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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from                          to                         
Commission file number 001-33508
 
EDGIO, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware20-1677033
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
2220 W. 14th Street,
Tempe, AZ 85281
(Address of principal executive offices, including Zip Code)
(602850-5000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act;
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareEGIONasdaq
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filer
Smaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes    No  
The number of shares outstanding of the registrant’s Common Stock, par value $0.001 per share, as of August 4, 2022: 219,713,284 shares.


EDGIO, INC.
FORM 10-Q
Quarterly Period Ended June 30, 2022
TABLE OF CONTENTS
  Page
PART I. FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 


Special Note Regarding Forward-Looking Statement
On June 15, 2022, we changed our corporate name from Limelight Networks, Inc. to Edgio, Inc. (“Edgio”). We will not distinguish between our prior and current corporate name and will refer to our current corporate name throughout this Quarterly Report on Form 10-Q. Beginning on June 15, 2022, our common stock is traded on the Nasdaq Global Select Market (the “Nasdaq”) under the ticker symbol "EGIO".
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this Quarterly Report on Form 10-Q, other than statements of historical fact, are forward-looking statements. Forward-looking statements generally can be identified by the words “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events, as well as trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These statements include, among other things:
our beliefs regarding delivery traffic growth trends and demand for digital content and edge services;
our expectations regarding revenue, costs, expenses, gross margin, non-generally accepted accounting principles (“Non-GAAP”) earnings per share, Adjusted EBITDA and capital expenditures;
our plans regarding investing in our content delivery network and Application Operations (“AppOps”), our coordinated complete solution to deliver instant, secure website applications, as well as other products and technologies;
our beliefs regarding the competition within the digital edge platform industry;
our beliefs regarding the growth of our business and how that impacts our liquidity and capital resources requirements;
our expectations regarding headcount and our ability to recruit personnel;
the impact of certain new accounting standards and guidance as well as the time and cost of continued compliance with existing rules and standards;
our plans with respect to investments in marketable securities;
our expectations and strategies regarding acquisitions;
our expectations regarding litigation and other pending or potential disputes;
our estimations regarding taxes and belief regarding our tax reserves;
our beliefs regarding the use of Non-GAAP financial measures;
our approach to identifying, attracting and keeping new and existing clients, our focus on core market growth segments where we have a right-to-win, as well as our expectations regarding client turnover;
the sufficiency of our sources of funding;
the sufficiency of our facilities to meet our needs;
our beliefs regarding our interest rate risk;
our beliefs regarding inflation risks;
our beliefs regarding expense and productivity of and competition for our sales force;
our beliefs regarding the significance of our large clients; and
our beliefs regarding the impact of health epidemics and pandemics, including the outbreak of COVID-19, on our current and potential clients, and our balance sheet, financial condition, and results of operations.
    These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described under the caption “Risk Factors” in Part II, Item 1A in this Quarterly Report on Form 10-Q and those discussed in other documents we file with the Securities and Exchange Commission (the “SEC”).
In addition, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
The forward-looking statements contained herein are based on our current expectations and assumptions and on information available as of the date of the filing of this Quarterly Report on Form 10-Q. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.


Unless expressly indicated or the context requires otherwise, the terms "Edgio," "we," "us," and "our" in this document refer to Edgio, Inc., a Delaware corporation, and, where appropriate, its wholly owned subsidiaries. All information is presented in thousands, except per share amounts, client count, headcount and where specifically noted.



PART I. FINANCIAL INFORMATION
Item 1.        Financial Statements
Edgio, Inc.
Consolidated Balance Sheets
(In thousands, except per share data)
June 30,
2022
December 31,
2021
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$55,175 $41,918 
Marketable securities22,158 37,367 
Accounts receivable, net108,445 42,217 
Income taxes receivable58 61 
Prepaid expenses and other current assets32,107 13,036 
Total current assets217,943 134,599 
Property and equipment, net106,059 33,622 
Operating lease right of use assets7,124 6,338 
Marketable securities, less current portion40 40 
Deferred income taxes2,866 1,893 
Goodwill163,489 114,511 
Intangible assets, net72,655 14,613 
Other assets7,334 5,485 
Total assets$577,510 $311,101 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$19,800 $11,631 
Deferred revenue4,790 3,266 
Operating lease liability obligations4,755 1,861 
Income taxes payable262 873 
Other current liabilities75,391 19,292 
Total current liabilities104,998 36,923 
Convertible senior notes, net122,202 121,782 
Operating lease liability obligations, less current portion11,352 9,616 
Deferred income taxes100 308 
Deferred revenue, less current portion1,530 116 
Other long-term liabilities716 777 
Total liabilities240,898 169,522 
Commitments and contingencies
Stockholders’ equity:
Convertible preferred stock, $0.001 par value; 7,500 shares authorized; no shares issued
  and outstanding
  
Common stock, $0.001 par value; 300,000 shares authorized; 219,706 and 134,337 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
220 134 
Common stock contingent consideration16,900  
Additional paid-in capital793,522 576,807 
Accumulated other comprehensive loss(11,413)(8,345)
Accumulated deficit(462,617)(427,017)
Total stockholders’ equity336,612 141,579 
Total liabilities and stockholders’ equity$577,510 $311,101 

The accompanying notes are an integral part of the unaudited consolidated financial statements.
5

Edgio, Inc.
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
 Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Revenue$74,312 $48,348 $132,270 $99,543 
Cost of revenue:
Cost of services (1)46,088 32,976 81,157 66,021 
Depreciation — network5,903 5,929 10,992 11,608 
Total cost of revenue51,991 38,905 92,149 77,629 
Gross profit22,321 9,443 40,121 21,914 
Operating expenses:
General and administrative26,927 7,515 42,760 20,412 
Sales and marketing10,946 5,784 18,573 15,631 
Research and development12,161 5,187 21,738 11,315 
Depreciation and amortization1,508 549 2,540 1,089 
Restructuring charges4,368 2,155 5,066 9,028 
Total operating expenses55,910 21,190 90,677 57,475 
Operating loss(33,589)(11,747)(50,556)(35,561)
Other income (expense):
Interest expense(1,315)(1,305)(2,628)(2,591)
Interest income33 42 60 87 
Other, net(1,146)(440)(1,859)(655)
Total other expense(2,428)(1,703)(4,427)(3,159)
Loss before income taxes(36,017)(13,450)(54,983)(38,720)
Income tax (benefit) expense (19,589)248 (19,383)507 
Net loss$(16,428)$(13,698)$(35,600)$(39,227)
Net loss per share:
Basic$(0.11)$(0.11)$(0.25)$(0.31)
Diluted$(0.11)$(0.11)$(0.25)$(0.31)
Weighted average shares used in per share calculation:
Basic151,776 126,050 143,652 125,170 
Diluted151,776 126,050 143,652 125,170 

(1) Cost of services excludes amortization related to intangibles, including technology, customer relationships, and trade names, which are included in depreciation and amortization

The accompanying notes are an integral part of the unaudited consolidated financial statements.
6

Edgio, Inc.
Unaudited Consolidated Statements of Comprehensive Loss
(In thousands)
 Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Net loss$(16,428)$(13,698)$(35,600)$(39,227)
Other comprehensive (loss) income, net of tax:
Unrealized gain (loss) on investments55 18 (33)29 
Foreign currency translation (loss) gain(2,464)479 (3,035)(483)
Other comprehensive (loss) income(2,409)497 (3,068)(454)
Comprehensive loss$(18,837)$(13,201)$(38,668)$(39,681)
The accompanying notes are an integral part of the unaudited consolidated financial statements.
7

Edgio, Inc.
Unaudited Consolidated Statements of Stockholders' Equity
(In thousands)
For the Three Months Ended June 30, 2022
Common Stock
SharesAmountCommon Stock Contingent ConsiderationAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal
Balance March 31, 2022138,178 $138 $ $590,249 $(9,004)$(446,189)$135,194 
Net loss— — — — — (16,428)(16,428)
Change in unrealized gain on available-for-sale investments, net of taxes— — — — 55 — 55 
Foreign currency translation adjustment, net of taxes— — — — (2,464)— (2,464)
Exercise of common stock options57  — 57 — — 57 
Vesting of restricted stock units544 1 — (1)— —  
Restricted stock units surrendered in lieu of withholding taxes(170)— — (524)— — (524)
Issuance of common stock under employee stock purchase plan280 — — 728 — — 728 
Share-based compensation— — — 5,595 — — 5,595 
Capital contributions— — — 1,884 — — 1,884 
Issuance of common stock for business acquisition
76,925 77 — 186,119 — — 186,196 
Common stock contingent consideration related to business acquisition
— — 16,900 — — — 16,900 
Issuance of common stock for employee compensation arrangements
3,892 4 — 9,415 — — 9,419 
Balance June 30, 2022219,706 $220 $16,900 $793,522 $(11,413)$(462,617)$336,612 

For the Three Months Ended June 30, 2021
Common Stock
SharesAmountAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal
Balance March 31, 2021125,248 $125 $545,516 $(8,462)$(397,785)$139,394 
Net loss— — — — (13,698)(13,698)
Change in unrealized gain on available-for-sale investments, net of taxes— — — 18 — 18 
Foreign currency translation adjustment, net of taxes— — — 479 — 479 
Exercise of common stock options777 1 1,699 — — 1,700 
Vesting of restricted stock units461 1 (1)— —  
Restricted stock units surrendered in lieu of withholding taxes(136)— (427)— — (427)
Issuance of common stock under employee stock purchase plan355 — 913 — — 913 
Share-based compensation— — 2,505 — — 2,505 
Balance June 30, 2021126,705 $127 $550,205 $(7,965)$(411,483)$130,884 
8

For the Six Months Ended June 30, 2022
Common Stock
SharesAmountCommon Stock Contingent ConsiderationAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal
Balance December 31, 2021134,337 $134 $ $576,807 $(8,345)$(427,017)$141,579 
Net loss— — — — — (35,600)(35,600)
Change in unrealized loss on available-for-sale investments, net of taxes— — — — (33)— (33)
Foreign currency translation adjustment, net of taxes— — — — (3,035)— (3,035)
Exercise of common stock options3,195 3 — 8,040 — — 8,043 
Vesting of restricted stock units1,522 2 — (2)— —  
Restricted stock units surrendered in lieu of withholding taxes(488)— — (1,809)— — (1,809)
Issuance of common stock under employee stock purchase plan280 — — 728 — — 728 
Share-based compensation— — — 12,340 — — 12,340 
Capital contributions— — — 1,884 — — 1,884 
Issuance of common stock for business acquisition
76,968 77 — 186,119 — — 186,196 
Common stock contingent consideration related to business acquisition
— $— $16,900 $— $— $— $16,900 
Issuance of common stock for employee compensation arrangements
3,892 $4 $— $9,415 $— $— $9,419 
Balance June 30, 2022219,706 $220 $16,900 $793,522 $(11,413)$(462,617)$336,612 
For the Six Months Ended June 30, 2021
Common Stock
SharesAmountAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal
Balance December 31, 2020123,653 $124 $556,512 $(7,511)$(373,933)$175,192 
Cumulative effect of adoption of new accounting pronouncement— — (21,733)— 1,677 (20,056)
Net loss— — — — (39,227)(39,227)
Change in unrealized gain on available-for-sale investments, net of taxes— — — 29 — 29 
Foreign currency translation adjustment, net of taxes— — — (483)— (483)
Exercise of common stock options1,935 2 4,545 — — 4,547 
Vesting of restricted stock units1,094 1 (1)— —  
Restricted stock units surrendered in lieu of withholding taxes(332)— (1,098)— — (1,098)
Issuance of common stock under employee stock purchase plan355 — 913 — — 913 
Share-based compensation— — 11,067 — — 11,067 
Balance June 30, 2021126,705 $127 $550,205 $(7,965)$(411,483)$130,884 
The accompanying notes are an integral part of the unaudited consolidated financial statements.
9

Edgio, Inc.
Unaudited Consolidated Statements of Cash Flows
(In thousands)
 Six Months Ended June 30,
 20222021
Operating activities
Net loss$(35,600)$(39,227)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization13,532 12,697 
Share-based compensation14,303 12,820 
Foreign currency remeasurement loss683 186 
Deferred income taxes(19,280)(81)
Gain on sale of property and equipment(10)(107)
Accounts receivable charges278 847 
Amortization of premium on marketable securities484 1,182 
Noncash interest expense420 400 
Changes in operating assets and liabilities, net of amounts acquired in business combinations:
Accounts receivable(17,956)5,962 
Prepaid expenses and other current assets(4,625)439 
Income taxes receivable(555)10 
Other assets1,126 912 
Accounts payable and other current liabilities26,671 6,732 
Deferred revenue1,867 (357)
Income taxes payable(603)141 
Other long-term liabilities(57)(111)
Net cash (used in) provided by operating activities (19,322)2,445 
Investing activities
Purchases of marketable securities(8,179)(31,411)
Sale and maturities of marketable securities22,871 31,715 
Purchases of property and equipment(18,325)(9,614)
Proceeds from sale of property and equipment10 107 
Cash acquired in acquisition of business
30,866  
Net cash provided by (used in) investing activities 27,243 (9,203)
Financing activities
Payment of debt issuance costs (30)
Payments of employee tax withholdings related to restricted stock vesting(1,809)(1,098)
Proceeds from employee stock plans8,771 5,460 
Net cash provided by financing activities6,962 4,332 
Effect of exchange rate changes on cash and cash equivalents(1,626)(304)
Net increase (decrease) in cash and cash equivalents13,257 (2,730)
Cash and cash equivalents, beginning of period41,918 46,795 
Cash and cash equivalents, end of period$55,175 $44,065 
Supplemental disclosure of cash flow information
Cash paid during the period for interest$2,208 $2,262 
Cash paid during the period for income taxes, net of refunds$1,002 $440 
Common stock issued in connection with acquisition of business
$186,146 $ 
Common stock contingent consideration related to business combination
$16,900 $ 
Common stock issued for employee compensation arrangements
$9,419 $ 
Property and equipment remaining in accounts payable and other current liabilities$1,100 $1,552 

The accompanying notes are an integral part of the unaudited consolidated financial statements.
10

Edgio, Inc.
Notes to Unaudited Consolidated Financial Statements
June 30, 2022
1. Nature of Business
Edgio, Inc., a provider of content delivery services, edge security, video services, AppOps and Jamstack application architecture, provides powerful tools to optimize and deliver digital experiences. Edgio offers one of the largest, best-optimized private networks coupled with a global team of industry experts to provide edge services that are fast, secure and reliable.
We were incorporated in Delaware in 2003, and have operated in the Phoenix metropolitan area since 2001 and elsewhere throughout the United States since 2003. We began international operations in 2004. On June 15, 2022, we changed our corporate name from Limelight Networks, Inc. to Edgio, Inc.
On June 15, 2022, Edgio completed the acquisition (the "Edgecast Acquisition") of all of the outstanding shares of common stock of Edgecast Inc., a California corporation (“Edgecast”), and certain Edgecast-related businesses and assets from College Parent, L.P., a Delaware limited partnership (“College Parent”), for total purchase consideration of $203,046. The total purchase consideration included 76,920 shares of our common stock. Edgecast is a leading provider of edge security, content delivery and video services. Edgio accounted for the acquisition in accordance with ASC 805, Business Combinations, which requires the asset acquired and liabilities assumed to be recognized on the balance sheet at their fair values as of the acquisition date.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). They do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. Such interim financial information is unaudited but reflects all adjustments that are, in the opinion of management, necessary for the fair presentation of the interim periods presented and of a normal recurring nature. This quarterly report on Form 10-Q should be read in conjunction with our audited financial statements and footnotes included in our annual report on Form 10-K for the fiscal year ended December 31, 2021. All information is presented in thousands, except per share amounts and where specifically noted.
The consolidated financial statements include accounts of Edgio and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. In addition, certain other reclassifications have been made to prior year amounts to conform to the current year presentation.
Use of Estimates
The preparation of the consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, assumptions, and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results and outcomes may differ from those estimates. The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, or for any future periods.
Recent Accounting Standards
Adopted Accounting Standards            
None
Recently Issued Accounting Standards
None
Significant Accounting Policies
There have been no changes in the significant accounting policies from those that were disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

11

Revenue Recognition
Revenues are recognized when control of the promised goods or services is transferred to our clients, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
For contracts that contain minimum commitments over the contractual term, not subject to the variable consideration exception, we estimate an amount of variable consideration by using the expected value method. We include estimates of variable consideration in revenue only when we have a high degree of confidence that revenue will not be reversed in a subsequent reporting period. We believe that the expected value method is the most appropriate estimate of the amount of variable consideration. These clients have entered into contracts with contract terms generally from one to four years. As of June 30, 2022, we have approximately $4,615 of remaining unsatisfied performance obligations. We recognized revenue of approximately $1,402 and $2,455, respectively, during the three months ended June 30, 2022 and 2021, related to these types of contracts with our clients. During the six months ended June 30, 2022 and 2021, we recognized revenue of approximately $2,808 and $4,356, respectively, related to these types of contracts with our clients. We expect to recognize approximately 76% of the remaining unsatisfied performance obligations in 2022, approximately 22% in 2023, and approximately 2% in 2024. In addition, we have deferred revenue of approximately $346 as of June 30, 2022 which represents our aggregate remaining performance obligations for services that have been invoiced, but not yet provided to the client and will be recognized as revenue in the period in which the performance obligations are satisfied. We expect to recognize approximately 85% of the remaining unsatisfied performance obligations in 2022, and approximately 15% in 2023.
3. Business Acquisitions
Edgecast Acquisition
On June 15, 2022, we closed the acquisition of 100% of the equity interests of Edgecast for total purchase consideration of $203,046.
The following table presents the allocation of the purchase price for Edgecast:
Consideration:
Common stock$195,565 
Common stock - contingent consideration16,900 
Less: Consideration allocated to employee compensation arrangements(9,419)
Total consideration allocated to Edgecast Acquisition
$203,046 
The purchase price was defined within the purchase agreement as $270,000 in Edgio common stock at a reference price of $4.1168 (determined using a 30 day VWAP of Edgio’s common stock price prior to the execution of the purchase agreement), and adjustments for customary working capital adjustments. The fair value of our common stock consideration of 80,812 shares, is based on the closing price of our common stock of $2.42 per share on the acquisition closing date. Inclusive within the 76,920 shares, and pursuant to the purchase agreement, Edgio issued 7,287 shares of common stock in exchange for cash from College Parent of $30,000. As the economic substance of this issuance was to provide additional cash to Edgecast for liabilities that existed prior to the business combination and the transaction occurred on June 15, 2022, Edgio concluded that this was part of the business combination, and therefore, should be considered as part of the consideration transferred in exchange for the acquisition of Edgecast. Purchase consideration was also adjusted for employee compensation arrangements accounted for as separate transactions as further discussed below.
The purchase agreement contains an “earn-out” or contingent consideration provision in the event that the price of our common stock exceeds certain thresholds during the period ending on the third anniversary of the acquisition date of the transaction (the “Earnout Period”), Edgio will be required to issue approximately up to an additional 12,685 shares of our common stock to College Parent (the “common stock contingent consideration”). If during the Earnout Period, the closing share price of our common stock exceeds the following share prices for 10 trading days in any 30 consecutive trading day period the following number of shares of our common stock will be issued: (a) approximately 5,398 shares of our common stock if the closing share price of our common stock exceeds $6.1752 per share, (b) approximately 4,048 shares of our common stock if the closing share price of our common stock exceeds $8.2336 per share, and (c) approximately 3,239 shares of our common stock if the closing share price of our common stock exceeds $10.2920 per share. Edgio estimated that the fair value of the common stock contingent consideration, with the assistance of a third-party valuation specialist using a Monte Carlo simulation, and concluded it was $16,900 as of the acquisition date.
12


As a result of the Edgecast Acquisition, certain cash awards that existed for Edgecast’s employees require the transferred employee to provide services to Edgio in the post-combination period in order for the cash award to be earned. When the awards are earned, Edgio will pay the employees the amount earned and subsequently be reimbursed by College Parent or College Parent will directly pay the employee the amount earned. Edgio considered whether the employee awards are part of the Edgecast Acquisition, and part of purchase consideration, or separate transactions, and not part of purchase accounting. Under ASC 805, a transaction entered into by or on behalf of the acquirer or primarily for the benefit of the acquirer or the combined entity, rather than primarily for the benefit of the acquiree (or its former owners) before the combination, is likely to be a separate transaction. The employee awards represent compensation for post-combination services rendered to Edgio and the reimbursement right was initiated by Edgio for the future economic benefit of the combined entity. Accordingly, Edgio concluded the employee awards represent transactions separate from the Edgecast Acquisition. Edgio allocated $9,419 of the total consideration transferred to College Parent to the employee compensation arrangements based on the post-combination fair value of the employee awards. As service is required to be rendered for the award to be earned, Edgio will recognize expense as the employee performs service. The employee compensation arrangements related to post-combination services and the related reimbursement right resulted in the recognition of $6,573 in prepaid expenses and other current assets and $2,846 in other assets on June 15, 2022.
During the three and six months ended June 30, 2022, Edgio recorded $997 in compensation expense to the unaudited consolidated statements of operations as a result of the employee compensation arrangements. The employee compensation arrangements are time-based vesting only and the unrecognized compensation expense is $8,422 as of June 30, 2022, of which $5,099 is expected to be recognized during the remainder of 2022, $2,848 in 2023, and the remainder thereafter.
College Parent and it's related affiliates qualify as a related party following the close of the Edgecast Acquisition. As of June 30, 2022, Edgio recorded a receivable from College Parent and its affiliates of $11,303 related to reimbursement for certain compensation and severance plans. Trade accounts receivable were immaterial as of June 30, 2022. Revenue from College Parent and its affiliates were immaterial for the three and six months ended June 30, 2022. Expenses related to transition service agreements were also immaterial for the three and six months ended June 30, 2022.
The Edgecast Acquisition was accounted for under the acquisition method of accounting and the operating results of Edgecast have been included in our consolidated financial statements as of the acquisition date. Under the acquisition method of accounting, the aggregate amount of consideration paid by us was allocated to Edgecast’s net tangible assets and intangible assets based on their estimated fair values as of the acquisition date. The excess of the purchase price over the value of the net tangible assets and intangible assets was recorded to goodwill. The factors contributing to the recognition of goodwill were based upon our conclusion that there are strategic and synergistic benefits that are expected to be realized from the acquisition. Goodwill, which is non-deductible for tax purposes, represents expected synergies and the assembled workforce at the time of the acquisition.
The following table summarizes the preliminary allocation of the purchase consideration to the acquisition date fair value of the assets, including intangible assets, liabilities assumed and related goodwill acquired:

13


Cash (inclusive of 30,000 as described above)
$30,037 
Accounts receivable, net48,553 
Prepaid expenses and other current assets6,669 
Property and equipment68,066 
Operating lease right of use assets1,365 
Goodwill50,938 
Intangible assets
  Customer relationships11,000 
  Technology49,000 
Other assets393 
Total assets acquired266,021 
Accounts payable and accrued liabilities6,917 
Deferred revenue1,060 
Operating lease liability obligations3,071 
Other current liabilities30,955 
Operating lease liability obligations, less current portion2,531 
Deferred income taxes18,433 
Deferred revenue, less current portion8 
Total liabilities62,975 
Total purchase consideration$203,046 
The fair values assigned to tangible assets acquired and liabilities assumed are based on management’s estimates and assumptions and certain amounts noted above are preliminary and subject to change during the measurement period as we obtain additional information for the preliminary fair value estimates of the assets acquired and liabilities assumed. The primary preliminary estimates that are not yet finalized relate to certain assets and liabilities assumed, identifiable intangible assets, deferred income taxes and residual goodwill. Edgio expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date.
The fair value of acquired property and equipment was valued using the market approach and indirect cost approach and primarily consists of computer and networking equipment. The weighted-average depreciation period for the acquired property and equipment was 2.9 years at the acquisition date. The fair value of the acquired intangible assets were determined as follows, customer relationships, utilizing the excess earnings method, and technology, utilizing the relief from royalty method. The weighted-average amortization period of the acquired intangible assets was 8.5 years for customer relationships and 4.0 years for technology at the acquisition date. The deferred income tax liability was $18,433, primarily as a result of the fair value attributable to the identifiable intangible assets.
During the three and six months ended June 30, 2022, Edgecast represented $12,774 of our total revenue and $13 of income included in our consolidated net loss.
Transaction costs incurred by us in connection with the Edgecast Acquisition were $14,139 and $19,382 for the three and six months ended June 30, 2022, respectively, and were recorded within general and administrative expenses in our unaudited consolidated statements of operations.
Unaudited Pro Forma Financial Information
The following unaudited pro forma combined financial information presents combined results of Edgio and Edgecast as if the acquisition of Edgecast has occurred on January 1, 2021:
 Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Revenue$142,577 $130,277 $278,802 $267,104 
Net loss$(24,832)$(38,943)$(59,533)$(98,301)

14


These unaudited pro forma combined financial statements include adjustments to reflect fair value adjustments related to property and equipment depreciation, customer relationships and technology amortization, compensation expense related to the employee compensation arrangements, exclusion of interest income related to loan receivables settled at the acquisition date, and the effects of the adjustments on income taxes and net loss. Additionally, the pro forma adjustments include adjustments to reflect non-recurring transaction costs of $14,139 and $19,382, incurred in the three and six months ended June 30, 2022, respectively, and non-recurring restructuring charges of $3,714 incurred in the three and six months ended June 30, 2022, as of the beginning of the comparable prior reporting period.
The pro forma financial information is not intended to represent or be indicative of the actual results of operations of the combined business that would have been reported had the acquisition of Edgecast been completed at the beginning of the fiscal year 2021, nor is it representative of future operating results of Edgio.
Moov Acquisition
In September 2021, we closed the acquisition of 100% of the equity interests of Moov Corporation (“Moov”), a California corporation doing business as Layer0, a sub-scale SaaS based application acceleration and developer support platform, for total purchase consideration of $52,487. The total purchase consideration included $34,054 in cash, and 6,878 shares of our common stock valued at $18,433 at the acquisition date.
The following table presents the allocation of the purchase price for Moov:
Consideration:
Cash$34,054 
Common stock18,433 
Total consideration$52,487 
The fair value of our common stock consideration of 6,878 shares, is based on the closing price of our common stock of $2.68 per share on the acquisition closing date.
The following table summarizes the allocation of the purchase consideration to the acquisition date fair value of the assets, including intangible assets, liabilities assumed and related goodwill acquired:
Cash$3,130 
Accounts receivable2,514 
Prepaid expenses and other current assets (a)1,171 
Goodwill (a)35,550 
Intangible assets:
  Trade name91 
  Customer relationships7,090 
  Technology8,480 
Total assets acquired58,026 
Accounts payable and accrued liabilities2,432 
Deferred revenue3,107 
Total liabilities5,539 
Total purchase consideration$52,487 
(a) During the first quarter of 2022, we identified measurement period adjustments related to preliminary fair value estimates. The total adjustment was an increase to prepaid expenses and other current assets of $860 and a decrease to goodwill of $860. During the second quarter of 2022, we identified measurement period adjustments related to preliminary fair value estimates. The total adjustment of $38 was due to an increase to prepaid expenses and other current assets and a decrease to goodwill of $38.
Certain amounts noted above are preliminary and subject to change during the respective measurement period (up to one year from the acquisition date) as we obtain additional information for the preliminary fair value estimates of the assets acquired and liabilities assumed. The remaining items to be finalized relate to the calculation of non-income based taxes and residual goodwill.
15


4. Investments in Marketable Securities
The following is a summary of marketable securities (designated as available-for-sale) at June 30, 2022:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Certificate of deposit$40 $ $ $40 
Corporate notes and bonds10,883  53 10,830 
Municipal securities11,349  21 11,328 
Total marketable securities$22,272 $ $74 $22,198 
The amortized cost and estimated fair value of marketable securities at June 30, 2022, by maturity are shown below:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Available-for-sale securities:
Due in one year or less$22,232 $ $74 $22,158 
Due after one year and through five years