AvePoint, Inc. 10-K

Item 8. Financial Statements AND SUPPLEMENTARY DATA   Index to Financial Statements   Page Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 )   46 Consolidated Balance Sheets   47 Consolidated Statements of Operations   48 Consolidated Statements of Comprehensive Loss   49 Consolidated Statements of Mezzanine Equity and Stockholders’ Equity (Deficiency )   50 Consolidated Statements of Cash Flows   52 Notes to Consolidated Financial Statements   53   45 Table of Contents   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   To the stockholders and the Board of Directors of AvePoint, Inc.   Opinion on the Financial Statements   We have audited the accompanying consolidated balance sheets of AvePoint, Inc. and subsidiaries (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, mezzanine equity and stockholders’ equity, and cash flows, for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.   Change in Accounting Principle   As discussed in Note 2 to the financial statements, the Company has changed its method of accounting for leases, effective January 1, 2022, due to the adoption of Accounting Standards Update No. 2016-02, Leases (Topic 842).   Basis for Opinion   These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.   We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.   Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.   /s/ Deloitte & Touche LLP   New York, New York March 31, 2023   We have served as the Company's auditor since 2021.   46 Table of Contents   AvePoint, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands, except par value)       December 31,     December 31,       2022     2021   Assets                 Current assets:                 Cash and cash equivalents   $ 227,188     $ 268,217   Short-term investments     2,620       2,411   Accounts receivable, net of allowance of $ 725 and $ 838 as of December 31, 2022 and December 31, 2021, respectively     66,474       55,067   Prepaid expenses and other current assets     10,013       8,461   Total current assets     306,295       334,156   Property and equipment, net     5,537       3,922   Goodwill     18,904       —   Intangible assets, net     11,079       —   Operating lease right-of-use assets     15,855       —   Deferred contract costs     48,553       38,926   Other assets     9,310       11,734   Total assets   $ 415,533     $ 388,738   Liabilities, mezzanine equity, and stockholders’ equity                 Current liabilities:                 Accounts payable   $ 1,519     $ 1,824   Accrued expenses and other liabilities     47,784       35,062   Current portion of deferred revenue     93,405       74,294   Total current liabilities     142,708       111,180   Long-term operating lease liabilities     11,348       —   Long-term portion of deferred revenue     8,085       8,038   Earn-out shares liabilities     6,631       10,012   Other non-current liabilities     3,607       3,943   Total liabilities     172,379       133,173   Commitments and contingencies (Note 13)                     Mezzanine equity                 Redeemable noncontrolling interest     14,007       5,210   Total mezzanine equity     14,007       5,210   Stockholders’ equity                 Common stock, $ 0.0001 par value; 1,000,000 shares authorized, 185,278 and 181,822 shares issued and outstanding     19       18   Additional paid-in capital     665,715       625,056   Treasury stock     ( 21,666 )     ( 1,739 ) Accumulated other comprehensive income     2,006       2,317   Accumulated deficit     ( 416,927 )     ( 375,297 ) Total stockholders’ equity     229,147       250,355   Total liabilities, mezzanine equity, and stockholders’ equity   $ 415,533     $ 388,738   See accompanying notes.   47 Table of Contents     AvePoint, Inc. and Subsidiaries Consolidated Statements of Operations (In thousands, except per share amounts)       For the Year Ended       December 31,       2022     2021   Revenue:                 SaaS   $ 117,180     $ 85,580   Term license and support     57,214       50,970   Services     41,283       31,919   Maintenance     15,868       21,022   Perpetual license     794       2,418   Total revenue     232,339       191,909   Cost of revenue:                 SaaS     26,617       19,039   Term license and support     1,969       950   Services     35,629       30,726   Maintenance     908       1,949   Total cost of revenue     65,123       52,664   Gross profit     167,216       139,245   Operating expenses:                 Sales and marketing     109,805       100,512   General and administrative     64,874       59,221   Research and development     30,519       31,765   Depreciation and amortization     3,084       1,238   Total operating expenses     208,282       192,736   Loss from operations     ( 41,066 )     ( 53,491 ) Gain on earn-out and warrant liabilities     4,497       21,233   Interest (expense) income, net     ( 40 )     102   Other income (expense), net     2,959       ( 632 ) Loss before income taxes     ( 33,650 )     ( 32,788 ) Income tax expense     5,038       457   Net loss   $ ( 38,688 )   $ ( 33,245 ) Net income attributable to and accretion of redeemable noncontrolling interest     ( 2,942 )     ( 1,974 ) Net loss attributable to AvePoint, Inc.   $ ( 41,630 )   $ ( 35,219 ) Deemed dividends on preferred stock     —       ( 32,928 ) Net loss available to common stockholders   $ ( 41,630 )   $ ( 68,147 ) Basic and diluted loss per share   $ ( 0.23 )   $ ( 0.48 ) Basic and diluted shares used in computing loss per share     181,957       141,596       See accompanying notes.   48 Table of Contents     AvePoint, Inc. and Subsidiaries Consolidated Statements of Comprehensive Loss (In thousands)         For the Year Ended       December 31,       2022     2021   Net loss   $ ( 38,688 )   $ ( 33,245 ) Other comprehensive (loss) income net of taxes                 Foreign currency translation adjustments     ( 250 )     463   Total other comprehensive (loss) income     ( 250 )     463   Total comprehensive loss   $ ( 38,938 )   $ ( 32,782 ) Comprehensive income attributable to redeemable noncontrolling interest     ( 3,003 )     ( 1,911 ) Total comprehensive loss attributable to AvePoint, Inc   $ ( 41,941 )   $ ( 34,693 )   See accompanying notes.   49 Table of Contents     AvePoint, Inc. and Subsidiaries Consolidated Statements of Mezzanine Equity and Stockholders’ Equity (Deficiency) For the Year Ended December 31, 2022 and 2021  (In thousands, except share amounts)       Redeemable     Total                                                     Accumulated             noncontrolling     mezzanine                     Additional                             Other     Total       interest     equity     Common Stock (1)     Paid-In     Treasury Stock     Accumulated     Comprehensive     Stockholders’       Amount     Amount     Shares     Amount     Capital     Shares     Amount     Deficit     Income     Equity   Balance, December 31, 2021   $ 5,210     $ 5,210       181,821,767     $ 18     $ 625,056       143,564     $ ( 1,739 )   $ ( 375,297 )   $ 2,317     $ 250,355   Proceeds from exercise of options     —       —       1,799,665       —       2,818       —       —       —       —       2,818   Common stock issued upon vesting of restricted stock units     —       —       1,784,993       —       —       —       —       —       —       —   Common stock issued upon acquisition     —       —       324,845       —       1,517       —       —       —       —       1,517   Common stock issued for canceled officer awards     —       —       3,592,504       1       ( 1 )     —       —       —       —       —   Stock-based compensation expense     —       —       —       —       37,210       —       —       —       —       37,210   Issuance of redeemable noncontrolling interest in EduTech     5,794       5,794       —       —       —       —       —       —       —       —   Reclassification of earn-out RSUs to earn-out shares     —       —       —       —       ( 885 )     —       —       —       —       ( 885 ) Repurchase of common stock     —       —       ( 4,046,186 )     —       —       4,046,186       ( 19,927 )     —       —       ( 19,927 ) Comprehensive income (loss):                                                                                 Net loss     —       —       —       —       —       —       —       ( 38,688 )     —       ( 38,688 ) Net income attributable to and accretion of redeemable noncontrolling interest     2,942       2,942       —       —       —       —       —       ( 2,942 )     —       ( 2,942 ) Foreign currency translation adjustment     61       61       —       —       —       —       —       —       ( 311 )     ( 311 ) Balance, December 31, 2022   $ 14,007     $ 14,007       185,277,588     $ 19     $ 665,715       4,189,750     $ ( 21,666 )   $ ( 416,927 )   $ 2,006     $ 229,147     50 Table of Contents                     Redeemable     Share     Redeemable     Total                                             Accumulated             Convertible     Common     Based     noncontrolling     mezzanine                     Additional                     Other     Total       Preferred Stock (1)     Shares     Awards     interest     equity     Common Stock (1)     Paid-In     Treasury     Accumulated     Comprehensive     Stockholders’       Shares     Amount     Amount     Amount     Amount     Amount     Shares     Amount     Capital     Stock     Deficit     Income     Equity   Balance, December 31, 2020     42,000,592     $ 183,390     $ 25,074     $ 1,489     $ 3,061     $ 213,014       100,068,469     $ 12     $ 105,159     $ —     $ ( 299,789 )   $ 1,791     $ ( 192,827 ) Reclassification of share-based awards to mezzanine equity     —       —       —       206       —       206       —       —       ( 206 )     —       —       —       ( 206 ) Reclassification of common shares to mezzanine equity     —       —       6,872       —       —       6,872       —       —       —       —       —       —       —   Remeasurement of redemption value of common shares     —       —       7,361       —       —       7,361       —       —       —       —       ( 7,361 )     —       ( 7,361 ) Proceeds from exercise of options     —       —       —       —       —       —       5,141,331       —       8,242       —       —       —       8,242   Common stock issued upon vesting of restricted stock units     —       —       —       —       —       —       170,852       —       —       —       —       —       —   Stock-based compensation expense     —       —       —       —       —       —       —       —       46,475       —       —       —       46,475   Remeasurement of redemption value of convertible preferred stock     —       32,928       —       —       —       32,928       —       —       —       —       ( 32,928 )     —       ( 32,928 ) Issuance of redeemable noncontrolling interest in EduTech     —       —       —       —       238       238       —       —       515       —       —       —       515   Conversion of convertible preferred stock     ( 42,000,592 )     ( 216,318 )     —       —       —       ( 216,318 )     28,500,592       3       85,390       —       —       —       85,393   Reclassification of redeemable common shares from mezzanine to permanent equity     —       —       ( 39,307 )     —       —       ( 39,307 )     —       —       39,307       —       —       —       39,307   Reclassification of share-based awards from liabilities and mezzanine equity to permanent equity     —       —       —       ( 1,695 )     —       ( 1,695 )     —       —       41,152       —       —       —       41,152   Merger and recapitalization, net of transaction costs     —       —       —       —       —       —       47,940,523       3       299,736       —       —       —       299,739   Reclassification of earn-out RSUs to earn-out shares     —       —       —       —       —       —       —       —       ( 714 )     —       —       —       ( 714 ) Reclassification of Apex shares purchased prior to the Business Combination     —       —       —       —       —       —       —       —       —       ( 1,739 )     —       —       ( 1,739 ) Comprehensive income (loss):                                                                                                         Net loss     —       —       —       —       —       —       —       —       —       —       ( 33,245 )     —       ( 33,245 ) Net income attributable to and accretion of redeemable noncontrolling interest     —       —       —       —       1,974       1,974       —       —       —       —       ( 1,974 )     —       ( 1,974 ) Foreign currency translation adjustment     —       —       —       —       ( 63 )     ( 63 )     —       —       —       —       —       526       526   Balance, December 31, 2021     —     $ —     $ —     $ —     $ 5,210     $ 5,210       181,821,767     $ 18     $ 625,056     $ ( 1,739 )   $ ( 375,297 )   $ 2,317     $ 250,355     (1) As part of the Apex Business Combination (the “ Apex   Business Combination ”) (as disclosed in “ Note 3 — Business Combination ”), all per share information has been retroactively adjusted using an exchange ratio of 8.69144 per share.   See accompanying notes. 51 Table of Contents     AvePoint, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In thousands)         For the Year Ended       December 31,       2022     2021   Operating activities                 Net loss   $ ( 38,688 )   $ ( 33,245 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities:                 Depreciation and amortization     3,494       1,238   Operating lease right-of-use assets expense     5,945       —   Foreign currency remeasurement loss     835       1,308   Stock-based compensation     37,218       59,508   Deferred income taxes     3,701       ( 175 ) Other     ( 607 )     ( 755 ) Change in value of earn-out and warrant liabilities     ( 4,402 )     ( 21,233 ) Changes in operating assets and liabilities:                 Accounts receivable     ( 14,388 )     ( 8,243 ) Prepaid expenses and other current assets     ( 2,108 )     ( 5,914 ) Deferred contract costs and other assets     ( 9,596 )     ( 8,890 ) Accounts payable, accrued expenses, operating lease liabilities and other liabilities     ( 2,553 )     10,626   Deferred revenue     20,375       10,805   Net cash (used in) provided by operating activities     ( 774 )     5,030   Investing activities                 Maturities of investments     183,554       —   Purchases of investments     ( 180,969 )     ( 916 ) Cash paid in business combinations and asset acquisitions, net of cash acquired     ( 18,572 )     —   Capitalization of internal-use software     ( 1,612 )     —   Purchase of property and equipment     ( 3,853 )     ( 2,461 ) Net cash used in investing activities     ( 21,452 )     ( 3,377 ) Financing activities                 Proceeds from recapitalization of Apex shares, net of transaction fees of $ 49,990     —       441,573   Redemption of redeemable convertible preferred stock     —       ( 130,925 ) Redemption of Legacy AvePoint common stock     —       ( 106,169 ) Purchase of common stock     ( 19,927 )     ( 1,628 ) Payment of net cash settlement for management options     —       ( 7,530 ) Proceeds from stock option exercises     2,818       5,566   Proceeds from sale of common shares of subsidiary     —       753   Repayments of finance leases     ( 39 )     ( 25 ) Payments of transaction fees by Legacy AvePoint     —       ( 2,998 ) Net cash (used in) provided by financing activities     ( 17,148 )     198,617   Effect of exchange rates on cash     ( 1,655 )     ( 1,165 ) Net (decrease) increase in cash and cash equivalents     ( 41,029 )     199,105   Cash and cash equivalents at beginning of period     268,217       69,112   Cash and cash equivalents at end of period   $ 227,188     $ 268,217   Supplemental disclosures of cash flow information                 Income taxes paid   $ 3,320     $ 4,037   Contingent considerations in business combination   $ 5,635     $ —   Common stock issued in business combination   $ 1,517     $ —   Loan to certain acquiree shareholders   $ 235     $ —     See accompanying notes.   52 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements   1. Nature of Business and Organization   AvePoint, Inc. was incorporated as a New Jersey corporation on July 24, 2001, and redomiciled as Delaware corporation in 2006. On July 1, 2021, AvePoint, Inc. (hereinafter referred to as “ AvePoint ”, the “ Company ”, “ we ”, “ us ”, or “ our ”) became a publicly traded company, as further described in “ Note 3 - Business Combination ”.   AvePoint provides a cloud-native software platform that organizations rely on to optimize operations, manage critical data and secure the digital workplace. As companies around the world embrace the new normal of hybrid work, they must build and deliver a new, seamless workplace experience for knowledge workers, centered around an extensive portfolio of SaaS solutions and productivity applications aimed at improving collaboration across the organization.   The adoption of this portfolio of solutions – what has been generally described as the “digital transformation” – is a substantial and ongoing challenge for most organizations, which for decades had previously relied upon only a small number of multi-purpose on-premises applications to drive business outcomes. However, to build and deliver an efficient digital workplace today, companies must address this abundance of applications – and the associated explosive growth and sprawl of data – with a platform offering that is well governed, fit for purpose, easy to use and built on automation.   AvePoint’s Confidence Platform empowers organizations – of all sizes, in all regions, and across all industries – to optimize and secure the solutions that most commonly establish and underpin the digital workplace. As our customers seek to rapidly reduce costs, improve productivity and make more informed business decisions, they depend on our platform for data-driven insights, critical business intelligence and ongoing operational value through automation.   Our principal headquarters are located in Jersey City, New Jersey, with our operating headquarters in Richmond, Virginia and additional offices in North America, Europe, Asia, Australia and the Middle East.   2. Summary of Significant Accounting Policies   Basis of Presentation   The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and include the consolidated accounts of AvePoint, Inc. and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.   Recently Adopted Accounting Guidance   In  February 2016,  the Financial Account Standard Board (the “ FASB ”) issued Accounting Standards Update (“ ASU ”)  2016 - 02,   Leases  (Accounting Standards Codification (“ ASC ”)) and subsequently issued amendments to the initial guidance: ASU  2017 - 13, ASU 2018 - 10, ASU 2018 - 11, ASU 2018 - 20, ASU 2019 - 01, ASU 2019 - 10, ASU 2020 - 02, ASU 2020 - 05 and ASU 2021 - 05 (collectively, “ ASC   842 ”). The Company adopted ASC  842  on  January 1, 2022, using the modified retrospective approach and has elected  not  to restate comparative periods and record a cumulative-effect adjustment as of the effective date. ASC  842  requires companies to generally recognize on the balance sheet operating and finance lease liabilities and corresponding right-of-use (“ ROU ”) assets.   The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed the Company to carry forward its historical assessments of whether a contract contains a lease, lease classification and initial direct costs. The Company elected  not  to use hindsight in determining the lease term. The Company made the following other transition considerations and elections under ASC  842 :  (i)  not  to separate non-lease components for all classes of underlying assets, including under Leases (“ ASC   840 ”) for the purpose of transition measurement; (ii) apply accounting similar to ASC  840  for operating lease with term of  12  months or less at the commencement date; (iii) consider remaining lease term as of the date of initial application in determining the incremental borrowing rate to be used to discount minimum rental payments for operating leases in transition.   The adoption of the new standard resulted in the recognition of ROU assets of $ 13.9  million, net of previously recognized deferred rent balance of $ 0.6  million and total lease liabilities of $ 14.5  million, including a current liability of $ 3.6  million, and corresponding deferred tax assets and liabilities, on the Company’s consolidated balance sheet as of  January 1, 2022 .  The adoption had  no  significant impact on the Company’s consolidated statements of operations or cash flows.   53 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   In  October 2021 ,  the FASB issued ASU  No.   2021 - 08 ,  Business Combinations (“ ASC   805 ”), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Revenue from contracts with customers (“ ASC   606 ”). Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The new guidance should be applied prospectively to acquisitions occurring on or after the effective date. The standard is effective for fiscal years beginning after  December 15, 2022 ,  including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have  not  been issued. The Company early adopted the new standard on  January 1, 2022 .  We applied the new guidance to the current year acquisitions. The adoption of the standard did  not  have any impact on the Company’s consolidated financial statements.   Comparative Data  Certain amounts from prior periods have been presented separately have been grouped to conform to the current period presentation, including:     ■ The reclassification of long-term unbilled receivables to be included in other assets on the consolidated balance sheets as of December 31, 2021;   ■ The reclassification of long-term unbilled receivables to be included in deferred contracts and other assets on the consolidated statements of cash flows for the year ended December 31, 2021;   ■ The reclassification of provision for doubtful accounts and loss (gain) on disposal of property and equipment to be included in other on the consolidated statements of cash flows for the year ended December 31, 2021; and   ■ The payments of transaction fees to be included in proceeds from recapitalization of Apex shares on the consolidated statements of cash flows for the year ended December 31, 2021.   Business Combination   When we consummate a business combination, the assets acquired, and the liabilities assumed are recognized separately from goodwill at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of the fair value of consideration transferred over the acquisition date fair value of the net identifiable assets acquired. While best estimates and assumptions are used to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which  may  be up to  one  year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill as we obtain new information about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. Upon the earlier of the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, any subsequent adjustments are recorded in the consolidated statements of operations. Acquisition-related costs were immaterial and were expensed as incurred. Pro forma historical results of operations related to the business combinations closed in 2022 have not been presented because they are not material business combinations to our consolidated financial statements, either individually or in aggregate.   Goodwill   Goodwill represents the excess of the fair value of consideration transferred over the fair value of net identifiable assets acquired.    We review goodwill for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. We have elected to first assess the qualitative factors to determine whether it is more likely than not that the fair value of our single reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test. If we determine that it is more likely than not that its fair value is less than its carrying amount, then the quantitative goodwill impairment test will be performed. The quantitative goodwill impairment test identifies goodwill impairment and measures the amount of goodwill impairment loss to be recognized by comparing the fair value of our single reporting unit with its carrying amount. If the fair value exceeds its carrying amount, no further analysis is required; otherwise, any excess of the goodwill carrying amount over the implied fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value.   During the year ended December 31, 2022, the goodwill was not impaired. There was  no  goodwill as of  December 31, 2021 .   Intangible Assets, net   Intangible assets primarily consist of customer related assets and acquired software and technology. Typical customer related assets include order backlogs and customer relationships. Intangible assets that have finite useful lives are amortized over their useful lives on a straight-line basis, which range from  one  year to  ten  years. We evaluate the recoverability of intangible assets periodically by considering events or circumstances that  may  warrant revised estimates of useful lives or that indicate the asset  may  be impaired.   54 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   Use of Estimates   The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. We base our estimates and assumptions on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The amounts of assets and liabilities reported in our consolidated balance sheets and the amounts of revenue and expenses reported for each of its periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition, allowance for doubtful accounts, deferred contract costs, valuation of goodwill and other intangible assets, income taxes and related reserves, stock-based compensation, purchase price in a business combination, and earn-out liabilities. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties.   Foreign Currency   The Company has foreign operations where the functional currency has been determined to be the local currency, in accordance with FASB ASC 830, Foreign Currency Matters . Adjustments resulting from translating such foreign functional currency assets and liabilities into U.S. dollars, based on current exchange rates, are recorded as a separate component of stockholders’ deficiency under the caption, accumulated other comprehensive income. Revenue and expenses are translated using average rates prevailing during the period. Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other income (expense), net in the Company’s consolidated statements of operations. Transaction gains totaled $ 0.1  million for the year ended  December 31, 2022 , and transaction losses totaled $( 0.9 ) million for the year ended December 31,  2021 .   Cash and Cash Equivalents   The Company maintains cash with several high credit-quality financial institutions. The Company considers all investments available with original maturities of three months or less to be cash equivalents. These investments are not subject to significant market risk. The Company maintains its cash and cash equivalents in bank accounts which, at times, exceed the federally insured limits. The Company has  not experienced any losses in such accounts. The Company maintains cash balances used in operations at entities based in countries which impose regulations that limit the ability to transfer cash out of the country. As of  December 31, 2022 and 2021 , the Company’s cash balances at these entities were $ 10.8  million and $ 9.3  million, respectively. For purposes of the consolidated statements of cash flows, cash includes all amounts in the consolidated balance sheets captioned cash and cash equivalents.   Short-Term Investments   Short-term investments consist mainly of certificates of deposit held by financial institutions which have an initial maturity of greater than three months but less than or equal to one year at period end.   Allowance for Doubtful Accounts   The Company evaluates the collectability of its accounts receivable based on a combination of factors. Where we are aware of circumstances that may impair a specific customer’s ability to meet its financial obligations, we record a specific allowance against amounts due. For all other customers, we recognize allowances for doubtful accounts based on the length of time the receivables are outstanding, the current business environment and its historical experience. Accounts are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. As such, we present trade receivables at their net estimated realizable value through use of the allowance for doubtful accounts.   Property and Equipment   Property and equipment are stated at cost and depreciated on a straight-line basis over the shorter of their estimated useful lives or related contract terms beginning in the year the asset was placed into service.   We depreciate computer equipment and software generally over a period of three years. We amortize leasehold improvements over the shorter of the remaining lease term or the estimated useful lives of the assets. We depreciate furniture and fixture generally over a period of seven years. We depreciate buildings over a period of forty years. We depreciate office equipment generally over a period of five years. Depreciation and amortization for buildings, information technology assets, leasehold improvements, and furniture and fixtures commences once they are ready for our intended use.   Normal repair and maintenance costs are expensed as incurred. We write off depreciated assets that are no longer in service.   We evaluate long-lived assets, which include leasehold improvements and equipment subject to depreciation and amortization, for impairment whenever events or changes in business circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss will be recognized when the aggregate of estimated undiscounted future cash flows expected to result from the use and the eventual disposition of the long-lived assets less than its carrying amount. Impairment, if any, is determined based on the fair value of the long-lived asset.   There were no impairment charges recognized during the years ended December 31, 2022  and  2021 , respectively.   We evaluate the portion of depreciation and amortization expense attributable to cost of revenue based on organizational headcount directly attributable to the generation of revenue. Based on this evaluation, we have determined that depreciation and amortization attributable to cost of revenue is not material; therefore, the full expense has been recorded in operating expenses in the consolidated statements of operations.   55 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   Deferred Contract Costs   We defer sales commissions earned by our sales force that are considered to be incremental and recoverable costs of obtaining or renewing SaaS, term license and support, service, perpetual license and maintenance contracts. We have structured commissions plans such that the commission rate paid on renewal contracts are less than those paid on the initial contract; therefore, it is determined that the renewal commissions are not commensurate with the initial commission and thus capitalized as deferred contract costs. We determine the estimated average customer relationship period and average renewal term utilizing a portfolio approach. No impairment was recorded for the years ended  December 31, 2022 and 2021 .   Amortization of deferred contract costs of $ 13.4  million and $ 9.5  million for the years ended  December 31, 2022  and  2021 , respectively, is included as a component of sales and marketing expenses in our consolidated statements of operations. Deferred contract costs recognized as a contract asset on our balance sheet was $ 48.6 million and $ 38.9 million as of  December 31, 2022 and 2021 , respectively.   Software Development Costs   Costs incurred in the development of new software products and enhancements to existing software products to be accounted for under software revenue recognition guidance are accounted for in accordance with ASC 985 - 20, Costs of Software to be Sold, Leased, or Marketed, or ASC 985 - 20. These costs, consisting primarily of salaries and related payroll costs, are expensed as incurred until technological feasibility has been established. After technological feasibility is established, costs are capitalized in accordance with ASC 985 - 20. The Company’s primary on-premises product is DocAve which is within the scope of subtopic 985 - 20. DocAve has been on the market since 2002. Typically, the economic life of software produced is less than five  years. As such, any costs subject to capitalization under ASC 985 - 20 would be fully amortized at this time. As a result, no internally generated software development costs have been capitalized as of  December 31, 2022 and 2021 .   We account for costs to develop or obtain internal-use software and implementation costs incurred in hosting arrangements in accordance with ASC 350 - 40, Internal-Use Software, or ASC 350 - 40. We also account for costs of significant upgrades and enhancements resulting in additional functionality under ASC 350 - 40. These costs are primarily software purchased for internal-use, purchased software licenses, implementation costs, and development costs related to our hosted product, which is accessed by customers on a subscription basis. Costs incurred for maintenance, training, and minor modifications or enhancements are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, which is generally three years. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Internally developed software costs required to be capitalized as defined by the accounting guidance are not material to our consolidated financial statements.   Revenue Recognition   We derive revenue from four primary sources: SaaS, term license and support, services, and maintenance.   The following table presents our revenue by source:       Year Ended       December 31,       2022     2021       (in thousands)   Revenue:                 SaaS   $ 117,180     $ 85,580   Term license and support     57,214       50,970   Services     41,283       31,919   Maintenance     15,868       21,022   Perpetual license     794       2,418   Total revenue   $ 232,339     $ 191,909     Term license and perpetual license revenue recognized at point in time was $ 40.0 million and $ 39.7 million for the years ended December 31, 2022  and  2021 , respectively. The remaining revenue amount is recognized over time.   Our sources of revenue mainly include:     ■ SaaS and term license and support revenue includes revenue from the sale of SaaS and term license and support, versions of our software and related customer support. SaaS revenue is recognized ratably over the term of the contract. Term license revenue includes distinct on-premises license and support performance obligations. The license is generally recognized upfront at the point in time when the software is made available to the customer to download and use, and the support is recognized ratably over the term of the contract.   ■ Perpetual license revenue is recognized upfront upon delivery of the licensed product and/or the utility that enables the customer to access authorization keys, provided that an enforceable contract has been received. Typically, our perpetual licenses are sold with post-contract support (PCS), which includes unspecified technical enhancements and customer support. Revenue from PCS is classified as maintenance revenue and is recognized ratably over the term of the contract, which is typically one year, as we satisfy the PCS performance obligation.   ■ Services revenue includes revenue derived primarily from the implementation of software, training, consulting, and migrations. We also offer license customization and managed services. Services revenue from implementation, training, consulting, migration, and license customization is recognized by applying a measure of progress, such as labor hours to determine the percentage of completion of each contract. Services revenue from managed services is recognized ratably on a straight-line basis over the contract term.   In rare cases when the software and the related when-and-if available updates are critical to the combined utility of the software, the Company has determined this to be one performance obligation and revenue is recognized ratably over the license term.    56 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   ASC 606 is a single standard for revenue recognition that applies to all of our SaaS, term license and support, services, perpetual license and maintenance arrangements and generally requires revenue to be recognized upon the transfer of control of promised goods or services provided to its customers, reflecting the amount of consideration it expects to receive for those goods or services. Pursuant to ASC 606, revenue is recognized upon the application of the following steps:     ■ identification of the contract, or contracts, with a customer;   ■ identification of the performance obligations in the contract;   ■ determination of the transaction price;   ■ allocation of the transaction price to the performance obligations in the contract; and   ■ recognition of revenue when, or as, the contractual performance obligations are satisfied.   The timing of revenue recognition may differ from the timing of invoicing to our customers. We record an unbilled receivable when revenue is recognized prior to invoicing. Current unbilled receivables are included in accounts receivable, net in the consolidated balance sheets. Long-term unbilled receivables that are expected to be billed more than twelve months after the period end are included within other assets in the consolidated balance sheets. We record deferred revenue in the consolidated balance sheets when cash is collected or invoiced before revenue is earned. Our standard payment terms are generally net 30 days. Invoices for SaaS, term license and support and maintenance are generally issued annually in advance or when the license is made available for customer use. Invoices for license contracts are generally issued when the license is available for the customer for download. Services are generally invoiced in advance or as the services are performed.   Total deferred revenue as of December 31, 2021 , was $ 82.3  million, of which $ 72.3  million was recognized as revenues for the year ended December 31, 2022 .   The opening and closing balances of the Company’s accounts receivable, net, deferred revenue and deferred contract costs are as follows:       Accounts             Deferred       receivable,     Deferred     contract       net (1)     revenue     costs       (in thousands)   Opening (January 1, 2021)   $ 53,749     $ 74,688     $ 31,943   Closing (December 31, 2021)     61,335       82,332       38,926   Increase/(decrease)     7,586       7,644       6,983                             Opening (January 1, 2022)   $ 61,335     $ 82,332     $ 38,926   Closing (December 31, 2022)     73,348       101,490       48,553   Increase/(decrease)     12,013       19,158       9,627     ( 1 ) Accounts receivable, net is inclusive of accounts receivable, net of allowance for doubtful accounts, current unbilled receivables and long-term unbilled receivables.   Our revenue arrangements generally include standard warranty or service level provisions that its arrangements will perform and operate in all material respects as defined in the respective agreements, the financial impacts of which have historically been and are expected to continue to be insignificant. Our arrangements generally do not include a general right of return relative to the delivered products or services. We recognize revenue net of any taxes collected from customers, which are subsequently remitted to governmental authorities.   Many of our contracts include multiple performance obligations. Judgment is required in determining whether each performance obligation is distinct. Our products and services generally do not require a significant amount of integration or interdependency; therefore, the Company’s products and services are generally not combined. We allocate the transaction price for each contract to each performance obligation based on the relative standalone selling price (“ SSP ”) for each performance obligation within each contract.   We use judgment in determining the SSP for products and services. For substantially all performance obligations except term licenses, we are able to establish the SSP based on the observable prices of products or services sold separately in comparable circumstances to similar customers. We typically establish an SSP range for our products and services which is reassessed on a periodic basis or when facts and circumstances change. Term licenses are sold only as a bundled arrangement that includes the rights to a term license and support.   In determining the SSP of license and support in a term license arrangement we apply observable inputs using the value relationship between support and term license, the value relationship between support and perpetual licenses, the average economic life of our products, software renewal rates and the price of the bundled arrangement in relation to the perpetual licensing approach. Using a combination of the relative fair value method or the residual value method, the SSP of the performance obligations in an arrangement is allocated to each performance obligation within a sales arrangement.   As of December 31, 2022 , transaction price allocated to remaining performance obligations, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods, was $ 237.8  million, of which $ 186.3  million is related to SaaS and term license and support revenue. We expect to recognize approximately 64 % of the total transaction price allocated to remaining performance obligations over the next twelve months and the remainder thereafter.   57 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   We utilize indirect sales channels which utilize Channel Partners. These deals are executed in one of two ways:     1. Channel Partner as Customer   In the first form of these arrangements, the Channel Partner purchases the products from us at a discounted price and resells the products to end users at a price determined by the Channel Partner. In this scenario, the Channel Partner is the entity that has contracted with us and therefore is determined to be our customer. We recognize revenue when control of the goods and/or services are transferred to the customer. In this first form of the sales transaction, revenue recognition occurs upon transfer to the Channel Partner (acting as reseller) or as directed by the Channel Partner (acting as reseller) to its customer.     2. End User as Customer   In the second form, we bill the end user, and the Channel Partner receives a commission. Upon analysis of deals executed through the second form of these channels, we determined that the end user represents our customer due to the fact that the end user purchased goods and/or services that are outputs of our ordinary activities. Consequently, Channel Partners utilized in deals executed through this second model are deemed to be agents of the transaction. In this second form of these arrangements, we recognize revenue upon transfer of the goods and/or services to the end user.   Stock-Based Compensation   Stock-based compensation represents the cost related to stock-based awards granted to employees. To date, we have issued both stock options and restricted stock units (“ RSUs ”). With respect to equity-classified awards, the Company measured stock-based compensation cost at the grant date based on the estimated fair value of the award and recognizes the cost as expense ratably (net of estimated forfeitures) over the requisite service period. With respect to liability-classified awards, the Company measures stock-based compensation cost at the grant date and at each reporting period based on the estimated fair value of the award. Stock-based compensation cost is recognized ratably over the requisite service period, net of actual forfeitures in the period.   We estimate the fair value of stock options using the Black-Scholes valuation model. The Black-Scholes model requires highly subjective assumptions in order to derive the inputs necessary to the calculate the fair value of stock options. To estimate the expected term of stock options, the Company considered contractual terms of the options, including the vesting and expiration periods, as well as historical option exercise data and current market conditions to determine an estimated expected term. The Company’s historical experience is too limited to be able to reasonably estimate expected term. Expected volatility is based on historical volatility of a group of peer entities. Dividend yields are based upon historical dividend yields. Risk-free interest rates are based on the implied yields currently available on U.S. Treasury zero coupon issues with a remaining term equal to the expected term.   Income Taxes   Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the difference between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled.   We recognize liabilities for uncertain tax positions taken or expected to be taken in income tax returns. Accrued interest and penalties related to unrecognized tax benefits are recognized as part of the provision for income taxes. Judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and unrecognize tax benefits. In determining the need for a valuation allowance, the historical and projected financial performance of the operation that is recording a net deferred tax asset is considered along with any other pertinent information.    We file income tax returns in the U.S. federal, various states and foreign jurisdictions. The tax years 2018  through 2021  are open and subject to audit by U.S. federal, state and local authorities. The tax years 2012 through  2021  are open and subject to audit by foreign tax jurisdictions.   58 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   Redeemable Noncontrolling Interest   As of  December 31, 2022 and 2021 , the Company owned 73.82 % and 76.09 % of AvePoint EduTech Pte. Ltd. (“ EduTech ”), respectively.   AEPL PTE. LTD. (“ AEPL ”)   As part of AEPL’s investment in EduTech, the Company granted AEPL a put option which allows AEPL to cause the Company to repurchase AEPL’s shares in EduTech at any time between December 24, 2022, and December 24, 2023, at a price equal to AEPL’s initial investment of approximately $ 8.3 million. Consequently, the Company records redeemable noncontrolling interest as mezzanine equity in its consolidated balance sheets. At each reporting period, the Company increases the carrying amount of the redeemable noncontrolling interest by periodic accretions using the interest method so that the carrying amount will equal the redemption amount on the date that the put option becomes exercisable, and adjustments to the value are recorded as net income attributable to redeemable noncontrolling interest. As of  December 31, 2022 and 2021 , AEPL owned  23.20 % and 23.91 % of EduTech, respectively.   I-Access Solutions Pte. Ltd. (“ I-Access ”)   On February 18, 2022, ( the “ I-Access Closing Date ”), EduTech consummated its acquisition of all of the ordinary shares of I-Access, a Singapore limited company. As a result, I-Access became a wholly owned subsidiary of EduTech. The acquisition was made pursuant to a share purchase agreement, dated as of January 31, 2022, ( the “ Share Purchase Agreement ”), by and among EduTech and the former I-Access shareholders. As of  December 31, 2022, former I-Access shareholders owned 2.98 % of EduTech and such shares were included in redeemable noncontrolling interest. Refer to (“ Note 3 - Business Combination ”) for further details.   Emerging Growth Company   The Company is considered an emerging growth company. Section  102 (b)( 1 ) of the Jobs Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.   Recent Accounting Pronouncements   In August 2020, the FASB issued 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 )” (“ ASU 2020 - 06 ”). ASU 2020 - 06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The amendments in this ASU are effective for entities eligible to be smaller reporting companies for fiscal years beginning after December 15, 2023. We are currently evaluating the impact ASU 2020 - 06 will have on our consolidated financial statements.   In January 2016, the FASB issued ASU 2016 - 13, “Financial Instruments — Credit Losses on Financial Instruments,” which replaces incurred loss methodology to estimate credit losses on financial instruments with a methodology that reflects expected credit losses. This amendment affects entities holding financial assets that are not accounted for at fair value through net income including trade receivables. Subsequently FASB issued ASU 2020 - 02 which deferred the adoption date. The amendments in this ASU are effective for EGC entities, which elected to take advantage of the extended transition period, for fiscal years beginning after December 15, 2022. Early application of the amendments is permitted. The adoption of the standard will not have a material impact on the Company's consolidated financial statements.   While we generally expect the financial records to be impacted by the requirements highlighted above, we cannot reasonably estimate the impact that adoption of the ASUs referenced in this announcement is expected to have on the financial statements at this time.   59 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   3.  Business Combination   Apex Technology Acquisition Corporation   On November  23, 2020, AvePoint, Inc. (“ Legacy AvePoint ”) and certain members of Apex (as defined below) entered into the Apex Business Combination Agreement. The business combination by and among Legacy AvePoint and certain members of Apex was effected on July 1, 2021, and through a series of merger transactions, which were finalized on July 26, 2021, ( the “ Apex Business Combination ”) Apex Technology Acquisition Corporation (“ Apex ”) was the surviving entity and changed its name to AvePoint.   The Apex Business Combination was accounted for as a reverse recapitalization as Legacy AvePoint was determined to be the accounting acquirer under ASC 805. This determination was primarily based on Legacy AvePoint comprising the ongoing operations of the combined entity, Legacy AvePoint’s senior management comprising the majority of the senior management of the combined company and the prior stockholders of Legacy AvePoint having a majority of the voting power of the combined entity. In connection with the Apex Business Combination, the outstanding shares of Legacy AvePoint’s preferred stock were redeemed for cash and shares of AvePoint’s common stock and the outstanding shares of Legacy AvePoint’s common stock were converted into AvePoint’s common stock, representing a recapitalization, and the net assets of the Company were acquired at historical cost, with  no  goodwill or intangible assets recorded. Operations and assets and liabilities of the Company prior to the Apex Business Combination in these financial statements are those of Legacy AvePoint. As a result, these financial statements represent the continuation of Legacy AvePoint and the historical stockholders’ deficiency. Common stock, preferred stock and loss per share of Legacy AvePoint prior to the Apex Business Combination have been retrospectively adjusted for the Apex Business Combination using an exchange ratio of  8.69144 . Options to purchase common stock of Legacy AvePoint were converted into options to purchase common stock of AvePoint, Inc. using an exchange ratio of  8.6914.  The options, as converted, continue to be governed by Legacy AvePoint’s existing stock option plan. The accumulated deficit of Legacy AvePoint has been carried forward after the Apex Business Combination. All per share information in the consolidated balance sheets, consolidated statements of operations, consolidated statements of mezzanine equity and stockholders’ equity (deficiency) and the notes to consolidated financial statements have been retroactively adjusted using an exchange ratio of  8.69144  per share.   The following transactions occurred in connection with the Apex Business Combination which impacted our mezzanine equity and permanent equity accounts:     ■ Shares of Legacy AvePoint common stock were cancelled and converted into 103,831,523 shares of our common stock, par value $ 0.0001 per share.   ■ $ 106.2 million was paid to holders of Legacy AvePoint common stock in exchange for 10,602,105 shares of common stock (as converted).    ■ Shares of Apex Class A common stock were cancelled and converted into 34,982,628 shares of our common stock.   ■ Shares of Apex Class B common stock were cancelled and converted into 9,560,000 shares of our common stock.   ■ Apex entered into subscription agreements with certain investors, whereby 14,000,000 shares of our common stock at $ 10.00  per share (“PIPE Shares”) for an aggregate purchase price of $ 140.0 million.   ■ A portion of Legacy AvePoint preferred stock was cancelled and converted into 28,500,592 shares of our common stock. The remaining preferred stock was redeemed for $ 130.9 million.   ■ Options to purchase Legacy AvePoint common stock (other than certain options held by certain executives and options issued to certain international employees) were cancelled and converted into an option to purchase our common stock with the same terms and conditions (including vesting and exercisability terms) applicable to the corresponding former Legacy AvePoint options.   ■ Options to purchase Legacy AvePoint common stock issued to certain international employees were cancelled and converted into an option to purchase our common stock with the same terms and conditions with the exception of fully vested options which will incur an additional month of vesting following the Apex Business Combination to comply with local regulations.   ■ Legacy AvePoint Officer Awards, as defined in “Note 16 — Stock-Based Compensation,” were cancelled. Refer to “Note 16 — Stock-Based Compensation” for more information.   ■ Put options on Legacy AvePoint Modified Options and Modified Common Stock, as defined in “Note 16 — Stock-Based Compensation”, were cancelled. Refer to “Note 16 — Stock-Based Compensation” for more information.   ■ We entered into earn-out agreements to issue additional shares if certain share price milestones are achieved. Refer to “Note 14 — Company Earn-Out and Warrant Liabilities” for more information.   ■ We assumed public and private placement warrants from Apex. Refer to “Note 14 — Company Earn-Out and Warrant Liabilities” for more information.   As of the Closing Date and following the completion of the Apex Business Combination, we are authorized to issue up to 1,000,000,000 shares of our common stock at a par value of $ 0.0001 per share and up to 20,000,000 shares of preferred stock, the rights, preferences and privileges of which may be designated from time to time by our Board.   As of the Closing Date and following the completion of the Apex Business Combination, we had the following outstanding securities:     ■ 180,272,638 shares of our common stock; and   ■ 17,905,000 warrants, each exercisable for one share of common stock at a price of $ 11.50 per share.   As a result of the Apex Business Combination, we received net cash consideration of $ 204.5 million. Legacy AvePoint and Apex incurred costs that are considered direct and incremental costs associated with the transaction. These costs amounted to $ 56.2  million and were treated as a reduction of additional paid-in capital.   Cash flows provided to or paid by Legacy AvePoint or Apex in connection with the Apex Business Combination are included in our consolidated statements of cash flows as financing activities. Our purchase of shares of Apex common stock prior to the Apex Business Combination is included in our consolidated statements of cash flows as a financing cash outflow. The shares purchased are recorded as treasury stock.   60 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   I-Access Acquisition   On the I-Access Closing Date, EduTech consummated its acquisition of all of the ordinary shares of I-Access. As a result, I-Access became a wholly-owned subsidiary of EduTech. The acquisition was made pursuant to the Share Purchase Agreement, by and among EduTech and the former I-Access shareholders. The Company, through its subsidiary EduTech, completed the acquisition of I-Access to further expand its SaaS solutions for corporate learning and development. The fair value of the transaction consideration totaled approximately $ 7.1  million, consisting of: $ 1.5  million in cash, and contingent consideration measured at a fair value of $ 5.6  million on the I-Access Closing date. The above-mentioned contingent consideration consists of:   (i)  2.98 % of EduTech common shares (of those,  292,440  shares were issued on the I-Access Closing Date and  30,252  shares were held in escrow pending distribution pursuant to the Adjustment for Guaranteed Minimum Revenue (as defined below)); (ii) a put option which allows sellers to cause EduTech to repurchase the shares of EduTech for approximately $ 5.9  million, upon  24  months from Acquisition Close Date or the occurrence of certain triggering events which are in the control of the Company; and (iii) earnout in EduTech shares held in escrow at a fair value equal to revenue surplus above the agreed guaranteed minimum revenue amount, of up to approximately $ 0.7  million, or the return of EduTech shares at a fair value equal to the revenue shortfall below the agreed guaranteed minimum revenue amount, of up to approximately $ 0.7  million (together, the “ Adjustment for Guaranteed Minimum Revenue ”). In the event of a revenue shortfall, all shares held in escrow would have been returned to EduTech.   On  April 15, 2022,  the Company implemented a management changeover. As a result, pursuant to the terms of the Share Purchase Agreement, the Adjustment for Guaranteed Minimum Revenue was cancelled and the  292,440  EduTech shares issued as consideration on the I-Access Closing Date, the  30,252  EduTech shares held in escrow, the put option on EduTech shares and the earnout in EduTech shares were no  longer contingent and were reclassified to mezzanine equity and included in redeemable noncontrolling interest.   The acquisition-related costs totaled $ 0.3  million and are recognized as an expense within general and administrative in the consolidated statements of operations.   Prior to being reclassified to mezzanine equity, the contingent consideration was liability classified and was measured at fair value on the I-Access Closing Date and remeasured on the date the Adjustment for Guaranteed Minimum Revenue was cancelled. The fair value of the contingent consideration was estimated using a combination of multiple valuation methods, including discounted cash flows method, guideline public company method, and the Black-Scholes option-pricing model with the following weighted-average assumptions as of  February 18, 2022, and  April 15, 2022 :       February 18, 2022     April 15, 2022   Expected life (in years)     2.08       1.93   Expected volatility     50 %     50 % Risk-free rate     1.23 %     1.83 % Dividend     0 %     0 %   The contingent consideration fair value estimated on the I-Access Closing Date and the date the Adjustment for Guaranteed Minimum Revenue was cancelled was $ 5.6  million and $ 5.8  million, respectively. During the year ended  December 31, 2022 , the change in the fair value of $ 0.2  million is included within general and administrative on the consolidated statements of operations. The financial results of I-Access have been included in our consolidated financial statements since the date of the acquisition. The I-Access business is reported within our reportable segment. In accordance with ASC 805 - 740 ,  the Company established a deferred tax liability with an offset to goodwill in connection with the accounting for the opening balance sheet of the I-Access acquisition as a result of book-to-tax differences primarily related to the technology and software intangibles and customer related assets.   The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:     Preliminary Allocation       (in thousands)   Accounts receivable, net   $ 429   Prepaid expenses and other current assets     72   Property and equipment     22   Goodwill     3,950   Technology and software     2,750   Customer related assets     909   Other assets     997   Accrued expenses and other liabilities     ( 718 ) Current portion of deferred revenue     ( 230 ) Other non-current liabilities     ( 1,072 ) Total purchase consideration   $ 7,109     61 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   The goodwill, which is generally  not  tax-deductible, is attributed to intangible assets that do  not  qualify for separate recognition, including the assembled workforce of the acquired business and the synergies expected to arise as a result of the acquisitions.   Intangible assets primarily relate to acquired technology and software and customer related assets. The acquired definite-lived intangible assets are being amortized over an estimated useful life of: (i)  10  years for technology and software on a straight-line basis; and (ii) 1 to 10  years for customer related assets on a straight-line basis. The estimated fair values of identifiable intangible assets were determined using the relief from royalty method which is based on the premise that the only value that a purchaser of the assets receives is the exemption from paying a royalty for its use over its remaining useful life. Some of the significant assumptions inherent in the development of such asset valuations include revenues, royalty rate, contributory asset charges, discount rate, useful life, as well as other factors. The fair value of intangible assets as of  December 31, 2022 , is based on preliminary assumptions which are subject to change as we complete our valuation procedures.   Essential Acquisition   On  August 25, 2022, the Company acquired all of the issued and outstanding equity interest in Essential Co. Ltd., a South Korea-based software solutions provider that will advance the Company’s ability to enable organizations to accelerate data-driven digital transformation, for a total valuation of $ 3.0  million with most of the value allocated to goodwill. The resulting goodwill is  not  deductible for income tax purposes.   tyGraph Companies Acquisition   On  September 12, 2022,  the Company consummated its acquisition of all of the outstanding shares of tyGraph Incorporated (“ tyGraph US ”), and AvePoint Ontario Ltd. (“ AvePoint Ontario ”, a wholly-owned subsidiary of AvePoint) consummated its acquisition of all of the outstanding shares of tyGraph Ltd. (“ tyGraph Canada ” and, collectively with tyGraph US, the “ tyGraph Companies ”). On  September 12, 2022,  tyGraph Canada was merged with and into AvePoint Ontario, with AvePoint Ontario surviving. As a result, the tyGraph Companies became wholly-owned subsidiaries of AvePoint. The acquisition was made pursuant to the Share Purchase Agreement, by and among AvePoint, AvePoint Ontario and the former tyGraph Companies shareholders. The Company completed the acquisition of the tyGraph Companies to further expand its SaaS solutions for providing robust analytics capabilities that enable organizations to uncover workplace engagement. The fair value of the transaction consideration totaled approximately $ 15.3  million, consisting of: $ 13.8  million in cash, and  324,845  of shares in the Company measured at a fair value of $ 1.5  million on the closing date. The above-mentioned cash consideration (the “ tyGraph Companies Consideration ”) consisted of:   (i) the cash purchase price of $ 13.5  million; (ii) the entire outstanding principal and interest of the loans made to certain tyGraph Companies shareholders which was approximately $ 0.2  million; and (iii) unpaid transaction costs incurred by the tyGraph Companies as of the open of business on the closing date which was approximately $ 0.1  million.   The acquisition-related costs incurred by the Company totaled $ 0.4  million and are recognized as an expense within general and administrative in the consolidated statements of operations.   The financial results of the tyGraph Companies have been included in our consolidated financial statements since the date of the acquisitions. The tyGraph Companies businesses are reported within our reportable segment. In accordance with ASC 805 - 740 ,  the Company established a deferred tax liability with an offset to goodwill in connection with the accounting for the opening balance sheet of the tyGraph Companies acquisitions as a result of book-to-tax differences primarily related to the technology and software intangibles and customer related assets.   The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:       Preliminary Allocation       (in thousands)   Accounts receivable, net   $ 449   Prepaid expenses and other current assets     262   Property and equipment     30   Goodwill     12,193   Customer related assets     3,868   Technology and software     2,552   Other assets     219   Accounts payable     ( 93 ) Accrued expenses and other liabilities     ( 342 ) Current portion of deferred revenue     ( 2,079 ) Other non-current liabilities     ( 1,724 ) Total purchase consideration   $ 15,335     The goodwill, which is generally  not  tax-deductible, is attributed to intangible assets that do  not  qualify for separate recognition, including the assembled workforce of the acquired business and the synergies expected to arise as a result of the acquisition.   Intangible assets primarily relate to acquired technology and software and customer related assets. The acquired definite-lived intangible assets are being amortized over an estimated useful life of: (i)  6  years for technology and software on a straight-line basis; and (ii) 10  years for customer related assets on a straight-line basis. The estimated fair values of identifiable intangible assets were determined using the relief from royalty method which is based on the premise that the only value that a purchaser of the assets receives is the exemption from paying a royalty for its use over its remaining useful life. Some of the significant assumptions inherent in the development of such asset valuations include revenues, royalty rate, contributory asset charges, discount rate, useful life, as well as other factors. The fair value of intangible assets as of  December 31, 2022 , is based on preliminary assumptions which are subject to change as we complete our valuation procedures.   62 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   4. Goodwill   The changes in the carrying amounts of goodwill were as follows:       Goodwill       (in thousands)   Balance as of December 31, 2021   $ —   Acquisitions     19,167   Effect of foreign currency translation     ( 263 ) Balance as of December 31, 2022   $ 18,904       5. Intangible assets, net   Intangible assets consist of the acquired intangible assets and the self-developed software. Amortization expense for intangible assets was $ 1.4  million for the year ended  December 31, 2022 . There was  no  amortization expense for intangible assets for the year ended  December 31, 2021.   As of  December 31, 2022 , estimated future amortization expense for the intangible assets reflected above was as follows:   Year Ending December 31:             (in thousands)   2023   $ 1,981   2024     1,869   2025     1,480   2026     1,135   2027     1,132   Thereafter     3,482   Total intangible assets subject to amortization   $ 11,079     A summary of the balances of the Company’s intangible assets as of  December 31, 2022 and 2021  is presented below:       Gross Carrying Amount     Accumulated Amortization     Net Carrying Amount     Gross Carrying Amount     Accumulated Amortization     Net Carrying Amount     Weighted Average                       December 31,                     December 31,     Life                       2022                     2021               (in thousands)     (in years)   Technology and software, net     6,842       ( 777 )     6,065       —       —       —       6.9   Customer related assets, net     4,799       ( 477 )     4,322       —       —       —       9.4   Content, net     830       ( 138 )     692       —       —       —       3.0   Total   $ 12,471     $ ( 1,392 )   $ 11,079     $ —     $ —     $ —       7.6         6. Concentration of Credit Risk   The Company deposits its cash with financial institutions and, at times, such balances may exceed federally insured limits. No customer accounted for more than 10% of revenue for the years ended December 31, 2022  and  2021 , and no  customer made up more than 10% of accounts receivable as of  December 31, 2022 and 2021 .   63 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   7. Accounts Receivable, Net   Accounts receivable, net, consists of the following components:       December 31,     December 31,       2022     2021       (in thousands)   Trade receivables   $ 47,046     $ 38,819   Current unbilled receivables     20,153       17,086   Allowance for doubtful accounts     ( 725 )     ( 838 )     $ 66,474     $ 55,067     Long-term unbilled receivables were $ 6.9 million and $ 6.3 million as of December 31, 2022  and  2021 , respectively.   8. Property and Equipment, Net   Property and equipment, net, consists of the following:       December 31,     December 31,       2022     2021       (in thousands)   Computer equipment   $ 6,079     $ 5,777   Leasehold improvements     3,823       2,769   Furniture and fixtures     1,316       1,102   Building     725       786   Office equipment     493       394   Software     347       378         12,783       11,206   Less accumulated depreciation and amortization     ( 7,246 )     ( 7,284 )     $ 5,537     $ 3,922     Depreciation and amortization expense was $ 2.1  million and $ 1.2  million for the years ended December 31, 2022  and  2021 , respectively.     9. Accrued Expenses and Other Liabilities   Accrued expenses and other liabilities consists of the following components:       December 31,     December 31,       2022     2021       (in thousands)   Accrued compensation   $ 26,585     $ 22,740   Current operating lease liabilities     5,392       —   Indirect taxes     3,638       3,945   Cloud service fees     2,285       1,314   Professional service fees     1,464       1,033   Accrued partner expenses     1,445       903   Income taxes payable     1,055       1,197   Other     5,920       3,930       $ 47,784     $ 35,062       6 4 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   10. Line of Credit   The Company maintains a loan and security agreement with a commercial bank. As lender for a revolving line of credit of up to $ 30.0 million, with an accordion feature that provides up to $ 20.0 million of additional borrowing capacity the Company may draw at its request. The line bears interest at a rate equal to LIBOR plus 3.5 %. The line carries an unused fee of 0.5 % per year. The line will mature on April  7, 2023.  We are required to maintain a specified adjusted quick ratio and a minimum annual recurring revenue tested by the bank each quarter. The Company pledged, assigned and granted the bank a security interest in all shares of its subsidiaries, future proceeds and assets (except for excluded assets, including material intellectual property) as security for the performance of the loan and security agreement obligations. As of December 31, 2022, the Company is compliant with all covenants under the line and had no borrowings outstanding under the line of credit.   The Company has  not at any time, including as of December 31, 2022 , and for the fiscal year ended December 31, 2022 , borrowed under the loan and security agreement.   11. Income Taxes   Pretax loss resulting from domestic and foreign operations is as follows:       Year Ended December 31,       2022     2021       (in thousands)   Domestic   $ ( 17,081 )   $ ( 23,583 ) Foreign     ( 16,569 )     ( 9,205 ) Pretax loss from continuing operations   $ ( 33,650 )   $ ( 32,788 )   The components of the provision (benefit) for income taxes consists of the following:       Year Ended December 31,       2022     2021       (in thousands)   Current income tax expense:                 Federal   $ 1,937     $ 467   State and local     668       ( 881 ) Foreign     ( 1,478 )     1,117   Total current income tax expense     1,127       703   Deferred income tax expense (benefit):                 Federal     2,370       89   State and local     ( 820 )     ( 12 ) Foreign     2,361       ( 323 ) Total deferred income tax expense (benefit)     3,911       ( 246 ) Total income tax expense   $ 5,038     $ 457     The reconciliation of the amounts at the U.S. federal statutory income tax rate to the company’s effective income tax rate is as follows:       Year Ended December 31,       2022     2021       (in thousands)   U.S. federal statutory tax rate   $ ( 7,067 )   $ ( 6,886 ) State and local income taxes, net     ( 292 )     ( 962 ) Stock-based compensation     ( 51 )     10,865   Executive compensation limitation     3,566       —   Fair value of earnout liability     ( 828 )     ( 3,946 ) Transaction costs     125       ( 2,209 ) Change in valuation allowance     12,844       3,085   Foreign rate differential     ( 2,066 )     440   Return-to-provision adjustments     ( 1,029 )     ( 196 ) Permanent differences     29       334   Other, net     ( 193 )     ( 68 ) Total   $ 5,038     $ 457     65 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   The Company’s effective tax rate differed from the U.S. federal statutory rate primarily due to mix of pre-tax income (loss) results by jurisdictions taxed at different rates than 21 %, a permanent item recorded for the executive compensation limitation, and changes in valuation allowance in certain foreign jurisdictions.   Deferred income taxes are provided for the tax effect of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. Significant components of the Company’s deferred tax assets and (liabilities) are as follows:       December 31,     December 31,       2022     2021       (in thousands)   Deferred tax assets:                 Net operating loss carryforwards   $ 13,775     $ 10,716   Deferred revenue     4,301       5,315   Compensation and benefits     6,567       4,384   Research and development expenses     6,169       —   Lease liability     3,622       —   Foreign tax credits     270       720   Fair value of earnout liability     93       181   Other     457       1,047         35,254       22,363   Less: Valuation allowance     ( 20,808 )     ( 8,356 ) Deferred tax assets, net     14,446       14,007                     Deferred tax liabilities:                 Property and equipment     ( 197 )     ( 132 ) Amortization     ( 2,595 )     ( 214 ) Commissions     ( 8,384 )     ( 7,918 ) Prepaid subscription     ( 836 )     ( 822 ) Unbilled receivable     ( 1,489 )     ( 2,183 ) Right-of-use assets     ( 3,402 )     —   Total deferred tax liability     ( 16,903 )     ( 11,269 ) Net deferred tax (liabilities) assets   $ ( 2,457 )   $ 2,738     Deferred tax assets are included within other assets in the consolidated balance sheets, and deferred tax liabilities are included within other non-current liabilities in the consolidated balance sheets.       December 31,     December 31,       2022     2021       (in thousands)   Deferred tax assets, net of valuation allowance   $ 488     $ 3,182   Deferred tax liabilities     ( 2,945 )     ( 444 ) Net deferred tax (liabilities) assets   $ ( 2,457 )   $ 2,738     As of December 31, 2022 , the Company had net operating loss (“ NOL ”) carryforwards for state and local income tax of $ 14.6  million, which may offset future taxable income. The state NOL carryforwards begin to expire in 2026. The Company also has foreign NOL carryforwards of approximately $ 54.5  million, which will expire beginning 2024  and NOL carryforward periods vary from 6 years to indefinite period. The Company has $ 0.3  million of foreign tax credit carryforwards available that expire in  2023.   Under the provisions of the Internal Revenue Code, the U.S. NOL carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL and tax credit carryforwards may become subject to an annual limitation in the event of a 50% cumulative change in the ownership interest of significant stockholders over a three -year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code, as well as similar state tax provisions. This could limit the amount of NOLs that the Company can utilize annually to offset future taxable income or tax liabilities. The amount of the annual limitation, if any, will be determined based on the value of the Company immediately prior to the ownership change. The Company may have experienced an ownership change prior to December  31, 2022, however, the Company does not believe its NOL carryforwards would be limited under IRC Section  382. The Company could experience an ownership change in the future which could limit the utilization of certain NOL carryforwards.   ASC  740 - 10 - 30 - 5  requires that a valuation allowance be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. In making this assessment, management considered all available positive and negative evidence, including the level of historical taxable income, future reversals of existing temporary differences, tax planning strategies, and projected future taxable income. On the basis of this evaluation, a valuation allowance of $ 20.8 million and $ 8.4 million was recorded as of December 31, 2022  and  2021 , respectively, against certain jurisdiction’s net deferred tax assets for which it is more likely than not that the tax benefit will not be realized. The valuation allowance was increased by $ 12.5  million for the year ended December 31, 2022, primarily due to full valuation allowances being established for U.S. and Japan in the current year.    As of December  31, 2022, the Company did not provide any foreign withholding taxes related to its foreign subsidiaries’ undistributed earnings, as such earnings have been retained and are intended to be indefinitely reinvested to fund ongoing operations of the foreign subsidiaries. It is not practicable to estimate the amount of taxes that would be payable upon remittance of these earnings, because such tax, if any, is dependent upon circumstances existing if and when remittance occur.   66 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding interest and penalties is as follows:       December 31,     December 31,       2022     2021       (in thousands)   Beginning balance   $ 1,088     $ 5,369   Additions based on tax positions related to the current year     —       —   Reduction for tax positions of prior years     ( 12 )     ( 4,281 ) Reduction for settlements     ( 935 )     —   Expiration of applicable statute of limitations     —       —   Ending balance   $ 141     $ 1,088     During 2022, certain foreign jurisdiction concluded an income tax audit for prior periods which recognizes $ 0.9 million unrecognized tax benefits.   The Company recognizes accrued interest and penalties related to unrecognized tax benefits as part of the provision for income taxes. As of  December 31, 2022 and 2021 , the Company had $ 0.2  million and $ 1.3  million, respectively, of accrued interest and penalties associated with unrecognized tax benefits. These amounts were included in other non-current liabilities in their respective years. As of December  31, 2022, and December  31, 2021, the total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was not material.   The Company files income tax returns in the U.S. federal jurisdiction, various state and foreign jurisdictions. The tax years 2018  through 2021  generally remain open for examination for federal, state and local tax purposes. The tax years 2012  through 2021  are open and subject to audit by foreign jurisdictions. To the extent utilized in future years’ tax returns, net operating loss carryforwards on December 31, 2022 , and December  31, 2021, will remain subject to examination until the respective tax year is closed.     12. Leases   The Company is obligated under various non-cancelable operating leases primarily for office space. The initial terms of the leases expire on various dates through  2030.  We determine if an arrangement is a lease at inception.   Leases are classified as either operating or finance leases based on certain criteria. This classification determines the timing and presentation of expenses on the income statement, as well as the presentation of the related cash flows and balance sheet. Operating leases are recorded on the balance sheet beginning  January 1, 2022, as operating lease right-of-use assets, accrued expenses and other liabilities, and long-term operating lease liabilities. The Company currently has  no  significant finance leases.   ROU assets and related liabilities are recorded at lease commencement based on the present value of the lease payments over the expected lease term. Lease payments include future increases unless the increases are based on changes in an index or rate. The rate implicit in the leases was not readily determinable, thus the Company’s incremental borrowing rate is used to calculate ROU assets and related liabilities. The incremental borrowing rate is determined based on the Company’s estimated credit rating, the term of the lease, the economic environment where the asset resides and full collateralization. Lease terms include periods under options to extend or terminate the lease when it is reasonably certain that we will exercise that option. We generally use the base, non-cancelable, lease term when determining the lease assets and liabilities. Operating lease expense is recognized on a straight-line basis over the lease term and is allocated within operating expenses in the consolidated statements of operations.   The components of the Company’s operating lease expense are reflected in the consolidated statements of operations for the year ended  December 31, 2022 , is as follows:       Year Ended December 31,       2022       (in thousands)   Lease liability cost   $ 5,945   Short-term lease expenses (1)     1,760   Variable lease cost not included in the lease liability (2)     261   Total lease cost   $ 7,966     ( 1 ) Short-term lease expenses include rent expenses from leases of  12  months or less on the transition date or lease commencement. ( 2 ) Variable lease cost includes common area maintenance, property taxes, and fluctuations in rent due to a change in an index or rate.   Our lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. We elected to combine fixed payments for non-lease components, for all classes of underlying assets, with our lease payments and account for them together as a single lease component which increases the amount of our lease assets and liabilities.   During the year ended  December 31, 2022 , ROU assets obtained in exchange for new operating lease liabilities amounted to $ 6.9  million.   67 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   Other information related to operating leases for the year ended  December 31, 2022 , is as follows:       Year Ended December 31,       2022       (in thousands)   Cash paid for amounts included in the measurement of the lease liability:         Operating cash flows from operating leases   $ 5,626     As of  December 31, 2022 , our operating leases had a weighted average remaining lease term of  4.4 years and a weighted average discount rate of 5.1 %.   The maturity schedule of the operating lease liabilities as of  December 31, 2022 , is as follows:   Year Ending December 31:             (in thousands)   2023   $ 6,104   2024     4,360   2025     2,817   2026     2,159   2027     1,373   Thereafter     1,887   Total future lease payments     18,700   Less: Present value adjustment     ( 1,960 ) Present value of future lease payments (1)   $ 16,740     ( 1 ) Includes the current portion of operating lease liabilities of $ 5.4  million, which is reflected in accrued expenses and other liabilities in the consolidated balance sheets.   During the year ended December 31, 2021, total rent expenses amounted to $ 6.4 million.   The future minimum rental payments under ASC  840  for all long-term non-cancelable property leases as of  December 31, 2021, were as follows:   Year Ending December 31:             (in thousands)   2022   $ 5,680   2023     3,808   2024     2,428   2025     1,840   2026     1,438   Thereafter     2,960       $ 18,154       13. Commitments and Contingencies   Purchase Commitments   The Company has outstanding unconditional purchase commitments to procure licenses to use IT software from suppliers. These agreements are negotiated in consideration of the volume of transactions with select suppliers and the associated required transaction volumes are expected to be met through the normal course of business.   In April 2019, the Company signed an unconditional purchase commitment related to the use of Microsoft Office 365 in the amount of $ 2.1 million payable in three equal installments during 2019, 2020, and 2021. In May 2020, the Company signed an unconditional purchased commitment in the amount of $ 22.0 million to purchase IT solutions over a three -year term. Under this agreement, payments are made upon consumption of the IT solutions and any remaining obligations due at the end of the three -year term in May 2023. Given the Company’s history of procuring similar products, it is expected that cash payments to the supplier will occur in 2021 and 2022 with any remaining amounts coming due in 2023. During the year ended December  31, 2019, the Company paid $ 0.7 million under the 2019 agreement. During the year ended December 31, 2020, the Company paid $ 0.7 million related to the 2019 agreement and $ 3.1 million under the 2020 agreement for a total of $ 3.8 million. During the year ended December 31, 2021, the Company paid the remaining $ 0.7 million related to the 2019 agreement and $ 12.1 million related to the 2020 agreement. During the year ended December 31, 2022 , the Company paid $ 19.1  million related to the 2020 agreement.   In July 2022, the Company signed an unconditional purchase commitment related to the use of Microsoft Office 365 in the amount of $ 6.1 million payable in three installments during 2022, 2023, and 2024.  During the year ended December 31, 2022, the Company paid $ 1.9 million related to the July 2022 agreement.   In December 2022, the Company signed an unconditional purchase commitment in the amount of $ 96.0 million to purchase IT solutions over a three -year term. Under this agreement, payments are made upon access to the service and any remaining obligations due at the end of the three -year term in December 2025. Given the Company’s history of procuring similar products, it is expected that cash payments to the supplier will occur in 2023 through 2025 with any remaining amounts coming due in 2025.   68 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   The Company is obligated to make the following future minimum payments under the non-cancelable terms of these contracts as of  December 31, 2022 :   Years ending December 31,             (in thousands)   2023   $ 2,026   2024     2,213   2025     96,000   2026     —   2027     —   Thereafter     —       $ 100,239     Legal Proceedings   In the normal course of its business, the Company may be involved in various claims, negotiations and legal actions. Except for such claims that arise in the normal course of business, as of December 31, 2022 , the Company was  not a party to any other litigation for which a material claim is reasonably possible, probable or estimable.   Guarantees   In the normal course of business, we are seldomly required to enter into service agreements that require contingency agreements with customers in highly regulated sectors. These agreements are secured by certificates of deposits. As of December 31, 2022 , letters of credit have been issued in the amount of $ 2.4  million, as security for the agreements. These agreements have not had a material effect on our results of operations, financial position or cash flow.     14. Company Earn-Out and Warrant Liabilities   Company Earn-Out   As a result of the Apex Business Combination, the holders of Legacy AvePoint Preferred Stock, Legacy AvePoint common stock and Legacy AvePoint Options shall be issued additional shares of AvePoint’s common stock, as follows:     ■ 1,000,000 shares of AvePoint’s common stock, in the aggregate, if at any time from and after the Apex Business Combination through the seventh anniversary thereof (a) AvePoint's stock price is greater than or equal to $12.50 over any 20 Trading Days within any 30 trading day period or (b) the Company consummates a subsequent transaction, which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $12.50 per share;   ■ 1,000,000 shares of AvePoint’s common stock, in the aggregate, if at any time from and after the Apex Business Combination through the seventh anniversary thereof (a) AvePoint's stock price is greater than or equal to $15.00 over any 20 Trading Days within any 30 trading day period or (b) the Company consummates a subsequent transaction, which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $15.00 per share;   ■ 1,000,000 shares of AvePoint’s common stock, in the aggregate, if at any time from and after the Apex Business Combination through the seventh anniversary thereof (a) AvePoint's stock price is greater than or equal to $17.50 over any 20 Trading Days within any 30 trading day period or (b) the Company consummates a subsequent transaction, which results in the stockholders of the Company having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $17.50 per share.   The rights described above are hereafter referred to as the “Company Earn-Out Shares”. To the extent that any portion of the Company Earn-Out Shares that would otherwise be issued to a holder of options that remain unvested at the date of the milestones described above, then in lieu of issuing the applicable Company Earn-Out Shares, the Company shall instead issue an award of RSUs of the Company for a number of shares of AvePoint’s common stock equal to such portion of the Company Earn-Out Shares issuable with respect to the unvested options (the “ Company Earn-Out RSUs ”). In evaluation of the Company Earn-Out Shares and Company Earn-Out RSUs, management determined that the Company Earn-Out Shares represent derivatives to be marked to market at each reporting period, while the Company Earn-Out RSUs represent equity under ASC 718. Refer to “ Note 16  — Stock-Based Compensation ” for more information regarding the Company Earn-Out RSUs.   In order to capture the market conditions associated with the Company Earn-Out Shares, the Company applied an approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the Sponsor Earn-Out Shares’ contractual life based on the appropriate probability distributions. The fair value was determined by taking the average of the fair values under each Monte Carlo simulation trial. The Monte Carlo model requires highly subjective assumptions including the expected volatility of the price of our common stock, and the expected term of the earn-out shares. Significant increases or decreases to these inputs in isolation could result in a significantly higher or lower liability. Under this approach, the fair value of the Company Earn-Out Shares on July 1, 2021, was determined to be $ 29.6  million. The fair value was remeasured as of  December 31, 2022 and 2021 , and was determined to be $ 6.6  million and $ 10.0 million, respectively, and included in the earn-out shares’ liabilities in the consolidated balance sheets. As a result, approximately $ 4.3 million and $ 20.3 million was recognized during the years ended  December 31, 2022 and 2021 , respectively, and included as gain on earn-out and warrant liabilities in the consolidated statements of operations. We estimated the earn-out shares fair value using a Monte Carlo model with the following significant unobservable assumptions:       December 31,     December 31,     July 1,       2022     2021     2021   Term (in years)     5.50       6.50       7.00   Volatility     55.00 %     40.00 %     40.00 %   69 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   Warrants to Acquire Common Stock   On July 1, 2021, as part of the Apex Business Combination, the Company effectively granted 405,000 private placement warrants with a 5 -year term and strike price of $ 11.50 per share. Management has determined that the private placements warrants are to be classified as liabilities to be marked to market at each reporting period.   The private placement warrants are held by only two parties and any transfer of the warrants to a party other than a current holder of the warrants would cause the warrants to be converted into public warrants. Consequently, the fair value of the private placement warrants is equivalent to the quoted price of the publicly traded warrants .  Under this approach, the fair value of the private placement warrants on July 1, 2021, was determined to be $ 1.4  million. The fair value was remeasured as of  December 31, 2022 and 2021 , and was determined to be $ 0.2 million and $ 0.5  million, respectively, and included in the other non-current liabilities in the consolidated balance sheets. As a result, $ 0.2 million and $ 0.9  million was recognized during the years ended  December 31, 2022 and 2021 , respectively, and included as gain on earn-out and warrant liabilities in the consolidated statements of operations.     15. Mezzanine Equity and Stockholders ’ Equity (Deficiency)   Prior to the Apex Business Combination, the Company had  two classes of capital stock: common stock and preferred stock. Following the Apex Business Combination, the Company has one class of capital stock: common stock. The following summarizes the terms of the Company’s capital stock.   Common Stock   Pursuant to the Company’s restated Articles of Incorporation, the Company is authorized to issue up to 1,000,000,000  shares of common stock at $ 0.0001 par value. There were 185,277,588 and 181,821,767 shares issued and outstanding as of  December 31, 2022 and 2021 , respectively, net of treasury shares. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors. The Company’s Board of Directors has not declared common stock dividends since inception.   On July 1, 2021, as part of the Apex Business Combination, all outstanding shares of Legacy AvePoint common stock was converted into common stock of AvePoint, Inc. using an exchange ratio of 8.69144 per share and options to purchase common stock of Legacy AvePoint were converted into options to purchase common stock of AvePoint, Inc. using an exchange ratio of 8.6914.  All per share information has been retroactively adjusted for this exchange ratio.    Sponsor Earn-Out Shares   On July 1, 2021, as a result of the Apex Business Combination, the Company modified the terms of 2,916,700  shares of common stock (“ Sponsor Earn-Out Shares ”) then held by Apex’s sponsor, such that such shares will be subject to the following vesting provisions:     ■ 100% of the Sponsor Earn-Out Shares shall vest and be released if at any time through the seventh anniversary of the Apex Business Combination, AvePoint’s stock price is greater than or equal to $15.00 (as adjusted for share splits, share capitalization, reorganizations, recapitalizations and the like) over any 20 trading days within any 30 trading day period; and   ■ 100% of the remaining Sponsor Earn-Out Shares that have not previously vested shall vest and be released if at any time through the seventh anniversary of the Apex Business Combination, the Company consummates a subsequent transaction.   The Sponsor Earn-Out Shares are currently outstanding and receive all benefits of regular shares with the exception of the fact that the shares are held in escrow and restricted from transfer until the vesting conditions described above are met. Consequently, the shares are classified as equity. No Sponsor Earn-Out Shares have vested as of  December 31, 2022 .   Public Warrants to Acquire Common Stock   On July 1, 2021, as part of the Apex Business Combination, the Company issued 17,500,000 public warrants with an exercise price of $ 11.50 . Each warrant entitles the registered holder to purchase one share of AvePoint’s common stock and the warrants are exercisable from the date of issuance through the fifth anniversary of the Apex Business Combination. The public warrants are equity classified and its fair value, based on the publicly traded warrants, was $ 59.3 million on July 1, 2021, and included in the additional paid-in capital on the consolidated balance sheets. As of  December 31, 2022 , all 17,500,000 warrants remain outstanding.    Convertible Contingently Redeemable Preferred Stock   On July 1, 2021, as part of the Apex Business Combination, the 42,000,592 outstanding preferred stock of the Company was redeemed for cash in part and converted into AvePoint’s common stock in part in connection with the Apex Business Combination with the Apex Group as described in “ Note 3  — Business Combination ” .   70 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   Share Repurchase Program   On March 17, 2022, the Company announced that its Board of Directors authorized a new share repurchase program (the “ Share Repurchase Program ”) for the Company to buy back shares of its common stock. Under the Share Repurchase Program, the Company has the authority to buy up to a maximum of $ 150 million of common stock shares via acquisitions in the open market or privately negotiated transactions. The Share Repurchase Program will remain open for a period of three years from the date of authorization and may be suspended or discontinued at any time. The Company is not obligated to make purchases of, nor is it obligated to acquire any particular amount of, common stock under the Share Repurchase Program. During the year ended December 31, 2022, the Company purchased 4,046,186 shares at an average price of $ 4.92 .   Redeemable Noncontrolling Interest   On December 24, 2020, AEPL, an unaffiliated entity, acquired a redeemable noncontrolling interest in EduTech through the contribution of $ 7.5 million. As of December 31, 2020,  AvePoint owned a 77.78 % interest in EduTech and AEPL owned a 22.22 % interest in EduTech.   On February 11, 2021, AEPL acquired additional redeemable noncontrolling interest in EduTech through the contribution of $ 0.8 million. At the transaction closing date, AvePoint owned a 76.09 % interest in EduTech and AEPL owned a 23.91 % interest in EduTech. As part of AEPL’s initial and subsequent investment in EduTech, the Company granted AEPL a put option which allows AEPL to cause the Company to repurchase AEPL’s shares in EduTech at any time between December 24, 2022, and December 24, 2023, at a price equal to AEPL’s initial and subsequent investment amounts.   On February 18, 2022, EduTech consummated the acquisition of 100 % of the equity in I-Access for an aggregate purchase price of approximately $ 7.1 million. The negotiated transaction consideration includes EduTech issuing shares and rights for shares which both also subject to a guaranteed minimum revenue provision (the “ GMR ”), and granting the former I-Access shareholders a put option which allows sellers to cause EduTech to repurchase the shares of EduTech for approximately $ 5.9 million, upon 24 months from Acquisition Close Date or the occurrence of certain triggering events which are in the control of the Company. Under the GMR the former I-Access shareholders may have earned additional shares or return shares base on a revenue surplus and shortfall outcome.   On April 15, 2022, the Company implemented a management changeover. As a result, pursuant to the terms of the Share Purchase Agreement, the GMR was cancelled and the  292,440  EduTech shares issued as consideration on the I-Access Closing Date, the  30,252  EduTech shares held in escrow, and the put option on EduTech shares were  no  longer contingent, reclassified to mezzanine equity and included in redeemable noncontrolling interest. From the date the GMR was cancelled to  December 31, 2022 , AvePoint owned a  73.82 % interest in EduTech, AEPL owned a  23.20 % interest in EduTech and the former I-Access shareholders owned a  2.98 % interest in EduTech.   At each reporting period, we increase the carrying amount of the redeemable noncontrolling interest by periodic accretions using the interest method so that the carrying amount will equal the redemption amount on the date that the put option becomes exercisable. These adjustments are recorded as net income attributable to and accretion of redeemable noncontrolling interest on the consolidated statements of mezzanine equity and stockholders' equity (deficiency). The roll forward of the balance of the redeemable noncontrolling interest is as follows:       Redeemable       noncontrolling       interest       (in thousands)   Beginning balance (December 31, 2021)   $ 5,210   Issuance of redeemable noncontrolling interest in EduTech     5,794   Net loss attributable to redeemable noncontrolling interest     ( 401 ) Other comprehensive income attributable to redeemable noncontrolling interest     61   Adjustment to present redemption value as of December 31, 2022     3,343   Ending balance (December 31, 2022)   $ 14,007     71 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   16. Stock-Based Compensation   The Company previously maintained the 2006 Equity Incentive Plan (the “ 2006 Plan ”) and the 2016 Equity Incentive Plan (the “ 2016 Plan ”). Under both the 2006 Plan and the 2016 Plan, the Company granted incentive stock options, non-qualified stock options and restricted stock to eligible recipients which included employees, directors and consultants. On May 27, 2021, the Company’s board of directors approved the 2021  Equity Incentive Plan (the “ 2021   Plan ”), which succeeded the 2016 Plan. As of the adoption of the 2021 Plan, all equity awards granted under the 2021 Plan and no equity is granted under the 2016 Plan, or, for the avoidance of doubt, the 2006 Plan. As of December 31, 2022 ,  20,298,497 shares remained for future issuance under the 2021 Plan. All outstanding stock awards granted under the 2006 Plan and 2016  Plan will remain subject to the terms and conditions of the  2006 Plan and 2016 Plan, respectively, and the provisions of any award agreements made thereunder. To date, the Company has issued only stock options, restricted stock and restricted stock units to employees, directors and consultants.   Stock-based compensation was included in the following line items in the consolidated statements of operations:       Year Ended December 31,       2022     2021       (in thousands)   Cost of revenue   $ 2,640     $ 3,477   Sales and marketing     11,393       15,906   General and administrative     19,398       24,063   Research and development     3,787       16,062   Total stock-based compensation   $ 37,218     $ 59,508     Total tax benefit related to vested or exercised awards during the year ended December 31, 2022 and 2021 was $ 2.2  million and $ 0.03 million, respectively.   Stock Options   The compensation costs for stock option awards are accounted for in accordance with ASC 718, Compensation-Stock Compensation . Stock options vest over a four -year service period and expire on the tenth anniversary of the date of award. Certain of the Company’s stock option awards (the “ Officer Awards ”) included a provision that required the Company to redeem the vested portion of options at fair value in cash upon a separation of service initiated by the Company or upon death or disability of the holder. The Company determined that the redemption feature required the Officer Awards to be classified in mezzanine equity prior to the Apex Business Combination. For share-based payment arrangements with employees, the amount presented in mezzanine equity at each balance sheet date was based on the redemption provisions of the instrument and adjusted for the proportion of consideration received in the form of employee services. The shares underlying the Officer Awards were puttable to the Company upon certain conditions, such as death or disability of the Officer Awards recipients, which the Company determined was  not probable; therefore, the Company reclassified the grant-date intrinsic value to mezzanine equity as the awards vested. The Officer Awards were cancelled in 2021, concurrent with the Apex Business Combination. In exchange for the cancellation of the Officer Awards, the Company agreed to deliver to the holders of the Officer Awards a fixed amount of shares equal to the amount of shares the holders would have received if the Officer Awards were exercised on the date of the Apex Business Combination in a net share settlement scenario. The cancelled Officer Awards were treated as modification of the original awards under ASC 718; however, no incremental value exists as a result of the modification. As a result of the cancellation of the original Officer Awards, the $ 1.7  million mezzanine balance was reclassified to permanent equity on July 1, 2021, and the Company recognized $ 3.5  million in previously unrecognized compensation costs. As a result, the Company issued 3,592,504  shares in July  2022.   72 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   The Company’s stock option awards granted to certain international employees (the “ Legacy International Options ”) contained a performance condition that stated that the awards are only exercisable if the Company’s common shares are publicly traded. When the exercise contingency was resolved upon completion of the Apex Business Combination, the Legacy International Options were cancelled and replaced with new awards with substantially the same terms and conditions (the “ International Options ”). Prior to the Apex Business Combination, no compensation expense related to the Legacy International Options was recognized, as the exercise contingency was not deemed probable until the occurrence of the Apex Business Combination. Had the exercise contingency been deemed probable, the Legacy International Options would have been classified as liabilities. After the Apex Business Combination vested International Options can be exercised utilizing broker-assisted settlements; therefore, the International Options are classified as equity. As a result of this change in classification, the Company calculated the fair value of the awards on July 1, 2021, for purposes of compensation expense. In accordance with ASC 718, all previously unrecognized compensation since the grant date was immediately recognized upon resolution of the exercise contingency. As a result, in 2021 the Company recognized a one -time charge of $ 24.3  million in previously unrecognized compensation costs.    In 2020, the Company granted certain executives stock option awards that contain both service and performance vesting conditions (the “ Time and Performance Based Options ”). The Time and Performance Based Options were granted in three tranches (the “ Time-Based Options ,” the “ Performance-Based 1 Options ,” and the “ Performance-Based II Options ”). The Time-Based Option vests over a four -year period, subject to the grantee’s continuous service with the Company. The Performance-Based I Option vests contingent upon the Company meeting certain performance goals. These goals were considered met in 2021.  The Performance-Based II Option vests contingent upon the grantee achieving certain goals. These goals were considered met on January 1, 2021. Both the Performance-Based I Option and Performance-Based II Option are subject to the grantee’s continuous service to the company.    The weighted-average grant date fair value of options granted in the year ended  December 31, 2022 and 2021  was $ 2.71 and $ 4.09 , respectively. The Company calculates the expected term using the “simplified” method, which is the simple average of the vesting period and the contractual term. The simplified method is applied as the Company does not have sufficient historical data to provide a reasonable basis for an estimate of the expected term. Expected volatility is based on historical and implied volatility of a group of peer entities over a similar expected term. Dividend yields are based upon historical dividend yields. Risk-free interest rates are based on the implied yields currently available on U.S. Treasury zero coupon issues with a remaining term equal to the expected term.   The Company estimated the grant date fair value of these stock options using the Black-Scholes option-pricing model with the following weighted-average assumptions:       2022     2021   Expected term (in years)     6.11       6.11   Expected volatility     45.18 %     43.31 % Risk-free rate     2.16 %     0.94 % Dividend yield     —       —     A summary of the Company’s stock option activity during the year ended  December 31, 2022  is as follows:       Stock Options     Weighted-Average Exercise Price     Weighted-Average Remaining Contractual Life                             Balance, January 1, 2022     30,480,317     $ 3.87       2.83   Granted     689,406       5.88       —   Exercised     ( 1,799,665 )     1.57       —   Forfeited or expired     ( 202,255 )     4.94       —   Balance, December 31, 2022     29,167,803     $ 4.05       6.53     As of December 31, 2022 , the following table summarizes information about outstanding and exercisable stock options:       Outstanding     Exercisable   Exercise Price   Stock Options     Weighted-Average Contractual Life     Weighted-Average Exercise Price     Stock Options     Weighted-Average Contractual Life     Weighted-Average Exercise Price   $ 0.03 - $ 1.34     5,964,947       3.68     $ 1.28       5,964,947       3.68     $ 1.28   $ 1.52 - $ 1.89     5,795,861       4.98       1.59       5,519,215       4.92       1.59   $ 3.90 - $ 9.64     17,406,995       8.01       5.82       7,973,397       7.85       5.17         29,167,803       6.53     $ 4.05       19,457,559       5.74     $ 2.96     As of  December 31, 2022 , there was $ 25.5  million in unrecognized compensation costs related to all non-vested options. This unrecognized stock-based compensation cost is expected to be recognized over a weighted-average period of approximately 2.3 years.   As of  December 31, 2022 , the Company had 29,167,803 options outstanding and 19,457,559  options exercisable with intrinsic values of $ 33.8 million and $ 32.0 million, respectively. During the year ended December 31, 2022 , 1,799,665 options were exercised, with a total intrinsic value of $ 6.6 million. During the year ended December 31, 2021, 5,141,331 options were exercised, with a total intrinsic value of $ 40.0 million.   Restricted Stock Units   In addition to Stock Options granted under the 2006 Plan, 2016 Plan and 2021 Plan, 5,749,764 RSUs were granted under the 2021 Plan in 2022. The compensation costs for stock option awards are accounted for in accordance with ASC 718, Compensation-Stock Compensation. RSUs vest over a four -year service period and expire on the tenth anniversary of the date of award. The RSUs are measured at the fair market value of the underlying stock at the grant date.    73 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   A summary of the Company’s RSU activity during the year ended  December 31, 2022  is as follows:     Unvested Restricted Stock Units       Number of Shares     Weighted-Average Grant-Date Fair Value                     Unvested as of December 31, 2021     5,167,479     $ 9.64   Granted     5,749,764       5.55   Vested     ( 1,784,993 )     9.42   Forfeited     ( 739,707 )     7.17   Unvested as of December 31, 2022     8,392,543     $ 7.10     The per share weighted-average grant date fair value of RSUs granted during the year ended  December 31, 2022 and 2021  was $ 5.55  and $ 9.64 , respectively.   The total fair value of shares vested during the year ended December 31, 2022 and 2021  was $ 8.2 million and $ 9.5 million, respectively.   As of  December 31, 2022 , there was $ 53.0 million in unrecognized compensation costs specific to the non-vested RSUs under the 2021 Plan. This unrecognized stock-based compensation cost is expected to be recognized over a weighted-average period of approximately 2.9 years.   Company Earn-Out RSUs   The compensation costs for Company Earn-Out RSUs are accounted for in accordance with ASC 718, Compensation-Stock Compensation . In order to capture the market conditions associated with the Company Earn-Out RSUs, the Company applied an approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the Sponsor Earn-Out RSUs’ contractual life based on the appropriate probability distributions. The fair value was determined by taking the average of the fair values under each Monte Carlo simulation trial. Under this approach, the grant-date fair value of the Company Earn-Out RSUs on July 1, 2021, was determined to be $ 2.5  million. The stock options underlying the Earn-Out RSUs vest over a four -year period and expire on the tenth anniversary of the date of award. If the contingent milestones of the Earn-Out RSUs are not met by the seventh anniversary of the Apex Business Combination, the holders of the underlying stock options will not receive the Earn-Out RSUs. For the years ended  December 31, 2022 and 2021 , the Company recorded stock-based compensation expense of $ 0.9 million and $ 0.4  million, respectively, related to these Earn-Out RSUs.   Put and Call Options   On December  26, 2019, the Company granted put options, to certain of the Company’s management, to request a redemption of 3,113,170 shares of common stock (“ Modified Common Stock ”) or 5,148,777 shares underlying options to acquire common stock (“ Modified Options ”, collectively, “ Eligible Shares ”) during the period from March  25, 2025, to April, 2025 ( the “ Settlement Period ”) or, if earlier, the 30 day period following a Qualifying Termination for a redemption price per share equal to the fair market value, as determined by the AvePoint’s Board of Directors; provided, that if a redemption request is delivered following a Qualifying Termination, the Company shall pay the redemption price during the Settlement Period unless the holders of Series C Preferred Stock consent to the payment of the redemption price by the Company within the 30 day period following the Qualifying Termination. In addition, the Company has a right to purchase all or any portion of the Eligible Shares at any time for a purchase price per share equal to the fair market value.   Mezzanine equity classification is required if stock awards that would otherwise qualify for equity classification are subject to contingent redemption features that are not solely within the control of the issuer. The Company remeasured the Modified Common Stock at each balance sheet date based on the fair value of the Company’s shares and such remeasurements are reflected as an adjustment of the value in mezzanine equity. In 2019, the Company recorded a one -time stock-based compensation expense of $ 0.5 million, related to Modified Common Stock. These costs have been recorded in operating expenses in the consolidated statements of operations.   In connection with the Apex Business Combination, the agreements creating the Modified Common Stock and Modified Options were terminated. As a result, the $ 39.3  million mezzanine balance and the $ 49.7  million liability balance were reclassified to permanent equity on July 1, 2021.   The fair values of Modified Options were estimated using a Black-Scholes option-pricing model with the following weighted-average assumptions on  July 1, 2021:       July 1       2021   Expected term (in years)     4.10   Expected volatility     34.44 % Risk-free rate     0.79 % Dividend yield     —     For the year ended December 31, 2021,  the Company recorded stock-based compensation expenses of $ 11.8 million, related to these options. These costs have been recorded in costs of revenue and operating expenses in the consolidated statements of operations.   During 2021, 1,365,503  options included in Modified Options were exercised. As a result of exercises of the Modified Options during 2021, $ 15.4 million of the liability balance related to Modified Options was reclassified to liability-classified outstanding shares within the six months from the time of exercise. During 2021, $ 6.9 million of the liability balance for these outstanding shares was reclassified to mezzanine equity as a result of the completion of six months from the time of the exercise of 690,474  options. As of July 1, 2021, the Apex Business Combination date, the liability balance related to this Modified Common Stock was $ 49.7 million. For the year ended  December 31, 2021 , the Company recorded stock-based compensation expense of $ 1.2 million, related to this Modified Common Stock.   74 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   17. Financial Instruments   Fair value is defined by ASC 820, Fair Value Measurement (ASC 820 ) as the price that would be received upon selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three -level fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:     ■ Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.   ■ Level 2 — Inputs other than quoted prices included within Level  1 that are observable for the asset or liability, either directly or indirectly.   ■ Level 3 — Unobservable inputs for the asset or liability.       Year Ended December 31,       2022       (in thousands)       Level 1     Level 2     Level 3     Total   Assets                                 Cash Equivalents:                                 Certificates of deposit   $ —     $ 1,693     $ —     $ 1,693   Money funds     —       188,769       —       188,769   Short term investments:                                 Certificates of deposit     —       2,620       —       2,620   Other assets:                                 Certificates of deposit     —       162       —       162   Total   $ —     $ 193,244     $ —     $ 193,244   Liabilities:                                 Earn-out shares (1)   $ —     $ —     $ 6,631     $ 6,631   Warrant liabilities (1)     —       227       —       227   Total   $ —     $ 227     $ 6,631     $ 6,858         Year Ended December 31,       2021       (in thousands)       Level 1     Level 2     Level 3     Total   Assets                                 Cash Equivalents:                                 U.S. treasury bills   $ —     $ 199,999     $ —     $ 199,999   Certificates of deposit     —       1,433       —       1,433   Short term investments:                                 Certificates of deposit     —       2,411       —       2,411   Other assets:                                 Certificates of deposit     —       285       —       285   Total   $ —     $ 204,128     $ —     $ 204,128   Liabilities:                                 Earn-out shares (1)   $ —     $ —     $ 10,012     $ 10,012   Warrant liabilities (1)     —       458       —       458   Total   $ —     $ 458     $ 10,012     $ 10,470     ( 1 ) As a result of the Apex Business Combination on July 1, 2021, the Company recorded Company Earn-Out Shares and private placement warrants as liabilities that must be marked to market each reporting period. The Company measured the Company Earn-Out Shares at fair value determined at Level 3. The Company measured the private placement warrants at fair value determined at Level 2. Refer to “ Note 14  — Company Earn-Out and Warrant Liabilities ” for further details.   The following table presents the reconciliation in Level 3 instruments which consisted of earn-out shares liabilities which were measured on a recurring basis for the year ended December 31, 2022.       Year Ended December 31,       2022       (in thousands)   Opening balance   $ 10,012   Total gains or losses from the period         Included in earnings     ( 4,165 ) Reclass from Earnout-RSU     784   Closing balance   $ 6,631     75 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   18. Segment information   The Company operates in one segment. Its products and services are sold throughout the world, through direct and indirect sales channels. The Company’s chief operating decision maker (the “ CODM ”) is the Chief Executive Officer. The CODM makes operating performance assessment and resource allocation decisions on a global basis. The CODM does not receive discrete financial information about asset allocation, expense allocation or profitability by product or geography.   Revenue by geography is based upon the billing address of the customer. All transfers between geographic regions have been eliminated from consolidated revenue. No customers represented greater than 10% of revenue for the years ended December 31, 2022  and  2021 . The following table sets forth revenue by geographic area:       Year Ended December 31,       2022     2021       (in thousands)   Revenue:                 North America   $ 102,025     $ 83,034   EMEA     71,635       58,285   APAC     58,679       50,590   Total revenue   $ 232,339     $ 191,909     The following table sets forth revenue generated from customers by country, which represents more than 10% of total consolidated revenue in any period presented:       Year Ended December 31,       2022     2021       (in thousands)   Revenue:                 United States   $ 100,870     $ 83,034   Germany     30,625       23,574   Japan     21,348       23,360     The following table sets forth property and equipment, net held within the United States, China and foreign countries:       December 31,     December 31,       2022     2021       (in thousands)   Property and equipment, net:                 United States   $ 1,279     $ 923   China     2,982       2,376   Other     1,276       623   Total property and equipment, net   $ 5,537     $ 3,922     76 Table of Contents   AvePoint, Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued)   19. Loss Per Share   Basic loss per share available to the Company’s common shareholders (“ EPS ”) is computed by dividing net loss by the weighted average number of common shares outstanding for the period. In computing diluted EPS, the Company adjusts the denominator, subject to anti-dilution requirements, to include the dilution from potential shares of common stock resulting from outstanding share-based payment awards, warrants, earn-outs and the conversion of convertible preferred shares. The Company applies the two -class method in calculating loss per share. the Company’s Sponsor Earn-Out Shares described in “ Note 15  — Mezzanine Equity and Stockholders’  Deficiency ” are considered participating securities and have no contractual obligation to shares in the loss of the Company. As such, the weighted-average impact of these shares is excluded from the calculation of loss per share below. As losses were incurred during all periods presented, no earnings per share exists for the Sponsor Earn-Out Shares.       Year Ended December 31,       2022     2021       (in thousands, except       per share amounts)   Loss per share available to common stockholders, excluding sponsor earn-out stockholders                 Numerator:                 Net loss   $ ( 38,688 )   $ ( 33,245 ) Net income attributable to redeemable noncontrolling interest     ( 2,942 )     ( 1,974 ) Net loss attributable to AvePoint, Inc.   $ ( 41,630 )   $ ( 35,219 ) Deemed dividends on preferred stock     —       ( 32,928 ) Total net loss available to common stockholders   $ ( 41,630 )   $ ( 68,147 ) Denominator:                 Weighted average common shares outstanding     181,957       141,596   Effect of dilutive securities     —       —   Weighted average diluted shares     181,957       141,596                     Basic and diluted loss per share available to common stockholders, excluding sponsor earn-out stockholders   $ ( 0.23 )   $ ( 0.48 )   To arrive at net loss available to common stockholders, the Company deducted net income attributable to the redeemable noncontrolling interest in EduTech and deemed dividends, which related to the redemption, extinguishment, and remeasurement of preferred stock.   For the years ended December 31, 2022  and  2021 , the Company’s potentially dilutive securities were deemed to be anti-dilutive given the Company’s net loss position. As such, basic loss per share is equal to diluted loss per share for the periods presented.   The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported:       Year Ended December 31,       2022     2021       (in thousands)   Stock options     29,168       30,480   Restricted stock units     8,493       5,167   Warrants     17,905       17,905   Company Earn-Outs     3,000       3,000   Total potentially dilutive securities     58,566       56,552     20. Related Party Transactions   The Company has entered into indemnification agreements with its executive officers and directors. These agreements, among other things, require AvePoint to indemnify its directors and executive officers to the fullest extent permitted by Delaware law, specifically the Delaware General Corporation Law (as the same exists or may hereafter be amended) for certain expenses, including attorneys’ fees, judgments, fines, and settlement amounts incurred by a director or officer in any action or proceeding arising out of their services as one of the Company’s directors or officers or any other company or enterprise to which the person provides services at the Company’s request.   77 Table of Contents     21. Subsequent Events   The following material subsequent events occurred since the date of the most recent balance sheet period reported.   Stock-Based Compensation   On March 13, 2023, we granted 6,349,464  RSUs and 1,125,374 options to employees in total fair value of $ 29.6 million.   205 Petition   In conjunction with the business combination between Apex and Legacy AvePoint, Apex issued a proxy statement on June 2, 2021, which among other things, sought the approval of a new charter by “the affirmative majority (virtually in person or by proxy) of holders of a majority of the outstanding shares of Apex voting together as a single class and a majority of the outstanding shares of Class B common stock voting separately as a single class” (the “ Charter Proposal ”). At a special meeting held on June 30, 2021, the combined vote of a majority of the voting power of the Class A common stock and Class B common stock, voting together as one class, approved the Charter Proposal. The Company obtained the separate class vote of the Class B common stock as well. According to the number of shares of common stock outstanding and the tabulated votes for and against the Charter Proposal, the Charter Proposal was not approved by a majority of the Class A common stock then outstanding. Believing it had obtained the stockholder votes required by the old charter and Delaware law, the Company filed the new charter with the State of Delaware on July 1, 2021.  On and after that date, the Company issued common stock and securities pursuant to the new charter.   A recent decision of the Delaware Court of Chancery has created uncertainty as to whether Section 242 (b)( 2 ) of the Delaware General Corporation Law would have required the Charter Proposal to be approved by a separate vote of the majority of the Company’s then-outstanding shares of Class A common stock, in addition to a majority of the shares of Class A and Class B common stock voting together (“ Boxed Decision ”). While the Company believes that the Company's shares have been validly authorized since their original issuance, in light of the Boxed Decision, on March 2, 2023, the Company petitioned the Court of Chancery to validate the Charter and the securities issued in reliance on the Charter (the “Petition”). In the Petition, the Company represented to the Court of Chancery that the Company filed the Charter with the belief that it had been approved in accordance with Delaware law and that the Company filed the Petition in response to the publication of the Boxed decision.   In response to the Petition, the Court of Chancery granted an order on March 17, 2023 ( the “ Order ”), and stated in the Order that:     ● “The Charter, including the filing and effectiveness thereof, is hereby validated and declared effective retroactive to the date of its filing with the Office of the Secretary of State of the State of Delaware on July 1, 2021, and all amendments effected thereby.”   ● “The Company’s securities (and the issuance of the securities) described in the Petition and any other securities issued in reliance on the validity of the Charter are hereby validated and declared effective as of the original date of issuance of such securities.”    The Court’s granting of the Order has addressed and eliminated the uncertainty created by the Boxed Decision.   78 Table of Contents   PART II Items 9 and 9A   ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE   None.    ITEM 9A. CONTROLS AND PROCEDURES   We maintain “disclosure controls and procedures,” as defined in Rule 13a–15(e) and Rule 15d–15(e) under the Exchange Act, that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer (in his capacity as principal executive officer) and our Chief Financial Officer (in his capacity as principal financial and accounting officer), as appropriate to allow timely decisions regarding required disclosure.   Evaluation of Disclosure Controls and Procedures   Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act, as of the end of the period covered by this Annual Report. Based upon that evaluation, our principal executive officer and principal financial and accounting officer concluded that our disclosure controls and procedures were not effective as of December 31, 2021, or during the year ended December 31, 2022, due to the material weaknesses described below. Notwithstanding such material weaknesses in internal control over financial reporting, our principal executive officer and principal financial and accounting officer have concluded that our audited Consolidated Financial Statements included in this Annual Report present fairly, in all material respects, our financial position, results of operations, and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles (“ GAAP ”).   Material Weaknesses in Internal Control over Financial Reporting   A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. Because the control deficiencies described below could have resulted in a material misstatement of our annual or interim financial statements, we determined that these deficiencies constitute material weaknesses.   Based upon the evaluation described above, our management identified the following material weaknesses in internal control over financial reporting in fiscal year 2020 which continued to exist during the year ended December 31, 2022:     ■ the completeness and accuracy of financial accounting, reporting and disclosures;   ■ the identification, review and accounting for nonroutine transactions and/or complex accounting transactions; and   ■ segregation of duties with respect to the processing of financial transactions.   79 Table of Contents   PART II Item 9A   Remediation of Material Weaknesses   Our management has been and continues to be committed to remediating these material weaknesses and has identified and implemented several steps to enhance our internal controls over financial reporting. We have implemented a remediation plan (the " Remediation Plan "), the actions under which coincide with and are incorporated into our overarching Sarbanes-Oxley Act of 2002 compliance implementation plan. The Remediation Plan actions include, but are not limited to:     ■ the hiring of personnel with technical accounting and financial reporting experience to further enhance our ability to accurately and expediently respond to increased accounting and financial complexities and increased resource demand with respect thereto, and to aid in further identification and oversight with respect to disclosure control activities in response;   ■ the engagement of external consultants in the assistance of the evaluation of complex accounting matters;   ■ the establishment of formalized internal controls to review and maintain segregation of duties between appropriate control operators; and   ■ the implementation of improved accounting and financial reporting procedures to enhance the completeness and accuracy of our financial accounting, reporting, and disclosures.   We have implemented documented policies and procedures for, and are in the process of testing the implementation and operating effectiveness of, the newly designed controls. The material weakness in our internal control over financial reporting will not be considered remediated until the newly designed controls operate for a sufficient period of time. In addition, we may discover additional material weaknesses that require additional time and resources to remediate, and we may decide to take additional measures to address the material weaknesses or modify the remediation steps described above.   Changes in Internal Control Over Financial Reporting   Other than the Remediation Plan discussed above and the ongoing implementation of measures under the Remediation Plan designed to accurately maintain our financial records, enhance the flow of financial information, improve data management, and provide timely information to our management team, there have been no changes in internal control over financial reporting during the year ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. However, as we continue to implement the Remediation Plan, we will change our process and procedures, which in turn could result in changes to our internal control over financial reporting. As such changes occur, we will evaluate quarterly whether such changes materially affect our internal control over financial reporting.   Inherent Limitations on Effectiveness of Controls   Our management, including our principal executive officer and principal financial and accounting officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in any control system, misstatements due to error or fraud may occur and not be detected.   80 Table of Contents   PART II Items 9B   ITEM 9B. OTHER INFORMATION   On March 29, 2023, our Board of Directors, as part of a periodic review of AvePoint’s governance documents, approved changes to AvePoint’s Bylaws, effective as of March 29, 2023 (as amended and restated, the “ Bylaws ”). The amendments, among other things:     ■ provide that special meetings of the stockholders may only be called by the president, the president or secretary of the corporation at the written request of a majority of the Board of Directors or by the secretary of the corporation at the written request of stockholders owning at least 50% of AvePoint’s stock that is issued and outstanding and entitled to vote at the meeting;   ■ require that the special meeting request be delivered to the secretary of the corporation at AvePoint’s principal executive offices and be signed by the stockholder or an authorized agent of the stockholder who is requesting the special meeting. The stockholder’s request must also set forth: a brief description of each matter of business desired to be brought before the special meeting, the reasons for conducting the business at the meeting, the text of any proposal or business to be considered at the meeting and the information required by the advance notice provision of the bylaws, as applicable;   ■ specify that the majority of the members of a committee shall constitute a quorum at any meeting of that committee and the vote of a majority of the members of the committee present at the meeting will be the act of the committee;   ■ require a stockholder seeking to bring a director nomination or other business before a meeting of stockholders (“proposing stockholder”) to provide certain disclosures, including:     ● any derivative instrument that has been entered into by, or on behalf of, the proposing stockholder and any affiliates or associates or other parties with whom the proposing stockholder is acting in concert (each, an “associated person”), the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, the proposing stockholder or any associated person, with respect to AvePoint shares, or relates to the acquisition or disposition of any AvePoint shares;   ● a brief description of the business desired to be brought before the meeting, including the complete text of any resolutions to be presented at the meeting;   ● the name and address, as they appear on the Corporation’s stock ledger, of the proposing stockholder and any associated person;   ● a representation that the proposing stockholder is a stockholder of record and intends to appear at the meeting of stockholders to bring the business before the meeting specified in the notice;   ● the class and number of shares of AvePoint’s stock owned by the proposing stockholder, any beneficial owner on whose behalf the nomination is being made and any associated person;   ● any agreement pursuant to which the proposing stockholder or any associated person, has a right to vote or direct the voting of any of the AvePoint’s securities;   ● any rights to dividends on AvePoint shares owned beneficially by the proposing stockholder and any associated person that are separated or separable from the underlying AvePoint shares;   ● any proportionate interest in AvePoint shares or any derivative instruments held, directly or indirectly, by a general or limited partnership or limited liability company or similar entity in which the proposing stockholder or any associated person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, is the manager or managing member or, directly or indirectly, beneficially owns an interest in the manager or managing member of a limited liability company or similar entity; and   ● any performance-related fees (other than an asset-based fee) that the proposing stockholder or any associated person is entitled to based on the increase or decrease in the value of AvePoint shares or derivative instruments;     ■ expand the scope of disclosures required by a proposing stockholder seeking to bring a director nomination (“stockholder nominee”) to include:     ● the name and address, as they appear on the Corporation’s stock ledger, of the proposing stockholder, any beneficial owner on whose behalf the nomination is being made and any associated person;   ● a representation that the proposing stockholder is a stockholder of record and intends to appear at the meeting of stockholders to nominate the person(s) specified in the notice;   ● the class and number of shares of AvePoint’s stock owned by the proposing stockholder, any beneficial owner on whose behalf the nomination is being made and any associated person;   ● a description of any derivative instrument that has been entered into by, or on behalf of, the proposing stockholder and any associated person, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, the proposing stockholder or any associated person, with respect to AvePoint shares, or relates to the acquisition or disposition of any AvePoint shares;   ● any agreement pursuant to which the proposing stockholder or any associated person, has a right to vote or direct the voting of any of the AvePoint’s securities;   ● any rights to dividends on AvePoint shares owned beneficially by the proposing stockholder and any associated person that are separated or separable from the underlying AvePoint shares;   ● any proportionate interest in AvePoint shares or any derivative instruments held, directly or indirectly, by a general or limited partnership or limited liability company or similar entity in which the proposing stockholder or any associated person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, is the manager or managing member or, directly or indirectly, beneficially owns an interest in the manager or managing member of a limited liability company or similar entity;   ● any performance-related fees (other than an asset-based fee) that the proposing stockholder or any associated person is entitled to based on the increase or decrease in the value of AvePoint shares or derivative instruments;   ● a description of all agreements between the proposing stockholder, beneficial owner on whose behalf the nomination is being made or any associated person and each stockholder nominee with respect to the stockholder nominee’s service or duties as a nominee or director of AvePoint, including as direct or indirect confidentiality, compensation, reimbursement or indemnification arrangements;   ● any information that would be required to be set forth in a Schedule 13D pursuant to Rule 13d-1(a) of the Exchange Act or Rule 13d-2(a) of the Exchange Act;   ● the name, age, business address and, if known, residence address of each stockholder nominee for whom the proposing stockholder is proposing or intends to solicit proxies and of each stockholder nominee who would be presented for election at the annual meeting in the event of a need to change the proposing stockholders’ original slate; and   ● a representation as to whether the proposing stockholder or any associated person intends to solicit proxies in support of director nominees other than individuals nominated by the Board of Directors (“board nominees”) in compliance with the requirements of Rule 14a-19(b) under the Securities Exchange Act of 1934 (the “Exchange Act”);   81 Table of Contents   PART II Items 9B     ■ set the deadline for which a proposing stockholder must provide notice to AvePoint of the proposing stockholder’s intent to nominate directors for election to the Board or propose other business at an annual meeting to not later than 90 calendar days or earlier than 120 days calendar days prior to the anniversary of the immediately preceding annual meeting and provide that, if no annual meeting was held in the previous year or the date of the annual meeting is more than 30 calendar days before or more than 60 calendar days after such anniversary date, the proposing stockholder must provide notice to AvePoint not later than the 90th calendar day prior to such annual meeting of stockholders or, if later, the 10th calendar day following the date on which public disclosure of the date of such annual meeting is first made;   ■ clarify that, in addition to complying with the advance notice provisions in the Bylaws, each proposing stockholder and any associated person must also comply with all applicable requirements of AvePoint’s Articles of Incorporation, the Bylaws and state and federal law, including the Exchange Act, with respect to any such proposal or the solicitation of proxies with respect thereto;   ■ provide that any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white;   ■ provide that (a) no stockholder or associated person may solicit proxies in support of any nominees other than board nominees unless such stockholder and associated person complies with Rule 14a-19 under the Exchange Act in connection with the solicitation of such proxies, including the provision to AvePoint of notices required thereunder in a timely manner, and (b) if such stockholder or associated person (i) provides notice pursuant to Rule 14a-19(b) under the Exchange Act and (ii) subsequently fails to comply with any of the requirements of Rule 14a-19 under the Exchange Act, then AvePoint will disregard any proxies or votes solicited for such stockholder’s nominees;   ■ provide that, if any stockholder or associated person provides notice pursuant to Rule 14a-19(b) under the Exchange Act, such stockholder or associated person must deliver to AvePoint, upon its request, reasonable evidence that such stockholder or associated person has met the requirements of Rule 14a-19 under the Exchange Act no later than five business days prior to the applicable meeting;   ■ require stockholder nominees and board nominees to provide any additional information necessary to permit the Board to determine the nominee’s independence;   ■ provide the number of directors shall be determined from time to time by resolutions of the Board;   ■ clarify that directors shall be elected by a plurality of the votes cast and all other matters shall be decided by a majority of votes cast;   ■ clarify that directors may be removed in accordance with AvePoint’s Certificate of Incorporation;   ■ expand the indemnification requirements to indemnify officers and employees, in addition to directors, to the fullest extend of the laws of the state of Delaware; and   ■ make various other updates, including clarify, ministerial and conforming changes.   The foregoing description of the amendments to the Bylaws is qualified in its entirety by reference to the full text of the Bylaws, a copy of which is attached hereto as Exhibit 3.2 and is incorporated herein by reference.   82 Table of Contents   PART II, PART III Items 9C, 10, 11, 12, 13, 14   ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS   Not applicable.     PART III   ITEM   10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE   A list of our Executive Officers and biographical information appears in Part I, Item 1 of this Annual Report. Information about our directors may be found in our Proxy Statement for the 2023 Annual Meeting of Stockholders (the “ Proxy Statement ”) which was filed with the SEC on March 24, 2023. The information required by this item is hereby incorporated by reference to the sections of the Proxy Statement under the captions “Corporate Governance,” “Election of Directors,” and “Named Executive Officers.”   We have adopted the AvePoint, Inc. Code of Ethics and Business Conduct (the “ Code ”), a code of ethics that applies to our employees, officers, and directors (including our Principal Executive Officer and Principal Financial and Accounting Officer) and is a “Code of Ethics for Senior Financial Officers” as defined by applicable rules of the SEC. The Code is publicly available on our Investor Relations website at https://ir.avepoint.com/. Information contained on or accessible through this website is not a part of this Annual Report, and the inclusion of such website address in this Annual Report is an inactive textual reference only. If we make any substantive amendments to the Code or grant any waiver, including any implicit waiver, from a provision of the code to our Executive Officers or directors, we will disclose the nature of the amendment or waiver on our Investor Relations website or in a report on Form 8-K to the extent required by applicable rules and exchange requirements.   ITEM   11. EXECUTIVE COMPENSATION   The information required by this item is hereby incorporated by reference to the sections of the Proxy Statement under the captions, “Elements of Executive Compensation” and “Non-Employee Director Compensation.”   ITEM   12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS   The information required by this item is hereby incorporated by reference to the sections of the Proxy Statement under the captions “Security Ownership.”   ITEM   13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR   INDEPENDENCE   The information required by this item is hereby incorporated by reference to the sections of the Proxy Statement under the captions “Transactions with Related Persons” and “Board Leadership Structure.”   ITEM   14. PRINCIPAL ACCOUNTING FEES AND SERVICES   The information required by this item is hereby incorporated by reference to the section of the Proxy Statement under the caption “Ratification of Appointment of Independent Registered Public Accounting Firm for the 2023 Fiscal Year.”   83 Table of Contents   PART IV   ITEM 15.   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES     a. Financial Statements and Schedules   Our Consolidated Financial Statements can be found under the heading “ Index to Financial Statements ” under Part II, Item 8 of this Annual Report. Financial statement schedules have been omitted because they are not required, not applicable, or the required information is included in the Consolidated Financial statements or notes thereto.     b. Exhibits   The following documents are filed as part of, furnished with, or incorporated by reference into, this Annual Report, in each case as indicated therein.   Exhibit   Index           Incorporated by Reference Exhibit Number   Description   Schedule/ Form   File No.   Exhibit   Filing Date   Filed Herewith 2.1   Business Combination Agreement and Plan of Reorganization, dated November 23, 2020, by and among Apex, Merger Subs and AvePoint.   Form 8-K   001-39048   2.1   March 9, 2021     2.2   Amendment No. 1 to Business Combination Agreement and Plan of Reorganization, dated December 30, 2020, by and among Apex, Merger Subs and AvePoint.   Form 8-K   001-39048   2.1   December 30, 2020     2.3   Amendment No. 2 to Business Combination Agreement and Plan of Reorganization, dated March 8, 2021, by and among Apex, Merger Subs and AvePoint.   Form 8-K   001-39048   2.1   March 9, 2021     2.4   Amendment No. 3 to Business Combination Agreement and Plan of Reorganization, dated May 18, 2021, by and among Apex, Merger Subs and AvePoint.   Form 10-Q   001-39048   10.3   May 19, 2021     2.5   Agreement and Plan of Merger, dated as of July 23, 2021, by and between AvePoint, Inc. and AvePoint US, LLC   Form 8-K   001-39048   2.1   July 30, 2021     3.1   Amended and Restated Certificate of Incorporation of AvePoint, Inc.   Form 8-K   001-39048   3.1   July 7, 2021     3.2   Amended and Restated Bylaws of AvePoint, Inc.                   X 4.1   Specimen Common Stock Certificate.   Form S-4/A   333-252712   4.4   May 20, 2021     4.2   Specimen Warrant Certificate.   Form S-1   333-233299   4.3   August 30, 2019     4.3   Description of Capital Stock                   X 10.1   Warrant Agreement, dated September 16, 2019, by and between Continental Stock Transfer & Trust Company and Apex.   Form 8-K   001-39048   4.1   September 20, 2019     10.1   Form of PIPE Subscription Agreement   Form 8-K   001-39048   10.7   November 23, 2020     10.2   Form of Amendment No. 1 to PIPE Subscription Agreements   Form S-4   333-252712   10.15   May 20, 2021     10.3   Form of Lock-Up Agreement   Form 8-K   001-39048   10.3   November 23, 2020     10.4   Amended and Restated Registration Rights Agreement, dated July 1, 2021, by and among AvePoint and certain stockholders of AvePoint.   Form 8-K   001-39048   10.4   July 7, 2021     10.5†   Form of Indemnification Agreement.   Form S-4   333-252712   10.29   May 20, 2021     10.6†   AvePoint 2006 Equity Incentive Plan.   Form 8-K   001-39048   10.6   July 7, 2021     10.7†   Form of Stock Option Grant Package under AvePoint 2006 Equity Incentive Plan.   Form 8-K   001-39048   10.7   July 7, 2021     10.8†   Form of RSU Grant Package under 2006 Equity Incentive Plan.   Form 8-K   001-39048   10.8   July 7, 2021     10.9†   AvePoint 2016 Equity Incentive Plan.   Form S-4   333-252712   10.15   February 4, 2021     10.10†   Form of Stock Option Grant Notice under AvePoint 2016 Equity Incentive Plan.   Form S-4   333-252712   10.16   February 4, 2021     10.11†   Form of Stock Option Agreement under 2016 Equity Incentive Plan.   Form S-4   333-252712   10.17   February 4, 2021     10.12†   AvePoint 2021 Equity Incentive Plan.   Form S-4   333-252712   10.18   February 4, 2021     10.13†   Form of Stock Option Grant Package under AvePoint 2021 Equity Incentive Plan.   Form 8-K   001-39048   10.13   July 7, 2021     10.14†   Form of RSU Grant Package under AvePoint 2021 Equity Incentive Plan.   Form 8-K   001-39048   10.14   July 7, 2021     10.15†   AvePoint 2021 Employee Stock Purchase Plan.   Form S-4   333-252712   10.19   February 4, 2021     10.16+^   Loan and Security Agreement, dated April 7, 2020, by and between HSBC Ventures USA Inc. and AvePoint, Inc.   Form S-4   333-252712   10.24   February 4, 2021       84 Table of Contents   10.17+^   Limited Consent and First Amendment to Loan and Security Agreement, dated July 1, 2021, by and among AvePoint Operations Inc. (f/k/a AvePoint, Inc.), HSBC Ventures USA Inc. and AvePoint US, LLC.   Form 8-K   001-39048   10.21   July 7, 2021     10.18+^   Assignment and Assumption Agreement, dated July 1, 2021, by and among AvePoint Operations, Inc. (f/k/a AvePoint, Inc.), HSBC Ventures USA Inc. and AvePoint US, LLC.   Form 8-K   001-39048   10.22   July 7, 2021     10.19+^   Pledge Agreement, dated July 1, 2021, by and between AvePoint, Inc. and HSBC Ventures USA Inc.   Form 8-K   001-39048   10.23   July 7, 2021     10.20+^   Limited Guaranty, dated July 1, 2021, by and between AvePoint, Inc. and HSBC Ventures USA Inc.   Form 8-K   001-39048   10.24   July 7, 2021     10.21+^   Assignment and Assumption Agreement, dated as of July 23, 2021, by and among AvePoint, Inc., AvePoint US, LLC, and HSBC Ventures USA Inc.   Form 8-K   001-39048   10.1   July 30, 2021     10.22+^   Limited Consent and Waiver to Loan and Security Agreement, dated as of July 23, 2021, by and among AvePoint, Inc., AvePoint US, LLC, AvePoint Public Sector, Inc., AvePoint Holdings USA, LLC, and HSBC Ventures USA Inc.   Form 8-K   001-39048   10.2   July 30, 2021     10.23+^   Second Amendment to Loan and Security Agreement, dated October 31, 2021, by and among AvePoint, Inc., AvePoint Public Sector, Inc., AvePoint Holdings USA, LLC, and HSBC Ventures USA Inc.   Form 8-K   001-39048   10.8   November 1, 2021     10.24+^   Annex A to Second Amendment to Loan and Security Agreement, dated October 31, 2021, by and among AvePoint, Inc., AvePoint Public Sector, Inc., AvePoint Holdings USA, LLC, and HSBC Ventures USA Inc.   Form 8-K   001-39048   10.9   November 1, 2021     10.25†   Employment Agreement, dated January 1, 2021, by and between AvePoint and Xunkai Gong.   Form S-4   333-252712   10.21   February 4, 2021     10.26†   Employment Agreement, dated January 1, 2021, by and between AvePoint and Tianyi Jiang.   Form S-4   333-252712   10.22   February 4, 2021     10.27†   Employment Agreement, dated January 1, 2021, by and between AvePoint and Brian Brown.   Form S-4   333-252712   10.23   February 4, 202     10.28†   Employment Agreement, dated August 10, 2021, by and between AvePoint and James Caci.   Form 8-K   001-39048   10.1   August 16, 2021     10.29   2022 Performance-Based Annual Incentive Plan                   X 21.1   List of Subsidiaries.                   X 23.1   Consent of Deloitte and Touche LLP, independent registered public accounting firm.                   X 24.1   Power of Attorney (included in the signature page hereto).                     31.1   Certification of Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                   X 31.2   Certification of Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                   X 32.1**   Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                   X 32.2**   Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                   X 101.INS   Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.                   X 101.SCH   Inline XBRL Taxonomy Extension Schema Document.                   X 101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document.                   X 101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document.                   X 101.LAB   Inline XBRL Taxonomy Extension Labels Linkbase Document.                   X 101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document.                   X 104.1   Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101).                   X   ** Furnished herewith. Any exhibit furnished herewith (including the certifications furnished in Exhibit 32.1 and Exhibit 32.2 hereto) are deemed to accompany this Annual Report on Form 10-K and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference. + Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601. We agree to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. † Indicates a management contract or compensatory plan, contract or arrangement. ^ Certain portions of this Exhibit will be omitted because they are not material and would likely cause competitive harm to us if disclosed.   85 Table of Contents   ITEM 16.   FORM 10-K SUMMARY   None.   86 Table of Contents   SIGNATURES   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned; thereunto duly authorized.     AVEPOINT, INC.     Date: March 31, 2023 /s/ Tianyi Jiang   Name: Tianyi Jiang   Title: Chief Executive Officer (Principal Executive Officer)   Date: March 31, 2023 /s/ James Caci   Name: James Caci   Title: Chief Financial Officer (Principal Financial and Accounting Officer)   87 Table of Contents   POWER OF ATTORNEY   KNOW ALL PERSONS BY THESE PRESENTS , that each person whose signature appears below constitutes and appoints Tianyi Jiang and Brian Michael Brown, and each of them, as his or her true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for such individual in any and all capacities, to do any and all acts and things and to execute in his or her name (whether on behalf of AvePoint, Inc. (the “ Company ”) or as an officer or director of the Company, or otherwise) any and all instruments and to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.   Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Registrant and in the capacities and on the dates indicated.   Signature   Title Date         /s/ Xunkai Gong   Executive Chairman and Director March 31, 2023 Xunkai Gong               /s/ Tianyi Jiang   Chief Executive Officer and Director March 31, 2023 Tianyi Jiang   ( Principal Executive Officer )           /s/ James Caci   Chief Financial Officer March 31, 2023 James Caci   ( Principal Financial and Accounting Officer )           /s/ Brian Michael Brown   General Counsel, Chief Legal and Compliance March 31, 2023 Brian Michael Brown   Officer, Secretary, and Director           /s/ Janet Schijns   Director March 31, 2023 Janet Schijns               /s/ Jeff Teper   Director March 31, 2023 Jeff Teper               /s/ John Ho   Director March 31, 2023 John Ho               /s/ Jeff Epstein   Director March 31, 2023 Jeff Epstein           88