Redeemable Convertible
Preferred Stock

Series A

Common Stock

Series B

Common Stock

Class A

Common Stock

Class B

Common Stock

Treasury Stock

Additional
Paid-in

Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Loss

Total

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Balance

as

of

January

1,

2020
39,223,194 $ 154,210 99,339,942 $ 99 3,054,318 $ 3 —   $ —   —   $ —   (8,195,464) $ (23,469) $ 27,909 $ (189,029) $ (1,847) $     (186,334)
Shares

issued

in

connection

with

an
agreement
—   —   154,560 —   —   —   —   —   —   —   —   —   423 —   —   423
Restricted stock grants
—   —   3,975,634 4 —   —   —   —   —   —   —   —   (4) —   —   —
Restricted stock forfeitures
—   —   (997,094) (1) —   —   —   —   —   —   —   —   1 —   —   —
Stock-based compensation
—   —   —   —   —   —   —   —   —   —   —   —   26 —   —   26
Foreign

currency

translation

adjustment
—   —   —   —   —   —   —   —   —   —   —   —   —   —   (741) (741)
Net loss
—   —   —   —   —   —   —   —   —   —   —   —   —   (16,380) —   (16,380)

Balance as of March 31, 2020

39,223,194

$
154,210

102,473,042

$
102

3,054,318

$
3

—

$
—

—

$
—

(8,195,464)

$
(23,469)

$
28,355

$
(205,409)

$
(2,588)

$
(203,006)

Restricted stock grants
—   —   1,148,962 1 —   —   —   —   —   —   —   —   (1) —   —   —
Restricted stock forfeitures
—   —   (383,695) —   —   —   —   —   —   —   —   —   —   —   —   —
Stock-based compensation
—   —   —   —   —   —   —   —   —   —   —   —   27 —   —   27
Foreign

currency

translation

adjustment
—   —   —   —   —   —   —   —   —   —   —   —   —   —   (47) (47)
Net loss
—   —   —   —   —   —   —   —   —   —   —   —   —   (15,054) —   (15,054)

Balance as of June 30, 2020

39,223,194

$
154,210

103,238,309

$
103

3,054,318

$
3

—

$
—

—

$
—

(8,195,464)

$
(23,469)

$
28,381

$
(220,463)

$
(2,635)

$
(218,080)

Restricted stock grants
—   —   8,743,780 9 —   —   —   —   —   —   —   —   (9) —   —   —
Restricted stock forfeitures
—   —   (481,656) —   —   —   —   —   —   —   —   —   —   —   —   —
Stock-based compensation
—   —   —   —   —   —   —   —   —   —   —   —   26 —   —   26
Foreign

currency

translation

adjustment
—   —   —   —   —   —   —   —   —   —   —   —   —   —   272 272
Net loss
—   —   —   —   —   —   —   —   —   —   —   —   —   (13,003) —   (13,003)

Balance as of September 30, 2020

39,223,194

$
154,210

111,500,433

$
112

3,054,318

$
3

—

$
—

—

$
—

(8,195,464)

$
(23,469)

$
28,398

$
(233,466)

$
(2,363)

$
(230,785)


	Class A common stock						Class B common stock
	Shares			Amount			Shares			Amount			Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total
Balance as of January 1, 20221		159,974,847			160			37,856,095			38			584,208			(491,817	)		(2,101	)		90,488
Shares issued in connection with certain agreements		1,026,785			1			-			—			11,082			—			—			11,083
Restricted stock grants		4,162,159			4			—			—			(4	)		—			—			—
Restricted stock forfeitures		(717,505	)		(1	)		—			—			1			—			—			—
Class B common stock transferred to Class A common stock		1,000,000			1			(1,000,000	)		(1	)		—			—			—			—
Stock-based compensation		—			—			—			—			74,990			—			—			74,990
Options exercised		15,500			—			—			—			65			—			—			65
Foreign currency translation adjustment		—			—			—			—			—			—			(244	)		(244	)
Net loss		—			—			—			—			—			(72,037	)		—			(72,037	)
Balance as of March 31, 20222		165,461,786			165			36,856,095			37			670,342			(563,854	)		(2,345	)		104,345


	Redeemable Convertible Preferred Stock				Series A common stock						Series B common stock
	Shares		Amount		Shares			Amount			Shares		Amount		Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total
Balance as of January 1, 2021		39,223,194	$	154,210		112,012,693		$	112			3,054,318	$	3	$	4,956		$	(242,254	)	$	(2,037	)	$	(239,220	)
Restricted stock cancelation		—		—		(17,853,416	)		(18	)		—		—		18			—			—			—
Shares issued in connection with certain agreements		—		—		613,497			1			—		—		5,453			—			—			5,454
Restricted stock grants		—		—		3,687,431			4			—		—		(4	)		—			—			—
Restricted stock forfeitures		—		—		(1,629,369	)		(2	)		—		—		2			—			—			—
Foreign currency translation adjustment		—		—		—			—			—		—		—			—			54			54
Net loss		—		—		—			—			—		—		—			(24,374	)		—			(24,374	)
Balance as of March 31, 2021		39,223,194	$	154,210		96,830,836		$	97			3,054,318	$	3	$	10,425		$	(266,628	)	$	(1,983	)	$	(258,086	)

1. Includes 115,456,543 outstanding Class A common stock, 18,419,260 outstanding Class B common stock, 44,518,304 unvested Class A restricted stock and 19,436,835 unvested Class B restricted stock.

2. Includes 117,498,828 outstanding Class A common stock, 17,419,260 outstanding Class B common stock, 47,962,958 unvested Class A restricted stock and 19,436,835 unvested Class B restricted stock.

See accompanying notes to condensed unaudited consolidated financial statements.

~~Table of Contents~~

Amortization expense ~~was $5,051 and $14,079~~of intangibles for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and March 31, 2021, ~~respectively,~~was $5,812 and ~~$3,913 and $11,754 for the three and nine months ended September 30, 2020,~~$4,080 respectively.

Weighted average useful life of the unamortized intangibles as of ~~September 30, 2021~~March 31, 2022 was ~~2.10~~3.83 years. Based on the amount of intangible assets subject to amortization, ~~as of September 30, 2021,~~ the Company’s estimated future a

~~ortization~~amortization expense over the next five years and beyond are as follows:


	As of March 31, 2022
Year ended December 31,
Remaining nine months of 2022	$	16,086
2023		12,966
2024		8,505
2025		4,574
2026		4,161
2027 and thereafter		3,800
Total	$	50,092

4.Goodwill

~~Total estimated future amortization expense is as follows:~~

As of September 30, 2021

Year ended December 31,

Remaining three months of 2021
   $ 4,952
2022
   15,332
2023
   6,040
2024
   2,002
2025
   482
2026 and thereafter
   124


Total

$
28,932

4.	~~Goodwill~~

~~The following~~

Following is a summary of the carrying value of goodwill:


Balance as of January 1, 2022	$	114,509
Acquisition of ArcaMax		18,548
Foreign currency translation		(8	)
Balance as of March 31, 2022	$	133,049

Balance as of January 1, 2021
   $ 76,432
Acquisition of Vital
   3,910
Acquisition of Kinetic
   1,578
Foreign currency translation
   (3 )


Balance as of September 30, 2021
   $
              81,917

There were no events during the three months ended ~~September 30, 2021~~March 31, 2022 to which an impairment analysis would be warranted.

5.	~~Acquisitions~~

5.Acquisitions

The ~~Company’s acquisitions have been accounted for under~~Company uses the purchase method of ~~accounting. The~~accounting in accordance with ASC 805, Business Combinations. This standard requires that the total ~~purchase price~~cost of ~~each~~an acquisition ~~was~~be allocated to the ~~fair value of~~tangible and intangible assets acquired and liabilities assumed based on ~~their~~the fair ~~values~~value of the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates and assumptions used in assessing fair value are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with ~~any excess~~the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as ~~goodwill.~~ of the acquisition date. Acquisition-related expenses are expensed when incurred.

The Company ~~agreed~~may also agree to pay a portion of the purchase price for certain acquisitions in the form of contingent ~~purchase price and~~consideration, the unpaid amounts of these liabilities are included in the ~~acquisition related~~acquisition-related liabilities on the condensed unaudited consolidated balance sheets as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~

2021.

(a) ArcaMax Publishing, Inc. (ArcaMax)

On March 11, 2022, the Company entered into a stock purchase agreement with the seller of ArcaMax Publishing, Inc., (“ArcaMax”) to purchase all of its issued and outstanding shares of common stock. The stock purchase agreement was effective March 1, 2022. The fair value of the aggregate purchase consideration for the ArcaMax acquisition was $26,925. The Company paid cash consideration of $9,322, issued 926,785 shares of Class A common stock with a fair value of $10,000, and agreed to pay certain earn-outs valued at $6,577 based on the operating performance of the acquired business after the closing date in cash and in shares of the Company, $962 in cash holdback and working capital adjustment of $64, payable in cash. The Company has recorded this transaction based on the preliminary purchase price allocation. Accordingly, the Company has recognized $5,100 as customer relationships intangibles, $5,700 as completed technologies, $18,548 as goodwill, $2,810 as deferred tax liability and $387 as other net assets associated with this acquisition. The Company amortizes the intangible assets over the weighted average life of 5 years.

Prior to the acquisition, ArcaMax was a leader in the development and distribution of more than 400 interest-based newsletters to consumers in the United States, distributing news and syndicating features to a growing opted-in subscriber audience of four million readers. Therefore, the Company paid a premium to acquire ArcaMax assets, which is represented as Goodwill in the above purchase price allocation. The Company incurred $344 as acquisition-related expenses related to this acquisition.

Goodwill acquired by the Company in its ArcaMax acquisition is not deductible for tax purposes.

(b) Apptness Media Group, LLC (“Apptness”):

On September 30, 2021, the Company entered into an asset purchase agreement with the sellers of Apptness to acquire its data platform business and hiring certain employees of Apptness who are engaged in the data platform business. This agreement was effective October 1, 2021. Since the assets acquired under the agreement with Apptness meets the definition of a business under ASC 805, Business Combinations, the Company concluded that it represents an acquisition of a business. The Company paid cash consideration of $17,934, issued 3,924,914 Class A common stock with a fair value of $23,000 and agreed to pay certain earn-outs valued at $7,748 based on the operating performance of the acquired business after the closing date and the Company shall pay such earn-out for a period of three years from the acquisition date in cash and in shares of the Company, and $1,396 in cash holdback. During the year ended December 31, 2021, the Company finalized the purchase price allocation for its Apptness acquisition. Accordingly, the Company recognized $13,530 as customer relationships intangibles, $2,740 as developed technology, $60 as database, $31,765 as goodwill and $1,983 as other net tangible assets associated with this acquisition. The Company amortizes the intangible assets over the weighted average life of 6.31 years.

Prior to the acquisition, Apptness operated a digital survey platform that provides comprehensive capabilities to engage consumers on sites across the open web, deliver proprietary insights and audiences to marketers, and providing publishers with new monetization opportunities. Therefore, the Company paid a premium to acquire Apptness assets, which is represented as Goodwill in the above purchase price allocation. The Company incurred $153 as acquisition-related expenses related to this acquisition

Goodwill acquired by the Company in its Apptness acquisition is deductible for tax purposes.

On March 3, 2021, the Company entered into a stock purchase agreement with the sellers of Vital Digital, Corp (“Vital”) to purchase all of the issued and outstanding shares of common stock of Vital. The fair value of the purchase consideration for this transaction is determined as $8,950, with $3,400 in cash, 306,748 shares of Series A common stock with a fair value of $2,710, $2,262 in earnouts based on the operating performance of the acquired business after the closing date, and $578 in cash holdback. During the year ended December 31, 2021, the Company finalized the purchase price allocation for its Vital acquisition. Accordingly, the Company has recognized $5,630 as customer relationship intangibles, $4,736 as goodwill, $1,465 as deferred tax liability and $49 as other net assets associated with this acquisition. The Company amortizes the customer relationship over 3 years.

Prior to the acquisition, Vital delivered data-driven marketing solutions that were complementary to the Company’s business, and therefore the Company paid a premium to acquire Vital assets, which is represented as Goodwill in the above purchase price allocation.

Goodwill acquired by the Company in its Vital acquisition is not deductible for tax purposes.

(d) Kinetic Data Solutions, LLC (“Kinetic”):

On March 1, 2021, the Company entered into a merger agreement with the sellers of Kinetic Data Solutions, LLC (“Kinetic”), an entity controlled by the Chief Executive Officer of the Company, to purchase all of the issued and outstanding stock of Kinetic. The fair value of the purchase consideration was estimated at ~~$2,762.~~$2,762. The Company agreed to issue 306,749 shares of Series A common stock with a fair value of ~~$2,738~~$2,738 and certain earn-outs of $24 based on the operating performance of the acquired business after the closing date. The

earn-out

was calculated based on the operating performance of the acquired business and the Company shall pay such

earn-out

for a period of three years from the acquisition date in cash and in restricted shares of the Company. ~~The~~During the year ended December 31, 2021, the Company ~~has recorded this transaction based on~~finalized the ~~preliminary~~ purchase price ~~allocation.~~allocation for its Kinetic acquisition. Accordingly, the Company recognized ~~$1,600~~$1,600 as customer relationships intangibles, ~~$1,578~~$1,579 as goodwill and ~~$416~~$417 as deferred tax liabilities associated with this acquisition.

~~On March~~ The Company amortizes the customer relationships over 3 ~~2021,~~ years.

Prior to the acquisition, Kinetic was engaged in the business of marketing solutions focused on homeowners. Kinetic had homeowner data that the Company ~~entered into~~integrated with its proprietary data to enhance its business and therefore paid a ~~stock purchase agreement with~~premium to acquire Kinetic assets, which is represented as Goodwill in the sellers of Vital Digital, Corp (“Vital”) to purchase all of the issued and outstanding shares of common stock of Vital. The fair value of the purchase consideration for this transaction is determined as $7,894, with $3,400 in cash, 306,748 shares of Series A common stock with a fair value of $2,710, $1,206 in earnouts based on the operating performance of the acquired business after the closing date, and $578 in cash holdback. The Company has recorded this transaction based on the preliminaryabove purchase price allocation. Accordingly, the Company has recognized $5,320 as customer relationship intangibles, $3,910 as goodwill, $1,385 as deferred tax liability and $49 as other net assets associated with this acquisition. Caivis, one of the Company’s related parties, owned 5% interest in Vital as of the effective date of this stock purchase agreement (refer to Note 13 for a description of relationship with Caivis).

~~Table of Contents~~

The revenues and earnings from these acquisitions are not significant to the Company’s condensed unaudited consolidated financial statements for the three months and nine months ending September 30, 2021.

Goodwill acquired by the Company in ~~these acquisitions~~its Kinetic acquisition is not deductible for tax purposes.

Acquisition Related Liabilities

The pro forma results of the Company as if these acquisitions had taken place on the first day of 2020 were not materially different from the amounts reflected in the accompanying condensed unaudited consolidated financial statements. The Company has recorded the earn-outs related to these acquisitions based on the fair value determined on the date of the acquisition, however the Company believes that the actual payouts for these acquisitions could be different from such recorded fair values.

6.	~~Acquisition Related Liabilities~~

The following is a summary of acquisition related liabilities:


	eBay CRM		Sizmek			IgnitionOne		Kinetic		Vital			Apptness		ArcaMax		Total
Balance as of January 1, 2022	$	8,000	$	1,927		$	1,360	$	24	$	2,840		$	8,806	$	-	$	22,957
Additions		—		—			—		—		—			—		7,539		7,539
Payments made during the period		—		(1,625	)		—		—		(105	)		—		—		(1,730	)
Change in fair value of earn-out		—		241			—		699		297			4,108		—		5,345
Balance as of March 31, 2022	$	8,000	$	543		$	1,360	$	723	$	3,032		$	12,914	$	7,539	$	34,111

eBay CRM

Sizmek

PlaceIQ

Ignition One

Kinetic

Vital

Total

Balance as of January 1, 2021

$
17,137


$
4,402

$
256

$
1,360


$
—


$
—
   $ 23,155
Additions
   —      —   —   —      24    1,784    1,808
Payments made during the year
   —      —   (64 ) —      —      —      (64 )
Change in fair value of
earn-out
   649    (470 ) (192 ) —      —      —      (13 )










Balance as of September 30, 2021

$
17,786


$
3,932

$
—

$
1,360


$
24


$
1,784


$
24,886

The changes in the fair value of the acquisition related liabilities are included in other expenses ~~/ (income)~~ on the condensed unaudited consolidated statements of operations and comprehensive loss.

The Company is a party to a litigation matter in relation to certain acquisition related liabilities for its eBay CRM acquisition dated November 2, 2015. The ~~amounts payable for eBay CRM has been contested by the Company in the court of law.~~

On October 14, 2021, the Company paid a portion of the liability for $9,786 to the sellers of eBay CRM business in satisfaction of a judgment, which was being accrued at $9,137. As such, the Company accrued an additional amount of $649 during the three months ending on September 30, 2021 such that the Company has ~~full accrual for the payment relating to this~~recorded a liability of $8,000 as of ~~September 30, 2021. Further, the Company has provided a letter of credit amounting to $6,028, against these payable amounts,~~March 31, 2022 which

~~is in the process of being~~

~~cancelled upon satisfaction of the judgment. Another portion of the liability, which stands at $8,000,~~ is still being contested by the Company and in view of the numerous legal, technical and factual issues involved in these lawsuits, the Company may resolve the remaining liabilities in any amount higher or lower than the ~~accruals as~~accruals.

On March 10, 2022, the Company entered into a settlement agreement with the sellers of ~~September 30, 2021.~~

Sizmek to resolve the dispute related to the contingent purchase consideration payable in connection with the Sizmek acquisition made during the year ended December 31, 2019. As such, the Company agreed to pay $1,085 in cash and issue 100,000shares of Class A common stock valued at $1,083, of which $542 in cash was paid and 100,000 shares of Class A common stock were issued during the three months ended March 31, 2022 and the remaining $543 cash was paid on April 1, 2022. As a result of this settlement, the Company accrued an additional liability of $241 during the three months ended March 31, 2022.

7.Credit Facilities

7.	~~Credit Facilities~~

The Company’s long-term borrowings are as follows:


	As of March 31, 2022			As of December 31, 2021
Credit facility	$	185,000		$	185,000
Less:
Unamortized deferred financing cost		(1,302	)		(1,387	)
Long-term borrowings	$	183,698		$	183,613

As of September 30, 2021

As of December 31, 2020

Credit facility
   $ 185,000    $ 137,950

Loan under paycheck protection program
   —      10,000

Revolving loan
   —      42,600





Total borrowings


185,000



190,550

Less:


Unamortized discount on debt
   —      (426
)
Unamortized deferred financing cost
   (1,472 )    (431
)




Long-term borrowings

$
183,528


$
189,693

In July 2016, the Company entered into a revolving credit, guarantee and security agreement with a financial institution and subsequently amended the agreement in May 2017. The agreement provides for a maximum revolving advance amount of $50,000. Interest on the outstanding balance is charged at an annual rate of the financial institution’s Prime Lending Rate (“PLR”)+

~~1.25~~

~~% or London Interbank Offered Rate (“LIBOR”)+~~

~~2.25~~

%, as elected by the Company. As of December 31, 2020, the outstanding balance of the revolving loan was $42,600. In addition, the Company also had an outstanding letter of credit amounting to $7,272 against the available revolving credit facility as of December 31, 2020. The credit facility was fully secured by the financial institution with a first lien on the Company’s account receivables. The Senior Secured Credit Facility, availed by the Company on February 3, 2021, was used to fully repay and terminate this Credit Agreement with a total payoff amount of $42,792.

~~Table of Contents~~

~~In July 2015, the Company entered into a term loan facility with a financial institution that was also invested in the Company’s Series~~

~~E-1~~

redeemable convertible preferred stock and subsequently invested in the Company’s Series F redeemable convertible preferred stock. The term loan facility, as amended, is for up to $142,950, which consists of a $70,000 initial term loan that was drawn at closing date, a $32,950 delay draw term loan and $40,000 in an incremental term loan commitment. As of December 31, 2020, the Company has an undrawn facility of $5,000, on the delay draw term loan. Interest on the outstanding balances is payable quarterly at an annual rate of

~~LIBOR+7.5~~

%. Interest expense for the term loan is calculated using a LIBOR rate of no lower than 1.0%. The extensions of credit may be used solely (a) to refinance indebtedness, (b) to pay any expenses associated with this line of credit agreement, (c) for working capital, capital expenditures, acquisitions and redemptions of equity interests and (d) for other general corporate purposes and shall not be used for purchases of margin stock. The Company will be required to repay the principal balance and any unpaid accrued interest on the loans at the maturity date of July 29, 2022. The financial institution had a second lien on the account receivables of the Company and first lien on all the other assets. The Senior Secured Credit Facility, availed by the Company on February 3, 2021, was used to fully repay and terminate this Credit Agreement with a total payoff amount of $137,953.

On February

3, 2021, the Company entered into a $

222,500

Senior Secured Credit Facility (“Senior Secured Credit Facility”) with a syndicate of financial institutions and institutional lenders, ~~led by BofA Securities, Inc., as a lead arranger and sole bookrunner, and Bank of America, N.A., as sole administrative agent.~~

~~The Senior Secured~~

~~Credit Facility is for up to $222,500,~~ which consists of (i) a ~~$73,750~~$73,750 initial Revolving Facility, ~~that was drawn at closing date,~~ (ii) a ~~$111,250~~$111,250 Term Facility, ~~that was drawn at closing date,~~ and (iii) a ~~$37,500~~$37,500 in incremental Revolving Facility ~~commitment that~~commitment. Out of the total available credit facility $36,094 remains ~~undrawn.~~undrawn as of March 31, 2022. In addition, the Company has an outstanding letter of credit amounting to ~~$7,272~~

$1,244against the available revolving credit ~~facility, of which a letter of credit amounting to $6,028 against the amount payable to eBay~~

~~is in the process of being~~

~~cancelled (refer to Note 6).~~facility. The credit facility was fully secured by the financial institution with a first lien on the Company’s

assets.

Interest on the

current outstanding balances is payable quarterly and calculated using a LIBOR rate of no lower than LIBOR+~~2.125%~~2.125% and no higher than LIBOR+~~2.625%~~2.625% based on the Company’s consolidated net leverage ratio stated in the credit ~~agr~~

~~ement.~~agreement. The effective interest rate on this debt for the three months ended March 31, 2022 was 2.6%. The extensions of credit may be used solely (a) to refinance existing indebtedness, (b) to pay any expenses associated with this line of credit agreement, (c) for acquisitions, and (d) for other general corporate purposes. The Company is required to repay the principal balance and any unpaid accrued interest on the Senior Secured Credit Facility on February 3, ~~2026.~~2026. During the three months ended March 31, 2022, the Company borrowed $1,406 against the revolver facility and repaid the same amount against the term loan under the credit facility. The ~~Company incurred $1,699 as~~initial debt issuance costs of $1,699 incurred in the form of the legal fee, underwriter’s fee, etc., ~~and these costs~~ are recognized as a reduction in ~~the~~ long-term borrowings in the ~~condensed unaudited~~ consolidated balance sheets, and are being amortized over the term of the contract on a straight-line basis.

The Senior

Secured Credit Facility contains certain financial maintenance covenants including consolidated net leverage ratio and consolidated fixed charge coverage ratio. In addition, this agreement contains restrictive covenants that may limit the Company’s ability to, among other things, acquire equity ~~interest~~interests of the Company from its shareholders, repurchase / retire any of the Company’s securities, and pay dividends or distribute excess cash flow. Additionally, the Company is required to submit periodic financial covenant letters that would include current net leverage ratio and fixed charge coverage ratio, among others. As of ~~September 30, 2021,~~March 31,

2022, the applicable total leverage ratio and fixed charge coverage ratio ~~was 4.0~~were 3.0 and 1.25, respectively, and the Company was in compliance with these covenants.

~~Since the time~~

lag between the effective date of the new credit facility and September 30, 2021 is minimal and the interest rates on the Company’s new credit facility approximates the current market rates, the fair value of the debt is approximately equal to the carrying amount as of September 30, 2021.

~~On April 23, 2020, the Company received proceeds from a~~

~~loan~~

~~in the amount of $10,000, bearing annual interest of 1% and was due on~~

~~April 24, 2022~~

(the “PPP Loan”) pursuant to the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The Company evaluated the applicable accounting guidance relative to the PPP Loan and accounted for the proceeds of the PPP Loan as debt under ASC 470. On June 10, 2021, the Small Business Administration (“SBA”) approved the forgiveness for the full amount of the PPP Loan which included principal of $10,000. The Company recognized the reversal of the debt liability upon forgiveness of the PPP Loan as “Gain on extinguishment of debt” in its condensed unaudited consolidated statements of operations and comprehensive loss during the nine months ended September 30, 2021.

As of ~~September 30, 2021,~~March 31, 2022, the repayment schedule for the long-term borrowings was as follows:

As of September 30, 2021

Year Ended December 31,

Remaining three months of 2021
   $ 0
2022
   5,625
2023
   11,250
2024
   11,250
2025
   16,875
2026 and thereafter
   140,000


Total*

$
185,000


	As of March 31, 2022
Year ended December 31,
Remaining nine months of 2022	$	4,219
2023		11,250
2024		11,250
2025		16,875
2026		141,406
Total*	$	185,000

*Includes ~~$4,219~~$7,031 repayable against the term loan facility within

the

~~twelve month~~ twelve-month period ending ~~September 30, 2022.~~March 31, 2023. The Company intends to draw against the available revolving facility to pay off term loan installments and therefore the total borrowings are included in “Long-term borrowings” on the condensed unaudited balance sheets as of ~~September 30, 2021.~~

March 31, 2022.

8.Commitments and Contingencies

(a)Purchase obligations

~~Table of Contents~~

8.	~~Commitments and Contingencies~~

~~(a)~~

~~Purchase obligations~~

The Company entered into

non-cancellable

vendor agreements to purchase services. As of ~~September 30, 2021,~~March 31, 2022, the Company was party to outstanding purchase contracts as follows:


	As of March 31, 2022
Year Ended December 31,
Remaining nine months of 2022	$	16,396
2023		21,599
2024		19,329
2025		5,700
2026		1,425
Total	$	64,449

As of September 30, 2021

Year Ended December 31,

Remaining three months of 2021
   $ 2,468
2022
   9,785
2023
   5,700
2024
   5,700
2025
   5,700
2026 and thereafter
   1,425


Total

$
30,778

~~(b)~~

~~Lease commitments~~

(b)Lease commitments

The Company maintains leased offices in the United States of America, United Kingdom, India, Belgium and France. Deferred rent as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 was ~~$2,458~~$2,813 and ~~$2,652,~~$2,508, respectively for these leases and is included in other current liabilities and

non-current

liabilities on the condensed unaudited consolidated balance sheets. Commitments for the base rents ~~as of September 30, 2021~~ are as follows:


	As of March 31, 2022
Year Ended December 31,
Remaining nine months of 2022	$	2,590
2023		2,423
2024		2,084
2025		1,864
2026		1,683
2027 and thereafter		3,485
Total	$	14,129

As of September 30, 2021

Year Ended December 31,

Remaining three months of 2021
   $ 778
2022
   2,553
2023
   2,133
2024
   1,953
2025
   1,788
2026 and thereafter
   5,062


Total

$
14,267

The Company is a party to various litigations and administrative proceedings related to claims arising from its operations in the ordinary course of business including in relation to certain contingent purchase price obligations noted above. The Company records provisions for losses when claims become probable, and the amounts are estimable. Although the outcome of these matters cannot be predicted with certainty, the Company’s management believes that the resolution of the matters will not have a material ~~impact~~effect on the Company’s business, results of operations, financial condition, or cash flows.

9.	~~Stock-Based Compensation~~

9.Stock-Based Compensation

Stock-based compensation plan

In 2008, the Company adopted its 2008 Stock Option/Stock Issuance Plan and, in 2017, the Company adopted the Zeta Global Holdings Corp. 2017 Incentive Plan (collectively, the “Plans”).

The Plans ~~permit~~permitted the issuance of stock options, restricted stock and restricted stock units to employees, directors and officers, consultants or advisors and

non-employee

directors of the Company. Options granted under the Plans expire no later than ten years from the grant date. ~~The~~Prior to the IPO, the restricted stock and restricted stock units granted under the Plans generally did not vest until a change in ~~control, which generally does not include an initial public offering.~~control. Upon a change in control, restricted stock and restricted stock units vest as to ~~25%~~25% of the shares with the balance of the shares vesting in equal quarterly installments following the change in control over the remainder of a ~~five~~five-year~~-year~~ term from the original date of grant. The restricted stock and restricted stock units ~~will~~ fully vest upon a change in control to the extent five years has passed from the original date of grant of the restricted stock or restricted stock units. Since the vesting of these awards was contingent upon the change of control event, which was not considered probable until it occurs, the Company did not record any stock-based compensation ~~expense~~ for such ~~awards.~~awards prior to the IPO, a change in control event. The stock-based compensation has been recognized following the vesting of restricted stock, restricted stock units and options as described below.

In the past, the Company has cancelled certain restricted stock and in ~~lieu of~~connection with such cancellation has issued restricted stock units to the holders of that restricted stock, with the same vesting conditions as the cancelled restricted stock.

~~Table of Contents~~

Restricted Stock and Restricted Stock Units

As noted above, the Company’s restricted stock and restricted stock units granted prior to the IPO did not vest until ~~the~~a change of control. On March 24, 2021, the Company’s board of directors approved a modification in the vesting terms of its restricted stock and restricted stock unit awards. ~~Pursuant to that approval, the existing restricted stock and restricted stock units were divided into three broad categories with different vesting conditions as follows:~~

~~For the first category of holders, terms of the modification provide the holders an option to tender up to 20% of their outstanding awards to the Company in a~~

~~buy-back~~

~~program for a cash payout on the effective date of the IPO, with the remaining percentage of the awards subject to future vesting beginning at the end of the first quarter following the~~

~~one-year~~

~~anniversary of the IPO and extending for a period of four years thereafter.~~

For the second category of holders, terms of the modification provide for vesting upon the effective date of the IPO as follows: (i) 25% of shares with an original grant date of less than five years prior to the IPO and (ii) 100% of shares with a grant date of five years or older. Post the IPO, additional vesting is deferred for one year. Thereafter the rema

~~ning shares shall vest in equal quarterly installments at the end of each quarter until the fifth anniversary of the date of the original grant.~~

~~For the third category of holders, terms of the modification provide for vesting to begin at the end of the first quarter following the~~

~~one-year~~

~~anniversary of the IPO, with such shares vesting in equal quarterly installments at the end of each quarter until the~~ ~~fifth~~ ~~anniversary of the date of the IPO.~~

~~The revised terms were communicated to the restricted stock and restricted stock unit holders.~~

~~The above~~This modification was accounted for under the guidance in ASC

718-20-35-3.

Given the vesting of the modified awards contained a performance condition associated with the IPO, the Company had determined that the modification was considered

improbable-to-improbable

under ASC

718-20-55-118

through 119.

The restricted stock or restricted stock units that ~~are~~were tendered by the holders in the

buy-back

program for ~~the first category of~~certain restricted stock and restricted stock units were liability classified and as such the expense related to these grants has been recognized based on the settlement price as of the date of IPO. In connection with the other ~~two categories of~~ holders, the Company will recognize compensation expense over the modified vesting terms, based on the fair value as of the date of modification. The portion of the awards subject to future service would remain classified as equity awards and expense would be recognized over the remaining future service period.

During the three months ended March 31, 2022, the Company's board of directors approved to modify the vesting schedule of certain awards granted prior to the IPO. The modification will have an impact of accelerating the vesting of those grants such that certain grants that were scheduled to cliff vest in September and December of 2022, will now vest from July to December of 2022 in equal monthly instalments. The modification was accounted for in accordance with ASC 718-20-35-3. The impact of such modification did not have any material impact on the stock-based compensation during the three months ended March 31, 2022.

The following is the activity of restricted stock and restricted stock units granted by the Company:


	Shares			Weighted Average Grant Date Fair Value
Non-vested as of January 1, 2022		65,208,870		$	10.86
Granted (1)		4,227,869			10.29
Forfeited (2)		(773,079	)		10.73
Non-vested as of March 31, 2022 (3)		68,663,660		$	10.83

(1)

During the three months ended March 31, 2022, the Company granted 4,162,159 restricted stock and 65,710 restricted stock units to its employees and advisors.

(2)

During the three months ended March 31, 2022, the 717,505 restricted stock and 55,574 restricted stock units were forfeited.

(3)

Includes 47,962,958 unvested Class A restricted stock, 19,436,835 unvested Class B restricted stock and 1,263,867 unvested restricted stock units as of March 31, 2022.

Stock options

Shares

Weighted Average
Grant Date Fair
Value

Non-vested
as of January 1, 2021
   85,903,970    $ 2.80
Granted
(1)
   9,112,569    8.62
Vested
   (9,300,893 )    11.04
Forfeited
(2)
   (4,700,102 )    9.46
Cancelled
(3)
   (16,655,197 )    3.60
Modified
   (68,986,297 )    2.78
Modified and reissued
   68,986,297    11.36




Non-vested
as of September 30
, 2021
   64,360,347    $ 10.94

~~(1)~~

During the nine months ended September 30, 2021, the Company granted 8,824,045 restricted stock and 288,724 restricted stock units to its employees and board members, of which 1,660,677 restricted stock and 98,993 restricted stock units were granted prior to March 12, 2021 and will be governed by the vesting rules described in a), b) and c) above. Remaining shares that were granted on or after March 12, 2021 shall vest over a period of four years, with 25% vesting on the

~~one-year~~

anniversary of the IPO and the remainder vesting in equal quarterly installments thereafter through the 4th anniversary of the grant date. The Company also converted 1,198,219 restricted stock into restricted stock units for certain employee related grants included in the cancelled grants in the statements of shareholders equity for the nine months ended September 30, 2021.

~~(2)~~

~~During the nine months ended September 30, 2021, the 4,682,178 restricted stock and 17,924 restricted stock units were forfeited.~~

~~(3)~~

During the nine months ended September 30, 2021, the Company also cancelled 16,655,197 shares of restricted stock granted to holders of series A redeemable convertible preferred shares (see Note 10 to the condensed unaudited consolidated financial statements below).

~~Table~~

Following is the summary of ~~Contents~~transactions under the Company’s stock option plan:


	Number of options			Weighted average exercise price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
Outstanding options as of January 1, 2021		1,150,893		$	3.61		5.31	$	3.89
Exercised		(31,985	)		3.29		—		0
Forfeited		(231,246	)		3.96		—		—
Outstanding options as of December 31, 2021		887,662		$	3.53		4.19	$	5.28
Exercised		(15,500	)		4.21		—		0
Outstanding options as of March 31, 2022		872,162		$	3.12		4.19	$	9.63

The Company did 0t grant any options during the three months ended March 31, 2022 and the year ended December 31, 2021. There was 0 unrecognized expense related to stock options as of March 31, 2022.

Performance Stock Unit (“PSU”) Award

On ~~August 18, 2021,~~February 23, 2022, the Compensation Committee of the Board of Directors approved ~~1,500,000 PSU awards~~the grant of 1,979,500 PSUs under the Company’s 2021 Incentive Award Plan. Upon achievement of the conditions described below, the PSUs could result in the issuance of up to ~~3,000,000~~7,438,500 shares of Class A common stock. Each PSU represents the right to receive shares of Class A common stock as set forth in the PSU grant agreement or, at the option of the Company, an equivalent amount of cash. Participants have no right to the distribution of any shares or payment of any cash until the time (if ever) the PSUs are earned and have vested. Each PSU provides for the right to receive a dividend equivalent to the value of any ordinary cash dividends paid on substantially all the outstanding shares of Class A common stock if the PSUs are earned and vested.

The PSUs may be earned at the end of each fiscal quarter beginning with the ~~three month~~three-month period ending on ~~June 30,~~December 31, 2022 and ending with, and including, the three month period ending on December 31, ~~2025.~~2026. Such number of shares of Class A common stock shall be earned as a percentage of the PSUs granted, as set forth in the table below, based on the ~~20 day~~20-day volume-weighted average closing price per share (“VWAP”) for such quarter. The number of PSUs earned for such quarter shall be reduced by the number of PSUs, if any, earned in any prior quarter.

20 Day VWAP of Class A common stock

Below $10

$10.00

$12.50

$15.00

$18.50

$22.00
Percentage of target PSUs

0%

25%

50%

100%

150%

200%

~~Upon being~~


20 Day VWAP of Class A common stock	Below $13.84			$	13.84		$	16.34		$	18.84		$	22.34		$	25.34		$	38.09
Percentage of target PSUs		0	%		25	%		50	%		100	%		150	%		200	%	*

* The percentage of target PSUs earned at $38.09 for each participant ranges between 300% and ~~subject to the participant’s continued service,~~500%.

Earned PSUs ~~will~~ vest in three equal annual installments, with the first installment vesting on the date the Company determines the number of ~~determination~~PSUs that are eligible to vest for ~~the applicable~~such quarter, ~~for which such PSUs were earned,~~ and the second and third installments vesting on the ~~second~~first and ~~third~~second anniversaries of such ~~quarterly~~ determination date, subject to accelerated vesting in connection with certain qualifying terminations of employment or a change in control. In

Following is the ~~event~~summary of ~~Participant’s termination of service for any reason, all unvested PSUs will immediately and automatically be cancelled and forfeited, except, to~~transactions under the extent a Participant is terminated without cause or resigns for good reason, (i) any PSUs earned for any quarter prior to the date of termination will fully vest, and (ii) any PSUs earned in the quarter in which the termination date occurs will fully vest.Company’s PSU plan:


	Number of PSUs		Weighted Average Grant Date Fair Value
Outstanding as of January 1, 2022		1,500,000	$	1.95
Granted		1,979,500		9.10
Outstanding as of March 31, 2022		3,479,500	$	6.02

The Company engaged a third-party valuation firm to determine the estimated fair value of the PSUs using the Monte Carlo simulation method, which was determined as ~~$1.95~~$9.10 per ~~PSU.~~ PSU issued during the three months ended March 31, 2022 using the following assumptions:


		As of
		March 31, 2022
Dividend yield		0.0%
Volatility		78.0%
Risk-free rate of interest		*
* For each simulation trial, the risk-free rate of interest was estimated based on the treasury securities with a similar term.

During the three ~~and nine~~ months ended ~~September 30, 2021,~~March 31, 2022, the Company recognized an expense of ~~$86~~$556 related to the target ~~PSUs during such period.~~

PSUs.

2021 Employee Stock Purchase Plan (“ESPP”)

In connection with its IPO, the Company adopted the 2021 Employee Stock Purchase Plan, or the 2021 ESPP. The Company expects that all of its employees will be eligible to participate (the “participants”) in the 2021 ESPP. The 2021 ESPP permits participants to purchase the Company’s Class A common stock through contributions up to a specified percentage of their eligible compensation. The maximum number of shares that may be purchased by a participant during any offering period are capped at 10,000. In addition, no employee will be permitted to accrue the right to purchase shares under the Section 423 component at a rate in excess of $25,000 worth of shares during any calendar year during which such a purchase right is outstanding (based on the fair market value per share of our Class A common stock as of the first day of the offering period).

On July 28, 2021, the Compensation Committee of the Board of Directors approved the Company’s first offering period under the ~~2021~~ ESPP, which commenced on August 1, 2021 and ~~will end on~~ended November 30, 2021. Following the end of the first offering period, the ~~2021~~ ESPP shall have consecutive offering periods of approximately six months in length commencing each year on December 1 and June 1 and ending on each May 31 and November 30 occurring six months later, as applicable.

During the three months ~~and nine months~~ ended ~~September 30, 2021,~~March 31, 2022, the Company recognized an expense of ~~$180~~$376 at a fair value of ~~$2.16~~$3.39 per ~~2021 ESPP~~ share related to ~~the~~ enrollments resulting in approximately 225,253 shares of Class A common stock to be issued under the ~~first~~second offering period that commenced on ~~August~~December 1, ~~2021. The fair value of the~~ 2021 ~~ESPP was determined, based~~and will end on ~~the Monte Carlo simulation method, by a third party valuation firm engaged by the Company.~~

May 31, 2022.

Unrecognized compensation expense

The Company has ~~$607,110~~$518,403 of unrecognized compensation expense related to its ~~64,360,347~~68,663,660 unvested restricted stock and restricted stock units, ~~1,500,000~~3,479,500 performance stock units and225,253 shares of Class A common stock to be issued under the ESPP. This unrecognized stock-based compensation will be recognized over a weighted average period of ~~1.37~~1.24 years.

~~10.~~

~~Stockholders’ Equity / (Deficit)~~

~~On February 24, 2021,~~

10.Stockholders’ Equity

During the ~~Company’s Board of Directors approved the correction of the conversion price of Series A redeemable convertible preferred shares held by certain shareholders and cancelation of 16,655,197~~three months ended March 31, 2022, 1,000,000 shares of ~~restricted stock granted to these holders of Series A~~

~~Table of Contents~~

redeemable convertible preferred shares. The Board of Directors determined that the restricted shares were issued to those shareholders in order to avoid dilution of their ownership in the Company as a result of other grants of shares. It was further determined that the dilutive effect of those other restricted shares should have been addressed by an adjustment to the conversion price of the Series A redeemable convertible preferred shares. Therefore, the issuance of the restricted shares to these holders of the Series A redeemable convertible preferred shares was determined to be an error and were duplicative with the corrected calculation of the conversion price of Series A redeemable convertible preferred shares. The conversion price of these Series A redeemable convertible preferred stock was adjusted to $0.073587 from $0.59.

~~The number of shares outstanding as of June 14, 2021 was 152,270,401 shares of our Class A common stock and 37,856,095 shares of our~~ Class B common stock ~~based on stock outstanding as of March 31, 2021, after giving effect to each of the Reorganization Transactions described in Note 1, as a result of the Company’s IPO.~~

~~Rights of Class A and Class B common stockholders:~~

~~The Company’s amended and restated Certificate of Incorporation defines the rights of the different classes of common stock as under:~~

~~Equal Status- Except as otherwise provided in the Certificate of Incorporation or required by applicable l~~

w,were automatically converted into 1,000,000 shares of Class A common stock upon transfer pursuant to the terms of our amended and ~~Class B common stock shall have~~restated certificate of incorporation.

Further, during the same rights, privileges and powers, rank equally (including as to dividends and distributions, and upon any liquidation, dissolution, distribution of assets or winding up of the Company), share ratably and be identical in all respects and as to all matters.

~~Voting- Except as otherwise required by applicable law, at all meetings of stockholders and on all matters submitted to a vote of stockholders of~~three months ended March 31, 2022, the Company generally, each holder of Class A common stock, as such, shall have the right to one (1) vote per share of Class A common stock held of record by such holder and each holder of Class B common stock, as such, shall have the right to ten (10) votes per share of Class B common stock held of record by such holder.

Dividend Rights- Shares of Class A common stock and Class B common stock shall be treated equally, identically and ratably, on a per share basis, with respect to any dividends as may be declared and paid from time to time by the Board of Directors of the Company.

~~Liquidation, Dissolution or Winding~~

~~Up-~~

Subject to the preferential or other rights of any holders of Preferred Stock then outstanding, upon the dissolution, distribution of assets, liquidation or winding up of the Company, whether voluntary or involuntary, holders of Class A common stock and Class B common stock will be entitled to receive ratably all assets of the Company available for distribution to its stockholders unless disparate or different treatment of the shares of each such class with respect to distributions upon any such liquidation, dissolution, distribution of assets or winding up is approved by the affirmative vote of the holders of a majority of the outstandingissued 926,785 shares of Class A common stock valued at $10,000 for its ArcaMax acquisition and ~~Class B common stock, each voting separately as a class.~~

~~Shares issued for a settlement~~

~~In connection with a settlement~~100,000 shares of ~~a dispute with a vendor, the Company issued 200,000 shares which it recorded as a General & Administrative expense in the condensed unaudited statements of operations and comprehensive loss.~~

~~Table of Contents~~

~~11.~~

~~Warrants and Derivative Liabilities~~

~~The following assumptions were used to determine the fair value of the warrants and derivative liabilities as of September 30, 2021 and December 31, 2020:~~

As of September 30, 2021

As of December 31, 2020

Stock price
   $ —      $ 7.56
Exercise price
   $ —      $ 0.01
Risk-free interest rate
   —      0.09%
Expected volatility
   —      64.0%
Time to maturity (in years)
   —      0.63

As of December 31, 2020, the fair value of the warrants and derivative liabilities was $58,100. In connection with the Company’s IPO, all the outstanding warrants were exercised by holders of those warrants and redeemable convertible preferred stock were converted to Class A common stock valued at $1,083 to the sellers of Sizmek to resolve the ~~Company. The derivative liability, that represented the conversion feature of certain redeemable convertible preferred stock has been settled in the additional paid in capital.~~

~~For the three months ended September 30, 2020, the Company recognized an expense of $9,700,~~dispute related to the changes in the fair value of warrants and derivative liabilities. There was no such expense in the three months ended September 30, 2021 due to the extinguishment of the warrants and derivative liabilitycontingent purchase consideration payable in connection with the ~~Company’s IPO~~Sizmek acquisition made during ~~Q2 2021. For~~ the ~~nine months~~year ended ~~September 30, 2021 and 2020, the Company recognized an expense related to changes in the fair value of such warrants and derivative liabilities of $5,000 and $16,400, respectively.~~

December 31, 2019.

~~12.~~

~~Fair Value Disclosures~~

11.Fair Value Disclosures

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers ~~include:~~

include Level 1, Level 2 and Level 3.

Level 1 is defined as observable inputs such as quoted prices in active markets for identical assets;

Level 2 is defined as observable inputs other than Level 1 prices such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3 is defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The following table represents the fair value of the financial instruments measured at fair value on a recurring basis:

As of September 30, 2021


Level 1

Level 2

Level 3

Total









Assets

Cash and cash equivalents*
   $ 5,764    $ —      $ —      $ 5,764








Total assets measured at fair value

$
5,764


$
—

$
—

$
5,764









Liabilities

Derivative liability
   $ —      $ —      $ —      $ —
Warrant liability
   —      —      —      —
Acquisition related liabilities
   —      —      24,886    24,886








Total liabilities measured at fair value

$
—

$
—

$
24,886


$
24,886

~~Table of Contents~~

As of December 31, 2020

Assets

Level 1

Level 2

Level 3

Total

Cash and cash equivalents*
   $   12,257    $       —      $ —      $ 12,257








Total assets measured at fair value

$
12,257


$
—

$
—

$
12,257









Liabilities

Derivative liability
   $ —      $ —      $ 38,400    $ 38,400
Warrant liability
   —      —      19,700    19,700
Acquisition related liabilities
   —      —      23,155    23,155








Total liabilities measured at fair value

$
—

$
—

$
  81,255


$

81,255


	As of March 31, 2022
	Level 1			Level 2		Level 3		Total
Assets
Cash and cash equivalents*		$	15,276	$	—	$	—		$	15,276
Total assets measured at fair value		$	15,276	$	—	$	—		$	15,276
Liabilities
Acquisition-related liabilities			—		—	$	34,111		$	34,111
Total liabilities measured at fair value	$		—	$	—	$	34,111		$	34,111


	As of December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents*	$	8,564	$	—	$	—	$	8,564
Total assets measured at fair value	$	8,564	$	—	$	—	$	8,564
Liabilities
Acquisition-related liabilities	$	—	$	—	$	22,957	$	22,957
Total liabilities measured at fair value	$	—	$	—	$	22,957	$	22,957

* Includes cash invested by ~~the Company in certain money market accounts with a financial institution.~~

~~As noted above in Note 7, as of September 30, 2021 and December 31, 2020,~~ the Company ~~determined that the Term Loan is classified as Level 3 and the relevant fair values were approximately equal to the book value as of September 30, 2021 and $152,538 as of December 31, 2020.~~

in certain money market accounts with a financial institution.

The following table reconciles the changes in the fair value of the liabilities categorized within Level 3 of the fair value hierarchy for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and year ended December 31, ~~2020:~~2021:


	Acquisition related liabilities
Balance as of January 1, 2022	$	22,957
Additions, net of payments		5,809
Change in fair value		5,345
Balance as of March 31, 2022	$	34,111

Warrant
liability

Acquisition
related liabilities

Derivative
liability

Balance as of January 1, 2021
   $ 19,700    $ 23,155    $ 38,400
Additions, net of payments
   —      1,744    —
Change in fair value
   4,400    (13)    600
Extinguishment of the warrant and derivative liabilities
   (24,100)    —      (39,000)






Balance as of September 30, 2021

$
0—

$
24,886


$
0—

In connection with certain business combinations, the Company may owe additional purchase consideration (contingent consideration included in the ~~acquisition related~~acquisition-related liabilities) based on the financial performance of the acquired entities after their acquisition. The fair value of the contingent consideration was determined using an unobservable input such as projected revenues, or collections of accounts ~~receivables.~~receivables, etc. Changes in any of the assumptions related to the unobservable inputs identified above may change the ~~contingent consideration’s~~ fair ~~value.~~

~~13.~~

~~Related Party Transactions~~

~~Caivis Acquisition Corp. II, Caivis Acquisition Corp. IV, Caivis Investment Company V, LLC and Caivis Investment Company VI, LLC (collectively, the “Caivis Group”) are entities owned by many~~value of the same stockholders of the Company. In addition, the Chief Executive Officer of the Company owns a controlling interest in the Caivis Group. On April 9, 2012, the Company amended its agreement with the Caivis Group, whereby the Caivis Group will provide support for general administrative and corporate development activities, including sourcing and evaluating potential partners and acquisition targets to the Company for $2,000 per year. This agreement with the Caivis Group was terminated on December 31, 2019 and therefore 0 such expenses are incurred during FY2020 and the nine months ended on September 30, 2021. As of December 31, 2020, the Company had outstanding payables of $533 to the Caivis Group included in the “accounts payable and accrued expenses” in the condensed unaudited consolidated balance sheets. During the nine months ended on September 30, 2021, the Company paid an amount of $533 and as such there is 0 outstanding payable to the Caivis Group as of September 30, 2021.

contingent consideration.

12.Related Party Transactions

Casting Made Simple Corp. (“CMS”) is an entity owned by the Caivis Group (Company's Chief Executive Officer's owns Controlling interest in Caivis Group) and the Chief Executive Officer’s spouse. On December 28, 2018, the Company entered into an agreement with CMS to monetize traffic generated through websites owned by CMS and give a profit share to CMS. ~~During~~The Company recognized $47 and $96 for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and March 31, 2021, ~~the Company recognized $49 and $211, respectively and during the three and nine months ended September 30, 2020, the Company recognized $92 and $277,~~ respectively as direct cost of revenues in the condensed unaudited consolidated statements of operations and comprehensive loss, representing the profit shared by the Company with CMS. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company had outstanding payables of ~~$48~~$39 and ~~$70,~~$20, respectively to CMS and included in the “accounts payable and accrued expenses” in the condensed unaudited consolidated ~~balances~~balance sheets.

~~Table~~

Prior to acquisition, Kinetic Data Solutions, LLC (“Kinetic”) was an entity in which Caivis Group was the majority shareholder. On September 9, 2020, the Company entered into an agreement with Kinetic, wherein the Company appointed Kinetic as a reseller of ~~Contents~~its email marketing services to Kinetic’s customers. The Company recognized revenues of $129 during the three months ended March 31, 2021. There were 0 outstanding amounts from Kinetic as of March 31, 2022 and December 31, 2020.

~~14.~~

~~Income Taxes~~

13.Income Taxes

The Company’s income tax provision consists of federal, foreign, and state taxes necessary to align the Company’s

year-to-date

tax provision with the annual effective rate that it expects to achieve for the full year. At each interim period, the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as necessary.

For the ~~interim period~~three months ended ~~September 30, 2020,~~March 31, 2022, the Company ~~utilized the annual~~recorded an income tax benefit of $2,599. The effective tax rate ~~methodology~~for the three months ended March 31, 2022 was 3.5% on a pre-tax loss of $74,636. The effective tax rate differs from the U.S. statutory rate primarily related to ~~determine~~limited tax benefit recorded for U.S. operating losses as the Company maintains a full valuation allowance against its U.S. deferred tax assets.

For the three months ended March 31, 2021, the Company recorded an income tax ~~provision.~~ benefit of $1,577. The effective tax rate for the three months ended March 31, 2021 was 6.1% on a pre-tax loss of $25,951. The effective tax rate differs from the U.S. statutory rate primarily related to limited tax benefit recorded for U.S. operating losses as the Company maintains a full valuation allowance against its U.S. deferred tax assets.

For the ~~interim~~three months period ended ~~September 30,~~March 31, 2021, the Company departed from the annual effective tax rate methodology and computed its income tax provision using a discrete method. The use of the discrete method was made in accordance with authoritative accounting guidance which allows for the use of a discrete method when there are significant changes to the projected annual effective tax rate as a result of minor adjustments to projected

pre-tax

earnings.

~~For the three months ended September 30, 2021, the Company recorded an income tax provision of $428. The income tax provision~~14.

~~related~~

~~primarily~~Net Loss Per Share Attributable to ~~foreign taxes. For the three months ended September 30, 2020, the Company recorded an income tax provision of $301 related primarily to foreign taxes.~~Common Stockholders

~~The effective tax rate for the three months ended September 30, 2021 was (0.62)% on a~~

~~pre-tax~~

~~loss of $68,701. The effective tax rate for the three months ended September 30, 2020 was (2.37)% on a~~

~~pre-tax~~

loss of $12,702. The effective tax rate for both interim periods was different than the U.S. statutory rate primarily related to limited tax benefit being recording for U.S. operating losses as the Company maintains a full valuation allowance against its U.S. deferred tax assets.

~~15.~~

~~Net Loss Per Share Attributable to Common Stockholders~~

Basic net loss per share is computed using the

two-class

method, by dividing the net loss by the weighted-average number of shares of common stock of the Company outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock of the Company, including redeemable convertible preferred stock, outstanding stock options, warrants, to the extent dilutive, and reduced by the amount of cumulative dividends earned on the preferred shares. However, the unvested restricted stock, restricted stock units and performance stock units as of ~~September 30,~~March 31, 2022 and 2021 of 72,143,160and ~~2020 of 65,860,347 and 84,486,332~~71,490,707 respectively, are not considered as participating securities and are anti-dilutive and as such are excluded from the weighted average number of shares used for calculating basic and diluted net loss per share. Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential shares of common stock of the Company outstanding would have been anti-dilutive.

The following table sets forth the calculation of basic and diluted net loss per share attributable to common stockholders during the periods presented:


	Three months ended March 31,
	2022			2021
Numerator:
Net loss	$	(72,037	)	$	(24,374	)
Cumulative redeemable convertible preferred stock dividends		—			3,894
Numerator for Basic and Dilutive loss per share - loss available to common stockholders	$	(72,037	)	$	(28,268	)
Denominator:
Class A common stock		116,232,110			—
Class B common stock		17,852,593			—
Series A common stock		—			26,306,393
Series B common stock		—			3,054,318
Warrants		—			3,486,280
Denominator for Basic and Dilutive loss per share- weighted-average common stock		134,084,703			32,846,991
Basic loss per share	$	(0.54	)	$	(0.86	)
Dilutive loss per share	$	(0.54	)	$	(0.86	)

Three months ended September 30,

Nine months ended September 30,


2021

2020

2021

2020

Net loss
   $ (69,129)    $ (13,003)    $ (188,425)    $ (44,437)
Cumulative redeemable convertible preferred stock dividends
   —      3,774    7,060    11,150








Numerator for Basic and Dilutive loss per share - loss available to common stockholders

$
(69,129)


$
(16,777)


$
(195,485)

   $ (55,587 )








Denominator:

Class A common stock
   111,312,720    —      50,027,683    —
Class B common stock
   18,419,260    —      7,300,725    —
Series A common stock
   —      26,108,711    14,420,964    26,108,727
Series B common stock
   —      3,054,318    1,664,380    3,054,318
Warrants (convertible to Series A common stock)
   —      3,444,328    1,899,768    3,444,328








Denominator for Basic and Dilutive loss per share-weighted-average common stock


129,731,980



32,607,357



75,313,520



32,607,373









Basic loss per share

$
(0.53)

   $ (0.51)
$
(2.60)

   $ (1.70)
Dilutive loss per share

$
(0.53)

   $ (0.51)
$
(2.60)

   $ (1.70)

~~Table of Contents~~

Since the Company was in a net loss position for all periods presented, basic loss per share calculation excludes redeemable convertible preferred stock as it does not participate in net losses of the Company. Additionally, net loss per share attributable to common shareholders was the same on a basic and diluted basis, as the inclusion of all potential common equivalent shares outstanding would have been anti-dilutive.

Anti-dilutive weighted-average common equivalent shares were as follows:


	Three months ended March 31,
	2022		2021
Options		880,846		912,198
Warrants		-		1,973,763
Preferred stock		-		39,223,194
Restricted stock and restricted stock units		67,499,127		—
Performance stock units		2,291,800		—

Three months ended September 30,

Nine months ended September 30,


2021

2020

2021

2020

Options (convertible to Series A common stock)
   923,750    1,137,026    923,750    1,137,026
Warrants (convertible to Series A common stock)
   —      1,973,763    —      1,973,763
Redeemable convertible preferred stock
   —      39,223,194    —      39,223,194
Restricted stock and restricted stock units
   64,360,347    84,486,332    64,360,347    84,486,332
Performance stock units
   1,500,000    —      1,500,000    —

~~16.~~

~~Subsequent Event~~

~~On October 1, 2021, the Company acquired the digital survey platform business~~

Item 2.Management’s Discussion and Analysis of ~~Apptness Media Group, LLC~~

~~(“Seller”)~~

~~from Seller. As consideration for the acquisition, the Company (i) paid $17,934 in cash to Seller,~~Financial Condition and ~~(ii) issued shares~~Results of the Company’s Class A common stock, par value $0.001 per share (the “Shares”), to Seller with an aggregate value of $23,000 calculated based on the closing price of the Shares on the New York Stock Exchange on September 30, 2021. The Shares are subject to an eighteen month

~~lock-up~~

~~period with approximately equal release installments every six months.~~

~~Additionally, the Company may also (i) release to~~

~~Selle~~

~~a $1,750 indemnity hold-back in eighteen months and (ii) pay up to $22,000 in~~

~~earn-out~~

~~consideration payable 50% in cash and 50% in shares, based on the performance of the acquired business over the next three years.~~

The Company has not completed the purchase price allocation of this acquisition prior to the issuance of these financial statements, and an estimate of the financial effect of the transaction cannot be made. All other business combination disclosures are not available due to the proximity of the acquisition to the issuance of these financial statements.

~~Table of Contents~~

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form

10-Q.

In addition to historical financial information, the following discussion contains forward-looking statements that are based upon current plans, expectations and beliefs that involve risks and uncertainties. Our actual results and the timing of events may differ materially from those anticipated and discussed in the forward-looking statements as a result of various factors, including those set forth ~~under the heading~~in Part 1, Item 1A “Risk Factors” in the ~~Prospectus filed with~~Company’s Annual Report on Form 10-K for the ~~SEC on June 14, 2021 pursuant to Rule 424(b)(4) under the Securities Act.~~

year ended December 31, 2021.

Overview

Zeta ~~develops and markets~~is a leading omnichannel data-driven cloud platform that provides enterprises with consumer intelligence and marketing automation software. We empower our customers to target, connect and engage consumers through software that delivers personalized marketing across all addressable channels, including email, social media, web, chat, ~~connected TV (“CTV”)~~CTV and video, among others. We believe our actionable insights derived from consumer intent enable our customers to acquire, grow and retain consumer relationships more efficiently and effectively than the alternative solutions available in the market.

Our

~~top-rated~~

Zeta Marketing Platform (the ~~“ZMP”~~"ZMP") is the largest omnichannel marketing platform with identity data at its core. The ZMP ~~analyzes~~can analyze billions of structured and unstructured data points to predict consumer intent by leveraging sophisticated machine learning algorithms and the industry’s largest

opted-in

data set for omnichannel marketing. The ZMP ~~connects~~acts on these insights by connecting with consumers through native integration of marketing channels and API integration with third parties. The ZMP’s data-driven algorithms and processes learn and optimize each customer’s marketing program in real time, producing a ‘flywheel effect’ that enables our customers to test, learn and improve their marketing programs in real time. ~~Over time, this~~This continuous learning loop provides greater efficiency and effectiveness for our customers and creates a competitive advantage for Zeta.

The ZMP empowers our customers to personalize consumer experiences at scale across multiple touchpoints. Marketing programs are created and orchestrated by our customers through automated workflows and sophisticated dashboards. Our CDP+ ingests, analyzes and distills disparate data points to generate a single view of a consumer, encompassing identity, profile characteristics, behaviors and purchase intent, which is then made accessible through a single console. Our Opportunity Explorer synthesizes Zeta’s proprietary data and data generated by our customers to uncover consumer insights that are translated into marketing programs designed for highly targeted audiences across digital channels, including email, SMS, websites, applications, social media, CTV and chat.

~~Recent Developments~~

~~Initial Public Offering~~

On June 14, 2021, we completed our initial public offering (“IPO”) in which we sold 14,773,939 shares of our Class A common stock, and certain selling stockholders sold an additional 6,726,061 shares of Class A common stock, at a public offering price of $10.00 per share. We received net proceeds of approximately $132.7 million, after deducting underwriters’ discounts and commissions (but excluding other offering expenses and reimbursements of $6.2 million), from sales of our shares in the IPO. We did not receive any of the proceeds from any sale of shares by the selling stockholders.

~~COVID-19~~

~~Update~~

~~During the first half of 2021, some of our scaled customers in industries that experience negative effects from the~~

~~COVID-19~~

pandemic, such as travel and hospitality and financial services, reduced or paused their levels of business with us. This resulted in a reduction of total scaled customers that has continued through the three months ended September 30, 2021 relative to the prior-year period, as we saw a decrease in our total scaled customers, from 354 customers to 347 customers. However, during the three months ended September 30, 2021, we experienced an increase in scaled customer ARPU, which resulted in our revenue increasing for the three months ended September 30, 2021 compared to the prior-year period. Our scaled customer ARPU growth resulted primarily from the initial effects of transitioning our sales team model to focus a dedicated team on new business development and a separate team on training and educating new and existing users on our platform capabilities. Our transition to this hunter/farmer sales model has included focusing more of our sales team on growth of existing scaled customers and aligning scaled customers with sellers that have specific industry expertise. In addition, scaled customer ARPU also benefitted from increased levels of business from customers in industries that experienced positive effects from the

~~COVID-19~~

~~pandemic, such as insurance, automotive and telecom.~~

In future periods, as the post-pandemic recovery continues and pandemic-related restrictions subside, we expect that our customers in industries such as travel and hospitality and financial services will return to levels of spending comparable to or greater than their historical spending. Although the pandemic-related growth levels we have experienced may decrease in the future, we expect that the success of our new sales team model will continue to drive new business. As a result, we expect customer spending in industries where we saw strength during the

~~COVID-19~~

~~pandemic to continue to increase even as the growth effects of the~~

~~COVID-19~~

~~pandemic on some industries may tend to be moderate.~~

~~Table of Contents~~

Factors Affecting Results of Operations

For a discussion of the factors affecting our results of operations, please see “Factors Affecting Results of Operations” in the ~~Management’s~~Part II, Item 7 "Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and ~~the~~Part 1, Item 1A “Risk Factors” section of our ~~Prospectus.~~

Annual Report on Form 10-K for the year ended December 31, 2021.

Key Business Metrics

~~For a list of the~~

We review several key performance metrics, ~~we use~~discussed below, to evaluate our business, track performance, identify trends, formulate plans and make strategic ~~decisions, please see “Key Business Metrics” in~~decisions. We believe that the ~~Management’s Discussion~~presentation of such metrics provides investors with effective ways to measure and ~~Analysis section and~~model the ~~“Risk, Factors” section~~performance companies such as ours, with recurring revenue streams.

Scaled customers increased 8%, from 333 for the three months ended March 31, 2021 to 359 for the three months ended March 31, 2022. Scaled customer ARPU increased 18%, from $289,275 for the three months ended March 31, 2021 to $341,265 for the three months ended March 31, 2022, primarily due to higher usage of our ~~Prospectus.~~

platform among scaled customers.

Description of Certain Components of Financial Data

Revenues

Our revenue is primarily ~~derived~~arises from use of our technology platform via subscription fees, volume-based utilization fees and fees for professional ~~services related to customers’ use~~services. Our platform revenue comprised of ~~our marketing platform. Our revenue is comprised from~~ a mix of direct platform revenue and integrated platform revenue, which leverages application programming interface (“API”) integrations with third parties. For the ~~nine~~three months ended ~~September 30,~~

March 31, 2022 and 2021, ~~and 2020,~~ we derived ~~75%~~81% and ~~71%~~74% of our revenues from direct platform revenue, respectively, and ~~25%~~19% and ~~29%~~26% of our revenues from integrated platform revenue, respectively. Revenues are recognized when control of these ~~products or~~ services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those ~~products and~~ services. Sales and other taxes collected by us are excluded from revenue. Our revenue recognition policies are discussed in more detail below under “Critical Accounting Policies and Estimates.”

Cost of revenues (excluding depreciation and amortization)

Cost of revenue excludes depreciation and amortization and consists primarily of media and marketing costs and certain ~~personnel~~employee-related costs. Media and marketing costs consist primarily of fees paid to third-party publishers, media owners or managers, ~~or to~~and strategic partners that are directly related to a revenue-generating event. We pay these third-party publishers, media owners or managers and strategic partners on a revenue-share, a

cost-per-lead,

cost-per-click,

cost-per-thousand-impressions

basis. ~~Personnel~~Expenses related to “internet traffic” associated with the viewing of available impressions or queries per second and costs of providing support to our customers are also included in the cost of revenues. Employee-related costs included in cost of revenues include salaries, bonuses, commissions, stock-based compensation and employee benefit costs primarily related to individuals directly associated with providing services to our customers. We expect costs of revenues will generally decrease in the future as a percentage of revenue ~~will generally decrease from current levels~~ over the long term.

General and administrative expenses

General and administrative expenses primarily consist of computer and telecom expenses, ~~personnel~~employee-related costs, including salaries, bonuses, stock-based compensation and employee benefits costs associated with our executive, finance, legal, human resources and other administrative personnel, as well as accounting and legal professional services ~~fees.~~fees and platform and related infrastructure costs. We expect general and administrative expenses to increase in absolute dollars in future periods. We expect that general and administrative expenses, excluding the impact of stock-based compensation which is being recognized on an accelerated basis, will stay consistent as a percentage of revenue over the long term.

~~Table of Contents~~

Selling and marketing expenses

Selling and marketing expenses primarily consist of ~~personnel~~employee-related costs, including salaries, bonuses, employee benefits costs, stock-based compensation and commission costs for our sales and marketing personnel. Selling and marketing expenses also include costs for market development programs, advertising, promotional and other marketing activities. We intend to continue to invest in marketing initiatives and as a result we expect selling and marketing expenses to increase in absolute dollars in future periods. Selling and marketing expense as a percentage of revenue may fluctuate from period to period based on revenue levels and the timing of our investments in these functions over the long term.

Research and development expenses

Research and development expenses primarily consist of ~~personnel~~employee-related costs, including salaries, bonuses and employee benefit costs, stock-based compensation associated with engineering and IT services associated with the ongoing research and maintenance of internal use ~~software, including platform and related infrastructure.~~software. We expect to continue to invest in research and development in order to develop our technology platform to drive incremental value and growth and as a result we expect that research and development expenses will increase as a percentage of revenue in the long term.

Depreciation and amortization

Depreciation and amortization relate to property and equipment, website and software development costs as well as acquisition-related and other acquired intangible assets. We record depreciation and amortization when appropriate using straight-line method over the estimated useful life of the assets.

Acquisition related expenses

Acquisition related expenses primarily consist of legal fees associated with certain business combinations and addressing disputes related to those transactions. It also includes retention bonuses agreed to be paid to employees related to

one-time

events such as an acquisition or a significant transaction. We expect that acquisition related expenses will be correlated with future acquisitions (if any), which could be greater than or less than our historic levels.

Restructuring expenses

Restructuring expenses consists primarily ~~consist~~ of employee termination costs due to internal restructuring. We expect that restructuring expenses will be correlated with future restructuring activities (if any), which could be greater than or less than our historic levels.

Interest expense

Interest expense primarily consists of interest ~~paid~~payable on our long-term borrowings.

Other ~~(income) / expense~~

expenses

Other ~~(income) /~~ expense primarily consists of changes in fair value of acquisition related liabilities, gains and losses on sale of assets ~~gains and losses on extinguishment of acquisition related liabilities~~ and foreign exchange gains and losses. We expect that the magnitude of other income and expenses will depend on external factors such as foreign exchange rate, which could be greater than or less than our historic levels.

Change in fair value of warrants and derivative liabilities

Change in fair value of warrants and derivative liabilities primarily relates to warrants to purchase shares of our common stock that we issued in connection with previous financing rounds. The change in fair value of warrants and derivative liabilities depends on external valuation-related factors. As of ~~September 30, 2021,~~March 31, 2022, the Company does not have any warrants and derivative liabilities on its condensed unaudited consolidated balance sheets.

~~Table of Contents~~

Income tax provision

The Company’s income tax provision consists of federal, foreign, and state taxes necessary to align the Company’s

year-to-date

Stock-based compensation

The measurement of stock-based compensation for all stock-based payment awards, including restricted stock and restricted stock units, employee’s stock purchase plan (“ESPP”), performance stock units (“PSUs”) and stock options granted to employees, consultants or advisors and non-employee directors, is based on the estimated fair value of the awards on the date of grant or date of modification of such grants.

We will expense the unrecognized stock-based compensation as follows, subject to future forfeitures:


				Year ended December 31,
Remaining period of 2022		2023			2024		2025		2026		Total
$	211,318	$	168,691		$	90,873	$	39,327	$	8,194	$	518,403

See Note 9 to our condensed unaudited financial statements for further details.

Results of Operations

We operate as a single reportable segment to reflect the way our Chief Operating Decision Officer (“CODM”) reviews and assesses the performance of the business. The Company’s CODM is the Chief Executive Officer.


	Three months ended March 31,
	2022			2021
Revenues	$	126,268		$	101,463
Operating expenses:
Cost of revenues (excluding depreciation and amortization)		41,725			38,972
General and administrative expenses		53,349			19,132
Selling and marketing expenses		68,918			20,570
Research and development expenses		17,231			9,784
Depreciation and amortization		12,766			10,117
Acquisition - related expenses		344			707
Restructuring expenses		—			287
Total operating expenses	$	194,333		$	99,569
(Loss) / Income from operations		(68,065	)	$	1,894
Interest expense		1,298			2,961
Other expenses		5,273			1,284
Change in fair value of warrants and derivative liabilities		—			23,600
Total other expenses	$	6,571		$	27,845
Loss before income taxes		(74,636	)		(25,951	)
Income tax benefit		(2,599	)		(1,577	)
Net loss	$	(72,037	)	$	(24,374	)

Comparison of the Three Months Ended March 31, 2022 and 2021

Revenues


	Three months ended March 31,				Change
	2022		2021		Amount		%
Revenues	$	126,268	$	101,463	$	24,805		24.4	%

Revenues increased by $24.8 million, or 24.4%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. This increase in revenues is attributable to incremental revenues of $5.5 million from existing customers and $19.3 million from new customers.

Cost of revenues (excluding depreciation and amortization)


	Three months ended March 31,				Change
	2022		2021		Amount		%
Cost of revenues (excluding depreciation and amortization)	$	41,725	$	38,972	$	2,753		7.1	%

Cost of revenues (excluding depreciation and amortization) increased by $2.8 million, or 7.1%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. This increase was primarily driven by $1.6 million in incremental media costs and higher stock-based compensation of $1.2 million (refer to Note 9).

General and administrative expenses


	Three months ended March 31,				Change
	2022		2021		Amount		%
General and administrative expenses	$	53,349	$	19,132	$	34,217		178.8	%

General and administrative expenses increased by $34.2 million, or 178.8%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. This increase was primarily driven by higher stock-based compensation of $29.8 million (refer to Note 9) , legal and professional fees of $1.5 million, employee-related costs of $1.0 million, computer and telecom-related expenses of $0.9 million, insurance-related expenses of $0.6 million and other expenses of $0.4 million.

Selling and marketing expenses


	Three months ended March 31,				Change
	2022		2021		Amount		%
Selling and marketing expenses	$	68,918	$	20,570	$	48,348		235.0	%

Selling and marketing expenses increased by $48.3 million, or 235.0%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. This increase was primarily driven by higher stock-based compensation of $36.8 million (refer to Note 9), employee-related costs of $9.4 million, legal and professional expenses of $0.8 million, other marketing-related expenses of $0.7 million and travel-related expenses of $0.6 million.

Research and development expenses


	Three months ended March 31,				Change
	2022		2021		Amount		%
Research and development expenses	$	17,231	$	9,784	$	7,447		76.1	%

Research and development expenses increased by $7.4 million, or 76.1%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. This increase was primarily driven by higher stock-based compensation of $6.0 million (refer to Note 9), employee-related costs of $0.8 million and legal and professional expenses of $0.6 million.

Depreciation and amortization


	Three months ended March 31,				Change
	2022		2021		Amount		%
Depreciation and amortization	$	12,766	$	10,117	$	2,649		26.2	%

Depreciation and amortization increased by $2.6 million, or 26.2%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. This increase was driven by an increase in amortization of intangible assets of $1.7 million. Further, there was an increase in depreciation expense of $0.9 million primarily due to incremental website and software development-related capitalization over the recent periods.

Acquisition related expenses


	Three months ended March 31,				Change
	2022		2021		Amount			%
Acquisition related expenses	$	344	$	707	$	(363	)		(51.3	)%

Acquisition related expenses decreased by $0.4 million, or 51.3%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. This decrease was primarily driven by lower retention bonuses and professional fees compared to those incurred during the three months ended March 31, 2021.

Restructuring expenses


	Three months ended March 31,				Change
	2022		2021		Amount			%
Restructuring expenses	$	—	$	287	$	(287	)		(100.0	)%

Restructuring expenses decreased by $0.3 million, or 100%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. During the three months ended March 31, 2022, the Company did not incur any reorganization expenses, compared to $0.3 million during three months ended March 31, 2021.

Interest expense


	Three months ended March 31,				Change
	2022		2021		Amount			%
Interest expense	$	1,298	$	2,961	$	(1,663	)		(56.2	)%

Interest expense decreased by $1.7 million, or 56.2%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. This decrease was primarily driven by a lower interest rate on the new debt facility entered into during February 2021.

Other expenses


	Three months ended March 31,				Change
	2022		2021		Amount		%
Other expenses	$	5,273	$	1,284	$	3,989		310.7	%

Other expenses increased by $4.0 million, or 310.7%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. The increase was primarily driven by an incremental change in the fair value of acquisition related liabilities of $4.6 million, related to the Company's prior acquisitions, during the three months ended March 31, 2022 compared with three months ended March 31, 2021. This increase was partially offset by an increase in foreign currency gain of $0.6 million.

Change in fair value of warrants and derivative liabilities


	Three months ended March 31,				Change
	2022		2021		Amount			%
Change in fair value of warrants and derivative liabilities	$	—	$	23,600	$	(23,600	)		(100.0	)%

Change in fair value of warrants and derivative liabilities expense decreased by $23.6 million for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. The warrants and derivative liabilities were extinguished upon the Company’s IPO on June 14, 2021 and accordingly no such expenses were recorded during the three months ended March 31, 2022.

Income tax benefit


	Three months ended March 31,						Change
	2022			2021			Amount			%
Income tax benefit	$	(2,599	)	$	(1,577	)	$	(1,022	)		64.8	%

For the ~~interim period~~three months ended ~~September 30, 2020,~~March 31, 2022, the Company ~~utilized the annual~~recorded an income tax benefit of $2.6 million yielding an effective tax rate ~~methodology to determine its income tax provision.~~of 3.5%. For the ~~interim period~~three months ended ~~September 30,~~March 31, 2021, the Company ~~departed from the annual~~recorded an income tax benefit of $1.6 million yielding an effective tax rate ~~methodology and computed its income tax provision using a discrete method.~~of 6.1%. The ~~use of the discrete method was made in accordance with authoritative accounting guidance which allows for the use of a discrete method when there are significant changes to the projected annual~~ effective tax rate for both interim periods was different than the U.S. statutory rate primarily related to limited tax benefit being recording for U.S. operating losses as the Company maintains a ~~result of minor adjustments to projected~~

~~pre-tax~~

~~earnings.~~

full valuation allowance against its U.S. deferred tax assets.

Non-GAAP

Financial Measures

We use the following

non-GAAP

financial information, collectively, to evaluate our ongoing operations and for internal planning and forecasting purposes.

Non-GAAP

financial information is presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from similarly titled

non-GAAP

measures used by other companies. Whenever we use a

non-GAAP

financial measure, a reconciliation is provided to the most closely applicable financial measure stated in accordance with generally accepted accounting principles.

Adjusted EBITDA and adjusted EBITDA margin

Adjusted EBITDA is

a non-GAAP financial

measure defined as net loss adjusted for interest expense, depreciation and amortization, stock-based compensation, income tax (benefit) / provision, ~~/ (benefit), acquisition related~~acquisition-related expenses, restructuring expenses, change in fair value of warrants and derivative liabilities, certain dispute settlement ~~expense,~~expenses, gain on extinguishment of debt, certain

non-recurring

IPO related expenses, including the payroll taxes related to vesting of restricted stock and restricted stock units upon the completion of our IPO, and other ~~expenses / (income). Acquisition related~~expenses. Acquisition-related expenses and restructuring expenses primarily consist of severance and other ~~personnel-related~~employee-related costs which we do not expect to incur in the future as acquisitions of businesses may distort the comparability of the results of operations. Change in fair value of warrants and derivative liabilities is

a non-cash expense

related to periodically

recording “mark-to-market” changes

in the valuation of derivatives and warrants. Other (income) / expenses ~~/ (income)~~ consists

of non-cash expenses

such as changes in fair value ~~of acquisition related liabilities, gains and losses on extinguishment~~ of acquisition-related liabilities, gains and losses on sales of assets and foreign exchange gains and losses. In particular, we believe that the exclusion of stock-based compensation, certain dispute settlement expenses and

non-recurring

IPO related expenses that are not related to our core operations provides measures for

period-to-period

comparisons of our business and provides additional insight into our core controllable costs. Adjusted EBITDA margin is a

non-GAAP

metric defined as adjusted EBITDA divided by the total revenues for the same period. Adjusted EBITDA and adjusted EBITDA margin provide us with a useful measure

for period-to-period comparisons

of our business as well as comparison to our peers. We believe that

these non-GAAP financial

measures are useful to investors in analyzing our financial and operational performance. Our use of adjusted EBITDA and adjusted EBITDA margin has limitations as an analytical tool, and you should not consider these measures in isolation or as a substitute for analysis of our financial results as reported under ~~U.S.~~ GAAP. Because of these and other limitations, you should consider

our non-GAAP measures

only as supplemental to other GAAP-based financial performance measures, including revenues and net loss.

~~Table of Contents~~

The following table reconciles adjusted EBITDA and adjusted EBITDA margin to net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP.

Three months ended September 30,

Nine months ended September 30,


2021

2020

2021

2020

Net loss

$
(69,129)


$
(13,003)


$
(188,425)


$
(44,437)

Net loss margin


(60.0)%



(13.6)%



(58.2)%



(17.5)%

Add back:

Interest expense


1,342

   3,823

5,705

   12,548
Income tax provision / (benefit)


428

   301

(565
)
   1,319
Depreciation and amortization


11,783

   10,133

33,135

   30,171
Stock-based compensation


69,343

   26

188,613

   79
IPO related expenses


—

   —

2,705

   —
Gain on extinguishment of debt


—

   —

(10,000)

   —
Acquisition related expenses


480

   1,230

1,516

   4,321
Restructuring expenses


30

   259

467

   1,950
Change in fair value of warrants and derivative liabilities


—

   9,700

5,000

   16,400
Dispute settlement expense


1,196

   —

1,196

   —
Other expenses / (income)


496

   (188)

1,031

   (546)








Adjusted EBITDA

$
15,969


$
12,281


$
40,378


$
21,805









Adjusted EBITDA margin


13.9%



12.9%



12.5%



8.6%

~~Table of Contents~~

~~Results of Operations~~

Three months ended September 30,

Nine months ended September 30,


2021

2020

2021

2020


Condensed Consolidated Statements of Operations Data:

Revenues

$
115,133

   $ 95,284
$
323,492

   $ 253,674








Operating expenses:

Cost of revenues (excluding depreciation and amortization)


44,525

   40,705

125,709

   100,530
General and administrative expenses


50,643

   17,150

135,682

   53,270
Selling and marketing expenses


60,537

   18,269

163,952

   54,359
Research and development expenses


13,998

   6,905

50,285

   23,789
Depreciation and amortization


11,783

   10,133

33,135

   30,171
Acquisition related expenses


480

   1,230

1,516

   4,321
Restructuring expenses


30

   259

467

   1,950








Total operating expenses

$
181,996

   $ 94,651
$
510,746

   $ 268,390








(Loss) / income from operations


(66,863)

   633

(187,254)

   (14,716)
Interest expense


1,342

   3,823

5,705

   12,548
Other expenses / (income), net


496

   (188)

1,031

   (546)
Gain on extinguishment of debt


—

   —

(10,000)

   —
Change in fair value of warrants and derivative liabilities


—

   9,700

5,000

   16,400








Total other expenses

$
1,838

   $ 13,335
$
1,736

   $ 28,402








Loss before income taxes


(68,701)

   (12,702)

(188,990)

   (43,118)
Income tax provision / (benefit)


428

   301

(565)

   1,319








Net loss available to common stockholders

$
(69,129)

   $ (13,003)
$
(188,425)

   $
(44,437)

~~Comparison of the Three Months Ended September 30, 2021 and 2020~~

~~Revenues~~

Three months ended September 30,

Change


        2021

        2020

    Amount

        %

Revenues
   $ 115,133    $ 95,284    $ 19,849        20.8%

Revenues increased by $19.8 million, or 20.8%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This increase in revenues is attributable to incremental revenues of $6.2 million from existing customers and $13.6 million from new customers.

~~Cost of revenues (excluding depreciation and amortization)~~

Three months ended September 30,

Change


        2021

        2020

    Amount

        %

Cost of revenues (excluding depreciation and amortization)
   $   44,525    $ 40,705    $ 3,820        9.4%

~~Table of Contents~~

Cost of revenues (excluding depreciation and amortization) increased by $3.8 million, or 9.4%, for the three months ended September 30, 2021, compared to the three months ended September 30, 2020. This increase was primarily driven by $1.9 million in incremental media costs and other direct fulfillment costs of $1.6 million.

~~General and administrative expenses~~

Three months ended September 30,

Change


        2021

        2020

    Amount

        %

General and administrative expenses
   $   50,643    $ 17,150    $ 33,493      195.3%

General and administrative expenses increased by $33.5 million, or 195.3%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This increase was primarily driven by stock-based compensation of $28.2 million, higher employee related costs of $3.1 million, higher legal and professional fees of $1.7 million and shares issued in the settlement of a dispute of $1.2 million, this increase was partially offset by reduction in the rent and facility expenses of $0.4 million and computer and telecom expenses of $0.4 million.

~~Selling and marketing expenses~~

Three months ended September 30,

Change


        2021

        2020

    Amount

        %

Selling and marketing expenses
   $   60,537    $ 18,269    $ 42,268      231.4%

Selling and marketing expenses increased by $42.3 million, or 231.4%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This increase was primarily driven by stock-based compensation of $35.1 million, higher employee related costs of $6.5 million and other marketing related expenses of $0.8 million.

~~Research and development expenses~~

Three months ended September 30,

Change


        2021

        2020

    Amount

        %

Research and development expenses
   $   13,998    $   6,905    $   7,093      102.7%

Research and development expenses increased by $7.1 million, or 102.7%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This increase was primarily driven by stock-based compensation of $4.8 million and higher employee related costs of $2.1 million.

~~Depreciation and amortization~~

Three months ended September 30,

Change


      2021

        2020

    Amount

        %

Depreciation and amortization
   $   11,783    $ 10,133    $   1,650        16.3%

Depreciation and amortization increased by $1.7 million, or 16.3%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This increase was primarily driven by amortization of intangibles of $1.1 million and depreciation expense of $0.5 million.

~~Table of Contents~~

~~Acquisition related expenses~~

Three months ended September 30,

Change


        2021

        2020

    Amount

        %

Acquisition related expenses
   $       480    $   1,230    $     (750)      (61.0)%

Acquisition related expenses decreased by $0.8 million, or 61.0%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This decrease was primarily driven by lower retention bonuses and professional fees compared with those incurred during the three months ended September 30, 2020, in conjunction with acquisitions completed in 2019.

~~Restructuring expenses~~

Three months ended September 30,

Change


        2021

        2020

    Amount

        %

Restructuring expenses
   $         30    $      259    $     (229)      (88.4)%

Restructuring expenses decreased by $0.2 million, or 88.4%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This decrease was primarily driven by lower employee severance cost.

~~Interest expense~~

Three months ended September 30,

Change


        2021

        2020

    Amount

        %

Interest expense
   $   1,342    $   3,823    $   (2,481)      (64.9)%

Interest expense decreased by $2.5 million, or 64.9%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This decrease was primarily driven by a lower interest rate on the new debt facility entered into during 2021.

~~Other expenses / (income)~~

Three months ended September 30,

Change


        2021

        2020

    Amount

        %

Other expenses / (income)
   $       496    $     (188)    $      684      (363.8)%

Other expenses increased by $0.7 million or 363.8% for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This increase was primarily driven by a foreign currency loss of $0.4 million and change in the fair value of acquisition related liabilities of $0.2 million.

~~Change in fair value of warrants and derivative liabilities~~

Three months ended September 30,

Change


        2021

        2020

    Amount

        %

Change in fair value of warrants and derivative liabilities
   $       —    $   9,700    $   (9,700)      (100)%

Change in fair value of warrants and derivative liabilities expense decreased by $9.7 million for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This loss during the three months September 30, 2020 was primarily driven by a change in our estimates and assumptions specifically as it relates to the price of our underlying stock used to calculate the fair value of our warrants and derivatives. The warrants and derivative liabilities were extinguished upon the Company’s IPO on June 14, 2021 and as such there are no such changes in the liabilities recorded during the three months ended September 30, 2021.

~~Table of Contents~~

~~Income tax provision~~

  Three months ended September 30,

Change


        2021

        2020

     Amount

        %

Income tax provision
   $         428    $       301    $      127 ��        42.2%

For the three months ended September 30, 2021, the Company recorded an income tax provision of $0.4 million yielding an effective tax rate of (0.62)%. For the three months ended September 30, 2020, the Company recorded an income tax provision of $0.3 million yielding an effective tax rate of (2.37)%. The effective tax rate for both interim periods was different than the U.S. statutory rate primarily related to limited tax benefit being recording for U.S. operating losses as the Company maintains a full valuation allowance against its U.S. deferred tax assets.

~~Comparison of the Nine Months Ended September 30, 2021 and 2020~~

~~Revenues~~

  Nine months ended September 30,

Change


        2021

        2020

    Amount

        %

Revenues
   $ 323,492    $ 253,674    $ 69,818        27.5 %

Revenues increased by $69.8 million, or 27.5%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This increase in revenues is attributable to incremental revenues of $30.8 million from existing customers and $38.9 million from new customers.

~~Cost of revenues (excluding depreciation and amortization)~~

  Nine months ended September 30,

Change


        2021

        2020

    Amount

        %

Cost of revenues (excluding depreciation and amortization)
   $ 125,709    $ 100,530    $ 25,179        25.0 %

Cost of revenues (excluding depreciation and amortization) increased by $25.2 million, or 25.0%, for the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. This increase was primarily driven by $20.0 million in incremental media costs, other direct fulfillment costs of $3.5 million and stock-based compensation of $1.5 million.

~~General and administrative expenses~~

  Nine months ended September 30,

Change


        2021

        2020

    Amount

        %

General and administrative expenses
   $ 135,682    $ 53,270    $ 82,412      154.7 %

General and administrative expenses increased by $82.4 million, or 154.7%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This increase was driven by stock-based compensation of $70.9 million, employee related costs of $9.3 million,

~~non-recurring~~

IPO related expenses of $1.5 million, legal and professional fees of $2.0 million and shares issued in the settlement of a dispute of $1.2 million, this increase was partially offset by reduction in the rent and facility expenses of $1.4 million and computer and telecom expenses of $1.0 million.

~~Table of Contents~~

~~Selling and marketing expenses~~

Nine months ended September 30,

Change


        2021

        2020

    Amount

        %

Selling and marketing expenses
   $ 163,952    $ 54,359    $ 109,593    201.6%

Selling and marketing expenses increased by $109.6 million, or 201.6%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This increase was primarily driven by stock-based compensation of $94.6 million, higher employee related costs of $14.2 million and

~~non-recurring~~

~~IPO related expense of $0.8 million.~~

~~Research and development expenses~~

Nine months ended September 30,

Change


        2021

        2020

    Amount

        %

Research and development expenses
   $   50,285    $ 23,789    $ 26,496    111.4%

Research and development expenses increased by $26.5 million, or 111.4%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This increase was primarily driven by stock-based compensation of $21.7 million, higher employee related costs and professional and consulting fees of $4.5 million and

~~non-recurring~~

~~IPO related expenses of $0.4 million.~~

~~Depreciation and amortization~~

Nine months ended September 30,

Change


        2021

        2020

    Amount

        %

Depreciation and amortization
   $   33,135    $ 30,171    $   2,964       9.8%

Depreciation and amortization increased by $3.0 million, or 9.8%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This increase was primarily driven by an increase in amortization of intangibles of $2.3 million and depreciation expense of $0.6 million.

~~Acquisition related expenses~~

Nine months ended September 30,

Change


        2021

        2020

    Amount

        %

Acquisition related expenses
   $   1,516    $   4,321    $   (2,805)    (64.9)%

Acquisition related expenses decreased by $2.8 million, or 64.9%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This decrease was primarily driven by lower retention bonuses and professional fees compared to those incurred during the nine months ended on September 30, 2020 in conjunction with acquisitions completed in 2019.

~~Restructuring expenses~~

Nine months ended September 30,

Change


        2021

        2020

    Amount

        %

Restructuring expenses
   $       467    $   1,950    $   (1,483)      (76.1)%

Restructuring expenses decreased by $1.5 million, or 76.1%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This decrease was primarily driven by lower employee severance cost during the nine months ending September 30, 2021 compared with September 30, 2020.

~~Table of Contents~~

~~Interest expense~~

Nine months ended September 30,

Change


        2021

        2020

    Amount

        %

Interest expense
   $   5,705    $ 12,548    $   (6,843)      (54.5)%

Interest expense decreased by $6.8 million, or 54.5%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This decrease was primarily driven by a lower interest rate on the new debt facility entered into during 2021.

~~Other expenses / (income)~~

Nine months ended September 30,

Change


        2021

        2020

    Amount

        %

Other expenses / (income)
   $   1,031    $     (546)    $   1,577    (288.8)%

Other expense increased by $1.6 million, or 288.8% for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This increase was primarily driven by an increase in loss on sale of assets of $0.7 million, and an increase in foreign currency loss of $0.8 million.

~~Change in fair value of warrants and derivative liabilities~~

Nine months ended September 30,

Change


        2021

        2020

    Amount

        %

Change in fair value of warrants and derivative liabilities
   $   5,000    $ 16,400    $ (11,400)    (69.5)%

Change in fair value of warrants and derivative liabilities expense decreased by $11.4 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. These losses during the nine months ended September 30, 2021 and 2020 were primarily driven by a change in our estimates and assumptions specifically as it relates to the price of our underlying stock used to calculate the fair value of our warrants and derivatives. The warrants and derivative liabilities were extinguished upon the Company’s IPO on June 14, 2021 and as such there are no such changes in the liabilities recorded during the three months ended September 30, 2021, and the losses in the nine months ended September 30, 2021 are much smaller compared to the nine months ended September 30, 2020,

~~Income tax (benefit) / provision~~

Nine months ended September 30,

Change


        2021

        2020

    Amount

        %

Income tax (benefit) / provision
   $     (565)    $   1,319    $   (1,884)    (142.8)%

For the nine months ended September 30, 2021, the Company recorded an income tax benefit of $0.6 million yielding an effective tax rate of 0.3%. For the nine months ended September 30, 2020, the Company recorded an income tax provision of $1.3 million yielding an effective tax rate of (3.06)%. The effective tax rate for both interim periods was different than the U.S. statutory rate primarily related to limited tax benefit being recording for U.S. operating losses as the Company maintains a full valuation allowance against its U.S. deferred tax assets.


	Three months ended March 31,
	2022			2021
Net loss	$	(72,037	)	$	(24,374	)
Net loss margin		57.1	%		24.0	%
Add back:
Depreciation and amortization		12,766			10,117
Restructuring expenses		—			287
Acquisition related expenses		344			707
Stock-based compensation		73,736			—
Other expenses		5,273			1,284
Change in fair value of warrants and derivative liabilities		—			23,600
Interest expense		1,298			2,961
Income tax benefit		(2,599	)		(1,577	)
Adjusted EBITDA		18,781			13,005
Adjusted EBITDA margin		14.9	%		12.8	%

Liquidity and Capital Resources

We have financed our operations and capital expenditures primarily through utilization of cash generated from operations, as well as borrowings under our credit facilities. As of ~~September 30, 2021,~~March 31, 2022, we had cash and cash equivalents of ~~$116.2 million. The~~$103.9 million and net working capital, consisting of current assets less current liabilities, as of ~~September 30, 2021 was $95.4~~$78.8 million. As of ~~September 30, 2021,~~March 31, 2022, we had an accumulated deficit of ~~$430.7~~$563.9 million.

~~Table of Contents~~

We believe our existing cash and anticipated net cash provided by operating activities, together with available borrowings under our credit facility, will be sufficient to meet our working capital requirements for at least the next 12 months. However, if our operating performance during the next 12 months is below our expectations, our liquidity and ability to operate our business could be adversely affected.

Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under "Risk Factors" in our Annual Report on Form 10 K for the year ended December 31, 2021. In the future, we may attempt to raise additional capital through sales of equity securities or through equity-linked or debt financing arrangements. Any future indebtedness we incur may result in terms that could be unfavorable to our equity investors. We cannot guarantee that we will be able to raise additional capital in the future on favorable terms, or at all. Any inability to raise capital could adversely affect our ability to achieve our business objectives.

Cash flows

The following table summarizes our cash ~~flows:~~

Nine months ended September 30,


2021

2020

Net cash provided by / (used for):

Cash provided by operating activities

$
23,366


$
16,642

Cash used in investing activities
   (22,463)    (19,408)
Cash provided by financing activities
   64,682    6,004
Effect of exchange rate changes on cash and cash equivalents
   (130)    (102)




Net increase in cash and cash equivalents

$
65,455


$
3,136

flows for the periods presented:


	Three months ended March 31,
	2022			2021
Net cash provided by / (used for):
Cash provided by operating activities	$	21,183		$	5,612
Cash used for investing activities		(20,365	)		(6,804	)
Cash (used for) / provided by financing activities		(582	)		2,502
Effect of exchange rate changes on cash and cash equivalents		(232	)		68
Net increase in cash and cash equivalents	$	4		$	1,378

Cash Flows from Operating Activities

For the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, net cash provided by operating activities of ~~$23.4~~$21.2 million resulted primarily from adjusted

non-cash

items of ~~$217.6~~$89.4 million, more than offsetting our net loss of ~~$188.4 million and resulting in a net cash income of $29.2~~$72.0 million. Changes in working capital were primarily driven by a decrease in accounts receivable of ~~$7.4~~$9.6 million, offset by a decrease ~~in prepaid and other current assets of $2.4 million and increase~~ in accrued expenses and other current liabilities of ~~$2.8~~$1.6 million, ~~offset by a decrease in~~ accounts payable of ~~$18.0~~$2.4 million and deferred revenues of ~~$1.3 million, for net decrease in working capital of $5.8~~$1.2 million.

For the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, net cash provided by operating activities of ~~$16.6~~$5.6 million resulted primarily from ~~changes~~a net loss of $24.4 million, adjusted for non-cash items of $33.6 million. Changes in working capital were primarily driven by a decrease in accounts receivable of ~~$29.0~~$11.1 million ~~partially~~and a decrease in other current assets of $2.2 million, offset by an increase in prepaid expenses of $0.8 million, a decrease in accounts payable of $9.8 million and a decrease in accrued expenses and other current liabilities of ~~$19.7 million, for net increase in working capital of $11.7~~$3.7 million. ~~This increase was partially offset by net loss of $44.4 million adjusted for~~

~~non-cash~~

~~items of $49.4 million, resulting in a net cash loss of $5.0 million.~~

Cash Flows from Investing Activities

For the ~~nine~~three months ended ~~September 30,~~March 31, 2022, we used $20.4 million of cash in investing activities, primarily consisting of business and asset acquisitions of $9.2 million, capital expenditures of $6.7 million (including a $6.1 million investment in data and partnership agreements) and website and software development costs of $4.5 million.

For the three months ended March 31, 2021, we used ~~$22.5~~$6.8 million of cash in investing activities, primarily consisting of website and software development costs of ~~$13.4 million, capital expenditure of $6.9~~$4.4 million and business and asset acquisitions, net of cash acquired, of $2.2 million.

Cash Flows used for / provided by Financing Activities

For the ~~nine~~three months ended ~~September 30, 2020, we~~March 31, 2022, net cash used ~~$19.4~~for financing activities of $0.6 million ~~of cash in investing activities,~~was primarily ~~consisting of website and software development costs of $17.5 million and capital expenditure of $1.9 million.~~

~~Cash Flows from Financing Activities~~

due to payments made against acquisition-related liabilities.

For the ~~nine~~three months ended ~~September 30,~~March 31, 2021, net cash provided by financing activities of ~~$64.7~~$2.5 million was primarily due to ~~IPO~~ proceeds ~~(net of issuance cost) of $126.5 million,~~from a new credit facility of $183.3 million, ~~(net~~net of financing ~~cost),~~cost, partially offset by repayments against credit ~~facilities~~lines of ~~$180.7~~$42.8 million and term loan of $138 million. ~~Further, in connection with our IPO, we repurchased and cancelled certain stock, including restricted stock and restricted stock units with a total repurchase amount of $64.5 million.~~

For the nine months ended September 30, 2020, net cash provided by financing activities of $6.0 million was primarily due to $10.0 million in proceeds from the PPP loan, partially offset by repayments of $3.5 million under our credit facilities and cash paid for acquisition related liabilities amounting to $0.5 million.

~~Table of Contents~~

Debt

As of ~~September 30, 2021,~~March 31, 2022, we have ~~$183.5~~$183.7 million (net of ~~$1.5~~$1.3 million of unamortized debt acquisition costs) of outstanding long-term borrowings.

On February 3, 2021, we completed our debt refinancing and as a result, ~~of such debt refinancing,~~ we entered into a $222.5 million Senior Secured Credit ~~Facility. The Senior Secured Credit~~ Facility which was used to fully repay and terminate our ~~existing~~previous credit agreement. Borrowings under the debt are ~~expected to be in an amount of~~ $185.0 million and bear interest payable quarterly ranging from LIBOR plus 2.125% to LIBOR plus 2.625% based on our consolidated net leverage ratio stated in the credit agreement. We are required to repay the principal balance and any unpaid accrued interest on the Senior Secured Credit Facility on February 3, 2026. We do not expect any other significant changes in liquidity as a result of this refinancing.

We are currently in compliance with our financial maintenance covenants under the Senior Secured Credit Facility and, based upon our current expectations, believe that we will continue to comply with our financial maintenance covenants for the next 12 months. The Senior Secured Credit Facility contains restrictive covenants that place restrictions on us and may limit our ability to,

among other things, incur additional debt and liens, purchase our securities, undertake transactions with affiliates, make other investments, pay dividends or distribute excess cash flow.

~~On April 23, 2020,~~

During the three months ended March 31, 2022, we ~~entered into a promissory note evidencing an unsecured $10,000~~borrowed $1.4 million against the revolver facility and repaid the same amount against the term loan under the Paycheck Protection Program (“PPP Loan”) of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) administered by the U.S. Small Business Administration (“SBA”). The loan was made through Radius Bank. credit facility.

We ~~accounted for the loan as a financial liability~~do not engage in accordance with ASC Topic 470, Debt. Accordingly, the loan was recognized within long-term debt. We used the proceeds from the loan for payroll, rent and utilities and certain other approved expenses during the eight-week period commencing on the loan effective date. On June 10, 2021, the Company received a notice from SBA stating full forgiveness of the principal amount of $10 million and the related interest therein.

off-balance sheet financing arrangements.

Contractual obligations

There have been no material changes to our contractual obligations as compared to the contractual obligations described in our ~~Management’s~~"Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations~~Operations" set forth in our Annual Report on Form 10-K for the ~~Prospectus related to our recent IPO.~~

year ended December 31, 2021.

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with U.S. GAAP. The preparation of our financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Estimates are based on management’s judgment and the best available information, and as such actual results could differ from those estimates.

There have been no material changes to our critical accounting policies and estimates as compared to the critical policies and estimates described in our ~~Management’s~~"Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations~~Operations" set forth in our Annual Report on Form 10-K for the ~~Prospectus related to our recent IPO.~~

year ended December 31, 2021.

JOBS Act Accounting Election

We are an emerging growth company, as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until ~~such time as~~ those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Off-Balance

Sheet Arrangements

We have not entered into any

off-balance

sheet arrangements and do not have any holdings in variable interest entities.

~~Table of Contents~~

~~Item 3.~~

~~Quantitative and Qualitative Disclosures about Market Risk~~

Item 3.Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk in the ordinary course of business. Market risk represents the risk of loss that may impact our financial condition due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in interest rates and foreign currency exchange risks. We do not hold or issue financial instruments for speculative or trading purposes.

Interest Rate Risk

We are exposed to market risk from changes in interest rates on our loan term borrowings, which accrue interest at a variable rate. Based upon the principal balance owed on our long-term borrowings as of ~~September 30, 2021,~~March 31, 2022, a hypothetical one percentage point increase or decrease in the interest would increase or decrease our annual interest expenses by $1.9 million. There were no ~~other~~ material changes in market risk exposures as of ~~September 30, 2021.~~

March 31, 2022.

Foreign Currency Risk

We have foreign currency risks related to a certain number of our foreign subsidiaries in the UK, France, Belgium and India. We do not believe that a 10% change in the relative value of the U.S. dollar to other foreign currencies would have a material effect on our cash flows and operating results in currencies other than the U.S. dollar.

Inflation Risk

We do not believe that inflation had a material effect on our business, financial condition or results of operations.

~~Table of Contents~~

~~Item 4.~~

Item 4.Controls ~~and Procedures~~

~~Internal Control Over Financial Reporting~~

~~Previously Identified Material Weaknesses~~

~~As previously identified, during the audits of our financial statements for the years ended December 31, 2020~~ and 2019, three material weaknesses were identified in our internal control over financial reporting. Under standards established by the PCAOB, a “material weakness” is a deficiency, or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected on a timely basis. The material weaknesses that have been identified relate to lack of segregation of duties, lack of a risk assessment process and lack of contemporaneous documentation and accounting analysis.

As an emerging growth company, we have experienced growth such that our existing accounting and finance staff was not adequate to contemplate all the financial transactions facing the company on a contemporaneous basis. This led to positions being taken without appropriate independent reviews by personnel adequately knowledgeable of the technical requirements under U.S. GAAP. Additionally, the Company had not historically completed a formalized risk assessment process on an annual basis, including an assessment of the risks related to fraud. Finally, the Company had taken historical accounting positions, specifically related to stock-based compensation awards, redeemable convertible preferred stock and warrants, which led to restatements of prior financial statements and material adjustments to current financial statements, to correct accounting errors associated with these positions. These positions were taken without complete documentation and full understanding of the technical requirements of the accounting literature as it related to our specific arrangements.

We are in the process of implementing a number of measures to address the material weaknesses and deficiencies that have been identified including: (i) hiring additional accounting and financial reporting personnel with generally accepted accounting principles in the U.S. GAAP and SEC reporting experience, (ii) developing, communicating and implementing an accounting policy manual for our accounting and financial reporting personnel for recurring transactions and

~~period-end~~

~~closing processes and (iii) establishing effective monitoring and oversight controls for~~

~~non-recurring~~

~~and complex transactions to ensure the accuracy and completeness of our consolidated financial statements and related disclosures.~~

These additional resources and procedures are designed to enable us to broaden the scope and quality of our internal review of underlying information related to financial reporting and to formalize and enhance our internal control procedures. With the oversight of senior management and our audit committee, we have begun taking steps and plan to take additional measures to remediate the underlying causes of the material weaknesses.

We intend to complete the implementation of our remediation plan during fiscal year 2021. Although we believe that our remediation plan will improve our internal control over financial reporting, additional time may be required to fully implement it and to make conclusions regarding the effectiveness of our internal controls over financial reporting. Our management will closely monitor and modify, as appropriate, the remediation plan to eliminate the identified material weaknesses.

If our remediation of the material weaknesses is not effective, or if we experience additional material weaknesses or otherwise fail to maintain an effective system of internal controls in the future, we may not be able to accurately or timely report our financial condition or results of operations. Accordingly, there could continue to be a reasonable possibility that a material misstatement of our financial statements would not be prevented or detected on a timely basis. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to remediate the material weaknesses we have identified or avoid potential future material weaknesses.

~~Table of Contents~~

Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer ~~has~~(“CFO”), evaluated the effectiveness of our disclosure controls and procedures ~~(as~~as defined in Rules

13a-15(e)

and

15d-15(e)

under the Exchange ~~Act),~~Act as of the end of the period covered by this Quarterly Report on Form

10-Q.

~~Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2021, our~~

Our disclosure controls and procedures ~~were effective~~are designed to provide reasonable assurance that information we are required to disclose in the reports ~~that~~ we file or submit under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures, and is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and ~~forms,~~forms. Based on this evaluation, our CEO and CFO have concluded that ~~such information is accumulated~~our disclosure controls and ~~communicated to our management, including our Chief Executive Officer and Chief Financial Officer,~~procedures were effective at the reasonable assurance level as ~~appropriate, to allow timely decisions regarding required disclosures.~~

of March 31, 2022.

Changes in Internal Control

~~Other than the changes described above regarding enhancements associated with ongoing remediation efforts, there~~ over Financial Reporting

There were no changes in our internal control over financial reporting in connection with the evaluation required by Rule

13a-15(d)

and

15d-15(d)

of the Exchange Act that occurred during the period covered by this Quarterly Report on Form

10-Q

that materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

~~Table of Contents~~

PART II - OTHER INFORMATION

~~Item 1.~~

~~Legal Proceedings~~

Item 1.Legal Proceedings

From time to time, we are involved in various legal proceedings arising from the normal course of business activities. We are not currently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows, or financial condition. Defending any such proceedings is costly and can impose a significant burden on management and employees. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

~~Item 1A~~

~~Risk Factors~~

Item 1A.Risk Factors

There are no material changes to the risk factors previously disclosed ~~under the heading~~in Part 1, Item 1A “Risk Factors” in the ~~Prospectus~~Form 10-K for the year ended December 31, 2021 filed with the SEC on ~~June 14, 2021 pursuant to Rule 424(b)(4) under the~~February 25, 2022.

Item 2.Unregistered Sales of Equity Securities ~~Act.~~

~~Item 2.~~

~~Unregistered Sales of Equity Securities and Use of Proceeds~~

and Use of Proceeds

On ~~July 28, 2021,~~March 11, 2022, the Company issued ~~200,000~~100,000 shares of ~~its~~ Class A common stock valued at $10.83 per share, for an aggregate value of $1.1 million, to ~~a vendor~~former shareholders of Sizmek in connection with a settlement agreement with the ~~settlement~~sellers of aSizmek to resolve its dispute ~~alleging~~

~~non-compensation~~

~~under a past services contract.~~related to the contingent purchase consideration payable in connection with its Sizmek acquisition made during the year ended December 31, 2019. We did not receive any proceeds from such issuance.

On March 11, 2022, the Company issued 926,785 shares of Class A common stock valued at $10.79 per share, for an aggregate value of $10.0 million, to former shareholders of ArcaMax in connection with the ArcaMax acquisition. We did not receive any proceeds from such issuance.

The securities described above were issued in reliance on the exemption from registration provided in Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions by an issuer not involving a public offering. The ~~vendor~~acquirer of our securities in such transactions confirmed that it was an accredited investor and acknowledged that the securities must be acquired and held for investment.

Item 3.Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

None.

Item 6.Exhibits


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed Herewith	Furnished Herewith

3.1	Amended and Restated Certificate of Incorporation of Zeta Global Holdings Corp.	8-K	001-40464	3.1	6/15/2021

3.2	Amended and Restated Bylaws of Zeta Global Holdings Corp.	8-K	001-40464	3.2	6/15/2021

31.1	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X

~~Item 3.~~	~~Defaults Upon Senior Securities~~
31.2	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X

32.1*	Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		X

32.2*	Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		X

101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.	X

101.SCH	Inline XBRL Taxonomy Extension Schema Document	X

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	X

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	X

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	X

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	X

104	Cover Page Interactive Data File (formatted as Inline XBRL And contained in Exhibit 101)

~~None.~~

~~Item 4.~~

~~Mine Safety Disclosures~~

~~Not applicable.~~

~~Item 5.~~

~~Other Information~~

~~None.~~

~~Table~~

* The certifications attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of ~~Contents~~

~~Item 6.~~

~~Exhibits~~

~~The documents listed in~~ the ~~Exhibit Index~~Company under the Securities Act or the Exchange Act whether made before or after the date of this Quarterly Report on Form

10-Q,

~~are incorporated by reference or are filed with this Quarterly Report on Form~~

~~10-Q,~~

irrespective of any general incorporation language contained in ~~each case as indicated therein.~~

Incorporated by Reference

Exhibit
Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

Filed
Herewith

Furnished
Herewith

    3.1    Amended and Restated Certificate of Incorporation of Zeta Global Holdings Corp. 8-K 001-40464 3.1 6/15/2021
    3.2    Amended and Restated Bylaws of Zeta Global Holdings Corp. 8-K 001-40464 3.2 6/15/2021
    4.1    Specimen Stock Certificate evidencing the shares of Class A common stock. S-1/A 333-255499 4.1 5/7/2021
  10.1    Letter Agreement, dated June 29, 2021, by and between Zeta Global Holdings Corp. and Jené Elzie 8-K 001-40464 10.1 6/29/2021
  10.2    Form of Indemnification Agreement by and between the Registrant and Each of its Directors and Executive Officers. S-1/A 333-255499 10.2 5/7/2021
  10.3#    Zeta Global Holdings Corp. 2008 Stock Option/Stock Issuance Plan S-1/A 333-255499 10.3 5/7/2021
  10.4#    Form of restricted stock agreement under 2008 Stock Option/Stock Issuance Plan S-1/A 333-255499 10.4 5/7/2021
  10.5#    Form of option agreement under 2008 Stock Option/Stock Issuance Plan S-1/A 333-255499 10.5 5/7/2021
  10.6#    Zeta Global Holdings Corp. 2017 Equity Incentive Plan S-1/A 333-255499 10.6 5/7/2021
  10.7#    Form of restricted stock agreement under 2017 Equity Incentive Plan S-1/A 333-255499 10.7 5/7/2021
  10.8#    Form of restricted stock unit agreement under 2017 Equity Incentive Plan S-1/A 333-255499 10.8 5/7/2021
  10.9#    Form of stock option agreement under 2017 Equity Incentive Plan S-1/A 333-255499 10.9 5/7/2021
  10.10#    Zeta Global Holdings Corp. 2021 Incentive Award Plan S-1/A 333-255499 10.10 5/7/2021
  10.11#    Form of restricted stock agreement under 2021 Incentive Award Plan. S-1/A 333-255499 10.11 5/7/2021
  10.12#    Form of restricted stock unit agreement under 2021 Incentive Award Plan S-1/A 333-255499 10.12 5/7/2021
  10.13#    Form of stock option agreement under 2021 Incentive Award Plan S-1/A 333-255499 10.13 5/7/2021
  10.14#    Zeta Global Holdings Corp. 2021 Employee Stock Purchase Plan S-1/A 333-255499 10.14 5/7/2021
  10.15#    Form of amendment to restricted stock agreement under 2008 Stock Option/Stock Issuance Plan and 2017 Equity Incentive Plan for participants eligible to participate in Buy-Back Program S-1/A 333-255499 10.15 5/7/2021
  10.16#    Form of amendment to restricted stock unit agreement under 2017 Equity Incentive Plan for participants eligible to participate in Buy-Back Program S-1/A 333-255499 10.16 5/7/2021
  10.17#    Form of Employment Agreement by and between Zeta Global Holdings Corp. and David A. Steinberg S-1/A 333-255499 10.17 5/7/2021
  10.18    Form of Exchange Agreement S-1/A 333-255499 10.18 5/7/2021
  10.19#    Form of Employment Agreement by and between Zeta Global Corp. and Steven Gerber S-1/A 333-255499 10.19 5/7/2021
  10.20#    Form of Employment Agreement by and between Zeta Global Corp. and Chris Greiner S-1/A 333-255499 10.20 5/7/2021
  10.21#    Form of performance stock unit agreement under 2021 Incentive Award Plan X
  31.1    Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X
  31.2    Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X
  32.1*    Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X
  32.2*    Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X
101.INS    XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. X
101.SCH    Inline XBRL Taxonomy Extension Schema Document X
101.CAL    Inline XBRL Taxonomy Extension Calculation Linkbase Document X
101.DEF    Inline XBRL Taxonomy Extension Definition Linkbase Document X
101.LAB    Inline XBRL Taxonomy Extension Label Linkbase Document X
101.PRE    Inline XBRL Taxonomy Extension Presentation Linkbase Document X
104
Cover Page Interactive Data File (formatted as Inline XBRL
And contained in Exhibit 101)

#	~~Indicates a management contract or compensatory plan.~~

~~The certifications attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Quarterly Report on Form~~

~~10-Q~~

are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act whether made before or after the date of this Quarterly Report on Form

~~10-Q,~~

~~irrespective of any general incorporation language contained in such filing.~~

such filing.

~~Table of Contents~~

SIGNATURES

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.


		~~Zeta Global Holdings Corp.~~

	Zeta Global Holdings Corp.

Date: ~~November 10, 2021~~May 11, 2022	By:	~~By:~~	/s/ David A. Steinberg
			David A. Steinberg
			President, Chief Executive Officer and Chairperson (Principal Executive Officer)

Date: ~~November 10, 2021~~May 11, 2022	By:	~~By:~~	/s/ Christopher Greiner
			Christopher Greiner
			Chief Financial Officer (Principal Financial Officer)


Delaware		80-0814458
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)


	As of September 30, 2021		As of December 31, 2020
ASSETS
Current assets:

Cash and cash equivalents	$	116,180	$	50,725
Accounts receivable, net of allowance of $2,046 and $2,207 as of September 30, 2021 and December 31, 2020, respectively		72,785		79,366
Prepaid expenses		5,820		3,903
Other current assets		3,058		7,374

Total current assets		197,843		141,368

Property and equipment, net		5,869		6,117
Website and software development costs, net		38,477		32,891
Intangible assets, net		28,932		28,591
Goodwill		81,917		76,432
Deferred tax assets, net		195		366
Other non-current assets		1,063		521

Total non-current assets		156,453		144,918

Total assets	$	354,296	$	286,286

LIABILITIES AND STOCKHOLDERS’ EQUITY / (DEFICIT)
Current liabilities:
Accounts payable	$	27,905	$	40,976
Accrued expenses		50,619		44,622
Acquisition related liabilities		16,155		6,018
Deferred revenue		2,739		4,053
Other current liabilities		5,044		8,310

Total current liabilities		102,462		103,979

Non-current liabilities:
Long-term borrowings		183,528		189,693
Acquisition related liabilities		8,731		17,137
Warrants and derivative liabilities		—		58,100
Other non-current liabilities		3,790		2,387

Total non-current liabilities		196,049		267,317

Total liabilities	$	298,511	$	371,296

Commitments and contingencies (Note 8)		0		0
Mezzanine equity:
Redeemable convertible preferred stock $0.001 per share par value, up to 60,137,979 shares authorized and 39,223,194 shares issued and outstanding as of December 31, 2020		—		154,210
Stockholders’ equity / (deficit):
Series A common stock $0.001 per share value, up to 204,220,800 shares authorized, 112,012,693 shares issued and outstanding as of December 31, 2020		—		112
Treasury common stock, 8,195,464 s hares repurchased at a weighted average price of $2.86 per share		(23,469)		(23,469)
Series B common stock $0.001 per share par value, up to 3,400,000 shares authorized, 3,054,318 shares issued and outstanding as of December 31, 2020		—		3
Class A common stock, par value $0.001 per share par value, up to 3,750,000,000 shares authorized and 155,022,167 shares issued and outstanding as of September 30, 2021		155		—
Class B common stock, par value $0.001, up to 50,000,000 shares authorized and 37,856,095 shares issued and outstanding as of September 30, 2021		38		—
Additional paid-in capital		511,929		28,425
Accumulated deficit		(430,679)		(242,254)
Accumulated other comprehensive loss		(2,189)		(2,037)

Total stockholders’ equity / (deficit)		55,785		(239,220)

Total liabilities and stockholders’ equity / (deficit)	$	354,296	$	286,286


	As of
	March 31, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	103,863		$	103,859
Accounts receivable, net of allowance of $1,554 and $1,295 as of March 31, 2022 and December 31, 2021, respectively		75,558			83,578
Prepaid expenses		6,773			6,970
Other current assets		1,825			1,649
Total current assets		188,019			196,056
Non-current assets:
Property and equipment, net		5,329			5,630
Website and software development costs, net		37,274			38,038
Intangible assets, net		50,092			40,963
Goodwill		133,049			114,509
Deferred tax assets, net		1,009			956
Other non-current assets		1,545			1,113
Total non-current assets	$	228,298		$	201,209
Total assets	$	416,317		$	397,265
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	17,272		$	21,711
Accrued expenses		62,353			63,979
Acquisition related liabilities (current)		17,419			8,042
Deferred revenue		5,699			6,866
Other current liabilities		6,469			5,159
Total current liabilities		109,212			105,757
Non-current liabilities:
Long term borrowings		183,698			183,613
Acquisition related liabilities (non-current)		16,692			14,915
Other non-current liabilities		2,370			2,492
Total non-current liabilities		202,760			201,020
Total liabilities	$	311,972		$	306,777
Commitments and contingencies (See Note 8)
Stockholders’ equity:
Class A common stock $ 0.001 per share par value, up to 3,750,000,000 shares authorized, 165,461,786 and 159,974,847 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		165			160
Class B common stock $ 0.001 per share par value, up to 50,000,000 shares authorized, 36,856,095 and 37,856,095 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		37			38
Additional paid-in capital		670,342			584,208
Accumulated deficit		(563,854	)		(491,817	)
Accumulated other comprehensive loss		(2,345	)		(2,101	)
Total stockholders' equity		104,345			90,488
Total liabilities and stockholders' equity	$	416,317		$	397,265


	Nine months ended September 30,
	2021		2020
Cash flows from operating activities:
Net loss	$	(188,425)	$	(44,437)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		33,135		30,171
Stock-based compensation		188,613		79
Deferred income taxes		(1,635)		(170)
Change in fair value of warrant and derivative liabilities		5,000		16,400
Gain on extinguishment of debt		(10,000)		—
Other, net		2,509		2,880
Changes in non-cash working capital (net of acquisitions):
Accounts receivable		7,423		28,967
Prepaid expenses		(1,917)		(450)
Other current assets		4,316		349
Other non-current assets		(542)		1,294
Deferred revenue		(1,314)		184
Accounts payable		(17,961)		(325)
Accrued expenses and other current liabilities		2,762		(19,405)
Other non-current liabilities		1,402		1,105

Net cash provided by operating activities		23,366		16,642

Cash flows from investing activities:
Capital expenditures		(6,883)		(1,903)
Website and software development costs		(13,421)		(17,505)
Business and asset acquisitions, net of cash acquired		(2,159)		—

Net cash used for investing activities		(22,463)		(19,408)

Cash flows from financing activities:
Proceeds from initial public offering, net of issuance costs		126,538		—
Cash paid for acquisition related liabilities		(64)		(496)
Proceeds from term loan, net of issuance cost		183,311		—
Proceeds from paycheck protection program loan		—		10,000
Repurchase of restricted stock		(64,468)		—
Exercise of warrants and options		110		—
Repayments against the credit facilities		(180,745)		(3,500)

Net cash provided by financing activities		64,682		6,004

Effect of exchange rate changes on cash and cash equivalents		(130)		(102)

Net increase in cash and cash equivalents		65,455		3,136

Cash and cash equivalents, beginning of period		50,725		37,818

Cash and cash equivalents, end of period	$	116,180	$	40,954

Supplemental cash flow disclosures including non-cash activities:
Cash paid for interest	$	5,673	$	10,330
Cash paid for income taxes, net	$	1,294	$	1,224
Liability established in connection with acquisitions	$	1,795	$	—
Shares issued in connection with acquisitions and other agreements	$	6,650	$	423
Dividends on redeemable convertible preferred stock settled in Company’s equity	$	60,082	$	—
Non-cash settlement of warrants and derivative liabilities	$	63,100	$	—
Capitalized stock-based compensation as website and software development costs	$	8,830	$	—
Non-cash consideration for website and software development costs	$	45	$	770


			~~Page~~
~~PART I - FINANCIAL INFORMATION~~

~~Item 1.~~		~~Financial Statements (unaudited)~~		3	Page
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Condensed Unaudited Consolidated Balance Sheets as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021		3

		Condensed Unaudited Consolidated Statements of Operations and Comprehensive Loss for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~		4

		Condensed Unaudited Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity / (Deficit) for the Three ~~and Nine~~ Months Ended ~~September 30, 2021~~March 31, 2022 and ~~2020~~202 1		5

		Condensed Unaudited Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2021~~March 31, 2022 and ~~2020~~202 1		7	6

		Notes to Condensed Unaudited Consolidated Financial Statements		8	7

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		23	22

Item 3.		Quantitative and Qualitative Disclosures About Market Risk		36	31

Item 4.		Controls and Procedures		37	32

PART II - OTHER INFORMATION

Item 1.		Legal Proceedings		39	33

Item 1A.		Risk Factors		39	33

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		39	33

Item 3.		Default Upon Senior Securities		39	33

Item 4.		Mine Safety Disclosures		39	33

Item 5.		Other Information		39	33

Item 6.	Exhibits	~~Exhibits~~		40	34

	Signatures	~~Signatures~~		41	35


	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020

Revenues	$	115,133	$	95,284	$	323,492	$	253,674

Operating expenses:
Cost of revenues (excluding depreciation and amortization) (1)		44,525		40,705		125,709		100,530
General and administrative expenses (1)		50,643		17,150		135,682		53,270
Selling and marketing expenses (1)		60,537		18,269		163,952		54,359
Research and development expenses (1)		13,998		6,905		50,285		23,789
Depreciation and amortization		11,783		10,133		33,135		30,171
Acquisition related expenses		480		1,230		1,516		4,321
Restructuring expenses		30		259		467		1,950

Total operating expenses		181,996		94,651		510,746		268,390

(Loss) / income from operations		(66,863)		633		(187,254)		(14,716)
Interest expense		1,342		3,823		5,705		12,548
Other expenses / (income), net		496		(188)		1,031		(546)
Gain on extinguishment of debt		0		—		(10,000)		—
Change in fair value of warrants and derivative liabilities		0		9,700		5,000		16,400

Total other expenses		1,838		13,335		1,736		28,402

Loss before income taxes		(68,701)		(12,702)		(188,990)		(43,118)
Income tax provision / (benefit)		428		301		(565)		1,319

Net loss	$	(69,129)	$	(13,003)	$	(188,425)	$	(44,437)

Other comprehensive (loss) / income :
Foreign currency translation adjustment		(77)		272		(152)		(516)

Total comprehensive loss	$	(69,206)	$	(12,731)	$	(188,577)	$	(44,953)

Net loss per share
Net loss	$	(69,129)	$	(13,003)	$	(188,425)	$	(44,437)
Cumulative redeemable convertible preferred stock dividends		0		3,774		7,060		11,150

Net loss available to common stockholders	$	(69,129)	$	(16,777)	$	(195,485)	$	(55,587	)

Basic loss per share	$	(0.53)	$	(0.51)	$	(2.60)	$	(1.70)
Diluted loss per share	$	(0.53)	$	(0.51)	$	(2.60)	$	(1.70)
Weighted average number of shares used to compute net loss per share
Basic		129,731,980		32,607,357		75,313,520		32,607,373
Diluted		129,731,980		32,607,357		75,313,520		32,607,373

(1) The Company recorded the total stock-based compensation expense as follows:
	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Cost of revenues (excluding depreciation and amortization)	$	1,183	$	—	$	1,449	$	—
General and administrative expenses		28,243		26		70,868		79
Selling and marketing expenses		35,114		—		94,626		—
Research and development expenses		4,803		—		21,670		—

Total	$	69,343	$	26	$	188,613	$	79


	Redeemable Convertible Preferred Stock				Series A Common Stock				Series B Common Stock				Class A Common Stock				Class B Common Stock				Treasury Stock				Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
Balance as of January 1, 2021		39,223,194	$	154,210		112,012,693	$	112		3,054,318	$	3		—	$	—		—	$	—		(8,195,464)	$	(23,469)	$	28,425	$	(242,254)	$	(2,037)	$	(239,220)
Shares issued in connection with an acquisition		—		—		613,497		1		—		—		—		—		—		—		—		—		5,453		—		—		5,454
Restricted stock grants		—		—		3,687,431		4		—		—		—		—		—		—		—		—		(4)		—		—		—
Restricted stock forfeitures		—		—		(1,629,369)		(2)		—		—		—		—		—		—		—		—		2		—		—		—
Restricted stock cancelation		—		—		(17,853,416)		(18)		—		—		—		—		—		—		—		—		18		—		—		—
Foreign currency translation adjustment		—		—		—		—		—		—		—		—		—		—		—		—		—		—		54		54
Net loss		—		—		—		—		—		—		—		—		—		—		—		—		—		(24,374)		—		(24,374)

Balance as of March 31, 2021		39,223,194	$	154,210		96,830,836	$	97		3,054,318	$	3		—	$	—		—	$	—		(8,195,464)	$	(23,469)	$	33,894	$	(266,628)	$	(1,983)	$	(258,086)
Conversion of Series A and Series B common shares into Class A and Class B common shares, respectively		—		—		(96,830,836)		(97)		(3,054,318)		(3)		60,421,367		60		39,463,787		39		—		—		1		—		—		—
Conversion of redeemable convertible preferred stock to Class A Common Stock		(39,223,194)		(154,210)		—		—		—		—		73,813,713		74		—		—		—		—		193,136		—		—		193,210
Warrants and options exercised		—		—		—		—		—		—		8,360,331		8		—		—		—		—		24,132		—		—		24,140
Shares issued in connection with the Initial Public Offering		—		—		—		—		—		—		14,773,939		15		—		—		—		—		147,724		—		—		147,739
Equity issuance cost		—		—		—		—		—		—		—		—		—		—		—		—		(21,201)		—		—		(21,201)
Shares repurchased		—		—		—		—		—		—		(4,138,866)		(4)		(2,307,692)		(2)		—		—		(64,462)		—		—		(64,468)
Restricted stock grants		—		—		—		—		—		—		1,155,598		1		700,000		1		—		—		(2)		—		—		—
Restricted stock forfeitures		—		—		—		—		—		—		(2,334,753)		(2)		—		—		—		—		2		—		—		—
Restricted stock units vesting		—		—		—		—		—		—		219,072		—		—		—		—		—		—		—		—		—
Stock-based compensation		—		—		—		—		—		—		—		—		—		—		—		—		126,775		—		—		126,775
Foreign currency translation adjustment		—		—		—		—		—		—		—		—		—		—		—		—		—		—		(129)		(129)
Net loss		—		—		—		—		—		—		—		—		—		—		—		—		—		(94,922)		—		(94,922)

Balance as of June 30, 2021		—	$	—		—	$	—		—	$	—		152,270,401	$	152		37,856,095	$	38		(8,195,464)	$	(23,469)	$	439,999	$	(361,550)	$	(2,112)	$	53,058
Options exercised		—		—		—		—		—		—		26,485		—		—		—		—		—		69		—		—		69
Shares repurchased		—		—		—		—		—		—		(37,679)		0		0		0		—		—		0		—		—		0
Restricted stock grants		—		—		—		—		—		—		3,281,016		3		0		0		—		—		(3)		—		—		—
Restricted stock forfeitures		—		—		—		—		—		—		(718,056)		0		—		—		—		—		0		—		—		—
Stock-based compensation		—		—		—		—		—		—		—		—		—		—		—		—		70,668		—		—		70,668
Shares issued in connection with settlement of a dispute		—		—		—		—		—		—		200,000		—		—		—		—		—		1,196		—		—		1,196
Foreign currency translation adjustment		—		—		—		—		—		—		—		—		—		—		—		—		—				(77)		(77)
Net loss		—		—		—		—		—		—		—				—		—		—		—		—		(69,129)		—		(69,129)

Balance as of September 30, 2021		—	$	—		—	$	—		—	$	—		155,022,167	$	155		37,856,095	$	38		(8,195,464)	$	(23,469)	$	511,929	$	(430,679)	$	(2,189)	$	55,785


	Three months ended March 31
	2022			2021
Direct platform revenues		81	%		74	%
Integrated platform revenues		19	%		26	%


	Three months ended September 30				Nine months ended September 30
	2021		2020		2021		2020
Direct platform revenues	$	84,663	$	63,346	$	242,219	$	180,589
Integrated platform revenues		30,470		31,938		81,273		73,085

Total revenues	$	115,133	$	95,284	$	323,492	$	253,674


	Three months ended September 30				Nine months ended September 30
	2021		2020		2021		2020

US	$	108,034	$	88,014	$	301,548	$	234,565
International		7,099		7,270		21,944		19,109

Total revenues	$	115,133	$	95,284	$	323,492	$	253,674


	As of
	September 30, 2021		December 31, 2020

US	$	43,734	$	38,413
International		612		595

Total long-lived assets	$	44,346	$	39,008


	As of March 31, 2022						As of December 31, 2021
	Gross value		Accumulated amortization		Net value		Gross value		Accumulated amortization		Net value
Data supply relationships	$	12,891	$	2,949	$	9,942	$	8,750	$	1,875	$	6,875
Tradenames		2,720		2,302		418		2,720		2,171		549
Completed technologies		28,792		18,813		9,979		23,092		17,568		5,524
Customer relationships		71,099		41,346		29,753		65,999		37,984		28,015
Total intangible assets	$	115,502	$	65,410	$	50,092	$	100,561	$	59,598	$	40,963


	As of September 30, 2021
Year ended December 31,
Remaining three months of 2021	$	4,952
2022		15,332
2023		6,040
2024		2,002
2025		482
2026 and thereafter		124

Total	$	28,932


Balance as of January 1, 2021	$	76,432
Acquisition of Vital		3,910
Acquisition of Kinetic		1,578
Foreign currency translation		(3	)

Balance as of September 30, 2021	$	81,917


	eBay CRM		Sizmek			PlaceIQ			Ignition One		Kinetic		Vital		Total
Balance as of January 1, 2021	$	17,137	$	4,402		$	256		$	1,360	$	—	$	—	$	23,155
Additions		—		—			—			—		24		1,784		1,808
Payments made during the year		—		—			(64	)		—		—		—		(64	)
Change in fair value of earn-out		649		(470	)		(192	)		—		—		—		(13	)

Balance as of September 30, 2021	$	17,786	$	3,932		$	—		$	1,360	$	24	$	1,784	$	24,886


	Shares			Weighted Average Grant Date Fair Value

Non-vested as of January 1, 2021		85,903,970		$	2.80
Granted (1)		9,112,569			8.62
Vested		(9,300,893	)		11.04
Forfeited (2)		(4,700,102	)		9.46
Cancelled (3)		(16,655,197	)		3.60
Modified		(68,986,297	)		2.78
Modified and reissued		68,986,297			11.36

Non-vested as of September 30 , 2021		64,360,347		$	10.94


20 Day VWAP of Class A common stock	Below $10	$10.00	$12.50	$15.00	$18.50	$22.00
Percentage of target PSUs	0%	25%	50%	100%	150%	200%


	As of September 30, 2021		As of December 31, 2020
Stock price	$	—	$	7.56
Exercise price	$	—	$	0.01
Risk-free interest rate		—		0.09%
Expected volatility		—		64.0%
Time to maturity (in years)		—		0.63


	Warrant liability		Acquisition related liabilities		Derivative liability
Balance as of January 1, 2021	$	19,700	$	23,155	$	38,400
Additions, net of payments		—		1,744		—
Change in fair value		4,400		(13)		600
Extinguishment of the warrant and derivative liabilities		(24,100)		—		(39,000)

Balance as of September 30, 2021	$	0—	$	24,886	$	0—

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