BTRS HOLDINGS INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)

You should read this section in conjunction with the Condensed Consolidated
Financial Statements and related Notes to Condensed Consolidated Financial
Statements included in Part I. Item 1 of this Quarterly Report on Form 10-Q, and
our Annual Report on Form 10-K. Unless otherwise stated or as the context
otherwise requires, references to "the Company," "we," "us," "our," "it," and
similar references refer to BTRS Holdings Inc., a Delaware corporation, and its
consolidated subsidiaries. References to the "Merger" have the meaning defined
in Note 1 - Organization and Nature of Business in our Notes to Condensed
Consolidated Financial Statements.

Certain figures, such as interest rates and other percentages, in this section
have been rounded for ease of presentation. Percentage figures included in this
section have not in all cases been calculated on the basis of such rounded
figures but on the basis of such amounts prior to rounding. For this reason,
percentage amounts in this section may vary slightly from those obtained by
performing the same calculations using the figures in our Condensed Consolidated
Financial Statements or Notes to Condensed Consolidated Financial Statements.
Certain other amounts that appear in this section may similarly not sum due to
rounding.

Forward Looking Statements

This discussion contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Forward-looking statements are identified by words such as "believe," "may,"
"could," "will," "estimate," "continue," "anticipate," "intend," "seek," "plan,"
"expect," "should," "would," "potentially," or the negative of these terms or
similar expressions in this Quarterly Report on Form 10-Q. You should read these
statements carefully because they discuss future expectations, contain
projections of future results of operations or financial condition, or state
other "forward-looking" information. These statements relate to our future
plans, objectives, expectations, intentions, and financial performance and the
assumptions that underlie these statements, and our ability to secure the
required regulatory and stockholder approvals for the Merger and meet the
applicable closing conditions of the Merger and the time therefor, if at all.
These forward-looking statements are subject to certain risks and uncertainties
that could cause a difference include, but are not limited to, those discussed
under the caption "Risk Factors" in Part I. Item 1A of our Annual Report on Form
10-K and this Quarterly Report on Form 10-Q. Forward-looking statements are
based on management's current beliefs and assumptions and based on information
currently available. These statements, like all statements in this Quarterly
Report on Form 10-Q, speak only as of their date, and we undertake no obligation
to update or revise these statements in light of future developments, except as
required by law.

Business Overview

We are a leading provider of cloud-based software and integrated payment
processing solutions that simplify and automate business-to-business ("B2B")
commerce. For businesses around the world, there is a high degree of cost, risk,
and complexity in timely receiving cash and recognizing revenue; We solve these
problems by addressing both sides of the payment equation, delivering an
order-to-cash platform that spans credit-to-cash application and collection,
integrated with an open network connecting the B2B payments ecosystem.

Our solution is at the forefront of the ongoing digital transformation of
accounts receivable ("AR"), providing mission-critical solutions that span
credit decisioning and monitoring, online ordering, invoicing, cash application,
and collections. Our Business Payments Network ("BPN") connects B2B buyers and
sellers to a community of banks, FinTechs, and card brands. Billtrust automates
payments from digital lockbox to final posting in an ERP, bridging receivables
with buyers' payment processes so sellers can manage cash flow more
strategically and make it easier for customers to do business with them.

Customers use our software as a service ("SaaS") platform to transition from
expensive paper invoicing and check acceptance to efficient electronic billing
and payments, simplifying and accelerating transactions. Our scalable platform
lets our customers maximize straight-through processing of invoicing, payments,
and cash application while also reducing headcount. The machine learning
capabilities and rules engine within our SaaS platform continuously evolve to
solve order-to-cash challenges and deliver a higher rate of touchless
transactions. We work with industry-leading security partners and take proactive
steps to keep data secure from threats. Collectively our platform reduces the
complexity of B2B commerce for our customers.

                                       40
--------------------------------------------------------------------------------

Our secure, proprietary platform offers customers multiple ways to present
invoices (online, email, AP portal, and print/mail) and receive payments (credit
card, automated clearing house ("ACH"), email, phone and paper check). Our
electronic solutions ("eSolutions") team works closely with our customers to
transition their users from paper invoices and payments to electronic, which
results in accelerated savings, faster realization of cash, a reduced
environmental footprint, and a better user experience. In turn, we benefit from
margin expansion and incremental revenue through the monetization of electronic
payments. We help customers prioritize which problems to solve, regularly assess
ROI, optimize the impact of digitization across processes, and drive more value
for their companies, allowing AR teams to play a more strategic role in moving a
business forward.

We have expanded our product reach and customer base over the past years and
scaled our business operations in recent periods. Our total revenues were $146.3
million and $123.5 million for the nine months ended September 30, 2022 and
2021, respectively. As a result of our focus on product development and sales
and marketing, we have generated net losses of $65.4 million and $44.7 million
for the nine months ended September 30, 2022 and 2021, respectively.

Merger project

On September 28, 2022, we entered into an Agreement and Plan of Merger (the
"Merger Agreement") with Bullseye FinCo, Inc., a Delaware corporation
("Parent"), and Bullseye Merger Sub, Inc., a Delaware corporation and a direct,
wholly owned subsidiary of Parent ("Merger Sub" and, together with Parent, the
"Acquiring Parties"), pursuant to which Merger Sub will, upon the terms and
subject to the conditions set forth in the Merger Agreement, merge with and into
us, and we will survive such merger as a wholly-owned subsidiary of Parent (the
"Merger") Parent and Merger Sub are each affiliated with the EQT X Fund.

Subject to the terms and conditions set forth in the Merger Agreement, at the
effective time of the Merger (the "Effective Time"), each share of our Class 1
common stock, $0.0001 par value, and Class 2 common stock, $0.0001 par value
(other than shares rolled over in accordance with the Merger Agreement, and
shares of our common stock held by us as treasury stock), issued and outstanding
immediately prior to the Effective Time (other than dissenting shares) will be
cancelled and immediately converted into the right to receive $9.50 in cash,
without interest and less any applicable withholding taxes.

The completion of the Merger is subject to several conditions beyond our control
that may prevent, delay or otherwise adversely affect its completion in a
material way, including the approval of our stockholders, the expiration or
termination of applicable waiting periods and the receipt of applicable
approvals or consents under antitrust and competition laws and foreign
investment laws of certain jurisdictions. Assuming the satisfaction of the
remaining outstanding conditions set forth in the Merger Agreement, the Merger
is currently expected to close in the fourth quarter of 2022 or first quarter of
2023. However, we cannot assure completion of the Merger by any particular date,
if at all or that, if completed, it will be completed on the terms set forth in
the Merger Agreement.

If the Merger is consummated, our securities will be de-listed from the Nasdaq
Global Select Market and de-registered under the Securities Exchange Act of 1934
as soon as practicable following the Effective Time.

Under the terms of the Merger Agreement, we may be required to pay Parent a
termination fee of $50.2 million if the Merger Agreement is terminated under
certain specified circumstances, including us terminating the Merger Agreement
to enter into a definitive written agreement with respect to a superior proposal
that did not result from a breach of the non-solicitation provisions. The Merger
Agreement additionally provides that Parent pay us a termination fee of
$100.5 million under certain specified circumstances.

Business combination with South Mountain

On October 18, 2020, as amended on December 13, 2020, South Mountain, BT Merger
Sub I, Inc., a Delaware corporation and a direct, wholly owned subsidiary of
South Mountain ("First Merger Sub"), BT Merger Sub II, LLC, a Delaware limited
liability company and a direct, wholly owned subsidiary of South Mountain
("Second Merger Sub") and Factor Systems, Inc ("Legacy Billtrust"), entered into
a Business Combination Agreement (the "BCA"), pursuant to which (i) First Merger
Sub was merged with and into Legacy Billtrust (the "First BCA Merger"), with
Legacy Billtrust surviving the First Merger as a wholly owned subsidiary of
South Mountain ("Surviving Corporation") and (ii) the Surviving Corporation
merged with and into Second Merger Sub (the "Second BCA Merger", and together
with the First BCA Merger, the "BCA Mergers"), with Second Merger Sub surviving
the Second Merger as a wholly owned subsidiary of South Mountain, (such BCA
Mergers, collectively with the other transactions described in the BCA, the
"Business Combination").

                                       41
--------------------------------------------------------------------------------

In connection with the execution of the Business Combination, on October 18,
2020, South Mountain entered into separate subscription agreements
("Subscription Agreements") with a number of investors ("PIPE Investors"),
pursuant to which the PIPE Investors agreed to purchase, and South Mountain sold
to the PIPE Investors, an aggregate of 20.0 million shares of South Mountain
Class A common stock, for a purchase price of $10.00 per share and at an
aggregate purchase price of $200.0 million, in a private placement ("PIPE
Financing").

The Business Combination and PIPE Financing closed on January 12, 2021 (the "BCA
Closing Date"). The Business Combination was accounted for as a reverse
recapitalization in accordance with the generally accepted accounting principles
in the United States of America ("U.S. GAAP"). Under this method of accounting,
South Mountain was treated as the "acquired" company for financial reporting
purposes. For accounting purposes, we were the accounting acquirer in the
transaction and, consequently, the transaction was treated as a recapitalization
of Billtrust (i.e., a capital transaction involving the issuance of stock by
South Mountain for the stock of Legacy Billtrust). Accordingly, the assets,
liabilities, and results of operations of Legacy Billtrust became the historical
financial statements of "New Billtrust," which was renamed BTRS Holdings Inc.,
and South Mountain's assets, liabilities, and results of operations were
consolidated with Legacy Billtrust beginning on the BCA Closing Date. All
amounts of BTRS Holdings Inc. reflect the historical amounts of Legacy Billtrust
carried over at book value with no step up in basis to fair value. After the
Business Combination, our Class 1 common stock ("Common Stock") began trading on
the Nasdaq Global Select Market under the ticker symbol "BTRS".

RECENT DEVELOPMENTS

Acquisition of Order2Cash

On February 14, 2022, we acquired 100% of the outstanding shares of Anachron
Beheer BV and subsidiaries, d/b/a Order2Cash ("Order2Cash"), a privately-held
company headquartered in Amsterdam, the Netherlands. Order2Cash is a European
B2B order-to-cash platform provider. Their enterprise customer base, global
interoperability capabilities, and established connections to over 70 B2B and
business-to-government ("B2G") e-invoicing networks broaden the BPN's reach to
deliver fully compliant and secure e-invoicing across multiple markets. The
acquisition is part of our strategic plan to continue expanding our physical
presence in the European market while also enhancing our global invoicing and
payments capabilities. Pursuant to the terms of the purchase agreement, we paid
$59.5 million, net of $0.4 million of acquired cash.

Impairment of right of use and restructuring charges

During the first quarter of 2022, we approved a strategic plan to optimize our
structure and costs related to our leased facilities and print operations. As
part of the plan, we approved a formal work from anywhere policy for our
employees due to high interest in allowing employees to work remotely and
investments in our operating environments and technology enabling seamless
day-to-day execution and increased productivity across a distributed workforce.
Additionally, we closed one of our print locations due to the continued decline
in customer print volumes and efficiencies gained through streamlining our print
operations. The overall plan included vacating some or all of several of our
leased office facilities and one of our leased print operations facilities and
making them available for sublease. We ceased using all of the facility space
outlined in the plan by March 31, 2022. As a result, during the three months
ended March 31, 2022, we incurred $10.0 million of right of use ("ROU") asset
impairments and $3.6 million of leasehold improvement and fixed asset
impairments

Subsequently, we approved an expansion of the strategic plan to further vacate
an additional portion of our leased office space. By September 30, 2022, we
ceased using the leased facility space under the expanded plan. As a result,
during the three months ended September 30, 2022, we incurred $3.3 million of
ROU asset impairments and $1.3 million of leasehold improvement and fixed asset
impairments.

In calculating the impairment amount, the fair value of each asset was
determined using an income approach based on the present value of future cash
flows from actual or estimated sublease income. In cases where a sublease has
not yet been entered into, this approach required the use of certain estimates,
including a discount rate, sublease rental rates, period of vacancy, and
sublease incentives, which were based in part by local real estate industry
data. For these subjective estimates based on unobservable inputs, the fair
value of the assets have been classified in Level 3 of the fair value hierarchy
(refer to Note 13 - Fair Value Measurements in the Notes to Condensed
Consolidated Financial Statements). All impairment amounts were recorded in
impairment and restructuring on the Condensed Consolidated Statements of
Operations.

                                       42
--------------------------------------------------------------------------------

Additionally, in accordance with ASC 420, Exit or Disposal Cost Obligations, we
recognized exit obligation costs related to closing the print operations
facility, including one-time employee severance benefits, contract termination
costs, and other costs associated with exiting the facility. These costs were
recorded in impairment and restructuring on the Condensed Consolidated
Statements of Operations, and are allocated to our Print segment. Total costs
recognized during the nine months ended September 30, 2022 were not material.

In the future, if we determine that we no longer intend to use some or all of the remaining space of our leased facilities, we may be required to record additional impairment or restructuring charges. .

Impact of COVID-19 and other macroeconomic events

During 2021 and nine months ended September 30, 2022, the COVID-19 pandemic did
not adversely impact us, as evidenced by the continued growth in our
subscription and transaction revenues. Our focus remains on investing in our
products and supporting our long-term growth, including global expansion. Since
the start of the pandemic, we have continued to operate despite the disruption
to some of our customer's operations. The pandemic has served to increase
awareness and urgency around accelerating the digital transformation of accounts
receivable through our platform and offerings which has helped avoid significant
business, bookings, or revenue disruptions thus far. Additionally, shifts from
in-person buying and traditional payment methods (such as cash or check) towards
e-commerce and digital payments, and the related increase in consumer and B2B
demand for safer payment and delivery solutions, have benefited us as it has
further ingrained our platform in our customers' critical day-to-day
order-to-cash operations. In response to the pandemic, we have modified some of
our business practices, such as enabling and encouraging our employees to work
from anywhere and establishing health and safety protocols in our offices. We
continue to monitor the situation and may take further actions as may be
required by government authorities or that we determine are in the best
interests of our employees, customers, and partners.

In addition, the spread of COVID-19 and its variants has contributed to a global
slowdown of economic activity, increased unemployment, supply chain disruptions,
higher rates of inflation, higher interest rates, increased volatility in
foreign currency exchange rates, and increased volatility in the global capital
markets, among other macroeconomic events. We are unable to predict the impact
the COVID-19 pandemic or other macroeconomic events will have on our future
results of operations, liquidity, financial condition, ability to access capital
markets, and business practices due to numerous uncertainties, including the
duration, severity, and spread of the virus and its variants, actions that may
be taken by government authorities, the impact to our employees, customers, and
partners, prolonged macroeconomic uncertainty, volatility, and disruption, and
various other factors beyond our knowledge or control. We continue to monitor
these situations and may take further actions as may be required by government
authorities or that we determine are in the best interests of our employees,
customers, and partners.

Key factors affecting our performance

We believe our performance and future growth depends on a number of factors that
present significant opportunities, but also pose risks and challenges, including
those discussed below and Part I. Item 1A. "Risk Factors" in our Annual Report
on Form 10-K and this Quarterly Report on Form 10-Q. For additional information
related to key performance metrics we use to evaluate the health of our
business, identify trends affecting our growth, formulate goals and objectives,
and make strategic decisions, please see the section within this Quarterly
Report on Form 10-Q titled "Key Performance Metrics". We believe the most
significant factors affecting our results of operations include:

Investment in technology

Our goal is to transform the way businesses send and capture payments in order
to be the leader in the order-to-cash process by digitizing areas including
credit decisioning, ordering, invoicing, payments, cash application, and
collections. We continue to invest in technology and the digitizing of our
platforms. Further, we continue to invest in certain internal initiatives
targeted at improving internal processes and enhancing the efficiency, security,
and scalability of our platforms. Our investment in technology is expected to
have a positive impact on our long-term profitability and operations. We also
intend to continue to evaluate strategic acquisitions and investments in
businesses and technologies to drive product and market expansion. Our future
success is dependent on our ability to successfully develop, market, and sell
existing and new products.

                                       43
--------------------------------------------------------------------------------

Acquisition of new customers

We reach new customers through our proven go-to-market strategies, which include
digital marketing campaigns, our direct sales force, and partnerships with
financial institutions and other complementary companies. Our growth depends in
part on our ability to acquire new customers.

As of September 30, 2022, we had customers across a wide variety of industries
and geographies, including distributors of building materials, electrical,
plumbing and technology equipment, healthcare, construction, and consumer
products, primarily located in North America. We continue to invest in our
sales, marketing, and go-to-market strategies in order to acquire customers in
our target markets. Our marketing efforts are campaign and content driven and
targeted depending on the size and industry of the customer. Marketing
initiatives focus on demand generation and include promotional activity and with
an emphasis on online digital marketing programs (e.g., webinars, virtual
events). We believe there is a long-term opportunity to expand into large, new
markets with compatible trends.

Our ability to attract new customers depends on a number of factors, including
the effectiveness and pricing of our products, our competitors' offerings, and
successfully executing our marketing efforts. Our financial performance depends
in large part on the overall demand for our platforms, and acquisition of new
customers is expected to have a positive impact on our long-term profitability
and operations.

Expansion of relationships with existing customers

Our revenue growth depends on our customers' usage of our range of products. Our
ability to monetize transactions and payments is an important part of our
business model. As we solve customers' problems and become more integrated into
their daily businesses, we see an increased opportunity to cross-sell to these
existing customers. This strategy is achieved by driving adoption of an existing
solution across different divisions and/or subsidiaries of an existing customer
and then expanding the scope of service with additional solutions. Our ability
to influence customers to process more transactions and payments on our
platforms will have a direct impact on our revenue.

Our revenue from existing customers is generally reliable due to both the
pricing structure and the business-critical nature of the functions our products
support for customers. We expand within our existing customer base by selling
additional modules on our platform, adding divisions, increasing transactions
per customer through proven e-solutions, as well as through effective pricing
and packaging our services. Our ability to increase sales to existing customers
depends on a number of factors, including our customers' satisfaction with our
solutions, competition, pricing, and overall changes in our customers' spending
levels with us.

Key Performance Metrics

We monitor the following key metric to help us assess the health of our business, identify trends affecting our growth, formulate goals and objectives, and make strategic decisions.

Total Payment Volume

Total Payment Volume (“TPV”) is the dollar value of customer payment transactions we process on our platform during a given time period. The TPV is made up of two categories of payment:

•POS – ACH/Wire – payments made through our software, portals, gateways and commercial payments network which are processed via ACH or wire transfers.

•POS – Card – payments through our third-party software, portals, gateways and processors, and includes our payment facilitator customers (“PayFac”).

To grow payments revenue from customers, we must deliver software platforms that
both simplify the process of accepting electronic payments and streamline the
reconciliation of remittance data. Additionally, as we increase the digital
delivery of invoices, the probability increases that digitally delivered
invoices will be paid electronically by our customers' end customers. The more
customers use our software platforms, the more payments transactions they are
likely to process through our various products. TPV provides an important
indication of the dollar value of transactions that customers are completing on
our platform and is helpful to investors as an indicator of our ability to
generate revenue from our customers.

                                       44
--------------------------------------------------------------------------------
                                      Three Months Ended                Nine Months Ended
                                        September 30,                     September 30,
                                       2022             2021            2022             2021

                                                         (in billions)
        Total Payment Volume    $     28.3            $ 21.0      $     76.5           $ 54.9

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


The increase in TPV for the three and nine months ended September 30, 2022
compared to the prior year periods was primarily due to the addition of new
customers on our PayFac platform, as well as an increase in existing customer
transactions on both our card and ACH/Wire platforms (including an expansion of
our product platforms for ACH transactions).

Components of operating results

Revenue

We generate revenue from the following sources: (1) Subscription, (2) Transaction, (3) Professional Services and (4) Reimbursable Costs.

Subscription revenue

Subscription revenue primarily consists of contractually agreed upon fees to
provide access to our cloud-based SaaS platform and modules that automate
processes across the accounts receivable function (including electronic invoice
presentment, payments solutions, credit decisioning and monitoring, cash
application, collections automation, and e-commerce).

Our subscription agreements do not provide a customer with the right to take
possession of the software, are typically non-cancellable, and do not contain
general rights of returns. Subscription agreements have an initial term of one
to three years and are typically invoiced in annual installments in advance of
each year. After the initial term, subscription agreements renew annually and
are typically invoiced in advance of each renewal year. In some cases,
subscriptions may be billed on a quarterly or monthly basis in advance.
Subscription services are recognized ratably over the contractual term of the
arrangement, beginning on the date the service is made available to the
customer.

Transaction revenue

Transaction revenue consists of per-item processing fees charged at contracted
rates based on the number of envelopes, invoices delivered, payments processed,
or basis points on the amount of credit card payments processed. Our transaction
fees are billed monthly based on the volume of items processed each month, at
the contractual rate per item processed. Transaction revenue is recognized at
the same time as the transactions are processed.

Professional services income

Professional services revenue includes implementation services for new customers or new product implementations for existing customers. It also includes separately contracted project services provided to clients after implementation.

Implementation services are typically sold on a time and materials basis and
billed monthly based on actual hours incurred. When our implementation services
are not capable of being distinct from the related subscription service, they
are combined with the subscription service and recognized over the term of the
agreement. In these cases, since the initial contract with a customer includes
both the subscription and implementation fees, and is therefore higher than
subscription renewal fees in subsequent years, the contract conveys a 'material
right' to the customer (i.e., an option for the customer to renew the contract
at a lower price in relation to the initial contract price). Material rights are
treated separately and are recognized over the period which the right is
expected to be exercised by a customer.

Project services are considered separate and distinct from other products or services purchased and are accounted for at the same time as the services are rendered.

                                       45
--------------------------------------------------------------------------------

Reimbursable expenses

Reimbursable cost revenue consists primarily of amounts billed to our customers for postage on invoices printed and mailed to their end customers. Related revenue is recognized on a gross basis, with an offsetting amount recognized as a cost of revenue.

Revenue cost

Subscription, transaction and service costs

Cost of subscription, transaction, and services consists primarily of
personnel-related costs, including stock-based compensation expense, for our
customer success, professional services, file, and payment operations teams,
print operations equipment costs, costs directly attributed to processing
customers' transactions (such as the cost of printing and mailing invoices,
excluding postage), expenses for processing payments (ACH and credit card),
direct and amortized costs for implementing and integrating our cloud-based
platforms with customers' systems, cloud hosting and related costs for the
infrastructure directly associated with production platforms, rent and utilities
expense for our leased print operations facilities, and allocated overhead
costs. Cost of subscription, transaction, and services excludes depreciation and
amortization. We expect that cost of subscription, transaction, and services
will increase in absolute dollars, but may fluctuate as a percentage of total
revenues from period to period as we continue to invest in growing our business.

Cost of reimbursable expenses

Cost of reimbursable costs consists of fees for postage related costs, primarily
paid to the United States Postal Service or third parties associated with
printed and mailed invoice deliveries for our customers, and are recorded at no
incremental margin on reimbursable costs revenues.

Functionnary costs

Research and development

Research and development expense consists primarily of personnel-related
expenses, including stock-based compensation expense, incurred in developing and
engineering new products or enhancing existing products, quality assurance and
testing of new and existing product technology, maintenance, and enhancement of
our existing technology and infrastructure, and allocated overhead costs. We
capitalize certain software development costs that are attributable to
developing new products and adding incremental functionality to our platforms,
and amortize such costs over the estimated life of the new product or
incremental functionality, which is typically four years.

In accordance with U.S. GAAP, we expense a substantial portion of research and
development expenses as incurred. We expect our research and development
expenses to increase in absolute dollars, but they may fluctuate as a percentage
of total revenues from period to period as we continue to expand our research
and development team to develop new products and product enhancements, as well
as to support our growing infrastructure.

Sales and Marketing

Sales and marketing expense consists primarily of personnel-related expenses,
including stock-based compensation expense, sales commissions, marketing program
expenses, travel-related expenses, and costs to market and promote our platforms
through advertisements, marketing events, partnership arrangements, direct
customer acquisition, and allocated overhead costs. Sales commissions that are
incremental to obtaining customer contracts are deferred and amortized on a
straight-line basis over the estimated period of the customer relationship,
which is estimated to be four to five years.

Our sales and marketing efforts are focused on increasing revenue from new customer acquisition, expanding subscription revenue from existing customers, and facilitating increased electronic adoption and customer activity. resulting digital processing between our customers and their end customers. Selling and marketing expenses may fluctuate from period to period based on a variety of factors, including changes in the general economic environment and our return on these expenses.

                                       46
--------------------------------------------------------------------------------

General and administrative

General and administrative expense consists of personnel-related expenses,
including stock-based compensation expense, for our executive team, talent
(human resources), finance, procurement, legal and compliance, and other
administrative teams, facility costs (including rent and utilities expense for
our leased office space, excluding those used in our print operations),
contingent consideration from acquisitions recognized as compensation expense,
and allocated overhead costs.

To support the growth in our business, our general and administrative expenses
will increase over time. We expect to incur additional general and
administrative expenses as a result of operating as a public company, including
expenses to comply with the rules and regulations applicable to companies listed
on a national securities exchange, expenses related to compliance, and reporting
obligations pursuant to the rules and regulations of the SEC, as well as higher
expenses for director and officer insurance, investor relations, and
professional services. We also expect to incur significant costs, expenses and
fees for professional services and other transaction costs in connection with
the Merger. A material portion of these expenses are payable by us whether or
not the Merger is completed. As a result, we expect that our general and
administrative expenses will increase in absolute dollars, but may fluctuate as
a percentage of total revenues from period to period.

Depreciation and amortization

Depreciation expense includes costs associated with the amortization of furniture and fixtures, computer hardware, software and technology assets, as well as the amortization of leasehold improvements, capitalized software and finite life intangible assets. .

Impairment and restructuring

Impairment and restructuring charges include asset write-downs, including those related to ceasing the use of leased facilities, costs associated with involuntary termination benefits provided to employees, certain contract termination costs and other costs associated with exit or divestiture activities.

Other income (expenses)

Change in fair value of financial instruments

Change in fair value of financial instruments consists of changes in the fair
value of equity instruments that do not meet the criteria to be classified as
equity and contingent consideration from acquisitions (excluding arrangements
recognized as compensation expense).

Interest expense and loss on extinguishment of debt

Interest expense and loss on extinguishment of debt consists of interest on any
outstanding debt, amortization of associated debt issuance costs, payment of
early termination fees, writing off unamortized debt discounts associated with
repaying our outstanding debt facilities prior to maturity, and interest expense
on finance leases.

Other non-operating income (expenses)

Other non-operating income (expense) includes interest income earned on our cash, cash equivalents and marketable securities, foreign exchange gains (losses) and other non-operating income (expense).

Income taxes

Income taxes consist primarily of income taxes related to federal, state, and
foreign jurisdictions in which we conduct business. We maintain a full valuation
allowance on net deferred tax assets for our U.S. federal taxes and certain
foreign and state taxes as we have concluded that it is not more likely than not
that the deferred assets will be utilized.

                                       47
--------------------------------------------------------------------------------

segments

Our operations are grouped into two reportable segments: (1) Software and
Payments, and (2) Print. Our Chief Operating Decision Maker ("CODM") is the
chief executive officer, who reviews discrete financial and other information
presented for print services and software and payment services for purposes of
allocating resources and evaluating our financial performance. The accounting
policies used by the reportable segments are the same as those used in our
Condensed Consolidated Financial Statements.

•Software and Payments - The Software and Payments segment primarily operates
using software and cloud based services, optimizes electronic invoice
presentment, electronic payments, credit decisioning, collections automation,
cash application and deduction management, and e-commerce of B2B customers.

• Printing – The Printing segment is primarily responsible for printing customer invoices and optimizing the time and cost associated with customer billing by mail.

We evaluate segment performance and allocate resources based on revenues, cost
of revenues, and gross profit. All of the revenues shown in the reportable
segments is revenue from external customers; there is no revenue from
transactions with other operating segments. Segment expenses include the direct
expenses of each segment's operations and exclude sales and marketing expenses,
research and development expenses, general and administrative expenses,
depreciation and amortization, impairment and restructuring expense, stock-based
compensation expense, other income (expense), and certain other identified costs
that we do not allocate to the segments for purposes of evaluating their
operational performance.

Given the nature of our business, the amount of assets does not provide meaningful insight into our operating performance. Accordingly, we do not identify or allocate assets by reportable segment and total assets are not included in our segment financial information.

                                       48
--------------------------------------------------------------------------------

Operating results

The following tables show certain data from the Condensed Consolidated Statements of Operations, and such data as a percentage of total revenues, for each of the periods indicated (in thousands, except percentages):

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

23

Cost of reimbursable costs           8,854            17              8,625            21             26,112            18             26,085           

21

Total cost of revenues,
excluding depreciation and
amortization                        20,109            39             17,993            44             58,841            40             54,066            44
Operating expenses:
Research and development            15,943            31             13,453            33             46,922            32             35,716            29
Sales and marketing                 11,591            23             10,310            25             34,030            23             29,226            24
General and administrative          19,613            38              9,838            24             49,426            34             32,766           

27

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

3

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

Total operating expenses            53,974           105             34,806            84            155,116           106            101,632            82
Loss from operations               (22,721)          (44)           (11,442)          (28)           (67,688)          (46)           (32,173)          (26)
Other income (expense):
Change in fair value of
financial instruments                  360             1                  -             -                122             -             (9,995)           (8)
Interest expense and loss on
extinguishment of debt                 (15)            -                 (2)            -                (22)            -             (2,947)           (2)
Other non-operating income             916             2                277             1              1,171             1                521           

Total other income (expense)         1,261             2                275             1              1,271             1            (12,421)          (10)
Loss before income taxes           (21,460)          (42)           (11,167)          (27)           (66,417)          (45)           (44,594)          (36)
Income tax expense (benefit)          (251)            -                 27
            -               (970)           (1)               130             -
Net loss                         $ (21,209)          (41) %       $ (11,194)          (27) %       $ (65,447)          (45) %       $ (44,724)          (36) %


                                       49
--------------------------------------------------------------------------------

Comparison of Results of Operations for the Three Months Ended September 30,
2022 and 2021

Total Revenues

                                                   Three Months Ended
                                                     September 30,                  Change
                                                   2022           2021         Amount         %

                                                            (in thousands)

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

$8,883 29%

     Services and other                             3,249         2,356    

893 38

Subscription, transaction and services 42,508 32,732

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


The increase in total revenues during the three months ended September 30, 2022
compared to the prior year period was primarily due to a $9.1 million increase
in subscription and transaction fees in the Software and Payments segment as a
result of contracting with new customers, existing customers purchasing
additional products, the acquisitions of iController BV ("iController") and
Order2Cash, and increased transaction volumes, primarily from payments. The
growth in transaction volumes was primarily related to the growth in variable
transactional fee revenue associated with card payments on our electronic
payments processing platforms. Additionally, total revenues increased $0.9
million from services and other revenues due to increases in consulting
engagements supporting the growth in new and existing customers, as well as
additional services revenue from the acquisition of Order2Cash.

Cost of Revenues

                                                    Three Months Ended
                                                      September 30,                              Change
                                                 2022                2021              Amount                %

                                                               (in thousands)
Cost of subscription, transaction, and
services                                     $   11,255          $   9,368          $   1,887                  20  %
Cost of reimbursable costs                        8,854              8,625                229                   3
Total cost of revenues, excluding
depreciation and amortization                $   20,109          $  17,993          $   2,116                  12  %


The increase in total cost of revenues during the three months ended September
30, 2022 compared to the prior year period was primarily due to (1) a $0.6
million increase in compensation, benefits, and other personnel-related costs
due to increased headcount and (2) a $1.4 million increase from the acquisitions
of iController and Order2Cash.

Research and Development

                                            Three Months Ended
                                              September 30,                  Change
                                            2022           2021        Amount         %

                                                    (in thousands)
             Research and development   $   15,943      $ 13,453      $ 2,490        19  %


The increase in research and development expenses during the three months ended
September 30, 2022 compared to the prior year period was primarily due to (1) a
$0.8 million increase in compensation, benefits, and other personnel-related
costs, and increased headcount, (2) a $0.3 million increase in stock-based
compensation expense, (3) a $0.3 million increase in software expenses directly
related to product development activities, and (4) a $0.6 million increase due
to the acquisitions of iController and Order2Cash.

                                       50
--------------------------------------------------------------------------------
Sales and Marketing

                                          Three Months Ended
                                            September 30,                  Change
                                          2022           2021        Amount         %

                                                  (in thousands)
              Sales and marketing     $   11,591      $ 10,310      $ 1,281        12  %


The increase in sales and marketing expenses during the three months ended
September 30, 2022 compared to the prior year period was primarily due to (1) a
$0.5 million increase in compensation, benefits, and other personnel-related
costs, and increased headcount, (2) a $0.4 million increase in sales and
marketing initiatives spend related to promoting our products and product
enhancements, including consulting and professional fees, and (3) a $0.5 million
increase due to the acquisitions of iController and Order2Cash. These increases
were partially offset by a $0.3 million decrease in stock-based compensation
expense related to forfeitures.

General and Administrative

                                             Three Months Ended
                                               September 30,                  Change
                                             2022           2021        Amount         %

                                                     (in thousands)
           General and administrative    $    19,613      $ 9,838      $ 9,775        99  %


The increase in general and administrative expenses during the three months
ended September 30, 2022 compared to the prior year period was primarily due to
(1) a $5.8 million increase in Merger related costs, primarily consisting of
investment banking, legal, accounting, and other professional advisory fees,
filing fees, regulatory fees, and other related costs, (2) a $1.0 million
increase in stock-based compensation expense, (3) a $0.9 million increase
compensation, benefits, and other personnel-related costs, and increased
headcount, (4) a $0.7 million increase in acquisition and integration expenses,
and (5) a $1.2 million increase due to the acquisitions of iController and
Order2Cash.

Depreciation and Amortization

                                               Three Months Ended
                                                  September 30,                  Change
                                                2022            2021        Amount        %

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


The increase in depreciation and amortization during the three months ended
September 30, 2022 compared to the prior year period was primarily due to the
amortization of intangible assets from the acquisitions of iController and
Order2Cash.

Impairment and Restructuring

                                              Three Months Ended
                                                 September 30,                     Change
                                                2022               2021      Amount         %

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

$4,636 100%


The increase in impairment and restructuring expense during the three months
ended September 30, 2022 compared to the prior year period was due to
impairments of operating lease ROU assets, leasehold improvements, and fixed
assets incurred as a result of vacating several leased office and print
facilities.

                                       51
--------------------------------------------------------------------------------
Total Other Income (Expense)

                                              Three Months Ended
                                                September 30,                    Change
                                               2022             2021       Amount         %

                                                      (in thousands)
       Total other income (expense)     $     1,261            $ 275      $  986        (359) %


The increase in other income (expense) during the three months ended September
30, 2022 compared to the prior year period was primarily due to (1) a $0.6
million increase in interest income, and (2) a $0.4 million decrease in the fair
value of the contingent consideration related to the iController acquisition.

Income Tax Expense (Benefit)

                                              Three Months Ended
                                                 September 30,                    Change
                                                2022              2021      Amount         %

                                                      (in thousands)
       Income tax expense (benefit)     $      (251)             $ 27     

($278) 1030%


The change from income tax expense to income tax benefit during the three months
ended September 30, 2022 was primarily due to a decrease in the deferred tax
liability related to foreign acquisitions and the ability to utilize certain tax
losses in the future. Overall, our effective tax rate is low due to our U.S. net
operating loss position. We maintain a valuation allowance on our U.S. deferred
taxes.

Comparison of Results of Operations for the Nine Months Ended September 30, 2022
and 2021

Total Revenues

                                                   Nine Months Ended
                                                     September 30,                  Change
                                                  2022           2021          Amount         %

                                                            (in thousands)

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

$21,347 24%

     Services and other                            9,179          7,809    

1,370 18%

Subscription, transaction and services 120,157 97,440

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


The increase in total revenues during the nine months ended September 30, 2022
compared to the prior year period was primarily due to (1) a $22.0 million
increase in subscription and transaction fees in the Software and Payments
segment as a result of contracting with new customers, existing customers
purchasing additional products, the acquisitions of iController and Order2Cash,
and increased transaction volumes, primarily from payments. The growth in
transaction volumes was primarily related to the growth in variable
transactional fee revenue associated with card payments on our electronic
payments processing platforms. Additionally, total revenues increased $1.4
million from services and other revenues due to increases in consulting
engagements supporting the growth in new and existing customers, as well as
additional services revenue from the acquisition of Order2Cash.

                                       52
--------------------------------------------------------------------------------
Cost of Revenues

                                                    Nine Months Ended
                                                      September 30,                             Change
                                                 2022                2021             Amount               %

                                                               (in thousands)
Cost of subscription, transaction, and
services                                     $   32,729          $  27,981          $  4,748                 17  %
Cost of reimbursable costs                       26,112             26,085                27                  -  %
Total cost of revenues, excluding
depreciation and amortization                $   58,841          $  54,066          $  4,775                  9  %


The increase in total cost of revenues during the nine months ended September
30, 2022 compared to the prior year period was primarily due to (1) a $1.2
million increase in compensation, benefits, and other personnel-related costs,
and increased headcount and (2) a $4.0 million increase due to the acquisitions
of iController and Order2Cash. These increases were partially offset by a $0.4
million decrease in print related costs resulting from efficiencies in our
operations and lower print transactional volumes as a result of converting
existing customers to electronic invoicing.

Research and Development

                                            Nine Months Ended
                                              September 30,                 Change
                                           2022           2021         Amount         %

                                                    (in thousands)
             Research and development   $  46,922      $ 35,716      $ 11,206        31  %


The increase in research and development expenses during the nine months ended
September 30, 2022 compared to the prior year period was primarily due to (1) a
$6.3 million increase in compensation, benefits, and other personnel-related
costs, and increased headcount, (2) a $0.9 million increase in software expenses
directly related to product development activities, (3) a $0.7 million increase
in stock-based compensation expense, (4) a $0.6 million increase in amortized
software development costs, (5) a $0.4 million increase in integration expenses,
and (6) a $2.1 million increase due to the acquisitions of iController and
Order2Cash.

Sales and Marketing

                                           Nine Months Ended
                                             September 30,                 Change
                                          2022           2021        Amount         %

                                                   (in thousands)
               Sales and marketing     $  34,030      $ 29,226      $ 4,804        16  %


The increase in sales and marketing expenses during the nine months ended
September 30, 2022 compared to the prior year period was primarily due to (1) a
$2.0 million increase in compensation, benefits, and other personnel-related
costs, and increased headcount, (2) a $0.9 million increase in sales and
marketing initiatives spend related to promoting our products and product
enhancements, including consulting and professional fees, (3) a $0.6 million
increase in travel and entertainment expenses due to increased travel as a
result of loosening COVID-19 restrictions, and (4) a $2.0 million increase due
to the acquisitions of iController and Order2Cash. These increases were
partially offset by a $0.9 million decrease in stock-based compensation expense
related to forfeitures.

                                       53
--------------------------------------------------------------------------------

General and Administrative

                                             Nine Months Ended
                                               September 30,                 Change
                                            2022           2021         Amount         %

                                                     (in thousands)
           General and administrative    $  49,426      $ 32,766      $ 16,660        51  %


The increase in general and administrative expenses during the nine months ended
September 30, 2022 compared to the prior year period was primarily due to (1) a
$5.8 million increase in Merger related costs, primarily consisting of
investment banking, legal, accounting, and other professional advisory fees,
filing fees, regulatory fees, and other related costs, (2) a $3.5 million
increase in compensation, benefits, and other personnel-related costs, and
increased headcount, (3) a $2.3 million increase in insurance, professional, and
consulting fees for reporting, compliance, and other related requirements
supporting public company operating requirements and as a result of becoming a
large accelerated filer for fiscal year 2022, (4) a $1.6 million increase in
acquisition and integration costs, (5) a $1.2 million increase related to
contingent consideration payable pursuant to the Order2Cash acquisition
agreement, and (6) a $2.6 million increase due to the acquisitions of
iController and Order2Cash. These increases were partially offset by a $0.3
million decrease in stock-based compensation expense related to forfeitures.

Depreciation and Amortization

                                               Nine Months Ended
                                                 September 30,                 Change
                                               2022          2021        Amount         %

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


The increase in depreciation and amortization during the nine months ended
September 30, 2022 compared to the prior year period was primarily due to the
amortization of intangible assets from the acquisitions of iController and
Order2Cash.

Impairment and Restructuring

                                               Nine Months Ended
                                                 September 30,                    Change
                                                2022              2021       Amount         %

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

$18,520 100%


The increase in impairment and restructuring expense during the nine months
ended September 30, 2022 compared to the prior year period was primarily due to
impairments of operating lease ROU assets, leasehold improvements, and fixed
assets incurred as a result of vacating several leased office and print
facilities.

Total Other Income (Expense)

                                              Nine Months Ended
                                                September 30,                  Change
                                             2022          2021          Amount          %

                                                      (in thousands)
         Total other income (expense)     $  1,271      $ (12,421)     $ 13,692        (110) %


The decrease in other expenses during the nine months ended September 30, 2022
compared to the prior year period was primarily due to the following one-time
costs recorded in the first quarter of 2021 related to the Business Combination:
(1) a $10.0 million fair value adjustment from the increase in value of the
Earnout Shares and, (2) a $2.9 million loss on extinguishment of debt associated
with the early payment of all our outstanding borrowings. The remainder of the
decrease was primarily due to $0.7 million of additional interest income.

                                       54
--------------------------------------------------------------------------------
Income Tax Expense (Benefit)

                                              Nine Months Ended
                                                September 30,                    Change
                                               2022            2021        Amount          %

                                                      (in thousands)
       Income tax expense (benefit)     $     (970)           $ 130      $

(1,100) (846)%


The change from income tax expense to income tax benefit during the nine months
ended September 30, 2022 was primarily due to a decrease in the deferred tax
liability related to foreign acquisitions and the ability to utilize certain tax
losses in the future. Overall, our effective tax rate is low due to our U.S. net
operating loss position. We maintain a valuation allowance on our U.S. deferred
taxes.

Cash and capital resources

Our principal sources of liquidity are cash, cash equivalents, and cash flows
from financing activities including through a public offering of our equity
securities. As of September 30, 2022, we had cash and cash equivalents of $145.9
million. Our primary uses of liquidity are operating expenses, capital
expenditures, and acquiring businesses. The acquisitions of iController and
Order2Cash were both funded entirely with cash on hand. Pursuant to the Merger
Agreement, while the Merger is pending, we are restricted or prohibited from
certain capital expenditures without the consent of the Parent. Additionally,
during that same time, we are subject to various restrictions under the Merger
Agreement on raising additional capital, issuing additional equity or debt, and
pursuing certain activities that could use significant amounts of our liquidity,
including assuming or incurring additional debt, repurchasing equity, paying
dividends, and entering into certain acquisition and disposition transactions,
among other restrictions.

We believe our current cash, cash equivalents, and cash flows from financing
activities, including additional consideration payable within the next year, if
any, related to our recent acquisitions, and incremental cash outlays for
transaction costs related to the proposed Merger expected to be incurred whether
or not the Merger is completed, are sufficient to meet our working capital and
capital expenditure requirements for a period of at least 12 months from the
date of this Quarterly Report on Form 10-Q. However, our anticipated results are
subject to significant uncertainty and may be affected by events beyond our
control, including the prevailing economic, financial, and industry conditions,
including from the COVID-19 pandemic and continued volatility and disruption in
the global financial markets.


The following table summarizes our cash flows for the periods presented (in thousands, except percentages):

                                                     Nine Months Ended
                                                       September 30,                              Change
                                                 2022                2021               Amount                 %

Net cash used in operating activities ($28,367) ($9,809) ($18,558)

               (189) %
Net cash used in investing activities           (15,703)            (46,647)             30,944                  66
Net cash provided by (used in)
financing activities                             (3,144)            282,945            (286,089)               (101)
Effect of exchange rate changes on
cash, cash equivalents, and restricted
cash                                               (125)                  -                (125)                  -
Net increase (decrease) in cash, cash
equivalents, and restricted cash             $  (47,339)         $  226,489          $ (273,828)               (121) %


Operating Activities

Cash flows from operations have historically been negative as we continue to
invest in our product features and platform, develop new products, increase our
sales and marketing efforts to sign contracts with new customers, and expand the
product breadth within existing customers. We do not expect this trend to change
on an annual basis, although we do see quarterly shifts where cash flows from
operations may be positive, primarily associated with invoicing and collecting
subscription fees from customers which are typically payable in advance.

                                       55
--------------------------------------------------------------------------------

For the nine months ended September 30, 2022, cash used in operating activities
was $28.4 million compared to $9.8 million during the prior year period. The
increase was primarily due to higher net loss from continued investments in
sales and marketing and product development, acquisition and integration costs,
and an increase in the use of cash for working capital.

Investing activities

During the nine months ended September 30, 2022 cash used in investing
activities was $15.7 million, which consisted primarily of $59.5 million for the
purchase of Order2Cash, net of acquired cash, and was partially offset by $45.2
million of proceeds from the sale of marketable securities and $1.4 million for
purchases of property and equipment.

In the nine months ended September 30, 2021 cash used in investing activities has been $46.6 millionwhich consisted mainly of $45.1 million purchases of securities and $1.6 million for the purchase of goods and equipment.

Financing Activities

In the nine months ended September 30, 2022 cash used in financing activities has been $3.1 millionwhich consisted mainly of a $5.6 million
increase in customer funds payable, and was partially offset by $3.3 million of the proceeds of the ordinary shares issued.

During the nine months ended September 30, 2021 cash provided by financing
activities was $282.9 million, which consisted primarily of $329.7 million of
proceeds from the Business Combination and PIPE Financing, net of offering
costs. These proceeds were offset by $46.2 million used to fully repay our
outstanding borrowings, including debt extinguishment costs, pursuant to the
Business Combination, and $1.3 million in proceeds from common stock issued.

Future cash obligations

In addition to the future cash obligations described below, we have other
payables and liabilities that may be legally enforceable but are not considered
contractual commitments. Refer to Note 15 - Accrued Expenses and Other Current
Liabilities in the Notes to Condensed Consolidated Financial Statements for more
information on our payables and liabilities.

Leases

We lease office space for our employees and facilities for our print operations
under non-cancellable operating lease agreements (refer to Note 9 - Leases in
the Notes to Condensed Consolidated Financial Statements, including a discussion
of the impairment of certain facility leases no longer in use). The remaining
duration of non-cancellable operating leases ranges from less than 1 year to 13
years. As of September 30, 2022, remaining non-cancellable lease payments are
due as follows: $1.3 million in 2022, $5.3 million in 2023, $4.9 million in
2024, $4.6 million in 2025, $4.3 million in 2026, and $24.7 million thereafter.

For certain leased facility space that we have ceased occupying, we have entered
into subleases under non-cancellable operating lease agreements. The remaining
duration of these non-cancellable subleases ranges from 2 years to 8 years. As
of September 30, 2022, remaining non-cancellable sublease payments to be
received are as follows: $0.3 million in 2022, $1.3 million in 2023, $1.1
million in 2024, $1.0 million in 2025, $1.1 million in 2026, and $1.6 million
thereafter.

Purchase Obligations

We enter into purchase commitments with certain vendors to secure pricing for
materials necessary for our print operations. As of September 30, 2022, we had
approximately $0.4 million remaining under such purchase commitments.

Conditional consideration

Our acquisitions of Order2Cash and iController include contingent consideration
arrangements with estimated fair values of $3.1 million and $4.5 million,
respectively at September 30, 2022. These amounts are to be paid to the sellers
based on the amount and timing of each acquired company's achievement of certain
recurring revenue growth targets and other certain conditions over a three year
period subsequent to each acquisition date.

                                       56
--------------------------------------------------------------------------------

Deferred purchase price

Our acquisition of Order2Cash includes a deferred purchase with an estimated
fair value at September 30, 2022 of $0.5 million. This amount is payable within
four years of the closing date upon achievement of certain conditions.

Letter of credit

We have commitments under letters of credit for $2.5 million that are maintained
pursuant to certain of our lease arrangements. $2.4 million of the letters of
credit expire in 2024, and the remainder expire in greater than five years from
September 30, 2022.

Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. GAAP, we believe
the following non-GAAP financial measures are useful in evaluating our operating
performance. We present these non-GAAP measures to assist investors in
understanding our financial performance from the perspective of management. We
believe these measures provide an additional tool for investors to use in
comparing our financial performance over multiple periods with other companies
in our industry. While we believe the use of these non-GAAP measures provides
useful information to investors and management in analyzing our financial
performance, non-GAAP measures have inherent limitations in that they do not
reflect all of the amounts and transactions that are included in our financial
statements prepared in accordance with U.S. GAAP. Non-GAAP measures do not serve
as an alternative to U.S. GAAP, nor do we consider our non-GAAP measures in
isolation. Accordingly, we present non-GAAP financial measures only in
connection with U.S. GAAP results. We urge investors to consider non-GAAP
measures only in conjunction with our U.S. GAAP financials and to review the
reconciliation of our non-GAAP financial measures to the most comparable U.S.
GAAP financial measures, as described below, included in this Quarterly Report
on Form 10-Q.

Net Revenue (non-GAAP)

Net revenue (non-GAAP) is defined as total revenues less reimbursable costs
revenue. Reimbursable costs revenue consists primarily of amounts charged to
customers for postage (with an offsetting amount recorded as a cost of revenue)
which we do not consider internally when monitoring operating performance.

We believe net revenue (non-GAAP) allows investors to evaluate comparability
with our past financial performance and facilitates period-to-period comparisons
of core operations. The most directly comparable U.S. GAAP measure to net
revenue (non-GAAP) is total revenues on our Condensed Consolidated Statements of
Operations.

Adjusted gross profit (non-GAAP) and adjusted gross margin (non-GAAP)

Adjusted gross profit (non-GAAP) is defined as total revenues less total cost of
revenues, excluding depreciation and amortization, plus stock-based compensation
expense included in total cost of revenues. Adjusted gross margin (non-GAAP) is
defined as adjusted gross profit (non-GAAP) divided by total revenues less
reimbursable costs revenue, or net revenue (non-GAAP).

We believe adjusted gross profit (non-GAAP) and adjusted gross margin (non-GAAP)
are useful financial measures to investors as they eliminate the impact of
certain non-cash expenses and allow a more direct comparison of our cash
operations and ongoing operating performance between periods. We expect adjusted
gross margin (non-GAAP) to continue to improve over time to the extent that we
are able to increase our scale by successfully growing revenues, both from
cross-selling existing customers and upselling current and future offerings.
However, our ability to improve adjusted gross margin (non-GAAP) over time is
not guaranteed and will be impacted by the factors affecting our performance
outlined in the Part I, Item 1a. "Risk Factors" of our Annual Report on Form
10-K and in this Quarterly Report on Form 10-Q. The most directly comparable
U.S. GAAP measure to adjusted gross profit (non-GAAP) and adjusted gross margin
(non-GAAP) is total revenues on our Condensed Consolidated Statements of
Operations.

                                       57
--------------------------------------------------------------------------------

The following table presents a reconciliation of our net revenue (non-GAAP),
adjusted gross profit (non-GAAP), and adjusted gross margin (non-GAAP) to their
most directly comparable U.S. GAAP financial measures (in thousands, except
percentages):

Reconciliation of Total Revenue to Net Revenue (non-GAAP), Adjusted Gross Profit (non-GAAP) and Adjusted Gross Margin (non-GAAP)

                                              Three Months Ended                       Nine Months Ended
                                                 September 30,                           September 30,
                                           2022                2021                2022                2021
Total revenues                         $   51,362          $   41,357          $  146,269          $  123,525
Less: Reimbursable costs revenue            8,854               8,625              26,112              26,085
Net revenue (non-GAAP)                 $   42,508          $   32,732       

$120,157 $97,440

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

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

$89,074 $70,743

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


Adjusted EBITDA (non-GAAP) and Adjusted EBITDA margin (non-GAAP)

Adjusted EBITDA (non-GAAP) is defined as net loss, plus (1) income tax expense
(benefit), (2) changes in the fair value of financial instruments that do not
meet the criteria to be classified as equity, (3) interest expense and loss on
extinguishment of debt, (4) depreciation and amortization, (5) stock-based
compensation expense, (6) impairment, restructuring, and related facility costs,
(7) acquisition and integration costs, (8) other capital structure transaction
costs, and (9) other non-operating expense (income). Adjusted EBITDA margin
(non-GAAP) is defined as adjusted EBITDA (non-GAAP) divided by total revenues
less reimbursable costs revenue, or net revenue (non-GAAP).

We believe adjusted EBITDA (non-GAAP) and adjusted EBITDA margin (non-GAAP) are
key measures for us to understand and evaluate our operating performance, to
establish budgets, and to develop operational and strategic goals. Adjusted
EBITDA (non-GAAP) and adjusted EBITDA margin (non-GAAP) can provide a useful
measure for period-to-period comparisons of our core operating performance and
help identify underlying trends since the expenses we exclude may not directly
correlate to our primary operating performance in any specific period. Excluded
expenses are:

•Certain non-cash charges, such as stock-based compensation expense, depreciation and amortization and changes in the fair value of financial instruments;

• Certain items not related to our main business activities, such as:

•Impairment, restructuring, and related facility costs associated with
realigning our organization or cost structure, impairments of ROU assets and
other long-lived assets from ceasing use of leased facility spaces, involuntary
termination benefits, ongoing lease expense and related sublease income from
facility spaces we have ceased using, and other related costs; and

•Other non-operating products.

                                       58
--------------------------------------------------------------------------------

•One-time items that are not expected to recur in the next two years or have not occurred in the previous two years, such as:

•Acquisition and integration expenses related to third-party costs associated
with acquiring companies, internal direct costs associated with integrating
acquired companies, employees, and their customers, and changes in the fair
value of contingent compensation consideration payable to employees of acquired
companies;

• Interest charges and loss on extinguishment of debt resulting from the prepayment penalty and costs associated with the repayment of all outstanding credit facilities in connection with the Business Combination; and

•Other capital structure transaction costs related to third-party fees,
including investment banking, legal, accounting, and other professional advisory
fees associated with financing transactions, such as the proposed Merger (and
one-time transaction to become a private company), the secondary offering of our
Class 1 common stock completed in July 2021 (a one-time transaction between
existing and new shareholders, with no new shares issued or offered by us), and
the Warrant Exchange Offer (a one-time transaction to convert all outstanding
warrants to Common Stock).

Most directly comparable WE The GAAP measure of Adjusted EBITDA (non-GAAP) and Adjusted EBITDA margin (non-GAAP) is Net Loss in the Condensed Consolidated Statements of Income.

The following table provides a reconciliation of our Adjusted EBITDA (non-GAAP) and Adjusted EBITDA (non-GAAP) margin to its most directly comparable GAAP financial measure (in thousands):

Reconciliation of net loss to Adjusted EBITDA (non-GAAP) and Adjusted EBITDA margin (non-GAAP)

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

                                                                      (in thousands)
Net loss                                 $  (21,209)         $  (11,194)         $  (65,447)         $  (44,724)
Income tax expense (benefit)                   (251)                 27                (970)                130
Change in fair value of financial
instruments                                    (360)                  -                (122)              9,995
Interest expense and loss on
extinguishment of debt                           15                   2                  22               2,947
Depreciation and amortization                 2,191               1,205               6,218               3,924
Stock-based compensation expense              6,940               5,914              20,293              20,446
Impairment, restructuring, and related
facility costs                                5,383                  35              20,262                 358
Acquisition and integration costs               702                 257               3,900                 257
Other capital structure transaction
costs                                         5,802                   -               5,802                 498
Other non-operating income                     (726)               (277)               (982)               (521)
Adjusted EBITDA (non-GAAP)               $   (1,513)         $   (4,031)         $  (11,024)         $   (6,690)

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


For the three months ended September 30, 2022, adjusted EBITDA (non-GAAP)
increased $2.5 million compared to the prior year period primarily due to growth
in total revenues and higher expenses that are excluded from adjusted EBITDA
(non-GAAP), including (1) $5.8 million of other capital structure transaction
costs related to the proposed Merger, (2) $5.4 million in impairment charges
from ceasing use of additional leased facilities in the third quarter of 2022,
(3) a $1.0 million increase in stock-based compensation expense due to increased
headcount, and (4) a $1.0 million increased depreciation and amortization
primarily due to the amortization of intangible assets from the acquisitions of
iController and Order2Cash. These increases were partially offset by higher
operating expenses.

                                       59
--------------------------------------------------------------------------------

For the nine months ended September 30, 2022, adjusted EBITDA (non-GAAP)
decreased $4.3 million compared to the prior year period primarily due to higher
operating expenses, offset by expenses that are excluded from adjusted EBITDA
(non-GAAP), including (1) $20.3 million in impairment charges from ceasing use
of several leased facilities in 2022, (2) $5.8 million of other capital
structure transaction costs related to the proposed Merger, (3) $3.9 million in
acquisition and integration costs from the acquisitions of Order2Cash and
iController, and (4) a $2.3 million increase in depreciation and amortization
primarily due to the amortization of intangible assets from the acquisitions of
iController and Order2Cash. These increases in expenses, which led to a decrease
in adjusted EBITDA (non-GAAP), were partially offset by growth in total revenues
and decreases to one-time costs recorded in the prior year related to the
Business Combination: (1) a $10.0 million fair value adjustment from the
increase in value of the Earnout Shares and (2) a $2.9 million loss on
extinguishment of debt associated with the early payment of all our outstanding
borrowings.

Direct card revenue (non-GAAP)

Direct card revenue (non-GAAP) is a subset of our software and payments segment
revenues and contains variable transactional fee revenue associated with card
payments on our electronic payments processing platforms and related fees.
Direct card revenue (non-GAAP) is defined as subscription, transaction, and
services revenues, less revenues generated from segments other than software and
payments (i.e., software and payments segment revenue), less software and
payments segment transaction revenue unrelated to card processing and all
subscription revenue.

We believe direct card revenue (non-GAAP) allows investors to understand the
revenue we earn from processing card payments and better comprehend underlying
trends in our payments business. The most directly comparable U.S. GAAP measure
to direct card revenue (non-GAAP) is subscription, transaction, and services
revenue on the Condensed Consolidated Financial Statements.

The following table provides a reconciliation of our direct card revenues (non-GAAP) to their most directly comparable revenues WE GAAP financial measure (in thousands):

Reconciliation of subscription, transaction and service revenue with direct card revenue (non-GAAP)

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

Revenue from subscriptions, transactions and services $42,508 $32,732 $120,157 $97,440
Less: Segment revenue excluding software and payments 7,355

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


Free Cash Flow (non-GAAP)

Free cash flow (non-GAAP) is defined as net cash used in operating activities less purchases of property, plant and equipment (which include capitalized internal-use software costs).

We believe free cash flow (non-GAAP) is an important liquidity measure of the
cash available for our operational expenses and investment in business growth.
It is useful to investors as a liquidity measure of our ability to generate, or
use cash to maintain, a strong balance sheet, and invest in future growth. The
most directly comparable GAAP measure to free cash flow (non-GAAP) is net cash
used in operating activities on the Condensed Consolidated Statements of Cash
Flows.

                                       60
--------------------------------------------------------------------------------

The following table provides a reconciliation of free cash flow to the most directly comparable GAAP measure (in thousands):

Reconciliation of Net Cash Used in Operating Activities to Free Cash Flow
(non-GAAP)

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

                                                                 (in thousands)

Net cash used in operating activities $(2,606) $1,012 ($28,367) ($9,809)

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

Critical accounting policies and procedures

There have been no material changes in critical accounting policies, significant judgments or estimates included in our Annual Report on Form 10-K.

Recent accounting pronouncements

Refer to Note 1 - Organization and Nature of Business in the Notes to Condensed
Consolidated Financial Statements for a full description of recent accounting
pronouncements, including the expected dates of adoption and effects on our
Condensed Consolidated Financial Statements.

© Edgar Online, source Previews