketable securities and $1.6 million for purchases of property
and gear.


Financing Actions

In the course of the 9 months ended September 30, 2022 money utilized in financing
actions was $3.1 million, which consisted primarily of a $5.6 million
enhance in buyer funds payable, and was partially offset by $3.3 million in
proceeds from widespread inventory issued.


In the course of the 9 months ended September 30, 2021 money offered by financing
actions was $282.9 million, which consisted primarily of $329.7 million of
proceeds from the Enterprise Mixture and PIPE Financing, internet of providing
prices. These proceeds have been offset by $46.2 million used to totally repay our
excellent borrowings, together with debt extinguishment prices, pursuant to the
Enterprise Mixture, and $1.3 million in proceeds from widespread inventory issued.

Future Money Obligations


Along with the long run money obligations described beneath, we've different
payables and liabilities which may be legally enforceable however are usually not thought-about
contractual commitments. Consult with Word 15 - Accrued Bills and Different Present
Liabilities within the Notes to Condensed Consolidated Monetary Statements for extra
info on our payables and liabilities.

Leases


We lease workplace house for our workers and amenities for our print operations
underneath non-cancellable working lease agreements (consult with Word 9 - Leases in
the Notes to Condensed Consolidated Monetary Statements, together with a dialogue
of the impairment of sure facility leases now not in use). The remaining
period of non-cancellable working leases ranges from lower than 1 yr to 13
years. As of September 30, 2022, remaining non-cancellable lease funds are
due as follows: $1.3 million in 2022, $5.3 million in 2023, $4.9 million in
2024, $4.6 million in 2025, $4.3 million in 2026, and $24.7 million thereafter.

For sure leased facility house that we've ceased occupying, we've entered
into subleases underneath non-cancellable working lease agreements. The remaining
period of those non-cancellable subleases ranges from 2 years to eight years. As
of September 30, 2022, remaining non-cancellable sublease funds to be
obtained are as follows: $0.3 million in 2022, $1.3 million in 2023, $1.1
million in 2024, $1.0 million in 2025, $1.1 million in 2026, and $1.6 million
thereafter.

Buy Obligations

We enter into buy commitments with sure distributors to safe pricing for
supplies needed for our print operations. As of September 30, 2022, we had
roughly $0.4 million remaining underneath such buy commitments.

Contingent Consideration


Our acquisitions of Order2Cash and iController embrace contingent consideration
preparations with estimated truthful values of $3.1 million and $4.5 million,
respectively at September 30, 2022. These quantities are to be paid to the sellers
primarily based on the quantity and timing of every acquired firm's achievement of sure
recurring income development targets and different sure situations over a 3 yr
interval subsequent to every acquisition date.

                                       56
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Deferred Buy Worth


Our acquisition of Order2Cash features a deferred buy with an estimated
truthful worth at September 30, 2022 of $0.5 million. This quantity is payable inside
4 years of the deadline upon achievement of sure situations.

Letters of Credit score


We now have commitments underneath letters of credit score for $2.5 million which are maintained
pursuant to sure of our lease preparations. $2.4 million of the letters of
credit score expire in 2024, and the rest expire in larger than 5 years from
September 30, 2022.

Non-GAAP Monetary Measures

Along with our outcomes decided in accordance with U.S. GAAP, we imagine
the next non-GAAP monetary measures are helpful in evaluating our working
efficiency. We current these non-GAAP measures to help traders in
understanding our monetary efficiency from the attitude of administration. We
imagine these measures present an extra instrument for traders to make use of in
evaluating our monetary efficiency over a number of durations with different corporations
in our {industry}. Whereas we imagine the usage of these non-GAAP measures gives
helpful info to traders and administration in analyzing our monetary
efficiency, non-GAAP measures have inherent limitations in that they don't
mirror all the quantities and transactions which are included in our monetary
statements ready in accordance with U.S. GAAP. Non-GAAP measures don't serve
as a substitute for U.S. GAAP, nor can we take into account our non-GAAP measures in
isolation. Accordingly, we current non-GAAP monetary measures solely in
reference to U.S. GAAP outcomes. We urge traders to think about non-GAAP
measures solely at the side of our U.S. GAAP financials and to assessment the
reconciliation of our non-GAAP monetary measures to essentially the most comparable U.S.
GAAP monetary measures, as described beneath, included on this Quarterly Report
on Type 10-Q.

Internet Income (non-GAAP)

Internet income (non-GAAP) is outlined as complete revenues much less reimbursable prices
income. Reimbursable prices income consists primarily of quantities charged to
clients for postage (with an offsetting quantity recorded as a value of income)
which we don't take into account internally when monitoring working efficiency.

We imagine internet income (non-GAAP) permits traders to guage comparability
with our previous monetary efficiency and facilitates period-to-period comparisons
of core operations. Essentially the most straight comparable U.S. GAAP measure to internet
income (non-GAAP) is complete revenues on our Condensed Consolidated Statements of
Operations.

Adjusted Gross Revenue (non-GAAP) & Adjusted Gross Margin (non-GAAP)


Adjusted gross revenue (non-GAAP) is outlined as complete revenues much less complete value of
revenues, excluding depreciation and amortization, plus stock-based compensation
expense included in complete value of revenues. Adjusted gross margin (non-GAAP) is
outlined as adjusted gross revenue (non-GAAP) divided by complete revenues much less
reimbursable prices income, or internet income (non-GAAP).

We imagine adjusted gross revenue (non-GAAP) and adjusted gross margin (non-GAAP)
are helpful monetary measures to traders as they remove the impression of
sure non-cash bills and permit a extra direct comparability of our money
operations and ongoing working efficiency between durations. We count on adjusted
gross margin (non-GAAP) to proceed to enhance over time to the extent that we
are capable of enhance our scale by efficiently rising revenues, each from
cross-selling present clients and upselling present and future choices.
Nevertheless, our skill to enhance adjusted gross margin (non-GAAP) over time is
not assured and can be impacted by the elements affecting our efficiency
outlined within the Half I, Merchandise 1a. "Danger Components" of our Annual Report on Type
10-Okay and on this Quarterly Report on Type 10-Q. Essentially the most straight comparable
U.S. GAAP measure to adjusted gross revenue (non-GAAP) and adjusted gross margin
(non-GAAP) is complete revenues on our Condensed Consolidated Statements of
Operations.

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The next desk presents a reconciliation of our internet income (non-GAAP),
adjusted gross revenue (non-GAAP), and adjusted gross margin (non-GAAP) to their
most straight comparable U.S. GAAP monetary measures (in hundreds, besides
percentages):

Reconciliation of Complete Revenues to Internet Income (non-GAAP), Adjusted Gross
Revenue (non-GAAP), and Adjusted Gross Margin (Non-GAAP)

                                              Three Months Ended                       9 Months Ended
                                                 September 30,                           September 30,
                                           2022                2021                2022                2021
Complete revenues                         $   51,362          $   41,357          $  146,269          $  123,525
Much less: Reimbursable prices income            8,854               8,625              26,112              26,085
Internet income (non-GAAP)                 $   42,508          $   32,732       

$ 120,157 $ 97,440


Complete revenues                         $   51,362          $   41,357          $  146,269          $  123,525
Much less: Value of income, excluding
depreciation and amortization              20,109              17,993              58,841              54,066
Gross revenue, excluding depreciation
and amortization                           31,253              23,364              87,428              69,459
Add: Inventory-based compensation expense         587                 436               1,646               1,284

Adjusted gross revenue (non-GAAP) $ 31,840 $ 23,800

$ 89,074 $ 70,743


Gross margin, excluding depreciation
and amortization                             60.8  %             56.5  %             59.8  %             56.2  %
Adjusted gross margin (non-GAAP)             74.9  %             72.7  %             74.1  %             72.6  %


Adjusted EBITDA (non-GAAP) & Adjusted EBITDA Margin (non-GAAP)


Adjusted EBITDA (non-GAAP) is outlined as internet loss, plus (1) revenue tax expense
(profit), (2) modifications within the truthful worth of monetary devices that don't
meet the factors to be categorised as fairness, (3) curiosity expense and loss on
extinguishment of debt, (4) depreciation and amortization, (5) stock-based
compensation expense, (6) impairment, restructuring, and associated facility prices,
(7) acquisition and integration prices, (8) different capital construction transaction
prices, and (9) different non-operating expense (revenue). Adjusted EBITDA margin
(non-GAAP) is outlined as adjusted EBITDA (non-GAAP) divided by complete revenues
much less reimbursable prices income, or internet income (non-GAAP).

We imagine adjusted EBITDA (non-GAAP) and adjusted EBITDA margin (non-GAAP) are
key measures for us to grasp and consider our working efficiency, to
set up budgets, and to develop operational and strategic targets. Adjusted
EBITDA (non-GAAP) and adjusted EBITDA margin (non-GAAP) can present a helpful
measure for period-to-period comparisons of our core working efficiency and
assist determine underlying traits because the bills we exclude might circuitously
correlate to our major working efficiency in any particular interval. Excluded
bills are:

•Sure non-cash prices, similar to stock-based compensation expense,
depreciation and amortization, and modifications in truthful worth of monetary
devices;

•Sure gadgets not associated to our major enterprise actions, similar to:


•Impairment, restructuring, and associated facility prices related to
realigning our group or value construction, impairments of ROU property and
different long-lived property from ceasing use of leased facility areas, involuntary
termination advantages, ongoing lease expense and associated sublease revenue from
facility areas we've ceased utilizing, and different associated prices; and

•Different non-operating revenue.

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•Non-recurring gadgets that aren’t anticipated to recur throughout the subsequent two years or
haven’t occurred throughout the prior two years, similar to:


•Acquisition and integration bills associated to third-party prices related
with buying corporations, inside direct prices related to integrating
acquired corporations, workers, and their clients, and modifications within the truthful
worth of contingent compensation consideration payable to workers of acquired
corporations;

•Curiosity expense and loss on extinguishment of debt ensuing from the
prepayment penalty and related prices of repaying all excellent debt
amenities as a part of the Enterprise Mixture; and


•Different capital construction transaction prices associated to third-party charges,
together with funding banking, authorized, accounting, and different skilled advisory
charges related to financing transactions, such because the proposed Merger (and
one-time transaction to change into a personal firm), the secondary providing of our
Class 1 widespread inventory accomplished in July 2021 (a one-time transaction between
present and new shareholders, with no new shares issued or supplied by us), and
the Warrant Change Provide (a one-time transaction to transform all excellent
warrants to Widespread Inventory).

Essentially the most straight comparable U.S. GAAP measure to adjusted EBITDA (non-GAAP) and
adjusted EBITDA margin (non-GAAP) is internet loss on the Condensed Consolidated
Statements of Operations.

The next desk presents a reconciliation of our adjusted EBITDA (non-GAAP)
and adjusted EBITDA margin (non-GAAP) to its most straight comparable GAAP
monetary measure (in hundreds):

Reconciliation of Internet Loss to Adjusted EBITDA (non-GAAP) and Adjusted EBITDA
Margin (non-GAAP)

                                                Three Months Ended                       9 Months Ended
                                                   September 30,                           September 30,
                                             2022                2021                2022                2021

                                                                      (in hundreds)
Internet loss                                 $  (21,209)         $  (11,194)         $  (65,447)         $  (44,724)
Earnings tax expense (profit)                   (251)                 27                (970)                130
Change in truthful worth of monetary
devices                                    (360)                  -                (122)              9,995
Curiosity expense and loss on
extinguishment of debt                           15                   2                  22               2,947
Depreciation and amortization                 2,191               1,205               6,218               3,924
Inventory-based compensation expense              6,940               5,914              20,293              20,446
Impairment, restructuring, and associated
facility prices                                5,383                  35              20,262                 358
Acquisition and integration prices               702                 257               3,900                 257
Different capital construction transaction
prices                                         5,802                   -               5,802                 498
Different non-operating revenue                     (726)               (277)               (982)               (521)
Adjusted EBITDA (non-GAAP)               $   (1,513)         $   (4,031)         $  (11,024)         $   (6,690)

Adjusted EBITDA margin (non-GAAP)              (3.6) %            (12.3) %             (9.2) %             (6.9) %


For the three months ended September 30, 2022, adjusted EBITDA (non-GAAP)
elevated $2.5 million in comparison with the prior yr interval primarily as a consequence of development
in complete revenues and better bills which are excluded from adjusted EBITDA
(non-GAAP), together with (1) $5.8 million of different capital construction transaction
prices associated to the proposed Merger, (2) $5.4 million in impairment prices
from ceasing use of further leased amenities within the third quarter of 2022,
(3) a $1.0 million enhance in stock-based compensation expense as a consequence of elevated
headcount, and (4) a $1.0 million elevated depreciation and amortization
primarily because of the amortization of intangible property from the acquisitions of
iController and Order2Cash. These will increase have been partially offset by greater
working bills.

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For the 9 months ended September 30, 2022, adjusted EBITDA (non-GAAP)
decreased $4.3 million in comparison with the prior yr interval primarily as a consequence of greater
working bills, offset by bills which are excluded from adjusted EBITDA
(non-GAAP), together with (1) $20.3 million in impairment prices from ceasing use
of a number of leased amenities in 2022, (2) $5.8 million of different capital
construction transaction prices associated to the proposed Merger, (3) $3.9 million in
acquisition and integration prices from the acquisitions of Order2Cash and
iController, and (4) a $2.3 million enhance in depreciation and amortization
primarily because of the amortization of intangible property from the acquisitions of
iController and Order2Cash. These will increase in bills, which led to a lower
in adjusted EBITDA (non-GAAP), have been partially offset by development in complete revenues
and reduces to one-time prices recorded within the prior yr associated to the
Enterprise Mixture: (1) a $10.0 million truthful worth adjustment from the
enhance in worth of the Earnout Shares and (2) a $2.9 million loss on
extinguishment of debt related to the early cost of all our excellent
borrowings.

Direct Card Income (non-GAAP)


Direct card income (non-GAAP) is a subset of our software program and funds section
revenues and accommodates variable transactional price income related to card
funds on our digital funds processing platforms and associated charges.
Direct card income (non-GAAP) is outlined as subscription, transaction, and
companies revenues, much less revenues generated from segments apart from software program and
funds (i.e., software program and funds section income), much less software program and
funds section transaction income unrelated to card processing and all
subscription income.

We imagine direct card income (non-GAAP) permits traders to grasp the
income we earn from processing card funds and higher comprehend underlying
traits in our funds enterprise. Essentially the most straight comparable U.S. GAAP measure
to direct card income (non-GAAP) is subscription, transaction, and companies
income on the Condensed Consolidated Monetary Statements.

The next desk presents a reconciliation of our direct card income
(non-GAAP) to its most straight comparable U.S. GAAP monetary measure (in
hundreds):

Reconciliation of Subscription, Transaction, and Companies Revenues to Direct
Card Income (non-GAAP)

                                                         Three Months Ended                    9 Months Ended
                                                            September 30,                        September 30,
                                                       2022               2021               2022              2021

Subscription, transaction, and companies revenues $ 42,508 $ 32,732 $ 120,157 $ 97,440
Much less: Non-software and funds section income 7,355

             6,723             21,859            21,164
Software program and funds section income                  35,153            26,009             98,298            76,276
Much less: Software program and funds section income
excluding direct card income (non-GAAP)               28,659            21,784             81,079            65,431
Direct card income (non-GAAP)                     $    6,494          $  4,225          $  17,219          $ 10,845


Free Money Movement (non-GAAP)

Free money stream (non-GAAP) is outlined as internet money utilized in working actions,
much less purchases of property and gear (which incorporates capitalized
internal-use software program prices).


We imagine free money stream (non-GAAP) is a vital liquidity measure of the
money out there for our operational bills and funding in enterprise development.
It's helpful to traders as a liquidity measure of our skill to generate, or
use money to take care of, a robust steadiness sheet, and spend money on future development. The
most straight comparable GAAP measure to free money stream (non-GAAP) is internet money
utilized in working actions on the Condensed Consolidated Statements of Money
Flows.

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The next desk presents a reconciliation of free money stream to essentially the most
straight comparable GAAP measure (in hundreds):


Reconciliation of Internet Money Used in Working Actions to Free Money Movement
(non-GAAP)

                                                Three Months Ended            9 Months Ended
                                                  September 30,                 September 30,
                                                2022           2021          2022           2021

                                                                 (in hundreds)

Internet money utilized in working actions $ (2,606) $ 1,012 $ (28,367) $ (9,809)

  Purchases of property and gear              (442)        (450)        (1,364)        (1,570)
  Free money stream (non-GAAP)                 $    (3,048)     $   562      $ (29,731)     $ (11,379)

Essential Accounting Insurance policies and Procedures

There have been no materials modifications to the crucial accounting insurance policies,
vital judgments, or estimates included in our Annual Report on Type 10-Okay.

Latest Accounting Pronouncements


Consult with Word 1 - Group and Nature of Enterprise within the Notes to Condensed
Consolidated Monetary Statements for a full description of latest accounting
pronouncements, together with the anticipated dates of adoption and results on our
Condensed Consolidated Monetary Statements.

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