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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 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 001-36720
upld-20220930_g1.jpg
UPLAND SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
Delaware27-2992077
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
401 Congress Ave., Suite 1850
Austin, Texas 78701
(Address, including zip code, of registrant’s principal executive offices)
(512960-1010
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.0001 per shareUPLDThe Nasdaq Global Market
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 and posted 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 and post 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(Do not check if a smaller reporting company)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 
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
As of October 31, 2022, 31,778,044 shares of the registrant’s Common Stock were outstanding. 


Upland Software, Inc.
Table of Contents 
Page
Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021
Condensed Consolidated Statements of Operations for the Three and Nine months ended September 30, 2022 and September 30, 2021
Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine months ended September 30, 2022 and September 30, 2021
Condensed Consolidated Statements of Equity for the Three and Nine months ended September 30, 2022 and September 30, 2021
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and September 30, 2021
 





Item 1. Financial Statements

Upland Software, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except for share and per share information)September 30, 2022December 31, 2021
ASSETS(unaudited)
Current assets:
Cash and cash equivalents$241,720 $189,158 
Accounts receivable (net of allowance of $1,119 and $1,107 at September 30, 2022 and December 31, 2021, respectively)
38,174 50,499 
Deferred commissions, current10,091 9,824 
Unbilled receivables5,991 4,801 
Prepaid expenses and other current assets12,679 8,709 
Total current assets308,655 262,991 
Tax credits receivable3,256 3,345 
Property and equipment, net2,040 2,667 
Operating lease right-of-use asset6,395 6,454 
Intangible assets, net254,040 279,920 
Goodwill479,642 457,472 
Deferred commissions, noncurrent14,321 14,808 
Interest rate swap assets43,947  
Other assets1,332 1,350 
Total assets$1,113,628 $1,029,007 
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$20,157 $20,362 
Accrued compensation10,050 9,829 
Accrued expenses and other current liabilities10,658 9,086 
Deferred revenue98,676 102,847 
Liabilities due to sellers of businesses5,941 7,607 
Operating lease liabilities, current3,601 3,546 
Current maturities of notes payable (includes unamortized discount of $2,269 and $2,233 at September 30, 2022 and December 31, 2021, respectively)
3,131 3,167 
Total current liabilities152,214 156,444 
Notes payable, less current maturities (includes unamortized discount of $5,765 and $7,287 at September 30, 2022 and December 31, 2021, respectively)
512,635 515,163 
Deferred revenue, noncurrent3,028 2,058 
Operating lease liabilities, noncurrent5,504 6,773 
Noncurrent deferred tax liability, net19,080 22,793 
Interest rate swap liabilities 8,409 
Other long-term liabilities1,168 1,079 
Total liabilities693,629 712,719 

Series A Convertible Preferred stock, 0.0001 par value; 5,000,000 shares authorized: 115,000 shares issued and outstanding as of September 30, 2022; no shares issued and outstanding as of December 31, 2021, respectively.
111,066  
Stockholders’ equity:
Common stock, $0.0001 par value; 50,000,000 shares authorized: 31,777,122 and 31,096,548 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively)
3 3 
Additional paid-in capital600,892 568,384 
Accumulated other comprehensive loss(5,640)(11,514)
Accumulated deficit(286,322)(240,585)
Total stockholders’ equity308,933 316,288 
Total liabilities, convertible preferred stock and stockholders’ equity$1,113,628 $1,029,007 












The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1

Upland Software, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for share and per share information)

 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Revenue:
Subscription and support$75,095 $72,264 $223,739 $215,322 
Perpetual license1,684 684 5,320 1,451 
Total product revenue76,779 72,948 229,059 216,773 
Professional services2,770 3,105 9,433 9,513 
Total revenue79,549 76,053 238,492 226,286 
Cost of revenue:
Subscription and support23,553 22,968 69,747 68,811 
Professional services and other2,173 1,848 7,287 5,444 
Total cost of revenue25,726 24,816 77,034 74,255 
Gross profit53,823 51,237 161,458 152,031 
Operating expenses:
Sales and marketing14,361 14,364 45,285 41,094 
Research and development11,645 10,441 35,388 32,494 
General and administrative14,668 17,725 56,110 61,286 
Depreciation and amortization10,117 10,764 31,970 30,785 
Acquisition-related expenses3,586 3,685 18,924 18,805 
Total operating expenses54,377 56,979 187,677 184,464 
Loss from operations(554)(5,742)(26,219)(32,433)
Other expense:
Interest expense, net(7,354)(7,971)(22,870)(23,700)
Other income (expense), net339 (650)1,698 (812)
Total other expense (7,015)(8,621)(21,172)(24,512)
Loss before benefit from income taxes(7,569)(14,363)(47,391)(56,945)
Benefit from income taxes1,056 3,348 1,654 6,204 
Net loss$(6,513)$(11,015)$(45,737)$(50,741)
Preferred stock dividends (546) (546) 
Net loss attributable to common stockholders$(7,059)$(11,015)$(46,283)$(50,741)
Net loss per common share:
Net loss per common share, basic and diluted$(0.22)$(0.36)$(1.47)$(1.68)
Weighted-average common shares outstanding, basic and diluted31,655,206 30,428,675 31,401,463 30,167,171 







The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2

Upland Software, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(unaudited)
(in thousands)

 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Net loss$(6,513)$(11,015)$(45,737)$(50,741)
Other comprehensive income (loss):
Foreign currency translation adjustment(13,869)(4,548)(32,272)(5,611)
Unrealized translation loss on intercompany loans with foreign subsidiaries(7,415)(2,664)(14,211)(884)
Unrealized gain on interest rate swaps17,988 2,112 52,357 14,391 
Other comprehensive income (loss):$(3,296)$(5,100)$5,874 $7,896 
Comprehensive loss$(9,809)$(16,115)$(39,863)$(42,845)









































The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3

Upland Software, Inc.
Condensed Consolidated Statements of Equity
(unaudited)
(in thousands, except share amounts)
Three Months Ended September 30, 2022
Preferred StockCommon StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders’
Equity
 SharesAmountSharesAmount
Balance at June 30, 2022 $ 31,632,628 $3 $594,080 $(2,344)$(279,809)$311,930 
Issuance of Convertible Preferred Stock115,000 110,520 — — — — — — 
Dividends accrued - Convertible Preferred Stock— 546 — — (546)— — (546)
Issuance of stock under Company plans, net of shares withheld for tax— — 144,494 — (169)— — (169)
Stock-based compensation— — — — 7,527 — — 7,527 
Foreign currency translation adjustment— — — — — (13,869)— (13,869)
Unrealized translation loss on foreign currency denominated intercompany loans— — — — — (7,415)— (7,415)
Unrealized gain on interest rate swaps— — — — — 17,988 — 17,988 
Net loss— — — — — — (6,513)(6,513)
Balance at September 30, 2022115,000 $111,066 31,777,122 $3 $600,892 $(5,640)$(286,322)$308,933 
Three Months Ended September 30, 2021
Preferred StockCommon StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmountSharesAmount
Balance at June 30, 2021 $ 30,413,246 $3 $546,771 $(13,238)$(222,099)$311,437 
Issuance of stock under Company plans, net of shares withheld for tax— — 103,104 — (323)— — (323)
Stock-based compensation— — — — 12,047 — — 12,047 
Foreign currency translation adjustment— — — — — (4,548)— (4,548)
Unrealized translation gain on foreign currency denominated intercompany loans— — — — — (2,664)— (2,664)
Unrealized loss on interest rate swaps— — — — — 2,112 — 2,112 
Net loss— — — — — — (11,015)(11,015)
Balance at September 30, 2021 $ 30,516,350 $3 $558,495 $(18,338)$(233,114)$307,046 



The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4



Nine Months Ended September 30, 2022
Preferred StockCommon StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total
Stockholders’
Equity
 SharesAmountSharesAmount
Balance at December 31, 2021 31,096,548 $3 $568,384 $(11,514)$(240,585)$316,288 
Issuance of Convertible Preferred Stock115,000 110,520 — — — — — — 
Dividends accrued - Convertible Preferred Stock— 546 — — (546)— — (546)
Issuance of stock under Company plans, net of shares withheld for tax— — 680,574 — (969)— — (969)
Stock-based compensation— — — — 34,023 — — 34,023 
Foreign currency translation adjustment— — — — — (32,272)— (32,272)
Unrealized translation loss on intercompany loans with foreign subsidiaries— — — — — (14,211)— (14,211)
Unrealized gain on interest rate swaps— — — — — 52,357 — 52,357 
Net loss— — — — — — (45,737)(45,737)
Balance at September 30, 2022115,000 $111,066 31,777,122 $3 $600,892 $(5,640)$(286,322)$308,933 
Nine Months Ended September 30, 2021
Preferred StockCommon StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmountSharesAmount
Balance at December 31, 2020 $ 29,987,114 $3 $515,219 $(26,234)$(182,373)$306,615 
Issuance of stock under Company plans, net of shares withheld for tax— — 529,236 — (145)— — (145)
Stock-based compensation— — — — 43,421 — — 43,421 
Foreign currency translation adjustment— — — — — (5,611)— (5,611)
Unrealized translation loss on intercompany loans with foreign subsidiaries— — — — — (884)— (884)
Unrealized gain on interest rate swaps— — — — — 14,391 — 14,391 
Net loss— — — — — — (50,741)(50,741)
Balance at September 30, 2021 $ 30,516,350 $3 $558,495 $(18,338)$(233,114)$307,046 


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

Upland Software, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
 Nine Months Ended September 30,
 20222021
Operating activities
Net loss$(45,737)$(50,741)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization41,333 39,420 
Change in fair value of liabilities due to sellers of businesses(75)(3,503)
Deferred income taxes(3,291)(7,726)
Amortization of deferred costs9,041 6,283 
Foreign currency re-measurement loss40 18 
Non-cash interest and other expense1,687 1,682 
Non-cash stock compensation expense34,023 43,421 
Non-cash loss on retirement of fixed assets26 2 
Changes in operating assets and liabilities, net of purchase business combinations:
Accounts receivable18,187 11,748 
Prepaid expenses and other current assets(5,055)(3,672)
Accounts payable(1,464)6,647 
Accrued expenses and other liabilities(11,256)(8,111)
Deferred revenue(13,321)(6,822)
Net cash provided by operating activities24,138 28,646 
Investing activities
Purchase of property and equipment(718)(965)
Purchase business combinations, net of cash acquired(62,356)(92,417)
Net cash used in investing activities(63,074)(93,382)
Financing activities
Payments on finance leases (12)
Proceeds from notes payable, net of issuance costs(200)(120)
Payments on notes payable(4,050)(4,050)
Issuance of Series A Convertible Preferred stock, net of issuance costs110,520  
Taxes paid related to net share settlement of equity awards(1,159)(373)
Issuance of common stock, net of issuance costs190 228 
Additional consideration paid to sellers of businesses(8,174)(769)
Net cash provided by (used in) financing activities97,127 (5,096)
Effect of exchange rate fluctuations on cash(5,629)(613)
Change in cash and cash equivalents52,562 (70,445)
Cash and cash equivalents, beginning of period189,158 250,029 
Cash and cash equivalents, end of period$241,720 $179,584 
Supplemental disclosures of cash flow information:
Cash paid for interest, net of interest rate swaps$21,804 $22,043 
Cash paid for taxes$3,163 $1,772 
Non-cash investing and financing activities:
Business combination consideration including holdbacks and earnouts$7,820 $14,204 

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


Upland Software, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(unaudited)
1. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
These condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated financial statements include the accounts of Upland Software, Inc. and its wholly owned subsidiaries (collectively referred to as “Upland”, the “Company”, “we”, “us” or “our”). All intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation.
The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. In the opinion of management of the Company, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, in all material respects, and include all adjustments of a normal recurring nature necessary for a fair presentation. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other period.
The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2021 Annual Report on Form 10-K filed with the SEC on February 24, 2022.
Use of Estimates
The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses. Significant items subject to such estimates include those related to revenue recognition, deferred commissions, allowance for credit losses, stock-based compensation, contingent consideration, acquired intangible assets, impairment of goodwill, intangibles and long-lived assets, the useful lives of intangible assets and property and equipment, the fair value of the Company’s interest rate swaps and income taxes. In accordance with GAAP, management bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ from those estimates.
We assessed the impact of COVID-19 on the estimates and assumptions and determined there was no material impact. Upland is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of November 3, 2022, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.
Concentrations of Credit Risk and Significant Customers
Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, accounts receivable and the Company’s interest rate swap hedges. The Company’s cash and cash equivalents are placed with high-quality financial institutions, which, at times, may exceed federally insured limits. The Company has not experienced any losses in these accounts, and the Company does not believe it is exposed to any significant credit risk related to cash and cash equivalents. The Company provides credit, in the normal course of business, to a number of its customers. To manage accounts receivable credit risk, the Company performs periodic credit evaluations of its customers and maintains current expected credit losses which considers such factors as historical loss information, geographic location of customers, current market conditions, and reasonable and supportable forecasts.
No individual customer represented more than 10% of total revenues for the nine months ended September 30, 2022, or more than 10% of accounts receivable as of September 30, 2022 or December 31, 2021.
7


Derivatives
Cash Flow Hedges—Interest Rate Swap Agreements
In August 2019 and in connection with borrowing funds under the Company’s credit facility, the Company entered into a floating-to-fixed interest rate swap agreements to limit exposure to interest rate risk related to our debt. These interest rate swaps effectively converted the entire balance of the Company's $540 million original principal term loans from variable interest payments to fixed interest rate payments, based on an annualized fixed rate of 5.4%, for a 7-year term of debt. ASC 815, Derivatives and Hedging, requires entities to recognize derivative instruments as either assets or liabilities in the statement of financial position at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. The Company assessed the effectiveness of the hedging relationship under the hypothetical derivative method and noted that all of the critical terms of the hypothetical derivative and hedging instrument were the same. The hedging relationship continues to limit the Company’s exposure to the variability in interest rates under the Company’s term loans and related cash outflows. As such, the Company has deemed this hedging relationship as highly effective in offsetting cash flows attributable to hedged risk (variability in forecasted monthly interest payments) for the term of the term loans and interest rate swap agreements. All derivative financial instruments are recorded at fair value as a net asset or liability in the accompanying condensed consolidated balance sheets. As of September 30, 2022, the fair value of the interest rate swaps included in assets in the Company's condensed consolidated balance sheets was $43.9 million. As of December 31, 2021, the fair value of the interest rate swaps included in liabilities in the Company's condensed consolidated balance sheets was $8.4 million.

The interest rate swap has been designated as a cash flow hedge. As such, the change in the fair value of the hedging instruments is recorded in Other comprehensive income (loss) in the accompanying condensed consolidated statements of comprehensive income (loss). Amounts deferred in Other comprehensive income (loss) will be reclassified to Interest expense in the accompanying condensed consolidated statements of operations in the period in which the hedged item affects earnings.

Fair Value of Financial Instruments
The Company recognizes financial instruments in accordance with the authoritative guidance on fair value measurements and disclosures for financial assets and liabilities. This guidance defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. The guidance also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.
These tiers include Level 1, defined as observable inputs, such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions.
The Company’s financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable and debt. The carrying value of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value, primarily due to short maturities. The carrying values of the Company’s debt instruments approximated their fair value based on rates currently available to the Company.
Preferred Stock
In August 2022, the Company closed on the issuance and sale of its Series A Convertible Preferred Stock (the “Series A Preferred Stock”). The Company issued 115,000 shares of Series A Preferred Stock, par value $0.0001 per share, at a price of $1,000 per share, for an initial investment amount of $115.0 million. Pursuant to the Certification of Designation, cumulative preferred dividends accrue quarterly on the Series A Preferred Stock at a rate of (i) 4.5% per annum until but excluding the seven year anniversary of the closing, and (ii) 7% per annum on and after the seven year anniversary of the closing. See “Note 9. Series A Preferred Stock—Series A Convertible Preferred Stock” for further details.
The Series A Preferred Stock and cumulative preferred dividends, net of preferred issuance costs, is presented as Mezzanine Equity of $111.1 million as of September 30, 2022 in the Company’s condensed consolidated balance sheets. The Series A Preferred Stock is classified as Mezzanine Equity because it is redeemable at the option of its holders (upon a deemed liquidation event as defined in “Note 9. Series A Preferred Stock—Series A Convertible Preferred Stock—Deemed Liquidation Event Redemption”) and has a condition for redemption that is not solely within the control of the issuer.

8


Recent Accounting Pronouncements
Recently issued accounting pronouncements - Adopted
In August 2020, the Financial Standards Accounting Board (“FASB”) issued accounting standards update (“ASU”) 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock. This update also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. The update also requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity’s financial statements, and information about events, conditions, and circumstances that can affect how to assess the amount or timing of an entity’s future cash flows related to those instruments. The guidance is effective for interim and annual periods beginning after December 15, 2021. The Company adopted this guidance in the first quarter of fiscal 2022.
Recently issued accounting pronouncements - Not yet adopted
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company evaluated the impact of this standard and determined it did not have a material impact on on our consolidated financial statements.
In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which creates an exception to the general recognition and measurement principle for contract assets and contract liabilities from contracts with customers acquired in a business combination. The new guidance will require companies to apply the definition of a performance obligation under accounting standard codification (“ASC”) Topic 606 to recognize and measure contract assets and contract liabilities (i.e., deferred revenue) relating to contracts with customers that are acquired in a business combination. Under current GAAP, an acquirer in a business combination is generally required to recognize and measure the assets it acquires and the liabilities it assumes at fair value on the acquisition date. The new guidance will result in the acquirer recording acquired contract assets and liabilities on the same basis that would have been recorded by the acquiree before the acquisition under ASC Topic 606. These amendments are effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is evaluating the impact of this standard on our consolidated financial statements.
2. Acquisitions
The Company performs quantitative and qualitative analyses to determine the significance of each acquisition to the financial statements the Company. Based on these analyses the below acquisitions were deemed to be insignificant on an individual and cumulative basis.
9


2022 Acquisitions
Acquisitions completed during the nine months ended September 30, 2022 include the following:
BA Insight - On February 22, 2022, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of BA Insight Inc., (“BA Insight”), a cloud-based enterprise knowledge management solution. Revenues recorded since the acquisition date through September 30, 2022 were approximately $5.2 million. Revenues recorded for BA Insight for the quarter ended September 30, 2022 were approximately $2.4 million.
Objectif Lune - On January 07, 2022, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of Objectif Lune Inc., a Quebec proprietary company (“Objectif Lune”), cloud-based document workflow product. Revenues recorded since the acquisition date through September 30, 2022 were approximately $15.5 million. Revenues recorded for Objectif Lune for the quarter ended September 30, 2022 were approximately $5.1 million.
2021 Acquisition
The acquisition completed during the year ended December 31, 2021 were:
Panviva - On June 24, 2021, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of Panviva Pty Ltd, an Australian proprietary company (“Panviva”), a cloud-based enterprise knowledge management solution.
BlueVenn - On February 28, 2021 the Company entered into an agreement to purchase the shares comprising the entire issued share capital of BlueVenn Group Limited, a company limited by shares organized and existing under the laws of England and Wales (“BlueVenn”), a cloud-based customer data platform.
Second Street - On January 19, 2021, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of Second Street Media, Inc., a Missouri corporation (“Second Street”), an audience engagement platform.
Consideration
The following table summarizes the consideration transferred for the acquisitions described above (in thousands):
BA InsightObjectif LunePanvivaBlueVennSecond Street
Cash$33,355 $29,750 $19,931 $53,535 $25,436 
Holdback (1)
645 5,250 3,517 2,429 5,000 
Contingent consideration (2)
   2,535 1,650 
Working capital and other adjustments1,587 338 379 (537)(1,365)
Total consideration$35,587 $35,338 $23,827 $57,962 $30,721 
(1)Represents the cash holdbacks subject to indemnification claims that are payable 12 months following closing for Objectif Lune, Panviva and Second Street, 15 months following closing for BA Insight and 18 months following closing for BlueVenn.
(2)Represents the acquisition date fair value of anticipated earnout payments, which are based on the estimated probability of attainment of the underlying future performance-based conditions at the time of acquisition. The maximum potential payout for the BlueVenn and Second Street earn-outs were $21.7 million and $3.0 million, respectively. As of March 31, 2022, the earnout payments for BlueVenn and Second Street were finalized resulting in no payments made.
Fair Value of Assets Acquired and Liabilities Assumed
The Company recorded the purchase of the acquisitions described above using the acquisition method of accounting, and has recognized the assets acquired and liabilities assumed at their fair values as of the date of the acquisition. The purchase accounting for the 2022 acquisitions of BA Insight and Objectif Lune are preliminary as the Company has not finalized the overall impact of these acquisitions. Management has recorded the purchase price allocations based upon acquired company information that is currently available. Management expects to complete the purchase accounting for BA Insight and Objectif Lune no later than the first quarter of 2023.
10


The following condensed table presents the preliminary and finalized acquisition-date fair value of the assets acquired and liabilities assumed for the acquisitions during the year ended December 31, 2021 and through the nine months ended September 30, 2022, (in thousands):
PreliminaryFinal
BA InsightObjectif LunePanvivaBlueVennSecond Street
Year Acquired20222022202120212021
Cash$4 $745 $132 $1,115 $ 
Accounts receivable2,466 5,251 2,122 1,289 1,105 
Other current assets4,080 7,197 4,985 2,002 89 
Operating lease right-of-use asset110 1,905 197 1,357 489 
Property and equipment3 248 26 611 156 
Customer relationships10,500 17,717 9,757 18,888 14,600 
Trade name150 362 76 238 200 
Technology2,000 5,512 2,194 4,337 3,400 
Favorable Leases 291    
Goodwill25,993 23,283 16,604 44,892 16,586 
Other assets25 744 33 24 13 
Total assets acquired45,331 63,255 36,126 74,753 36,638 
Accounts payable(236)(2,001)(1,257)(2,772)(230)
Accrued expense and other(4,193)(9,437)(5,053)(2,429)(378)
Deferred tax liabilities(388)(5,726)(2,395)(3,640)(4,320)
Deferred revenue(4,817)(8,848)(3,397)(6,593)(500)
Operating lease liabilities(110)(1,905)(197)(1,357)(489)
Total liabilities assumed(9,744)(27,917)(