AvePoint Inc

1. Nature of Business and Organization

AvePoint, Inc. (collectively with its subsidiaries, hereinafter referred to as “AvePoint,” the “Company,” “we,” “us,” or “our”) was incorporated as a New Jersey corporation on* July 24, 2001and redomiciled as a Delaware corporation in2006.*

AvePoint provides a cloud-native software platform that organizations rely on to optimize operations, manage critical data and secure the digital workplace. As companies around the world embrace the new normal of hybrid work, they must build and deliver a new, seamless workplace experience for knowledge workers, centered around an extensive portfolio of SaaS solutions and productivity applications aimed at improving collaboration across the organization.

Our principal corporate headquarters are located in Jersey City, New Jersey, with our principal operating headquarters in Richmond, Virginia and additional offices in North America, Europe, Asia, Australia and the Middle East.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated balance sheet as of* December 31, 2023,*which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information and include the accounts of the Company and entities consolidated under the variable interest and voting models. All intercompany transactions and balances have been eliminated. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been condensed or omitted.

In the opinion of management, these financial statements contain all material adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Interim results arenot necessarily indicative of results that* maybe expected for any other interim period or for the year ending December 31, 2024.*

These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the related notes included in our most recent Annual Report on Form10-K for the year ended* December 31, 2023*, which was filed with the SEC on* February**29,* 2024 (“Annual Report”).

The Company’s significant accounting policies are discussed in Note2 to the consolidated financial statements included in the Annual Report. There have beenno significant changes to these policies during thenine months ended* September**30,* 2024.

Comparative Data

Certain amounts from prior periods have been reclassed to conform to the current period presentation, including:

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Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. We base our estimates and assumptions on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The amounts of assets and liabilities reported and the amounts of revenue and expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, butnot limited to, the accounting for the determination of standalone selling price for revenue recognition, deferred contract costs, valuation of goodwill and other intangible assets, income taxes and related reserves, purchase price in a business combination, and earn-out liabilities. Actual results and outcomes* may*differ from management’s estimates and assumptions due to risks and uncertainties.

Foreign Currency

Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other expense, net in the Company’s condensed consolidated statements of income.

Cash and Cash Equivalents

The Company maintains cash with several high credit-quality financial institutions. The Company considers its investments with original maturities ofthree months or less to be cash equivalents. These investments arenot subject to significant market risk. The Company maintains its cash and cash equivalents in bank accounts which, at times, exceed the federally insured limits. The Company hasnot experienced any losses in such accounts. The Company maintains cash balances used in operations at entities based in countries that impose regulations that limit the ability to transfer cash out of the country. As of* September 30, 2024* and* December 31, 2023*, the Company’s cash balances at these entities were $11.7 million and $13.1 million, respectively. For purposes of the condensed consolidated statements of cash flows, cash includes all amounts in the condensed consolidated balance sheets captioned cash and cash equivalents.

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Goodwill

No events or circumstances changed since the acquisitions that would indicate that the fair value of our reporting unit is below its carrying amount. No impairment was deemed necessary as of* September 30, 2024* or* December 31, 2023*.

Deferred Contract Costs

We defer sales commissions that are considered to be incremental and recoverable costs of obtaining or renewing SaaS, term license and support, services, and maintenance contracts. Changes in the anticipated period of asset benefit or the average renewal term are recognized on a prospective basis upon occurrence.

Amortization of deferred contract costs of $5.6 million and $15.7 million for thethree andnine months ended* September 30, 2024*, and $4.6 million and $13.1 million for thethree andnine months ended* September 30, 2023*, is included as a component of sales and marketing expenses in our condensed consolidated statements of income. Deferred contract costs recognized as a contract asset in the condensed consolidated balance sheets were $55.4 million and $54.7 million as of* September 30, 2024* and* December 31, 2023*, respectively.

Revenue Recognition

The Company derives revenue fromfour primary sources: SaaS, term license and support, services, and maintenance. Services include installation services, training and other consulting services.

Term license revenue recognized at a point in time was $9.9 million and $22.1 million for thethree andnine months ended* September 30, 2024*, and $11.1 million and $24.9 million for thethree andnine months ended* September 30, 2023*.

Accounts receivable, net is inclusive of accounts receivable, and current unbilled receivables, net of allowance for credit losses. We record an unbilled receivable when revenue is recognized prior to invoicing. We have a well-established collection history from our direct and indirect sales. We periodically evaluate the collectability of our accounts receivable and provide an allowance for credit losses as necessary, based on the age of the receivable, expected payment ability, and collection experience. As of* September 30, 2024* and* December 31, 2023*, the allowance for credit losses wasnot material.

We record deferred revenue in the condensed consolidated balance sheets when cash is collected or invoiced before revenue is earned. Deferred revenue as of* September 30, 2024* and* December 31, 2023* was $142.3 million and $129.3 million, respectively. Revenue recognized that was included in the deferred revenue balance as of* December 31, 2023,was $103.1 million for thenine* months ended* September 30, 2024*.

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The opening and closing balances of the Company’s accounts receivable, net, deferred revenue and deferred contract costs are as follows:

(1) Includes long-term unbilled receivables.

There wereno significant changes to the Company’s contract assets or liabilities during thenine months ended* September 30, 2024* and the year ended* December 31, 2023* outside of its sales activities.

As of* September 30, 2024*, transaction price allocated to remaining performance obligations, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods, was $363.7 million, of which $310.4 million is related to SaaS and term license and support revenue. We expect to recognize approximately 61% of the total transaction price allocated to remaining performance obligations over the next twelve months and the remainder thereafter.

Stock-Based Compensation

Stock-based compensation represents the cost related to stock-based awards granted to employees. To date, we have issued both stock options and restricted stock units. The Company measures stock-based compensation cost at the grant date based on the estimated fair value of the award and recognizes the cost ratably over the requisite service period, net of actual forfeitures in the period.

We estimate the fair value of stock options using the Black-Scholes valuation model. The Black-Scholes model requires highly subjective assumptions in order to derive the inputs necessary to calculate the fair value of stock options. To estimate the expected term of stock options, the Company considers contractual terms of the options, including the vesting and expiration periods, as well as historical option exercise data and current market conditions to determine an estimated expected term. The Company’s historical experience is too limited to be able to reasonably estimate an expected term. Expected volatility is based on the historical volatility of a group of peer entities. Dividend yields are based upon historical dividend yields. Risk-free interest rates are based on the implied yields currently available on U.S. Treasuryzero coupon issues with a remaining term equal to the expected term.

Recent Accounting Pronouncementsnot yet effective**

In* November 2023,the FASB issued ASU2023*-07, “Improvements to Reportable Segment Disclosures (Topic280)” (“ASU2023-07**”). ASU2023-07 is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendment in this ASU is effective for annual periods beginning after* December 15, 2023,and interim periods within fiscal years beginning after December 15, 2024.Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. We are currently evaluating the impact ASU2023*-07 will have on our consolidated financial statements and related disclosures.

In* December 2023,the FASB issued ASUNo.* 2023-09, “Improvements to Income Tax Disclosures (Topic740)” (“ASU2023-09**”). ASU2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The amendment in this ASU is effective on a prospective basis for annual periods beginning after* December 15, 2024.Early adoption is also permitted. We are currently evaluating the impact ASU2023*-09 will have on our consolidated financial statements and related disclosures.

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3. Goodwill

The changes in the carrying amounts of goodwill were as follows:

4. Intangible assets, net

Intangible assets consist of acquired intangible assets and self-developed software.

A summary of the balances of the Company’s intangible assets as of* September 30, 2024* and* December 31, 2023* is presented below:

Amortization expense for intangible assets was $0.7 million and $1.9 million for thethree andnine months ended* September 30, 2024*, and $0.6 million and $1.6 million for thethree andnine months ended* September 30, 2023*, respectively.

As of* September 30, 2024*, estimated future amortization expense for intangible assets, net is as follows:

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5. Accounts Receivable, Net

Accounts receivable, net, consists of the following components:

6. Line of Credit

The Company maintains a loan and security agreement (the “Loan Agreement”) with HSBC Bank USA, National Association, (“HSBC”) as lender, for a revolving line of credit of up to $30.0 million, with an accordion feature that provides up to $20.0 million of additional borrowing capacity the Company* maydraw upon at its request. The line bears interest at a rate equal to term SOFR plus 3.0% to 3.3% depending on the Consolidated Total Leverage Ratio (as defined in the Loan Agreement). The line carries an unused fee at a rate equal to 0.5%. The line will mature on November 3, 2026.We are required to maintain a minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Loan Agreement) as well as a maximum Consolidated Total Leverage Ratio, tested by HSBC each quarter. The Company pledged, assigned and granted HSBC a security interest in all shares of its subsidiaries, future proceeds and assets (except for excluded assets, including material intellectual property) as security for the performance of the Loan Agreement obligations. As of September**30,* 2024, the Company is compliant with all covenants under the line and hadno borrowings outstanding under the line of credit.

7. Income Taxes

The Company had an effective tax rate of 5.9% and (106.5)% for thethree andnine months ended* September 30, 2024*, respectively, and (204.5)% and (45.7)% for thethree andnine months ended* September 30, 2023*, respectively.

The change in effective tax rates for thethree-month period ended* September 30, 2024* as compared to thethree-month period ended* September 30, 2023* was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates, the impact of foreign inclusions, stock-based compensation and changes in valuation allowance in certain jurisdictions.

The change in effective tax rates for thenine-month period ended* September 30, 2024* as compared to thenine-month period ended* September 30, 2023* was primarily due to the mix of pre-tax income (loss) results by jurisdictions taxed at different rates, the impact of foreign inclusions, stock-based compensation and changes in valuation allowance in certain jurisdictions.

The Company continues to evaluate the realizability of its deferred tax assets on a quarterly basis and will adjust such amounts in light of changing facts and circumstances. In making such an assessment, management would consider all available supporting data, including the level of historical taxable income, future reversals of existing temporary differences, tax planning strategies, and projected future taxable income.

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8. Leases

The Company is obligated under various non-cancelable operating leases primarily for office space. The initial terms of the leases expire on various dates through2030. We determine if an arrangement is a lease at inception.

The components of the Company’s operating lease expenses are reflected in the condensed consolidated statements of income as follows:

(1) Short-term lease expenses include rent expenses from leases of12 months or less on the transition date or lease commencement.

(2) Variable lease cost includes common area maintenance, property taxes, and fluctuations in rent due to a change in an index or rate.

Our lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. We elected to combine fixed payments for non-lease components, for all classes of underlying assets, with our lease payments and account for them together as a single lease component which increases the amount of our lease assets and liabilities.

During thenine months ended* September 30, 2024* and2023, right-of-use assets obtained in exchange for new operating lease liabilities amounted to $5.2 million and $3.7 million, respectively.

Other information related to operating leases is as follows:

As of* September 30, 2024*, our operating leases had a weighted average remaining lease term of 3.6 years and a weighted average discount rate of 5.4%.

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As of* December 31, 2023,*our operating leases had a weighted average remaining lease term of 3.8 years and a weighted average discount rate of 5.6%.

The maturity schedule of the operating lease liabilities as of* September 30, 2024* is as follows:

(1) Includes the current portion of operating lease liabilities of $5.9 million, which is reflected in accrued expenses and other liabilities in the condensed consolidated balance sheets.

As of* September**30,* 2024, letters of credit have been issued in the amount of $0.8 million as security for operating leases. The letters of credit are secured by certificates of deposit and a line of credit. The certificates of deposit are included in short-term investments within the condensed consolidated balance sheets.

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9. Commitments and Contingencies

Legal Proceedings

In the normal course of its business, the Company* maybe involved in various claims, negotiations and legal actions. Except for such claims that arise in the normal course of business, as of September 30, 2024*, the Company wasnot a party to any other litigation for which a material claim is reasonably possible, probable or estimable.

Indemnification

The Company has entered into indemnification agreements with its executive officers and directors. These agreements, among other things, require AvePoint to indemnify its directors and executive officers to the fullest extent permitted by Delaware law, specifically the Delaware General Corporation Law (as the same exists or* mayhereafter be amended) for certain expenses, including attorneys’ fees, judgments, fines, and settlement amounts incurred by a director or officer in any action or proceeding arising out of their services asone* of the Company’s directors or officers or any other company or enterprise to which the person provides services at the Company’s request.

As part of the business combination with Apex Technology Acquisition Corporation, Inc. (“Apex”), we assumed certain indemnification obligations for Apex Technology Sponsor LLC and Jeff Epstein, Brad Koenig, David Chao, Peter Bell, Donna Wells, and Alex Vieux (the “Indemnitees” or “Defendants”). On* February 2, 2024,Drulias and Farzad (as purported Apex stockholders, the “Plaintiffs”) filed a class action complaint against the Indemnities in Delaware Court of Chancery, captioned Dean William Drulias, et.al. v. Apex Technology Sponsor LLC, et.al., C.A.No. 2024-0094-LWW. Plaintiffs asserted breach of fiduciary duty and unjust enrichment claims against the Defendants. The complaint alleged that Defendants made false and misleading disclosures in the June 2, 2021proxy statement of Apex impacting its stockholders’ vote to approve a merger between Apex and us and also affecting stockholders’ redemption rights prior to the merger. Plaintiffs sought unspecified damages, rescission or rescissory damages, and disgorgement of unjust enrichment. We werenot* a named defendant in the complaint but had indemnification obligations to the Defendants under indemnification agreements executed during the merger. Also, in accordance with the business combination agreement, the Defendants obtained insurance policies to cover post-closing liability, with Apex securing a policy with a limit of $10 million and the sponsors obtaining a policy with a $3 million limit. The parties participated in a mediation in* Octoberand agreed to settlement terms. Pursuant to a signed letter of intent and a forthcoming settlement agreement, releasing us and the Defendants and settling the class action, we will contribute $1.4 million toward the full settlement amount of $14.4 million. The remaining $13 million will be paid pursuant to thetwo* aforementioned insurance policies covering the Defendants and sponsor. As of* September 30, 2024,*an estimated accrual of $1.4 million was included in the accrued expenses and other current liabilities within the condensed consolidated balance sheets.

Guarantees******

In the normal course of business, customers in certain geographies or in highly regulated sectors occasionally require contingency agreements for the completion of service projects, the completion of which are secured by certificates of deposit and a line of credit. The certificates of deposit are included in short-term investments within the condensed consolidated balance sheets. As of* September 30, 2024*, letters of credit have been issued in the amount of $3.7 million, as security for the agreements. These agreements havenot had a material effect on our results of operations, financial position or cash flow.

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10. Earn-Out and Warrant Liabilities

Company Earn-Out

Certain holders of common stock and certain holders of options shall be issued additional shares of AvePoint’s common stock, as follows:

The rights described above are hereafter referred to as the “Company Earn-Out Shares”. To the extent that any portion of the Company Earn-Out Shares that would otherwise be issued to a holder of options that remain unvested at the date of the milestones described above, then in lieu of issuing the applicable Company Earn-Out Shares, the Company shall instead issue an award of restricted stock units of the Company for a number of shares of AvePoint’s common stock equal to such portion of the Company Earn-Out Shares issuable with respect to the unvested options (the “Company Earn-Out RSUs”). In evaluation of the Company Earn-Out Shares and Company Earn-Out RSUs, management determined that the Company Earn-Out Shares represent derivatives to be marked to market at each reporting period, while the Company Earn-Out RSUs represent equity under ASC718, Compensation-Stock Compensation (“ASC718**”). Refer to “Note13* — Stock-Based Compensation*” for more information regarding the Company Earn-Out RSUs.

In order to capture the market conditions associated with the Company Earn-Out Shares, the Company applied an approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the Sponsor Earn-Out Shares’ (as defined below) contractual life based on the appropriate probability distributions. The fair value was determined by taking the average of the fair values under each Monte Carlo simulation trial. The Monte Carlo model requires highly subjective assumptions including the expected volatility of the price of our common stock, and the expected term of the earn-out shares. Significant increases or decreases to these inputs in isolation could result in a significantly higher or lower liability. Under this approach, the fair value of the Company Earn-Out Shares on* July 1, 2021was determined to be $29.6 million. The fair value was remeasured as of September 30, 2024* and* December 31, 2023*, and was determined to be $29.9 million and $18.3 million, respectively, and included in the earn-out shares’ liabilities in the condensed consolidated balance sheets. As a result, $4.2 million and $11.2 million increases in liability were recognized during thethree andnine months ended* September 30, 2024*, and $2.8 million and $6.8 million increases in liability were recognized during thethree andnine months ended* September 30, 2023*, and included as other expense, net in the condensed consolidated statements of income.No Company Earn-Out Shares have been issued as of* September 30, 2024.*We estimated the earn-out shares fair value using a Monte Carlo model with the following significant unobservable assumptions:

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Private Warrants to Acquire Common Stock

On* July 1, 2021,*the Company granted 405,000 private placement warrants with a 5-year term and an exercise price of $11.50 per share. Management has determined that the private placement warrants are to be classified as liabilities to be marked to market at each reporting period.

The private placement warrants are non-transferable and any transfer to an unrelated party would cause the warrants to be converted into public warrants. Consequently, the fair value of the private placement warrants is equivalent to the quoted price of the publicly traded warrants. Under this approach, the fair value of the private placement warrants on* July 1, 2021,was determined to be $1.4 million. The fair value was remeasured as of September 30, 2024* and* December 31, 2023*, and was determined to be $0.9 million and $0.5 million, respectively, and included in the other non-current liabilities in the condensed consolidated balance sheets. As a result, $0.3 million and $0.5 million of losses were recognized during thethree andnine months ended* September 30, 2024*, and $0.1 million and $0.2 million were recognized during thethree andnine months ended* September 30, 2023*, and included as other expense, net in the condensed consolidated statements of income.

As of* September 30, 2024,*328,750 private placement warrants remained outstanding.

11. Mezzanine Equity and Stockholders’** Equity**

The Company hasone class of capital stock: common stock. The following summarizes the terms of the Company’s capital stock.

Common Stock

Pursuant to the Company’s restated Articles of Incorporation, the Company was authorized to issue up to 1,000,000,000 shares of common stock at $0.0001 par value. There were 187,430,543 and 184,652,402 shares issued and outstanding as of* September 30, 2024* and* December 31, 2023*, respectively. Each share of common stock is entitled toone vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Company’s Board of Directors. The Company’s Board of Directors hasnot declared common stock dividends since inception.

Share Repurchase Program

On* March 17, 2022,the Company announced that its Board of Directors authorized a new share repurchase program (the “Share Repurchase Program”) for the Company to buy back shares of its common stock. Under the Share Repurchase Program, the Company has the authority to buy up to $150 million of common stock via acquisitions in the open market or privately negotiated transactions. The Share Repurchase Program will remain open for a period ofthree* years from the date of authorization and* maybe suspended or discontinued at any time. The Company isnot* obligated to make purchases of, nor is it obligated to acquire any particular amount of, common stock under the Share Repurchase Program. During thenine months ended* September 30, 2024, the Company repurchased and retired 2,629,978 shares at an average price of $8.25 per share. The shares were returned to the status of authorized but unissued shares. As a result, common stock amount, additional paid-in capital, and accumulated deficit in the condensed consolidated balance sheet during thenine* months ended* September**30,* 2024, were reduced by $0.0 million, $9.7 million, and $12.1 million, respectively. During thenine months ended* September 30, 2023*, the Company repurchased and retired 5,983,651 shares at an average price of $5.62.

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Sponsor Earn-Out Shares

On* July 1, 2021,*the Company modified the terms of 2,916,700 shares of common stock (“Sponsor Earn-Out Shares”) then held by Apex Technology Acquisition Corporation’s sponsor, such that such shares will be subject to the following vesting provisions:

The Sponsor Earn-Out Shares are currently outstanding and receive all benefits of regular shares with the exception of the fact that the shares are held in escrow and restricted from transfer until the vesting conditions described above are met. Consequently, the shares are classified as equity. No Sponsor Earn-Out Shares have vested as of* September 30, 2024*.

Public Warrants to Acquire Common Stock

On* July 1, 2021,the Company issued 17,500,000 public warrants with an exercise price of $11.50. Each warrant entitles the registered holder to purchaseone share of AvePoint’s common stock and the warrants are exercisable from the date of issuance through July 1, 2026.*

On* August 27, 2024,the Company announced the commencement of an offer to purchase all of its outstanding public warrants at a price of $2.50 per warrant in cash, with an expiration date of September 26, 2024 (the “Offer”). On September 26, 2024,the Company announced that 1,596,314 warrants had been validly tendered and purchased, representing approximately 9.1% of the outstanding warrants, for a total amount of $4.0 million. As of September 30, 2024*,15,979,936 warrants remained outstanding.

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Redeemable Noncontrolling Interest

During thenine months ended* September**30,* 2024, the redeemable noncontrolling interest shareholders of MaivenPoint Pte. Ltd. (“MaivenPoint”), a consolidated subsidiary of the Company, submitted notices of exercise of their put option to cause MaivenPoint to repurchase their shares at a price of $6.1 million. As a result of the exercise, AvePoint’s ownership in MaivenPoint became 76.1%, with the remaining ownership interest held by an unaffiliated investor. Due to the ownership percentage change, the Company adjusted the carrying amount of the noncontrolling interest by multiplying the adjusted net assets of MaivenPoint by the unaffiliated investor’s new ownership percentage, resulting in a reduction to noncontrolling interest and increase in additional-paid-in capital of $6.4 million, respectively, within the condensed consolidated balance sheets.

There areno put options held by MaivenPoint’s remaining noncontrolling interest shareholders, and therefore, there isno longer any redeemable noncontrolling interest in MaivenPoint as of* September**30,* 2024.

12. Growth Equity Fund

On* February 28, 2024,the Company and Lumens Capital Partners Ltd. (“LCP”) establishedA3V* JV Co. (the “Venture”), with each owning an equal share of the Venture. In addition, the Company entered into a separate agreement with LCP to formA3 Ventures Fund1, L.P. (the “Fund”). The Fund is a Cayman Islands-exempted limited partnership, aimed at investing in companies in the growth equity phase and mature cashflow generating businesses with strong growth potential. The Fund looks to invest in companies situated in enterprise software markets aligning with the professional expertise and geographical presence of both the Company and LCP.

The Venture wholly ownsA3V GP Co., which serves as the general partner of the Fund. As a limited partner, the Company committed to contribute $50.0 million to the Fund, to be called as needed, for portfolio investments, fees, and expenses of the Fund. The Company also participates in Fund establishment costs and an annual management fee equal to 2.0% of the total commitment. Any future repayment obligations will be triggered upon the receipt by LCP of profit allocations related to the Fund.

As of* September 30, 2024,no portion of the Company’s $50.0 million commitment has been called or was callable, and the operations of the Fund and the Venture havenot* materially impacted the Company’s financial position, financial performance, or cash flows.

As of* September30,* 2024, $1.9 million of management fee and establishment costs were included in accrued expenses and other liabilities in the condensed consolidated balance sheets. During thethree andnine months ended* September30,* 2024, $0.6 million and $1.9 million, respectively, of management fee and establishment costs were included in general and administrative in the condensed consolidated statements of income.

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13. Stock-Based Compensation

The Company maintains the2021 Equity Incentive Plan (the “2021 Plan”). As of* September 30, 2024*,27,210,325 shares remained for future issuance under the2021 Plan. To date, the Company has issued only stock options and restricted stock units to employees, directors and consultants.

For thethree months ended* September 30, 2024and2023,* total stock-based compensation expense was $9.8 million and $9.3 million, respectively. For thenine months ended* September 30, 2024and2023,* total stock-based compensation expense was $29.8 million and $27.0 million, respectively.

Stock Options

The compensation costs for stock option awards are accounted for in accordance with ASC718. Stock options vest over afour-year service period and expire on thetenth anniversary of the date of award.

On* March 5, 2024,the Company granted 469,920 options under the2021* Plan. The Company estimated the grant date fair value of these stock options using the Black-Scholes option-pricing model with the following weighted-average assumptions:

To estimate the expected life of stock options, the Company considered the vesting term, contractual expiration period, and market conditions. Expected volatility is based on historical volatility of a group of peer entities. Dividend yields are based upon historical dividend yields. Risk-free interest rates are based on the implied yields currently available on U.S. Treasuryzero coupon issues with a remaining term equal to the expected life. Based on these inputs, the grant-date fair value was determined to be $2.0 million.

As of* September 30, 2024*, there was $8.4 million in unrecognized compensation costs related to all unvested options.

As of* September 30, 2024*, the Company had 25,195,045 options outstanding and 22,646,655 options exercisable with intrinsic values of $188.6 million and $177.8 million, respectively. During thenine months ended* September 30, 2024*,1,502,820 options were exercised, with a total intrinsic value of $9.5 million.

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Restricted Stock Units

Under the terms of the2021 Plan, we have issued restricted stock unit awards with a continuous employment condition only (“Time-Based RSUs”), and restricted stock unit awards with a continuous employment condition that are also contingent on the Company meeting certain performance goals (“PSUs”, and together “RSUs”). Both types of RSU awards vest over afour-year period from the grant date.

3,727,387 Time-Based RSUs and 502,676 PSUs were granted under the2021 Plan during thenine months ended* September 30, 2024*, with a weighted-average grant date fair-value of $7.52 per award. The compensation costs for RSUs are accounted for in accordance with ASC718. RSUs are measured at the fair market value of the underlying stock at the grant date. RSUs that vested during thenine months ended* September 30, 2024* had an aggregate fair value at vesting of $35.5 million. As of* September 30, 2024*, there was $60.0 million in unrecognized compensation costs specific to the unvested RSUs, to be recognized over a weighted-average period of 2.5 years. As of* September 30, 2024*, the Company had 10,031,797 unvested Time-Based RSUs and 502,676 unvested PSUs with a weighted-average grant date fair-value of $6.29 per award.

Company Earn-Out RSUs

The compensation costs for Company Earn-Out RSUs are accounted for in accordance with ASC718. In order to capture the market conditions associated with the Company Earn-Out RSUs, the Company applied an approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the Sponsor Earn-Out RSUs’ contractual life based on the appropriate probability distributions. The fair value was determined by taking the average of the fair values under each Monte Carlo simulation trial. Under this approach, the grant-date fair value of the Company Earn-Out RSUs on* July 1, 2021,was determined to be $2.5 million. The stock options underlying the Earn-Out RSUs vest over afour-year period and expire on thetenth anniversary of the date of award. If the contingent milestones of the Earn-Out RSUs arenot* met by* July 1, 2028,the holders of the underlying stock options willnot* receive the Earn-Out RSUs.

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14. Financial Instruments

Fair value is defined by ASC820, Fair Value Measurement (“ASC820**”) as the price that would be received upon selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC820 establishes athree-level fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. Thethree levels of inputs used to measure fair value are as follows:

(1)During2023, the Company extended a credit facility to LCP with a total commitment of up to $5.0 million and maturities of greater thantwelve months (the “LCP Notes Receivable”). Refer to “Note12* — Growth Equity Fund*” for further details. The LCP Notes Receivable bear interest at an annual rate equal to 8%. As of* September**30,* 2024 and* December 31, 2023,the LCP Notes Receivable in the amounts of $3.5 million and $1.8 million, respectively, were included in other assets within the condensed consolidated balance sheets. Fair values are based on discounted future cash flows using current interest rates offered for similar notes tothird* parties with similar credit ratings for the same remaining maturities.

(2) Refer to “Note10* — Earn-Out and Warrant Liabilities*” for further details.

(3) The majority of certificates of deposit are foreign deposits.

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The following tables summarize the Company’s available-for-sale securities measured at fair value as of* September**30,* 2024 and* December 31, 2023.*

The contractual maturity of the available-for-sale securities held as of* September**30,* 2024 and* December 31, 2023was withinone* year.

The following table presents the reconciliation in Level3 instruments which consisted of earn-out shares liabilities which were measured on a recurring basis.

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15. Segment Information

The Company operates inone segment. Its products and services are sold throughout the world, through direct and indirect sales channels. The Company’s chief operating decision maker (the “CODM”) is the Chief Executive Officer. The CODM makes operating performance assessment and resource allocation decisions on a global basis. The CODM doesnot receive discrete financial information about asset allocation or profitability by product or geography.

Revenue by geography is based upon the billing address of the customer. All transfers between geographic regions have been eliminated from consolidated revenue. The following table sets forth revenue by geographic area:

The following table sets forth revenue generated by countries which represent more than10% of total consolidated revenue:

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16. Other expense, net

Other expense, net is disaggregated as follows:

(1) Profits on securities consist of interest income from amortization of the discount arising at acquisition of U.S. treasury bills.

17. Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing total net income (loss) by the weighted average common shares outstanding for the period. In computing diluted net income (loss) per share, the Company adjusts the denominator, subject to anti-dilution requirements, to include the dilution from potential shares of common stock resulting from outstanding share-based payment awards, warrants and Company Earn-Outs. The Company’s Sponsor Earn-Out Shares described in “Note11* — Mezzanine Equity and Stockholders’ Equity*” are considered participating securities and haveno contractual obligation to shares in the loss of the Company. As such, the weighted-average impact of these shares is excluded from the calculation of loss per share below.

To arrive at net income (loss) available to common stockholders, the Company deducted net income attributable to Sponsor Earn-out Shares and net (income) loss attributable to noncontrolling interest.

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The below table includes the total potentially dilutive securities for thethree andnine months ending* September 30, 2024and thethree* andnine months ending* September 30, 2023*which have been excluded from the computation of diluted net income (loss) per share as their effect is anti-dilutive:

18. Subsequent Events

No material subsequent events occurred since the date of the most recent balance sheet period reported.