What changed in this filing

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Item 1. Financial Statements

2022-09-01 compared with 2022-06-01 · 128 added, 81 removed, 607 unchanged (26% of the section changed)

2 unchanged sentences

(In thousands, except share and per share data)

January 31, 2022 April 30, 2022

January 31, 2022 July 31, 2022

Current assets

Cash and cash equivalents (VIE:

$ 4,183 and $ 3,388 at January 31, 2022 and April 30, 2022, respectively)

$ 4,183 and $ 2,954 at January 31, 2022 and July 31, 2022, respectively)

$ 88,014 $ 86,148

Accounts receivable, less allowance for doubtful accounts of $ 151 and $ 166 at January 31, 2022 and April 30, 2022, respectively

Accounts receivable, less allowance for doubtful accounts of $ 151 and $ 301 at January 31, 2022 and July 31, 2022, respectively

74,528 68,347

29 unchanged sentences

Preferred stock, $ 0.001 par value;

10,000,000 shares authorized, and none issued and outstanding as of January 31, 2022 and April 30, 2022

10,000,000 shares authorized, and none issued and outstanding as of January 31, 2022 and July 31, 2022

Common stock, $ 0.0005 par value;

500,000,000 shares authorized as of January 31, 2022 and April 30, 2022;

109,778,542 and 110,128,561 shares issued and outstanding as of January 31, 2022 and April 30, 2022, respectively

500,000,000 shares authorized as of January 31, 2022 and July 31, 2022;

109,778,542 and 110,616,050 shares issued and outstanding as of January 31, 2022 and July 31, 2022, respectively

Additional paid-in capital 1,277,258 1,306,339

6 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2021 2022 2021 2022

Subscription $ 53,934 $ 84,445 $ 104,967 $ 163,634

34 unchanged sentences

(In thousands)

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2021 2022 2021 2022

Net loss $ ( 14,263 ) $ ( 27,424 ) $ ( 29,868 ) $ ( 57,427 )

12 unchanged sentences

(In thousands, except share data)

Three Months Ended April 30, 2021

Three Months Ended July 31, 2021

Common Stock Additional

4 unchanged sentences

Shares Amount

Balance, January 31, 2021 93,643,759 $ 47 $ 585,956 $ 240 $ ( 161,064 ) $ 425,179

Balance, April 30, 2021 95,318,070 $ 48 $ 601,034 $ 161 $ ( 176,202 ) $ 425,041

Exercise of stock options 316,241 — 1,315 — — 1,315

3 unchanged sentences

Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — 177 — ( 13,860 ) ( 13,683 )

Balance, July 31, 2021 95,927,741 $ 48 $ 610,166 $ ( 259 ) $ ( 190,062 ) $ 419,893

Three Months Ended July 31, 2022

Common Stock Additional

Capital Other

Comprehensive

Income (Loss) Accumulated

Deficit Total

Shares Amount

Balance, April 30, 2022 110,128,561 $ 55 $ 1,290,295 $ 762 $ ( 239,275 ) $ 1,051,837

Three Months Ended April 30, 2022

Exercise of stock options 148,419 — 1,084 — — 1,084

Stock issuance upon vesting of restricted stock units 246,834 — — — — —

Stock issuance under the employee stock purchase plan 92,236 — 2,424 — — 2,424

Stock-based compensation — — 12,664 — — 12,664

Other comprehensive income — — — 457 — 457

Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — ( 128 ) — ( 27,117 ) ( 27,245 )

Balance, July 31, 2022 110,616,050 $ 55 $ 1,306,339 $ 1,219 $ ( 266,392 ) $ 1,041,221

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

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except share data)

Six Months Ended July 31, 2021

Common Stock Additional

8 unchanged sentences

Stock-based compensation — — 14,704 — — 14,704

Other comprehensive loss — — — ( 499 ) — ( 499 )

Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — 307 — ( 28,998 ) ( 28,691 )

Balance, July 31, 2021 95,927,741 $ 48 $ 610,166 $ ( 259 ) $ ( 190,062 ) $ 419,893

Six Months Ended July 31, 2022

Common Stock Additional

Capital Other

Comprehensive

Income (Loss) Accumulated

Deficit Total

Shares Amount

Balance, January 31, 2022 109,778,542 $ 55 $ 1,277,258 $ ( 72 ) $ ( 209,616 ) $ 1,067,625

Exercise of stock options 305,394 — 1,856 — — 1,856

Stock issuance upon vesting of restricted stock units 439,878 — — — — —

Stock issuance under the employee stock purchase plan 92,236 — 2,424 — — 2,424

Stock-based compensation — — 25,958 — — 25,958

Other comprehensive income — — — 1,291 — 1,291

Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — ( 1,157 ) — ( 56,776 ) ( 57,933 )

Balance, April 30, 2022 110,128,561 $ 55 $ 1,290,295 $ 762 $ ( 239,275 ) $ 1,051,837

Balance, July 31, 2022 110,616,050 $ 55 $ 1,306,339 $ 1,219 $ ( 266,392 ) $ 1,041,221

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

1 unchanged sentence

(In thousands)

Three Months Ended April 30,

Six Months Ended July 31,

Cash flows from operating activities

11 unchanged sentences

Provision for (recovery of) bad debt ( 5 ) 154

Net foreign currency (gains) losses ( 566 ) 1,582

Net foreign currency losses 245 2,635

Change in operating assets and liabilities:

16 unchanged sentences

Exercise of stock options 9,200 1,856

Stock issuance under the employee stock purchase plan — 2,424

Principal payments on financing obligations ( 95 ) ( 303 )

1 unchanged sentence

Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash ( 466 ) ( 1,895 )

Net increase (decrease) in cash, cash equivalents, and restricted cash 15,279 ( 4,330 )

Net increase in cash, cash equivalents, and restricted cash 28,266 3,131

Cash, cash equivalents, and restricted cash, beginning of period 371,425 88,399

9 unchanged sentences

Purchase of property and equipment, accrued but not paid $ 12,379 $ 7,359

Net working capital receivable adjustment $ — $ 676

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

28 unchanged sentences

Toronto, Canada;

Paris, France;

Madrid, Spain;

and Tokyo, Japan.

52 unchanged sentences

The Company’s financial instruments that are exposed to concentration of credit risk consist primarily of cash, cash equivalents, restricted cash and accounts receivable.

The Company’s cash and cash equivalents exceeded federally insured limits at January 31, 2022 and April 30, 2022.

The Company’s cash and cash equivalents exceeded federally insured limits at January 31, 2022 and July 31, 2022.

The Company maintains its cash, cash equivalents and restricted cash with high-credit-quality financial institutions.

As of January 31, 2022, one individual customer represented more than 12 % of accounts receivable and, as of April 30, 2022, one customer represented 16 % of accounts receivable.

For the three months ended April 30, 2021 and 2022, no individual customer represented more than 10% of the Company’s total revenues.

As of January 31, 2022, one individual customer represented 12 % of accounts receivable and, as of July 31, 2022, two customers represented 12 % and 11 % of accounts receivable.

For the three and six months ended July 31, 2021 and 2022, no individual customer represented more than 10% of the Company’s total revenues.

Restricted Cash:

4 unchanged sentences

(In thousands, except share and per share amounts and unless otherwise indicated)

included in other long-term assets at January 31, 2022 and April 30, 2022 on the unaudited condensed consolidated balance sheets.

included in other long-term assets at January 31, 2022 and July 31, 2022 on the unaudited condensed consolidated balance sheets.

Accounts Receivable and Allowances:

10 unchanged sentences

A summary of activity in the allowance for doubtful accounts is as follows:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2021 2022 2021 2022

Balance, beginning of period $ 52 $ 166 $ 88 $ 151

6 unchanged sentences

The Company assesses at each reporting period if the investment continues to qualify for the measurement alternative.

Gains or losses resulting from changes in fair value are recognized currently in the Company's consolidated statement of operations.

Gains or losses resulting from observable price changes are recognized currently in the Company's consolidated statement of operations.

The Company assesses the investment whenever events or changes in circumstances indicate that the carrying value of the investment may not be recoverable.

8 unchanged sentences

In October 2019, the Company initially contributed $ 4.7 million in cash in exchange for 51 % of the outstanding common stock of nCino K.K.

As of April 30, 2022, the Company controls a majority of the outstanding common stock in nCino K.K.

As of July 31, 2022, the Company controls a majority of the outstanding common stock in nCino K.K.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

5 unchanged sentences

are classified outside of permanent equity in the Company’s unaudited condensed consolidated balance sheets.

The estimated redemption value of the call/put option embedded in the redeemable non-controlling interest was $ 2.3 million at April 30, 2022.

The estimated redemption value of the call/put option embedded in the redeemable non-controlling interest was $ 2.4 million at July 31, 2022.

The following table summarizes the activity in the redeemable non-controlling interests for the period indicated below:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2021 2022 2021 2022

Balance, beginning of period $ 3,065 $ 3,419 $ 3,791 $ 2,882

11 unchanged sentences

Significant unobservable inputs which are supported by little or no market activity.

The carrying amounts of cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value as of January 31, 2022 and April 30, 2022 because of the relatively short duration of these instruments.

The carrying amounts of cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value as of January 31, 2022 and July 31, 2022 because of the relatively short duration of these instruments.

The Company evaluated its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period.

The following table summarizes the Company’s financial assets measured at fair value as of January 31, 2022 and April 30, 2022 and indicates the fair value hierarchy of the valuation:

The following table summarizes the Company’s financial assets measured at fair value as of January 31, 2022 and July 31, 2022 and indicates the fair value hierarchy of the valuation:

Fair value measurements on a recurring basis as of January 31, 2022

5 unchanged sentences

(In thousands, except share and per share amounts and unless otherwise indicated)

Fair value measurements on a recurring basis as of April 30, 2022

Fair value measurements on a recurring basis as of July 31, 2022

Level 1 Level 2 Level 3

5 unchanged sentences

The Company's assets measured at fair value on a nonrecurring basis include the investment accounted for under the measurement alternative.

There was no adjustment or impairment recognized for the three months ended April 30, 2021 and 2022, respectively.

There was no adjustment or impairment recognized for the three and six months ended July 31, 2021 and 2022, respectively.

Revenues by Geographic Area

Revenues by geographic region were as follows:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2021 2022 2021 2022

United States $ 55,706 $ 84,678 $ 109,032 $ 164,607

8 unchanged sentences

Accounts Receivable

Accounts receivable, less allowance for doubtful accounts, is as follows as of January 31, 2022 and April 30, 2022:

As of January 31, 2022 As of April 30, 2022

Accounts receivable, less allowance for doubtful accounts, is as follows as of January 31, 2022 and July 31, 2022:

As of January 31, 2022 As of July 31, 2022

Trade accounts receivable $ 71,417 $ 64,944

3 unchanged sentences

Total accounts receivable, net $ 74,528 $ 68,347

1 Includes $ 0.5 million and $ 0.3 million income tax receivable of as of January 31, 2022 and April 30, 2022, respectively.

1 Includes $ 0.5 million and $ 0.3 million income tax receivable of as of January 31, 2022 and July 31, 2022, respectively.

Deferred Revenue and Remaining Performance Obligations

Significant movements in the deferred revenue balance during the period consisted of increases due to payments received or due in advance prior to the transfer of control of the underlying performance obligations to the customer, which were offset by decreases due to revenues recognized in the period.

During the three months ended April 30, 2022, $ 53.0 million of revenues were recognized out of the deferred revenue balance as of January 31, 2022.

During the six months ended July 31, 2022, $ 89.5 million of revenues were recognized out of the deferred revenue balance as of January 31, 2022.

Transaction price allocated to remaining performance obligations represents contracted revenues that have not yet been recognized, which includes both deferred revenue and amounts that will be invoiced and recognized as revenues in future periods.

1 unchanged sentence

The Company applies practical expedients to exclude amounts related to performance obligations that are billed and recognized as they are delivered, optional purchases that do not represent material rights, and any estimated amounts of variable consideration that are subject to constraint.

Remaining performance obligations were $ 905.6 million as of April 30, 2022.

Remaining performance obligations were $ 907.4 million as of July 31, 2022.

The Company expects to recognize approximately 65 % of its remaining performance obligation as revenues in the next 24 months, approximately 29 % more in the following 25 to 48 months, and the remainder thereafter.

1 unchanged sentence

Property and equipment, net consisted of the following:

As of January 31, 2022 As of April 30, 2022

As of January 31, 2022 As of July 31, 2022

Furniture and fixtures $ 7,503 $ 7,590

12 unchanged sentences

The Company recognized depreciation expense as follows:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2021 2022 2021 2022

Cost of subscription revenues $ 81 $ 86 $ 167 $ 176

13 unchanged sentences

(In thousands, except share and per share amounts and unless otherwise indicated)

The Acquisition-Date estimated fair value of the consideration transferred is as follows:

The fair value of the consideration transferred was $ 933.6 million on the Acquisition Date, subject to a net working capital adjustment.

The net working capital adjustment was finalized in July 2022, resulting in a decrease to the purchase price of $ 0.7 million which was recorded to goodwill.

The total consideration transferred is as follows:

Total Consideration

1 unchanged sentence

Voting common stock issued ( 12,762,146 shares) 1

Net working capital adjustment ( 676 )

Total consideration $ 932,919

1 unchanged sentence

$ 0.3 million was allocated to the purchase consideration and $ 1.1 million was allocated to future services and will be expensed over the service period remaining in fiscal 2023 on a straight-line basis.

Approximately $ 3.0 million of the cash paid is being held in escrow until the completion of the final post-closing adjustments.

The number of shares for stock consideration was based on a 20-day volume weighted average price fair value of $ 72.53 established prior to and including November 12, 2021 to determine the number of shares to be issued on the Acquisition Date.

On the Acquisition Date, the Company's closing stock price was $ 50.82 per share.

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the Acquisition Date:

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of July 31, 2022:

Cash and cash equivalents $ 17,038

13 unchanged sentences

Due to the timing and the magnitude of the transaction, initial accounting for the acquisition is not complete, and further measurement period adjustments may occur in fiscal year 2023, but no later than one year from the Acquisition Date.

The Company has estimated the preliminary fair value of net assets acquired based on information currently available and with the assistance of independent third-party valuations and will continue to adjust those estimates as additional information becomes available, valuations are finalized and the tax returns for the pre-acquisition period are completed.

The primary areas of the acquisition accounting that remain preliminary relate to, but are not limited to, (i) finalizing the review and valuation of intangible assets (including key assumptions, inputs and estimates), (ii) finalizing the Company's review of certain assets acquired and liabilities assumed, (iii) finalizing the evaluation and valuation of certain legal matters and/or loss contingencies, including those that the Company may not yet be aware of but meet the requirement to qualify as a pre-acquisition contingency, and (iv) finalizing our estimate of the impact of acquisition accounting on deferred income taxes or liabilities.

As the initial

The Company has estimated the preliminary fair value of net assets acquired based on information currently available and with the assistance of independent third-party valuations and will continue to adjust those estimates as additional information becomes available and the tax returns for the pre-acquisition period are completed.

The primary areas of the acquisition accounting that remain preliminary relate to, but are not limited to, (i) finalizing the Company's review of certain assets acquired and liabilities assumed, (ii) finalizing the evaluation and valuation of certain legal matters and/or loss contingencies, including those that the Company may not yet be aware of but meet the requirement to qualify as a pre-acquisition contingency, and (iii) finalizing our estimate of the impact of acquisition accounting on deferred income taxes or liabilities.

As the initial acquisition accounting is based on preliminary assessments, actual values may differ materially when final information

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share amounts and unless otherwise indicated)

acquisition accounting is based on preliminary assessments, actual values may differ materially when final information becomes available.

becomes available.

The Company believes the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed.

9 unchanged sentences

Trade names represents the preliminarily estimated fair value of SimpleNexus’ company name.

The Company continues to assess the rates used in the preliminary valuation methods such as, but not limited to, the discount rates for developed technology, customer relationships and trade name and customer attrition rate for customer relationships.

Goodwill is primarily attributable to expanded market opportunities, synergies expected from the acquisition, and assembled workforce and approximately $ 189.2 million is expected to be deductible for tax purposes.

2 unchanged sentences

Balance, January 31, 2022 $ 841,487

SimpleNexus net working capital purchase adjustment ( 676 )

Translation adjustments ( 85 )

Balance, April 30, 2022 $ 841,503

Balance, July 31, 2022 $ 840,726

Intangible assets

Intangible assets, net are as follows:

As of January 31, 2022 As of April 30, 2022

As of January 31, 2022 As of July 31, 2022

Amount Accumulated

9 unchanged sentences

The Company recognized amortization expense as follows:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2021 2022 2021 2022

Cost of subscription revenues $ 393 $ 4,256 $ 789 $ 8,518

1 unchanged sentence

Total amortization expense $ 810 $ 7,028 $ 1,624 $ 14,061

The expected future amortization expense for intangible assets as of April 30, 2022 is as follows:

The expected future amortization expense for intangible assets as of July 31, 2022 is as follows:

Fiscal Year Ending January 31,

6 unchanged sentences

This agreement expires in June 2027 and will automatically renew in annual increments thereafter unless either party gives notice of non-renewal before the end of the initial term or the respective renewal term.

Cost of subscription revenues in each of the three months ended April 30, 2021 and 2022 substantially consists of fees paid for access to the related party’s platform, including their hosting infrastructure and data center operations.

Cost of subscription revenues in each of the three and six months ended July 31, 2021 and 2022 substantially consists of fees paid for access to the related party’s platform, including their hosting infrastructure and data center operations.

Based solely on information reported in a Schedule 13G/A filed with the SEC on February 11, 2022, the reseller is no longer considered a related party as of December 31, 2021 and the amounts disclosed related to them are accordingly presented while the reseller was considered a related party.

The reseller was considered a related party for the three months ended April 30, 2021 and was no longer considered a related party for the three months ended April 30, 2022.

The Company has recorded expenses of $ 10.6 million for the three months ended April 30, 2021.

The reseller was considered a related party for the three and six months ended July 31, 2021 and was no longer considered a related party for the three and six months ended July 31, 2022.

The Company has recorded expenses of $ 11.2 million for the three months ended July 31, 2021 and $ 21.7 million for the six months ended July 31, 2021.

The Company continues to do business with the reseller.

1 unchanged sentence

Stockholders’ Equity

At April 30, 2022, the Company committed a total of 31,049,997 shares of common stock for future issuance as follows:

At July 31, 2022, the Company committed a total of 30,562,508 shares of common stock for future issuance as follows:

Issued and outstanding stock options 2,308,091

5 unchanged sentences

Stock Options

Stock option activity for the three months ended April 30, 2022 was as follows:

Stock option activity for the six months ended July 31, 2022 was as follows:

Shares Weighted

3 unchanged sentences

Exercised ( 305,394 ) 6.09

Outstanding, April 30, 2022 2,463,322 $ 6.80

Exercisable, April 30, 2022 2,197,707 $ 5.78

Fully vested or expected to vest, April 30, 2022 2,436,761 $ 6.71

As of April 30, 2022, there was $ 0.7 million of total unrecognized compensation expense related to unvested stock-based compensation arrangements under the 2014 Stock Plan ("2014 Plan") and 2019 Equity Incentive Plan (as amended and restated, "2019 Plan").

Outstanding, July 31, 2022 2,308,091 $ 6.74

Exercisable, July 31, 2022 2,108,538 $ 5.88

Fully vested or expected to vest, July 31, 2022 2,288,136 $ 6.66

As of July 31, 2022, there was $ 0.4 million of total unrecognized compensation expense related to unvested stock-based compensation arrangements under the 2014 Stock Plan ("2014 Plan") and 2019 Equity Incentive Plan (as amended and restated, "2019 Plan").

That cost is expected to be recognized over a weighted average period of 0.89 years.

Restricted Stock Units

RSU activity during the three months ended April 30, 2022 was as follows:

RSU activity during the six months ended July 31, 2022 was as follows:

Shares Weighted Average

4 unchanged sentences

Forfeited ( 309,494 ) 48.45

Nonvested, April 30, 2022 4,071,125 $ 45.14

As of April 30, 2022, total unrecognized compensation expense related to non-vested RSUs was $ 154.7 million, adjusted for estimated forfeitures, based on the estimated fair value of the Company’s common stock at the time of grant.

Nonvested, July 31, 2022 3,865,041 $ 45.71

As of July 31, 2022, total unrecognized compensation expense related to non-vested RSUs was $ 142.0 million, adjusted for estimated forfeitures, based on the estimated fair value of the Company’s common stock at the time of grant.

That cost is expected to be recognized over a weighted average period of 3.26 years.

2 unchanged sentences

Thereafter, offering periods will begin on January 1 and July 1.

The fair value of ESPP shares during the three months ended April 30, 2022 was estimated at the date of grant using the Black-Scholes option valuation model based on assumptions as follows for ESPP awards:

(i) expected life of 0.5 years, (ii) expected volatility of 49.65 %, (iii) expected dividends of 0.00 %, (iv) risk-free interest rate of 0.22 %.

As of April 30, 2022, total unrecognized compensation expense related to the ESPP was $ 0.3 million.

That cost is expected to be recognized over the remaining term of the offering period that began on January 1, 2022 and will end on June 30, 2022.

The fair value of ESPP shares during the six months ended July 31, 2022 was estimated at the date of grant using the Black-Scholes option valuation model based on assumptions as follows for ESPP awards:

(i) expected life of 0.5 years, (ii) expected volatility of 49.65 % to 84.59 %, (iii) expected dividends of 0.00 %, (iv) risk-free interest rate of 0.22 % to 2.52 %.

As of July 31, 2022, total unrecognized compensation expense related to the ESPP was $ 0.8 million.

That cost is expected to be recognized over the remaining term of the offering period that began on July 1, 2022 and will end on December 31, 2022.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

Total stock-based compensation expense included in our consolidated statements of operations were as follows:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2021 2022 2021 2022

Cost of subscription revenues $ 257 $ 352 $ 542 $ 728

7 unchanged sentences

The components of lease expense were as follows:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2021 2022 2021 2022

Operating lease expense $ 739 $ 973 $ 1,421 $ 1,938

3 unchanged sentences

Supplemental cash flow information related to operating leases were as follows:

Three Months Ended April 30,

Six Months Ended July 31,

Cash paid for amounts included in the measurement of operating lease liabilities $ 1,435 $ 2,007

Right-of-use assets obtained in exchange for operating lease liabilities 1,771 677

The weighted-average remaining lease term and weighted-average discount rate for the Company's operating lease liabilities as of April 30, 2022 were 4.34 years and 4.4 %, respectively.

The weighted-average remaining lease term and weighted-average discount rate for the Company's operating lease liabilities as of July 31, 2022 were 4.07 years and 4.4 %, respectively.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share amounts and unless otherwise indicated)

Future minimum lease payments as of April 30, 2022 were as follows:

Future minimum lease payments as of July 31, 2022 were as follows:

Fiscal Year Ending January 31, Operating Leases

6 unchanged sentences

Long-term lease obligations $ 9,468

As of April 30, 2022, the Company had an additional operating lease that had not yet commenced, which is excluded from the table above.

The operating lease will commence in fiscal year 2023 and have total undiscounted future payments of $ 0.7 million with a lease term of 2 years.

Revolving Credit Facility

13 unchanged sentences

Consolidated Liquidity is measured as the sum of 100 % of unrestricted and unencumbered cash of the Company and its domestic subsidiaries, 75 % of unrestricted and unencumbered cash of the Company’s foreign subsidiaries and the lesser of Credit Facility availability and $ 25.0 million.

The Company is also required to maintain at least $ 5.0 million of the Company's cash and/or marketable securities with the lender which is considered restricted cash and is included in other long-term assets at April 30, 2022 on the unaudited condensed consolidated balance sheets.

The Company is also required to maintain at least $ 5.0 million of the Company's cash and/or marketable securities with the lender which is considered restricted cash and is included in other long-term assets at July 31, 2022 on the unaudited condensed consolidated balance sheets.

The Credit Facility is guaranteed by the Company and each of its current and future material domestic subsidiaries (the “Guarantors”) and secured by substantially all of the personal property, subject to customary exceptions, of the Borrower and the Guarantors, in each case, now owned or later acquired, including a pledge of all of the Borrower’s capital stock, the capital stock of all of the Company’s domestic subsidiaries, and 65 % of the capital stock of foreign subsidiaries that are directly owned by the Borrower or a Guarantor.

As of July 31, 2022, unamortized debt issuance costs were $ 0.3 million and are included in other long-term assets.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share amounts and unless otherwise indicated)

As of April 30, 2022, unamortized debt issuance costs were $ 0.3 million and are included in other long-term assets.

As of April 30, 2022, the Company had no amounts outstanding or letters of credit issued on the Credit Facility and was in compliance with all covenants.

The available borrowing capacity under the Credit Facility was $ 50.0 million as of April 30, 2022.

As of July 31, 2022, the Company had no amounts outstanding or letters of credit issued on the Credit Facility and was in compliance with all covenants.

The available borrowing capacity under the Credit Facility was $ 50.0 million as of July 31, 2022.

Commitments and Contingencies

19 unchanged sentences

(In thousands, except share and per share amounts and unless otherwise indicated)

Purchase commitments and future minimum lease payments required under financing obligations as of April 30, 2022 is as follows:

Purchase commitments and future minimum lease payments required under financing obligations as of July 31, 2022 is as follows:

Fiscal Year Ending January 31, Purchase commitments Financing obligations - leased facility

44 unchanged sentences

Based solely on information reported in a Schedule 13G/A filed with the SEC on February 11, 2022, this vendor is no longer considered a related party as of December 31, 2021, and the amounts disclosed related to them are accordingly presented while the vendor was considered a related party.

The vendor was considered a related party for the three months ended April 30, 2021, and was no longer considered a related party for the three months ended April 30, 2022.

Total payments for these services recorded to expenses were $ 0.4 million for the three months ended April 30, 2021.

The vendor was considered a related party for the three and six months ended July 31, 2021 and was no longer considered a related party for the three and six months ended July 31, 2022.

Total payments for these services recorded to expenses were $ 0.4 million for the three months ended July 31, 2021 and $ 0.8 million for the six months ended July 31, 2021.

The Company continues to do business with the vendor.

5 unchanged sentences

The dilutive effect of outstanding awards is reflected in diluted earnings per share by application of the treasury stock method.

Diluted loss per share for the three months ended April 30, 2021 and 2022 is the same as the basic loss per share as there was a net loss for those periods, and inclusion of potentially issuable shares was anti-dilutive.

Diluted loss per share for the three months ended July 31, 2021 and 2022 and for the six months ended July 31, 2021 and 2022 is the same as the basic loss per share as there was a net loss for those periods, and inclusion of potentially issuable shares was anti-dilutive.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

The components of basic and diluted loss per share for periods presented are as follows (in thousands, except share and per share data):

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2021 2022 2021 2022

Basic and diluted loss per share:

5 unchanged sentences

The weighted-average number of shares outstanding used in the computation of diluted loss per share does not include the effect of the following potential outstanding common stock because the effect would have been anti-dilutive:

Three Months Ended April 30,

Six Months Ended July 31,

Stock options issued and outstanding 3,465,303 2,308,091

2 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements