UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
(Exact name of registrant as specified in its charter)
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(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (
Not Applicable
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ◻ | Accelerated filer | ◻ | |
☒ | 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
As of May 13, 2022,
GTY TECHNOLOGY HOLDINGS INC.
Form 10-Q
For the Quarter Ended March 31, 2022
Table of Contents
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
GTY TECHNOLOGY HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
March 31, | December 31, | |||||||
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| 2022 |
| 2021 | ||||
(unaudited) | ||||||||
Assets |
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Current assets: |
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Cash and cash equivalents | $ | | $ | | ||||
Accounts receivable, net | | | ||||||
Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net | | | ||||||
Finance lease right of use assets | | | ||||||
Operating lease right of use assets | | | ||||||
Intangible assets, net | | | ||||||
Goodwill | | | ||||||
Other assets |
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Total assets | $ | | $ | | ||||
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Liabilities and Shareholders’ Equity |
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Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | | $ | | ||||
Deferred revenue - current portion |
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Finance lease liability - current portion | | | ||||||
Operating lease liability - current portion | | | ||||||
Contingent consideration - current portion | | | ||||||
Total current liabilities |
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Deferred revenue - less current portion | | | ||||||
Warrant liability | | | ||||||
Deferred tax liability | | | ||||||
Contingent consideration - less current portion | | | ||||||
Term loans, net | | | ||||||
Operating lease liability - less current portion |
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Total liabilities |
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Commitments and contingencies |
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Shareholders’ equity: |
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Common stock |
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Exchangeable shares |
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Additional paid in capital |
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Accumulated other comprehensive loss |
| ( |
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Treasury stock | ( | ( | ||||||
Accumulated deficit | ( | ( | ||||||
Total shareholders' equity |
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Total liabilities and shareholders’ equity | $ | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
GTY TECHNOLOGY HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
(Amounts in thousands, except per share amounts)
Three Months Ended | Three Months Ended | ||||||
March 31, | March 31, | ||||||
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| 2022 | 2021 |
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Revenues | $ | | $ | | |||
Cost of revenues |
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Gross Profit |
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Operating expenses | |||||||
Sales and marketing | | | |||||
General and administrative | | | |||||
Research and development | | | |||||
Amortization of intangible assets | | | |||||
Change in fair value of contingent consideration | ( | | |||||
Total operating expenses | | | |||||
Loss from operations | ( | ( | |||||
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Other income (expense) | |||||||
Interest expense, net | ( | ( | |||||
Loss from repurchase/issuance of shares | — | ( | |||||
Change in fair value of warrant liability | | ( | |||||
Gain on extinguishment of debt | — | | |||||
Other income (loss), net | ( | ( | |||||
Total other income (expense), net | | ( | |||||
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Loss before income taxes | ( | ( | |||||
Benefit from income taxes | | | |||||
Net loss | ( | ( | |||||
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Net loss per share, basic and diluted | ( | ( | |||||
Weighted average common shares outstanding, basic and diluted | | | |||||
Net loss | $ | ( | $ | ( | |||
Other comprehensive gain (loss): | |||||||
Foreign currency translation gain (loss) | ( | | |||||
Total other comprehensive gain (loss) | ( | | |||||
Comprehensive loss | $ | ( | $ | ( | |||
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
GTY TECHNOLOGY HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)
(Amounts in thousands, except share amounts)
Three Months Ended March 31, 2022
Accumulated | |||||||||||||||||||||||||
Additional | Other | Total | |||||||||||||||||||||||
Common Stock | Exchangeable Shares | Paid in | Treasury | Accumulated | Comprehensive | Shareholders’ | |||||||||||||||||||
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Stock |
| Deficit |
| Loss |
| Equity | ||||||||
Balance - December 31, 2021 |
| | $ | |
| | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | |||||||
Net loss |
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| — |
| — |
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| ( |
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Foreign currency translation loss | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||
Share-based compensation | — |
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Vested and issued restricted stock units | | — | — | — | — | — | — | — | — | ||||||||||||||||
Stock option exercises | |
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Common stock issued for exchangeable shares | |
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| ( |
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Balance - March 31, 2022 |
| | $ | |
| | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
GTY TECHNOLOGY HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)
(Amounts in thousands, except share amounts)
Three Months Ended March 31, 2021
Accumulated | |||||||||||||||||||||||||
Additional | Other | Total | |||||||||||||||||||||||
Common Stock | Exchangeable Shares | Paid in | Treasury | Accumulated | Comprehensive | Shareholders’ | |||||||||||||||||||
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Stock |
| Deficit |
| Income |
| Equity | ||||||||
Balance - December 31, 2020 |
| | $ | | | $ | | $ | | $ | ( | $ | ( | $ | | $ | | ||||||||
Adjustment for correction of an error - warrant liability | — | — | — | — | ( | — | | — | ( | ||||||||||||||||
Balance - December 31, 2020, as adjusted | | | | | | ( | ( | | | ||||||||||||||||
Net loss |
| — | — | — | — | — | — | ( | — | ( | |||||||||||||||
Foreign currency translation gain | — | — | — | — | — | — | — | | | ||||||||||||||||
Share-based compensation | — | — | — | — | | — | — | — | | ||||||||||||||||
Issuance of common stock | | — | — | — | | — | — | — | | ||||||||||||||||
Common stock repurchases | ( | — | — | — | — | ( | — | — | ( | ||||||||||||||||
Vested and issued restricted stock units | | — | — | — | — | — | — | — | — | ||||||||||||||||
Stock option exercises | | — | — | — | | — | — | — | | ||||||||||||||||
Common stock issued for exchangeable shares | | — | ( | ( | | — | — | — | — | ||||||||||||||||
Balance - March 31, 2021 |
| | $ | |
| | $ | | $ | | $ | ( | $ | ( | $ | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
GTY TECHNOLOGY HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Amounts in thousands)
Three Months Ended | Three Months Ended | ||||||
March 31, | March 31, | ||||||
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| 2022 | 2021 | ||||
Cash flows from operating activities: |
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Net loss | $ | ( | $ | ( | |||
Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation of property and equipment |
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Amortization of intangible assets | | | |||||
Amortization of right of use assets | | | |||||
Share-based compensation | | | |||||
Deferred income tax benefit | ( | ( | |||||
Loss on issuance/repurchase of shares | — | | |||||
Change in fair value of warrant liability | ( | | |||||
Change in fair value of contingent consideration | ( | | |||||
Amortization of deferred debt issuance costs | | | |||||
Accrual of paid in kind interest | | | |||||
Gain on extinguishment of debt | — | ( | |||||
Bad debt expense | — | | |||||
Loss on disposal of fixed assets | — | | |||||
Changes in operating assets and liabilities: |
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Accounts receivable |
| ( |
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Prepaid expenses and other assets |
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Accounts payable and accrued liabilities |
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Deferred revenue and other liabilities | | | |||||
Operating lease liabilities |
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Net cash used in operating activities |
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Cash flows from investing activities: |
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Capital expenditures | ( | ( | |||||
Proceeds from disposal of fixed assets | — | | |||||
Net cash used in investing activities |
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Cash flows from financing activities: |
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Contingent consideration payments | ( | ( | |||||
Stock options exercises | | | |||||
Common stock repurchases | — | ( | |||||
Proceeds from issuance of common stock, net of costs | — | | |||||
Repayments of finance lease liabilities |
| ( |
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Net cash used in financing activities |
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Effect of foreign currency on cash and cash equivalents |
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Net change in cash and cash equivalents | ( | ( | |||||
Cash and cash equivalents, beginning of period |
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Cash and cash equivalents, end of period | $ | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
GTY TECHNOLOGY HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SUPPLEMENTAL CASH FLOWS DISCLOSURE
(Amounts in thousands)
Three Months Ended | Three Months Ended | ||||||
March 31, | March 31, | ||||||
2022 | 2021 | ||||||
Supplemental disclosure of cash flow information: |
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Cash paid for interest | $ | | $ | | |||
Noncash Investing and Financing Activities: | |||||||
Exchangeable shares converted to common stock | $ | | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8
GTY TECHNOLOGY HOLDINGS, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2022
(Amounts in tables in thousands, except share and per share amounts)
Note 1. Organization and Business Operations
GTY Technology Holdings Inc. and its subsidiaries (“GTY” or the “Company”) offers a cloud-based suite of solutions primarily for North American state and local governments. GTY’s cloud-based suite of solutions for state and local governments addresses functions in procurement, payments, grant management, budgeting and permitting.
The Company is headquartered in Boston, Massachusetts and has other offices in the United States and Canada. The following is a brief description of the Company’s primary subsidiaries and their businesses.
Bonfire, a Procurement Business
Bonfire Interactive Ltd. (“Bonfire” or “Procurement”) was incorporated on March 5, 2012 under the laws of the Province of Ontario. Bonfire is a provider of strategic sourcing and procurement software, serving customers in government, the broader public sector, and various highly regulated commercial vertical markets. Bonfire offers customers and their sourcing professionals a modern software-as-a-service (“SaaS”) application that helps find, engage, evaluate, negotiate and award vendor and supplier contracts. Bonfire delivers workflow automation, data collection and analysis, and collaboration to drive cost savings, compliance, and strategic outcomes. All of Bonfire’s applications are delivered as a SaaS offering, and Bonfire offers implementation and premium support services.
CityBase, a Payments Business
CityBase, Inc. (“CityBase” or “Payments”), a Delaware corporation headquartered in Chicago, provides dynamic content, digital services, and integrated payments via a SaaS platform that includes technological functionality accessible via web and mobile, kiosk, point-of-sale, and other channels. CityBase software integrates its platform to underlying systems of record, billing, and other source systems, and configures payments and digital services to meet the requirements of its customers, which include government agencies and utility companies.
eCivis, a Grants Management Business
eCivis, Inc. (“eCivis” or “Grants Management”), a Delaware corporation headquartered in Los Angeles, California, is a leading SaaS provider of grants management and indirect cost reimbursement solutions that enable its customers to standardize and streamline complex grant processes in a fully integrated platform. The eCivis platform consists of four core cloud-based products, including grants research, grants management, sub-recipient management, and cost allocation and recovery. To assist its customers in the implementation of its cloud-based products, eCivis offers one-time implementation services, including data integration, grants migration and change management. Additionally, eCivis provides ongoing grants management training, cost allocation plan consulting and cost recovery services.
Open Counter, a Permitting Business
Open Counter Enterprises Inc. (“Open Counter” or “Permitting”), a Delaware corporation headquartered in Boston, Massachusetts, is a developer and provider of software tools for cities to streamline permitting and licensing services for municipal governments. Open Counter provides customers with software through a hosted platform and provides professional services related to software implementation.
Questica, a Budget Business
Questica Software Inc. (“Questica” and, collectively with Sherpa, “Budget”) is a British Columbia corporation organized in 1998 and headquartered in Burlington, Ontario, Canada. Questica designs and develops budgeting software that
9
GTY TECHNOLOGY HOLDINGS, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2022
(Amounts in tables in thousands, except share and per share amounts)
supports the unique requirements of the public sector. The Questica suite of products are part of a comprehensive web-based budgeting preparation, performance, management, data visualization and visual publication solution that enables public sector and non-profit organizations to improve and shorten their budgeting cycles.
Sherpa, a Budget Business
Sherpa Government Solutions LLC (“Sherpa” and, collectively with Questica, “Budget”) is a Colorado limited liability company headquartered in Denver, Colorado, established in 2004. Sherpa is a leading provider of public sector budgeting software and consulting services that help state and local governments create and manage budgets and performance. Customers purchase Sherpa’s software and then engage its consulting services to configure the software and receive training on how to manage the software going forward. Following implementation, customers continue to use the software in exchange for maintenance or subscription fees.
Note 2. Going Concern and Liquidity
The Company’s condensed consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
As reflected in the condensed consolidated financial statements, the Company had an accumulated deficit of approximately $
The Company is attempting to further expand its customer base; scale up its production of various products; increase revenue; and replace the term loans with financing with terms similar to the current agreement in place; however, the Company’s cash position may not be sufficient to support its daily operations through the next twelve months from the date of filing this 10-Q. While the Company believes in the viability of its platform and in its ability to raise additional funds by way of a public or private offering, there can be no assurances to that effect.
The condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Note 3. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Certain information and disclosures normally included in condensed consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”) on February 18, 2022.
10
GTY TECHNOLOGY HOLDINGS, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2022
(Amounts in tables in thousands, except share and per share amounts)
The accompanying condensed consolidated financial statements reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year ending December 31, 2022.
Certain reclassifications have been made to conform to current period presentation. These reclassifications include the presentation of the gain on extinguishment of debt and the proceeds from the disposal of fixed assets. There was no impact to net loss or net change in cash and cash equivalents, respectively.
Principles of Consolidation
The condensed consolidated financial statements include all accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in the accompanying condensed consolidated financial statements.
Use of Estimates
The preparation of the condensed consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheets and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates include revenue recognition, the carrying value of goodwill, the fair value of acquired intangibles, the capitalization of software development costs, the useful lives of intangible assets, share-based compensation, right of use assets, warrant liability, financing and operating lease liabilities, contingent consideration and the valuation allowance of deferred tax assets resulting from net operating losses.
COVID-19 Update
The COVID-19 pandemic has created and may continue to create significant uncertainty in macroeconomic conditions, which may cause customer slowdowns or shutdowns, depress demand, and adversely impact results of operations. During the quarter ended March 31, 2022, the Company faced significant uncertainties and continues to expect uncertainties around its key accounting estimates to continue to evolve depending on the duration and degree of impact associated with the COVID-19 pandemic. Estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in the consolidated financial statements.
Significant Accounting Policies
There have been no material changes to the Company’s significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 as filed with the SEC on February 18, 2022.
Fair Value
The fair value of an asset or liability is the price that would be received to sell an asset or transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes a fair value hierarchy that maximizes the use of observable inputs and
11
GTY TECHNOLOGY HOLDINGS, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2022
(Amounts in tables in thousands, except share and per share amounts)
minimizes the use of unobservable inputs when measuring fair value and defines three levels of inputs that may be used to measure fair value.
● | Level 1 — uses quoted prices in active markets for identical assets or liabilities. |
● | Level 2 — uses observable inputs other than quoted prices in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. |
● | Level 3 — uses one or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment. |
The Company’s only material financial instruments carried at fair value as of March 31, 2022 and December 31, 2021, with changes in fair value flowing through current earnings, consist of contingent consideration liabilities recorded in conjunction with business combinations and the fair value of its warrant liabilities are as follows:
Fair Value Measurement at | ||||||||||||
Reporting Date Using | ||||||||||||
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| Quoted Prices in |
| Significant |
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Active Markets | Other | Significant | ||||||||||
Balance as of | for Identical | Observable | Unobservable | |||||||||
March 31, | Assets | Inputs | Inputs | |||||||||
2022 | (Level 1) | (Level 2) | (Level 3) | |||||||||
Contingent consideration – current | $ | | $ | — | $ | — | $ | | ||||
Contingent consideration – long term |
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| — |
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Warrant liability | | — | — | | ||||||||
Total liabilities measured at fair value | $ | | $ | — | $ | — | $ | | ||||
Fair Value Measurement at | ||||||||||||
Reporting Date Using | ||||||||||||
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| Quoted Prices in |
| Significant |
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Active Markets | Other | Significant | ||||||||||
Balance as of | for Identical | Observable | Unobservable | |||||||||
December 31, | Assets | Inputs | Inputs | |||||||||
2021 | (Level 1) | (Level 2) | (Level 3) | |||||||||
Contingent consideration – current | $ | | $ | — | $ | — | $ | | ||||
Contingent consideration – long term |
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| — |
| — |
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Warrant liability | | — | — | | ||||||||
Total liabilities measured at fair value | $ | | $ | — | $ | — | $ | |
There were no transfers made among the three levels in the fair value hierarchy during the three months ended March 31, 2022.
The following tables present additional information about Level 3 liabilities measured at fair value. Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the Level 3 category. As a result, the unrealized gains and losses for liabilities within the Level 3 category may include changes in
12
GTY TECHNOLOGY HOLDINGS, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2022
(Amounts in tables in thousands, except share and per share amounts)
fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs.
Changes in contingent consideration liabilities measured at fair value from December 31, 2021 to March 31, 2022 were as follows:
Contingent consideration – December 31, 2021 |
| $ | |
Change in fair value of contingent consideration |
| ( | |
Payments of contingent consideration | ( | ||
Contingent consideration – March 31, 2022 | $ | |
On February 19, 2019, the Company consummated several acquisitions (collectively, the “Acquisition”), pursuant to which it acquired each of Bonfire, CityBase, eCivis , Open Counter, Questica and Sherpa (together with Bonfire, CityBase, eCivis, Open Counter and Questica, the “Acquired Companies”).
The fair value of the Company’s contingent consideration liabilities recorded as part of the Acquisition has been classified within Level 3 in the fair value hierarchy. The contingent consideration represents the estimated fair value of future payments due to the sellers based on each company’s achievement of annual earnings targets in certain years and other events considered in certain transaction documents. The fair values of the contingent consideration were calculated through the use of either Monte Carlo simulation or modified Black-Scholes analyses based on earnings projections for the respective earn-out periods, corresponding earnings thresholds, and approximate timing of payments as outlined in the purchase agreements for each of the Acquired Companies. The analyses utilized the following assumptions: (i) expected term; (ii) risk-adjusted net sales or earnings; (iii) risk-free interest rate; and (iv) expected volatility of earnings. Estimated payments, as determined through the respective models, were further discounted by a credit spread assumption to account for credit risk. The contingent consideration is revalued to fair value each period, and any increase or decrease is recorded in operating income (loss). The fair value of the contingent consideration may be impacted by certain unobservable inputs, most significantly with regard to discount rates, expected volatility and historical and projected performance. Significant changes to these inputs in isolation could result in a significantly different fair value measurement.
As of March 31, 2022, the contingent consideration liability consists of consideration due to former shareholders of CityBase and shareholders associated with an asset purchase by eCivis prior to the Acquisition.
Pursuant to the terms of a 2018 asset purchase agreement by eCivis, shareholders associated with the purchase may receive cash consideration equal to
13
GTY TECHNOLOGY HOLDINGS, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2022
(Amounts in tables in thousands, except share and per share amounts)
is unlimited. The total fair value of the associated contingent liability as of March 31, 2022 is approximately $
Changes in the warrant liability measured at fair value from December 31, 2021 to March 31, 2022 were as follows:
Warrant liability – December 31, 2021 | $ | | |
Change in fair value of warrant liability |
| ( | |
Warrant liability – March 31, 2022 | $ | | |
The warrant liability was estimated using a Black-Scholes model derived from a Monte Carlo simulation of the Company’s outstanding public warrants. These inputs were primarily derived from the implied volatility of the traded public warrant price. The warrant liability is revalued to fair value each period, and any increase or decrease is recorded in other income (expense).
The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and term loans approximates fair value because of the short-term nature of these instruments.
The Company measures certain assets at fair value on a non-recurring basis, generally annually or when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. These assets include goodwill and other intangible assets.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Disaggregation of Revenues
Three Months Ended | Three Months Ended | ||||||
| March 31, | March 31, | |||||
| 2022 |
| 2021 | ||||
Subscriptions, support and maintenance | $ | |
| $ | | ||
Professional services |
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License |
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Asset sales |
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Total revenues | $ | |
| $ | | ||
Revenues
Subscription, support and maintenance. The Company delivers its solutions primarily as a subscription service that provides customers with access to SaaS related support and updates during the term of the arrangement. Revenues are recognized ratably over the contract term as the customer simultaneously receives and consumes the benefits of the subscription, as the service is made available by the Company. The first year of subscription fees are typically payable within 30 days after the execution of a contract, and thereafter upon renewal. The Company initially records subscription fees as contract liabilities and recognizes revenues on a straight-line basis over the term of the agreement.
14
GTY TECHNOLOGY HOLDINGS, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2022
(Amounts in tables in thousands, except share and per share amounts)
The Company’s contracts may include variable consideration in the form of usage fees, which are constrained and recognized once the uncertainties associated with the constraint are resolved, which is when usage occurs and the fee is known.
Subscription, support and maintenance revenues also includes kiosk rentals and support or maintenance pertaining to license sales. Revenues from kiosk rentals and support are recognized on a straight-line basis over the support period.
Revenues from subscription, support and maintenance comprised approximately
Professional services. The Company’s professional services contracts generate revenues on a time and materials or fixed fee basis. Revenues are recognized as the services are rendered for time and materials contracts. Revenues are recognized when the milestones are achieved and accepted by the customer or on a proportional performance basis for fixed fee contracts. Training revenues are recognized as the services are performed. Revenues from professional services comprised approximately
License. Revenues from distinct licensed software are recognized upfront when the software is made available to the customer, which normally coincides with contract execution, as this is when the customer has the risks and rewards of the right to use the software. Revenues from licenses comprised less than
Asset sales. Revenues from asset sales are recognized when the asset, typically a kiosk, has been received by the customer and is fully operational and ready to accept transactions, which is when the customer obtains control and has the risks and rewards of the asset. Asset sales comprised approximately
Net Loss per Share
Net loss per share of common stock is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share of common stock is computed similarly to basic net income per share of common stock except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock. Due to the net loss for the three months ended March 31, 2022 and 2021, diluted and basic loss per share are the same.
Securities that could potentially dilute net loss per share in the future that were not included in the computation of diluted loss per share at March 31, 2022 and 2021 are as follows:
2022 | 2021 | |||
Warrants to purchase common stock |
| | | |
Unvested restricted stock units |
| | | |
Options to purchase common stock |
| | | |
Total |
| | |
15
GTY TECHNOLOGY HOLDINGS, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2022
(Amounts in tables in thousands, except share and per share amounts)
Income Taxes
In determining the quarterly benefit from income taxes, the Company uses the annual estimated effective tax rate applied to the actual year-to-date loss, adjusted for discrete items arising in that quarter. The Company’s annual estimated effective tax rate differs from the U.S. federal statutory rate of
Recently Adopted Accounting Pronouncements
On January 1, 2021, the Company adopted ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. ASU 2019-12 simplifies various aspects related to accounting for income taxes, removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. The adoption of this new standard did not have a material impact on the Company’s condensed consolidated financial statements.
Accounting Pronouncements Not Yet Adopted
In November 2021, the Financial Accounting Standards Board issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosure by Business Entities about Government Assistance (ASU 2021-10), which requires the disclosure of government assistance received by most business entities relating to: (1) the types of government assistance received; (2) the accounting for such assistance; and (3) the effect of the assistance on a business entity's financial statements. This guidance will be effective for our annual financial statements for the year ended December 31, 2022. We are currently evaluating the impact of the new guidance on our consolidated financial statements.
16
GTY TECHNOLOGY HOLDINGS, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2022
(Amounts in tables in thousands, except share and per share amounts)
Note 4. Intangible Assets
The Company recognized goodwill and certain identifiable intangible assets in connection with business combinations. Identifiable intangible assets consist of the following as of March 31, 2022 and December 31, 2021:
March 31, 2022 | |||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||
Patents / Developed Technology | $ | | $ | ( | $ | | |||
Trade Names / Trademarks | | ( | | ||||||
Customer Relationships | | ( | | ||||||
Non-Compete Agreements | | ( | - | ||||||
Total Intangibles | $ | | $ | ( | $ | | |||
December 31, 2021 | |||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||
Patents / Developed Technology | $ | | $ | ( | $ | | |||
Trade Names / Trademarks | | ( | | ||||||
Customer Relationships | | ( | | ||||||
Non-Compete Agreements | | ( | | ||||||
Total Intangibles | $ | | $ | ( | $ | |
Amortization expense recognized by the Company related to intangible assets was $
The estimated aggregate future amortization expense for intangible assets is as follows:
Nine months ending December 31, 2022 |
| | |
Year ending December 31, 2023 |
| | |
Year ending December 31, 2024 |
| | |
Year ending December 31, 2025 |
| | |
Year ending December 31, 2026 | | ||
Thereafter |
| | |
$ | |
Note 5. Leases
The Company leases office space under agreements classified as operating leases that expire on various dates through 2030. Such leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. Certain of the Company’s leases include renewal options and escalation clauses; renewal options have not been included in the calculation of the lease liabilities and right of use assets as the Company is not reasonably certain to exercise the options. Variable expenses generally represent the Company’s share of the landlord’s operating expenses.
At March 31, 2022, the Company had operating right of use assets of approximately $
17
GTY TECHNOLOGY HOLDINGS, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2022
(Amounts in tables in thousands, except share and per share amounts)
assets obtained in exchange for new operating lease liabilities was approximately $
The Company purchases kiosks that are funded by finance leases that expire on various dates through 2023 and are included in fixed assets. At March 31, 2022, the Company had finance lease right of use assets of $
The following summarizes quantitative information about the Company’s leases:
Three Months Ended March 31, 2022:
Grants | |||||||||||||||
|
| Procurement |
| Payments |
| Management | Budget |
| Total | ||||||
Finance lease cost |
|
|
|
|
|
|
|
| |||||||
Amortization of right-of-use assets | $ | — | $ | | $ | — | $ | — | $ | | |||||
Interest | — | | — | — | | ||||||||||
Operating lease cost | | | | | | ||||||||||
Total lease cost | $ | | $ | | $ | | $ | | $ | |
|
| Grants |
| |||||||||||||
Procurement |
| Payments |
| Management | Budget |
| Total | |||||||||
Weighted-average remaining lease term – finance leases | N/A | N/A | N/A | |||||||||||||
Weighted-average remaining lease term – operating leases |
|
|
|
| ||||||||||||
Weighted-average discount rate – finance leases | N/A | | % | N/A | N/A | | % | |||||||||
Weighted-average discount rate – operating leases |
| | % |
| | % | | % |
| | % |
| | % |
As of March 31, 2022, future minimum lease payments under non-cancellable leases are as follows:
|
| Grants | Operating | Finance | ||||||||||||||
Procurement |
| Payments |
| Management | Budget |
| Leases |
| Leases | |||||||||
Year Ending December 31, 2022 | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Year Ending December 31, 2023 |
| — | | — |
| |
| | — | |||||||||
Year Ending December 31, 2024 |
| — | | — |
| |
| | — | |||||||||
Year Ending December 31, 2025 |
| — | | — |
| |
| | — | |||||||||
Year Ending December 31, 2026 | — | | — | | | — | ||||||||||||
Thereafter |
| — | | — |
| |
| | — | |||||||||
Total | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Less present value discount |
| ( | ( | ( | ( | ( | ( | |||||||||||
Present value of lease liabilities | $ | | $ | | $ | | $ | | $ | | $ | |
18
GTY TECHNOLOGY HOLDINGS, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2022
(Amounts in tables in thousands, except share and per share amounts)
Note 6. Term Loans
Credit Facility
On November 13, 2020, the Company entered into a senior secured term loan facility (“November 2020 Credit Facility”) that provides for borrowing of term loans in an aggregate principal amount of $
For the three months ended March 31, 2022 and 2021, the Company recognized $
The Company’s term loan as of March 31, 2022 is summarized as follows:
November 2020 | |
Principal | $ |
Payment-in-kind ("PIK") accrued interest | |
Unamortized deferred issuance costs | ( |
Term loans, net | $ |
Maturity date | May 2023 |
Interest rate | |
PIK interest rate |
Note 7. Commitments and Contingencies
Legal Proceedings
From time to time, the Company may become involved in legal proceedings arising in the ordinary course of its business. The Company is not currently a party to any legal proceedings that, if determined adversely to the Company, would have a material adverse effect on the Company.
Indemnification
Additionally, in the ordinary course of business, the Company may provide indemnification of varying scope and terms to customers, vendors, investors, directors and officers with respect to certain matters, including, but not limited to, losses arising out of our breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. These indemnification provisions may survive termination of the underlying
19
GTY TECHNOLOGY HOLDINGS, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2022
(Amounts in tables in thousands, except share and per share amounts)
agreement and the maximum potential amount of future payments that the Company could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The maximum potential amount of future payments that the Company could be required to make under these indemnification provisions is indeterminable. The Company has never paid a material claim, nor has it been sued in connection with these indemnification arrangements.
As of March 31, 2022 and December 31, 2021, the Company has not accrued a liability for any legal proceedings, claims or indemnification arrangements because the likelihood of incurring a payment obligation, if any, in connection with them is not probable or reasonably estimable.
Note 8. Shareholders’ Equity
Common Stock – GTY is authorized to issue
On February 4, 2022, the Company entered into an At Market Issuance Sales Agreement with B. Riley Securities, Inc. (“B. Riley Securities”) and Needham & Company, LLC (“Needham & Company” and together with B. Riley Securities, the “Sales Agents”) with respect to an at-the-market offering program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $
During the three months ended March 31, 2022 and 2021, the Company issued
Share Redemptions
Under the agreements with eCivis, the Company acquired eCivis for aggregate consideration of approximately $
Preferred Shares – GTY is authorized to issue
20
GTY TECHNOLOGY HOLDINGS, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2022
(Amounts in tables in thousands, except share and per share amounts)
Warrants
At March 31, 2022, there were a total of
The Company may call the public warrants for redemption, in whole and not in part, at a price of $
Note 9. Share-Based Compensation
Stock Options
In connection with the Acquisition, the Company adopted a stock option plan and issued
A summary of stock option activity is as follows:
|
|
|
| Weighted |
| |||||
Average | ||||||||||
Weighted | Remaining | |||||||||
Average | Contractual | Total | ||||||||
Number of | Exercise | Life (in | Intrinsic | |||||||
Shares | Price | years) | Value | |||||||
Outstanding as of December 31, 2021 |
| | $ | |
| $ | | |||
Granted |
| — |
| — |
| — |
| — | ||
Exercised |
| ( | | |||||||
Forfeited/expired |
| ( | | |||||||
Outstanding as of March 31, 2022 |
| | $ | |
| $ | | |||
Options vested and exercisable |
| | $ | | $ | |
For each of the three months ended March 31, 2022 and 2021, the Company recorded less than $
Restricted Stock Units
Subsequent to the Acquisition, the Company adopted a plan to issue restricted stock units (“RSUs”) to employees as annual performance awards. RSUs may vest in ratable annual installments over either
21
GTY TECHNOLOGY HOLDINGS, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2022
(Amounts in tables in thousands, except share and per share amounts)
A summary of the Company's RSU’s and related information is as follows:
|
|
| Weighted Average | ||
Number of Units | Grant Price | ||||
Unvested as of December 31, 2021 |
| | $ | | |
Granted |
| | | ||
Vested | ( | | |||
Forfeited/expired |
| ( | | ||
Unvested as of March 31, 2022 |
| | $ | |
For the three months ended March 31, 2022 and 2021, the Company recorded approximately $
22
GTY TECHNOLOGY HOLDINGS, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2022
(Amounts in tables in thousands, except share and per share amounts)
Note 10. Segment Reporting
The Company conducts its business through the following
The accounting policies of the operating segments are the same as those described in Note 3. The following provides operating information about the Company’s reportable segments for the periods presented:
|
| Corporate |
| Procurement |
| Payments |
| Grants Management |
| Permitting |
| Budget |
| Total | |||||||
Three Months Ended March 31, 2022 |
|
| |||||||||||||||||||
Total revenue | $ | — | | | | | | $ | | ||||||||||||
Cost of revenues |
| — | | | | | |
| | ||||||||||||
Income (loss) from operations |
| ( | ( | ( | ( | ( | ( |
| ( | ||||||||||||
Amortization of intangible assets | — | | | | | | | ||||||||||||||
Depreciation expense | — | | | | | | | ||||||||||||||
Interest income (expense), net | ( | — | — | — | — | — | ( | ||||||||||||||
Benefit from (provision for) income taxes | — | | — | — | — | ( | | ||||||||||||||
|
|
| |||||||||||||||||||
Three Months Ended March 31, 2021 |
|
|
| ||||||||||||||||||
Total revenue | $ | — | | | | | | $ | | ||||||||||||
Cost of revenues |
| — | | | | | |
| | ||||||||||||
Loss from operations |
| ( | ( | ( | ( | ( | |
| ( | ||||||||||||
Amortization of intangible assets | — | | | | | | | ||||||||||||||
Depreciation expense | — | | | | | | | ||||||||||||||
Interest income (expense), net | ( | — | ( | ( | — | — | ( | ||||||||||||||
Benefit from (provision for) income taxes | — | — | — | — | — | | | ||||||||||||||
As of March 31, 2022 |
|
|
| ||||||||||||||||||
Goodwill | $ | — | | | | | | $ | | ||||||||||||
Assets |
| | | | | | |
| | ||||||||||||
As of December 31, 2021 |
|
|
| ||||||||||||||||||
Goodwill | $ | — | | | | | | $ | | ||||||||||||
Assets |
| | | | | | |
| |
Revenues from North America customers accounted for greater than
Note 11. Subsequent Events
Second Amendment to November 2020 Credit Facility
On April 1, 2022, the Company entered into a Second Amendment to the November 2020 Credit Facility (the “Second Amendment”). Under the Second Amendment, a term loan in the aggregate principal amount of $
23
GTY TECHNOLOGY HOLDINGS, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 2022
(Amounts in tables in thousands, except share and per share amounts)
Agreement and Plan of Merger
On April 28, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with GI Georgia Midco Inc., a Delaware corporation (“Parent”), and GI Georgia Merger Sub Inc., a Massachusetts corporation and a wholly owned subsidiary of Parent (“Merger Sub”). The Merger Agreement provides, subject to its terms and conditions, for the acquisition of the Company by Parent at a price of $
24
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with the financial statements and related notes that are included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K filed with the SEC on February 18, 2022. Certain statements in this Quarterly Report on Form 10-Q are “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”). These statements involve a number of risks, uncertainties and other factors that could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that could materially affect such forward-looking statements can be found in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 and elsewhere in this Form 10-Q. Investors are urged to consider these factors carefully in evaluating any forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date hereof, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
Certain statements in the following discussions are based on non-GAAP financial measures. A “non-GAAP financial measure” is a numerical measure of a registrant’s historical or future financial performance, financial position or cash flows that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statements of comprehensive income, balance sheets or statements of cash flows of the issuer; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. The Company includes non-GAAP financial measures in this Management’s Discussion and Analysis, as the Company’s management believes that these measures and the information they provide are useful to investors because they permit investors to view the Company’s performance using the same tools that management uses and to better evaluate the Company’s ongoing business performance. In order to better align the Company’s reported results with the internal metrics used by the Company’s management to evaluate business performance as well as to provide better comparisons to prior periods and peer data, non-GAAP measures exclude the impact of purchase accounting related to the Acquisition. See “Reconciliation of Non-GAAP Revenues” below for more information and reconciliations of such measures to the nearest comparable GAAP measures.
Overview
We are a public sector company that offers a cloud-based suite of solutions primarily for North American state and local governments. Our six wholly-owned subsidiaries are Bonfire, CityBase, eCivis, Open Counter, Questica and Sherpa. Through our operating subsidiaries, we serve some of the fastest growing segments in the government technology sector, specifically procurement, payments, grants management, permitting, and budgeting.
We were formed on August 11, 2016 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “business combination”). Until the business combination, we did not engage in any operations nor generate any revenues. We recognized an opportunity to replace costly legacy on-premises software systems with scalable and efficient SaaS products. Our search led to the acquisition (the “Acquisition”) of Bonfire, CityBase, eCivis, Open Counter, Questica, and Sherpa on February 19, 2019.
Our customers are primarily located in the United States and Canada, including counties, municipalities, special districts, law enforcement agencies and public school districts. We plan to continue to increase our customer base by leveraging our comprehensive product portfolio with our existing customer base, investing in direct sales to new customers, and using relationships with other companies that offer complementary products and services.
We have historically signed a high percentage of agreements with new customers, as well as renewal agreements with existing customers, in the second and third quarters of each year and usually during the last month of the quarter. This can be attributed to buying patterns typical in the public sector. As the terms of most of our customer agreements are measured in full year increments, agreements initially entered into in any given month of any quarter will generally come up for
25
renewal at that same time in subsequent years. This seasonality is reflected in our invoicing and cash flows with our highest collections occurring in the second half of each calendar year.
Our variable consideration or usage fee revenue is also dependent on the payment patterns of our customers’ constituents. Historically, a high percentage of these usage fees have been earned in the second and fourth quarters of each year. This seasonality is also reflected in our revenues and cash flows during the respective periods.
Expansion and Further Penetration of Our Customer Base. We employ a strategy that focuses on acquiring new customers and growing our relationships with existing customers over time. We believe that significant opportunity exists for us to acquire new customers as well as expand the use of our platforms by selling additional products and increasing the number of users within our current customers’ organizations.
Investment in Growth. We plan to continue to invest in our business so that we can capitalize on our market opportunity. We intend to continue to grow our sales and marketing team to acquire new customers and to increase sales to existing customers. We intend to continue to grow our research and development team to extend the functionality and range of our applications. We also intend to invest in new and improved information technology solutions to support our business. However, we expect our sales and marketing expenses and research and development expenses as a percentage of revenues to decrease over time as we grow our revenues and gain economies of scale by increasing our customer base and increase sales to our existing customer base. We believe that these investments will contribute to our long-term growth, although they may adversely affect our profitability in the near term.
Leveraging Relationships. We plan to continue to strengthen and expand our relationships with technology vendors, professional services firms, and resellers. These relationships enable us to increase the speed of deployment and offer a wider range of integrated services to our customers. We intend to support these existing relationships, seek additional relationships and further expand our channel of resellers to help us increase our presence in existing markets and to expand into new markets. Our business and results of operations will be significantly affected by whether we succeed in leveraging and expanding these relationships.
Market Adoption of Our Platforms. A key focus of our sales and marketing efforts is creating market awareness about the benefits of our cloud-based SaaS platforms. The market for SaaS solutions is less mature than the market for on-premise software applications, and potential customers may be slow or unwilling to migrate from their legacy solutions. Our business and operating results will be significantly affected by the degree to and speed with which organizations adopt our solutions.
Key Components of our Results of Operations
Revenues
Subscription, support and maintenance. We deliver our solutions primarily as a subscription service and provide customers with access to SaaS-related support and updates during the term of the arrangement. Revenues are recognized ratably over the contract term as the customer simultaneously receives and consumes the benefits of the subscription service. Subscription fees are typically payable within 30 days after the execution of a contract, and thereafter upon renewal. We initially record subscription fees as contract liabilities and recognize revenues on a straight-line basis over the term of the agreement.
Our contracts may include variable consideration in the form of usage fees, which are included in the transaction price in the period in which the usage occurs and the fee is known.
Subscription, support and maintenance revenues also includes kiosk rentals and support or maintenance pertaining to license sales. Revenues from kiosk rentals and support are recognized on a straight-line basis over the support period.
Revenues from subscription, support and maintenance comprised approximately 79% and 77% of total revenues for the three months ended March 31, 2022 and 2021, respectively.
26
Professional services. Our professional services contracts generate revenues on a time and materials, fixed fee or subscription basis. Revenues are recognized as the services are rendered for time and materials contracts. Revenues are recognized when the milestones are achieved and accepted by the customer or on a proportional performance basis for fixed fee contracts. Revenues are recognized ratably over the contract term for subscription contracts. The milestone method for revenue recognition is used when there is substantive uncertainty at the date the contract is entered into regarding whether the milestone will be achieved. Training revenues are recognized as the services are performed. Revenues from professional services comprised approximately 19% and 22% of total revenues for the three months ended March 31, 2022 and 2021, respectively.
License. Revenues from distinct licensed software are recognized upfront when that software is made available to the customer, which normally coincides with contract execution, as this is when the customer has the risks and rewards of the right to use the software. Revenues from licenses comprised less than 1% for the three months ended March 31, 2022 and 2021.
Asset sales. Revenues from asset sales are recognized when the asset, typically a kiosk, has been received by the customer and is fully operational and ready to accept transactions, which is when the customer obtains control and has the risks and rewards of the asset. Asset sales comprised approximately 2% and 1% of total revenues for the three months ended March 31, 2022 and 2021, respectively.
Cost of Revenues
Cost of revenues primarily consists of salaries and benefits of personnel relating to our hosting operations and support, implementation, and grants research. Cost of revenues includes data center costs including depreciation of the Company’s data center assets, third-party licensing costs, consulting fees, and the amortization of acquired technology from recent acquisitions.
Operating Expenses
Sales and marketing
Sales and marketing expenses consist primarily of personnel costs of our sales and marketing employees, including salaries, sales commissions and incentives and benefits, travel and related costs, outside consulting fees, marketing programs, including lead generation, and costs of advertising and trade shows. We defer sales commissions and amortize them ratably over the expected customer life. We expect that sales and marketing expenses will increase as we expand our direct sales teams and increase sales through our strategic relationships and resellers.
Research and development
Research and development expenses consist primarily of salaries and benefits associated with our engineering, product and quality assurance personnel. Research and development expenses also include the cost of third-party contractors. Other than internal-use software development costs that qualify for capitalization, research and development costs are expensed as incurred. We expect research and development costs to increase as we develop new solutions and make improvements to our existing platforms.
General and administrative
General and administrative expenses consist primarily of salaries and benefits with our executive, finance, legal, human resources, compliance and other administrative personnel, accounting, auditing and legal professional services fees, recruitment costs, and other corporate-related expenses. We expect that general and administrative expenses will increase as we scale our business, but at a lower rate over time.
27
Results of Operations
Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021
Total revenues
Our total revenues were $15.9 million for the three months ended March 31, 2022. Excluding the $0.1 million impact of purchase accounting, our total non-GAAP revenues for the three months ended March 31, 2022 was $16.0 million compared to $13.4 million for the three months ended March 31, 2021, representing a 20% increase. This increase was driven by an increase in the number of customers, an increase in the number of users added by existing customers and an increase in the number of products purchased by existing customers. The change in revenues for each operating segment is provided in the following table (in thousands, except percentages):
| |||||||||||||||||||||||
Generally Accepted Accounting Principles (“GAAP”) | Non-GAAP |
| |||||||||||||||||||||
Total | Total | Increase / | Increase / | Total | Total | Increase / | Increase / |
| |||||||||||||||
Revenues | Revenues | (Decrease) | (Decrease) | Revenues | Revenues | (Decrease) | (Decrease) |
| |||||||||||||||
| 2022 |
| 2021 |
| in Dollars |
| in % |
| 2022 |
| 2021 |
| in Dollars |
| in % |
| |||||||
Procurement |
| $ | 2,939 | $ | 2,437 | $ | 502 | 21 | % | $ | 2,939 | $ | 2,437 | $ | 502 | 21 | % | ||||||
Payments | 3,046 | 2,229 | 817 | 37 | % | 3,175 | 2,351 | 824 | 35 | % | |||||||||||||
Grants Management | 2,153 | 1,750 | 403 | 23 | % | 2,153 | 1,750 | 403 | 23 | % | |||||||||||||
Permitting | 729 | 695 | 34 | 5 | % | 729 | 695 | 34 | 5 | % | |||||||||||||
Budget | 7,033 | 6,148 | 885 | 14 | % | 7,033 | 6,148 | 885 | 14 | % | |||||||||||||
Total |
| $ | 15,900 | $ | 13,259 | $ | 2,641 | 20 | % | $ | 16,029 | $ | 13,381 | $ | 2,648 | 20 | % |
A reconciliation of non-GAAP revenues and other non-GAAP financial measures is included in the section titled “Reconciliation of Non-GAAP Financial Measures” in this Quarterly Report on Form 10-Q.
Total cost of revenues
Our total cost of revenues for the three months ended March 31, 2022 increased primarily as a result of costs associated with our headcount additions to support our revenue growth. The change in cost of revenues for each operating segment is due to the following (in thousands, except percentages):
| ||||||||||||
Total Cost of | Total Cost of | Increase / | Increase / |
| ||||||||
Revenues | Revenues | (Decrease) | (Decrease) |
| ||||||||
| 2022 |
| 2021 |
| in Dollars |
| in % |
| ||||
Procurement | $ | 676 | $ | 470 | $ | 206 | 44 | % | ||||
Payments | 1,974 | 1,566 | 408 | 26 | % | |||||||
Grants Management | 1,007 | 650 | 357 | 55 | % | |||||||
Permitting | 207 | 154 | 53 | 34 | % | |||||||
Budget | 2,173 | 1,902 | 271 | 14 | % | |||||||
Total |
| $ | 6,037 | $ | 4,742 | $ | 1,295 | 27 | % |
Procurement
Procurement’s total cost of revenues increased by $0.2 million or 44% primarily due to a $0.1 million or 30% increase in salaries and wages driven by a 33% increase in average headcount from March 31, 2021 to March 31, 2022 and a $0.1 million increase in stock-based compensation related to the issuance of restricted stock units.
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Payments
Payments’ total cost of revenues increased by $0.4 million or 26% primarily due to a $0.2 million increase in kiosk operations, a $0.1 million increase in costs associated with the sale of kiosks, and a $0.1 million increase in implementation costs.
Grants Management
Grants Management’s total cost of revenues increased by $0.4 million or 55% primary due to a $0.1 million increase in hosting costs, a $0.1 million increase in the cost of third-party contractors to support implementations, a $0.1 million increase in royalty expense, and a $0.1 million or 21% increase in salaries and wages.
Permitting
Permitting’s total cost of revenues increased by $0.1 million or 55% due to a $0.1 million increase in salaries and wages.
Budget
Budget’s total cost of revenues increased by $0.3 million or 14% primarily due to a $0.3 million or 26% increase in salaries and wages driven by a 17% increase in average headcount from March 31, 2021 to March 31, 2022.
Operating expenses (sales and marketing, general and administrative, and research and development)
Our operating expenses (including sales and marketing, general and administrative and research and development expenses) for the three months ended March 31, 2022 have increased due primarily to an increase in salaries and wages from an increase in headcount, reestablishment of business travel, and expansion of third-party costs to support operations. The change in operating expenses for each operating segment is due to the following (in thousands, except percentages):
| ||||||||||||
Total | Total |
| ||||||||||
Operating | Operating | Increase / | Increase / |
| ||||||||
Expenses | Expenses | (Decrease) | (Decrease) |
| ||||||||
| 2022 |
| 2021 |
| in Dollars |
| in % |
| ||||
Procurement |
| $ | 2,531 | $ | 2,121 | $ | 410 | 19 | % | |||
Payments | 3,208 | 3,054 | 154 | 5 | % | |||||||
Grants Management | 2,370 | 1,732 | 638 | 37 | % | |||||||
Permitting | 629 | 631 | (2) | (0) | % | |||||||
Budget | 4,207 | 2,646 | 1,561 | 59 | % | |||||||
Corporate | 2,628 | 1,756 | 872 | 50 | % | |||||||
Total |
| $ | 15,573 | $ | 11,940 | $ | 3,633 | 30 | % |
Procurement
Procurement’s total operating expense increased by $0.4 million or 19% primarily due to a $0.3 million or 52% increase in research and development expense, a $0.2 million or 18% increase in sales and marketing expense, and partially offset by a $0.1 million or 8% decrease in general and administrative expense. The increase in research and development expense was primarily due to a $0.3 million or 53% increase in salaries and wages due to a 58% increase in average headcount from March 31, 2021 to March 31, 2022. The increase in sales and marketing expense was primarily due to a $0.2 million or 28% increase in salaries and wages due to a 21% increase in average headcount from March 31, 2021 to March 31, 2022. The decrease in general and administrative expense was primarily due to a $0.1 million decrease in share-based compensation expense.
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Payments
Payments’ total operating expense increased by $0.2 million or 5% primarily due to a $0.2 million or 18% increase in research and development expense. The increase in research and development expense was primarily due to a $0.2 million or 15% increase in salaries and wages due to a 21% increase in average headcount from March 31, 2021 to March 31, 2022.
Grants Management
Grants Management’s total operating expense increased by $0.6 million or 37% primarily due to a $0.4 million or 78% increase in research and development expense and a $0.2 million or 31% increase in sales and marketing expense. The increase in research and development expense was due to a $0.3 million increase in the cost of third-party contractors. The increase in sales and marketing expense was due to a $0.2 million or 47% increase in salaries and wages due to a 68% increase in average headcount from March 31, 2021 to March 31, 2022.
Permitting
Permitting’s total operating expense was materially consistent year-over-year.
Budget
Budget’s total operating expense increased by $1.6 million or 59% primarily due to a $0.8 million or 75% increase in sales and marketing expense and a $0.7 million or 69% increase in general and administrative expense. The increase in sales and marketing expense was primarily due to a $0.4 million or 53% increase in salaries and wages and a $0.3 million increase in share-based compensation expense. The increase in salaries and wages was due primarily to a 39% increase in average headcount from March 31, 2021 to March 31, 2022. The increase in general and administrative expense was primarily due to a $0.8 million increase in share-based compensation expense.
Corporate
Corporate expenses are primarily comprised of outside services including legal, accounting and consulting fees, payroll and related expenses, corporate insurance, and share-based compensation. Corporate expenses increased by $0.9 million or 50% due to a $0.4 million or 29% increase in salaries and wages, a $0.2 million increase in share-based compensation expense, a $0.1 million increase in insurance costs, and a $0.1 million increase in outside services.
Other operating expenses
Amortization of intangible assets
Amortization of intangible assets consists of the amortization of finite lived intangibles resulting from the Acquisition as described in Note 4 of the notes to our condensed consolidated financial statements.
Change in fair value of contingent consideration
The change in fair value of contingent consideration consists of any adjustments to the contingent consideration liability since the Acquisition.
Other income (expense)
Interest income (expense)
Interest income (expense) is primarily comprised of the investments held by GTY Corporate, offset by interest under the November 2020 Credit Facility.
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Loss on repurchase/issuance of shares
Loss on repurchase/issuance of shares is comprised of the difference in fair value between the price in which shares are issued and the market value on the date of grant.
Change in fair value of warrant liability
Change in fair value between the current price of the Company’s warrants and the previously reported price.
Gain on extinguishment of debt
Gain on extinguishment of debt is comprised of debt forgiveness associated with loans under the Paycheck Protection Program.
Other income (loss)
Other income (loss) is comprised primarily of unrealized gains and losses associated with transactions in currencies that are not denominated in U.S. Dollars.
Reconciliation of Non-GAAP Revenues
To supplement our condensed consolidated financial statements, which are prepared in accordance with U.S. generally accepted accounting principles, or GAAP, we have provided certain financial measures that have not been prepared in accordance with GAAP (“non-GAAP financial measures”), which include (i) non-GAAP revenues, (ii) non-GAAP gross profit and non-GAAP gross margin and (iii) non-GAAP loss from operations.
We use these non-GAAP financial measures internally in analyzing our financial results and believe that these metrics are useful to investors, as a supplement to the corresponding GAAP measure, in evaluating our ongoing operational performance and trends. However, it is important to note that particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.
Non-GAAP Revenues. Non-GAAP revenues are defined as GAAP revenues adjusted for the impact of purchase accounting resulting from a company’s business combination which reduced its acquired contract liabilities to fair value. The Company believes that presenting non-GAAP revenues is useful to investors as it eliminates the impact of the purchase accounting adjustments to revenues to allow for a direct comparison between current and future periods.
Non-GAAP Gross Profit and Non-GAAP Gross Margin. Non-GAAP gross profit is defined as GAAP gross profit adjusted for the impact of purchase accounting resulting from a company’s business combination and share-based compensation included in cost of revenues. Non-GAAP gross margin is defined as non-GAAP gross profit divided by non-GAAP revenues. The Company believes that presenting non-GAAP gross profit and margin is useful to investors as it eliminates the impact of the purchase accounting adjustments to allow for a direct comparison between periods.
Non-GAAP Loss from Operations. Non-GAAP loss from operations is defined as GAAP loss from operations adjusted for the impact of purchase accounting to revenues resulting from a company’s business combination, the amortization of acquired intangible assets, share-based compensation, acquisition related costs, goodwill impairment expense, restructuring charges and the change in fair value of contingent consideration. The Company believes that presenting non-GAAP loss from operations is useful to investors as it eliminates the impact of certain non-cash and acquisition related expenses to allow a direct comparison of loss from operations between all periods presented.
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Below is a reconciliation of non-GAAP revenues, non-GAAP gross profit and non-GAAP gross margin and non-GAAP loss from operations to their most directly comparable GAAP financial measures (in thousands, except percentages):
Three Months Ended |
| |||||||||
March 31, | December 31, | March 31, |
| |||||||
| 2022 |
| 2021 |
| 2021 |
| ||||
Revenues | $ | 15,900 | $ | 16,620 | $ | 13,259 |
| |||
Purchase accounting adjustment to revenue | 129 | 104 | 122 |
| ||||||
Non-GAAP Revenues |
| $ | 16,029 | $ | 16,724 | $ | 13,381 | |||
Gross Profit |
| $ | 9,863 | $ | 10,120 | $ | 8,517 | |||
Purchase accounting adjustment to revenue | 129 | 104 | 122 | |||||||
Share-based compensation | 447 | 357 | 292 | |||||||
Non-GAAP Gross Profit |
| $ | 10,439 | $ | 10,581 | $ | 8,931 | |||
Gross Margin | 62 | % | 61 | % | 64 | % | ||||
Non-GAAP Gross Margin | 65 | % | 63 | % | 67 | % | ||||
Loss from operations |
| $ | (7,626) | $ | (20,976) | $ | (8,136) | |||
Purchase accounting adjustment to revenue | 129 | 104 | 122 | |||||||
Amortization of intangibles | 3,593 | 3,668 | 3,599 | |||||||
Share-based compensation | 3,432 | 2,942 | 1,823 | |||||||
Goodwill impairment expense | — | 15,827 | — | |||||||
Change in fair value of contingent consideration | (1,677) | (3,002) | 1,114 | |||||||
Non-GAAP Loss from operations |
| $ | (2,149) | $ | (1,437) | $ | (1,478) |
Below is a reconciliation of non-GAAP revenues to revenues by operating segment:
Three Months Ended March 31, | |||||||||||||||||||
Grants | Total | ||||||||||||||||||
| Procurement |
| Payments |
| Management |
| Permitting |
| Budget |
| Revenues |
| |||||||
Revenues 2022 | $ | 2,939 | $ | 3,046 | $ | 2,153 | $ | 729 | $ | 7,033 | $ | 15,900 | |||||||
Purchase accounting adjustment to revenues | — | 129 | — | — | — | 129 | |||||||||||||
Non-GAAP Revenues 2021 | $ | 2,939 | $ | 3,175 | $ | 2,153 | $ | 729 | $ | 7,033 | $ | 16,029 | |||||||
| |||||||||||||||||||
Revenues 2021 | $ | 2,437 | $ | 2,229 | $ | 1,750 | $ | 695 | $ | 6,148 | $ | 13,259 | |||||||
Purchase accounting adjustment to revenues |
| — |
| 122 |
| — | — |
| — |
| 122 | ||||||||
Non-GAAP Revenues 2020 | $ | 2,437 | $ | 2,351 | $ | 1,750 | $ | 695 | $ | 6,148 | $ | 13,381 | |||||||
|
|
|
| ||||||||||||||||
% change |
| 21 | % |
| 35 | % |
| 23 | % |
| 5 | % |
| 14 | % |
| 20 | % | |
Liquidity and Capital Resources
As of March 31, 2022, we had a cash balance of approximately $11.3 million. From the date of the Acquisition through March 31, 2022, our liquidity needs have been satisfied through proceeds from the January–February 2020 private investment in public equity, or PIPE, transactions, proceeds from our initial public offering that were released in February 2019 from the trust account established in connection with such offering for the benefit of our shareholders, proceeds from our June 2019 registered direct offering, proceeds from our February 2020 and November 2020 credit facilities, proceeds
32
from issuances of stock under our at-the-market offering program, and loan proceeds in April–May 2020 from the Paycheck Protection Program.
As reflected in the condensed consolidated financial statements, the Company had an accumulated deficit of approximately $181.2 million at March 31, 2022, a net loss of approximately $4.7 million, approximately $1.7 million net cash used in operating activities for the three months ended March 31, 2022, and $30.0 million of term loans due within 12 months of the date of these condensed consolidated financial statements. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The Company is attempting to further expand its customer base; scale up its production of various products; increase revenue; and replace the term loans with financing with terms similar to the current agreement in place; however, the Company’s cash position may not be sufficient to support its daily operations through the next twelve months from the date of filing this 10-Q. While the Company believes in the viability of its platform and in its ability to raise additional funds by way of a public or private offering, there can be no assurances to that effect.
The condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
COVID-19 Update
The COVID-19 pandemic has created and may continue to create significant uncertainty in macroeconomic conditions, which may cause customer slowdowns or shutdowns, depress demand, and adversely impact results of operations. During the quarter ended March 31, 2022, the Company faced significant uncertainties and continues to expect uncertainties around its key accounting estimates to continue to evolve depending on the duration and degree of impact associated with the COVID-19 pandemic. Estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in the consolidated financial statements.
Historical Cash Flows
The following table sets forth a summary of our cash flows for the periods indicated:
Three Months Ended | Three Months Ended | ||||||
March 31, | March 31, | ||||||
| 2022 |
| 2021 |
| |||
Net cash used in operating activities | $ | (1,691) | $ | (3,406) | |||
Net cash used in investing activities | $ | (170) | $ | (25) | |||
Net cash used in financing activities | $ | (112) | $ | (1,424) |
Net Cash Used In Operating Activities
Our net loss and cash flows from operating activities are significantly influenced by our investments in headcount and infrastructure to support anticipated growth.
For the three months ended March 31, 2022, net cash used in operations was $1.7 million resulting from our net loss of $4.7 million and partially offset by changes in operating assets and liabilities of $0.4 million and net non-cash expenses of $2.6 million. The $2.6 million of non-cash expenses was comprised of $3.6 million of amortization of intangible assets acquired as a result of the Acquisition, $3.4 million from share-based compensation resulting from our issuance of stock options and restricted stock units, and partially offset by a $3.0 million change in fair value of warrant liability and a $1.7 million change in contingent consideration. The changes in operating assets and liabilities of $0.4 million was comprised primarily of a $1.8 million increase in accounts payable and accrued liabilities and a $1.4 million increase in deferred revenue and other liabilities and partially offset by a $1.7 million increase in prepaid expenses and other assets, a $0.9 million increase in accounts receivable, and a $0.2 million decrease in operating lease liabilities.
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For the three months ended March 31, 2021, net cash used in operations was $3.4 million resulting from our net loss of $18.0 million and changes in operating assets and liabilities of $1.7 million, offset by net non-cash expenses of $16.4 million. The $16.4 million of non-cash expenses was comprised of a $5.3 million loss associated with the redemption of common stock, a $4.0 million change in fair value of warrant liability, $3.6 million of amortization of intangible assets acquired as a result of the Acquisition, $1.8 million from share-based compensation resulting from our issuance of stock options and restricted stock units and a $1.1 million change in contingent consideration, offset by $0.2 million of deferred tax benefits related to the tax and book basis difference on the amortization of intangible assets and $0.2 million gain on extinguishment of debt. The changes in operating assets and liabilities of $(1.7) million was comprised primarily of a $1.5 million increase in prepaid expenses and other assets, a $0.8 million decrease in accounts payable and accrued liabilities, and a $0.8 million increase in accounts receivable, offset by a $1.7 million increase in deferred revenue and other long-term liabilities.
Net Cash Used In Investing Activities
Our primary investing activities have consisted of capital expenditures.
For the three months ended March 31, 2022, cash used in investing activities was $0.2 million resulting from capital expenditures.
For the three months ended March 31, 2021, cash used in investing activities was less than $0.1 million resulting from capital expenditures.
Net Cash Used in Financing Activities
For the three months ended March 31, 2022, cash used in financing activities was $0.1 million primarily due to repayments of finance lease liabilities.
For the three months ended March 31, 2021, cash used in financing activities was $1.4 million primarily due to $8.0 million in redemptions of common shares offset by $6.8 million in proceeds from the issuance of common stock.
Critical Accounting Policies and Use of Estimates
See Note 3 of the notes to our unaudited condensed consolidated financial statements.
Recent Accounting Pronouncements
The impact of recently issued accounting standards is set forth in Note 3, Summary of Significant Accounting Policies, of the notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Off-Balance Sheet Arrangements
We are not party to any off-balance sheet transactions. We have no guarantees or obligations other than those which arise out of normal business operations.
Contractual Obligations and Commitments
As of March 31, 2022, there were no significant changes to our contractual obligations from those presented as of December 31, 2021 in our Annual Report on Form 10-K filed with the SEC on February 18, 2022.
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Item 3. Quantitative and Qualitative Disclosures About Market Risks
During the three ended March 31, 2022, there were no material changes to our interest rate risk disclosures, market risk disclosures and foreign currency exchange rate risk disclosures reported in our Annual Report on Form 10-K filed with the SEC on February 18, 2022 for the year ended December 31, 2021.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and our Principal Financial Officer, to allow timely decisions regarding required disclosure.
The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
With respect to the quarter ended March 31, 2022, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures. Based upon this evaluation, the Company’s Principal Executive Officer and Principal Financial Officer have concluded that the Company’s disclosure controls and procedures are effective.
Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Based on its evaluation, management concluded that our internal control over financial reporting was effective as of March 31, 2022.
Changes in Internal Control over Financial Reporting
During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1.Legal Proceedings
As previously disclosed, on March 19, 2021, the Company received a request (the “Initial Request”) from the Securities and Exchange Commission (the “SEC”) for documents relating to the Company’s business combination consummated on February 19, 2019 and related transactions, including those described in a Form 8-K filed by the Company on February 14, 2019. The Company cooperated in the SEC’s investigation and delivered its last response to the Initial Request on August 6, 2021. On May 9, 2022, the Company received an additional request from the SEC for documents relating to such business combination and intends to cooperate with such additional request and any further requests it receives from the SEC.
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Item 1A.Risk Factors
The reader should carefully consider, in connection with the other information in this Quarterly Report on Form 10-Q, the factors discussed in the section entitled “Risk Factors” of our 2021 Annual Report on Form 10-K. These factors could cause our actual results to differ materially from those stated in forward-looking statements contained in this document and elsewhere.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities
None.
Item 6.Exhibits.
Exhibit Number |
| Description |
1.1 | ||
2.1† | ||
3.1 | ||
10.1+ | ||
10.2+ | ||
10.3+ | ||
10.4 | ||
10.5+ | ||
31.1* | ||
31.2* | ||
36
32.1** | ||
32.2** | ||
101.INS* | Inline XBRL Instance Document | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101) |
* Filed herewith.
**Furnished herewith.
+ | Management contract or any compensatory plan, contract or arrangement. |
† | Certain schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant hereby agrees to furnish a copy of any omitted schedules to the SEC upon request. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on this 13th day of May, 2022.
GTY TECHNOLOGY HOLDINGS INC. | |||
| |||
/s/ TJ Parass | |||
Name: | TJ Parass | ||
Title: | Chief Executive Officer | ||
(Principal Executive Officer) | |||
/s/ John Curran | |||
Name: | John Curran | ||
Title: | Chief Financial Officer | ||
(Principal Financial Officer) |
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