What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-05-16 · 227 added, 148 removed, 664 unchanged (36% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

March 31, 2022 December 31, 2021

(Unaudited, in thousands except share and per share data)

June 30, 2022 December 31, 2021

Cash and cash equivalents $ 76,292 $ 66,778

26 unchanged sentences

Common stock, $ 0.01 par value.

Authorized 120,000,000 at March 31, 2022;

total issued and outstanding 19,995,528 and 19,978,580 shares at March 31, 2022 and December 31, 2021, respectively.

Treasury stock, at cost ( 19,922 and zero shares at March 31, 2022 and December 31, 2021, respectively).

Authorized 120,000,000 ;

total issued is 20,015,838 and 19,978,580 shares and total outstanding is 19,826,724 and 19,978,580 shares at June 30, 2022 and December 31, 2021, respectively.

Treasury stock, at cost ( 189,114 and zero shares at June 30, 2022 and December 31, 2021, respectively).

Additional paid-in capital 11,913 2,878

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, in thousands)

Three Months Ended March 31,

Total revenues $ 90,925 $ 86,620

(Unaudited, in thousands except share and per share data)

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Revenues $ 93,163 $ 87,842 $ 184,088 $ 174,462

Cost of revenues (1)

5 unchanged sentences

Research, development and engineering (1)

2,741 1,940 5,077 3,616

General and administrative (1)

17,450 5,976 36,256 12,025

Total operating expenses 36,585 21,597 73,557 42,557

1 unchanged sentence

Interest expense ( 12,359 ) ( 254 ) ( 25,632 ) ( 480 )

Interest income — 9

Other income, net 174 379

Other income (expense), net 1,577 ( 97 ) 1,750 281

Income before income taxes 30,209 51,340 55,957 103,182

1 unchanged sentence

Income from continuing operations 22,274 38,854 40,979 78,088

Income from discontinued operations, net of income taxes (1)

Income from discontinued operations, net of income tax (1)

— ( 11,337 ) — ( 3,210 )

Net income $ 22,274 $ 27,517 $ 40,979 $ 74,878

23 unchanged sentences

(Unaudited, in thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Net income $ 22,274 $ 27,517 $ 40,979 74,878

Other comprehensive loss:

Other comprehensive (loss) income:

Foreign currency translation adjustment ( 4,344 ) 2,401 ( 6,461 ) ( 5,307 )

Other comprehensive loss ( 2,117 ) ( 7,708 )

Other comprehensive (loss) income ( 4,344 ) 2,401 ( 6,461 ) ( 5,307 )

Comprehensive income $ 17,930 $ 29,918 $ 34,518 $ 69,571

4 unchanged sentences

(Unaudited, in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

7 unchanged sentences

Deferred income taxes, net ( 2,435 ) ( 4,289 )

Lease asset impairments — 561

Gain on sale of businesses — ( 2,802 )

Changes in fair value of contingent consideration — 648

Decrease (increase) in:

Goodwill impairment on business — 32,629

Other — 1,508

Changes in operating assets and liabilities:

Accounts receivable ( 7,351 ) ( 6,271 )

1 unchanged sentence

Other assets ( 279 ) 1,592

Increase (decrease) in:

Accounts payable and accrued expenses ( 1,857 ) 2,318

3 unchanged sentences

Liability for uncertain tax positions 1,458 ( 4,008 )

Other long-term liabilities 5,145 ( 723 )

Other liabilities ( 1,310 ) 4,298

Net cash provided by operating activities 52,206 126,617

7 unchanged sentences

Debt issuance costs ( 232 ) —

Acquired restricted stock ( 1,173 ) —

Issuance of common stock under employee stock purchase plan 631 —

Repurchase of common stock ( 7,596 ) —

Shares withheld related to net share settlement ( 1,590 ) —

Deferred payments for acquisitions — ( 6,339 )

Contribution from Parent — 12,306

Contribution from Former Parent — 25,443

Other — ( 290 )

Net cash provided by (used in) financing activities ( 1,405 ) 10,581

Net cash (used in) provided by financing activities ( 8,787 ) 18,814

Effect of exchange rate changes on cash and cash equivalents ( 4,806 ) ( 234 )

8 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

Three Months Ended March 31, 2022 and 2021

(Unaudited, in thousands)

Three and Six Months Ended June 30, 2022 and 2021

(Unaudited, in thousands except share amounts)

Common stock Additional

1 unchanged sentence

Shares Amount capital Shares Amount Deficit loss investment Equity

Balance, April 1, 2021 — $ — $ — — $ — $ — $ ( 63,674 ) $ 1,239,667 $ 1,175,993

Net income — — — — — — — 27,517 27,517

Other comprehensive income, net of tax — — — — — 2,401 — 2,401

Share-based compensation — — — — — — — 1,429 1,429

Parent contribution — — — — — — — 26,392 26,392

Balance, June 30, 2021 — $ — $ — — $ — $ — $ ( 61,273 ) $ 1,295,005 $ 1,233,732

Common stock Additional

paid-in Treasury stock Accumulated Accumulated other comprehensive Total

Shares Amount capital Shares Amount Deficit loss Equity

Balance, April 1, 2022 20,015,450 $ 200 $ 6,918 ( 19,922 ) — ( 302,068 ) ( 18,974 ) ( 313,924 )

Treasury stock ( 19,922 ) — — 19,922 — — — —

Net income — — — — — 22,274 — 22,274

Other comprehensive loss, net of tax — — — — — — ( 4,344 ) ( 4,344 )

Vested restricted stock 12,401 — — — — — — —

Shares withheld related to net share settlement ( 7,897 ) — ( 417 ) — — — — ( 417 )

Repurchase of common stock — — — ( 189,114 ) ( 7,596 ) — — ( 7,596 )

Share-based compensation — — 4,781 — — — — 4,781

Issuance of shares under ESPP 15,806 — 631 — — — — 631

Reclassifications related to the Separation (Note 1)

— — — — — ( 622 ) — ( 622 )

Balance, June 30, 2022 20,015,838 $ 200 $ 11,913 ( 189,114 ) ( 7,596 ) ( 280,416 ) ( 23,318 ) ( 299,217 )

Common stock Additional

paid-in Treasury stock Accumulated Accumulated other comprehensive Net parent Total

Shares Amount capital Shares Amount Deficit loss investment Equity

Balance, January 1, 2021 — $ — $ — — $ — $ — $ ( 55,966 ) $ 1,178,508 $ 1,122,542

3 unchanged sentences

Parent contribution — $ — $ — — $ — $ — — 38,699 $ 38,699

Balance, March 31, 2021 — $ — $ — — $ — $ — $ ( 63,674 ) $ 1,239,667 $ 1,175,993

Balance, June 30, 2021 — $ — $ — — $ — $ — $ ( 61,273 ) $ 1,295,005 $ 1,233,732

Common stock Additional

4 unchanged sentences

Other comprehensive loss, net of tax — — — — — — ( 6,461 ) ( 6,461 )

Vested restricted stock 49,271 — — — — — — —

Shares withheld related to net share settlement ( 27,819 ) — ( 1,590 ) — — — — ( 1,590 )

Repurchase of common stock — — — ( 189,114 ) ( 7,596 ) — — ( 7,596 )

Treasury stock 19,922 — — ( 19.922 ) — — — —

Share-based compensation — — 9,994 — — — — 9,994

Reclassifications related to bonuses and other corporate accruals prior to the Separation (Note 1)

Issuance of shares under ESPP 15,806 — 631 — — — — 631

Reclassifications related to the Separation (Note 1)

— — — — — ( 2,509 ) — ( 2,509 )

Balance, March 31, 2022 20,015,450 $ 200 $ 6,918 — $ — $ ( 302,068 ) $ ( 18,974 ) $ ( 313,924 )

Balance, June 30, 2022 20,015,838 $ 200 $ 11,913 ( 189,114 ) $ ( 7,596 ) $ ( 280,416 ) $ ( 23,318 ) $ ( 299,217 )

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

Basis of Presentation

9 unchanged sentences

Ziff Davis retained a 19.9 % interest in Consensus following the Separation.

Subsequently Ziff Davis has sold, or otherwise disposed of, a portion of its Consensus shares, reducing its beneficial ownership in the Company to 9.8 % as of June 30, 2022 (see Note 17 - Related Party Transactions).

Principles of Consolidation

4 unchanged sentences

J2 Cloud Services was a wholly-owned subsidiary of Ziff Davis, and together with its subsidiaries, was a provider of internet services, including cloud-based subscription services to consumers and businesses including cloud fax, voice, cybersecurity, privacy and marketing technology.

For periods prior to the Separation, the interim condensed consolidated financial statements Consensus included an allocation of certain corporate expenses related to services provided to J2 Cloud Services by Ziff Davis.

For periods prior to the Separation, the interim condensed consolidated financial statements of Consensus included an allocation of certain corporate expenses related to services provided to J2 Cloud Services by Ziff Davis.

These expenses included the cost of executive management, information technology, legal, treasury, risk management, human resources, accounting and financial reporting, investor relations, public relations, and internal audit services provided by the Former Parent company personnel to J2 Cloud Services.

37 unchanged sentences

The Company accounts for long-lived assets, which include property and equipment, operating lease right-of-use assets and identifiable intangible assets with finite useful lives (subject to amortization), in accordance with the provisions of FASB ASC Topic No.

360, Property, Plant, and Equipment (“ASC 360”), which requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

360, Property, Plant, and Equipment (“ASC 360”).

ASC 360 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability is measured by comparing the carrying amount of an asset to the expected undiscounted future net cash flows generated by the asset.

3 unchanged sentences

• Significant underperformance relative to expected historical or projected future operating results;

• Significant changes in the manner of our use of the acquired assets or the strategy for J2 Cloud Services overall business;

• Significant changes in the manner of the Company’s use of the acquired assets or the strategy for J2 Cloud Services overall business;

• Significant negative industry or economic trends;

1 unchanged sentence

• The Company’s market capitalization relative to net book value.

If the Company determined that the carrying value of definite-lived intangibles and long-lived assets may not be recoverable based upon the existence of one or more of the above indicators of impairment, it would record an impairment equal to the excess of the carrying amount of the asset over its estimated fair value.

If the Company determines that the carrying value of definite-lived intangibles and long-lived assets may not be recoverable based upon the existence of one or more of the above indicators of impairment, it would record an impairment equal to the excess of the carrying amount of the asset over its estimated fair value.

The Company assessed whether events or changes in circumstances have occurred that potentially indicate the carrying amount of long-lived assets may not be recoverable.

No impairment was recorded in the first quarter of 2022.

In the first quarter of 2021, the Company recorded impairment of certain operating right-of-use assets (see Note 9 - Leases).

The Company classifies its long-lived assets to be sold as held for sale in the period (i) it has approved and committed to a plan to sell the asset, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable, (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

No impairment was recorded in the second quarter of 2022.

In the second quarter of 2021, the Company recorded impairment of certain operating right-of-use assets related to the non-fax business (refer to Note 5 - Discontinued Operations and Disposition of Businesses).

The Company classifies its long-lived assets to be sold as held for sale in the period if (i) it has approved and committed to a plan to sell the asset, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable, (v) the

asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

The Company initially measures a long-lived asset that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell.

1 unchanged sentence

Conversely, gains are not recognized on the sale of a long-lived asset until the date of sale.

Upon designation as an asset held for sale, the Company stops recording

depreciation expense on the asset.

Upon designation as an asset held for sale, the Company stops recording depreciation expense on the asset.

The Company assesses the fair value of a long-lived asset less any costs to sell at each reporting period and until the asset is no longer classified as held for sale.

9 unchanged sentences

Identifiable intangible assets are comprised of purchased customer relationships, trademarks and trade names, developed technologies and other intangible assets.

Intangible assets subject to amortization are amortized over the period of estimated economic benefit ranging from 1 to 20 years and are included in general and administrative expenses on the Condensed Consolidated Statements of Income.

Intangible assets subject to amortization are amortized over the period of estimated economic benefit ranging from 1 to 20 years, with amortization expense included in general and administrative expenses on the Condensed Consolidated Statements of Income.

The Company evaluates its goodwill and indefinite-lived intangible assets for impairment pursuant to FASB ASC Topic No.

5 unchanged sentences

If the carrying value of a reporting unit exceeds the reporting unit’s fair value, an impairment loss is recognized for the difference.

No impairment was recorded in the first quarter of 2022 and 2021.

No impairment was recorded in the second quarter of 2022 and 2021.

Historically, J2 Cloud Services was included in the federal consolidated and state combined income tax returns with the Former Parent and its other subsidiaries.

16 unchanged sentences

The valuation allowance is reviewed quarterly based upon the facts and circumstances known at the time.

In assessing this

valuation allowance, the Company reviews historical and future expected operating results and other factors, including its recent cumulative earnings experience, expectations of future taxable income by taxing jurisdiction and the carryforward periods available for tax reporting purposes, to determine whether it is more likely than not that deferred tax assets are realizable.

In assessing this valuation allowance, the Company reviews historical and future expected operating results and other factors, including its recent cumulative earnings experience, expectations of future taxable income by taxing jurisdiction and the carryforward periods available for tax reporting purposes, to determine whether it is more likely than not that deferred tax assets are realizable.

ASC 740 provides guidance on the minimum threshold that an uncertain income tax benefit is required to meet before it can be recognized in the financial statements and applies to all income tax positions taken by a company.

33 unchanged sentences

The chief operating decision maker views the Company as one reportable segment known as Cloud Fax (see Note 15 - Segment Information).

Reclassifications to correct prior period errors

In the first quarter of 2022, the Company identified certain errors related to executive bonuses and other corporate charges incurred prior to the Separation that were incorrectly treated as equity contributions at the time of the Spin-off rather than liabilities.

The Company recorded a reclassification of $ 1.9 million from equity to accrued expenses and due to Former Parent to correct the prior period errors on the balance sheet.

Reclassifications to prior period

During 2022, the Company identified certain improper classifications related to executive bonuses and other corporate charges incurred prior to the Separation that were incorrectly treated as equity contributions at the time of the Spin-off rather than liabilities.

The Company recorded a reclassification of $ 0.6 million and $ 2.5 million for the three and six months ended June 30, 2022 from equity to accrued expenses and due to Former Parent to correct the prior period classification on the balance sheet.

The Company determined that the impact of this reclassification was not material to the current or prior period financial statements.

Recent Accounting Pronouncements

In March 2020, the FASB issued ASU No.

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2020-04, Reference Rate Reform (Topic 848):

16 unchanged sentences

The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, including the interim periods within those fiscal years.

adoption is permitted.

The Company early adopted ASU 2021-08 in the second quarter of 2022 and applied it to the Summit acquisition as disclosed within Note 4 - Business Acquisitions.

As a result of this adoption, the Company recognized $ 0.9 million in Deferred revenue with a corresponding increase in Goodwill.

In June 2022, the FASB issued ASU No.

2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.

This ASU clarifies the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security and introduces new disclosure requirements or equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820.

The amendments in this ASU are effective for fiscal years beginning after December 15, 2024, including the interim periods within those fiscal years.

Early adoption is permitted.

3 unchanged sentences

Revenues from external customers classified by revenue source are as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Corporate $ 49,140 $ 41,961 $ 95,658 $ 83,115

Small office home office (“SoHo”) 44,002 45,790 88,409 91,164

Other 21 91 21 183

Total revenues $ 93,163 $ 87,842 $ 184,088 $ 174,462

3 unchanged sentences

Total $ 93,163 $ 87,842 $ 184,088 $ 174,462

The Company has recorded $ 10.9 million and $ 12.3 million of revenue for the three months ended March 31, 2022 and 2021, respectively, which was previously included in the deferred revenue balance as of the beginning of each respective year.

As of March 31, 2022 and December 31, 2021, the Company acquired $ 2.6 million and zero , respectively, of deferred revenue in connection with the Company’s business acquisitions (see Note 4 - Business Acquisitions) which are subject to purchase accounting adjustments.

The Company has recorded $ 4.3 million of revenue for both the three months ended June 30, 2022 and 2021 and $ 15.2 million and $ 16.6 million of revenue for the six months ended June 30, 2022 and 2021, respectively, that was previously included in the deferred revenue balance as of the beginning of each respective year.

As of June 30, 2022 and December 31, 2021, the Company acquired $ 5.1 million and zero , respectively, of Deferred revenue in connection with the Company’s business acquisitions (see Note 4 - Business Acquisitions), which are subject to purchase accounting adjustments.

Performance Obligations

11 unchanged sentences

This has been determined based on the fact that the nature of services offered are subscription based, where the customer simultaneously receives and consumes the benefit of the services provided regardless of whether the customer uses the services or not.

Depending on the individual contracts with the customer, revenue for these services are recognized over the contract period when faxing capabilities are provided.

The Company has concluded that the best measure of progress toward the complete satisfaction of the performance obligation over time is a time-based measure.

Depending on the individual contracts with the customer, revenues for these services are recognized over the contract period when faxing capabilities are provided.

The Company has concluded that the best measure of progress toward the complete satisfaction of the performance obligations over time is a time-based measure.

The Company recognizes revenue on a straight-line basis throughout the subscription period and believes that the method used is a faithful depiction of the transfer of goods and services.

2 unchanged sentences

As a practical expedient, the Company has not assessed whether a contract has a significant financing component because the Company expects at contract inception that the period between payment by the customer and the transfer of promised goods or services by the Company to the customer will be one year or less.

In addition, the Company has determined that the payment terms that the Company provides to its customers are structured primarily for reasons other than the provision of finance to the Company.

In addition, the Company has determined that the payment terms the Company provides to its customers are structured primarily for reasons other than the provision of finance to the Company.

The Company typically charges a single upfront amount for the services because other payment terms would affect the nature of the risk assumed by the Company to provide service given the costs of the customer acquisition and the highly competitive and commoditized nature of the business Consensus operates which allows customers to easily move from one provider to another.

3 unchanged sentences

Costs primarily consist of incentive compensation paid based on the achievements of sales targets in a given period for related revenue streams and are recognized in the month when the revenue is earned.

Incentive compensation is paid on the issuance or renewal of the customer contract.

As a practical expedient, for amortization periods which are determined to be one year or less, the Company expenses any incremental costs of obtaining the contract with a customer when incurred.

Incentive compensation is paid upon the issuance or renewal of the customer contract.

As a practical expedient, for amortization periods that are determined to be one year or less, the Company expenses any incremental costs of obtaining the contract with a customer when incurred.

For those customer contracts greater than one year, the Company capitalizes and amortizes the expenses over the period of benefit.

2 unchanged sentences

Business Acquisitions

On February 4, 2022, in a cash transaction, the Company acquired certain assets of Summit Healthcare Services, Inc., a Massachusetts based provider of secure interoperability solutions within the healthcare industry for a total consideration of $ 15.0 million.

The Condensed Consolidated Statement of Income since the date of acquisition and balance sheet as of March 31, 2022, reflect the results of operations of this 2022 acquisition.

For the three months ended March 31, 2022, this acquisition contributed $ 0.8 million to the Company’s revenues.

The Condensed Consolidated Statement of Income since the date of acquisition and balance sheet as of June 30, 2022, reflect the results of operations of this 2022 acquisition.

For the six months ended June 30, 2022, this acquisition contributed $ 3.4 million to the Company’s revenues.

Net income contributed by this acquisition was not separately identifiable due to the Company’s integration activities and is not material.

Total consideration for this transaction was $ 14.4 million, net of cash acquired and assumed liabilities and is subject to certain post-closing adjustments which may increase or decrease the final consideration paid.

The following table summarizes the allocation of the purchase consideration for this acquisition (in thousands):

Total consideration for this transaction was $ 14.4 million, net of cash acquired, and is subject to certain post-closing adjustments which may increase or decrease the final consideration paid.

The following table summarizes the preliminary allocation of the purchase consideration, net of cash acquired, for this acquisition (in thousands):

Assets and Liabilities Valuation

11 unchanged sentences

Total $ 14,355

The initial accounting for the Summit acquisition is incomplete due to timing of available information and is subject to change.

The Company has recorded provisional amounts which may be based upon past acquisitions with similar attributes for certain intangible assets (including trade names, software and customer relationships), preliminary acquisition date working capital, and related tax items.

The initial accounting for the Summit acquisition is preliminary and subject to change.

The Company expects to finalize the accounting for the Summit acquisition within twelve months of the acquisition date.

The Company recorded $ 1.6 million in additional Deferred revenue with a corresponding increase in Goodwill related to the Summit acquisition as a measurement period adjustment during the quarter ended June 30, 2022.

Additionally, as a result of the early adoption of ASU 2021-08 in the second quarter of 2022 the Company recognized $ 0.9 million in Deferred revenue with a corresponding increase in Goodwill.

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and represents intangible assets that do not qualify for separate recognition.

Goodwill recognized associated with this acquisition during the three months ended March 31, 2022 is $ 5.5 million, of which $ 5.5 million is expected to be deductible for income tax purposes.

Goodwill recognized associated with this acquisition during the six months ended June 30, 2022 is $ 8.0 million, of which $ 8.0 million is expected to be deductible for income tax purposes.

Discontinued Operations and Disposition of Businesses

On October 7, 2021, the Former Parent transferred certain assets and liabilities associated with its Cloud Fax business to Consensus, including the equity interests in J2 Cloud Services, in exchange for approximately $ 259.1 million in cash, an asset related to the $ 500 million aggregate principal amount of the 6.5 % Senior Notes due 2028, and the return of the assets and liabilities related to the non-fax business back to Ziff Davis.

On October 7, 2021, the Former Parent transferred certain assets and liabilities associated with its Cloud Fax business to Consensus, including the equity interests in J2 Cloud Services, in exchange for approximately $ 259.1 million in cash, an asset related to the $ 500 million aggregate principal amount of the 6.5 % Senior Notes due in 2028, and the return of the assets and liabilities related to the non-fax business back to Ziff Davis.

The transfer to the Former Parent of the non-fax business met the accounting requirements to be presented as a discontinued operation once the Separation was completed as the disposition of the non-fax business constitutes a strategic shift that will have a major effect on the Company’s operations relative to the historical operations of J2 Cloud Services.

Accordingly, the condensed consolidated financial statements reflect the results of the non-fax business as a discontinued operation for all periods presented.

The Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Income report discontinued operations separate from continuing operations.

The Condensed Consolidated Statements of Comprehensive Income, Condensed Consolidated Statements of Cash Flows and Condensed Consolidated Statements of Stockholders’ Equity combine continuing and discontinued operations.

The Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Comprehensive Income, Condensed Consolidated Statements of Cash Flows and Consolidated Statements of Stockholders’ Equity include the non-fax business activity through October 7, 2021.

The Condensed Consolidated Statements of Income report discontinued operations separate from continuing operations.

The Condensed Consolidated Statements of Comprehensive Income, Condensed Consolidated Statements of Cash Flows and Condensed Consolidated Statements of Stockholders’ (Deficit) Equity combine continuing and discontinued operations.

The Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Comprehensive Income, Condensed Consolidated Statements of Cash Flows and Consolidated Statements of Stockholders’ (Deficit) Equity include the non-fax business activity through October 7, 2021.

The key components of income from discontinued operations that were included in the Company’s Condensed Consolidated Statement of Income are as follows (in thousands):

Three Months Ended March 31, 2021

Three Months Ended

June 30, 2021 Six Months Ended

June 30, 2021

$ 87,517 $ 172,326

Cost of revenues

23,635 46,629

Gross Profit 63,882 125,697

1 unchanged sentence

Sales and marketing

24,741 45,478

Research, development and engineering

General and administrative

26,112 55,323

Goodwill impairment on business 32,629 32,629

Total operating expense 88,659 143,550

4 unchanged sentences

Income from discontinued operations before income taxes

( 23,610 ) ( 14,481 )

Income tax expense

( 12,273 ) ( 11,271 )

Income from discontinued operations, net of income taxes

$ ( 11,337 ) $ ( 3,210 )

The key components of cash flows from discontinued operations are as follows (in thousands):

Three Months Ended March 31, 2021

Six Months Ended

June 30, 2021

Depreciation and amortization

Capital expenditure

Share-based compensation expense

Share-based compensation

Non-cash operating lease costs 3,189

2 unchanged sentences

Gain on sale of businesses 2,802

Goodwill impairment on business 32,629

Prior to the Separation, the Company completed the following dispositions that did not meet the criteria for discontinued operations by themselves but were subsequently classified as discontinued operations as they are part of the non-fax business transferred back to the Former Parent.

1 unchanged sentence

During the first quarter of 2021, the Company committed to a plan to sell certain Voice assets in the United Kingdom as they were determined to be non-core assets.

On February 9, 2021, in a cash transaction, the Company sold the Voice assets for a gain of $ 2.0 million which was recorded in discontinued operations on the Condensed Consolidated Statement of Income for the three months ended March 31, 2021.

On February 9, 2021, in a cash transaction, the Company sold the Voice assets.

For the three and six months ended June 30, 2021, the Company recognized a gain associated with the sale of the Voice assets of $ 0.8 million and $ 2.8 million, respectively, which was recorded in discontinued operations on the Condensed Consolidated Statement of Income.

B2B Back-up Held-for-Sale (Non-Consensus)

During the first quarter of 2021, the Company committed to a plan to sell its B2B Backup business as it was determined to be a non-core business.

The B2B Backup business met the held for sale criteria, and accordingly, the assets and liabilities were presented as held for sale on the Consolidated Balance Sheets at March 31, 2021 and June 30, 2021.

second quarter of 2021, the Company received an offer to purchase the business.

Management has determined that the fair value of the business less cost to sell is lower than its carrying amount.

As a result, the Company recorded an impairment to goodwill of $ 32.6 million which was recorded in discontinued operations on the Condensed Consolidated Statement of Income.

Fair Value Measurements

7 unchanged sentences

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The fair value of long-term debt is determined using recent quoted market prices or dealer quotes for each of the Company’s instruments, which are Level 1 inputs (see Note 8 - Long-Term Debt).

The fair value of long-term debt is determined using recent quoted market prices or dealer quotes for each of the Company’s instruments, which are Level 1 inputs (see Note 8 - Debt).

Goodwill and Intangible Assets

6 unchanged sentences

Identifiable intangible assets are amortized over the period of estimated economic benefit, which ranges from 1 year to 20 years.

In the three months ended March 31, 2022, the Company acquired technology for jSign, a corporate solution that provides electronic signature and digital signature solutions to businesses, offering document markup and end-user signing services via mobile-aware web application and enterprise API.

The purchase price was $ 1.0 million and the asset is included in Other Purchased Intangibles on the Condensed Consolidated Balance Sheet.

The changes in carrying amounts of goodwill for the three months ended March 31, 2022 are as follows (in thousands):

In the six months ended June 30, 2022, the Company acquired technology for jSign, a corporate solution that provides electronic signature and digital signature solutions to businesses, offering document markup and end-user signing services via mobile-aware web application and enterprise API.

The purchase price was $ 1.0 million and the asset is included in Intangibles, net on the Condensed Consolidated Balance Sheet.

The changes in carrying amounts of goodwill for the six months ended June 30, 2022 are as follows (in thousands):

Balance as of January 1, 2022 $ 339,209

1 unchanged sentence

Foreign exchange translation 635

Balance as of March 31, 2022 $ 344,025

Balance as of June 30, 2022 $ 347,855

Intangible Assets with Indefinite Lives:

Intangible assets are summarized as of March 31, 2022 and December 31, 2021 as follows (in thousands):

March 31, 2022 December 31, 2021

Intangible assets are summarized as follows (in thousands):

June 30, 2022 December 31, 2021

Trade names $ 27,323 $ 27,388

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Intangible Assets Subject to Amortization:

As of March 31, 2022, intangible assets subject to amortization relate primarily to the following (in thousands):

As of June 30, 2022, intangible assets subject to amortization relate primarily to the following (in thousands):

Weighted-Average

26 unchanged sentences

Total $ 20,923

Amortization expense was $ 1.5 million and $ 1.7 million for the three months ended March 31, 2022 and 2021, respectively.

Long-term debt as of March 31, 2022 and December 31, 2021 consists of the following (in thousands):

March 31, 2022 December 31, 2021

Amortization expense was $ 1.1 million and $ 1.5 million for the three months ended June 30, 2022 and 2021, respectively.

Amortization expense was $ 2.6 million and $ 3.2 million for the six months end June 30, 2022 and 2021, respectively.

Long-term debt consists of the following (in thousands):

June 30, 2022 December 31, 2021

2026 Senior Notes $ 305,000 $ 305,000

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Total long-term debt $ 792,916 $ 792,040

Interest expense was $ 13.3 million and $ 0.2 million for the three months ended March 31, 2022 and 2021, respectively.

2026 Senior Notes

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Consensus received proceeds of $ 301.2 million, after deducting the initial purchasers’ discounts, commissions and offering expenses.

The 2026 6.0 % Senior Notes are presented as long-term debt, net of deferred issuance costs, on the Condensed Consolidated Balance Sheet as of March 31, 2022.

The 2026 6.0 % Senior Notes are presented as long-term debt, net of deferred issuance costs, on the Condensed Consolidated Balance Sheet as of June 30, 2022.

The 2026 Senior Notes bear interest at a rate of 6.0 % per annum, payable semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2022.

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In addition, if such net leverage ratio is in excess of 3.0 to 1.0, the restriction on restricted payments is subject to various exceptions, including the total aggregate amount not to exceed the greater of (A) $ 100.0 million and (B) 50.0 % of EBITDA for the most recently ended four fiscal quarter period ended immediately prior to such date for which internal financial statements are available.

The Company is in compliance with its debt covenants as of March 31, 2022.

As of March 31, 2022 and December 31, 2021, the estimated fair value of the 2026 Senior Notes was approximately $ 302.7 million and $ 316.1 million, respectively, and was based on quoted market prices or dealer quotes for the 2026 Senior Notes which are Level 1 inputs in the fair value hierarchy.

The Company is in compliance with its debt covenants as of June 30, 2022.

As of June 30, 2022 and December 31, 2021, the estimated fair value of the 2026 Senior Notes was approximately $ 261.5 million and $ 316.1 million, respectively, and was based on quoted market prices or dealer quotes for the 2026 Senior Notes which are Level 1 inputs in the fair value hierarchy.

2028 Senior Notes

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Ziff Davis then exchanged the 2028 Senior Notes with lenders under its credit agreement (or their affiliates) in exchange for extinguishment of a similar amount indebtedness under such credit agreement for a total amount of $ 483.8 million, after deducting the initial purchasers’ discounts, commissions and offering expenses.

The 2028 Senior Notes were presented as long-term debt, net of deferred issuance costs, on the Condensed Consolidated Balance Sheet as of March 31, 2022.

The 2028 Senior Notes were presented as long-term debt, net of deferred issuance costs, on the Condensed Consolidated Balance Sheet as of June 30, 2022.

The 2028 Senior Notes bear interest at a rate of 6.5 % per annum, payable semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2022.

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The Company is in compliance with its debt covenants as of March 31, 2022.

As of March 31, 2022 and December 31, 2021, the estimated fair value of the 2028 Senior Notes was approximately $ 495.6 million and $ 521.2 million, respectively, and was based on quoted market prices or dealer quotes for the 2028 Senior Notes which are Level 1 inputs in the fair value hierarchy.

The Company is in compliance with its debt covenants as of June 30, 2022.

As of June 30, 2022 and December 31, 2021, the estimated fair value of the 2028 Senior Notes was approximately $ 407.5 million and $ 521.2 million, respectively, and was based on quoted market prices or dealer quotes for the 2028 Senior Notes which are Level 1 inputs in the fair value hierarchy.

Credit Agreement

On March 4, 2022, the Company entered into a Credit Agreement (the “Credit Agreement”) with certain lenders party thereto (the “Lenders) and MUFG Union Bank, N.A., as agent (the “Agent”).

Pursuant to the Credit Agreement, the Lenders have provided MUFG has provided Consensus with a senior secured revolving credit facility of $ 25.0 million (the “Credit Facility”).

Pursuant to the Credit Agreement, the Lenders have provided MUFG has provided Consensus with a senior secured revolving credit facility of $ 25.0 million (the “Credit Facility”) with an option held by the Company to obtain an additional commitment of up to a maximum of $ 25.0 million.

The final maturity of the Credit Facility will occur on March 4, 2027.

As of March 31, 2022, no amount has been drawn down on the Credit Facility.

As of June 30, 2022, no amount has been drawn down on the Credit Facility.

The Credit Facility is guaranteed by each wholly-owned material domestic subsidiary of Consensus, and secured by substantially all assets of Consensus and the guarantors.

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These covenants contain certain exceptions.

Unsecured indebtedness may be incurred, assets may be

disposed of, restricted payments may be made and investments may be made, in each case subject to compliance with the Company’s financial covenants.

The Company is in compliance with its covenants as of March 31, 2022.

Unsecured indebtedness may be incurred, assets may be disposed of, restricted payments may be made and investments may be made, in each case subject to compliance with the Company’s financial covenants.

The Company is in compliance with its covenants as of June 30, 2022.

The Company leases certain facilities and equipment under non-cancelable operating and finance leases which expire at various dates through 2031.

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The components of lease expense were as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Operating lease cost $ 607 $ 628 $ 1,236 $ 1,255

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Supplemental balance sheet information related to leases was as follows (in thousands):

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Operating leases

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Total operating lease liabilities $ 16,905 $ 16,529

(1) Included in “Other assets” in the Consolidated Balance Sheet.

(1) The full amount of the finance leases were prepaid.

1 unchanged sentence

Supplemental cash flow information related to leases was as follows (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Cash paid for amounts included in the measurement of lease liabilities:

3 unchanged sentences

Other supplemental operating lease information consists of the following:

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Operating leases:

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Weighted average discount rate 4.8 % 4.8 %

Maturities of operating lease liabilities as of March 31, 2022 were as follows (in thousands):

Maturities of operating lease liabilities as of June 30, 2022 were as follows (in thousands):

Operating Leases

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The Company does not believe, based on current knowledge, that any legal proceedings or claims currently exist which, after giving effect to existing accrued liabilities, are likely to have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.

It is the Company’s policy to expense as incurred legal fees related to any litigation.

It is the Company’s policy to expense legal fees related to any litigation as incurred.

Non-Income Related Taxes

The Company has not historically withheld sales tax in states where it was not able to quantify the appropriate sales tax to be withheld.

The Company has not historically collected sales tax in states where it was not able to quantify the appropriate sales tax to be collected.

The Company believes it is probable that sales tax liability exists for its corporate accounts for the periods 2017 through 2021.

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Therefore it cannot estimate the sales tax liability for these corporate customers.

The Company is currently analyzing the pool of corporate customers subject to sales tax in order to estimate the liability and will record an accrual when the exposure is estimable.

The Company is currently analyzing the pool of corporate customers subject to sales tax in order to estimate the liability and will record an accrual when the exposure is probable and estimable.

The Company currently cannot estimate the range of sales tax liability for corporate customers.

In the year ended December 31, 2021, the Company determined that a sales tax liability is probable and it developed a methodology to estimate the liability for the sales tax for the SoHo revenue stream during the affected periods 2017 through 2021.

The Company has taken the same approach in estimating the liability for the three months ended March 31, 2022.

Accordingly, the Company has recorded a sales tax expense in three months ended March 31, 2022 and 2021 of $ 0.8 million and zero , respectively, for the period, net of federal income tax benefit of $ 0.2 million.

In the year ended December 31, 2021, the Company determined that a sales tax liability is probable and it developed a methodology to estimate the sales tax liability for the SoHo revenue stream during the affected periods 2017 through 2021.

The Company has taken the same approach in estimating the liability for the six months ended June 30, 2022.

Accordingly, the Company has recorded a sales tax expense in the six months ended June 30, 2022 and 2021 of $ 1.1 million and zero , respectively.

Historically, we were included in the federal consolidated and state combined income tax returns with the Former Parent and its other subsidiaries.

For purposes of the prior period condensed consolidated financial statements, the Company’s taxes were determined using the separate return method as if the Company had filed separate tax returns as a C-Corporation.

Accordingly, income tax amounts computed under this method (including deferred taxes and net operating loss carryforwards) may differ from amounts included in the Parent’s historical consolidated provision.

Accordingly, income tax amounts computed under this method (including deferred taxes and net operating loss carryforwards) may differ from amounts included in the Former Parent’s historical consolidated provision.

Pursuant to the terms of the Separation, any tax liabilities with respect to Discontinued Operations remains the responsibility of the Former Parent.

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Each quarter the Company updates its estimated annual effective tax rate and, if the estimate changes, makes a cumulative adjustment.

The Company’s effective tax rate was 27.4 % and 24.3 % for the three months ended March 31, 2022 and 2021, respectively.

The Company’s increased rate during the three months ended March 31, 2022 is primarily due to certain compensation not being deductible for tax.

Income before income taxes included income from domestic operations of $ 0.8 million and $ 29.4 million for the three months ended March 31, 2022 and 2021, respectively, and income from foreign operations of $ 24.9 million and $ 22.4 million for the three months ended March 31, 2022 and 2021, respectively.

As of March 31, 2022 and December 31, 2021, the Company had $ 4.8 million and $ 4.8 million, respectively, in liabilities for uncertain income tax positions.

Changes in the geographical mix, permanent differences or the estimated level of annual pre-tax income can affect the effective tax rate.

The Company’s effective tax rate for the three months ended June 30, 2022 and 2021 was 26.3 % and 24.3 %, respectively.

The Company’s effective tax rate for the six months ended June 30, 2022 and 2021 was 26.8 % and 24.3 %, respectively.

The Company’s increased rate during the three and six months ended June 30, 2022 is primarily due to certain expenses not being deductible for tax.

Income before income taxes included income from domestic operations of $ 4.5 million and $ 57.4 million for the six months ended June 30, 2022 and 2021, respectively, and income from foreign operations of $ 51.5 million and $ 45.8 million for the six months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022 and December 31, 2021, the Company had $ 6.3 million and $ 4.8 million, respectively, in liabilities for uncertain income tax positions.

Accrued interest and penalties related to unrecognized tax benefits are recognized in income tax expense on the Company’s Condensed Consolidated Statements of Income.

Cash paid for income taxes net of refunds received was $ 3.6 million and $ 1.2 million for the three months ended March 31, 2022 and 2021, respectively.

Certain taxes are prepaid during the year and, where appropriate, included within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheet.

The Company’s prepaid tax payments were zero at March 31, 2022 and December 31, 2021, respectively.

Income Tax Audits :

The Company files tax returns in the US, Ireland, Netherlands, France, Canada, Japan and Hong Kong.

As of March 31, 2022, the Company is not under audit in any jurisdiction that it operates within.

As of June 30, 2022, the Company is not under audit in any jurisdiction that it operates within.

The Company has not filed any tax returns for the post spin periods, however it does have some international subsidiaries who have previously filed tax returns in their local jurisdictions.

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On March 1, 2022, the Company’s Board of Directors approved a share buyback program.

Under this program, the Company may purchase in the public market or in off-market transactions up to $ 100.0 million worth of the Company’s common stock through February 2025.

Under this program, the Company may purchase, in the public market or in off-market transactions, up to $ 100.0 million of the Company’s common stock through February 2025.

The timing and amounts of purchases will be determined by the Company, depending on market conditions and other factors it deems relevant.

During the first quarter of 2022, the Company entered into Rule 10b-18 and Rule 10b5-1 trading plans and during the three months ended March 31, 2022, the Company repurchased zero shares under these program.

Periodically, participants in the Consensus’ Equity Incentive Plan surrender to the Company shares of the Company’s stock to satisfy tax withholding obligations arising upon the vesting of restricted stock.

During the three months ended March 31, 2022, participants surrendered to the Company 19,922 shares from plan participants for this purpose at an aggregate cost of $ 1.2 million.

The Company entered into Rule 10b-18 and Rule 10b5-1 trading plans and during the three months ended June 30, 2022, the Company repurchased 189,114 shares under this program.

Cumulatively as of June 30, 2022, 189,114 shares were repurchased at an aggregate cost of $ 7.6 million.

At the time of certain vesting events related to restricted stock units or restricted stock awards that are held by participants in Consensus’ Equity Incentive Plan, a portion of the awards subject to vesting are withheld by the Company to satisfy the employees’ tax withholding obligations that arise upon the vesting of restricted stock.

As a result, the number of shares issued upon vesting for these awards is net of the statutory withholding requirements that the Company pays on behalf of its employees.

Although shares withheld are not issued, they are treated as common share repurchases in the Company’s condensed consolidated financial statements, as they reduce the number of shares that would have been issued upon vesting.

These shares do not count against the authorized capacity under the Company’s share repurchase program described above.

During the three and six months ended June 30, 2022 the Company withheld shares on its vested restricted stock units relating to its share-based compensation plans of 7,897 and 27,819 shares, respectively

The Company currently does not issue dividends to Consensus shareholders.

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Vesting periods are approximately one year for awards to members of the Company’s Board of Directors, four years for staff and five years for the Chief Executive Officer and Chief Operating Officer (excluding market-based awards discussed below).

The Company granted 26,612 shares of restricted stock and restricted stock units (excluding awards with market conditions below) during the three months ended March 31, 2022.

Restricted Stock Awards with Market Conditions

The Company granted 23,632 shares and 50,244 shares of restricted stock and restricted stock units (excluding awards with market conditions below) during the three and six months ended June 30, 2022, respectively.

Restricted Stock and Restricted Stock Units with Market Conditions

The Company has awarded certain key employees market-based restricted stock awards pursuant to the 2021 Plan.

1 unchanged sentence

Market conditions were factored into the grant date fair value using a Monte Carlo valuation model, which utilized multiple input variables to determine the probability of the Company achieving specified stock price targets over 30 trading days.

Stock-based compensation expense related to an award with a market condition will be recognized over the requisite service period using the graded-vesting method unless the market condition has been met and requisite service period has been completed, then the expense will be accelerated and recognized in period.

During the three months ended March 31, 2022, the Company awarded 5,091 market-based restricted stock awards.

The per share weighted average grant-date fair value of the market-based restricted stock awards granted during the three months ended March 31, 2022 were $ 47.54 , as determined by the valuation.

Stock-based compensation expense related to an award with a market condition is recognized over the requisite service period using the graded-vesting method unless the market condition has been met and requisite service period has been completed, then the expense will be accelerated and recognized in period.

During the three and six months ended June 30, 2022, the Company awarded zero and 5,091 market-based restricted stock awards, respectively.

The per share weighted average grant-date fair value of the market-based restricted stock awards granted during the six months ended June 30, 2022 was $ 47.54 , as determined by the valuation.

Notwithstanding the valuation, all market-based stock awards are issued at the market value at the close of business on the date the grant is awarded.

The weighted-average fair values of market-based restricted stock awards granted have been estimated utilizing the following assumptions:

March 31, 2022

June 30, 2022

Underlying stock price at valuation date $ 57.15

1 unchanged sentence

Risk-free interest rate 1.3 %

Restricted stock award activity for the three months ended March 31, 2022 is set forth below:

Restricted stock activity for the six months ended June 30, 2022 is set forth below:

Shares Weighted-Average

1 unchanged sentence

Vested ( 27,167 ) 63.69

Nonvested at March 31, 2022 55,178 $ 56.70

Restricted stock unit activity for the three months ended March 31, 2022 is set forth below:

Nonvested at June 30, 2022

38,068 $ 53.55

Restricted stock unit activity for the six months ended June 30, 2022 is set forth below:

Shares Weighted-Average

4 unchanged sentences

Canceled ( 18,102 )

Outstanding at March 31, 2022 999,885 4.3 $ 60,123,085

Vested and expected to vest at March 31, 2022 601,934 3.5 $ 36,194,267

As of March 31, 2022, the Company had unrecognized share-based compensation cost of $ 44.5 million associated with these awards.

This cost of $ 1.1 million for awards and $ 43.3 million for units is expected to be recognized over a weighted-average period of 1.3 years and 5.2 years, respectively.

Outstanding at June 30, 2022

1,001,059 4.1 $ 43,726,257

Vested and expected to vest at June 30, 2022

619,612 3.3 $ 27,064,662

As of June 30, 2022, the Company had unrecognized share-based compensation cost of $ 39.9 million associated with these awards.

This cost of $ 0.9 million for awards and $ 39.0 million for units is expected to be recognized over a weighted-average period of 1.4 years for awards and 5.0 years for units.

(b) Employee Stock Purchase Plan

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The purchase price for each offering period is 85 % of the lesser of the fair market value of a share of common stock of the Company on the beginning or the end of the offering period, with each offering period being six months.

The Company determined that a plan provision exists which allows for the more favorable of two exercise prices, commonly referred to as a “look-back” feature.

The Company determined that a plan provision exists that allows for the more favorable of two exercise prices, commonly referred to as a “look-back” feature.

The purchase price discount and the look-back feature cause the Purchase Plan to be compensatory and the Company to recognize compensation expense.

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The Company uses an annualized dividend yield based upon the per share dividends declared by the Company’s Board of Directors.

Estimated forfeiture rates were 10.34 % as of March 31, 2022.

For the three months ended March 31, 2022, zero shares were purchased under the Purchase Plan.

Cash received upon the issuance of Consensus common stock under the Purchase Plan was zero for the three months ended March 31, 2022.

As of March 31, 2022, 989,579 shares were available under the Purchase Plan for future issuance.

The compensation expense related to the Purchase Plan has been estimated utilizing the following assumptions:

March 31, 2022

Estimated forfeiture rates were 1.94 % as of June 30, 2022.

For the three and six months ended June 30, 2022, 15,806 shares were purchased under the Purchase Plan.

Cash received upon the issuance of Consensus common stock under the Purchase Plan was $ 0.6 million for the three and six months ended June 30, 2022.

As of June 30, 2022, 973,773 shares were available under the Purchase Plan for future issuance.

The compensation expense related to the current offering period of the Purchase Plan has been estimated utilizing the following assumptions:

June 30, 2022

Risk-free interest rate 1.54 %

5 unchanged sentences

The components of basic and diluted earnings per share are as follows (in thousands, except share and per share data):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 (1)

Numerator for basic and diluted net income per common share:

1 unchanged sentence

Net income available to participating securities (2)

( 36 ) — ( 82 ) —

Net income available to common shareholders from continuing operations $ 22,238 $ 38,854 $ 40,897 $ 78,088

9 unchanged sentences

The Former Parent distributed 19,902,924 shares of Consensus common stock to holders of J2 Global common stock as of the close of business on October 1, 2021, the record date for the distribution.

This share amount was utilized for the computation of basic and diluted earnings per share for the three months ended March 31, 2021 because the number of shares issued simply reflect a recharacterization of the capital account previously held by the former parent.

This share amount was utilized for the computation of basic and diluted earnings per share for the three and six months ended June 30, 2021 because the number of shares issued simply reflect a recharacterization of the capital account previously held by the Former Parent.

(2) Represents unvested share-based payment awards that contain certain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid).

For the three months ended March 31, 2022, 495,010 anti-dilutive shares were excluded from the earnings per share calculation.

For the three and six months ended June 30, 2022, there were 495,010 anti-dilutive shares that were excluded from the earnings per share calculation.

Segment Information

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The CODM views the Company as one business, Cloud Fax.

The Company’s Cloud Fax business is driven primarily by subscription revenues that are relatively higher margin, stable and predictable from quarter to quarter with minor seasonal weakness in the fourth quarter.

The Company’s Cloud Fax business is driven primarily by subscription revenues that have relatively higher margins, are stable and predictable from quarter to quarter with minor seasonal weakness in the fourth quarter.

The accounting policies of the businesses are the same as those described in Note 1 - Basis of Presentation.

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Such information attributes revenues based on markets where revenues are reported (in thousands).

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

United States $ 73,874 $ 68,339 $ 145,012 $ 135,264

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Accumulated Other Comprehensive Loss

The following table summarizes the changes in accumulated balances of other comprehensive loss, which solely comprises of foreign currency translation adjustments, for the three months ended March 31, 2022 (in thousands):

Foreign Currency Translation

Balance as of April 1, 2022 $ ( 18,974 )

Other comprehensive loss ( 4,344 )

Net increase in other comprehensive loss ( 4,344 )

Balance as of June 30, 2022 $ ( 23,318 )

The following table summarizes the changes in accumulated balances of other comprehensive loss, which solely comprises of foreign currency translation adjustments, for the six months ended June 30, 2022 (in thousands):

Foreign Currency Translation

Balance as of January 1, 2022 $ ( 16,857 )

1 unchanged sentence

Net increase in other comprehensive loss ( 6,461 )

Balance as of March 31, 2022 $ ( 18,974 )

There were zero reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2022.

Balance as of June 30, 2022 $ ( 23,318 )

There were zero reclassifications out of accumulated other comprehensive loss for the three and six months ended June 30, 2022.

Related Party Transactions

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Ziff Davis and Consensus will have joint liability under the lease through October 7, 2022, after which time the Company will be the sole lessee under the lease.

Amounts due to Ziff Davis as of March 31, 2022 and December 31, 2021 was $ 11.7 million and $ 5.7 million, respectively, related to these items, as well as reimbursement related to certain transaction related costs.

During the second quarter of 2022, the Company paid approximately $ 11.5 million to Ziff Davis to settle co-mingled cash accounts, costs associated with the transition services agreement and Separation.

Additionally, the Company incurred approximately $ 0.4 million in costs related to the registration of shares for sale held by Ziff Davis for the three and six months ended June 30, 2022.

These costs were recorded in ‘General and administrative expenses’ within the Condensed Consolidated Statement of Income.

Subsequent to the disposition of the shares, Ziff Davis’ beneficial ownership in the Company was 9.8 %, as of June 30, 2022.

Amounts due to Ziff Davis as of June 30, 2022 and December 31, 2021 were $ 4.4 million and $ 5.7 million, respectively, related to these items, as well as reimbursement related to certain transaction related costs.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements