~~Registrant’s~~Registrant's telephone number, including area code: (866) 432-6736

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

~~There were~~As of October 5, 2023, E2open Parent Holdings, Inc. had ~~302,254,586~~303,303,494 shares of Class A common stock ~~$0.0001 par value per share, issued and outstanding as of October 5, 2022.~~outstanding.

This Quarterly Report on Form 10-Q (Quarterly Report) contains ~~“forward-looking statements”~~"forward-looking statements" within the meaning of the federal securities law. These forward-looking statements give E2open Parent Holdings, Inc.'s (we, our, us, Company or E2open) current expectations and include projections of results of operations or financial condition or forecasts of future events. Words such as "may," "can," "should," "will," "estimate," "plan," "project," "forecast," "intend," "expect," "anticipate," "believe," "seek," "target" and similar expressions are used to identify forward-looking statements. Without limiting the generality of the forgoing, forward-looking statements contained in this document include our expectations regarding our future growth, operational and financial performance and business prospects and opportunities.

These forward-looking statements are based on information available as of the date of this Quarterly Report and ~~management’s then~~management's current expectations, forecasts and assumptions, and involve a number of judgments, known and unknown risks and uncertainties and other factors, many of which are outside our control and our directors, officers and affiliates. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date. We do not undertake any obligation to update, add or to otherwise correct any forward-looking statements contained herein to reflect events or circumstances after the date they were made, whether as a result of new information, future events, inaccuracies that become apparent after the date hereof or otherwise, except as may be required under applicable securities laws.

As a result of a number of known and unknown risks and uncertainties, our results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

For a further discussion of these and other factors that could impact our future results and performance, see Part I, Item 1A., Risk Factors in our Annual Report on Form 10-K for the fiscal year ended February 28, ~~2022,~~2023, filed with the SEC on ~~April 29, 2022 (2022~~May 1, 2023 (2023 Form 10-K).


(In thousands, except share amounts)	August 31, 2022			February 28, 2022			August 31, 2023			February 28, 2023
	(Unaudited)						(Unaudited)
Assets
Cash and cash equivalents	$	98,056		$	155,481		$	111,840		$	93,032
Restricted cash		17,404			19,073			22,761			11,310
Accounts receivable - net of allowance of $5,308 and $3,055 as of August 31, 2022 and February 28, 2022, respectively		154,772			155,341
Accounts receivable, net								122,120			174,809
Prepaid expenses and other current assets		30,527			26,243			30,882			25,200
Total current assets		300,759			356,138			287,603			304,351
Long-term investments		185			208
Goodwill		3,292,660			3,756,871			2,532,171			2,927,807
Intangible assets, net		1,136,109			1,181,390			960,785			1,051,124
Property and equipment, net		76,913			65,937			69,498			72,476
Operating lease right-of-use assets		24,839			28,102			18,748			18,758
Other noncurrent assets		20,771			16,809			27,073			25,659
Total assets	$	4,852,236		$	5,405,455		$	3,895,878		$	4,400,175
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities	$	115,465		$	131,246		$	90,888		$	97,491
Incentive program payable		17,404			19,073
Channel client deposits payable								22,761			11,310
Deferred revenue		177,068			190,992			170,822			203,824
Payable to Logistyx sellers		57,625			—
Current portion of notes payable		10,978			89,097			11,119			11,144
Current portion of operating lease obligations		8,106			7,652			7,387			7,622
Current portion of financing lease obligations		2,117			2,307			625			2,582
Income taxes payable								3,003			2,190
Total current liabilities		388,763			440,367			306,605			336,163
Long-term deferred revenue		2,650			1,141			2,212			2,507
Operating lease obligations		19,960			21,202			15,287			15,379
Financing lease obligations		74			1,950			776			1,049
Notes payable		1,046,397			863,577			1,040,485			1,043,636
Tax receivable agreement liability		60,429			66,590			64,278			69,745
Warrant liability		46,525			67,139			13,447			29,616
Contingent consideration		34,108			45,568			19,288			29,548
Deferred taxes		257,733			413,038			72,986			144,529
Other noncurrent liabilities		779			712			766			1,083
Total liabilities		1,857,418			1,921,284			1,536,130			1,673,255
Commitments and Contingencies (Note 27)
Commitments and Contingencies (Note 26)
Stockholders' Equity
Class A common stock; $0.0001 par value, 2,500,000,000 shares authorized; 302,199,373 and 301,536,621 issued and 302,022,719 and 301,359,967 outstanding as of August 31, 2022 and February 28, 2022, respectively		31			31
Class V common stock; $0.0001 par value; 42,747,890 shares authorized; 33,192,007 and 33,560,839 issued and outstanding as of August 31, 2022 and February 28, 2022, respectively		—			—
Series B-1 common stock; $0.0001 par value; 9,000,000 shares authorized; 94 shares issued and outstanding		—			—
Series B-2 common stock; $0.0001 par value; 4,000,000 shares authorized; 3,372,184 issued and outstanding		—			—
Class A common stock; $0.0001 par value, 2,500,000,000 shares authorized; 303,426,175 and 302,582,007 issued and 303,249,521 and 302,405,353 outstanding as of August 31, 2023 and February 28, 2023, respectively								30			30
Class V common stock; $0.0001 par value; 42,747,890 shares authorized; 32,992,007 shares issued and outstanding as of August 31, 2023 and February 28, 2023								—			—
Series B-1 common stock; $0.0001 par value; 9,000,000 shares authorized; 94 shares issued and outstanding as of August 31 2023 and February 28, 2023								—			—
Series B-2 common stock; $0.0001 par value; 4,000,000 shares authorized; 3,372,184 shares issued and outstanding as of August 31, 2023 and February 28, 2023								—			—
Additional paid-in capital		3,370,315			3,362,219			3,388,570			3,378,633
Accumulated other comprehensive loss		(91,681	)		(19,019	)		(46,199	)		(68,603	)
Accumulated deficit		(535,020	)		(154,976	)		(1,163,946	)		(803,679	)
Treasury stock, at cost: 176,654 shares		(2,473	)		(2,473	)
Treasury stock, at cost: 176,654 shares as of August 31, 2023 and February 28, 2023								(2,473	)		(2,473	)
Total E2open Parent Holdings, Inc. equity		2,741,172			3,185,782			2,175,982			2,503,908
Noncontrolling interest		253,646			298,389			183,766			223,012
Total stockholders' equity		2,994,818			3,484,171			2,359,748			2,726,920
Total liabilities and stockholders' equity	$	4,852,236		$	5,405,455		$	3,895,878		$	4,400,175


	Three Months Ended August 31,						Six Months Ended August 31,						Three Months Ended August 31,						Six Months Ended August 31,
(In thousands, except per share amounts)	2022			2021			2022			2021			2023			2022			2023			2022
Revenue
Subscriptions	$	131,621		$	61,725		$	261,168		$	112,759		$	134,734		$	131,621		$	269,637		$	261,168
Professional services and other		29,055			16,354			59,889			31,647			23,754			29,055			48,971			59,889
Total revenue		160,676			78,079			321,057			144,406			158,488			160,676			318,608			321,057
Cost of Revenue
Subscriptions		36,302			16,246			69,436			32,754			36,780			36,302			73,324			69,436
Professional services and other		22,383			10,967			43,029			21,107			17,844			22,383			37,372			43,029
Amortization of acquired intangible assets		24,566			12,338			49,467			23,849			24,698			24,566			49,328			49,467
Total cost of revenue		83,251			39,551			161,932			77,710			79,322			83,251			160,024			161,932
Gross Profit		77,425			38,528			159,125			66,696			79,166			77,425			158,584			159,125
Operating Expenses
Research and development		25,587			16,208			48,149			31,909			24,945			25,587			50,811			48,149
Sales and marketing		22,745			11,174			46,900			23,688			21,551			22,745			41,109			46,900
General and administrative		23,355			13,401			43,701			27,118			38,550			23,355			64,675			43,701
Acquisition-related expenses		5,580			7,174			12,344			16,952			18			5,580			407			12,344
Amortization of acquired intangible assets		21,023			3,543			42,558			7,373			19,993			21,023			40,121			42,558
Goodwill impairment		514,816			—			514,816			—			—			514,816			410,041			514,816
Total operating expenses		613,106			51,500			708,468			107,040			105,057			613,106			607,164			708,468
Loss from operations		(535,681	)		(12,972	)		(549,343	)		(40,344	)		(25,891	)		(535,681	)		(448,580	)		(549,343	)
Other income (expense)
Interest and other expense, net		(18,049	)		(6,332	)		(33,462	)		(11,235	)		(25,517	)		(18,049	)		(51,243	)		(33,462	)
Change in tax receivable agreement liability		8,062			(637	)		6,392			(3,136	)
Gain (loss) from change in fair value of warrant liability		15,159			18,727			20,614			(41,216	)
Gain (loss) from change in fair value of contingent consideration		7,260			(16,780	)		11,460			(90,040	)
Total other income (expense)		12,432			(5,022	)		5,004			(145,627	)
Gain from change in tax receivable agreement liability														7,927			8,062			5,467			6,392
Gain from change in fair value of warrant liability														1,489			15,159			16,169			20,614
Gain from change in fair value of contingent consideration														1,260			7,260			10,260			11,460
Total other (expense) income														(14,841	)		12,432			(19,347	)		5,004
Loss before income tax provision		(523,249	)		(17,994	)		(544,339	)		(185,971	)		(40,732	)		(523,249	)		(467,927	)		(544,339	)
Income tax benefit (expense)		113,664			(5,994	)		122,133			(7,372	)
Income tax benefit														2,103			113,664			68,414			122,133
Net loss		(409,585	)		(23,988	)		(422,206	)		(193,343	)		(38,629	)		(409,585	)		(399,513	)		(422,206	)
Less: Net loss attributable to noncontrolling interest		(40,897	)		(3,471	)		(42,162	)		(30,568	)		(3,757	)		(40,897	)		(39,246	)		(42,162	)
Net loss attributable to E2open Parent Holdings, Inc.	$	(368,688	)	$	(20,517	)	$	(380,044	)	$	(162,775	)	$	(34,872	)	$	(368,688	)	$	(360,267	)	$	(380,044	)

Weighted average common shares outstanding:
Basic		301,898			195,148			301,635			191,099			303,220			301,898			302,861			301,635
Diluted		301,898			195,148			301,635			191,099			303,220			301,898			302,861			301,635
Net loss attributable to E2open Parent Holdings, Inc. common shareholders per share:
Basic	$	(1.22	)	$	(0.11	)	$	(1.26	)	$	(0.85	)	$	(0.12	)	$	(1.22	)	$	(1.19	)	$	(1.26	)
Diluted	$	(1.22	)	$	(0.11	)	$	(1.26	)	$	(0.85	)	$	(0.12	)	$	(1.22	)	$	(1.19	)	$	(1.26	)


(In thousands)	Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Income			Retained Earnings (Accumulated Deficit)			Treasury Stock			Total E2open Equity			Noncontrolling Interest			Total Equity			Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Treasury Stock			Total E2open Equity			Noncontrolling Interest			Total Equity
Balance, February 28, 2021	$	19	$	2,071,206		$	2,388		$	10,800		$	—		$	2,084,413		$	392,945		$	2,477,358
Balance, February 28, 2022																								$	31	$	3,362,219		$	(19,019	)	$	(154,976	)	$	(2,473	)	$	3,185,782		$	298,389		$	3,484,171
Share-based compensation		—		2,043			—			—			—			2,043			—			2,043			—		3,188			—			—			—			3,188			—			3,188
Other comprehensive income		—		—			1,475			—			—			1,475			—			1,475
Net loss		—		—			—			(142,258	)		—			(142,258	)		(27,097	)		(169,355	)
Balance, May 31, 2021		19		2,073,249			3,863			(131,458	)		—			1,945,673			365,848			2,311,521
Share-based compensation		—		2,509			—			—			—			2,509			—			2,509
Business Combination purchase price adjustment		—		1,666			—			—			—			1,666			1,299			2,965
Conversion of Common Units to common stock		—		27,228			—			—			—			27,228			(43,995	)		(16,767	)		—		195			—			—			—			195			(195	)		—
Conversion of Series B-1 shares to common stock		1		174,999			—			—			(2,473	)		172,527			—			172,527
Impact of Common Unit conversions on Tax Receivable Agreement		—		(7,512	)		—			—			—			(7,512	)		—			(7,512	)
Vesting of restricted stock awards, net of shares withheld for taxes																									—		(1,330	)		—			—			—			(1,330	)		—			(1,330	)
Other comprehensive loss		—		—			(6,523	)		—			—			(6,523	)		—			(6,523	)		—		—			(30,700	)		—			—			(30,700	)		—			(30,700	)
Net loss		—		—			—			(20,517	)		—			(20,517	)		(3,471	)		(23,988	)		—		—			—			(11,356	)		—			(11,356	)		(1,265	)		(12,621	)
Balance, August 31, 2021	$	20	$	2,272,139		$	(2,660	)	$	(151,975	)	$	(2,473	)	$	2,115,051		$	319,681		$	2,434,732
Balance, May 31, 2022																									31		3,364,272			(49,719	)		(166,332	)		(2,473	)		3,145,779			296,929			3,442,708
Share-based compensation																									—		5,154			—			—			—			5,154			—			5,154
Conversion of Common Units to common stock																									—		989			—			—			—			989			(2,386	)		(1,397	)
Vesting of restricted stock awards, net of shares withheld for taxes																									—		76			—			—			—			76			—			76
Impact of Common Unit conversions on Tax Receivable Agreement, net of tax																									—		(176	)		—			—			—			(176	)		—			(176	)
Other comprehensive loss																									—		—			(41,962	)		—			—			(41,962	)		—			(41,962	)
Net loss																									—		—			—			(368,688	)		—			(368,688	)		(40,897	)		(409,585	)
Balance, August 31, 2022																								$	31	$	3,370,315		$	(91,681	)	$	(535,020	)	$	(2,473	)	$	2,741,172		$	253,646		$	2,994,818


	Six Months Ended August 31,						Six Months Ended August 31,
(In thousands)	2022			2021			2023			2022
Cash flows from operating activities
Net loss	$	(422,206	)	$	(193,343	)	$	(399,513	)	$	(422,206	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization		107,380			41,000			107,168			107,380
Amortization of deferred commissions		1,838			410			2,758			1,838
Provision for credit losses		266			303			1,294			266
Amortization of debt issuance costs		2,487			1,334			2,640			2,487
Amortization of operating lease right-of-use assets		3,960			3,742			3,890			3,960
Share-based compensation		8,342			4,552			11,887			8,342
Deferred income taxes		(133,632	)		4,450			(72,721	)		(133,632	)
Right-of-use assets impairment charge		2,376			—			549			2,376
Goodwill impairment charge		514,816			—			410,041			514,816
Change in tax receivable agreement liability		(6,392	)		3,136
(Gain) loss from change in fair value of warrant liability		(20,614	)		41,216
(Gain) loss from change in fair value of contingent consideration		(11,460	)		90,040
Loss (gain) on disposal of property and equipment		162			(236	)
Indefinite-lived intangible asset impairment charge								4,000			—
Gain from change in tax receivable agreement liability								(5,467	)		(6,392	)
Gain from change in fair value of warrant liability								(16,169	)		(20,614	)
Gain from change in fair value of contingent consideration								(10,260	)		(11,460	)
Gain on operating lease termination								(189	)		—
(Gain) loss on disposal of property and equipment								(147	)		162
Changes in operating assets and liabilities:
Accounts receivable		5,610			44,785			51,394			5,610
Prepaid expenses and other current assets		257			(6,401	)		(3,338	)		257
Other noncurrent assets		(2,493	)		(3,232	)		(4,172	)		(2,493	)
Accounts payable and accrued liabilities		(15,726	)		(1,453	)		(7,825	)		(15,726	)
Incentive program payable		(1,669	)		(2,272	)
Channel client deposits payable								11,451			(1,669	)
Deferred revenue		(23,162	)		20,083			(33,296	)		(23,162	)
Changes in other liabilities		(7,976	)		(6,630	)		(2,714	)		(7,976	)
Net cash provided by operating activities		2,164			41,484			51,261			2,164
Cash flows from investing activities
Payments for acquisitions - net of cash acquired		(124,168	)		—			—			(124,168	)
Capital expenditures		(31,557	)		(17,372	)		(16,057	)		(31,557	)
Minority investment in private firm		(3,000	)		—			—			(3,000	)
Net cash used in investing activities		(158,725	)		(17,372	)		(16,057	)		(158,725	)
Cash flows from financing activities
Proceeds from PIPE investment		—			280,000
Proceeds from indebtedness		190,000			—			—			190,000
Repayments of indebtedness		(85,857	)		(1,582	)		(5,587	)		(85,857	)
Repayments of financing lease obligations		(2,213	)		(5,902	)		(2,243	)		(2,213	)
Repurchase of common stock		—			(2,473	)
Repurchase of Common Units		(1,397	)		(16,767	)
Repurchase of common units								—			(1,397	)
Payments of debt issuance costs		(4,766	)		—			—			(4,766	)
Net cash provided by financing activities		95,767			253,276
Net cash (used in) provided by financing activities								(7,830	)		95,767
Effect of exchange rate changes on cash and cash equivalents		1,700			(1,244	)		2,885			1,700
Net (decrease) increase in cash, cash equivalents and restricted cash		(59,094	)		276,144
Net increase (decrease) in cash, cash equivalents and restricted cash								30,259			(59,094	)
Cash, cash equivalents and restricted cash at beginning of period		174,554			207,542			104,342			174,554
Cash, cash equivalents and restricted cash at end of period	$	115,460		$	483,686		$	134,601		$	115,460

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	98,056		$	473,133		$	111,840		$	98,056
Restricted cash		17,404			10,553			22,761			17,404
Total cash, cash equivalents and restricted cash	$	115,460		$	483,686		$	134,601		$	115,460

3. Acquisitions

Logistyx Acquisition

On March 2, 2022, E2open, LLC, our subsidiary, acquired all of the issued and outstanding membership interests of Logistyx for a purchase price of $185 ~~million, with an estimated fair value of $183.4~~ million, including $90 million paid in cash at closing (Logistyx Acquisition). An additional $95 million, which was subject to standard working capital adjustments and other contractual provisions, was paid in two installments on May 31, 2022 and September 1, 2022. ~~We had the option to finance the remaining payments, at our discretion, through cash or a combination of cash and Class A Common Stock.~~ The May 31, 2022 payment of $37.4 million was paid in cash. ~~The~~On September 1, 2022, E2open, LLC made a cash payment of $54.0 million to Logistyx as the final installment payment for the Logistyx Acquisition which reflected a working capital adjustment of $~~57.6~~3.6 million. An additional payment of $1.1 million ~~was due on August 29, 2022; however, the parties agreed to extend the payment to~~ ~~September 1, 2022~~ ~~due to the finalization of the~~for working capital ~~adjustments and other contractual provisions. See Note 29,~~ ~~Subsequent Events~~ ~~for additional information.~~was made to Logistyx on December 5, 2022.

The Logistyx Acquisition was accounted for as a business combination under ASC 805, Business Combinations.

The following summarizes the consideration paid for the Logistyx Acquisition.

($ in thousands)

Fair Value

Cash consideration to Logistyx at fair value

$
153,090

Cash repayment of debt

29,777

Cash paid for seller transaction costs

489

Estimated consideration paid for the Logistyx Acquisition

$
183,356


($ in thousands)	Fair Value
Cash consideration to Logistyx at fair value	$	153,090
Cash repayment of debt		29,777
Cash paid for seller transaction costs		489
Working capital adjustment		(2,550	)
Estimated consideration paid for the Logistyx Acquisition	$	180,806

~~We recorded the preliminary~~The allocation of the purchase price was recorded to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of March 2, 2022. The ~~preliminary~~final purchase price allocation iswas as follows:


($ in thousands)	Preliminary Purchase Price Allocation			Adjustments (3)			Updated Preliminary Purchase Price Allocation			Final Purchase Price Allocation
Cash and cash equivalents	$	1,563		$	—		$	1,563		$	1,563
Account receivable, net		5,332			—			5,332			5,332
Other current assets		3,335			—			3,335			3,335
Property and equipment, net		144			—			144			144
Intangible assets		67,200			(400	)		66,800			66,800
Goodwill (1)		125,896			400			126,296			123,746
Non-current assets		619			—			619			619
Accounts payable		(5,897	)		—			(5,897	)		(5,897	)
Current liabilities		(3,931	)		—			(3,931	)		(3,931	)
Deferred revenue (2)		(10,747	)		—			(10,747	)		(10,747	)
Non-current liabilities		(158	)		—			(158	)		(158	)
Total assets acquired and liabilities assumed	$	183,356		$	—		$	183,356		$	180,806

(1)

Goodwill represents the excess of the purchase price over the estimated fair value of the identifiable net assets acquired in the Logistyx Acquisition. Goodwill associated with the Logistyx Acquisition iswas deductible for tax purposes at the U.S. entity level.

(2)

The deferred revenue was recorded under ASC 606 in accordance with ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers; therefore, a reduction in deferred revenues related to the estimated fair values of the acquired deferred revenues was not required.

~~(3)~~

~~The adjustments primarily relate to the change in fair value of the intangible assets due to a change in the deferred revenue.~~

The fair value of the intangible assets iswas as follows:


($ in thousands)	Useful Lives	Fair Value
Trade name	1	$	500
Developed technology (1)	6.4		33,500
Client relationships (2)	13		32,000
Backlog (3)	2.5		800
Total intangible assets		$	66,800

(1)

The developed technology represents technology developed by Logistyx and acquired by E2open, which was valued using the multi-period excess earnings method, a form of the income approach considering technology migration.

(2)

The client relationships represent the existing client relationships of Logistyx and acquired by E2open that was estimated by applying the with-and-without methodology, a form of the income approach.

(3)

The backlog represents the present value of future cash flows from contracts with clients where service has not been performed and billing has not occurred.

The preliminary allocation of the purchase price is based on preliminary valuations performed to determine the fair value of the net assets as of March 2, 2022. This allocation is subject to revision as the assessment is based on preliminary information subject to refinement.

We incurred $~~3.6~~4.1 million ($~~0.7~~ ~~million as of February 28, 2022)~~ of expenses directly related to the Logistyx Acquisition through ~~August 31, 2022~~February 28, 2023 which are included in acquisition-related ~~expense~~expenses in the Condensed Consolidated Statements of Operations. Included in these expenses were $1.6 million acquisition-related advisory fees which were incurred on March 2, 2022. At the closing of the Logistyx Acquisition, we paid $0.5 million ofin acquisition-related advisory fees and other expenses related to the Logistyx Acquisition on behalf of ~~Logistyx. These expenses~~Logistyx, which were accounted for as part of the purchase price ~~consideration and not recognized as expense in our or Logistyx's Condensed Consolidated Statements of Operations.~~

~~BluJay Acquisition~~

On May 27, 2021, we entered into a Purchase Agreement with the BluJay Sellers to acquire all of the outstanding equity of BluJay. On September 1, 2021 (Acquisition Date), we completed the acquisition of BluJay (BluJay Acquisition). The BluJay Acquisition was accounted for as a business combination under ASC 805, ~~Business Combinations.~~

~~The cash consideration in the BluJay Acquisition was provided by $380.0~~ ~~million in proceeds from the issuance of an incremental term loan, $300.0~~ ~~million in PIPE financing from institutional investors for the purchase of an aggregate of~~ ~~28,909,022~~ ~~shares of our Class A Common Stock and cash on hand.~~

~~The following summarizes the consideration paid for the BluJay Acquisition.~~

($ in thousands)

Fair Value

Equity consideration paid to BluJay (1)

$
730,854

Cash consideration to BluJay

350,658

Preference share consideration paid to BluJay (2)

86,190

Cash repayment of debt

334,483

Cash paid for seller transaction costs

26,686

Estimated consideration paid for the BluJay Acquisition

$
1,528,871

~~(1)~~

~~Equity consideration paid to BluJay equity holders consisted of the following:~~

(In thousands, except per share data)

Consideration

Common shares subject to sales restriction

72,383

Fair value per share

$
10.097

Equity consideration paid to BluJay

$
730,854

~~(2)~~

~~Represents the liability and dividends owed related to the BluJay preference shares at the date of the acquisition.~~

We recorded the preliminary allocation of the purchase price to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the Acquisition Date and adjusted certain items as noted below. ~~The final purchase price allocation is as follows:~~

($ in thousands)

Preliminary Purchase Price Allocation

Adjustments (4)

Final Purchase Price Allocation

Cash and cash equivalents

$
23,773

$
—

$
23,773

Account receivable, net

33,834

(12
)

33,822

Other current assets

10,352

865

11,217

Property and equipment, net

6,503

—

6,503

Operating lease right-of-use assets

9,018

—

9,018

Intangible assets

484,800

—

484,800

Goodwill (1)

1,152,084

(2,218
)

1,149,866

Non-current assets

2,200

(2,016
)

184

Accounts payable

(11,773
)

143

(11,630
)
Current liabilities (2)

(33,530
)

10,652

(22,878
)
Deferred revenue (3)

(39,283
)

—

(39,283
)
Deferred taxes

(101,936
)

(7,414
)

(109,350
)
Non-current liabilities

(7,171
)

—

(7,171
)
Total assets acquired and liabilities assumed

$
1,528,871

$
—

$
1,528,871

~~(1)~~

Goodwill represents the excess of the purchase price over the estimated fair value of the identifiable net assets acquired in the BluJay Acquisition. Goodwill associated with the BluJay Acquisition is not deductible for tax purposes.

~~(2)~~

~~Current liabilities include a $2.7~~ million deferred acquisition liability that was acquired related to a prior acquisition by BluJay. The deferred acquisition liability was a fixed amount that was determined at the closing of the acquisition and payable after a certain period of time. The deferred acquisition liability was paid in December 2021.

~~(3)~~

~~The deferred revenue was recorded under ASC 606 in accordance with ASU 2021-08,~~ ~~Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers;~~ ~~therefore, a reduction in deferred revenues related to the estimated fair values of the acquired deferred revenues was not required.~~

~~(4)~~

The adjustments primarily relate to the jurisdictional netting of income taxes, impact of a tax rate change on the deferred balance and the reinstatement of income tax receivables along with the true-up of accrued liabilities.

~~The fair value of the intangible assets is as follows:~~

($ in thousands)

Useful Lives

Fair Value

Trade name

1

$
3,800

Developed technology (1)

5.9

301,000

Client relationships (2)

3

180,000

Total intangible assets

$
484,800

~~(1)~~

The developed technology represents technology developed by BluJay and acquired by E2open, which was valued using the multi-period excess earnings method, a form of the income approach considering technology migration.

~~(2)~~

~~The client relationships represent the existing client relationships of BluJay and acquired by E2open that was estimated by applying the with-and-without methodology, a form of the income approach.~~

~~We incurred $33.7~~ million of expenses directly related to the BluJay Acquisition during the year ended February 28, 2022, which are included in acquisition-related expense in the Condensed Consolidated Statements of Operations. Included in these expenses were $~~13.4~~ ~~million acquisition-related advisory fees which were incurred on the Acquisition Date. In addition, we paid $10.4~~ ~~million of debt issuance costs associated with the $380.0~~ ~~million incremental term loan on the Acquisition Date which were capitalized and recorded as a reduction of the outstanding debt balances. At the closing of the BluJay Acquisition, we paid $7.1~~ ~~million in fees related to the $300.0~~ million PIPE financing which were recorded as a reduction to the proceeds from the issuance of Class A Common Stock in the Condensed Consolidated Statements of Stockholders' Equity. Additionally, we paid $~~26.7~~ million of acquisition-related advisory fees and other expenses related to the BluJay Acquisition on behalf of BluJay. These expenses were part of the purchase price consideration and not recognized as expense in our or BluJay's Condensed Consolidated Statements of Operations.

Additionally, the Investor Rights Agreement was amended and restated to add certain of BluJay's existing stockholders as parties, including certain affiliates of Francisco Partners and Temasek, as well as include a ~~six-month~~ ~~lock-up period from September 1, 2021 through February 28, 2022 for certain equity holders of E2open and BluJay.~~The Investor Rights Agreement also provides Francisco Partners and Temasek the right to nominate one member each to our board of directors. Mr. Deep Shah, nominated by Francisco Partners, and Mr. Martin Fichtner, nominated by Temasek, became new directors on September 1, 2021.

~~Unaudited Pro Forma Operating Results~~

The following unaudited pro forma combined financial information presents the results of operations as if the BluJay and Logistyx acquisitions happened as of March 1, 2021. The unaudited pro forma results may not necessarily reflect actual results of operations that would have been achieved, nor are they necessarily indicative of future results of operations. The unaudited pro forma results reflect the step-up amortization adjustments for the fair value of intangible assets acquired, the elimination of historical interest expense incurred by BluJay and Logistyx on its debt and the incurrence of interest expense related to the issuance of debt in connection with the BluJay and Logistyx acquisitions, transaction expenses, nonrecurring post-combination compensation expense and the related adjustment to the income tax provision.

Three Months Ended

Six Months Ended

($ in millions)

August 31, 2021

August 31, 2021

Total revenue

$
136.4

$
260.0

Net loss

(45.7
)

(257.7
)
Less: Net loss attributable to noncontrolling interest

(5.3
)

(29.1
)
Net loss attributable to E2open Parent Holdings, Inc.

$
(40.4
)

$
(228.6
)

~~4. Liquidity and Capital Resources~~

We measure liquidity in terms of our ability to fund the cash requirements of our business operations, including working capital, capital expenditure needs, contractual obligations and other commitments, with cash flows from operations and other sources of funding. Current working capital needs relate mainly to employee compensation and benefits, as well as interest, debt repayments, capital expenditures and operating expenses. Our ability to expand and grow our business will depend on many factors, including working capital needs and the evolution of operating cash flows.

~~We had $98.1~~ million in cash and cash equivalents as of August 31, 2022. We believe our existing cash and cash equivalents, cash provided by operating activities, and, if necessary, the borrowing capacity of up to $~~155.0~~ ~~million available under our 2021 Revolving Credit Facility (see Note 13,~~ ~~Notes Payable) will be sufficient to meet our working capital, debt repayment and capital expenditure requirements for at least the next twelve months.~~

~~In the future, we may enter into arrangements to acquire or invest in complementary businesses. To facilitate these acquisitions or investments, we may seek additional equity or debt financing.~~consideration.

8.7. Intangible Assets, Net

We test our indefinite-lived intangible asset for impairment on an annual basis or whenever events or changes occur that would more-likely-than not reduce the fair value of the indefinite-lived intangible asset below its carrying value between annual impairment tests. As we have only one reporting unit, any indefinite-lived intangible asset assessment is performed at the Company level.

During the first quarter of fiscal 2024, the market price of our Class A Common Stock and market capitalization declined significantly. This decline resulted in us determining that a triggering event occurred and an interim indefinite-lived intangible asset impairment assessment was performed.

The fair value of the indefinite-lived intangible asset was calculated using the relief from royalty payments method which is based on management's estimates of projected net sales and terminal growth rates, taking into consideration market and industry conditions. The royalty rate used was based on royalty rates of companies with similar characteristics to E2open. The discount rate used was based on the weighted-average cost of capital adjusted for the risk, size premium and business-specific characteristics related to projected net sales.

The interim assessment indicated that the fair value of E2open's indefinite-lived intangible asset was less than its carrying amount; therefore, in the first quarter of fiscal 2024, we recognized an impairment charge of $4.0 million to intangible assets, net for the indefinite-lived trademark / trade name which is reflected in general and administrative expenses on the Condensed Consolidated Statements of Operations.

We did not record an indefinite-lived intangible asset impairment charge for the three and six months ended August 31, 2022.

Intangible assets, net consisted of the following:


	August 31, 2022								August 31, 2023
($ in thousands)	Weighted Average Useful Life	Cost		Accumulated Amortized			Net		Weighted Average Useful Life	Cost		Accumulated Amortized			Net
Indefinite-lived:
Trademark / Trade name	Indefinite	$	110,000	$	—		$	110,000	Indefinite	$	106,000	$	—		$	106,000
Definite-lived:
Client relationships	13.8		498,644		(80,778	)		417,866	13.7		502,867		(156,780	)		346,087
Technology	7.3		685,517		(120,291	)		565,226	7.3		691,819		(220,569	)		471,250
Content library	10.0		50,000		(7,872	)		42,128	10.0		50,000		(12,872	)		37,128
Trade name	1.0		3,710		(3,461	)		249	1.0		4,005		(4,005	)		—
Backlog	2.5		800		(160	)		640	2.5		800		(480	)		320
Total definite-lived			1,238,671		(212,562	)		1,026,109			1,249,491		(394,706	)		854,785
Total intangible assets		$	1,348,671	$	(212,562	)	$	1,136,109		$	1,355,491	$	(394,706	)	$	960,785


	February 28, 2022								February 28, 2023
($ in thousands)	Weighted Average Useful Life	Cost		Accumulated Amortized			Net		Weighted Average Useful Life	Cost		Accumulated Amortized			Net
Indefinite-lived:
Trademark / Trade name	Indefinite	$	109,998	$	—		$	109,998	Indefinite	$	110,000	$	—		$	110,000
Definite-lived:
Client relationships	13.6		476,584		(45,467	)		431,117	13.8		500,975		(118,520	)		382,455
Technology	7.3		666,160		(72,414	)		593,746	7.3		688,739		(170,178	)		518,561
Content library	10.0		50,000		(5,372	)		44,628	10.0		50,000		(10,372	)		39,628
Trade name	1.0		3,705		(1,804	)		1,901	1.0		3,843		(3,843	)		—
Backlog									2.5		800		(320	)		480
Total definite-lived			1,196,449		(125,057	)		1,071,392			1,244,357		(303,233	)		941,124
Total intangible assets		$	1,306,447	$	(125,057	)	$	1,181,390		$	1,354,357	$	(303,233	)	$	1,051,124

The e2open trade name is indefinite-lived. Acquired trade names are definite-lived as over time we rebrand acquired products and services as e2open.

~~During the three months ended August 31, 2022, gross client relationships and technology were reduced by $0.3~~ ~~million and $0.1~~ ~~million, respectively, due to the Logistyx purchase price adjustments.~~

Amortization of intangible assets is recorded in cost of revenue and operating expenses in the Condensed Consolidated Statements of Operations. We recorded amortization expense related to intangible assets of $~~45.6~~44.7 million and $~~15.9~~45.6 million for the three months ended August 31, ~~2022~~2023 and ~~2021,~~2022, respectively. We recorded amortization expense related to intangible assets of $~~92.1~~89.4 million and $~~31.2~~92.1 million for the six months ended August 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

We ~~had capitalized software costs of~~recognized $~~28.2~~2.3 million and $~~20.9~~ ~~million as of August 31, 2022 and February 28, 2022, respectively. We recognized $~~1.4 ~~million and $0.6~~ million of amortized capitalized software development costs for the three months ended August 31, ~~2022~~2023 and ~~2021,~~2022, respectively, and $~~2.2~~4.2 million and $~~1.2~~2.2 million for the six months ended August 31, 2023 and 2022, ~~and 2021, respectively~~.respectively.

~~In the 2022 Form 10-K, $0.8~~ million of accrued expenses related to accrued severance and retention were reflected in accrued compensation. These amounts have been reclassified to accrued severance and retention to correspond to the current year presentation. See Note 18, ~~Severance and Exit Costs~~ ~~for additional information.~~

~~16.~~15. Fair Value Measurement

Our financial instruments include cash and cash equivalents; investments; accounts receivable, net; accounts payable; ~~acquisition-related obligations;~~ notes payable; and financing lease obligations. Accounts receivable, net; and accounts ~~payable; and acquisition-related obligations~~payable are stated at their carrying value, which approximates fair value, due to their short maturity. We measure our cash equivalents and investments at fair value, based on an exchange or exit price which represents the amount that would be received for an asset sale or an exit price, or paid to transfer a liability in an orderly transaction between knowledgeable and willing market participants. We estimate the fair value for notes payable and financing lease obligations by discounting the future cash flows of the related note and lease payments. As of August 31, ~~2022~~2023 and February 28, ~~2022,~~2023, the fair value of the cash and cash equivalents, restricted cash, notes payable and financing lease obligations approximates their recorded values.

The following tables set forth details about our investments:

($ in thousands)

Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Fair Value

August 31, 2022

Asset-backed securities

$
162

$
23

$
—

$
185

February 28, 2022

Asset-backed securities

$
162

$
46

$
—

$
208


($ in thousands)	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
August 31, 2023
Asset-backed securities	$	162	$	39	$	—	$	201

February 28, 2023
Asset-backed securities	$	162	$	35	$	—	$	197

Observable inputs are based on market data obtained from independent sources. Unobservable inputs reflect our assessment of the assumptions market participants would use to value certain financial instruments. This hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.

Our assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy are summarized as follows:


	August 31, 2022								August 31, 2023
($ in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Investments:
Asset-backed securities	$	—	$	185	$	—	$	185	$	—	$	201	$	—	$	201
Total investments		—		185		—		185		—		201		—		201
Other assets:
Interest rate collar agreements									$	—	$	2,739	$	—	$	2,739
Total other assets										—		2,739		—		2,739
Total assets	$	—	$	185	$	—	$	185	$	—	$	2,940	$	—	$	2,940

Liabilities:
Forward currency contracts	$	—	$	207	$	—	$	207	$	—	$	123	$	—	$	123
Cash-settled restricted stock units										40		—		—		40
Tax receivable agreement liability		—		—		43,876		43,876		—		—		47,687		47,687
Warrant liability		18,078		—		28,447		46,525		10,055		—		3,392		13,447
Contingent consideration		—		—		34,108		34,108		—		—		19,288		19,288
Total liabilities	$	18,078	$	207	$	106,431	$	124,716	$	10,095	$	123	$	70,367	$	80,585


	February 28, 2023
($ in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Investments:
Asset-backed securities	$	—	$	197	$	—	$	197
Total investments		—		197		—		197
Total assets	$	—	$	197	$	—	$	197

Liabilities:
Forward currency contracts	$	—	$	856	$	—	$	856
Cash-settled stock units		21		—		—		21
Tax receivable agreement liability		—		—		53,154		53,154
Warrant liability		16,920		—		12,696		29,616
Contingent consideration		—		—		29,548		29,548
Total liabilities	$	16,941	$	856	$	95,398	$	113,195

February 28, 2022

($ in thousands)

Level 1

Level 2

Level 3

Total

Assets:

Cash equivalents:

Money market

$
4

$
—

$
—

$
4

Total cash equivalents

4

—

—

4

Investments:

Asset-backed securities

—

208

—

208

Total investments

—

208

—

208

Total assets

$
4

$
208

$
—

$
212

Liabilities:

Tax receivable agreement liability

$
—

$
—

$
50,268

$
50,268

Warrant liability

27,324

—

39,815

67,139

Contingent consideration

—

—

45,568

45,568

Total liabilities

$
27,324

$
—

$
135,651

$
162,975

Cash-Settled Restricted Stock Units

Cash-settled restricted stock units (RSUs) form part of our compensation program. The fair value of these awards is determined using the closing stock price of our Class A Common Stock on the last day of each balance sheet date which is considered an observable quoted market price in active markets (Level 1).

Contingent Consideration

The following table provides a reconciliation of the beginning and ending balances of ~~acquisition related accrued earn-outs and~~the contingent consideration using significant unobservable inputs (Level 3) ~~from March 1, 2022 through August 31, 2022 and March 1, 2021 through February 28, 2022:~~:


($ in thousands)	August 31, 2022			February 28, 2022			August 31, 2023			February 28, 2023
Beginning of period	$	45,568		$	152,808		$	29,548		$	45,568
Conversion to Class A Common Stock		—			(175,000	)
Cash payments		—			(2,000	)
(Gain) loss from fair value of contingent consideration		(11,460	)		69,760
Gain from fair value of contingent consideration								(10,260	)		(16,020	)
End of period	$	34,108		$	45,568		$	19,288		$	29,548

The ~~change in the fair value of the earn-out is recorded in acquisition-related expenses while the~~ change in the fair value of the contingent consideration is recorded in gain (loss) from change in fair value of contingent consideration in the Condensed Consolidated Statements of Operations.

Tax Receivable Agreement

Our tax receivable agreement liability is measured under both ASC 805 at fair value on a recurring basis using significant unobservable inputs (Level 3) and ASC 450 at book value. The following table provides a reconciliation of the portion of the tax receivable agreement liability measured at fair value under Level ~~3 from March 1, 2022 through August 31, 2022 and March 1, 2021 through February 28, 2022:~~3:


($ in thousands)	August 31, 2022			February 28, 2022		August 31, 2023			February 28, 2023
Beginning of period	$	50,268		$	50,114	$	53,154		$	50,268
Loss from fair value of tax receivable agreement liability		(6,392	)		154
(Gain) loss from fair value of tax receivable agreement liability							(5,467	)		2,886
End of period	$	43,876		$	50,268	$	47,687		$	53,154

The change in the fair value of the tax receivable agreement liability is recorded in gain (loss) from change in tax receivable agreement liability in the Condensed Consolidated Statements of Operations.

Warrants

Our warrant liability is measured at fair value on a recurring basis using active market quoted prices (Level 1) and significant unobservable inputs (Level 3). The following table provides a reconciliation of the warrant ~~liability from March 1, 2022 through August 31, 2022 and March 1, 2021 through February 28, 2022:~~liability:



($ in thousands)	August 31, 2022			February 28, 2022			August 31, 2023			February 28, 2023
Beginning of period	$	67,139		$	68,772		$	29,616		$	67,139
Gain from fair value of warrant liability		(20,614	)		(1,633	)		(16,169	)		(37,523	)
End of period	$	46,525		$	67,139		$	13,447		$	29,616

The change in the fair value of the warrant liability is recorded in gain (loss) from change in fair value of warrant liability in the Condensed Consolidated Statements of Operations.

The fair values of our Level 1 financial instruments, which are traded in active markets, are based on quoted market prices for identical instruments. The fair values of our Level 2 financial instruments are based on daily market foreign currency rates, interest rate curves and quoted market prices for comparable instruments or model-driven valuations using observable market data or inputs corroborated by observable market data.

Our ~~earn-out liabilities and~~ contingent consideration ~~are~~is valued using a Monte Carlo simulation model. The assumptions used in preparing ~~these models include~~this model includes estimates such as volatility, contractual terms, discount rates, dividend yield and risk-free interest rates. ~~These~~This valuation ~~models use~~model uses unobservable market input, and therefore the ~~liabilities are~~liability is classified as Level 3.

Our public warrants are valued using active market quoted prices, which are Level 1 inputs. The private placement warrants are valued using a binomial pricing model when the warrants are subject to the make-whole table, or otherwise are valued using a Black-Scholes pricing model. The Forward Purchase Warrants ~~are~~were valued utilizing observable market prices for public shares and warrants, relative to the present value of contractual cash proceeds. The assumptions used in preparing these models include estimates such as volatility, contractual terms, discount rates, dividend yield, expiration dates and risk-free interest rates. These valuation models use unobservable market input, and therefore the liability is classified as both Level 1 and Level 3.

There were no transfers of financial instruments between the levels of the fair value hierarchy during the three and six months ended August 31, 2023 and 2022.

Included in accounts payable and accrued liabilities as of August 31, ~~2022~~2023 and February 28, ~~2022~~2023 was a restructuring liability balance, primarily consisting of lease related obligations, of $~~0.3~~0.2 million, ~~and $0.8~~ ~~million, respectively,~~ and a restructuring severance liability of $~~3.6~~0.7 million and $~~1.9~~0.9 million, ~~respectively, which also includes the executive severance accrual noted above.~~respectively. We expect these amounts to be substantially paid within the next 12 months.

InAccrued severance includes activity related to the ~~2022 Form 10-K, $0.8~~ ~~million of~~pre and post-acquisition related operational reviews (acquisition related severance) as well as various departmental cost cutting initiatives resulting in severance awards to specific individuals that are not under a specific Company program (non-acquisition related severance). The non-acquisition related severance payments are accrued ~~expenses related to~~in both accrued severance and ~~retention were reflected in~~ accrued compensation. ~~This amount has been reclassified to accrued~~Total severance expense, including both acquisition and ~~retention to correspond to~~non-acquisition related severance payments, for the ~~current year presentation.~~three months ended August 31, 2023 and 2022 was a $0.5 million and $2.8 million, respectively, and for the six months ended August 31, 2023 and 2022 was $3.5 million and $4.7 million, respectively.

~~20. Stockholders’~~23

19. Stockholders' Equity

Class A Common Stock

We are authorized to issue 2,500,000,000 Class A common stock with a par value of $0.0001 per share. Holders of our Class A Common Stock are entitled to one vote for each share. As of August 31, ~~2022~~2023 and February 28, ~~2022,~~2023, there were ~~302,199,373~~303,426,175 and ~~301,536,621~~302,582,007 shares of Class A Common Stock issued, respectively, and ~~302,022,719~~303,249,521 and ~~301,359,967~~302,405,353 shares of Class A Common Stock outstanding, respectively.

Class V Common Stock

We ~~were~~are authorized to issue ~~40,000,000~~42,747,890 Class V common stock with a par value of $0.0001 per share. ~~As of August 19, 2021, the number of shares authorized for issuance was increased to~~ ~~42,747,890~~ ~~Class V common stock with a par value of $0.0001~~. These shares have no economic value but entitle the holder to one vote per share. As of August 31, ~~2022~~2023 and February 28, ~~2022,~~2023, there were ~~33,192,007~~ ~~and~~ ~~33,560,839~~32,992,007 shares of Class V Common Stock issued and outstanding ~~respectively,~~ and ~~9,555,883~~ ~~and~~ ~~9,187,051~~9,755,883 shares of Class V Common Stock held in ~~treasury, respectively.~~treasury.

The holders of Common Units participate in net income or loss allocations and distributions of E2open Holdings. They are also entitled to Class V ~~common stock~~ Common Stock on a ~~one for one~~one-for-one basis to their Common Units which in essence allows each holder one vote per Common ~~Unit.~~Unit.

The following table reflects the changes in our outstanding stock:

Class A

Class V

Series B-1

Series B-2

Balance, February 28, 2022

301,359,967

33,560,839

94

3,372,184

Conversion of Common Units (1)

149,941

(368,832
)

—

—

Vesting of restricted awards, net of shares
withheld for taxes (2)

512,811

—

—

—

Balance, August 31, 2022

302,022,719

33,192,007

94

3,372,184


	Class A		Class V		Series B-1		Series B-2
Balance, February 28, 2023		302,405,353		32,992,007		94		3,372,184
Vesting of restricted awards, net of shares withheld for taxes (1)		844,168		—		—		—
Balance, August 31, 2023		303,249,521		32,992,007		94		3,372,184

(1)

~~Class A Common Stock issued for the conversion of Common Units settled in stock. During the six months ended August 31, 2022, we paid $1.4~~ ~~million in cash for the repurchase of~~ ~~218,891~~ Common Units that were converted into cash instead of stock at our option. Class V Common Stock are retired on a one-for-one basis when Common Units are converted into Class A Common Stock or settled in cash.

~~(2)~~

The Class A Common Stock withheld for taxes revert back to the 2021 Incentive Plan, as defined below, and are used for future grants.

~~Share Repurchase Program~~

~~On January 20, 2022, the board of directors approved a $100.0~~ million share repurchase program (2022 Share Repurchase Program). Stock repurchases may be made from time to time in the open market, in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means. The 2022 Share Repurchase Program is subject to market conditions and other factors, and does not obligate us to repurchase any dollar amount or number of our Class A Common Stock and the program may be extended, modified, suspended or discontinued at any time, without prior notice.

We will record all share repurchases based on the trade date. Shares of our Class A Common Stock repurchased under the 2022 Share Repurchase Program are typically recorded as treasury stock, at cost, but may from time to time be retired.

No ~~shares of Class A Common Stock have been repurchased to date.~~

~~21.~~20. Noncontrolling ~~Interests~~Interest

Noncontrolling interest represents the portion of E2open Holdings that we control and consolidate but do not own. As of August 31, ~~2022~~2023 and February 28, ~~2022,~~2023, the noncontrolling ~~interests represent~~interest represents a ~~9.9% and~~ ~~10.0~~9.8% ownership in E2open Holdings. As part of the Business Combination, E2open Parent Holdings, ~~respectively.~~Inc. became the owner of E2open Holdings along with the existing owners of E2open Holdings through Common Unit ownership. The existing owners of E2open Holdings are shown as noncontrolling interest on the Condensed Consolidated Balance Sheets and their portion of the net income (loss) of E2open Holdings is shown as net income (loss) attributable to noncontrolling interest on the Condensed Consolidated Statements of Operations.

Generally, Common Units participate in net income or loss allocations and distributions and entitle their holder to the right, subject to the terms set forth in the ~~limited liability agreement,~~Third Amended and Restated Limited Liability Company Agreement of E2open, LLC (Third Company Agreement), to require E2open Holdings to redeem all or a portion of the Common Units held by such participant. At our option, we may satisfy this redemption with cash or by exchanging Class V Common Stock for Class A Common Stock on a one-for-one basis.

During the three and six months ended August 31, 2023, there were no Common Units converted into Class A Common Stock.

During the three months ended August 31, 2022, 124,941 Common Units were converted into Class A Common Stock with a value of $1.0 million based off the 5-day VWAP. During the six months ended August 31, 2022, 149,941 Common Units were converted into Class A Common Stock with a value of $1.2 million based off the 5-day VWAP. A total of 218,891 Common Units were settled in cash of $1.4 million during the three and six months ended August 31, ~~2021.~~2022. This activity resulted in a decrease to noncontrolling interests of $2.4 million and $2.6 million during the three and six months ended August 31, 2022, respectively.

As of August 31, ~~2022~~2023 and February 28, ~~2022,~~2023, there were a total of ~~33.2~~ ~~million and~~ ~~33.6~~33.0 million Common Units held by participants of E2open ~~Holdings, respectively.~~Holdings.

We follow the guidance issued by the FASB regarding the classification and measurement of redeemable securities. Accordingly, we have determined that the Common Units meet the requirements to be classified as permanent equity.

~~22.~~21. Other Comprehensive Loss

Accumulated other comprehensive loss in the equity section of our Condensed Consolidated Balance Sheets includes:


($ in thousands)	Foreign Currency Translation Adjustment			Unrealized Holding (Losses) Gains on Foreign Exchange Forward Contracts			Unrealized Holding Gains on Interest Rate Collar Agreements		Total
Balance, February 28, 2023	$	(67,747	)	$	(856	)	$	—	$	(68,603	)

Other comprehensive gain		18,932			733			2,739		22,404
Other comprehensive gain		18,932			733			2,739		22,404
Balance, August 31, 2023	$	(48,815	)	$	(123	)	$	2,739	$	(46,199	)

There were no income taxes recorded to other comprehensive loss during the three or six months ended August 31, 2023.

The effect of amounts reclassified out of unrealized holding losses for foreign exchange forward contracts into net loss was as follows:


	Three Months Ended		Six Months Ended
($ in thousands)	August 31, 2023		August 31, 2023
Reclassifications:
Cost of revenue	$	30	$	91
Research and development		29		84
Sales and marketing		1		4
General and administrative		14		38
Total	$	74	$	217

The effect of amounts reclassified out of unrealized gains for interest rate collars as an offset to interest expense was as follows:


	Three Months Ended			Six Months Ended
($ in thousands)	August 31, 2023			August 31, 2023
Reclassifications:
$100 million notional interest rate collar	$	(184	)	$	(255	)
$200 million notional interest rate collar		(242	)		(306	)
Total	$	(426	)	$	(561	)

We did not reclass any items to the Condensed Consolidated Statements of Operations from accumulated other comprehensive loss during the three and six months ended August 31, ~~2022 and 2021.~~2022.

~~Accumulated other comprehensive loss in the equity section of our Condensed Consolidated Balance Sheets includes:~~

($ in thousands)

Foreign Currency Translation Adjustment

Unrealized Holding Gains (Losses) on Derivatives

Total

Balance, February 28, 2022

$
(19,019
)

$
—

$
(19,019
)

Other comprehensive loss

(100,109
)

(207
)

(100,316
)
Tax effects

27,654

27,654

Other comprehensive loss

(72,455
)

(207
)

(72,662
)
Balance, August 31, 2022

$
(91,474
)

$
(207
)

$
(91,681
)

Accumulated foreign currency translation adjustments are reclassified to net ~~income (loss)~~loss when realized upon sale or upon complete, or substantially complete, liquidation of the investment in the foreign entity.

See Note ~~15,~~14, Financial Instruments for additional information related to our derivative instruments.

2825

~~23.~~22. Earnings Per Share

Basic earnings per share is calculated as net loss divided by the average number of shares of common stock outstanding. Diluted earnings per share assumes, when dilutive, the issuance of the net incremental shares from options and restricted shares. The following is a reconciliation of the denominators of the basic and diluted per share computations for net loss:


	Three Months Ended August 31,						Six Months Ended August 31,						Three Months Ended August 31,						Six Months Ended August 31,
(in thousands, except per share data)	2022			2021			2022			2021			2023			2022			2023			2022
Net loss per share:
Numerator - basic:
Net loss per share:	$	(409,585	)	$	(23,988	)	$	(422,206	)	$	(193,343	)	$	(38,629	)	$	(409,585	)	$	(399,513	)	$	(422,206	)
Less: Net loss attributable to noncontrolling interests		(40,897	)		(3,471	)		(42,162	)		(30,568	)		(3,757	)		(40,897	)		(39,246	)		(42,162	)
Net loss attributable to E2open Parent Holdings, Inc. - basic	$	(368,688	)	$	(20,517	)	$	(380,044	)	$	(162,775	)	$	(34,872	)	$	(368,688	)	$	(360,267	)	$	(380,044	)

Numerator - diluted:
Net loss attributable to E2open Parent Holdings, Inc. - basic	$	(368,688	)	$	(20,517	)	$	(380,044	)	$	(162,775	)	$	(34,872	)	$	(368,688	)	$	(360,267	)	$	(380,044	)
Add: Net loss and tax effect attributable to noncontrolling interests		—			—			—			—
Net loss attributable to E2open Parent Holdings, Inc. - diluted	$	(368,688	)	$	(20,517	)	$	(380,044	)	$	(162,775	)	$	(34,872	)	$	(368,688	)	$	(360,267	)	$	(380,044	)

Denominator - basic:
Weighted average shares outstanding - basic		301,898			195,148			301,635			191,099			303,220			301,898			302,861			301,635
Net loss per share - basic	$	(1.22	)	$	(0.11	)	$	(1.26	)	$	(0.85	)	$	(0.12	)	$	(1.22	)	$	(1.19	)	$	(1.26	)

Denominator - diluted:
Weighted average shares outstanding - basic		301,898			195,148			301,635			191,099			303,220			301,898			302,861			301,635
Weighted average effect of dilutive securities:
Shares related to Common Units		—			—			—			—
Weighted average shares outstanding - diluted		301,898			195,148			301,635			191,099			303,220			301,898			302,861			301,635
Diluted net loss per common share	$	(1.22	)	$	(0.11	)	$	(1.26	)	$	(0.85	)	$	(0.12	)	$	(1.22	)	$	(1.19	)	$	(1.26	)

Potential common shares issuable to ~~employee~~employees or directors upon exercise or conversion of shares under our share-based compensation plans and upon exercise of warrants are excluded from the computation of diluted earnings per common share when the effect would be anti-dilutive. All potential common shares are anti-dilutive in periods of net loss available to common stockholders.

The following table summarizes the weighted-average potential common shares excluded from diluted loss per common share as their effect would be anti-dilutive:

Three Months Ended August 31,

Six Months Ended August 31,

2022

2021

2022

2021

Shares related to Series B-1 common stock

94

86

94

43

Shares related to Series B-2 common stock

3,372,184

3,372,184

3,372,184

3,372,184

Shares related to restricted common units Series 2

2,627,724

2,627,724

2,627,724

2,627,724

Shares related to warrants (1)

29,079,872

29,079,972

29,079,872

29,079,972

Shares related to Common Units

33,364,002

38,670,936

33,461,877

37,153,808

Shares related to options

4,833,446

2,583,320

3,562,837

2,583,320

Share related to performance based restricted stock

2,267,887

1,009,995

2,038,782

560,375

Shares related to time based restricted stock

3,262,797

1,048,641

2,454,587

581,431

Units/Shares excluded from the dilution computation

78,808,006

78,392,858

76,597,957

75,958,857

~~(1)~~

~~The warrants include the public warrants, private placement warrants and Forward Purchase Warrants.~~


	Three Months Ended August 31,				Six Months Ended August 31,
	2023		2022		2023		2022
Shares related to Series B-1 common stock		94		94		94		94
Shares related to Series B-2 common stock		3,372,184		3,372,184		3,372,184		3,372,184
Shares related to restricted common units Series 2		2,627,724		2,627,724		2,627,724		2,627,724
Shares related to warrants		29,079,872		29,079,872		29,079,872		29,079,872
Shares related to Common Units		32,992,007		33,364,002		32,992,007		33,461,877
Shares related to performance-based options		1,815,643		4,833,446		1,501,688		3,562,837
Shares related to time-based options		1,189,476		—		1,232,030		—
Share related to performance-based restricted stock		4,237,141		2,267,887		4,204,993		2,038,782
Shares related to time-based restricted stock		7,765,620		3,262,797		9,037,028		2,454,587
Units/Shares excluded from the dilution computation		83,079,761		78,808,006		84,047,620		76,597,957

~~24.~~23. Share-Based Compensation

2021 Incentive Plan

The E2open Parent Holdings, Inc. 2021 Omnibus Incentive Plan (2021 Incentive Plan) ~~became effective on the Closing Date with the approval of CCNB1’s shareholders and board of directors. The 2021 Incentive Plan~~ allows us to make equity and equity-based incentive awards to officers, employees, directors and consultants. There were 15,000,000 shares of Class A Common Stock reserved for issuance under the 2021 Incentive Plan as of February 28, 2022. The "evergreen" provision of the 2021 Incentive Plan provides for an annual automatic increase to the number of shares of Class A Common Stock available under the plan. As of March 1, 2022 and 2023, an additional 4,849,684 shares and 7,304,646 shares were reserved for issuance under the "evergreen " ~~provision.~~provision, respectively. Shares issued under the 2021 Incentive Plan can be granted as stock options, restricted stock awards, restricted stock units, performance stock awards, cash awards and other equity-based awards. No award may vest earlier than the first anniversary of the date of grant, expect under limited conditions.

Our board of directors, or its expressly approved delegees, have approved the grant of options and RSUs under the 2021 Incentive Plan.

Options

The options are either performance-based or time-based. The fiscal year 2022 options were ~~performance based~~performance-based and measured based on obtaining an organic growth target over a one-year ~~period with a quarter of the options vesting at the end of the performance period and the remaining options vesting equally over the following~~ ~~three years~~.period. The fiscal year 2023 options ~~are performance based~~were performance-based and measured based on obtaining an organic growth, adjusted EBITDA and net booking targets over a one-year ~~period with a~~period. A quarter of the options ~~vesting~~vest at the end of the performance period and the remaining options ~~vesting~~will vest equally over the following three years. The fiscal year 2024 options are time-based with one-third of the options vesting at the end of the first year with the remaining options vesting ratably each quarter over the remaining two-years.

Our executive officers and senior management are granted these ~~performance based~~performance-based and time-based options. The performance target is set at 100% at the grant date, and the probability of meeting the performance target is remeasured each quarter over the performance period and adjusted if needed. The performance target for the options granted during May 2021 was finalized in April 2022 above 100% and adjusted accordingly. The performance target for the options granted in May 2022 was finalized in April 2023 below 100% and adjusted accordingly.

As of August 31, ~~2022,~~2023, there were ~~4,259,741~~1,501,688 unvested ~~performance based~~performance-based options and 1,232,030 unvested time-based options.

RSUs

The RSUs are either ~~performance based~~performance-based or ~~time based.~~time-based. The fiscal year 2022 ~~performance based~~performance-based RSUs were measured based on obtaining an organic growth target over a one-year ~~period with a quarter of the RSUs vesting at the end of the performance period and the remaining RSU's vesting equally over the following~~ ~~three years~~.period. The fiscal year 2023 ~~performance based~~performance-based RSUs ~~are~~were measured based on obtaining an organic growth, adjusted EBITDA and net bookings target over a one-year ~~period with~~period. The fiscal year 2024 performance-based RSUs are measured based on obtaining an organic subscription revenue growth, constant currency adjusted EBITDA and net bookings target over a one-year period. A quarter of the RSUs ~~vesting~~will vest at the end of the performance period and the remaining ~~RSU's vesting~~RSUs will vest equally over the following three ~~years~~years.

. The performance target is set at 100% at the date of grant, and the probability of meeting the performance target is remeasured each quarter over the performance period and adjusted if needed. The performance target for the ~~performance based~~performance-based RSUs granted during May 2021 was finalized in April 2022 above 100% and adjusted accordingly. The ~~time based~~performance target for the performance-based RSUs granted in May 2022 was finalized in April 2023 below 100% and adjusted accordingly. The time-based RSUs for executive officers, senior management and employees granted during fiscal years 2022 and 2023 vest ratably over a three-year ~~period while~~period. Beginning in fiscal year 2024, the ~~time based~~time-based RSUs for executive officers, senior management and employees will vest one-third at the end of the first year and then ratably each quarter over the remaining two years. The time-based RSUs for non-employee directors of our board of directors have a one-year vesting period.

As of August 31, ~~2022,~~2023, there were ~~2,186,081~~4,204,993 ~~performance based~~performance-based RSUs and ~~3,069,013~~9,037,028 ~~time based~~time-based RSUs that were ~~vested or~~unvested and expected to vest.

During fiscal 2023 and 2024, our board of directors approved a company-wide share-based compensation program under our 2021 Incentive Plan where all eligible employees received annual stock awards as part of their annual compensation package. The fiscal 2023 grant was awarded on October 1, 2022 and the fiscal 2024 grant was awarded on July 1, 2023. Future awards under this program are at the discretion of the board of directors and are not guaranteed for any fiscal year.

For employees based in China, they are awarded cash-settled RSUs which will vest ratably over a three-year period. The cash-settled RSUs must be settled in cash and are accounted for as liability-type awards. The fair value of these cash-settled RSUs equals the value of our Class A Common Stock on the date of grant and is remeasured at the end of each reporting period at fair value. The change in fair value will be recorded in share-based compensation expense in the Condensed Consolidated Statements of Operations. The liability for the cash-settled RSUs was negligible as of August 31, 2023 and is included in accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheets. As of August 31, 2023, there were 46,590 unvested cash-settled RSUs with a total intrinsic value of $~~35.3~~0.2 million. ~~Performance based RSUs of~~ ~~74,089~~ ~~have vested but have not been released as of August 31, 2022. Time based RSUs of~~ ~~45,513~~ ~~have vested but have not been released as of August 31, 2022.~~

As of August 31, ~~2022,~~2023, there were ~~9,806,788~~9,592,387 shares of Class A Common Stock available for grant under the 2021 Incentive Plan.

See Note 28, Subsequent Events for information regarding accelerating vesting of awards and grants made after August 31, 2023.

As previously disclosed in our 2022 Form 10-K in Item 9B., Other Information, our former Chief Financial Officer entered into a Transition Agreement in which all of his outstanding stock awards accelerated vesting to August 31, 2022. Additionally, the exercise period for his options was extended from 90 days to one year with exercises permitted through August 31, 2023. All of the options expired unexercised as of August 31, 2023.

Activity under the 2021 Incentive Plan related to options was as follows:

Number of Shares
(in thousands)

Weighted Average Exercise Price Per Share

Weighted Average Remaining Contractual Life (in years)

Balance, February 28, 2022

2,524

$
9.83

9.0

Granted

3,275

7.76

Forfeited/Expired

(966
)

9.85

Balance, August 31, 2022

4,833

$
8.42

8.9

Vested and exercisable as of August 31, 2022

573

$
9.82

5.4


	Number of Shares (in thousands)			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (in years)
Balance, February 28, 2023		4,833		$	8.42		8.5
Granted		1,232			4.65
Forfeited/Expired		(3,331	)		8.00
Balance, August 31, 2023		2,734		$	7.23		8.6

Vested and exercisable as of August 31, 2023		672		$	9.56		7.7

Number of Shares
(in thousands)

Weighted Average Exercise Price Per Share

Weighted Average Remaining Contractual Life (in years)

Balance, February 28, 2021

—

$
—

—

Granted

2,583

9.86

Balance, August 31, 2021

2,583

$
9.86

9.5


	Number of Shares (in thousands)			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (in years)
Balance, February 28, 2022		2,524		$	9.83		9.0
Granted		3,275			7.76
Forfeited		(966	)		9.85
Balance, August 31, 2022		4,833		$	8.42		8.9

Vested and exercisable as of August 31, 2022		573		$	9.82		5.4

As of August 31, ~~2022,~~2023, there was $~~8.2~~5.5 million of unrecognized compensation cost related to unvested options. The aggregate intrinsic value of outstanding stock option awards ~~and~~was $0.2 as of August 31, 2023. The aggregate intrinsic value of the vested and exercisable stock option awards was zero as of August 31, ~~2022~~2023 since our Class A Common Stock price was less than the exercise price of the stock option awards.

Activity under the 2021 Incentive Plan related to RSUs was as follows:


	Number of Units (in thousands)			Weighted Average Grant Date Fair Value Per Unit		Weighted Average Remaining Recognition Period (in years)
Balance, February 28, 2023		6,475		$	8.44		2.4
Granted		9,729			5.84
Added by performance factor		39			9.02
Released		(1,256	)		9.46
Canceled and forfeited		(1,745	)		7.86
Balance, August 31, 2023		13,242		$	6.48		2.4


	Number of Units (in thousands)			Weighted Average Grant Date Fair Value Per Unit		Weighted Average Remaining Recognition Period (in years)
Balance, February 28, 2022		2,103		$	12.47		2.7
Granted		3,925			8.06
Added by performance factor		300			12.87
Released		(665	)		12.16
Canceled and forfeited		(408	)		10.50
Balance, August 31, 2022		5,255		$	9.32		2.7

Number of Units
(in thousands)

Weighted Average Grant Date Fair Value Per Unit

Weighted Average Remaining Recognition Period (in years)

Balance, February 28, 2021

—

$
—

—

Granted

2,105

12.84

Forfeited

(47
)

12.87

Balance, August 31, 2021

2,058

$
12.84

3.1

As of August 31, ~~2022,~~2023, there was $~~37.1~~61.3 million of unrecognized compensation cost related to unvested RSUs. The aggregate intrinsic value of the RSUs was $~~35.3~~64.0 million as of August 31, ~~2022~~2023 which is the outstanding RSUs valued at the closing price of our Class A Common Stock on August 31, ~~2022.~~2023.

Activity under the 2021 Incentive Plan related to cash-settled RSUs was as follows:

~~See Note 29,~~


	Number of Units (in thousands)			Weighted Average Grant Date Fair Value Per Share		Weighted Average Remaining Recognition Period (in years)
Balance, February 28, 2023		25		$	6.07		2.6
Granted		24			5.60
Canceled and forfeited		(2	)		6.07
Balance, August 31, 2023		47		$	5.83		2.5

~~Subsequent Events~~

As of August 31, 2023, there was $0.2 ~~for information regarding time based~~million of unrecognized compensation cost related to unvested cash-settled RSUs. The aggregate intrinsic value of the cash-settled RSUs ~~granted during~~was $0.2 million as of August 31, 2023 which is the ~~third quarter~~outstanding cash-settled RSUs valued at the closing price of ~~fiscal~~our Class A Common Stock on August 31, 2023.

The estimated grant-date fair values of the options granted during the six months ended August 31, 2023 and 2022 were calculated using the Black-Scholes option-pricing valuation model, based on the following assumptions:


~~Expected term (in years)~~		~~6.25~~
~~Expected equity price volatility~~		~~44.17~~%
~~Risk-free interest rate~~		~~2.91~~%
~~Expected dividend yield~~		0%


	Six Months Ended August 31,
	2023	2022
Expected term (in years)	6.00 - 6.25	6.25
Expected volatility	49.61% - 50.41%	44.17%
Risk-free interest rate	3.38% - 4.15%	2.91%
Expected dividend yield	0%	0%

The assumptions and estimates were as follows:

31Expected Term: The expected term represents the weighted-average period the share-based awards are expected to remain outstanding and is calculated using the simplified method, as we do not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. The simplified method calculates the expected term as the midpoint between the vesting date and the contractual expiration date of the option.

Expected Volatility: The expected stock price volatility assumption was determined based on the historical volatility of the Class A Common Stock.

Risk-Free Interest Rate: The risk-free rate assumption was based on the U.S. Treasury instruments whose term was consistent with the option's expected term.

Expected Dividend Yield: We do not currently declare or pay dividends on our common stock and do not expect to do so for the foreseeable future.

The table below sets forth the functional classification in the Condensed Consolidated Statements of Operations of our equity-based compensation expense:

Three Months Ended August 31,

Six Months Ended August 31,

($ in thousands)

2022

2021

2022

2021

Cost of revenue

$
90

$
257

$
311

$
457

Research and development

764

374

1,243

697

Sales and marketing

909

478

1,659

760

General and administrative

3,391

1,400

5,129

2,638

Total share-based compensation

$
5,154

$
2,509

$
8,342

$
4,552


	Three Months Ended August 31,				Six Months Ended August 31,
($ in thousands)	2023		2022		2023		2022
Cost of revenue	$	1,138	$	90	$	1,755	$	311
Research and development		1,552		764		2,512		1,243
Sales and marketing		1,410		909		1,888		1,659
General and administrative		3,342		3,391		5,732		5,129
Total share-based compensation	$	7,442	$	5,154	$	11,887	$	8,342

~~25.~~24. Leases

We account for leases in accordance with ASC 842, Leases,, which requires lessees to recognize lease liabilities and ~~ROU~~right-of-use (ROU) assets on the balance sheet for most operating leases. We made the accounting policy election not to apply the recognition provisions of ASC 842 to short-term leases which are leases with a lease term of 12 months or less. Instead, we recognize the lease payments for short-term leases on a straight-line basis over the lease term. ~~We currently do not have any short-term leases.~~

Operating lease liabilities reflect our obligation to make future lease payments for real estate locations. Lease terms are comprised of contractual terms. Payments are discounted using the rate we would pay to borrow amounts equal to the lease payments over the lease term (our incremental borrowing rate). We do not separate lease and non-lease components for contracts in which we are the lessee. ROU assets are measured based on lease liabilities adjusted for incentives and timing differences between operating lease expense and payments, recognized on a straight-line basis over the lease term. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are recognized as incurred. Common area maintenance and other executory costs are the main components of variable lease payments. Operating and variable lease expenses are recorded in general and administrative ~~expense~~expenses in the Condensed Consolidated Statements of Operations.

Real Estate Leases

We lease our primary office ~~space~~spaces under non-cancelable operating leases with various expiration dates through June 2030. Many of our leases have an option to be extended from two to five years, and several of the leases give us the right to ~~cancel~~ early cancellation with proper notification. Additionally, we have ~~three~~five subleases of our office leases as of August 31, ~~2022.~~2023.

Several of the operating lease agreements require us to provide security deposits. As of August 31, ~~2022,~~2023, and February 28, ~~2022,~~2023, lease deposits were $~~3.8~~4.8 million and $~~3.6~~4.7 million, respectively. The deposits are generally refundable at the expiration of the lease, assuming all obligations under the lease agreement have been met. Deposits are included in prepaid and other current assets and other noncurrent assets in the Condensed Consolidated Balance Sheets.

During the three and six months ended August 31, 2023, we incurred $0.2 million and $0.5 million impairments on our operating lease ROU assets and leasehold improvements, respectively, due to vacating three locations with the intent to sublease them. During the second quarter of fiscal 2023, we incurred a $2.4 million impairment on our operating lease ~~right-of-use~~ROU assets and leasehold improvements due to vacating four locations with the intent to sublease them. The ~~impairment was~~impairments were recorded in general and administrative ~~expense~~expenses in the Condensed Consolidated Statements of Operations.

During the second quarter of fiscal 2023, we terminated an operating lease early with a lease expiration date of February 2026. We paid an early termination fee of $0.2 million and recognized a $0.2 million gain on the write-off of the remaining ROU asset and liability. An ROU impairment was taken on this lease during August 2022.

Vehicle Leases

We lease vehicles under non-cancelable operating lease arrangements which have various expiration dates through ~~July 2026~~May 2027. We do not have the right to purchase the vehicles at the end of the lease term.

Equipment Leases

We purchase certain equipment under non-cancelable financing lease arrangements which are primarily related to software and computer equipment and which have various expiration dates through ~~October 2023~~December 2025. We have the right to purchase the software and computer equipment anytime during the lease or upon lease completion.

Balance Sheet Presentation

The following tables ~~presents~~present the amounts and classifications of our estimated ROU assets, net and lease liabilities:


($ in thousands)	Balance Sheet Location	August 31, 2022		February 28, 2022		Balance Sheet Location	August 31, 2023		February 28, 2023
Operating lease right-of-use assets	Operating lease right-of-use assets	$	24,839	$	28,102	Operating lease right-of-use assets	$	18,748	$	18,758
Finance lease right-of-use asset	Property and equipment, net		2,746		3,719	Property and equipment, net		2,144		3,358
Total right-of-use assets		$	27,585	$	31,821		$	20,892	$	22,116

($ in thousands)

Balance Sheet Location

August 31, 2022

February 28, 2022

Operating lease liability - current

Current portion of operating lease obligations

$
8,106

$
7,652

Operating lease liability

Operating lease obligations

19,960

21,202

Finance lease liability - current

Current portion of finance lease obligations

2,117

2,307

Finance lease liability

Finance lease obligations

74

1,950

Total lease liabilities

$
30,257

$
33,111


($ in thousands)	Balance Sheet Location	August 31, 2023		February 28, 2023
Operating lease liability - current	Current portion of operating lease obligations	$	7,387	$	7,622
Operating lease liability	Operating lease obligations		15,287		15,379
Finance lease liability - current	Current portion of finance lease obligations		625		2,582
Finance lease liability	Finance lease obligations		776		1,049
Total lease liabilities		$	24,075	$	26,632

Lease Cost and Cash Flows

The following table summarizes our total lease cost:

Three Months Ended August 31,

Six Months Ended August 31,

($ in thousands)

2022

2021

2022

2021

Finance lease cost:

Amortization of right-of-use asset

$
567

$
398

$
1,178

$
1,591

Interest on lease liability

56

287

126

417

Finance lease cost

623

685

1,304

2,008

Operating lease cost:

Operating lease cost

1,894

1,143

3,266

2,492

Variable lease cost

1,204

1,178

3,300

1,979

Sublease income

(208
)

(359
)

(436
)

(533
)
Operating net lease cost

2,890

1,962

6,130

3,938

Total net lease cost

$
3,513

$
2,647

$
7,434

$
5,946


	Three Months Ended August 31,						Six Months Ended August 31,
($ in thousands)	2023			2022			2023			2022
Finance lease cost:
Amortization of right-of-use asset	$	576		$	567		$	1,184		$	1,178
Interest on lease liability		44			56			101			126
Finance lease cost		620			623			1,285			1,304
Operating lease cost:
Operating lease cost		1,868			1,894			3,730			3,266
Variable lease cost		766			1,204			1,851			3,300
Sublease income		(151	)		(208	)		(231	)		(436	)
Operating net lease cost		2,483			2,890			5,350			6,130
Total net lease cost	$	3,103		$	3,513		$	6,635		$	7,434

~~We currently do not have any~~

Short-term lease expense was immaterial for the three and six months ended August 31, 2023. There was no short-term ~~leases.~~lease expense for the three and six months ended August 31, 2022.

Item 2. ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations.

This item contains a discussion of our business, including a general overview of our business, results of operations, liquidity and capital resources as well as quantitative and qualitative disclosures about market risk.

The following discussion should be read in conjunction with Part II, Item 7., ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations of our ~~2022~~2023 Form 10-K and the unaudited condensed financial statements and related notes beginning on page 5. This Item 2 contains ~~“forward looking”~~"forward-looking" statements that involve risks and uncertainties. See Forward-Looking Statements at the beginning of this Quarterly Report.

We are a leading provider of cloud-based, end-to-end SCM and orchestration software. Our connected supply chain software platform enables the world's largest companies to transform the way they make, move and sell goods and services. Our SaaS platform spans many key strategic and operational areas including omni-channel, demand sensing, supply planning, global trade management, transportation and logistics and manufacturing and supply management. Our software combines networks, data and applications to provide a deeply embedded, mission-critical platform that allows clients to optimize their channel and supply chains by accelerating growth, reducing costs, increasing visibility and driving improved resiliency. Given the mission-critical nature of our solutions, we maintain long-term relationships with our clients, which is reflected by our high gross retention and long client tenure. In aggregate, we serve clients in all major countries in the world across a wide range of end-markets, including consumer goods, food and beverage, manufacturing, retail, technology and transportation, among others.

In 2014, Kewill (a predecessor of BluJay) entered into a software licensing and service contract with a customer that resulted in a dispute over Kewill’s performance under the agreement. In June 2020, prior to our acquisition of BluJay, the customer filed suit. BluJay and its external counsel considered the claims meritless and intended to file a counter claim for delinquent uncollected receivables. At the time of the BluJay Acquisition in September 2021, an allowance for credit losses was recorded against the uncollected receivables from this customer. No further accrual was established for this litigation at the time of the acquisition or in subsequent periods through the first quarter of fiscal 2024, as in our judgement, which was based on the advice of external legal counsel, the claims were without merit. Any loss beyond the uncollected receivables was considered remote and the maximum exposure was believed to be immaterial. In February 2022, consistent with the related contractual terms, the case moved to binding arbitration. Upon conclusion of the arbitration proceedings in August 2023, the arbitrator ruled against BluJay. On March 2, 2022, E2open, LLC acquired Logistyx Technologies, LLC (Logistyx) for a purchase price of $185 million, with an estimated fair value of $183.4 million, including $90 million paid in cash at closing. An additional $95 million was paid in two installments on May 31, 2022 and August 29, 2022. We had the option to finance the remaining payments, at our discretion, through cash or a combination of cash and Class A Common Stock. The May 31, 2022 payment of $37.4 million was paid in cash. The final payment for the Logistyx Acquisition of $57.6 million was due on August 29, 2022; however,September 14, 2023, the parties agreed to ~~extend~~a settlement for $17.8 million which resolved the ~~payment to~~matter and released us from all alleged claims. The settlement was paid on September ~~1, 2022 due to~~20, 2023.

The settlement is not an admission of liability or wrongdoing by us or our predecessors, nor does it validate the ~~finalization of the working capital adjustments and other contractual provisions. On September 1, 2022, E2open, LLC made a cash payment of $54.0~~alleged claims.

We accrued $17.8 million ~~to Logistyx~~ for the final payment for the Logistyx Acquisition which reflected a working capital adjustment of $3.6 million. The Logistyx sellers have disputed the working capital adjustment pursuant to the terms of the Membership Interest Purchase Agreement and the parties aresettlement in ~~the process of negotiating in good faith to come to a resolution.~~

~~During~~ the second quarter of fiscal ~~2023,~~2024 as part of general and administrative expenses on the Condensed Consolidated Statement of Operations.

During the first quarter of fiscal 2024, the market price of our Class A Common Stock and market capitalization declined significantly. This decline resulted in ~~us determining that~~ a triggering event, ~~occurred and~~as such an interim goodwill impairment assessment was performed. ~~We calculated the~~The fair value of E2open was calculated using an equally weighted combination of three different methods: discounted cash flow method, guideline public company method and guideline transaction method. The discounted cash flow method was based on the present value of estimated future cash flows which were based on management's estimates of projected net sales, net operating margins and aterminal growth rates, taking into consideration market ~~approach where we evaluated~~and industry conditions. Under the guideline public company method, the fair value was based on current and forward-looking earnings multiples using management's estimates of projected net sales and adjusted EBITDA margins with consideration of market premiums. Under the guideline transaction method, the fair value was based on pricing multiples derived from ~~comparable publicly traded~~recently sold companies with similar ~~market position~~characteristics to ours taking into consideration management's estimates of projected net sales and ~~size.~~ net operating income margins.

The ~~two~~three approaches generated similar results and indicated that the fair value of E2open's equity and goodwill was less than its carrying amount. Therefore, in the ~~second~~first quarter of fiscal ~~2023,~~2024, we recognized an impairment charge of ~~$514.8~~$410.0 million to goodwill. See Note 7,6, Goodwill to the Notes to the Unaudited Condensed Consolidated Financial Statements.

The significant decline in the market price of our Class A Common Stock and market capitalization was also a triggering event which resulted in the performance of an interim indefinite-lived intangible asset impairment assessment. The fair value of the indefinite-lived intangible asset was calculated using the relief from royalty payments method which was based on management's estimates of projected net sales and terminal growth rates, taking into consideration market and industry conditions. The interim assessment indicated that the fair value of E2open's indefinite-lived intangible asset was less than its carrying amount; therefore, in the first quarter of fiscal 2024, we recognized an impairment charge of $4.0 million to intangible assets, net for the indefinite-lived trademark / trade name which is recorded in general and administrative expenses on the Condensed Consolidated Statements of Operations. See Note 7, Intangible Assets, Net to the Notes to the Unaudited Condensed Consolidated Financial Statements.

The following table is our Unaudited Condensed Consolidated Statements of Operations for the periods indicated:


	Three Months Ended August 31,							Six Months Ended August 31,						Three Months Ended August 31,						Six Months Ended August 31,
($ in thousands)	2022				2021			2022			2021			2023			2022			2023			2022
Revenue	$	160,676			$	78,079		$	321,057		$	144,406		$	158,488		$	160,676		$	318,608		$	321,057
Cost of revenue		(83,251	)			(39,551	)		(161,932	)		(77,710	)		(79,322	)		(83,251	)		(160,024	)		(161,932	)
Total gross profit		77,425				38,528			159,125			66,696			79,166			77,425			158,584			159,125

Operating Expenses
Research and development		25,587				16,208			48,149			31,909			24,945			25,587			50,811			48,149
Sales and marketing		22,745				11,174			46,900			23,688			21,551			22,745			41,109			46,900
General and administrative		23,355				13,401			43,701			27,118			38,550			23,355			64,675			43,701
Acquisition-related expenses		5,580				7,174			12,344			16,952			18			5,580			407			12,344
Amortization of acquired intangible assets		21,023		��		3,543			42,558			7,373			19,993			21,023			40,121			42,558
Goodwill impairment		514,816				—			514,816			—			—			514,816			410,041			514,816
Total operating expenses		613,106				51,500			708,468			107,040			105,057			613,106			607,164			708,468
Loss from operations		(535,681	)			(12,972	)		(549,343	)		(40,344	)		(25,891	)		(535,681	)		(448,580	)		(549,343	)
Interest and other expense, net		(18,049	)			(6,332	)		(33,462	)		(11,235	)		(25,517	)		(18,049	)		(51,243	)		(33,462	)
Change in tax receivable agreement liability		8,062				(637	)		6,392			(3,136	)
Gain (loss) from change in fair value of warrant liability		15,159				18,727			20,614			(41,216	)
Gain (loss) from change in fair value of contingent consideration		7,260				(16,780	)		11,460			(90,040	)
Total other income (expenses)		12,432				(5,022	)		5,004			(145,627	)
Gain from change in tax receivable agreement liability															7,927			8,062			5,467			6,392
Gain from change in fair value of warrant liability															1,489			15,159			16,169			20,614
Gain from change in fair value of contingent consideration															1,260			7,260			10,260			11,460
Total other (expense) income															(14,841	)		12,432			(19,347	)		5,004
Loss before income tax provision		(523,249	)			(17,994	)		(544,339	)		(185,971	)		(40,732	)		(523,249	)		(467,927	)		(544,339	)
Income tax benefit (expense)		113,664				(5,994	)		122,133			(7,372	)
Income tax benefit															2,103			113,664			68,414			122,133
Net loss		(409,585	)			(23,988	)		(422,206	)		(193,343	)		(38,629	)		(409,585	)		(399,513	)		(422,206	)
Less: Net loss attributable to noncontrolling interest		(40,897	)			(3,471	)		(42,162	)		(30,568	)		(3,757	)		(40,897	)		(39,246	)		(42,162	)
Net loss attributable to E2open Parent Holdings, Inc.	$	(368,688	)		$	(20,517	)	$	(380,044	)	$	(162,775	)	$	(34,872	)	$	(368,688	)	$	(360,267	)	$	(380,044	)
Net loss attributable to E2open Parent Holdings, Inc. Class A common stockholders per share:
Basic	$	(1.22	)		$	(0.11	)	$	(1.26	)	$	(0.85	)	$	(0.12	)	$	(1.22	)	$	(1.19	)	$	(1.26	)
Diluted	$	(1.22	)		$	(0.11	)	$	(1.26	)	$	(0.85	)	$	(0.12	)	$	(1.22	)	$	(1.19	)	$	(1.26	)
Weighted-average common shares outstanding:
Basic		301,898				195,148			301,635			191,099			303,220			301,898			302,861			301,635
Diluted		301,898				195,148			301,635			191,099			303,220			301,898			302,861			301,635

In the discussion of our results of operations, we may quantitatively disclose the impact of our acquired products and services to the extent they remain ascertainable. Revenue and expense contributions from our acquisitions for the respective period comparisons generally were not separately identifiable due to our strategy of rapid integration of these businesses into our existing operations.

Three Months Ended August 31, ~~2022~~2023 compared to Three Months Ended August 31, ~~2021~~2022

Subscriptions revenue was $134.7 million for the three months ended August 31, 2023, a $3.1 million, or 2%, increase compared to subscriptions revenue of $131.6 million for the three months ended August 31, ~~2022, a $69.9 million increase compared to subscriptions revenue of $61.7 million for the three months ended August 31, 2021.~~2022. The increase in subscriptions revenue was primarily due to ~~the BluJay Acquisition, Logistyx Acquisition and~~ new organic subscription sales predominantly driven by increases in products utilized across our current client ~~portfolio, as well as the $14.2 million amortization of the fair value adjustment~~portfolio. Our growth rate has slowed during fiscal 2024 due to ~~deferred revenue related to the purchase price allocation~~lower than anticipated new bookings, higher than expected churn and macroeconomic impacts primarily in the ~~Business Combination in the second quarter of fiscal 2022. With the early adoption of ASU 2021-08, a fair value adjustment to deferred revenue for the BluJay~~technology, freight and Logistyx acquisitions was not recorded; therefore, amortization of the fair value adjustment to deferred revenue similar to the Business Combination adjustment did not occur for the BluJay and Logistyx acquisitions.transportation sectors.

Professional services and other revenue ~~was~~were $23.8 million for the three months ended August 31, 2023, a $5.3 million, or 18%, decrease compared to $29.1 million for the three months ended August 31, ~~2022, a $12.7 million, or 78%, increase compared~~2022. The decrease in professional services and other revenue was due to ~~$16.4 million for~~macroeconomic impacts primarily in the ~~three months ended August 31, 2021. The increase was primarily related to the BluJay Acquisition~~technology, freight and ~~Logistyx Acquisition.~~transportation sectors and lower than anticipated order volume.

Our subscriptions revenue as a percentage of total revenue increased to 85% for the second quarter of fiscal 2024 compared to 82% for the second quarter of fiscal ~~year 2023 compared to 79% for the second quarter~~2023. This increase is a result of ~~fiscal 2022. The second quarter of fiscal 2022 included $14.2 million amortization related to the fair value adjustment to deferred~~our continued focus on subscriptions revenue ~~related to the purchase price allocation~~growth and a decline in ~~the Business Combination, reducing subscription~~professional services revenue. Our professional services and other revenue as a percentage of total revenue decreased to 15% for ~~that period.~~the second quarter of fiscal 2024 compared to 18% for the second quarter of fiscal 2023 as professional services and other revenue declined, and we shifted more focus to our subscriptions revenue.

Cost of subscriptions was $36.8 million for the three months ended August 31, 2023, a $0.5 million, or 1%, increase compared to $36.3 million for the three months ended August 31, ~~2022,~~2022. This increase was primarily driven by an increase in stock-based compensation expense partially offset by a ~~$20.1 million increase~~decrease in software and hosting costs when compared to ~~$16.2~~the prior year.

Cost of professional services and other revenue was $17.8 million for the three months ended August 31, ~~2021. This increase was primarily driven by $14.6~~2023, a $4.5 million, ~~related~~or 20%, decrease compared to the BluJay and Logistyx acquisitions and an increase in personnel costs for items such as salaries and incentive compensation. Additionally, there was an increase of $5.3 million for software and hosting costs.

~~Cost of professional services revenue was~~ $22.4 million for the three months ended August 31, ~~2022, an $11.4~~2022. The decrease was mainly due to a $2.9 million ~~increase~~lower spend for consulting services primarily related to our investment in strategic system integrator partnerships and $1.5 million in lower personnel costs when compared to ~~$11.0~~the prior year.

Amortization of acquired intangible assets was $24.7 million for the three months ended August 31, ~~2021. The BluJay Acquisition in fiscal year 2022, Logistyx Acquisition in fiscal year~~ 2023, ~~increased personnel costs such as salaries and incentive compensation and our investment in strategic system integrator partnerships accounted for $10.6~~a $0.1 million, ~~of the~~or 1%, increase ~~in cost of professional services revenue.~~

~~Amortization of acquired intangible assets was~~compared to $24.6 million for the three months ended August 31, ~~2022, a $12.2 million increase~~2022.

Our subscriptions gross margin was flat at 54% for the second quarter of fiscal 2024 and 2023.

Our professional services gross margin increased for the second quarter of fiscal 2024 to 25% compared to ~~$12.3~~23% in the second quarter of fiscal 2023 primarily driven by our lower costs of revenue in the second quarter of fiscal 2024.

Research and development expenses were $24.9 million for the three months ended August 31, ~~2021, driven primarily by the BluJay Acquisition in September 2021 and the Logistyx Acquisition in March 2022.~~

~~Our subscriptions gross margin was consistent for the second quarter of fiscal~~ 2023, ~~and 2022 at 54% primarily due to the $14.2~~a $0.6 million, amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination in fiscal 2022 offset by the additional revenue from the BluJay and Logistyx acquisitions in fiscal 2023. With the early adoption of ASU 2021-08, the BluJay and Logistyx deferred revenue was recorded under ASC 606 and not at fair value at the acquisition date; therefore, amortization of the fair value adjustment to deferred revenue similar to the Business Combination adjustment did not occur for the BluJay or ~~Logistyx acquisitions.~~

~~Our professional services gross margin was down for the second quarter of fiscal 2023 at 23%~~3%, decrease compared to ~~33% in the second quarter of fiscal 2022 primarily due to a significant increase in our investment in strategic system integrator partnerships.~~

~~Research and development expenses were~~ $25.6 ~~million for the three months ended August 31, 2022, a $9.4 million, or 58%, increase compared to $16.2~~ million in the prior year. The ~~increase~~decrease was primarily due to ~~$8.7~~a $1.5 million ~~related to the BluJay and Logistyx acquisitions as well as major strategic partnership initiatives around product development efforts during fiscal year 2023, which resulted~~decrease in ~~net increased~~ personnel costs ~~such as salaries and incentive compensation and consulting~~partially offset by a $1.0 million increase in depreciation expenses as compared to the prior year period.

Sales and marketing expenses were ~~$22.7~~$21.6 million for the three months ended August 31, ~~2022, an $11.6~~2023, a $1.2 million, ~~increase~~or 5%, decrease compared to ~~$11.2~~$22.7 million in the prior year. The ~~increase~~decrease was primarily driven by a ~~$10.4~~$3.5 million ~~increase~~decrease in marketing expenses due to the ~~BluJay Acquisition~~rebranding efforts in fiscal ~~2022 and Logistyx Acquisition~~2023. These savings were partially offset by $1.1 million of higher expense for allowance for credit losses in fiscal ~~2023 as well as additional expenses associated with corporate branding and hiring additional marketing resources.~~2024 compared to fiscal 2023.

General and administrative expenses were ~~$23.4~~$38.6 million for the three months ended August 31, ~~2022,~~2023, a ~~$10.0~~$15.2 million, or ~~74%~~65%, increase compared to ~~$13.4~~$23.4 million in the prior year. ~~The~~This increase was mainly a result of ~~$4.5~~the $17.8 million unfavorable arbitration ruling related to a 2014 contract between Kewill (a predecessor of BluJay) and a customer regarding Kewill's performance under the agreement as noted above. This increase was ~~primarily attributable to the BluJay and Logistyx acquisitions. Additionally, there was an increase of $2.0~~partially offset by $2.2 million ~~for share-based compensation. During~~in lower ROU asset impairments during the second quarter of fiscal ~~2023, we incurred a $2.4 million impairment on our operating lease right-of-use assets and leasehold improvements due~~2024 as compared to ~~vacating locations with~~ the ~~intent to sublease them.~~second quarter of fiscal 2023.

Acquisition and other related expenses were negligible for the three months ended August 31, 2023, compared to $5.6 million for the three months ended August 31, ~~2022, a $1.6 million, or 22%, decrease compared to $7.2 million for the three months ended August 31, 2021.~~2022. The decrease was mainly related to legal and consulting expenses associated with the ~~BluJay~~Logistyx Acquisition in fiscal ~~2022.~~2023.

Amortization of acquired intangible assets ~~were~~was $20.0 million for the three months ended August 31, 2023, a $1.0 million, or 5%, decrease, compared to $21.0 million for the three months ended August 31, ~~2022, a $17.5 million increase, compared~~2022. This was primarily due to ~~$3.5 million for~~ the ~~three months ended August 31, 2021. The increase was a result~~full amortization of the ~~BluJay Acquisition~~definite-lived trade name during fiscal 2023 along with higher intangible assets related to Logistyx in ~~September 2021~~the first quarter of fiscal 2023 which were reduced as part of the purchase price adjustments in the second and ~~Logistyx Acquisition in March 2022.~~third quarters of fiscal 2023.

During the second quarter of fiscal 2023, the market price of our Class A Common Stock and market capitalization declined significantly. This decline resulted in us determining that a triggering event occurred and an interim goodwill impairment assessment was performed. The result of the impairment assessment was the realization of a $514.8 million impairment charge. We did not have an impairment charge in the ~~prior year.~~second quarter of fiscal 2024.

Interest and other expense, net was ~~$18.0~~$25.5 million for the three months ended August 31, ~~2022,~~2023, a ~~$11.7~~$7.5 million, or 41%, increase compared to ~~$6.3~~$18.0 million in the prior year. The increase was ~~primarily~~ driven by ~~the additional term loans used for the BluJay Acquisition in September 2021 and Logistyx Acquisition in March 2022, as well as~~ higher interest rates in fiscal ~~year 2023.~~2024.

During the three months ended August 31, ~~2022,~~2023, we recorded a gain of ~~$8.1~~$7.9 million related to the change in the fair value of the tax receivable agreement liability, including interest, compared to a ~~$0.6~~gain of $8.1 million ~~expense~~ during the three months ended August 31, ~~2021. Pursuant to ASC 805,~~ ~~Business Combination~~ ~~and relevant tax law, we~~2022. We have calculated the fair value of the tax receivable agreement payments and identified the timing of the utilization of the tax attributes. The tax receivable agreement liability, related to exchanges as of the Business Combination date, is revalued at the end of each reporting period with the gain or loss as well as the associated interest reflected in gain (loss) from change in tax receivable agreement liability in the Unaudited Condensed Consolidated Statements of Operations in the period in which the ~~event~~change occurred.

In addition, under ASC 450, transactions with partnership unit holders after the acquisition date will result in additional Tax Receivable Agreement liabilities that are recorded on a gross undiscounted basis. During the three months ended August 31, ~~2022~~2023 and ~~2021,~~2022, the Tax Receivable Agreement ~~liability under ASC 450~~applicable to this guidance increased by ~~$0.2 million~~a negligible amount and ~~$10.1~~$0.2 million, respectively.

We recorded a gain of ~~$15.2~~$1.5 million during the three months ended August 31, ~~2022,~~2023, a ~~$3.6~~$13.7 million ~~or 19%,~~ decrease compared to a gain of ~~$18.7~~$15.2 million in the prior year for the change in fair value on the revaluation of our warrant liability associated with our ~~public, private placement and forward purchase~~ warrants. We are required to revalue the warrants at the end of each reporting period and reflect in the Unaudited Condensed Consolidated Statements of Operations a gain or loss from the change in fair value of the warrant liability in the period in which the change occurred.

We recorded a gain of ~~$7.3~~$1.3 million during the three months ended August 31, ~~2022,~~2023, a ~~$24.0~~$6.0 million ~~increase~~decrease compared to a ~~loss~~gain of ~~$16.8~~$7.3 million in the prior year for the change in fair value on the revaluation of our contingent consideration associated with our restricted B-2 common stock and Series 2 RCUs. We are required to revalue the contingent consideration at the end of each reporting period or upon conversion and reflect in the Unaudited Condensed Consolidated Statements of Operations a gain or loss from the change in fair value of the contingent consideration in the period in which the change occurred.

Loss before income taxes was $40.7 million for the three months ended August 31, 2023, a $482.5 million decrease compared to $523.2 million for the three months ended August 31, ~~2022, a $505.3 million increase compared to $18.0 million for the three months ended August 31, 2021.~~2022. The ~~increase~~decrease in the loss was primarily related to the $514.8 million impairment on goodwill ~~taken~~ in the second quarter of fiscal ~~2023. The remaining increase was~~2023 and a $5.6 million reduction in acquisition and other related expenses due to ~~$46.8~~the Logistyx Acquisition in March 2022. These reductions were partially offset by a $13.7 million ~~of higher operating expenses, $11.7 million of higher interest expense, $17.5 million increase~~decrease in the ~~amortization of the intangible assets and a $3.6 lower~~ gain onassociated with the change in the fair value ~~adjustments for~~of the warrant liability, ~~when compared to the prior year. These expenses were partially offset by a $38.9~~$6.0 million ~~higher gross profit due to the BluJay and Logistyx acquisitions along with a~~ decrease in the amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination of $14.1 million. Additionally, there was a $24.0 million increase in the gain associated with the fair value adjustments for the contingent consideration liability related to the restricted Series B-2 common stock and Series 2 RCUs, $17.8 million expense for the unfavorable arbitration ruling and $7.5 million of higher interest expense when compared to the prior year.

Income tax benefit was $2.1 million, or 5.2%, for the three months ended August 31, 2023 compared to $113.7 million, or 21.7%, for the three months ended August 31, ~~2022 compared to an income tax expense of $6.0 million, or 33.3%, for the three months ended August 31, 2021.~~2022. The change in our effective tax rate between periods iswas primarily due to ~~the reduction of our~~increases in valuation allowances in jurisdictions within which certain deferred tax ~~liability~~assets are not being benefited as ~~a result of the goodwill impairment and year-over-year changes in book losses in certain jurisdictions for which no benefit can be recognized,~~well as changes in the impact of book income and losses of affiliates on the carrying amount of our partnership investment and changes in the mark-to-market gains and losses on certain contingent liabilities.

Six Months Ended August 31, ~~2022~~2023 compared to Six Months Ended August 31, ~~2021~~2022

Subscriptions revenue was $269.6 million for the six months ended August 31, 2023, a $8.5 million, or 3%, increase compared to subscriptions revenue of $261.2 million for the six months ended August 31, ~~2022, a $148.4 million increase compared to subscriptions revenue of $112.8 million for the six months ended August 31, 2021.~~2022. The increase in subscriptions revenue was primarily due to ~~the BluJay Acquisition, Logistyx Acquisition and~~ new organic subscription sales predominantly driven by increases in products utilized across our current client ~~portfolio, as well as the $36.7 million amortization of the fair value adjustment~~portfolio. Our growth rate has slowed during fiscal 2024 due to ~~deferred revenue related to the purchase price allocation~~lower than anticipated new bookings, higher than expected churn and macroeconomic impacts primarily in the ~~Business Combination in the first half of fiscal 2022. With the early adoption of ASU 2021-08, a fair value adjustment to deferred revenue for the BluJay~~technology, freight and Logistyx acquisitions was not recorded; therefore, amortization of the fair value adjustment to deferred revenue similar to the Business Combination adjustment did not occur for the BluJay and Logistyx acquisitions.transportation sectors.

Professional services and other revenue ~~was~~were $49.0 million for the six months ended August 31, 2023, a $10.9 million, or 18%, decrease compared to $59.9 million for the six months ended August 31, ~~2022,~~2022. The decrease in professional services and other revenue was due to macroeconomic impacts primarily in the technology, freight and transportation sectors, a ~~$28.2 million, or 89%, increase compared to $31.6 million for the six months ended August 31, 2021. The increase was primarily related to the BluJay Acquisition~~decline in perpetual license fees and ~~Logistyx Acquisition.~~lower than anticipated order volume.

Our subscriptions revenue as a percentage of total revenue increased to 85% for the first half of fiscal 2024 compared to 81% for the first half of fiscal ~~year 2023 compared to 78% for the first half~~2023. This increase is a result of ~~fiscal 2022. The first half of fiscal 2022 included $36.7 million amortization related to the fair value adjustment to deferred~~our continued focus on subscriptions revenue ~~related to the purchase price allocation~~growth and a decline in ~~the Business Combination, reducing subscription~~professional services revenue. Our professional services and other revenue as a percentage of total revenue decreased to 15% for ~~that period.~~the first half of fiscal 2024 compared to 19% for the first half of fiscal 2023 as professional services and other revenue declined, and we shifted more focus to our subscriptions revenue.

Cost of subscriptions was $73.3 million for the six months ended August 31, 2023, a $3.9 million, or 6%, increase compared to $69.4 million for the six months ended August 31, ~~2022,~~2022. This increase was primarily driven by a ~~$36.7~~$2.4 million increase ~~compared to $32.8~~in personnel costs including non-acquisition severance.

Cost of professional services and other revenue was $37.4 million for the six months ended August 31, ~~2021. This increase was primarily driven by $26.5~~2023, a $5.7 million, ~~related~~or 13%, decrease compared to the BluJay and Logistyx acquisitions and an increase in personnel costs for items such as salaries and incentive compensation. Additionally, there was an increase of $10.0 million for software and hosting costs.

~~Cost of professional services revenue was~~ $43.0 million for the six months ended August 31, ~~2022,~~2022. The decrease was mainly due to a ~~$21.9~~$4.4 million ~~increase~~lower spend for consulting services related to our investment in strategic system integrator partnerships and a $1.9 million decrease in personnel costs when compared to ~~$21.1~~the prior year.

Amortization of acquired intangible assets was $49.3 million for the six months ended August 31, ~~2021. The BluJay Acquisition in fiscal year 2022, Logistyx Acquisition in fiscal year~~ 2023, ~~increased personnel costs such as salaries and incentive compensation and our investment in strategic system integrator partnerships accounted for $20.8~~a $0.1 million ~~of the increase in cost of professional services revenue.~~

~~Amortization of acquired intangible assets was~~decrease compared to $49.5 million for the six months ended August 31, 2022, ~~a $25.6 million increase compared to $23.8 million for the six months ended August 31, 2021,~~ driven primarily by the ~~BluJay Acquisition~~full amortization of the definite-lived trade name during fiscal 2023 along with higher intangible assets related to Logistyx in ~~September 2021~~the first quarter of fiscal 2023 which were reduced as part of the purchase price adjustment in the second and ~~the Logistyx Acquisition in March 2022.~~third quarters of fiscal 2023.

Our subscriptions gross margin was 55% and 54% ~~in the first half of fiscal 2023 as compared to 50%~~ for the first half of fiscal 2022 primarily due to the amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination offset by the additional revenue from the BluJay2024 and Logistyx acquisitions in fiscal 2023. With the early adoption of ASU 2021-08, the BluJay and Logistyx deferred revenue was recorded under ASC 606 and not at fair value at the acquisition date; therefore, amortization of the fair value adjustment to deferred revenue similar to the Business Combination adjustment did not occur for the BluJay or Logistyx acquisitions.2023, respectively.

Our professional services gross margin was down ~~to 28%~~ for the first half of fiscal ~~2023~~2024 at 24% compared to ~~33%~~28% in the first half of fiscal ~~2022~~2023 primarily ~~due to a significant increase~~driven by our lower revenue in ~~our investment in strategic system integrator partnerships.~~the first half of fiscal 2024.

Research and development expenses were ~~$48.1~~$50.8 million for the six months ended August 31, ~~2022,~~2023, a ~~$16.2~~$2.7 million, or ~~51%~~6%, increase compared to ~~$31.9~~$48.1 million in the prior year. The increase was primarily due to ~~$15.3~~a $1.3 million ~~related~~increase in stock-based compensation expense and $2.4 million increase in depreciation expense largely due to an increase in the BluJay and Logistyx acquisitions as well as major strategic partnership initiatives around product development efforts during fiscal year 2023, which resulted in net increased personnel costs such as salaries and incentive compensation and consulting expensesamortization of capitalized software as compared to the prior year period. These expenses were partially offset by the reduced spend of $1.2 million for consulting services.

Sales and marketing expenses were ~~$46.9~~$41.1 million for the six months ended August 31, ~~2022,~~2023, a ~~$23.2~~$5.8 million, ~~increase~~or 12%, decrease compared to ~~$23.7~~$46.9 million in the prior year. The ~~increase~~decrease was primarily driven by a ~~$20.7~~$3.2 million ~~increase due~~decrease in personnel costs and $3.8 million decrease in marketing costs related to ~~the BluJay Acquisition~~our rebranding efforts in fiscal ~~2022 and Logistyx Acquisition~~2023. These savings were partially offset by $1.1 million of higher expense for allowance for credit losses in fiscal ~~2023 as well as additional expenses associated with corporate branding and hiring additional marketing resources. Additionally, there was an increase of $1.5 million for travel and entertainment.~~2024 compared to fiscal 2023.

General and administrative expenses were ~~$43.7~~$64.7 million for the six months ended August 31, ~~2022,~~2023, a ~~$16.6~~$21.0 million, or 48%, increase compared to ~~$27.1~~$43.7 million in the prior year. ~~The~~This increase was mainly a result of ~~$9.9~~the accrual for the $17.8 million ~~was primarily attributable~~unfavorable arbitration ruling related to a 2014 contract between Kewill (a predecessor of BluJay) and a customer regarding Kewill's performance under the ~~BluJay and Logistyx acquisitions.~~agreement as noted above. Additionally, there was ~~an increase of $2.5~~a $4.0 million ~~for share-based compensation. During~~indefinite-lived intangible asset charge taken in the ~~second~~first quarter of fiscal ~~2023, we incurred~~2024 as well as a ~~$2.4~~$2.0 million ~~impairment on our operating lease right-of-use assets and leasehold improvements due~~increase in personnel costs as compared to ~~us vacating locations with~~ the ~~intent~~prior year period. These increases in expenses were partially offset by $1.8 million in lower ROU asset impairments in fiscal 2024 as compared to ~~sublease them.~~fiscal 2023.

Acquisition and other related expenses were $0.4 million for the six months ended August 31, 2023, a $11.9 million decrease compared to $12.3 million for the six months ended August 31, ~~2022, a $4.6 million, or 27%, decrease compared to $17.0 million for the six months ended August 31, 2021.~~2022. The decrease was mainly related to legal and consulting expenses associated with the ~~BluJay~~Logistyx Acquisition in fiscal ~~2022.~~2023.

Amortization of acquired intangible assets ~~were~~was $40.1 million for the six months ended August 31, 2023, a $2.4 million, or 6%, decrease, compared to $42.6 million for the six months ended August 31, ~~2022, a $35.2 million increase, compared~~2022. This was primarily due to ~~$7.4 million for~~ the ~~six months ended August 31, 2021. The increase was a result~~full amortization of the ~~BluJay Acquisition~~definite-lived trade name during fiscal 2023 along with higher intangible assets related to Logistyx in ~~September 2021~~the first quarter of fiscal 2023 which were reduced as part of the purchase price adjustments in the second and ~~Logistyx Acquisition in March 2022.~~third quarters of fiscal 2023.

As indicated above, the market price of our Class A Common Stock and market capitalization declined significantly during the ~~second fiscal~~first quarter of fiscal 2024 and second quarter of fiscal 2023. ~~This decline~~These declines resulted in us determining that a triggering ~~event~~events occurred and an interim goodwill impairment ~~assessment was~~assessments were performed. The result of the impairment ~~assessment~~assessments was the realization of a $410.0 million impairment charge in fiscal 2024 and a $514.8 million impairment ~~charge. We did not have an impairment~~ charge in ~~the prior year.~~fiscal 2023.

Interest and other expense, net was ~~$33.5~~$51.2 million for the six months ended August 31, ~~2022,~~2023, a ~~$22.2~~$17.8 million, or 53%, increase compared to ~~$11.2~~$33.5 million in the prior year. The increase was ~~primarily~~ driven by ~~the additional term loans used for the BluJay Acquisition in September 2021 and Logistyx Acquisition, as well as~~ higher interest rates in fiscal ~~year 2023.~~2024.

During the six months ended August 31, ~~2022,~~2023, we recorded a gain of ~~$6.4~~$5.5 million related to the change in the fair value of the tax receivable agreement liability, including interest, compared to a ~~$3.1~~gain of $6.4 million ~~expense~~ during the six months ended August 31, ~~2021. Pursuant to ASC 805,~~ ~~Business Combination~~ ~~and relevant tax law, we~~2022. We have calculated the fair value of the tax receivable agreement payments and identified the timing of the utilization of the tax attributes. The tax receivable agreement liability, related to exchanges as of the Business Combination date, is revalued at the end of each reporting period with the gain or loss as well as the associated interest reflected in gain (loss) from change in tax receivable agreement liability in the Unaudited Condensed Consolidated Statements of Operations in the period in which the ~~event~~change occurred.

In addition, under ASC 450, transactions with partnership unit holders after the acquisition date will result in additional Tax Receivable Agreement liabilities that are recorded on a gross undiscounted basis. During the six months ended August 31, ~~2022~~2023 and ~~2021,~~2022, the Tax Receivable Agreement ~~liability under ASC 450~~applicable to this guidance increased by ~~$0.2 million~~a negligible amount and ~~$10.1~~$0.2 million, respectively.

We recorded a gain of ~~$20.6~~$16.2 million during the six months ended August 31, ~~2022,~~2023, a ~~$61.8~~$4.4 million ~~increase~~decrease compared to a ~~loss~~gain of ~~$41.2~~$20.6 million in the prior year for the change in fair value on the revaluation of our warrant liability associated with our ~~public, private placement and forward purchase~~ warrants. We are required to revalue the warrants at the end of each reporting period and reflect in the Unaudited Condensed Consolidated Statements of Operations a gain or loss from the change in fair value of the warrant liability in the period in which the change occurred.

We recorded a gain of ~~$11.5~~$10.3 million during the six months ended August 31, ~~2022,~~2023, a ~~$101.5~~$1.2 million ~~increase~~decrease compared to a ~~loss~~gain of ~~$90.0~~$11.5 million in the prior year for the change in fair value on the revaluation of our contingent consideration associated with our restricted B-2 common stock and Series 2 RCUs. We are required to revalue the contingent consideration at the end of each reporting period or upon conversion and reflect in the Unaudited Condensed Consolidated Statements of Operations a gain or loss from the change in fair value of the contingent consideration in the period in which the change occurred.

Loss before income taxes was $467.9 million for the six months ended August 31, 2023, a $76.4 million decrease compared to $544.3 million for the six months ended August 31, ~~2022, a $358.4 million increase compared to $186.0 million for the six months ended August 31, 2021. This increase~~2022. The decrease in the loss was primarily related to the ~~$514.8~~$104.8 million lower impairment on goodwill ~~taken~~ in ~~the second quarter of~~ fiscal ~~2023. The remaining increase was related to $86.6 million of higher operating expenses, $22.2 million of higher interest expense~~2024 and a ~~$35.2~~$11.9 million ~~increase~~reduction in ~~the amortization of the intangible assets when compared~~acquisition and other related expenses due to the ~~prior year.~~Logistyx Acquisition in March 2022. These ~~expenses~~reductions were partially offset by a ~~$92.4~~$4.4 million ~~higher gross profit due to the BluJay and Logistyx acquisitions along with a~~ decrease in the ~~amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination of $36.5 million. Additionally, there was a $61.8 million~~ gain onassociated with the change in the fair value ~~adjustments for~~of the warrant liability, ~~and a $101.5~~$1.2 million decrease in the gain associated with the fair value adjustments for the contingent consideration liability related to the restricted Series B-2 common stock and Series 2 RCUs and $17.8 million of higher interest expense when compared to the prior year. Additionally, we recorded an $17.8 million expense for the unfavorable arbitration ruling related to the Kewill customer case in the second quarter of fiscal 2024 and there was a $4.0 million impairment on indefinite-lived intangible assets in the first quarter of fiscal 2024.

Income tax benefit was $68.4 million, or 14.6%, for the six months ended August 31, 2023 compared to $122.1 million, or 22.4%, for the six months ended August 31, ~~2022 compared to an~~2022. $64.7 million of the income tax ~~expense~~benefit, net of ~~$7.4~~a valuation allowance of $24.6 million, ~~or 4.0%,~~ for the six months ended August 31, ~~2021.~~2023 primarily resulted from the discrete impact of the goodwill impairment taken in the first quarter of fiscal 2024. The remainder of the change in our effective tax rate between periods is primarily ~~due~~relates to ~~the reduction~~increases in ~~our~~valuation allowances in jurisdictions within which certain deferred tax ~~liability~~assets are not being benefited as ~~a result of the goodwill impairment and year-over-year changes in book losses in certain jurisdictions for which no benefit can be recognized,~~well as changes in the impact of book income and losses of affiliates on the carrying amount of our partnership investment and changes in the mark-to-market gains and losses on certain contingent liabilities.

This document includes ~~Non-GAAP revenue, Non-GAAP subscriptions revenue,~~ Non-GAAP gross profit, Non-GAAP gross margin, EBITDA and Adjusted EBITDA, which are non-GAAP performance measures that we use to supplement our results presented in accordance with U.S. GAAP. We believe these non-GAAP measures are useful in evaluating our operating performance, as they are similar to measures reported by our public competitors and are regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. These non-GAAP measures are not intended to be a substitute for any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.

We calculate and define Non-GAAP revenue and Non-GAAP subscriptions revenue as revenue excluding the impact of the deferred revenue fair value adjustment related to the purchase price allocation in the Business Combination. We calculate and define Non-GAAP gross profit as gross profit excluding ~~amortization of the deferred revenue fair value adjustment,~~ depreciation and amortization, share-based compensation and certain other non-cash and non-recurring items. We define and calculate EBITDA as net income or losses excluding interest income or expense, income tax expense or benefit, depreciation and amortization and Adjusted EBITDA as further adjusted for the following items: ~~amortization of the deferred revenue fair value adjustment,~~ goodwill impairment charge, indefinite-lived intangible asset impairment charge, right-of-use assets impairment charge, transaction-related costs, ~~changes~~gain (loss) from change in the tax receivable agreement liability, (gain) loss from changes in the fair value of the warrant liability and contingent consideration, share-based compensation and certain other non-cash and non-recurring items as described in the reconciliation below. We also report Non-GAAP gross profit and Adjusted EBITDA as a percentage of Non-GAAP revenue as additional measures to evaluate financial performance.

We include these non-GAAP financial measures because they are used by management to evaluate our core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. These non-GAAP measures exclude certain expenses that are required in accordance with U.S. GAAP because they are non-recurring (for example, in the case of transaction-related costs, litigation settlements, goodwill impairment charge, indefinite-lived intangible asset impairment charge and right-of-use assets ~~charge and amortization of the deferred revenue fair value adjustment)~~impairment charge), non-cash (for example, in the case of depreciation, amortization, ~~changes~~gain (loss) from change in the tax receivable agreement liability, (gain) loss from changes in the fair value of the warrant liability and contingent consideration and share-based ~~compensation and amortization of the deferred revenue fair value adjustment)~~compensation) or are not related to our underlying business performance (for example, in the case of interest income and expense). There are limitations to non-GAAP financial measures because they exclude charges and credits that are required to be included in the U.S. GAAP financial presentation. The items excluded from U.S. GAAP financial measures such as net income or loss to arrive at non-GAAP financial measures are significant components for understanding and assessing our financial performance. As a result, non-GAAP financial measures should be considered together with, and not alternatives to, financial measures prepared in accordance with U.S. GAAP.

The table below presents our Non-GAAP ~~revenue reconciled to our reported revenue, the closest U.S. GAAP measure, for the periods indicated:~~

~~The table below presents our Non-GAAP~~ gross profit reconciled to our reported gross profit, the closest U.S. GAAP measure, for the periods indicated:

The table below presents our Adjusted EBITDA reconciled to our net ~~loss,~~income (loss), the closest U.S. GAAP measure, for the periods indicated:


	Three Months Ended August 31,						Six Months Ended August 31,						Three Months Ended August 31,						Six Months Ended August 31,
($ in thousands)	2022			2021			2022			2021			2023			2022			2023			2022
Net loss	$	(409,585	)	$	(23,988	)	$	(422,206	)	$	(193,343	)	$	(38,629	)	$	(409,585	)	$	(399,513	)	$	(422,206	)
Adjustments:
Interest expense, net		17,320			6,043			32,902			12,180			24,669			17,320			48,948			32,902
Income tax (benefit) expense		(113,664	)		5,994			(122,133	)		7,372
Income tax benefit														(2,103	)		(113,664	)		(68,414	)		(122,133	)
Depreciation and amortization		54,083			20,795			107,380			41,000			53,849			54,083			107,168			107,380
EBITDA		(451,846	)		8,844			(404,057	)		(132,791	)		37,786			(451,846	)		(311,811	)		(404,057	)
EBITDA Margin		-281.2	%		11.3	%		-125.9	%		-92.0	%		23.8	%		-281.2	%		-97.9	%		-125.9	%
Business Combination adjustment (1)		—			14,203			—			36,705
Goodwill impairment charge (2)		514,816			—			514,816			—
Goodwill impairment charge (1)														—			514,816			410,041			514,816
Indefinite-lived intangible asset impairment charge (2)														—			—			4,000			—
Right-of-use assets impairment charge (3)		2,376			—			2,376			—			187			2,376			549			2,376
Acquisition-related adjustments (4)		5,580			7,174			12,344			16,952			18			5,580			407			12,344
Change in tax receivable agreement liability (5)		(8,062	)		637			(6,392	)		3,136
(Gain) loss from change in fair value of warrant liability (6)		(15,159	)		(18,727	)		(20,614	)		41,216
(Gain) loss from change in fair value of contingent consideration (7)		(7,260	)		16,780			(11,460	)		90,040
Gain from change in tax receivable agreement liability (5)														(7,927	)		(8,062	)		(5,467	)		(6,392	)
Gain from change in fair value of warrant liability (6)														(1,489	)		(15,159	)		(16,169	)		(20,614	)
Gain from change in fair value of contingent consideration (7)														(1,260	)		(7,260	)		(10,260	)		(11,460	)
Non-recurring/non-operating costs (8)		2,748			2,052			4,374			2,499			3,600			2,748			8,926			4,374
Share-based compensation (9)		5,154			2,537			8,360			4,934
Legal settlement (9)														17,750			—			17,750			—
Share-based compensation (10)														7,443			5,154			11,903			8,360
Adjusted EBITDA	$	48,347		$	33,500		$	99,747		$	62,691		$	56,108		$	48,347		$	109,869		$	99,747
Adjusted EBITDA Margin		30.1	%		36.3	%		31.1	%		34.6	%		35.4	%		30.1	%		34.5	%		31.1	%

Three Months Ended August 31, ~~2022~~2023 compared to Three Months Ended August 31, ~~2021~~2022

~~Non-GAAP subscriptions revenue~~Gross profit was ~~$131.6~~$79.2 million for the three months ended August 31, ~~2022,~~2023, a ~~$55.7~~$1.7 million, or ~~73%~~2%, increase compared to ~~$75.9~~$77.4 million for three months ended August 31, 2022. Subscriptions gross profit was up 4%, more than offsetting the 11% reduction in gross profit from professional services and other. Gross margin was 50% for the second quarter of fiscal 2024 compared to 48% for the second quarter of fiscal 2023.

Non-GAAP gross profit was $109.5 million for the three months ended August 31, 2021. The increase in Non-GAAP subscriptions revenue relates to the BluJay and Logistyx acquisitions and new organic subscription sales predominately driven by increases in products utilized across our client portfolio.

~~Non-GAAP revenue was $160.7~~2023, a $2.7 million, ~~for the three months ended August 31, 2022, a $68.4 million~~or 3%, increase compared to $92.3 million for the three months ended August 31, 2021. The increase in Non-GAAP revenue was mainly due to the $55.7 million increase in our subscriptions revenue related to the BluJay and Logistyx acquisitions and new organic sales driven by increases in products utilized across our current client portfolio. Additionally, $12.7 million of the increase was due to an increase in our professional services revenue primarily related to the BluJay and Logistyx acquisitions.

Gross profit was $77.4 million for the three months ended August 31, 2022, a $38.9 million increase compared to $38.5 million for three months ended August 31, 2021. The increase in gross profit was primarily due to the BluJay and Logistyx acquisitions as well as the decrease in the amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination of $36.7 million. Gross margin was 48% for the second quarter of fiscal 2023 compared to 49% for the second quarter of fiscal 2022.

~~Non-GAAP gross profit was~~ $106.9 million for the three months ended August 31, ~~2022,~~2022. The increase in Non-GAAP gross profit was primarily due to an increase in subscriptions Non-GAAP gross profit, which more than offset a ~~$38.7 million, or 57%, increase~~decrease in professional services and other Non-GAAP gross profit. The Non-GAAP gross margin increased in the second quarter of fiscal 2024 to 69% compared to ~~$68.1~~67% in the second quarter of fiscal 2023.

EBITDA was $37.8 million for the three months ended August 31, ~~2021. The~~2023, a $489.6 million increase ~~in adjusted gross profit was primarily due to the BluJay and Logistyx acquisitions. The Non-GAAP gross margin decreased in the second quarter of fiscal 2023 to 67%~~ compared to ~~74% in the second quarter of fiscal 2022 due to~~ a ~~significant increase in our investment in strategic system integrator partnerships as well as increased hosting and labor costs.~~

~~EBITDA was a loss of~~negative $451.8 million ~~for the three months ended August 31, 2022, a $460.7 million decrease compared to $8.8 million~~EBITDA for three months ended August 31, ~~2021.~~2022. EBITDA ~~margins decreased to a negative 281%~~margin was 24% for the second quarter of fiscal ~~2023~~2024 compared to ~~11%~~negative 281% in the prior year. The ~~decrease~~increase in EBITDA and EBITDA margin was primarily related to the $514.8 million impairment on goodwill ~~impairment~~ taken in ~~the second quarter of~~ fiscal 2023 and ~~a $3.6~~the $5.6 million ~~smaller gain on the change~~decrease in ~~fair value of the warrant liability~~acquisition related expenses between periods. These reductions in ~~fiscal 2023 as compared to fiscal 2022. These changes~~expenses were partially offset by athe $17.8 million expense for the unfavorable arbitration ruling as well as the $13.7 million decrease ~~of $14.2 million~~ in the ~~amortization of~~gain for the fair value adjustment ~~to deferred revenue related to~~for the ~~purchase price allocation~~warrant liability and a $6.0 million decrease in the ~~Business Combination. Additionally, there was a $24.0 million higher~~ gain associated with the fair value adjustment for the contingent consideration liability related to the restricted Series B-2 common stock ~~when~~as compared to ~~the second quarter of fiscal 2022.~~prior periods.

Adjusted EBITDA was $56.1 million for the three months ended August 31, 2023, a $7.8 million, or 16%, increase compared to $48.3 million for the three months ended August 31, ~~2022, a $14.8 million, or 44%, increase compared to $33.5 million for the three months ended August 31, 2021.~~2022. Adjusted EBITDA margin was 35% for the second quarter of fiscal 2024 compared to 30% for the second quarter of fiscal ~~2023~~2023. The increase in Adjusted EBITDA and Adjusted EBITDA margin was primarily a result higher Non-GAAP gross profit and lower operating expenses mainly comprised of $1.3 million in consulting services and $3.2 million in marketing expenses due to the rebranding efforts in fiscal 2023. These savings were partially offset by $1.1 million of higher expense for allowance for credit losses in sales and marketing expenses compared to 36% for the second quarter of fiscal 2022 primarily due to lower gross margin driven by a significant increase in our investment in strategic system integrator partnerships as well as increased hosting and labor costs.prior periods.

Six Months Ended August 31, ~~2022~~2023 compared to Six Months Ended August 31, ~~2021~~2022

~~Non-GAAP subscriptions revenue~~Gross profit was ~~$261.2~~$158.6 million for the six months ended August 31, ~~2022,~~2023, a ~~$111.7~~$0.5 million ~~or 75%, increase~~decrease compared to ~~$149.5~~$159.1 million for six months ended August 31, 2022. Gross profit for subscriptions increased $4.7 million while gross profit for professional services and other decreased $5.3 million. This is a result of a decline in professional services and other revenue and growth in our subscriptions revenue. Gross margin was flat at 50% for the first half of fiscal 2024 and 2023.

Non-GAAP gross profit was $219.9 million for the six months ended August 31, 2021. The increase in Non-GAAP subscriptions revenue relates to the BluJay and Logistyx acquisitions and new organic subscription sales predominately driven by increases in products utilized across our client portfolio.

~~Non-GAAP revenue was $321.1 million for the six months ended August 31, 2022,~~2023, a ~~$139.9~~$1.8 million, or ~~77%~~1%, increase compared to $181.1 million for the six months ended August 31, 2021. The increase in Non-GAAP revenue was mainly due to the $111.7 million increase in our subscriptions revenue related to the BluJay and Logistyx acquisitions and new organic sales driven by increases in products utilized across our current client portfolio. Additionally, $28.2 million of the increase was due to an increase in our professional services revenue primarily related to the BluJay and Logistyx acquisitions.

Gross profit was $159.1 million for the six months ended August 31, 2022, a $92.4 million increase compared to $66.7 million for six months ended August 31, 2021. The increase in gross profit was primarily due to the BluJay and Logistyx acquisitions as well as the decrease in the amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination of $36.7 million. Gross margin was 50% for the first half of fiscal 2023 compared to 46% for the first half of fiscal 2022.

~~Non-GAAP gross profit was~~ $218.1 million for the six months ended August 31, ~~2022,~~2022. The increase in Non-GAAP gross profit was driven by an ~~$84.5 million, or 63%,~~ increase in subscriptions Non-GAAP gross profit, partially offset by a decrease in professional services and other Non-GAAP gross profit. The Non-GAAP gross margin increased in the first half of fiscal 2024 to 69% compared to ~~$133.6~~68% in the first half of fiscal 2023.

EBITDA was a negative $311.8 million for the six months ended August 31, ~~2021. The increase in adjusted gross profit was primarily due to the BluJay and Logistyx acquisitions. The Non-GAAP gross margin decreased in the first half of fiscal~~ 2023, ~~to 68% compared to 74% in the first half of fiscal 2022 due to~~ a ~~significant increase in our investment in strategic system integrator partnerships as well as increased hosting and labor costs.~~

~~EBITDA was a loss of $404.1~~$92.2 million, ~~for the six months ended August 31, 2022, a $271.3 million~~or 23%, increase compared to a ~~loss of $132.8~~negative $404.1 million for six months ended August 31, ~~2021.~~2022. EBITDA ~~margins were a~~margin was negative ~~126%~~98% for the first half of fiscal ~~2023~~2024 compared to a negative ~~92%~~126% in the prior year. The ~~decrease~~increase in EBITDA and EBITDA margin was primarily related to the ~~$514.8~~$104.8 million lower impairment on goodwill ~~impairment taken in the second quarter of fiscal 2023. This expense was partially offset by~~and a decrease of ~~$36.5~~$11.9 million of acquisition related expenses between periods. Partially offsetting these decreases in expenses was the ~~amortization of~~$17.8 million expense for the ~~fair value adjustment to deferred revenue~~unfavorable arbitration ruling related to the ~~purchase price allocation~~Kewill customer case and the $4.0 million impairment on indefinite-lived intangible assets in ~~the Business Combination.~~fiscal 2024. Additionally, there was a ~~$3.8 million~~ decrease in ~~acquisition related expenses, higher revenues in fiscal 2023, a $61.8~~the gain of $4.4 million ~~higher gain~~ for the fair value adjustment for the warrant liability and a ~~$101.5~~decrease in the gain of $1.2 million ~~higher gain~~ associated with the fair value adjustment for the contingent consideration liability related to the restricted Series B-2 common stock ~~when compared to the second quarter of fiscal 2022.~~between periods.

Adjusted EBITDA was $109.9 million for the six months ended August 31, 2023, a $10.1 million, or 10%, increase compared to $99.7 million for the six months ended August 31, ~~2022, a $37.1 million, or 59%, increase compared to $62.7 million for the six months ended August 31, 2021.~~2022. Adjusted EBITDA margin was 35% for the first half of fiscal 2024 compared to 31% for the first half of fiscal ~~2023~~2023. The increase in Adjusted EBITDA and Adjusted EBITDA margin was primarily a result of higher Non-GAAP gross profit and a reduction in operating expenses comprised of $1.5 million in personnel costs, $2.5 million in spend for consulting expenses and $3.4 million in marketing expenses due to the rebranding efforts in fiscal 2023. These savings were partially offset by $1.1 million of higher expense for allowance for credit losses in sales and marketing expenses compared to 35% for the first half of fiscal 2022 primarily due to a lower gross margin driven by a significant increase in our investment in strategic system integrator partnerships as well as increased hosting and labor costs.prior periods.

We measure liquidity in terms of our ability to fund the cash requirements of our business operations, including working capital, capital expenditure needs, contractual obligations and other commitments, with cash flows from operations and other sources of funding. Current working capital needs relate mainly to employee compensation and benefits, as well as interest and debt. Our ability to expand and grow our business will depend on many factors, including working capital needs and the evolution of our operating cash flows.

We had ~~$98.1~~$111.8 million in cash and cash equivalents and $155.0 million of unused borrowing capacity under our 2021 Revolving Credit Facility as of August 31, ~~2022.~~2023. See Note ~~13,~~12, Notes Payable to the Notes to the Unaudited Condensed Consolidated Financial Statements. We believe our existing cash and cash equivalents, cash provided by operating activities and, if necessary, the borrowing capacity under our 2021 Revolving Credit Facility will be sufficient to meet our working capital, debt repayment and capital expenditure requirements ~~and share repurchases~~ for at least the next twelve months.

In the future, we may enter into arrangements to acquire or invest in complementary businesses. To facilitate these acquisitions or investments, we may seek additional equity or debt financing.

On January 20, 2022, our board of directors approved the 2022 Share Repurchase Program. Share repurchases may be made from time to time in the open market, in privately negotiated transactions, pursuant to other Rule 10b5-1 trading plans or other available means. The 2022 Share Repurchase Program is subject to market conditions and other factors, and does not obligate us to repurchase any dollar amount or number of Class A Common Stock and the program may be extended, modified, suspended or discontinued at any time, without prior notice. We plan to fund this program with cash on hand.

OnIn February 4, 2021, E2open, LLC, our subsidiary, entered into the Credit Agreement which provided for the 2021 Term Loan in the amount of $525.0 million and the 2021 Revolving Credit Facility for $75.0 million. OnIn September 1, 2021, the Credit Agreement was amended to include a $380.0 million incremental term loan, an increase in the letter of credit sublimit from $15.0 million to $30.0 million and an increase in the 2021 Revolving Credit Facility from $75.0 million to $155.0 million. OnIn April 6, 2022, the Credit Agreement was amended to include a $190.0 million incremental term ~~loan.~~loan bringing our total borrowing under the term loans to $1,095.0 million.

The 2021 Revolving Credit Facility will mature on February 4, 2026. E2open, LLC can request increases in the revolving commitments and additional term loan facilities, in minimum amounts of $2.0 million for each facility. Principal payments are due on the Credit Agreement the last day of ~~each~~ February, May, August and November commencing August 2021. The Credit Agreement was payable in quarterly installments of $1.3 million beginning in August 2021; however, the payments were increased to $2.3 million with the addition of the incremental term loan beginning in November 2021. The payment increased to $2.7 million with the addition of the $190.0 million incremental term loan beginning in May 2022. The Credit Agreement is payable in full on February 4, 2028.

The 2021 Term Loan has a variable interest rate ~~which was 5.86%~~resulting in an interest rate of 8.95% and ~~4.00%~~8.08% as of August 31, ~~2022~~2023 and February 28, ~~2022,~~2023, respectively, which was based on SOFR plus 350 basis points and LIBOR plus 350 basis points, respectively. As of August 31, ~~2022~~2023 and February 28, ~~2022,~~2023, the 2021 Term Loan had a principal balance outstanding of ~~$1,083.7~~$1,072.7 million and ~~$899.2~~$1,078.2 million, respectively. There were no outstanding borrowings, no letters of credit and $155.0 million available borrowing capacity under the 2021 Revolving Credit Facility as of August 31, ~~2022. There were $80.0~~2023 and February 28, 2023.

The average interest rate on our 2021 Term Loan was impacted by changes in market interest rates, which was attributed to the Federal Open Market Committee (FOMC) of the Federal Reserve repeatedly raising their target benchmark interest rate throughout fiscal 2023 and into fiscal 2024, resulting in subsequent prime rate increases of 300 basis points between September 2022 and August 2023. Based on our current outstanding 2021 Term Loan as of August 31, 2023, this increase would result in an additional $32.2 million of ~~borrowings~~interest expense per year.

Beginning in March 2023, we entered into zero-cost interest rate collars to reduce our exposure to the variability of our interest rate associated with our outstanding atdebt. By keeping interest rates within the executed bands, or caps and floors, of the collars, we are able to reduce exposure to the interest rate risk. Effective March 31, 2023, we entered into an interest rate collar with a notional amount of ~~5.25%, no outstanding letters~~$200.0 million and a maturity date of ~~credit~~March 31, 2026. The executed cap was 4.75% and ~~$75.0 million available borrowing capacity under~~ the ~~2021 Revolving Credit Facility as of February 28, 2022.~~

~~During September 2022, we borrowed~~floor was 2.57%. Effective April 6, 2023, an ~~aggregate of $25.0 million under our 2021 Revolving Credit Facility at a weighted average~~additional interest rate collar was executed with a notional amount of ~~5.64%. All~~$100.0 million and a maturity date of March 31, 2026. The executed cap was 4.50% and the ~~funds will be used for general operating activities.~~floor was 2.56%.

The following table presents net cash from operating, investing and financing activities:

Six Months Ended August 31, ~~2022~~2023 compared to Six Months Ended August 31, ~~2021~~2022

As of August 31, ~~2022,~~2023, our consolidated cash, cash equivalents and restricted cash was ~~$115.5~~$134.6 million, a ~~$59.1~~$30.3 million ~~decrease~~increase from our balance of ~~$174.6~~$104.3 million as of February 28, ~~2022.~~2023.

Net cash provided by operating activities for the six months ended August 31, ~~2022~~2023 was ~~$2.2~~$51.3 million compared to ~~$41.5~~$2.2 million for the six months ended August 31, ~~2021.~~2022. The ~~$39.3~~$49.1 million ~~decrease~~increase in cash was primarily driven by ~~the use of $90.0 million of~~less cash used for consulting and acquisition-related expenses in fiscal 2024 and more cash provided from working capital items in fiscal 2024 from such items as the ~~decrease~~following:

Net cash used in investing activities was ~~$158.7~~$16.1 million and ~~$17.4~~$158.7 million for the six months ended August 31, ~~2022~~2023 and ~~2021,~~2022, respectively. During the six months of fiscal 2024 and 2023, $16.1 million and $31.6 million were used for the acquisition of software and property related to our data centers, respectively. Additionally, during fiscal year 2023, net cash of $124.2 million was used for the Logistyx ~~Acquisition. Additionally, we made a~~Acquisition and $3.0 million was used for a minority investment in a private firm during the first quarter of fiscal 2023. ~~During the six months of fiscal 2023 and 2022, $31.6 million and $17.4 million were used for the acquisition of property and software related to our data centers, respectively.~~

Net cash ~~provided by~~used in financing activities for the six months ended August 31, ~~2022~~2023 was ~~$95.8~~$7.8 million compared to ~~$253.3~~net cash provided by financing activities of $95.8 million for six months ended August 31, ~~2021.~~2022. The ~~increase~~decrease in cash provided by financing activities was mainly due to the following:

Concurrently with the completion of the Business Combination, we entered into the Tax Receivable Agreement with certain selling equity holders of E2open ~~Holdings that requires us to pay~~Holdings. The Tax Receivable Agreement provides for the payment by the Company of 85% of ~~the~~certain tax ~~savings~~benefits that are realized ~~because~~or deemed realized as a result of increases in ~~the~~ tax, ~~basis~~utilization of ~~E2open Holdings' assets. This increase is either from the sale~~pre-existing tax attributes of ~~Common Units or exchange~~certain sellers and realization of ~~Common Units for shares of Class A Common Stock and cash, as well as~~additional tax benefits attributable to payments under the Tax Receivable ~~Agreement, We will retain the benefit of the remaining 15% of these cash savings.~~Agreement. The term of the Tax Receivable Agreement will continue until all such tax benefits have been utilized or expired unless we exercise our right to terminate the Tax Receivable Agreement for an amount representing the present value of anticipated future tax benefits under the Tax Receivable Agreement or certain other acceleration events occur. We will retain the benefit of the remaining 15% of these cash savings.

Amounts payable under the Tax Receivable Agreement will be contingent upon, among other things, our generation of taxable income over the term of the Tax Receivable Agreement. If we do not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits subject to the Tax Receivable Agreement, we would not be required to make the related payments under the Tax Receivable Agreement. Although the amount of any payments required to be made under the Tax Receivable Agreement may be significant, the timing of these payments will vary and will generally be limited to one payment per member per year.

The liability related to the Tax Receivable Agreement was ~~$60.4~~$64.3 million and ~~$66.6~~$69.7 million as of August 31, ~~2022~~2023 and February 28, ~~2022,~~2023, respectively, assuming (1) a ~~constant~~ corporate tax rate of ~~24.1%,~~24.2% as of August 31, 2023 and February 28, 2023, (2) no dispositions of corporate subsidiaries, (3) no material changes in tax law and (4) we do not elect an early termination of the Tax Receivable Agreement. However, due to the uncertainty of various factors, including: (a) the timing and value of future exchanges, (b) the amount and timing of our future taxable income, (c) changes in our tax rate, (d) no future dispositions of any corporate stock, (e) changes in the tax law and (f) changes in the discount rate, the likely tax savings we will realize and the resulting amounts we are likely to pay to the selling equity holders of E2open Holdings pursuant to the Tax Receivable Agreement are uncertain. ~~Additionally, interest will accrue~~Interest accrued on the portion of the Tax Receivable Agreement liability recorded under ASC 805 at a rate of LIBOR plus 100 basis ~~points.~~points through June 30, 2023. Beginning July 1, 2023, interest will accrue at SOFR plus the applicable spread for the quarter. The portion of the Tax Receivable Agreement liability under ASC 450 is recorded on a gross undiscounted basis.

The liability recorded on the balance sheet does not include an estimate of the amount of payments to be made if certain sellers exchanged their remaining interests in E2open Holdings for our common stock, as this amount is not readily determinable and is dependent on several future variables, including timing of future exchanges, stock price at date of exchange, tax attributes of the individual parties to the exchange and changes in future applicable federal and state tax rates.

In addition, if we exercise our right to terminate the Tax Receivable Agreement or certain other acceleration events occur, we will be required to make immediate cash payments. Such cash payments will be equal to the present value of the assumed future realized tax benefits based on a set of assumptions and using an agreed upon discount rate, as defined in the Tax Receivable Agreement. The early termination payment may be made significantly in advance of the actual realization, if any, of those future tax benefits. Such payments will be calculated based on certain assumptions, including that we have sufficient taxable income to utilize the full amount of any tax benefits subject to the Tax Receivable Agreement over the period specified therein. The payments that we would be required to make will generally reduce the amount of the overall cash flow that might have otherwise been available to us, but we expect the cash tax savings we will realize from the utilization of the related tax benefits will exceed the amount of any required payments.

We are entitled to receive quarterly tax distributions from E2open Holdings, subject to limitations imposed by applicable law and contractual restrictions. The cash received from such tax distributions will first be used to satisfy any tax liability and then make any payments required under the Tax Receivable Agreement. We expect that such tax distributions will be sufficient to fund both our tax liability and the required payments under the Tax Receivable Agreement.

As of August 31, 2023 and February 28, 2023, there were an aggregate of 29,079,872 warrants outstanding. Each warrant entitles its holder to purchase one share of our Class A Common Stock at an exercise price of $11.50 per share. The warrants are recorded as a liability in warrant liability on the Condensed Consolidated Balance Sheets with a balance of $13.4 million and $29.6 million as of August 31, 2023 and February 28, 2023, respectively. During the three months ended August 31, 2023 and 2022, a gain of $1.5 million and $15.2 million was recognized in gain from change in fair value of the warrant liability in the Unaudited Condensed Consolidated Statements of Operations, respectively. During the six months ended August 31, 2023 and 2022, a gain of $16.2 million and $20.6 million was recognized in gain from change in fair value of the warrant liability, respectively.

The contingent consideration liability was ~~$34.1~~$19.3 million and ~~$45.6~~$29.5 million as of August 31, ~~2022~~2023 and February 28, 2023, respectively. The fair value remeasurements resulted in a gain of $1.3 million and $7.3 million for the three months ended August 31, 2023 and 2022, respectively. The fair value remeasurements resulted in a gain of ~~$7.3~~$10.3 million and ~~loss of 16.8 million for the three months ended August 31, 2022 and 2021, respectively. The fair value remeasurements resulted in a gain of~~ $11.5 ~~million and a loss of $90.0~~ million for the six months ended August 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The contingent liability represents the Series ~~B-1 common stock, Series~~ B-2 common stock ~~Series 1 RCUs~~ and Series 2 RCUs.

As of June 8, 2021, the Series B-1 common stock and Series 1 RCUs were no longer reflected as a contingent consideration liability as the 5-day VWAP of our Class A Common Stock exceeded $13.50 per share. This triggering event resulted in the 8,120,273 Series B-1 common stock converting into Class A Common Stock and 4,379,557 Series 1 RCUs becoming 4,379,557 Common Units of E2open Holdings along with entitling the holders of the newly vested common units to 4,379,557 shares of Class V Common Stock.

On March 2, 2022, E2open, LLC acquired Logistyx Technologies, LLC for a purchase price of $185 million, and at an estimated fair value of $183.4 million, including $90 million paid in cash at closing. An additional $95 million was paid in two installments on May 31, 2022 and September 1, 2022. We had the option to finance the remaining payments, at our discretion, through cash or a combination of cash and Class A Common Stock. The May 31, 2022 payment of $37.4 million was paid with cash. The final payment for the Logistyx Acquisition of $57.6 million was due on August 29, 2022; however, the parties agreed to extend the payment to September 1, 2022 due to the finalization of the working capital adjustments and other contractual provisions. On September 1, 2022, E2open, LLC made a cash payment of $54.0 million to Logistyx for the final payment for the Logistyx Acquisition which reflected a working capital adjustment of $3.6 million.

We account for leases in accordance with ASC 842, Leases,, which requires lessees to recognize lease liabilities and ROU assets on the balance sheet for contracts that provide lessees with the right to control the use of identified assets for periods of greater than 12 months.

Our non-cancelable operating leases for our office spaces and vehicles have various expiration dates through June 2030. Under these leases, our undiscounted future cash flows utilized in the calculation of the lease liabilities as of August 31, ~~2022~~2023 were: ~~$4.7~~$4.5 million for September 1, ~~2022~~2023 through February ~~28, 2023, $8.8 million for fiscal~~29, 2024, ~~$7.0~~$7.7 million for fiscal 2025, ~~$4.6~~$5.3 million for fiscal 2026, ~~$3.3~~$4.2 million for fiscal 2027, $2.6 million for fiscal 2028 and ~~$2.8~~$1.3 million thereafter. These numbers include interest of ~~$3.2~~$2.9 million.

Our non-cancelable financing lease arrangements relate to software and computer equipment and have various expiration dates through ~~October 2023.~~May 2027. We have the right to purchase the software and computer equipment anytime during the lease or upon lease completion. Under these leases, our undiscounted future cash flows utilized in the calculation of the lease liabilities as of August 31, ~~2022~~2023 were: ~~$0.2~~$0.4 million for September 1, ~~2022~~2023 through February ~~28, 2023 and $2.1~~29, 2024, $0.6 million for fiscal ~~2024.~~2025 and $0.5 million for fiscal 2026. These numbers include interest of $0.1 million.

Our condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. Preparation of the financial statements requires management to make judgments, estimates and assumptions that impact the reported amount of revenue and expenses, assets and liabilities and the disclosure of contingent assets and liabilities. We consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on our condensed consolidated financial statements. Our significant accounting policies are described in Note 2, Summary of Significant Accounting Policies to the Notes to the Consolidated Financial Statements in our ~~2022~~2023 Form 10-K.

There have been no changes to our critical accounting policies and estimates during the three ~~and six~~ months ended August 31, ~~2022~~2023 from those previously disclosed in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our ~~2022 Annual Report.~~2023 Form 10-K.

Recently issued and adopted accounting ~~pronouncement~~pronouncements are described in Note 2, Accounting Standards to the Notes to the Unaudited Condensed Consolidated Financial Statements.

There have been no material changes in the market risks during the three ~~and six~~ months ended August 31, ~~2022~~2023 from those previously disclosed in Part II, Item 7A., Quantitative and Qualitative Disclosures About Market Risk of our ~~2022~~2023 Form 10-K.

We have disclosure controls and procedures in place to ensure that information required to be disclosed in our reports filed or submitted under the Securities and Exchange Act of 1934, as amended (Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the ~~SEC’s~~SEC's rules and forms. These controls and procedures are accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by the Quarterly Report. In designing and evaluating these disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating and implementing possible controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective.

There have not been any changes in our internal controls over financial reporting during the quarter ended August 31, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We review our disclosure controls and procedures, which may include internal controls over financial reporting, on an ongoing basis. From time to time, management makes changes to enhance the effectiveness of these controls and ensure that they continue to meet the needs of our business over time.

The settlement is not an admission of liability or wrongdoing by us or our predecessors, nor does it validate the alleged claims.

We accrued $17.8 million for the settlement in the second quarter of fiscal 2024 as part of general and administrative expenses on the Condensed Consolidated Statement of Operations.

From time to time, we have exposure and are subject to contingencies that arise in the ordinary course of ~~business.~~business for a variety of claims. We record an accrual for a contingency when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We do not currently believe the resolution of any other such contingencies will have a material adverse effect upon our Unaudited Condensed Consolidated Balance Sheets, Statements of Operations or Statements of Cash Flows.

There have been no material changes in our risk factors during the three ~~and six~~ months ended August 31, ~~2022~~2023 from those previously disclosed in Part I, Item 1A., Risk Factors of our ~~2022~~2023 Form 10-K. You should carefully consider the risk factors discussed in our ~~2022~~2023 Form 10-K, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or future results.

Because this Quarterly Report is being filed within four business days from the date of the reportable events, we have elected to make the following disclosures in this Quarterly Report instead of in a Current Report on Form 8-K.

As previously disclosed on July 5, 2023, we informed Mr. Peter Hantman that the role of Chief Operating Officer had been eliminated. In connection with such role elimination, Mr. Hantman agreed to stay employed with us to ensure an orderly transition of his various responsibilities to other members of our executive team. Mr. Hantman’s employment with us ended on September 27, 2023 (Separation Date).

In connection with such separation, we and Mr. Hantman entered into a Release and Non-Competition Agreement, dated as of October 3, 2023 (Separation Agreement). Pursuant to the Separation Agreement, in addition to certain other cooperation obligations, Mr. Hantman will remain available following the Separation Date to provide transition services to us and our affiliates until December 31, 2023 (Transition Period). During the Transition Period, Mr. Hantman will not receive any compensation or benefits for providing such transition services, other than the severance benefits and incentive equity treatment summarized below.

Subject to Mr. Hantman’s continued compliance with the provisions of the Separation Agreement, Mr. Hantman will receive the severance benefits set forth in Article III of the E2open Parent Holdings, Inc. Executive Severance Plan (Severance Plan), in accordance with the terms of the Severance Plan.A summary of the material terms of the Severance Plan is contained in our proxy statement for the 2023 annual meeting of stockholders (2023 Proxy Statement) under the heading Potential Payments Upon Termination or Change-in-Control, which was filed with the SEC on May 26, 2023.

In addition, subject to Mr. Hantman’s continued compliance with the provisions of the Separation Agreement, Mr. Hantman’s outstanding incentive equity awards will be treated as follows:

The Separation Agreement includes a customary release of claims by Mr. Hantman in favor of us and our affiliates, as well as other customary provisions relating to ~~Rule 10b5-1 trading plans or other available means.~~ confidentiality and restrictive covenants.

The ~~2022 Share Repurchase Program~~foregoing description of the Separation Agreement is ~~subject~~qualified in its entirety by reference to ~~market conditions~~the complete terms of the Separation Agreement which is filed as Exhibit 10.2 to this Quarterly Report. The description of the Severance Plan is qualified in its entirety by reference to the complete terms of the Executive Severance Plan, dated as of February 4, 2021, by and ~~other factors, and does not obligate us to repurchase any dollar amount or number of our Class A Common Stock~~among E2open Parent Holdings, Inc. and the ~~program may be extended, modified, suspended or discontinued at any time, without prior notice.~~

~~No shares of Class A Common Stock have been repurchased~~executive named therein, which was filed as Exhibit 10.15 to ~~date.~~our Annual Report on Form 10-K filed on May 20, 2021.

Furnish the exhibits required by Item 601 of Regulation S-K (§ 229.601 of this chapter).

† ~~Schedules to~~Certain portions of this exhibit have been omitted pursuant to Item 601(b)~~(2)~~(10)(iv) of ~~Registration~~Regulation S-K. ~~The Registrant hereby agrees to furnish a copy of any omitted schedules to the Commission upon request~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Delaware	86-1874570
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
9600 Great Hills Trail, Suite 300E Austin, TX	78759
(Address of principal executive offices)	(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share	ETWO	New York Stock Exchange
Warrants to purchase one share of Class A Common Stock at an exercise price of $11.50	ETWO-WT	New York Stock Exchange


		Page
Glossary		3
Forward-Looking Statements		4
PART I.		5
Item 1.	Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations	6
	Condensed Consolidated Statements of Comprehensive Loss	7
	Condensed Consolidated Statements of ~~Stockholders’~~Stockholders' Equity	8
	Condensed Consolidated Statements of Cash Flows	9
	Notes to Unaudited Condensed Consolidated Financial Statements	10
Item 2.	~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations	3534
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5351
Item 4.	Controls and Procedures	5351
PART II.	Other Information	5351
Item 1.	Legal Proceedings	5351
Item 1A.	Risk Factors	5352
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5352
Item 6.	Exhibits	5453
Signatures		5554


Abbreviation		Term
ASC		Accounting Standards Codification

BluJay		BluJay TopCo Limited, a private limited liability company registered in England and Wales which owns BluJay Solutions, a cloud-based logistics execution platform company

~~BluJay Sellers~~		~~BluJay and its subsidiaries~~

~~CC Capital~~		~~CC NB Sponsor 1 Holdings LLC~~

Class A Common Stock		Class A common stock, par value $0.0001 per share

Class V Common Stock		Class V common stock, par value $0.0001 per share

Common Units		common units representing limited liability company interests of E2open Holdings, LLC, which are non-voting, economic interests in E2open Holdings, LLC. Every economic common unit is tied to one voting share of Class V Common Stock of E2open Parent Holdings, Inc.

Forward Purchase Agreement		agreement dated as of April 28, 2020, by and between CCNB1 and Neuberger Berman Opportunistic Capital Solutions Master Fund LP

Forward Purchase Warrants		5,000,000 redeemable warrants purchased pursuant to the Forward Purchase Agreement

~~Insight Partners~~		~~entities affiliated with Insight Venture Management, LLC, including funds under management; controlling unitholder of E2open Holdings, LLC~~

~~Investor Rights Agreement~~		agreement amended and restated on September 1, 2021 providing Insight Partners, CC Capital, Francisco Partners and Temasek the right to nominate members to the board of directors, requires parties to vote in favor of director nominees recommended by the board of directors, requires the registration of securities within 30 days of September 1, 2021 and limited the transfer of beneficially owned shares of common stock prior to February 28, 2022.

LIBOR		London Interbank Offered Rate

Logistyx		Logistyx Technologies, LLC, a private limited liability company headquartered in Chicago, Illinois, which connects top retailers, manufacturers and logistics providers to more than 550 in-network carriers with strategic parcel shipping and omni-channel fulfillment technology.

nm		not meaningful

NYSE		New York Stock Exchange

~~PIPE~~		~~private investment in public equity; financing from institutional investors~~

~~Purchase Agreement~~		~~Share Purchase Deed entered into on May 27, 2021 with BluJay~~

RCU		restricted common units representing ~~Series 1 and~~ Series 2 of E2open Holdings, LLC

SCM		omni-channel and supply chain management

SEC		U.S. Securities and Exchange Commission

~~Temasek~~		~~Temasek Holdings (Private) Limited~~
SOFR		Secured Overnight Financing Rate

SONIA		Sterling Overnight Index Average

U.S. GAAP		generally accepted accounting principles in the United States

VWAP		daily per share volume-weighted average price of the Class A Common Stock on the NYSE as displayed on the Bloomberg page under the heading Bloomberg VWAP


($ in thousands)	August 31, 2022			February 28, 2022			August 31, 2023			February 28, 2023
Accounts receivable	$	134,644		$	143,799		$	105,805		$	153,618
Unbilled receivables		25,436			14,597			22,435			25,481
Less: Allowance for credit losses		(5,308	)		(3,055	)		(6,120	)		(4,290	)
Accounts receivable, net	$	154,772		$	155,341		$	122,120		$	174,809


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


($ in thousands)	Fair Value
Equity consideration paid to BluJay (1)	$	730,854
Cash consideration to BluJay		350,658
Preference share consideration paid to BluJay (2)		86,190
Cash repayment of debt		334,483
Cash paid for seller transaction costs		26,686
Estimated consideration paid for the BluJay Acquisition	$	1,528,871


(In thousands, except per share data)	Consideration
Common shares subject to sales restriction		72,383
Fair value per share	$	10.097
Equity consideration paid to BluJay	$	730,854


($ in thousands)	Preliminary Purchase Price Allocation			Adjustments (4)			Final Purchase Price Allocation
Cash and cash equivalents	$	23,773		$	—		$	23,773
Account receivable, net		33,834			(12	)		33,822
Other current assets		10,352			865			11,217
Property and equipment, net		6,503			—			6,503
Operating lease right-of-use assets		9,018			—			9,018
Intangible assets		484,800			—			484,800
Goodwill (1)		1,152,084			(2,218	)		1,149,866
Non-current assets		2,200			(2,016	)		184
Accounts payable		(11,773	)		143			(11,630	)
Current liabilities (2)		(33,530	)		10,652			(22,878	)
Deferred revenue (3)		(39,283	)		—			(39,283	)
Deferred taxes		(101,936	)		(7,414	)		(109,350	)
Non-current liabilities		(7,171	)		—			(7,171	)
Total assets acquired and liabilities assumed	$	1,528,871		$	—		$	1,528,871


	Three Months Ended			Six Months Ended
($ in millions)	August 31, 2021			August 31, 2021
Total revenue	$	136.4		$	260.0
Net loss		(45.7	)		(257.7	)
Less: Net loss attributable to noncontrolling interest		(5.3	)		(29.1	)
Net loss attributable to E2open Parent Holdings, Inc.	$	(40.4	)	$	(228.6	)


($ in thousands)	Amount
~~Balance, February 28, 2021~~	$	(~~908~~	)
~~BluJay Acquisition~~		(~~1,779~~	)
~~Additions~~		(~~1,917~~	)
~~Write-offs~~		~~1,549~~
Balance, February 28, 2022	$	(3,055	)
Logistyx Acquisition		(267	)
Additions		(~~2,436~~2,185	)
Write-offs		~~450~~		1,217
Balance, February 28, 2023		(4,290	)
Additions		(2,979	)
Write-offs		1,149
Balance, August 31, ~~2022~~2023	$	(~~5,308~~6,120	)


~~($ in thousands)~~	~~August 31, 2022~~
~~Accounts payable and accrued liabilities~~	$	(~~125~~	)
~~Other noncurrent liabilities~~		(82	)


($ in thousands)	Notional		August 31, 2023
Prepaid expenses and other current assets	$	200,000	$	619
Other noncurrent assets		200,000		981
Prepaid expenses and other current assets		100,000		441
Other noncurrent assets		100,000		698


($ in thousands)	Foreign Currency Translation Adjustment			Unrealized Holding Gains (Losses) on Derivatives			Total
Balance, February 28, 2022	$	(19,019	)	$	—		$	(19,019	)

Other comprehensive loss		(100,109	)		(207	)		(100,316	)
Tax effects		27,654						27,654
Other comprehensive loss		(72,455	)		(207	)		(72,662	)
Balance, August 31, 2022	$	(91,474	)	$	(207	)	$	(91,681	)


($ in thousands)	Operating Leases			Finance Leases			Operating Leases			Finance Leases
September 2022 - February 2023	$	4,728		$	228
2024		8,810			2,105
September 2023 - February 2024							$	4,547		$	392
2025		6,970			—			7,668			610
2026		4,641			—			5,315			508
2027		3,293			—			4,186			—
2028								2,564			—
Thereafter		2,798			—			1,264			—
Total		31,240			2,333			25,544			1,510
Less: Present value discount		(3,174	)		(142	)		(2,870	)		(109	)
Lease liabilities	$	28,066		$	2,191		$	22,674		$	1,401


Exhibit Number		Description
3.1		Certificate of Incorporation of the E2open Parent Holdings, Inc. (incorporated by reference to Exhibit 3.2 of E2open Parent Holdings, Inc.’s's Form 8-K (File No. 001-39272) filed with the SEC on February 10, 2021).
3.2		Amendment to the Certificate of Incorporation of E2open Parent Holdings, Inc. (incorporated by reference to Exhibit 3.3 of E2open Parent Holdings, Inc.'s Form S-1 (File No. 333-259562) filed with the SEC on September 15, 2021).
3.3		Bylaws of the E2open Parent Holdings, Inc. (incorporated by reference to Exhibit 3.3 of E2open Parent Holdings, Inc.’s's Form 8-K (File 001-39272) filed with the SEC ofon February 10, 2021).
10.1*†		Confidential Settlement Agreement and Mutual Release dated September 14, 2023
10.2*		Mr. Peter Hantman's Release and Non-Competition Agreement
31.1*		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File


	E2open Parent Holdings, Inc.

Date: October ~~11, 2022~~10, 2023	By:	/s/ Michael A. Farlekas
		Michael A. Farlekas
		Chief Executive Officer

Date: October ~~11, 2022~~10, 2023	By:	/s/ Marje Armstrong
		Marje Armstrong
		Chief Financial Officer

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company