What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-09-09 compared with 2021-09-15 · 332 added, 494 removed, 564 unchanged (59% of the section changed)

1 unchanged sentence

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Financial Statements:

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Consolidated Statements of Comprehensive Loss

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

Consolidated Statements of Cash Flows

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We have audited the accompanying consolidated balance sheets of Intapp, Inc.

and subsidiaries (the "Company") as of June 30, 2021 and 2020, the related consolidated statements of operations, comprehensive loss, convertible preferred stock and stockholders’ deficit, and cash flows, for each of the three years in the period ended June 30, 2021, and the related notes (collectively referred to as the "financial statements").

and subsidiaries (the "Company") as of June 30, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, convertible preferred stock and stockholders' equity (deficit), and cash flows, for each of the three years in the period ended June 30, 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 June 30, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 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 revenue in fiscal year 2021 due to the adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers , and all subsequent amendments (collectively, “ASC 606”).

The Company adopted ASC 606 using the full retrospective approach.

Basis for Opinion

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We have served as the Company's auditor since 2018.

Intapp, Inc .

C ONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(As adjusted)*

June 30, 2022

June 30, 2021

Current assets:

1 unchanged sentence

Restricted cash

Accounts receivable, net

Accounts receivable, net of allowance for doubtful accounts of $ 918 and $ 764 as of June 30, 2022 and 2021, respectively

Unbilled receivables, net

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Deferred commissions, noncurrent

Liabilities, convertible preferred stock and stockholders’ deficit

Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit)

Current liabilities:

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Deferred tax liabilities

Long-term deferred revenue, net

Deferred revenue, noncurrent

Other liabilities

1 unchanged sentence

Commitments and contingencies (Note 8)

Convertible preferred stock, $0.001 par value per share,

19,870,040 shares authorized as of June 30, 2021 and 2020;

19,034,437 shares issued and outstanding as of June 30, 2021 and 2020;

Convertible preferred stock, $ 0.001 par value per share, zero and 19,870,040 shares authorized as of June 30, 2022 and 2021, respectively;

zero and 19,034,437 shares issued and outstanding as of June 30, 2022 and 2021, respectively;

liquidation preference of $ 0 and $ 203,340 as of June 30, 2022 and 2021, respectively

Stockholders’ deficit

Common stock, $0.001 par value per share,

65,000,000 and 60,000,000 shares authorized as of June 30, 2021 and 2020, respectively;

Stockholders’ equity (deficit):

Preferred stock, $ 0.001 par value per share, 50,000,000 and zero shares authorized as of June 30, 2022 and 2021, respectively;

no shares issued or outstanding as of June 30, 2022 and 2021

Common stock, $ 0.001 par value per share, 700,000,000 and 65,000,000 shares authorized as of June 30, 2022 and 2021, respectively;

62,739,497 and 29,444,577 shares issued and outstanding as of June 30, 2022 and 2021, respectively

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Accumulated deficit

Total stockholders’ deficit

Total liabilities, convertible preferred stock and stockholders’ deficit

As adjusted to reflect the impact of the full retrospective adoption of ASC 606.

See Note 2 for a summary of adjustments.

Total stockholders’ equity (deficit)

Total liabilities, convertible preferred stock and stockholders’ equity (deficit)

See accompanying notes to consolidated financial statements.

C ONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

Year Ended June 30,

(As adjusted)*

SaaS and support

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Operating loss

Loss on debt extinguishment

Interest expense

6 unchanged sentences

Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted

As adjusted to reflect the impact of the full retrospective adoption of ASC 606.

See Note 2 for a summary of adjustments.

See accompanying notes to consolidated financial statements.

C ONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

Year Ended June 30,

(As adjusted)*

Other comprehensive income (loss):

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Comprehensive loss

As adjusted to reflect the impact of the full retrospective adoption of ASC 606.

See Note 2 for a summary of adjustments.

See accompanying notes to consolidated financial statements.

C ONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share data)

1 unchanged sentence

Comprehensive

(as adjusted)*

Stockholders'

(as adjusted)*

Balance as of July 1, 2018(1)

Issuance of common stock

Equity (Deficit)

Balance as of June 30, 2019

Issuance of Series A-1 convertible preferred stock, net of issuance costs of $ 81

Repurchase of shares and fully vested options

Stock option exercises

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Balance as of June 30, 2020

Issuance of Series A-1

convertible preferred

stock, net of issuance

Repurchase of shares and

fully vested options

Issuance of common stock, net of issuance costs of $ 169

Repurchase of shares

Stock option exercises

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Balance as of June 30, 2021

Issuance of common stock,

net of issuance costs of

Repurchase of shares

Stock option exercises

Conversion of convertible preferred stock to common stock upon initial public offering

Issuance of common stock upon initial public offering, net of offering costs of $ 9,767

Issuance of common stock upon exercise of stock options

Vesting of early exercised stock options

Vesting of performance stock units and restricted stock units, net of shares withheld for taxes

Issuance of common stock under employee stock purchase plan

Stock-based compensation

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Balance as of June 30, 2022

As adjusted to reflect the impact of the full retrospective adoption of ASC 606.

See Note 2 for a summary of adjustments.

(1) The adjusted balance as of July 1, 2018 includes $27.6 million of cumulative effects of changes in accounting principle for the full retrospective adoption of ASC 606.

See accompanying notes to consolidated financial statements.

C ONSOLIDATED STATEMENTS OF CASH FLOWS

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Year Ended June 30,

(As adjusted)*

Cash Flows from Operating Activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

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Stock-based compensation

Tax benefit for business combinations

Loss on debt extinguishment

Change in fair value of contingent consideration, including unrealized foreign exchange gain

Payment of contingent consideration in excess of acquisition date fair value

Deferred income taxes

Changes in operating assets and liabilities, net of business combinations:

Accounts and other receivables

Accounts receivable

Unbilled receivables, current

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Other liabilities

Net cash used in operating activities

Net cash provided by (used in) operating activities

Cash Flows from Investing Activities:

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Shareholder contribution

Proceeds from initial public offering, net of underwriting discounts

Payments for deferred offering costs

Proceeds from common stock issuance

Proceeds from issuance of convertible preferred stock, net of issuance costs

Proceeds from stock option exercises

Proceeds from common stock issuance

Proceeds from employee stock purchase plan

Payments related to tax withholding for vested equity awards

Payments of deferred financing costs

Payments of contingent consideration

Repurchase of shares and fully vested options

Payments for deferred offering costs

Payments for debt financing costs

Net cash provided by financing activities

Effect of foreign exchange rates on cash and cash equivalents

Effect of foreign currency exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash, cash equivalents and restricted cash

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Non-cash investing and financing activities:

Purchases of property and equipment in accounts payable and accrued liabilities

Deferred offering costs in accounts payable and accrued liabilities

Acquisition holdback in other liabilities

Fair value of contingent considerations in accrued and other liabilities

Conversion of convertible preferred stock to common stock upon initial public offering

Vesting of early exercised stock options

Deferred consideration in other liabilities

Acquisition holdbacks in other liabilities

Fair value of contingent consideration in accrued and other liabilities

Business combinations, net of cash acquired:

1 unchanged sentence

Total consideration

As adjusted to reflect the impact of the full retrospective adoption of ASC 606.

See Note 2 for a summary of adjustments.

See accompanying notes to consolidated financial statements.

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Description of Business

(Intapp), formerly known as LegalApp Holdings, Inc., was incorporated in Delaware on November 27, 2012 to facilitate the acquisition of Integration Appliance, Inc.

(“Intapp” or the “Company”), formerly known as LegalApp Holdings, Inc., was incorporated in Delaware on November 27, 2012 to facilitate the acquisition of Integration Appliance, Inc.

which became a wholly owned subsidiary of Intapp, Inc.

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Intapp has no significant assets or operations other than the ownership of Integration Appliance, Inc.

Integration Appliance, Inc.

is a leading provider of industry-specific, cloud-based software solutions for the professional and financial services industry globally.

The Company is a leading provider of industry-specific, cloud-based software solutions for the global professional and financial services industry.

The Company empowers private capital, investment banking, legal, accounting, and consulting firms with the technology they need to meet rapidly changing client, investor, and regulatory requirements, deliver the right insights to the right professionals, replace legacy systems, and operate more competitively.

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Initial Public Offering

On July 2, 2021, the Company completed its Initial Public Offering (“IPO”), in which it sold 10,500,000 shares of common stock at a public offering price of $26.00 per share for net proceeds of $245.2 million after deducting underwriting discounts of $18.4 million and estimated offering costs of $9.4 million.

On July 2, 2021, the Company completed its Initial Public Offering (“IPO”), in which it sold 10,500,000 shares of common stock at a public offering price of $ 26.00 per share for net proceeds of $ 244.8 million after deducting underwriting discounts of $ 18.4 million and offering costs of $ 9.8 million.

Upon the closing of the IPO, all outstanding shares of Series A and Series A-1 convertible preferred stock automatically converted into 19,034,437 shares of common stock on a one-for-one basis .

On July 8, 2021, the underwriters of the Company’s IPO exercised in full their right to purchase an additional 1,575,000 shares of common stock at the public offering price of $ 26.00 per share, resulting in additional net proceeds of $ 38.2 million after deducting underwriting discounts of $ 2.8 million.

The consolidated financial statements as of June 30, 2021, including share and per share amounts, do not give effect to the IPO and related conversion of convertible preferred stock as they were completed subsequent to June 30, 2021.

See Note 15, Subsequent events for further details .

Summary of accounting policies

Prior to the IPO, deferred offering costs, which primarily consist of direct incremental legal and accounting fees relating to the IPO, were capitalized and recorded in other assets on the consolidated balance sheet as of June 30, 2021.

Upon the consummation of the IPO, these costs were reclassified into additional paid-in capital as a reduction of the net proceeds received from the IPO.

Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

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Those estimates and assumptions include, but are not limited to, revenue recognition including determination of the standalone selling price (“SSP”) of the deliverables included in multiple deliverable revenue arrangements;

allowance for doubtful accounts;

the depreciable lives of long-lived assets including intangible assets;

the expected useful life of deferred commissions;

the fair value of common stock used in stock-based compensation;

the fair value of assets acquired and liabilities assumed in business combination;

the fair value of stock-based awards;

the fair value of assets acquired and liabilities assumed in business combinations;

goodwill and long-lived assets impairment assessment;

the fair value of contingent consideration liabilities;

valuation allowance on deferred tax assets;

valuation allowances on deferred tax assets;

uncertain tax positions;

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The Company’s property and equipment are primarily located in the United States.

Information about geographic revenues are included in Note 3.

Information about geographic revenues is included in Note 3.

Revenue Recognition

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The Company accounts for revenues in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), which the Company adopted on July 1, 2020 using the full retrospective method of adoption.

The Company adjusted historical periods to include results as if the new revenue standard was applied to all of our client contracts as of the initial application date and the consolidated financial statements present revenues and contract costs in accordance with ASC 606 for all periods presented.

The core principle of ASC 606 is to recognize revenues upon the transfer of control of services or products to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services or products.

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The Company records revenues net of applicable sales taxes collected.

Sales taxes collected from clients are recorded as part of accounts payable in the accompanying consolidated balance sheets and are remitted to state and local taxing jurisdictions based on the filing requirements of each jurisdiction.

Sales taxes collected from clients are recorded in other current liabilities in the accompanying consolidated balance sheets and are remitted to state and local taxing jurisdictions based on the filing requirements of each jurisdiction.

Performance obligations satisfied at a point in time

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The Company’s client acquisition costs consist primarily of commissions paid to its sales team.

Commissions related to client acquisition are capitalized and amortized over the expected benefit period of four years.

Commissions related to client acquisition are capitalized and amortized over the expected benefit period of up to four years .

Commissions related to subscription licenses are expensed when control of the license is transferred to clients and commissions related to SaaS and support revenues are expensed on a straight-line basis over four years.

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The major components of research and development costs include salaries, bonuses and benefits, stock-based compensation, costs of third-party services, and allocations of various overhead and occupancy costs.

Advertising Costs

Advertising costs are expensed as incurred.

Advertising expense was $ 1.3 million for the fiscal year ended June 30, 2022 and was not significant for each of the fiscal years ended June 30, 2021 and 2020.

Stock-Based Compensation

Compensation expense related to stock-based awards made to employees, consultants and directors are calculated based on the fair value of stock-based awards on the date of grant.

The Company determines the grant date fair value of stock option awards and stock purchase rights under the Employee Stock Purchase Plan (ESPP) using the Black-Scholes option pricing model, and restricted stock units based on the fair value of the Company’s common stock on the date of grant.

The related stock-based compensation for stock option awards and restricted stock units is recognized in the consolidated statements of operations on a straight-line basis, over the period in which a participant is required to provide service in exchange for the stock-based awards, which is generally four years .

The Company recognizes compensation expense related to ESPP over the respective offering period, which is 18 to 24 months .

The Company recognizes forfeitures of stock-based awards as they occur.

This valuation model for stock-based compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation, including the expected term (weighted-average period of time that the options granted are expected to be outstanding), the volatility of the Company’s common stock and an assumed risk-free interest rate.

No compensation cost is recorded for stock-based awards that do not vest.

The Company uses historical experience and future expectations to determine the expected term, and volatility is based on an average of the historical volatilities of the common stock of public companies with characteristics similar to those of the Company.

The risk-free rate is based on the U.S.

Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option.

The Company has issued performance-based stock options and performance-based stock units that vest based upon continued service through the vesting term and achievement of certain annual recurring revenues and annual contract value targets established by the Board of Directors for a predetermined period.

The Company measures stock-based compensation expense for performance-based stock options based on the estimated grant date fair value determined using the Black-Scholes valuation model.

The Company measures the fair value of the performance-based stock units based on the fair value of the Company’s common stock on the date of grant.

The Company recognizes compensation expense for such awards in the period in which it becomes probable that the performance target will be achieved.

Compensation expense for awards that contain performance conditions is calculated using the graded vesting method and the portion of expense recognized in any period may fluctuate depending on changing estimates of the achievement of the performance conditions.

Restricted Cash

Restricted cash represents amounts held as collateral under certain facility lease agreements and company credit cards and amounts held back related to a business combination.

Restricted cash represents amounts held as collateral under certain facility lease agreements and amounts held back related to a business combination.

Accounts Receivable and Allowance for Doubtful Accounts

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Actual future losses from uncollectible accounts may differ from these estimates.

Accounts receivable, net consist of the following (in thousands):

(As adjusted)*

Accounts receivable

Allowance for doubtful accounts

Accounts receivable, net

As adjusted to reflect the impact of the full retrospective adoption of ASC 606.

See Note 2 for a summary of adjustments.

The movements in the allowance for doubtful accounts were not significant for any of the periods presented.

Property and equipment, net

Property and equipment, net are stated at cost, less accumulated depreciation and amortization.

Construction-in-progress primarily consists of leasehold improvements that have not yet been placed into service for their intended use.

Changes in the allowance for doubtful accounts are recorded as general and administrative expense in the consolidated statements of operations and were not significant for any of the periods presented.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation and amortization.

Construction-in-progress primarily consists of the construction or development of property and equipment that have not yet been placed into service for their intended use.

Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the related assets.

Depreciation on property and equipment, excluding leasehold improvements, ranges from three to five years.

Depreciation on property and equipment, excluding leasehold improvements, ranges from two to seven years .

Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful lives of the respective assets or the lease term.

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Maintenance and repair costs that do not extend the useful life of the assets are expensed as incurred.

Capitalized software development costs

Capitalized Internal-Use Software

Costs related to software acquired, developed, or modified solely to meet the Company’s internal requirements, with no substantive plans to market such software at the time of development, or costs related to development of our hosted SaaS products are capitalized during the application development stage.

The Company capitalized $2.5 million, $2.5 million and $1.9 million of costs related to software developed for internal use during the fiscal years ended June 30, 2021, 2020 and 2019, respectively, and amortized $1.2 million, $0.6 million and $0.1 million during the fiscal years ended June 30, 2021, 2020 and 2019, respectively.

The net book value of capitalized software development costs was $5.0 million and $3.6 million as of June 30, 2021 and 2020, respectively, and is included in property and equipment, net.

Deferred offering costs

Deferred offering costs, which primarily consist of direct incremental legal and accounting fees relating to the IPO, are capitalized.

The deferred offering costs will be offset against IPO proceeds upon the consummation of the offering.

A total of $9.4 million was recorded in other assets on the consolidated balance sheet as of June 30, 2021, and no amounts were deferred as of June 30, 2020.

Once the products are available for general release, capitalized costs are amortized to cost of revenue on a straight-line basis over its estimated useful life, which is generally four years .

Capitalized internal-use software development costs are recorded in property and equipment on the Company’s consolidated balance sheets.

Goodwill and Acquired Intangible Assets

Goodwill represents the excess purchase price over fair value of net tangible and identifiable intangible assets acquired in a business combination.

Goodwill is tested for impairment on an annual basis during the fourth quarter or whenever events or changes in circumstances indicate the carrying amount of the goodwill may not be recoverable.

Goodwill is tested for impairment at least annually during the fourth quarter or whenever events or changes in circumstances indicate that the carrying amount of the goodwill may not be recoverable.

The Company has determined that it is comprised of one reporting unit for purposes of its annual impairment evaluation.

As part of the annual goodwill impairment test, the Company first performs a qualitative assessment to determine whether further impairment testing is necessary.

If, as a result of its qualitative assessment, it is more-likely-than-not that the fair value of our reporting unit is less than its carrying amounts, the quantitative impairment test will be required.

There was no impairment of goodwill recorded for the fiscal years ended June 30, 2021, 2020 and 2019.

As part of the annual goodwill impairment test, the Company performs a quantitative assessment to determine whether a goodwill impairment shall be recognized.

If, as a result of its quantitative assessment, the carrying amount of the reporting unit is more than its fair value, an impairment charge in the amount of such excess is recorded to goodwill.

Intangible assets resulting from the acquisition of entities are estimated by the Company based on the fair value of assets received.

Acquired intangible assets consist of client relationships, noncompete agreements, trademarks and trade names and core technology.

Acquired intangible assets consist of client relationships, non-compete agreements, trademarks and trade names, core technology and backlog.

Certain assets are being amortized on a straight-line basis over the period of expected benefit with no calculated residual value, as follows:

1 unchanged sentence

9 to 15 years

Noncompete agreements

Non-compete agreements

Trademarks and trade names

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Impairment Assessment of Long-lived Assets

The Company reviews long-lived assets, which include property plant and equipment and finite long-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable or that the useful life is shorter than what was originally estimated.

The Company reviews long-lived assets, which include property and equipment and finite long-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable or that the useful life is shorter than what was originally estimated.

Recoverability of assets to be held and used is measured by comparing the carrying amount of each asset group to the undiscounted future net cash flows expected to be generated by the asset group over its remaining life.

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If the useful life is shorter than originally estimated, the remaining carrying value is amortized over the new shorter useful life.

No impairment charge was recorded during the fiscal years ended June 30, 2021, 2020 and 2019.

Business Combinations

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Assets and liabilities recorded at fair value are categorized based upon the level of judgment associated with the inputs used to measure their fair value.

Stock-based compensation

Compensation expense related to stock-based awards made to employees, consultants and directors are calculated based on the fair value of stock-based awards on the date of grant.

The Company determines the grant date fair value of our stock option awards using the Black-Scholes option pricing model and restricted stock units based on the fair value of the Company’s common stock on the date of grant.

The related stock-based compensation is recognized on a straight-line basis, over the period in which a participant is required to provide service in exchange for the stock-based awards, which is generally four years.

Stock-based compensation expense is recognized in the consolidated statements of operations based on awards ultimately expected to vest.

The Company recognizes forfeitures of stock-based awards as they occur.

No compensation cost is recorded for stock-based awards that do not vest.

The Company uses historical experience and future expectations to determine the expected term and volatility is based on an average of the historical volatilities of the common stock of public companies with characteristics similar to those of the Company.

The risk-free rate is based on the U.S.

Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option.

The Company has issued performance-based stock options and performance stock units that vest based upon continued service through the vesting term and achievement of certain annual recurring revenues targets established by the Board of Directors for a predetermined period.

The Company measures stock-based compensation expense for performance-based stock options based on the estimated grant date fair value determined using the Black-Scholes valuation model.

The Company measures the fair value of the performance stock units based on the fair value of the Company’s common stock on the date of grant.

The Company recognizes compensation expense for such awards in the period in which it becomes probable that the performance target will be achieved.

Leases and Deferred Rent

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Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the period of straight-line recognition.

Advertising expense

Advertising costs are expensed as incurred.

Advertising expense was not significant for the fiscal years ended June 30, 2021, 2020 and 2019.

Foreign Currency

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dollars as their functional currency using the exchange rates at the balance sheet date for assets and liabilities, the period average exchange rates for revenues and expenses, and the historical exchange rates for equity transactions.

The effects of foreign currency translation adjustments are recorded in other comprehensive loss.

Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the local functional currency are recorded as foreign currency transaction adjustments in the consolidated statements of operations.

The effects of foreign currency translation adjustments are reflected in stockholders’ equity (deficit) as a component of accumulated other comprehensive loss.

Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are recorded as foreign currency transaction adjustments within other income (expense) in the consolidated statements of operations.

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss, which is reported in the accompanying consolidated statements of stockholders’ deficit, consists of net loss and foreign currency translation adjustments.

Accumulated other comprehensive loss, which is reported in the accompanying consolidated statements of stockholders’ equity (deficit), consists of net loss and foreign currency translation adjustments.

The Company’s other comprehensive loss consists of changes in the cumulative effect of translation of financial statements of certain wholly owned foreign subsidiaries.

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No client individually accounted for 10% or more of the Company’s revenues for the fiscal years ended June 30, 2022, 2021 and 2020.

As of June 30, 2021, one client individually accounted for 25% of the Company’s total accounts receivable.

As of June 30, 2020, no client individually accounted for 10% or more of the Company’s total accounts receivable.

Deferred financing costs

The Company presents debt issuance costs as a deduction from the associated debt obligation.

The Company capitalizes costs associated with the issuance of debt instruments and amortizes these costs over the term of the debt agreement using the effective interest method.

As of June 30, 2022 and 2021, one client individually accounted for 20 % and 25 % of the Company’s total accounts receivable, respectively.

The Company accounts for income taxes using the asset and liability method.

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Tax contingencies are based upon their technical merits, relative tax law, and the specific facts and circumstances as of each reporting period.

The Company establishes liabilities or reduce assets for uncertain tax positions when the Company believes certain tax positions are not more likely than not of being sustained if challenged.

The Company establishes liabilities or reduce assets for uncertain tax positions when the Company believes certain tax positions are more likely than not of not being sustained if challenged.

Changes in facts and circumstances could result in material changes to the amounts recorded for such tax contingencies.

Restructuring

Costs associated with management-approved restructuring activities, including reductions in headcount, exiting a market or consolidation of facilities are recognized when they are incurred.

The Company records a liability for employee termination benefits either when it is probable that an employee is entitled to them and the amount of the benefits can be reasonably estimated or when management has communicated the termination plan to employees and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Restructuring charges are separately identified and included within the consolidated statements of operations and are classified according to the nature of the costs within cost of revenues or operating expenses.

Net Loss Per Share Attributable to Common Stockholders

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The Company’s convertible preferred stock contractually entitles the holders of such shares to participate in dividends but does not contractually require the holders of such shares to participate in the Company’s losses.

The Company’s basic net loss per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities.

The diluted net income (loss) per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method based on the nature of such securities.

The Company’s basic net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities.

The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method based on the nature of such securities.

For periods in which the Company reports net losses, diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

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The JOBS Act does not preclude an emerging growth company from early adopting new or revised accounting standards.

Recently adopted accounting pronouncements

In May 2014, the FASB issued accounting guidance related to revenue recognition, Accounting Standard Update (“ASU”) No.

2014-09, Revenue from Contracts with Customers (ASC 606).

ASC 606 supersedes the existing revenue recognition guidance in “Revenue Recognition (ASC 605)”.

The new revenue recognition standard provides a unified model to determine when and how revenue is recognized.

The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers, who are our clients, in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services.

ASC 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others.

ASC 606 also provides guidance on the recognition of costs related to obtaining client contracts.

The Company adopted ASC 606 on July 1, 2020 using the full retrospective method of adoption, adjusting historical periods to include results as if the new revenue standard was applied to all client contracts as of the initial application date.

The Company applied the following practical expedients on adoption provided by the new standard:

For completed contracts that have variable consideration, the Company used the transaction price at the date the contract was completed rather than estimating variable consideration.

No disclosure of amounts of consideration allocated to the remaining performance obligations for all reporting periods presented before the date of the initial application.

The consolidated financial statements are in accordance with ASC 606 for all periods presented.

The adoption of the new standard primarily impacted the Company’s accounting as follows:

Upfront recognition of revenues for the Company’s subscription licenses upon delivery of the license, as compared to over-time recognition under ASC 605.

As a result, under ASC 606, the allocated transaction price under a subscription license that the Company reasonably expects to collect are recognized upon the transfer of control of the subscription license, which is generally when made available to a client.

Incremental costs to obtain a contract have been capitalized and are amortized over on an expected period of benefit on a systematic basis that is consistent with the transfer to the client of the goods or services to which the asset relates.

Most of the Company’s commission expenses meet this definition.

In contrast, under ASC 605, costs to obtain a contract were capitalized and amortized ratably over the estimated contract period.

Select consolidated statements of operations line items, which reflect the adoption of the new standard are as follows (in thousands, except per share data):

Year ended June 30,

Operating expenses:

Sales and marketing

Operating loss

Net loss per share attributable to common stockholders, basic and diluted

Select consolidated balance sheet line items, which reflect the adoption of the new standard are as follows (in thousands):

Year ended June 30, 2020

Accounts receivable, net

Unbilled receivables, net

Deferred commissions, current

Deferred commissions, noncurrent

Deferred revenue, net

Long-term deferred revenue, net

Stockholders’ deficit:

Accumulated deficit

Select consolidated statements of cash flows line items, which reflect the adoption of the new standard are as follows (in thousands):

Year ended June 30,

Cash Flows from Operating Activities

Adjustments to reconcile net loss to net cash used in operating activities:

Changes in operating assets and liabilities:

Accounts and other receivables

Unbilled receivables, current

Prepaid expenses and other assets

Deferred commissions

Deferred revenue, net

Net cash used in operating activities

In August 2018, the FASB issued ASU No.

2018-15, Intangibles – Goodwill and Other – Internal-Use Software:

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which clarifies the accounting for implementation costs in cloud computing arrangements.

The new standard aligns the treatment of implementation costs incurred by customers in cloud computing arrangements that are service contacts with the treatment of similar costs incurred to develop or obtain internal-use software.

Under the new standard, implementation costs are deferred and presented in the same financial statement caption on the consolidated balance sheet as a prepayment of related arrangement fees.

The deferred costs are recognized over the term of the arrangement in the same financial statement caption in the consolidated income statement as the related fees of the arrangement.

The Company early adopted this guidance in the first quarter of fiscal year 2021 on a prospective basis and the adoption of this guidance did not have a material impact on its consolidated financial statements and related disclosures.

Recently issued accounting pronouncements

Recently A dopted A ccounting P ronouncements

In October 2021, the FASB issued Accounting Standards Update (“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 (i.e., unearned revenue) acquired in a business combination to be recognized and measured in accordance with ASC 606.

Before the adoption of this standard, the Company recognized contract assets and contract liabilities at the acquisition date based on fair value estimates, which historically has resulted in a reduction to unearned revenue on the balance sheet.

ASU 2021-08 is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2023, and for interim periods within those fiscal years, and early adoption is permitted.

The Company early adopted this standard in the fourth quarter of fiscal year 2022.

The adoption did not have a material impact to its consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU No.

2016-02, Leases .

The guidance requires lessees to put most leases on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice.

2016-02, Leases (ASC 842) .

The guidance requires lessees to put most leases on their balance sheets but recognize the expenses in their income statements in a manner similar to current practice.

The guidance states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term.

The new standard is effective for the Company for fiscal periods beginning after December 15, 2021 and early adoption is permitted.

The Company expects to recognize lease liabilities and right-of-use assets related to its operating leases upon adoption of the standard.

The Company is evaluating the impact of this ASU on its financial statements.

The new standard is effective for the Company on July 1, 2022.

The Company intends to adopt this standard using the modified retrospective approach in which the Company is not required to restate the comparative prior periods.

The Company expects to recognize total right-of-use assets in the range of $ 20.0 million to $ 22.0 million, with corresponding operating lease liabilities in the range of $ 23.0 million to $ 26.0 million on the consolidated balance sheet upon the adoption of the standard.

The right-of-use assets are net of adjustments in the range of $ 3.0 million to $ 4.0 million consisting of prepayments, deferred rent and accrued lease incentives related to its operating leases as of the effective date.

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments – Credit Losses , which requires the establishment of an allowance for estimated credit losses on financial assets, including trade and other receivables, at each reporting date.

The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

The guidance is effective for the Company beginning July 1, 2023.

The Company is evaluating the impact of this ASU on its financial statements.

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Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis.

This new standard will be effective for the Company for fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022.

Early adoption is permitted.

The Company is currently assessing the impact of adopting this standard on the consolidated financial statements.

Revenue recognition

This new standard will be effective for the Company beginning July 1, 2022.

The Company does not expect that the adoption of the new standard will have a material impact on the consolidated financial statements.

Disaggregation of Revenues

Revenues by geography is as follows (in thousands):

Revenues by geography were as follows (in thousands):

Year Ended June 30,

(As adjusted)*

United States

1 unchanged sentence

Rest of the world

As adjusted to reflect the impact of the full retrospective adoption of ASC 606.

See Note 2 for a summary of adjustments.

No country other than those listed above accounted for more than 10% of revenues during the fiscal years ended June 30, 2021, 2020 and 2019.

No country other than those listed above accounted for 10% or more of the Company’s revenues during the fiscal years ended June 30, 2022, 2021 and 2020.

Client Contract — Related Balance Sheet Amounts

Deferred Commissions

The following table summarizes the activity of the deferred commissions (in thousands):

The following table summarizes the activity of deferred commissions (in thousands):

Year Ended June 30,

(As adjusted)*

Beginning balance

1 unchanged sentence

Ending balance

As adjusted to reflect the impact of the full retrospective adoption of ASC 606.

See Note 2 for a summary of adjustments.

Contract Balances

The Company’s contract assets and liabilities were as follows (in thousands):

(As adjusted)*

June 30, 2022

June 30, 2021

Unbilled accounts receivable, net (1)

1 unchanged sentence

The long-term portion of $ 159 and $ 85 as of June 30, 2022 and 2021, respectively, is included in other assets .

As adjusted to reflect the impact of the full retrospective adoption of ASC 606.

See Note 2 for a summary of adjustments.

There was no allowance for doubtful accounts associated with unbilled receivables as of June 30, 2022 and 2021.

During the fiscal year ended June 30, 2021, the Company recognized $76.2 million in revenue pertaining to deferred revenue as of the beginning of the period.

During the fiscal year ended June 30, 2022, the Company recognized $ 108.2 million in revenue pertaining to deferred revenue as of June 30, 2021.

Performance Obligations

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Professional services under time and material contracts are not included in the performance obligations amount as these arrangements can be cancelled at any time.

As of June 30, 2021, approximately $230.6 million of revenues is expected to be recognized from remaining performance obligations with approximately 64% over the next 12 months and approximately 36% thereafter.

Goodwill and intangible assets

Goodwill and intangible assets acquired through business combinations consisted of the following (in thousands):

June 30, 2021

Client relationships

Noncompete agreements

Trademarks and trade names

Core technology

Intangible assets, net

June 30, 2020

Client relationships

Noncompete agreements

Trademarks and trade names

Core technology

Intangible assets, net

The fair value of intangible assets was derived based on the income approach.

This fair value measurement is based on significant inputs that are not observable in the market.

Key assumptions utilized in the management’s analysis included the following:

Revenues and expense forecasts used in the evaluation were based on trends of historical performance and management’s estimate of future performance.

Cash flows utilized in the discounted cash flow analysis were estimated using a weighted-average cost of capital.

During the year ended June 30, 2020, the Company recognized a purchase price adjustment of $0.3 million related to the OnePlace Pte Ltd.

acquisition that occurred in May 2019, which increased goodwill and the net liabilities acquired.

The amortization expense for intangible assets recognized for the fiscal years ended June 30, 2021, 2020 and 2019 was $10.9 million, $11.3 million and $8.4 million, respectively.

The changes in the gross amount of goodwill for the year s ended June 30, 202 1 and 2020 , were as follows (in thousands):

Balance as of June 30, 2019

Foreign currency translation adjustment

Purchase price adjustment

Balance as of June 30, 2020

Foreign currency translation adjustment

Balance as of June 30, 2021

As of June 30, 2021, the estimated aggregate amortization expense for each of the five succeeding fiscal years and thereafter is as follows (in thousands):

Year Ending June 30,

2027 and thereafter

Total remaining amortization

As of June 30, 2022, approximately $ 349.7 million of revenues is expected to be recognized from remaining performance obligations with approximately 54 % over the next 12 months and the remainder thereafter.

Business Combinations

DealCloud, Inc.

On August 13, 2018, the Company acquired a 100% equity interest in DealCloud, Inc.

(“DealCloud”), a cloud software company based in Charlotte, North Carolina which specializes in CRM and deal management for investment banking and private equity firms.

The consideration for the acquisition consisted of cash of $123.3 million.

The results of operations of DealCloud have been included in the Company’s consolidated statements of operations from the date of acquisition.

The goodwill balance is primarily attributable to the expected revenue opportunities with the Company’s applications and services offerings, assets acquired and acquired workforce.

Generally, the related amortization is not deductible for tax purposes.

In connection with the acquisition of DealCloud, the Company incurred $1.4 million of transaction expenses, which are included in general and administrative expenses in the consolidated statements of operations for the year ended June 30, 2019.

The following table summarizes the allocation of the consideration to the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):

Trademarks and trade names

Core technology

Client relationships

Favorable lease agreement

Net liabilities acquired (inclusive of deferred tax liabilities of $6,804)

On March 27, 2019, the Company acquired a 100% equity interest in gwabbit, Inc.

(“gwabbit”) for cash consideration of $8.0 million.

The results of operations of gwabbit have been included in the Company’s consolidated statements of operations from the date of acquisition.

The goodwill balance is primarily attributable to the expected revenue opportunities with the Company’s applications and services offerings, assets acquired and acquired workforce.

Generally, the related amortization is not deductible for tax purposes.

In association with the acquisition of gwabbit, the Company incurred $0.3 million of transaction expenses, which are included in general and administrative expenses in the consolidated statements of operations for the fiscal year ended June 30, 2019.

The following table summarizes the allocation of the consideration to the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):

Core technology

Client relationships

Net liabilities acquired (inclusive of deferred tax liabilities of $526)

OnePlace Pte Ltd.

On May 17, 2019, the Company acquired a 100% equity interest in OnePlace Holdings Pte.

Ltd (“OnePlace”), a provider of cloud-based solutions for marketing and business development teams.

The consideration for the acquisition consisted of cash of $62.5 million.

The results of operations of OnePlace have been included in the Company’s consolidated statements of operations from the date of acquisition.

On June 13, 2022 , the Company acquired the assets of Billstream, a pre-billing automation and workflow solution, from legal operations specialist Wilson Allen.

The solution leverages advanced technology to simplify the preparation and validation of prebills and proforma invoices, enhancing the OnePlace Operations & Finance suite to create a comprehensive billing and time tracking software solution.

The transaction has been accounted for as a business combination.

The total consideration for the acquisition was $ 18.5 million, which consisted of initial cash consideration of $ 2.5 million paid at closing, deferred purchase consideration of $ 10.4 million, payable in the third quarter of fiscal year 2023, contingent consideration estimated at $ 4.1 million and amounts held back in the amount of $ 1.5 million.

The contingent consideration will be payable based upon the achievement of certain performance measures, calculated as of September 30, 2023.

The goodwill balance is primarily attributable to the expected revenue opportunities with the Company’s applications and services offerings, assets acquired and acquired workforce.

Generally, the related amortization is not deductible for tax purposes.

In association with the acquisition of OnePlace, the Company incurred $1.6 million of transaction expenses, which are included in general and administrative expenses in the consolidated statements of operations for the fiscal year ended June 30, 2019.

The following table summarizes the allocation of the consideration to the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):

Trademarks and tradenames

Acquisition-related transaction costs of $ 0.2 million, consisting primarily of third-party professional fees, were expensed as incurred and are included in general and administrative expenses in the Company’s consolidated statements of operations for the fiscal year ended June 30, 2022.

The following table summarizes the preliminary allocation of the consideration to the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):

Deferred consideration

Fair value of contingent consideration

Total purchase consideration

Non-compete agreement

Core technology

Client relationships

Net liabilities acquired (inclusive of deferred tax liabilities of $2,584)

Unaudited Pro Forma information

The results of operations of the acquisitions of DealCloud, Gwabbit and OnePlace (the “Acquisitions”) have been included in our consolidated statements of operations from their acquisition dates.

The following unaudited pro forma combined financial information presents the Company’s results for the year ended June 30, 2019 as if the Acquisitions had occurred as of July 1, 2018 (in thousands):

(As adjusted)*

Pro forma revenues

Pro forma net loss

As adjusted to reflect the impact of the full retrospective adoption of ASC 606.

See Note 2 for a summary of adjustments.

The pro forma results include the accounting effects resulting from the Acquisitions such as the amortization charges from acquired intangible assets, reversal of transaction costs and other payments directly related to the Acquisitions.

The unaudited pro forma combined financial information presented does not purport to present what the actual results would have been had the Acquisitions actually occurred on July 1, 2018, nor is the information intended to project results for any future period.

Net assets acquired

Pro forma financial information related to this acquisition has not been presented as the effects of the acquisition described above were not material to the Company’s consolidated financial results.

On June 1, 2021 , the Company acquired a 100 % equity interest in Repstor, Limited (“Repstor”), a cloud software company based in Belfast, Northern Ireland that engages in the creation of Microsoft 365-based enterprise content management and team collaboration tools for the professional services industry.

1 unchanged sentence

The cash holdback was placed into a separate account and included in restricted cash on the consolidated balance sheet as of June 30, 2022.

The payments for contingent consideration are expected to be paid in cash in the third quarter of fiscal year 2022 and the first quarter of fiscal year 2023, if the performance measures are achieved.

The results of operations of Repstor have been included in the Company’s consolidated statements of operations from the date of acquisition and were not material.

We have paid $ 10.7 million of this contingent consideration during fiscal year 2022 and expect to pay $ 9.7 million in full consideration for the remaining contingent consideration in the first quarter of fiscal year 2023.

The goodwill balance is primarily attributable to the expected revenue opportunities with the Company’s applications and services offerings, assets acquired and acquired workforce.

4 unchanged sentences

Total purchase consideration

Noncompete agreement

Non-compete agreement

Core technology

2 unchanged sentences

Fair Value Measurement

Goodwill and Intangible Assets

Changes in the carrying amounts of goodwill were as follows (in thousands):

Year Ended June 30,

Balance, beginning of period

Goodwill acquired during the period

Foreign currency translation adjustment

Balance, end of period

No impairment of goodwill has been recorded for the fiscal years ended June 30, 2022, 2021 and 2020.

Intangible Assets

Intangible assets acquired through business combinations consisted of the following (in thousands):

June 30, 2022

Gross Carrying Amount

Net Carrying Amount

Client relationships

Non-compete agreements

Trademarks and trade names

Core technology

Intangible assets, net

June 30, 2021

Gross Carrying Amount

Net Carrying Amount

Client relationships

Non-compete agreements

Trademarks and trade names

Core technology

Intangible assets, net

The fair value of intangible assets was derived based on the income approach.

This fair value measurement is based on significant inputs that are not observable in the market.

Key assumptions utilized in management’s analysis included the following:

Revenues and expense forecasts were based on trends of historical performance and management’s estimate of future performance.

Estimated future cash flows were discounted using a weighted-average cost of capital.

Amortization expense related to acquired intangible assets was recognized as follows (in thousands):

Year Ended June 30,

Cost of SaaS and support

Sales and marketing

General and administrative

Total amortization expense

There was no impairment of intangible assets recorded during the fiscal years ended June 30, 2022, 2021 and 2020.

As of June 30, 2022, the estimated future amortization expense of acquired intangible assets for each of the five succeeding fiscal years and thereafter is as follows (in thousands):

Fiscal Year Ending June 30,

2028 and thereafter

Total remaining amortization

Fair Value Measurements

The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows :

4 unchanged sentences

June 30, 2022

Revolving credit facility

Liability for contingent consideration, current and non-current portion

Liability for contingent consideration, current portion

Liability for contingent consideration, non-current portion

June 30, 2021

Revolving credit facility

Liability for contingent consideration, current and non-current portion

Based upon Level 2 inputs and the borrowing rates available to the Company for loans with similar terms and consideration of the Company’s credit risk, the carrying value of the Company’s term loan and revolving credit facility approximate their fair value.

In connection with the acquisition of Repstor, the Company recorded contingent consideration liabilities representing the amounts payable to former Repstor shareholders based upon the achievement of certain performance measures.

The fair value of the contingent consideration was estimated using the Monte Carlo simulation with key assumptions used by management that include the estimated probability of occurrence and discount rates.

The fair value of the contingent consideration was initially estimated using the Monte Carlo simulation and included key assumptions used by management related to the estimated probability of occurrence and discount rates.

These inputs are unobservable in the market and therefore categorized as level 3 inputs as defined above.

Subsequent changes in the fair value of the contingent consideration liabilities, resulting from management’s revision of key assumptions and estimates, will be recorded in general and administrative expense in the consolidated statement of operations.

In connection with the acquisition of Repstor in June 2021, the Company recorded contingent consideration liabilities representing the amounts payable to former Repstor shareholders based upon the achievement of certain performance measures.

The current and non-current portions of these liabilities of $ 11.0 million and $ 12.5 million, respectively, are included in other current liabilities and other liabilities on the consolidated balance sheet as of June 30, 2021.

The changes in the fair value of contingent consideration liabilities during fiscal year ended June 30, 2021 were not material.

During fiscal year ended June 30, 2022, $ 10.7 million was paid to the former shareholders of Repstor.

In connection with the acquisition of Billstream in June 2022, the Company recorded a contingent consideration liability of $ 4.1 million on the acquisition date for the estimated fair value of the contingent consideration.

The fair value was measured based on the probability of achieving certain performance measures pursuant to the acquisition agreement.

The liability was included in other liabilities on the consolidated balance sheet as of June 30, 2022.

Changes in the fair value of contingent consideration liabilities during fiscal year ended June 30, 2022 were as follows (in thousands):

Balance as of June 30, 2021

Contingent consideration accrued at acquisition

Payment of contingent consideration

Change in fair value of contingent consideration

Effect of foreign currency exchange rate changes

Balance as of June 30, 2022

Other financial instruments consist of accounts receivable, accounts payable and accrued expenses and other current liabilities.

Accounts receivable, accounts payable and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment.

Accounts receivable, accounts payable and accrued liabilities are stated at their carrying value, which approximates fair value due to the short time to expected receipt or payment.

Property and Equipment

Property and equipment consist of the following (in thousands):

Property and equipment, net, consisted of the following (in thousands):

June 30, 2022

June 30, 2021

Computer equipment and software

Capitalized software

Capitalized internal-use software

Furniture and office equipment

1 unchanged sentence

Construction in progress

Total property and equipment

accumulated depreciation and amortization

The Company recorded $2.5 million, $1.4 million and $0.6 million in depreciation and amortization expense for the fiscal years ended June 30, 2021, 2020 and 2019, respectively.

Property and equipment, net

Depreciation expense, excluding the amortization of capitalized internal-use software development costs, was $ 1.3 million, $ 1.3 million and $ 0.8 million for fiscal years ended June 30, 2022, 2021 and 2020, respectively.

The Company capitalized $ 4.2 million, $ 2.5 million and $ 2.5 million of costs related to software developed for internal use during the fiscal years ended June 30, 2022, 2021 and 2020, respectively.

Amortization expense related to capitalized internal-use software was $ 1.9 million, $ 1.2 million and $ 0.6 million for fiscal years ended June 30, 2022, 2021 and 2020, respectively.

The net book value of capitalized software development costs was $ 7.3 million and $ 5.0 million as of June 30, 2022 and 2021, respectively.

Commitments and Contingencies

Operating Leases

The Company leases the majority of its office space in the U.S., U.K.

and Ukraine under noncancelable operating leases, which have various expiration dates through fiscal 2031.

The Company leases the majority of its office space in the U.S., U.K., Singapore and Ukraine under non-cancelable operating lease agreements, which have various expiration dates through June 2030 .

Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease, including any periods of free rent and rent concessions.

Total rent expense for the fiscal years ended June 30, 2022, 2021 and 2020 was $ 9.0 million, $ 8.4 million and $ 7.8 million, respectively.

As of June 30, 2021, future minimum lease payments under noncancelable operating leases are as follows (in thousands):

In April 2022, the Company entered into a lease agreement to lease an office space in the U.K.

for an eight-year term ending June 2030 .

The total commitment under this lease is approximately $ 9.8 million.

As of June 30, 2022, future minimum lease payments under non-cancelable operating leases are as follows (in thousands):

Year ending June 30,

1 unchanged sentence

Total future minimum lease payments

Software and Other

In the ordinary course of business, the Company enters into commitments to purchase or subscribe to software that is required to conduct its business activities.

Such commitments are due as follows (in thousands):

Other Purchase Commitments

The Company’s other purchase commitments primarily consist of third-party cloud services, support fees and software subscriptions to support operations i n the ordinary course of business.

Future minimum payments under the Company’s non-cancelable purchase commitments as of June 30, 2022 are as follows (in thousands):

Year ending June 30,

Total future minimum payments

The Company also has commitments towards its cloud hosting service providers.

As of June 30, 2021, the Company had $7.2 million remaining on these commitments, including $3.5 million to be fully paid by June 2022 and $3.7 million by August 2023.

In the ordinary course of business, the Company often includes standard indemnification provisions in its commercial arrangements.

Pursuant to these provisions, the Company may be obligated to indemnify such parties for losses or claims suffered or incurred in connection with its products, services, breach of representations or covenants, intellectual property infringement or other claims made against such parties.

It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular arrangement.

The Company has never incurred material amounts under these provisions.

Accordingly, the Company has no liabilities recorded for the provisions as of June 30, 2021 and 2020.

In September 2013, the Company obtained a revolving and term credit facility (as amended, the “credit agreement”) from a lender.

The revolving credit facility, as amended, (the “revolving credit facility”) provides for a maximum of $5.0 million in available credit and the term loans, as amended, (the “term loans”) provide for borrowings of $65.0 million.

The credit agreement allows for letters of credit not to exceed $0.1 million.

Under the revolving credit facility, amounts drawn may be repaid and reborrowed at any time during the term of the agreement.

The outstanding principal amount of the draws, together with any accrued and unpaid interest shall be due and payable on the maturity date or, if earlier, on the date on which they are declared due and payable pursuant to the credit agreement.

The Company may prepay the term loans at any time with an applicable prepayment premium.

Any principal amount of the term loans that is repaid or prepaid may not be reborrowed.

The outstanding principal amount of the term loans, together with any accrued and unpaid interest, shall be due and payable on the maturity date or, if earlier, on the date on which they are declared due and payable pursuant to the agreement.

In August 2018, the Company entered into an agreement to amend the above-mentioned credit agreement to increase the total borrowing capacity to $210.0 million, consisting of $200.0 million term loan and $10.0 million revolving line of credit.

In March 2019, the Company drew down $8.0 million from the revolving credit facility.

The $8.0 million was fully repaid in May 2019.

Further, in May 2019, the Company entered into an agreement to amend the above-mentioned credit agreement to increase the total borrowing capacity to $283.0 million, consisting of $273.0 million term loan and $10.0 million revolving line of credit.

The maturity date of the credit agreement is August 2023.

The revolving credit facility and term loans bear a floating rate of interest, which the Company selects at the beginning of a period between (i) a LIBOR loan, for which the interest rate is calculated as the then-current LIBOR rate, with a floor of 1.00%, plus 7.25%, and (ii) an Index Loan, for which the interest rate is calculated as the then-current Wall Street Journal Prime rate, with a floor of 2.00%, plus 6.25%.

The credit facility is collateralized by substantially all assets of the Company.

The credit agreement contains certain restrictive covenants which, among other things, requires the Company to meet a defined financial ratio as well as maintain a specified minimum liquidity amount.

The Company is in compliance with all of the covenants as of June 30, 2021 and 2020.

As of June 30, 2019, the Company had borrowed $273.0 million under the term loan and this amount was outstanding as of June 30, 2021 and 2020.

During the year ended June 30, 2020, the Company borrowed and repaid amounts against the revolving credit facility, borrowing a total of $15.0 million, of which $5.0 million was repaid, resulting in an outstanding balance of $10.0 million as of June 30, 2020.

During the fiscal year ended June 30, 2021, the Company repaid an additional $5.0 million on the revolving credit facility, resulting in an outstanding balance of $5.0 million as of June 30, 2021.

The Company incurred $4.6 million in financing costs, in connection with the two amendments mentioned above that are deferred and amortized over the term of the credit agreement in interest expense using the effective interest method.

Amortization expense recognized on deferred financing costs totaled $ 1.1 million , $1.2 million and $0.8 million for the fiscal years ended June 30, 20 2 1 , 2020 and 2019 , respectively, and is included in interest expense in the consolidated statements of operations.

The components of debt are as follows (in thousands):

Outstanding term loan facility

Outstanding revolving credit facility

deferred financing costs

Debt-related interest expense for the fiscal years ended June 30, 2021, 2020 and 2019 was $23.5 million, $26.7 million and $19.2 million, respectively, net of amortization of financing costs, and $5.8 million and $6.6 million is accrued as interest payable on the outstanding term loans and revolving credit facility as of June 30, 2021 and 2020, respectively.

The weighted average interest rate for the fiscal years ended June 30, 2021, 2020 and 2019 was 8.3%, 9.6% and 9.7%, respectively.

In June 2021, the Company entered into a commitment letter with JPMorgan Chase Bank, N.A.

(“JPMorgan) pursuant to which JPMorgan agreed to arrange a revolving credit facility in the aggregate amount of $100.0 million, of which JPMorgan committed to providing $50.0 million.

However, the terms of our financing arrangements have not yet been determined, remain under discussion, and are subject to change, including as a function of market conditions.

Capital stock

As of June 30, 2021 and June 30, 2020, the authorized capital of the Company consists of 65,000,000 and 60,000,000 shares of common stock, respectively, and 19,870,040 shares of convertible preferred stock, of which 1,846,154 are designated as Series A-1 convertible preferred stock and 18,023,886 are designated as Series A convertible preferred stock.

All classes of the Company’s stock have a par value of $0.001 per share.

In conjunction with the IPO that closed on July 2, 2021, all preferred stock converted into equivalent number of shares of common stock.

See Note 15, Subsequent events , for additional details.

In March 2019, the Company issued 250,000 shares of common stock at $12.00 per share.

In October 2019, the Company issued 923,077 shares of Series A-1 convertible preferred stock for a total amount of $12.0 million to a single investor.

Additionally, under this share purchase agreement, the investor agreed to purchase 1 share of Series A-1 convertible preferred stock for each share of common stock purchased by the Company under the tender program offered to its current and former employees up to a maximum of 923,077 shares at a price of $13.00 per share.

All terms remained the same as existing Series A convertible preferred stock.

In October 2019, the Company launched a tender offer to repurchase up to a maximum of 923,077 shares of common stock at a price of $12.00 per share from its current and former employees.

Under this program employees owning shares or fully vested options as of the record date (September 9, 2019) of the tender offer were eligible to participate.

The Company repurchased 348,981 shares, of which 184,251 were shares of common stock and 164,730 were fully vested options to purchase shares of common stock.

Total consideration was $3.6 million, net of proceeds from the exercise of fully vested options and includes $0.9 million of stock-based compensation costs.

In November 2019, the Company issued 348,981 shares of Series A-1 convertible preferred stock to the investor under the share purchase agreement.

In July and August 2020, the Company issued 2,432,545 shares of common stock at $12.00 per share for total proceeds of $29.2 million to certain existing shareholders.

Additionally, the Company repurchased 200,000 shares of the Company’s common stock from the Chief Financial Officer at a price of $12.00 per share for an aggregate purchase price of $2.4 million.

In anticipation of this transaction, the Company also amended its certificate of incorporation to increase its authorized number of common shares to 65,000,000.

In February 2021, a director of the Company exercised his option to purchase 300,000 shares of the Company’s common stock prior to vesting for an aggregate price of approximately $4.4 million.

As of June 3 0 , 2021, 150,000 shares were vested upon the pricing of the IPO on June 2 9 , 2021 and the remaining 150,000 shares will vest on the first anniversary of the IPO pricing date .

There were 17,762,379 shares of Series A convertible preferred stock, 1,272,058 shares of Series A-1 convertible preferred stock and 29,444,577 shares of common stock outstanding as of June 30, 2021.

Shares of common stock have been reserved as of June 30, 2021 and 2020 for the following:

Conversion of convertible preferred stock

Outstanding options

Performance stock units and restricted stock units

Reserved for future grants

The holders of Series A and Series A-1 convertible preferred stock have various significant rights and preferences, as follows:

Dividend provisions

Holders of Series A and Series A-1 are entitled to receive cumulative dividends at the per-annum rate of 8%, which are payable when and if declared by the Board of Directors.

The holders of convertible preferred stock are also entitled to participate in dividends on common stock, when and if declared by the Board of Directors, based on the number of shares of common stock that would be held on an as-if-converted basis.

No dividends on convertible preferred stock or common stock have been declared from inception to date.

Series A cumulative unpaid and undeclared dividends are $52.1 million and $38.0 million as of June 30, 2021 and 2020, respectively.

Series A-1 cumulative unpaid and undeclared dividends are $2.4 million and $1.0 million as of June 30, 2021 and 2020, respectively.

Liquidation preference

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, or a “Deemed Liquidation Event” (defined as a merger or consolidation involving the Company effecting a change of control or a sale of substantially all the assets of the Company), the liquidation preference is the greater of (i) $7.445675 per share for Series A and $13.00 per share for Series A-1 plus cumulative unpaid and undeclared dividends and (ii) such amount per share as would have been payable had all shares of preferred stock been converted into common stock prior to such liquidation, dissolution, winding up or Deemed Liquidation Event, prior to any distributions to the common shareholders.

Upon completion of the above distribution, the remaining assets of the Company available for distribution to shareholders will be distributed among the holders of common stock pro rata based on the number of shares held by each such holder.

Conversion rights

Each share of convertible preferred stock is convertible, at the option of the holder, into such number of fully paid and nonassessable shares of common stock as is determined by dividing the original issuance price for a share by the conversion price at the time in effect for such share.

Each share of Series A and Series A-1 would convert into common stock on a one-for-one basis.

Each share of convertible preferred stock automatically converts into the number of shares of common stock into which such shares are convertible at the then- effective conversion ratio upon the closing of a public offering in which the implied valuation is at least $1 billion and resulting in gross proceeds of at least $100 million received by the Company, or upon the consent of the holders of a majority of convertible preferred stock.

At any time after April 27, 2021, certain significant investors shall have the right to cause the Company to initiate a “Sale Event,” which shall mean a) a transaction or a series of related transactions where an investor who is not one of these significant shareholders acquires more than 50% of the outstanding voting power of the Company, or b) a transaction that is or could be treated as a Deemed Liquidation Event (as defined above).

Voting rights

On any matter presented generally to the stockholders of the Company, the holder of each share of convertible preferred stock has voting rights equal to the number of shares of common stock into which it is convertible and votes together as one class with the common stock.

Each share of common stock is entitled to one vote.

With respect to the election of directors of the Company, the holders of the convertible preferred stock, voting together as a separate class, have the right to elect two directors and the holders of common stock, voting together as a separate class, have the right to elect three directors.

The convertible preferred stock is not subject to redemption by the Company except in the event of a Deemed Liquidation Event (as defined above).

The Series A and Series A-1 convertible preferred stock do not have a defined redemption date;

therefore, the redemption value is not being accreted and is only disclosed on the face of the accompanying consolidated balance sheet.

The Company classified the convertible preferred stock outside of stockholders’ deficit because, in the event of certain liquidation events that are not solely within its control, the shares would become redeemable at the option of the holders.

The Company did not adjust the carrying values of the convertible preferred stock to the current redemption value of such shares since a liquidation event was not probable at any of the balance sheet dates.

Subsequent adjustments to increase or decrease the carrying values to the ultimate redemption value will be made only if and when it becomes probable that such a liquidation event will occur.

Stock plans and stock-based compensation

Total purchase commitments

In December 2021, the Company entered into an agreement with Microsoft, pursuant to which the Company is committed to spend a minimum of $ 110.0 million on cloud services.

Payments under this agreement are expected to commence in January 2023 .

The committed spend period concludes at the end of December 2028 , with the Company having the option to extend any remaining commitment into a further 12 month period to the end of December 2029 .

From time to time, the Company is a party to claims, lawsuits, and proceedings which arise in the ordinary course of business.

The Company warrants to its customers that it has all necessary rights and licenses to the intellectual property comprised in its products and services and indemnifies those customers against intellectual property claims with respect to such products and services, so such claims, lawsuits and proceedings might in the future include claims of alleged infringement of intellectual property rights.

The Company records a liability when it believes that it is probable that a loss will be incurred, and the amount of loss or range of loss can be reasonably estimated.

Given the unpredictable nature of legal proceedings, the Company bases its estimate on the information available at the time of the assessment.

As additional information becomes available, the Company reassesses the potential liability and may revise the estimate.

The Company is not presently a party to any litigation the outcome of which, it believes, if determined adversely to the Company, would individually or in the aggregate have a material adverse effect on the business, operating results, or financial condition.

As of June 30, 2021, the Company had outstanding borrowings of $ 273.0 million under a term loan and $ 5.0 million under the Prior Credit Facility.

On July 12, 2021, amounts outstanding under the Prior Credit Facility were repaid in full from proceeds of the IPO.

As a result of the extinguishment of the debt, a loss of $ 2.4 million related to the write-off of unamortized financing costs, has been recorded as a loss on debt extinguishment in the consolidated statement of operations for the fiscal year ended June 30, 2022.

As of June 30, 2022, the Company had no outstanding borrowings under the Prior Credit Facility.

On October 5, 2021, the Company entered into a Credit Agreement among the Company, the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (“JPMorgan”).

The Credit Agreement provides for a five-year , senior secured revolving credit facility of $ 100.0 million with a sub-facility for letters of credit in the aggregate amount of up to $ 10.0 million (the “JPMorgan Credit Facility”).

The Credit Agreement also provides that the Company may seek additional revolving credit commitments in an aggregate amount not to exceed $ 50.0 million, subject to certain administrative procedures, including approval by the Administrative Agent.

Future borrowings under the JPMorgan Credit Facility will bear interest, at the Company’s election, at an annual rate of either (a) LIBOR plus a percentage spread (ranging from 1.75 % to 2.50 %) or (b) an alternate base rate (as described in the Credit Agreement) plus a percentage spread (ranging from 0.75 % to 1.50 %), in each case based on the Company’s total net leverage ratio.

In addition, a commitment fee accrues with respect to the unused amount of the JPMorgan Credit Facility at an annual rate ranging from 0.25 % to 0.40 %, based on the Company’s total net leverage ratio.

In connection with the execution of the Credit Agreement, the Company also entered into a pledge and security agreement (the “Security Agreement”) dated as of October 5, 2021 with the subsidiaries of the Company and JPMorgan, as collateral agent for the secured parties.

Under the Security Agreement, borrowings under the JPMorgan Credit Facility are secured by a first priority pledge of all of the capital stock and substantially all of the assets (excluding real estate interests) of each subsidiary of the Company and the subsidiary guarantors.

The Credit Agreement provides that the Company must maintain compliance with a maximum consolidated total net leverage ratio covenant, as determined in accordance with the Credit Agreement.

It also contains affirmative, negative and financial covenants, including limitations on certain other indebtedness, loans and investments, liens, mergers, asset sales, and transactions with affiliates, as well as customary events of default.

The Company was in compliance with all covenants as of June 30, 2022.

The Company incurred $ 0.8 million of costs directly related to the Credit Agreement, which were capitalized and are being amortized over the term of the Credit Agreement.

These debt issuance costs are included in other assets on the consolidated balance sheets.

As of June 30, 2022, there were no outstanding borrowings under the JPMorgan Credit Facility.

Stockholders’ Equity

On July 2, 2021, in conjunction with the closing of the IPO, the Company’s Amended and Restated Certificate of Incorporation became effective, pursuant to which the Company’s authorized capital stock was increased to 700,000,000 shares of common stock, par value $ 0.001 per share, and 50,000,000 shares of preferred stock, par value $ 0.001 per share.

On July 2, 2021, upon the closing of the IPO, all outstanding shares of Series A and Series A-1 convertible preferred stock were automatically converted into 19,034,437 shares of the Company’s common stock on a one -for-one basis.

Shares of common stock reserved for future issuance were as follows (in thousands):

Convertible preferred stock

Outstanding stock options

Unvested performance stock units and restricted stock units

Reserved for ESPP

Reserved for future stock award grants

Total shares of common stock reserved for issuance

Stock-Based Compensation

Amended and Restated 2012 Stock Plan

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The exercise price of incentive options granted to a stockholder holding at least 10 % of the combined voting power of all classes of stock must be at least 110 % of the fair value of the Company’s common stock at the date of grant, as determined by the Board of Directors.

Stock option activity for grants under the stock plans during the fiscal years ended June 30, 2021 and 2020 was as follows:

(in thousands)

Balance as of June 30, 2019

Stock option activity under the Company’s equity incentive plans during the fiscal years ended June 30, 2022 and 2021 was as follows (in thousands, except per share data):

Balance as of June 30, 2020

Balance as of June 30, 2021

Outstanding as of June 30, 2022

Vested and exercisable as of June 30, 2022

Unvested and early exercised as of June 30, 2021

Vested and expected to vest as of June 30, 2022

Aggregate intrinsic value for stock options represents the difference between the exercise price and the per share fair value of the Company’s common stock as of the end of the period, multiplied by the number of stock options outstanding.

The weighted-average grant date fair value of options granted during the fiscal years ended June 30, 2022, 2021 and 2020 was $ 12.61 , $ 6.43 and $ 3.50 , respectively.

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Upon the effectiveness of the Company’s initial public offering on June 29, 2021, 150,000 shares vested and $ 2.2 million was reclassified from other current liabilities into additional paid-in-capital.

The remaining $2.2 million is recorded as other current liabilities on the consolidated balance sheet as of June 30, 2021 and will be reclassified into additional paid-in-capital as the shares vest.

The remaining $ 2.2 million was recorded as other current liabilities on the consolidated balance sheet as of June 30, 2021 and was reclassified into additional paid-in-capital upon the vesting of the remaining 150,000 shares on June 30, 2022.

During the fiscal year ended June 30, 2021, the Company granted 3,586,644 options with vesting terms based on continued service and meeting certain recurring annual contract value targets.

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Upon pricing of the Company shares on June 29, 2021 in connection with the IPO, $ 1.2 million was recognized as stock-based compensation expense.

The remaining compensation cost will be recognized over the remaining service period.

The remaining compensation cost was recognized during fiscal year 2022.

Performance Stock Units and Restricted Stock Units

On June 29, 2021, upon the effectiveness of the IPO, the Company granted 3,950,000 shares of performance stock units to certain employees, which vest quarterly over a four-year period based on continued service and meeting certain annual recurring revenue targets.

The fair value of these awards is based on the IPO price of $26.00 and is recognized as compensation expense over the requisite service period, using the accelerated attribution method as achievement of the performance condition is considered probable.

If the performance targets are not achieved at the end of the performance period, any previously recognized compensation expense will be reversed.

As of June 30, 2021, all these awards were outstanding with an aggregated intrinsic value of $110.6 million.

On June 29, 2021, the Company granted 46,150 shares of restricted stock units to certain of our service providers and non-employee directors, which vest over one to three years based on continued service.

The fair value of these awards is based on the IPO price of $26.00 per share and is recognized as compensation expense over the requisite service period.

As of June 30, 2021, all these awards were outstanding with an aggregated intrinsic value of $1.3 million.

Employee stock purchase plans

In June 2021, the Board of Directors adopted and shareholders approved the 2021 Employee Stock Purchase Plan ("ESPP"), which became effective as of the effective date of the Company’s Registration Statement on Form S-1.

The ESPP initially reserved 1,466,996 shares of our common stock for future issuance to participating employees.

The first offering (“Initial Offering”) is expected to begin on December 1, 2021 and end on November 30, 2023.

Eligible employees may purchase the Company’s common stock at a price equal to 85% of the lower of the fair market value of the Company’s common stock on the offering date or the purchase date.

During the fiscal year ended June 30, 2022, the Company granted stock units to certain of its employees with vesting terms based on meeting certain annual recurring revenue targets and continued service.

The Company also granted stock units to certain employees that vest based on continued service.

Performance stock unit activity during the fiscal year ended June 30, 2022 and 2021 was as follows (in thousands):

Number of Shares

Balance as of June 30, 2020

Balance as of June 30, 2021

Balance as of June 30, 2022

Restricted stock unit activity during the fiscal year ended June 30, 2022 and 2021 was as follows (in thousands):

Number of Shares

Balance as of June 30, 2020

Balance as of June 30, 2021

Balance as of June 30, 2022

Stock-Based Compensation Expense

Total stock-based compensation from stock-based awards during the fiscal years ended June 30, 2022, 2021 and 2020 included in the consolidated statements of operations is $ 77.5 million, $ 18.1 million and $ 3.3 million, respectively.

During the fiscal year ended June 30, 2021 and 2020, the Company also recognized additional stock-based compensation expense of $0.5 million and $0.8 million, respectively, relating to the buy-back of shares of common stock and fully vested options, which represents the excess between the repurchase price and the fair value of common stock and fully vested options at the date of repurchase.

During the fiscal years ended June 30, 2021 and 2020, the Company also recognized additional stock-based compensation expense of $ 0.5 million and $ 0.8 million, respectively, relating to the buy-back of shares of

common stock and fully vested options, which represents the excess between the repurchase price and the fair value of common stock and fully vested options at the date of repurchase .

The Company recorded stock-based compensation expense in the consolidated statements of operations as follows (in thousands):

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Expected life (in years)

Restructuring

In April 2020, the Company undertook a re-organization and restructuring plan.

The restructuring involved the organizational integration of the DealCloud acquisition and COVID-19-related headcount reductions across all functions.

The Company recorded $3.7 million of restructuring charges during the fiscal year ended June 30, 2020 related to severance payments and termination benefits.

The restructuring was completed as of June 30, 2020.

As of June 30, 2020, the total liabilities related to the restructuring plan were $2.4 million.

As of June 30, 2021, there were no remaining restructuring accruals associated with this plan.

The following table presents activity for the restructuring plan during the years ended June 30, 2021 and 2020 (in thousands):

Balance—July 1, 2019

Restructuring charges

Cash payments

Balance—June 30, 2020

Cash payments

Release of accrual

Balance—June 30, 2021

The components of loss before income taxes is as follows (in thousands):

2021 Employee Stock Purchase Plan

In June 2021, the Board of Directors adopted and shareholders approved the 2021 Employee Stock Purchase Plan ("ESPP"), which became effective as of June 29, 2021.

The ESPP initially reserved 1,466,996 shares of the Company’s common stock for future issuance to participating employees.

The initial offering period for the ESPP began on December 16, 2021 and will end on November 30, 2023 .

Subsequent offering periods will begin on the first trading day on or after each June 1 and December 1.

The first purchase date was on May 31, 2022, followed by three more purchase dates in six-month intervals thereafter during this initial offering period.

Eligible employees may purchase the Company’s common stock at a price equal to 85 % of the lower of the fair market value of the Company’s common stock on the offering date or the applicable purchase date.

As of June 30, 2022, 68,872 shares have been purchased under the ESPP.

The fair value of ESPP shares was estimated using the Black-Scholes option valuation model with the following weighted-average assumptions:

Year Ended June 30,

(As adjusted)*

As adjusted to reflect the impact of the full retrospective adoption of ASC 606.

See Note 2 for a summary of adjustments.

Expected dividend yield

Risk-free interest rate

Expected volatility

Expected life (in years)

As of June 30, 2022, total unrecognized compensation expense related to the ESPP was $ 1.9 million.

That cost is expected to be recognized over the remaining term of the offering periods of 1.2 years.

The components of loss before income taxes are as follows (in thousands):

Year Ended June 30,

The income tax (benefit)/expense consists of the following (in thousands):

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Year Ended June 30,

(As adjusted)*

Federal tax (benefit)/expense:

At statutory rate

Nondeductible acquisition costs

State tax (net of federal benefit)

Research credits

Research and development credits

Stock-based compensation

Transaction costs

Acquisition-related transaction costs

Change in valuation allowance

As adjusted to reflect the impact of the full retrospective adoption of ASC 606.

See Note 2 for a summary of adjustments.

Income tax (benefit)/expense

Deferred tax assets and liabilities are as follows (in thousands):

(As adjusted)*

Deferred tax assets:

1 unchanged sentence

Net operating loss carryforwards

Research and development credit

Research and development credits

Stock-based compensation

Interest carryforwards

Deferred revenue, net

Deferred revenue

Valuation allowance

2 unchanged sentences

Revenue recognition

Deferred sales commissions

Purchased intangibles

Deferred commissions

Intangible assets

Total deferred tax liabilities

Net deferred tax liabilities

As adjusted to reflect the impact of the full retrospective adoption of ASC 606.

See Note 2 for a summary of adjustments.

The Company adopted ASC 606 effective July 1, 2020 using the full retrospective method of adoption and recorded an increase of $8.8 million in deferred tax liabilities related to deferred revenue and an increase of $1.0 million in deferred tax liabilities related to deferred commissions as of June 30, 2019, which was fully offset by a decrease in the valuation allowance.

The Company recorded a decrease of $0.7 million in deferred tax assets and an increase in deferred tax liabilities of $6.6 million related to deferred revenue and an increase of $1.1 million in deferred tax liabilities related to deferred commissions as of June 30, 2020, which was fully offset by a decrease in the valuation allowance.

As of June 30, 2022, the Company has federal, California and other state net operating loss carryforwards of approximately $ 120.9 million, $ 28.9 million and $ 60.2 million, respectively, which expire beginning in the year 2032 for federal and 2029 for California.

3 unchanged sentences

Accordingly, the Company’s ability to utilize these carryforwards may be limited as a result of such ownership change.

The limitation resulted in an immaterial amount of tax attribute carryforwards that will expire before utilization.

Such a limitation could result in the expiration of carryforwards before they are utilized.

In assessing the need for a valuation allowance, the Company considered all available evidence both positive and negative, including historical levels of income, legislative developments, expectations and risks associated with estimates of future taxable income, and prudent and feasible tax planning strategies.

As a result of this analysis as of June 30, 2022 and 2021, the Company has determined that it is more likely than not that it will not realize the benefits of its deferred tax assets due to continuing losses and therefore has recorded a valuation allowance of $ 45.3 million and $ 31.9 million, respectively, to reduce the carrying value of its deferred tax assets.

As of June 30, 2021, the Company has accumulated undistributed earnings generated by foreign subsidiaries of approximately $ 1.6 million.

The Company intends, however, to indefinitely reinvest these earnings and expect s future U.S.

cash generation to be sufficient to meet future U.S.

The Company has not recognized deferred taxes related to the federal and state income taxes and foreign withholding taxes on the undistributed earnings of foreign subsidiaries indefinitely reinvested outside the United States.

At June 30, 2022, the Company asserts that it will not permanently reinvest its foreign earnings outside the U.S.

The Company anticipates that the cash from its foreign earnings may be used to fund operations domestically, settle a portion of the outstanding debt obligations, or used for other business needs.

The accumulated undistributed earnings generated by its foreign subsidiaries was approximately $ 10.9 million.

Substantially all of these earnings will not be taxable upon repatriation to the United States since under the Tax Cuts and Jobs Act they will be treated as previously taxed income or benefit from the dividends received deduction.

The withholding taxes related to the distributable earnings of the Company's foreign subsidiaries are not expected to be material.

It is the Company’s policy to recognize interest and penalties related to income tax matters in income tax expense.

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There is no applicable lapse of the statute of limitations in the next 12 months.

The Company files income tax returns in the U.S.

The Company files income tax returns in the U .

federal jurisdiction , various state jurisdictions and various foreign jurisdictions .

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Beginning of the year, unrecognized tax benefits

Decreases, prior year tax positions

Increases (decreases), prior year tax positions

Increases, current year tax positions

End of the year, unrecognized tax benefits

As of June 30, 2021, 2020 and 2019, unrecognized tax benefits approximated $3.0 million, $2.8 million and $2.1 million, respectively, of which none of the tax benefits would affect the effective tax rate if recognized.

As of June 30, 2022 and 2021, unrecognized tax benefits approximated $ 3.8 million and $ 3.0 million, respectively, of which no ne of the tax benefits would affect the effective tax rate if recognized.

There are no interest and penalties accrued as of June 30, 2022.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted.

The CARES Act was signed into law with the intention of providing economic relief to address the effects of the COVID-19 pandemic in the United States, which had several changes to corporate income tax law.

Significant changes were made to the net operating loss carryforward and carryback rules, business interest expense limitation rules under section 163(j) and other provisions.

No provisions of the CARES Act are expected to have a material impact to the Company’s income tax provision for the fiscal years ended June 30, 2021 or 2020.

The Company will keep monitoring the impact that the COVID-19 pandemic and/or the CARES Act will have on the Company and reflect any tax effects in the corresponding periods.

Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share for the periods indicated (in thousands, except per share data):

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the periods indicated (in thousands, except per share data):

Year Ended June 30,

(As adjusted)*

cumulative dividends allocated to preferred stockholders

Net loss attributable to common stockholders

Weighted-average shares used to compute net loss per share

attributable to common stockholders, basic and diluted

Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted

Net loss per share attributable to common stockholders

Basic and diluted

As adjusted to reflect the impact of the full retrospective adoption of ASC 606.

See Note 2 for a summary of adjustments.

Basic net loss per share is the same as diluted net loss per share because the Company reported net losses for all periods presented.

The Company excluded the following potential shares of common stock from the calculation of diluted net loss per share attributable to common stockholders because these would be anti-dilutive:

The Company excluded the following potential shares of common stock from the calculation of diluted net loss per share attributable to common stockholders because their effect would be anti-dilutive (in thousands):

As of June 30,

Convertible preferred stock (on an if-converted basis)

Stock options to purchase common stock

Outstanding stock options to purchase common stock

Unvested stock options exercised early

Performance stock units and restricted stock units

Unvested performance stock units and restricted stock units

Shares issuable under employee stock purchase plan

Employee Benefit Plans

3 unchanged sentences

The Company may make discretionary and matching contributions to the 401(k) Plan each year for the preceding calendar year.

Employees are immediately vested 100 % in the Company’s matching contributions.

The Company incurred matching expenses of $ 3.0 million, $ 2.4 million and $ 2.2 million for the fiscal years ended June 30, 2022, 2021 and 2020, respectively.

4 unchanged sentences

Subsequent Events

On July 2, 2021, immediately prior to the closing of the IPO, the Company’s amended and restated Certificate of Incorporation became effective, pursuant to which our authorized capital stock was increased to 700 million shares of common stock and 50 million shares of preferred stock.

The rights and preferences of the Series A and Series A-1 convertible preferred stock described in Note 9, Capital Stock, were removed pursuant to the amendment of organizational documents relating to the IPO.

On July 2, 2021, the Company completed its IPO and sold 10,500,000 shares of its common stock at a public offering price of $26.00 per share.

The net proceeds to the Company were $245.2 million, after deducting the underwriters’ discounts and offering expenses payable by the Company.

On July 8, 2021, the underwriters of the Company’s IPO exercised in full their right to purchase an additional 1,575,000 shares of common stock at the public offering price of $26.00 per share.

The net proceeds to the Company were $38.2 million, after deducting the underwriters’ discounts.

On July 12, 2021, the Company repaid the outstanding $273.0 million borrowing under the term loan and $5.0 million borrowing under the revolving credit facility from the proceeds of the IPO.

As a result, the Company will recognize a loss on extinguishment of debt of $2.4 million on this date for the unamortized financing costs related to the term loan.

Changes in and Disagreements w ith Acco untants on Accounting and Financial Disclosure

Under the 2021 Plan, on July 1, 2022 and each July 1 thereafter, through (and including) July 1, 2031, the number of Shares reserved and available for issuance shall be increased by a number of Shares of up to 5 % of the number of Shares issued and outstanding calculated on a fully-diluted basis on the immediately preceding June 30, provided that our Board may act prior to July 1 of a given year to provide that the increase will be a lesser number of shares.

On July 1, 2022, 3,999,369 shares were added to the 2021 Plan pursuant to the plan provision.

Under the ESPP Plan, on July 1, 2022 and each July 1 thereafter through (and including) July 1, 2031, the number of shares of Common Stock reserved and available for issuance under the Plan shall be cumulatively increased by the lesser of (a) 1 % of the number of shares of Common Stock issued and outstanding calculated on a fully-diluted basis on the immediately preceding June 30;

or (b) such lesser number of shares as the Administrator shall approve.

On July 1, 2022, 799,873 shares were added to the ESPP Plan pursuant to the plan provision.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data